States quickly responded to the COVID-19 pandemic, and now every state except Utah allows restaurants to sell alcoholic beverages for off-site consumption.
Thirty-five states now allow restaurants to deliver alcoholic beverages to customer’s homes. All but three states have allowed liquor stores to remain open as essential businesses during emergency shutdowns.
The biggest question for the food and beverage industry is whether these temporary changes will become permanent.
The COVID-19 pandemic has upended the economy, with many states forcing non-essential businesses to close in March. Restaurants have mostly been limited to carryout and delivery service to minimize human-to-human contact. While many restaurants were able to adapt quickly to offer to-go service, alcohol laws in many states initially prevented customers from enjoying alcoholic beverages to carry out with their food orders.
States Quickly Changed Alcohol Rules
Typically, alcohol sales account for 30 to 50 percent of a restaurant’s revenues, and, with business already hurting, restaurants looked to state and local governments to loosen restrictions and allow patrons to take home a bottle of wine or beer. Some states immediately took action, with governors signing executive orders under an emergency declaration to suspend alcohol laws that prohibited restaurant licensees from making sales for off-site consumption. Minnesota is the latest state to enact legislation that allows restaurants to offer to-go alcohol service. Currently, every state except Utah has now lifted such restrictions. In most cases, that means a patron can purchase only beer or wine with their food order, but in some states, you can even purchase spirits or a cocktail.
Most states require alcohol to be sold with an order of food, and many also have limits on how much alcohol can be sold.
The closing of dine-in portions of restaurants has been a boon for the food delivery business. Some states have loosened rules to allow restaurants to include alcoholic beverages in food deliveries, either by themselves or by third-party delivery services like Uber Eats, Grubhub, or Doordash.
Some of the new delivery rules include caveats. For example, in Kentucky, delivery is still not permitted to a local jurisdiction that has prohibited alcohol sales. Idaho only allows the sale of beer and wine and does not allow money to be exchanged at the point of delivery. Payment must be arranged online or over the phone. South Carolina only allows delivery through third-party services. And some states require registration before permitting delivery.
Liquor Stores as “Essential”
Most states have closed non-essential businesses, but liquor stores have remained open in all but three states — Nevada, New Mexico, and Pennsylvania. In Nevada, some counties still allow liquor stores to deliver. The closing of state-run stores in Pennsylvania caused some concern for neighboring states, with Pennsylvanians flocking to Ohio and West Virginia to purchase alcohol. Those states each passed a rule requiring stores in their border counties to deny sales to anyone with an out-of-state state identification. Eventually, Pennsylvania opened state stores up, but only for curbside service, not in-store service.
Alcohol sales are up significantly during the pandemic, so giving customers access to their favorite beverages through curbside service and delivery helps minimize the risk of spread.
Temporary or Permanent?
The biggest question for the food and beverage industry is whether these temporary changes will become permanent. Policymakers should find ways to help these small business owners, especially as restaurants and bars attempt to recover from the pandemic induced shutdown.