Virginia Alcoholic Beverage Control Authority and General Assembly Make Major Policy Changes

McGuireWoods LLP
ABC Policy Changes

Beer/Wine/Mixed Beverage Takeout and Delivery. For the first time in ABC history, ABC adjusted its licensing regulations on March 20 to allow businesses with on-premises licenses (restaurants, eat-in establishments) to sell wine or beer in sealed containers for curbside pickup in a designated area and to deliver beer and wine to customers’ homes without holding a delivery permit. Gov. Ralph Northam followed up on ABC’s March 20 policy change by announcing on April 8 that mixed beverage licensees could sell mixed beverages for takeout or delivery. These two changes provide a much-needed revenue source to restaurants with beer and wine and/or mixed beverage licenses during the pandemic.

Distillery/Winery/Brewery Delivery and Pickup. ABC also announced on March 20 that breweries/wineries/distilleries with off-premises licenses could sell their products to customers for pickup or may deliver their products without a delivery permit to the customer’s home if the customer lives in Virginia. This policy change, which is unprecedented in Virginia ABC history, is intended to support Virginia’s burgeoning wine, beer and distillery industries when their facilities would otherwise be closed by Gov. Northam’s emergency order.

Other Changes. ABC has adopted a number of additional policy changes addressing a wide array of issues:

  1. Wholesalers accepting the return of product from retailers
  2. Waiving the requirement that wholesalers must obtain a retailer’s signature coincident with product delivery, and the same for delivery permittees to consumers
  3. Authorizing distilleries to manufacture hand sanitizer
  4. Expanding the types of containers that may be used to sell wine and beer for off-premises consumption
  5. Extending the expiration date for licenses and permits that otherwise would expire in March, April and June 2020, for 90 days from date of expiration, without penalties and fees

Timeline. ABC’s policy changes remain effective so long as Gov. Northam’s stay-at-home order (Executive Order 51) remains in effect or by extension of ABC. As of April 23, 2020, the executive order is set to expire June 10, 2020.

New ABC Laws

Commercial Lifestyle Center License. Gov. Northam signed legislation (SB 181) on April 6 allowing mixed-use commercial developments located on a minimum site area of 10 acres to hold a commercial lifestyle center license. The commercial lifestyle center license allows licensees to sell alcohol to customers who can then consume alcohol anywhere within the mixed-use commercial development. SB 181 builds on legislation passed during the 2019 legislative session by reducing the minimum required site area from 25 acres to 10 acres. It’s likely that SB 181 will make more mixed-use commercial developments eligible for a commercial lifestyle center license and will allow developers to provide a unique amenity to their tenants and customers. SB 181 will go into effect July 1, 2020.

ABC License and Fee Reform. Other legislation (SB 389) signed into law on April 10 reorganizes all alcoholic beverage control licenses within the industry’s three-tier structure. In summary, this legislation consolidates many licenses with common privileges, aligns license fee amounts with enforcement demands and standardizes quantity limits on alcohol samples. The intent behind SB 389 is to streamline and harmonize ABC’s disparate licenses and fees into a more user-friendly system for licensees. Unlike most legislation passed each year, SB 389 has a delayed effective date of July 1, 2021.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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