Significant changes are on the way for Liquor Laws in Utah.  H.B. 442 passed the legislature on March 8, 2017 and Governor Herbert signed it into law March 29, 2017.  The new law makes numerous changes to how restaurants, dining clubs and off-premise beer retailers will operate.  These changes will create opportunities for some, and present significant challenges for others.  Following is a summary of some of the more meaningful changes for businesses.  Note that the law affects many licensees though, so we encourage anyone who sells alcohol in Utah to discuss the changes with their attorney.

Restaurants and Bars

The law replaces the current Restaurant – Dining Club – Social Club structure with two categories: Restaurants and Bars, making Dining Clubs obsolete.  Bars and restaurants will have to start displaying an 8.5 x 11 sign declaring that they are either a bar or a restaurant, and not the other.

On the good news front, restaurants will be able to choose how they want to operate their own bars from the following three options:

• Keep the Zion curtain – continue under the current rules that require all pouring and mixing of drinks to occur behind an opaque barrier.
• No minor zone – create a 10 foot area around the bar where minors are not allowed.
• Barrier – install a barrier that is at least 42” high and 5 feet from the bar where minors are not allowed.

Existing restaurants may tear down their Zion curtains only after changes are approved by the Department of Alcoholic Beverage Control (DABC).  According to the DABC, applications to make changes to Zion curtains should be available soon on their website.  DABC has guaranteed it will review applications submitted by May 9, 2017 in a timely manner, presumably in time for restaurants to adopt changes come July 1, 2017 when these portions of the law go into effect.  Requests made after May 9 will be handled as time permits, and delays should be expected given the increased workload the new law puts on DABC.

The new law also extends hours of service and reduces the wine exception (where it doesn’t count against the 70/30 ratio) from $250 to $175 per bottle and over $30 per glass).  Other existing operational rules for restaurants still apply, e.g., patrons still cannot stand or walk with a drink and servers must confirm a patron’s intent-to-dine.  Patrons waiting for a table may be served one drink if they intend-to-dine and they are seated.

Dining Clubs

Dining clubs will soon be Dodo birds and DABC announced at the March meeting that it will not issue any more dining club licenses.  Those who hold a dining club license have until July 1, 2018 to elect to operate as a bar (fka social clubs) or a restaurant.  If a restaurant election is made, then the business must comply with the restaurant operation rules by 2022, although some rules will have to be implemented prior to then.  If a bar election is made, the major change will be that minors will no longer be allowed.  Note, however, that zoning rules and leases may have constraints regarding operating as a bar.  If you have a dining club license, we suggest you start considering the options early.

Convenience & Grocery Stores

If you sell beer for off-premise consumption, then you may display the beer only in 2 locations in a store.  The 2 beer displays must not be adjacent to non-alcoholic beverage displays unless a physical divider separates the products or the beer is in a separate cooler with a door.  These rules are effective August 1, 2017 for businesses with 2 or more off-premise locations, and May 9, 2017 for retailers with only 1 location.

Businesses that sell beer for off premise consumption will also have to obtain a license from the state beginning July 1, 2018.  In addition, management and staff will have to complete training to be provided by the DABC and will be subject to disciplinary actions.