The beverage alcohol industry has experienced a stampede of emergency orders by state governors and legislation at the state levels nationwide to provide lifelines to bars and restaurants since the onset of the Covid-19 pandemic. This is the first time the U.S. has experienced sweeping beverage alcohol regulatory changes since Prohibition was repealed in 1933. “The desire for consumers to be served was there and the pandemic definitely brought that out,” says David Wojnar, vice president of state government relations of the Distilled Spirits Council of the United States (DISCUS). “We view it as a rising tide.”
New York led the way as the first state to declare the beverage alcohol retail tier as essential and to allow customers to purchase cocktails to-go from the on-premise during the pandemic. Many other states quickly followed suit; now, more than 30 states and Washington, D.C. are allowing cocktails to-go in sealed containers, bottles to-go, or both from bars and/or restaurants.
Iowa became the first state to make to-go cocktails permanent in June, and Michigan has approved an extension of takeaway drinks until the end of 2025. These privileges have also been extended in Colorado, New Jersey, Massachusetts, Delaware, and Kansas. Lawmakers in Texas, Florida, Ohio, Oklahoma, and Washington, D.C. are also considering making emergency policies permanent.
With bars and restaurants now re-opening, though, beverage alcohol retailers are concerned about to-go privileges becoming permanent policy. Retailers supported emergency orders allowing bars and restaurants to sell cocktails and bottles to-go at first, but that sentiment is now shifting. There are two bills in New York to extend to-go privileges sales for bars and restaurants for two years with further extension options.
“If passed, these bills will allow restaurants and bars to act as liquor stores that also sell food,” explains Michael A. Correra, executive director of the Metropolitan Package Store Association. “They will benefit from on- and off-premise privileges, which poses a significant threat to our stores.”
Similar concerns over the state of the industry are present in Massachusetts, where the governor signed legislation on July 20 allowing restaurants to sell cocktails to-go—with the purchase of food—until February 2021. “The bottom line is that we are not against takeout per se for the duration of the emergency—we helped write the takeout provisions,” says Massachusetts Package Store Association executive director and general counsel Rob Mellion. “But we are against making this permanent.”
While the beverage alcohol industry’s retail tier sales are up about 30% since mid-March, the overall industry is still holding its collective breath in the face of Covid-19. The pandemic is far from being under control, with re-opening plans that began in June stalling in some major states. California, for one, ordered all bars to cease operations in mid-July, and indoor venues were shuttered.
Bars and nightclubs in Florida and Texas were ordered to close in late June, except for some to-go business. “Year-to-date the spirits industry is probably up just a little, but it’s hard to tell,” says David Ozgo, senior vice president of economic and strategic analysis for DISCUS.
Ozgo expresses particular concern over what will happen to retailers this winter. “Thirty to 40% of sales come at the end of the year during the holiday season,” he explains, adding that a lot of those sales come from people stocking up their bars. “Are we going to have that kind of bar stocking this year, though, considering how much people are buying right now?
Ozgo adds that, if the economy is weak come Christmastime, gift shopping at liquor stores might be scarcer than usual. For now, though, both the retail and on-premise tiers will focus on getting through the rest of the summer, combatting the uncertainty that the public health crisis will surely continue to fuel.