Wallerlaw.com
Disclaimer
New Tennessee Law Great for Wineries, Distilleries and Liquor Stores - But Offensive to Restaurants, Bars and Hotels
Back

New Tennessee Law Great for Wineries, Distilleries and Liquor Stores - But Offensive to Restaurants, Bars and Hotels

05.08.14
We have blogged about HB 2027 and a last minute amendment that requires Tennessee restaurants, bars, hotels and clubs to pay for liquor upon delivery, ending the long-standing 10 day credit rule.  Hospitality leaders have asked the Governor to veto the bill.

The law is not all bad.  HB 2027 was proposed to eliminate burdensome restrictions on wineries, distilleries and retail liquor stores.  The bill:

1. Allows wineries and farm wineries to charge for samples.  Currently, samples must be free.

2 .Gives wineries the right to open up to 2 satellite wineries, to allow patrons to purchase samples, bottles of wine and merchandise.

3. Authorizes a winery or farm winery owner to hold a restaurant liquor license and also sell the bottles of wine for off-premises consumption from the restaurant.

4. Expands rights of wineries to self wholesale, including a new winery wholesale license.

5. Allows distilleries to charge for samples.  Currently, samples must be free.

6. Allows retail liquor stores to charge for tastings.  Currently, tastings must be free.

HB 2027 offers great new profit centers for Tennessee wineries, distilleries and retail stores.  It is good for business and modernizes some antiquated limitations.

Pink Floyd comes to mind:

Money, it's a gas
Grab that cash with both hands and make a stash
New car, caviar, four star daydream
Think I'll buy me a football team
 

It is a shame that this positive law was burdened at the last minute with the controversial COD requirement.  For this bill, we hope that the dirty politics does not torpedo an otherwise positive development for Tennessee liquor laws.

The new law has another new concept that greatly troubles us.  For violations of the small winery wholesale law, the ABC can collect fees for agent and staff attorney time spent investigating and prosecuting  alleged violations of the law.  The ABC already has the right to collect fees for an administrative law judge, but the ability to collect fees for ABC agent and attorney time is a big shift of power away from business and in favor of the ABC.

Anyone that has tried to contest an ABC citation knows that the ABC often threatens to ask for revocation or suspension of your license if you press for a hearing.  Although completely unfair, the practice is legal.

If the ABC can collect fees for agent and attorney time, the ABC will have even more leverage against a license holder trying to negotiate settlement of a citation.  We think the balance of power is already tilted in favor of the ABC.  Allowing the ABC to use the threat of collecting significant amounts of money for agent and attorney time as added pressure to settle a citation is harsh.

At present, the fee shifting law only applies to small winery wholesalers.  We see it as dangerous precedent that could be applied to all Tennessee liquor license holders.

Subscribe Now!

Recommended Content

n/a
Top of Page