The Legalization Of “Alcohol To-Go” In Florida’s Highly Regulated Beverage Alcohol Industry – Corporate/Commercial Law

More than a year since the COVID-19 pandemic first began, we are
all familiar with the ways in which it has impacted industry in the
United States. While it decimated brick and mortar businesses and
caused thousands of bars and restaurants to close, it also
propelled retail trends in e-commerce to light speed. “Direct
to consumer” trends are impacting every industry, with
consumer convenience as the primary objective.

The alcohol industry is among those irreversibly altered by the
COVID-19 pandemic. Aside from the obvious pain caused to the bar
and restaurant community, the same trends towards consumer
convenience have gained substantial momentum. While some of those
trends occurred organically as consumer demand shifted, the
COVID-19 pandemic also spurred legislative efforts to loosen
certain regulatory restrictions in Florida’s Beverage Law.

As a highly regulated industry, state-by-state beverage alcohol
laws trace their origins to the repeal of “Prohibition”
by the Twenty-First Amendment, and adoption of the “three-tier
system” in the vast majority of states. With certain
exceptions, the three-tier system segments the industry into three
distinct and separate layers—producers, wholesalers, and
retailers—creating a regulated environment whereby the
interests of the different tiers are generally required to be
separate, with regulations and restrictions aimed at each level. As
one example, within the retail tier the Florida Division of Alcohol
Beverages and Tobacco maintains dozens of varying licensure
requirements depending on the types of alcohol a vendor seeks to
sell to consumers, and distinguishing between sales for consumer
consumption on-premise (think bars and restaurants) or off-premise
(think liquor stores).

The 2021 Legislative session saw several notable bills aimed at
loosening alcohol regulation in Florida, particularly at the retail
and consumer level. One noteworthy bill that the Legislature passed
was Senate Bill 46, aimed at easing restrictions on “craft
distilleries” by increasing production limits to qualify as a
“craft distillery” from 75,000 gallons per calendar year
to 250,000 gallons per calendar year. The bill further allows a
craft distillery to sell up to 75,000 gallons per calendar year
directly to consumers at the

distillery, and creates opportunities for qualifying craft
distilleries to operate in “destination entertainment
venues” where they can be licensed to operate similar to a
bar. Another bill, HB 6073, attempted to repeal Florida law
prohibiting the sale of wine in containers larger than a
gallon.

SB 46 and HB 6073 represent trends that have been developing for
a number of years. The Florida Legislature previously carved out
exceptions for craft distilleries to make direct to consumer sales,
and this is not the first year that the industry has attempted to
repeal the maximum container size for wine sales in Florida.

On the other hand, the Florida Legislature also passed SB 148
during this session, which

permanently permits restaurants and food establishments to sell
“alcohol to-go” and was a direct result and response to
the COVID-19 pandemic. In Florida, alcohol to-go was first
legalized by Governor DeSantis as a temporary emergency measure
included within his executive orders establishing Florida’s
COVID-19 lockdowns. However, alcohol to-go was met with
overwhelming public support, and the consensus among the industry
is that it was key to survival for many businesses in the
hospitality industry during the heights of the COVID-19
pandemic.

Development of Alcohol To-Go by Executive Order

Governor DeSantis first declared a state of emergency as a
result of the COVID-19 pandemic on March 1, 2020. Like most states across the
country, subsequent executive orders took further steps to avoid
social gatherings. DeSantis’ March 17, 2020, executive order
required all restaurants immediately limit occupancy to 50%, and
ordered restaurants to follow other CDC guidelines about spacing
between groups of patrons, limiting party sizes, and screening of
employees for COVID-19 symptoms or exposures. That order further
required all businesses that derive more than 50% of gross revenue
from the sale of alcoholic beverages to suspend the sale of
alcoholic beverages.

Three days later, on March 20, 2020, DeSantis issued another
executive order that, among other things, suspended restaurants and
food establishments from serving food for on-premise consumption,
as well as the service of on-premise alcohol. However, DeSantis’ March 20,
2020 order did permit restaurants and food establishments to
operate kitchens for the purpose of providing delivery or take-out
services. Importantly, the March 20, 2020 order also permitted
vendors licensed to sell alcoholic beverages on-premise, to sell
alcohol to-go in “sealed containers” for consumption
off-premise. The order contained particular guidance for
restaurants licensed to sell alcohol under section 561.20(2)(a)4.,
permitting them to sell alcohol for consumption off-premise so long
as it is in a sealed container and is accompanied by the sale of
food within the same order, among other requirements.

Initially, there was substantial confusion among Florida bars
and restaurants about what the executive order meant by
“sealed container.” Some vendors were advised that
“sealed containers” referred only to containers that were
sealed by the manufacturer, thus prohibiting a bar or restaurant
from mixing its own cocktails, pouring them into a container and
selling them for consumption offpremise. That confusion was subsequently
resolved, and it was clarified that the Division would not enforce
any requirement that bars and restaurants were limited to beverages
sealed by the manufacturer, and could in fact mix their own
beverages and seal them for sale to-go.

Florida was not alone in instituting emergency measures to allow
for alcohol to-go in response to the COVID-19 pandemic. More than
30 states and the District of Columbia allowed for some version of
alcohol to-go in response to the pandemic, with eligibility
requirements and restrictions varying state-bystate.

Legislation Making Alcohol To-Go Permanent in Florida

Alcohol to-go has been a lifeline to restaurants during the
COVID-19 pandemic, and was perceived as so successful that in the
fall of 2020 discussions began about legislation to allow
restaurants to sell alcohol to-go on a permanent basis. In
September 2020, DeSantis voiced support for legislation making
alcohol to-go permanent and suggested that such action would likely
be well-received by the Legislature as a result of the positive
experience under the executive order.

Legislation designed to make the measure permanent was filed by
several state Senators and Representatives, but shortly after the
legislative session began it became clear that Senator Jennifer
Bradley’s SB 148 was selected as the frontrunner in committee.
After several amendments,
SB 148 garnered a near-unanimous vote, being unanimously approved
by the Senate and passing the Florida House by 111-1.

Under SB 148, alcohol to-go only applies to licensed restaurants
or food service

establishments. Key features of the legislation include the
following:

1. The sale or delivery of alcohol must be accompanied by the sale
   of food in the same order;




2.  The alcoholic beverage must be in a “sealed
   container,” sealed by the licensee’s employees with an
   unbroken seal preventing consumption before leaving the
   premises;




3. The alcoholic beverage must be placed in a bag or other
   container secured so that it is visible if the beverage has been
   opened or tampered with;




4. A dated receipt for the alcoholic beverage and food must be
   provided and attached to the bag or container;




5. Sales and deliveries of the alcoholic beverages may not occur
   after food service ends, or after midnight, whichever is
   earlier;




6. If transported in a motor vehicle, the alcoholic beverage must
   be placed in a locked compartment, a locked trunk, or the area
   behind the last upright seats;




7. If delivered to the consumer, Florida law must be complied with
   and the delivery must be made by someone over the age of 21.

In the event a restaurant or food establishment operates under a
quota license, rather than under section 561.20(2)(a)4., the
restaurant or food establishment only qualifies for service of
alcohol for consumption off-premise if the charge for the sale of
food and nonalcoholic beverages is at least 40% of the total charge
for the order, excluding the charge for any manufacturer-sealed
containers of alcoholic beverages included in the order.

Finally, SB 148 also amends current beverage law such that
restaurants licensed to sell wine on premise may permit a consumer
to remove one unsealed bottle of wine for consumption off-premise
if the patron purchased a meal and consumed a portion of the bottle
of wine on the premises. Similar to cocktails to-go, the
restaurant’s employees must seal the bottle, it must be
accompanied by a dated receipt, and if transported in a motor
vehicle it must be stored in a locked glove compartment, locked
trunk, or behind the last row of upright seats.

Conclusion

Trends toward consumer convenience will no doubt continue to
dominate the retail sector in the United States, including in the
alcohol industry. Alcohol to-go provided critical support to
restaurants during the COVID-19 pandemic, but by passing SB 148 the
Legislature also signaled an increased interest in loosening
restrictions in Florida’s Beverage Law that may continue into
the future.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.