Mixed views about bills to increase alcohol sales

Published January 21, 2016 by Matt Chaney

Richmond restaurant owners have mixed perspectives on legislation that would allow their establishments to sell more alcoholic beverages.

Two Republican lawmakers from Virginia Beach – Sen. Bill DeSteph and Del. Scott Taylor – have proposed changing the 20-year-old requirement that restaurants and caterers with liquor licenses limit their alcohol sales to 55 percent of their total revenue. This means that under the current law, a little less than half of all sales in restaurants must come from food. Wine and beer sales are not considered in this ratio.

The bills proposed by DeSteph and Taylor would raise the maximum percentage of revenue from liquor sales to 75 percent of total sales per restaurant. Many restaurateurs believe they would benefit from such an increase.

“There’s a lot of things out there that people are doing wrong, just so they can stay ahead of that law, so they can maintain their bills as a restaurant or bar or nightclub,” says Johnny Giavos, owner of Richmond mainstays Stella’s and Kuba Kuba as well as the recently opened Continental Westhampton. “Just let people open a bar and charge them more for the liquor license. Just let them be bars … The state makes more money, nobody has to fudge their numbers or steal money to make their numbers work, and everybody benefits from it,” Giavos says.

Terrence O’Neill, owner of Terrence O’Neill in downtown Richmond, agreed.

“I don’t understand why that’s a big deal,” he says. “If you go to other states, they seem to manage fine just having bars … I think it’s time to lower [the required percentage of food sales] again. I think that’s the right move.”
Other interested parties – like the Downtown Business Group, a confederation of hotels, restaurants, retailers and apartments in Richmond – disagree. They feel that such a rule change would cut into profits at other restaurants by opening up a market for businesses to promote cheap alcohol as their main source of revenue.

“They’re trying to fundamentally change the way the entire state of Virginia works from a hospitality standpoint,” says Michael Byrne, director of operations at the Tobacco Company Restaurant and Properties and a leader in the business group. “They’re putting alcohol center stage, because you make more money off of liquor than you do anything else. If all you need to sell is liquor, why would you worry about selling food?”
When asked about the creation of a specific license for bars, as Giavos suggested, Byrne says, “The nightclub-only license is a dangerous license. Look at the places that operate as bars, and you’ll find the highest amount of crime, the highest number of visits from the police department … So it definitely is a public safety issue.”

Other business owners are still on the fence.

“I could go either way. I own a restaurant, not a bar. I have a bar in the restaurant,” says Ron Joseph, owner of Strawberry Street Cafe in Richmond’s Fan neighborhood.

He says the legislation “won’t hurt me. It may open up more opportunities for somebody that may want to open up a [music] venue. But I don’t think it will do any more damage than the breweries do to restaurants.”

This is not the first time such legislation has been introduced in the General Assembly. Just last year, when DeSteph was a member of the House, he sponsored an almost identical bill. It failed, largely as a result of lobbying by the Downtown Business Group.

In an interview at the General Assembly this week, DeSteph says he believes the measure has a better chance of passing during the current legislative session.

“Before, there were about eight restaurants opposed to the bill, with three different owners,” he says. “This year, on the other side, we have the Fan Restaurant Group and about 600 different restaurants in support of the bill.”

DeSteph is carrying two proposals – SB 488 and SB 489 – to change the food-beverage ratio for Virginia restaurants. The bills have been assigned to the Committee on Rehabilitation and Social Services.

Taylor’s bill – HB 219 – has been assigned to Subcommittee 3 of the House Committee on General Laws.

DeSteph says he expects the committees to take up the legislation in the next week or two.