Movie theaters with restaurant-style food service will reach a broader audience with the recent signing into law of a bill passed by the Washington State Legislature allowing service of food and alcoholic beverages to their patrons. The law as currently written allows some service of alcohol in movie theaters, but requires exclusion of minors from the premises. The new law will create a new, more family friendly, beer, wine and spirits license for theaters. The license will allow minors if certain conditions are met and approved by the Washington State Liquor Control Board, such as submission of an alcohol control plan outlining the methods to prevent minors from obtaining alcohol, similar to plans that are required for clubs and show venues that host all‑ages concerts. Theaters will also be required to meet food and service requirements, similar to restaurants, to qualify for the license. (Senate Bill 5607 as Passed by Legislature)
When the new license goes into effect this summer, not only will it provide an opportunity for luxury theaters to expand their market in the competitive entertainment industry—as more families and groups combine dinner with watching first release films—but it has the potential to create new outlets for Washington’s craft breweries, wineries and distilleries that are likely to promote their products and services to venues that offer up-scale in-theater dining options.
Stoel Rives, LLP had the pleasure of working with our client iPic Entertainment to craft and support passage of this new class of Washington State liquor license.
Sales Limit Increase Could Give Washington State Craft Distilleries More Momentum in the Retail Market
This week, a bill passed the Washington legislature that will allow a craft distillery to sell more of its product to customers visiting its distillery.
House Bill 1149 has been sent to Governor Inslee to sign in to law, amending RCW 66.24.145 to allow a craft distillery to sell a maximum of three liters of spirits of its own production per person per day for off-premise consumption. The prior limit was two liters per person per day. Importantly, craft distilleries that opt to sell spirits from their premises must be aware that they are required to comply with the applicable laws that relate to retail liquor licensees, such as responsible alcohol sales, as well as the state and federal requirements that apply to distilleries.
Craft distilleries are distinguished from larger distilleries most notably by the amount of spirits produced—a maximum of 60,000 proof gallons per year (WAC 314-28-050)—and the requirement that a minimum of 50% of Washington-grown raw materials be used for production (WAC 314-28-060). The craft distillery industry has experienced steadfast growth since the Washington State Liquor Control Board implemented the license less than three years ago. The passage of 1149 is a clear indication of the need for refinement of the laws that regulate this growing industry. Craft distilleries have the potential to gain a stronger presence in the liquor market as more people look to them directly for unique, local spirits.
WSLCB adopted a new rule that will allow spirits retail licensees to deliver spirits to customers that place orders in person, through the mail or over the phone, fax or internet. This rule mirrors the beer and wine delivery privileges currently held by grocery store and beer/wine speciality shop licensees. The rule will go into effect December 8, 2012, and the full text of the rule can be found here.
On the list of California laws affecting the wine industry in the New Year is AB 605 – the Instructional Tasting Events License. Introduced in 2009 and signed into law September 23, 2010, AB 605 adds to the Business and Professions Code sections 23396.6 and 25503.56. The additions allow the ABC to issue a single “instructional tasting license” to any holder of an off-sale retail license, thus doing away with the need for retailers/suppliers to get a permit for every “instructional tasting” event. Retailers granted an instructional tasting license would be allowed to hold an “event for consumers on the subject of wine, beer, or distilled spirits, including, but not limited to, the history, nature, values, and characteristics of wine, beer, or distilled spirits, and the methods of presenting and serving wine, beer, or distilled spirits.” These events may include the consumption of alcohol.
The retailers may not conduct the events themselves. However, they may invite “authorized licensees” (i.e., holders of manufacturing or supply licenses) to conduct them. The retailer may hold the event if, among other things, the authorized license holder is unable to attend and the event has been advertised and scheduled. In addition, the retailer can’t supply the alcohol for the event; it must be supplied by the authorized licensees or purchased from the retailer by the authorized licensees at the going rate.
The events must be located at a cordoned-off section of the retailer’s premises. The law also sets stringent restrictions on servers and attendees (no one under 21), types of alcohol (wine, spirits, or beer but no combinations), charge (can’t have one), serving amount (one ounce for wine), and event times (between 10 am and 9 pm).
The new licenses are not permitted to be issued to any off-sale licensee at a location where gasoline is sold, unless the licensee operates a “fully-enclosed” off-sale retail space of at least 10,000 square feet (i.e., Costco, Walmart, Safeway, etc.). Nor can they be issued to licensees at locations “with a total of less than 5,000 square feet of interior retail space” unless yearly gross sales of alcohol at that location are at least 75% of total gross sales (i.e., liquor stores).
The fee for the new license is $300. Violations of the age limit are a misdemeanor and carry a penalty of $200 (for both the retailer and the minor). A violation of any section carries a penalty of suspension of the instructional license for the retailer and suspension of the privilege of conducting instructional tasting events for the authorized licensee for a period of six months to a year.
Dueling Liquor Privatization Initiatives in Washington State: What do the Initiatives Say and Who are the Players?
Word is out that enough signatures have likely been gathered to ensure that an initiative backed by Costco will make it on the on the ballot in Washington State in November. The Costco backed initiative would transition sales of spirits in Washington State from state operated liquor stores to private retail stores and allow manufacturer to retailer direct sales and volume discounts.
A second initiative backed by distributors would also move spirits sales from state operated stores to private retail stores, but would preserve the role of distributors in a traditional three tier system, has until July 2nd, to amass enough signatures to make it on the ballot.
A third group is raising money to oppose any attempts to change the current state administered system. Combined contributions of over $1,200,000 have been reported to the Washington State Public Disclosure Commission in support of and opposition to privatization.
We have assembled the following information so that you can read the actual initiatives, explore the proponents and opponents, and form your own opinion.
1. Initiative No. 1100 was filed by Modernize Washington, is financially backed by big box retailer Costco, and has statements of support from other groups that retail liquor such as the Northwest Grocery Association and the Washington Restaurant Association.
- Where to Follow updates: Modernize Washington on Facebook
- Reported Contributions: > $700,000
- Where to Follow updates: Yes on 1105 on Facebook
- Reported Contributions: $400,000
3. Keep our Kids Safe is leading efforts to preserve the existing state operated system. Washington Association for Prevention of Substance Abuse filed fund raising reports for Keep our Kids Safe with the Public Disclosure Commission. The reports identify the union that the state liquor store employees belong to, United Food and Commercial Workers as the source of the funds. UFCW 21, with the endorsement of other organizations, has issued a fact sheet outlining rationales for preserving the current system of state run liquor stores.
- Reported Contributions: $38,000
We will report back in a few weeks to let you know if one or both privatization initiatives make on to the ballot and the status of efforts to promote preservation of the existing state operated system.