By: Gillian Garrett & John Hinman, Hinman & Carmichael LLP
On Friday, May 15th, the California Department of Alcoholic Beverage Control (the “ABC”) issued another round of temporary relief. For those of you counting, this is the fourth round of temporary relief for licensees. This latest round includes a significant opportunity for licensees to temporarily expand their licensed footprints so they can serve more people and serve them outside where it will be safer while the COVID-19 pandemic continues.
This round of relief also expands sale privileges for type 50, 51, and 52 members-only clubs.
Here are the details:
1. Temporarily Expand Your Licensed Footprint to Adjacent Areas
In counties where stay-at-home orders have been lifted, the Department will grant a COVID-19 “Temporary Catering Authorization” to on-sale licensees to serve alcohol and food on adjacent property outside their licensed footprint that is under the licensee’s control.
Adjacent areas eligible for the Temporary COVID-19 Catering Authorization include, but are not limited to:
· Indoor areas accessible from the licensed premise not currently licensed (such as storage areas, office space and basements);
· Outdoor areas accessible from the licensed premise not currently licensed (such as side yards, back yards and adjacent alleys);
· Indoor and Outdoor areas under the control of the licensee and one or more other businesses (such as common areas in shopping centers or malls);
· Parking lots;
· Sidewalks and other public thoroughfares closed to public access during the period of service (blocked off with temporary barriers); and
· Other areas with “close proximity” (i.e., near) to the licensed premises immediately accessible to the licensee, and that are secured by and under the control of the licensee, at the discretion of the ABC. This would describe, for example, common area patios outside of normal restaurant areas.
Licensees must adhere to state and local health and safety directives. In addition, alcohol service is limited to times when “bona fide meals” are being served in the temporarily licensed area. Bona fide meals ae defined in the ABC Act (Section 23038) as:
"Meals" means the usual assortment of foods commonly ordered at various hours of the day; the service of such food and victuals only as sandwiches or salads shall not be deemed a compliance with this requirement.
The ABC will permit the “bona fide meals” to be prepared and served by the licensee or any other person or business under an agreement with the licensee. This means that catering services may be engaged to serve the meals required by this section. Licensees must continue to meet all specific conditions on their licenses, which remain enforceable.
Expanded Footprints Available This Week
COVID-19 Temporary Catering Authorization applications will be available this week. As soon as a licensee applies and pays the fee, the licensee can exercise retail privileges in the temporarily licensed area.
You can prepare your application now. It must include:
· A diagram of the currently licensed premises and the proposed temporary area, clearly delineating the respective spaces;
· An explanation of the licensee’s ability to control the proposed temporary area (e.g., the licensee owns or rents the area, the local governing authority has authorized the licensee to use the area, or the licensee has another type of permission to use it);
· What temporary or fixed barriers will enable the licensee to control the temporary area;
· Whether the temporary area will be shared with any other person, whether or not a licensee, and whether any other licensee will be permitting the consumption of alcohol in the area;
· A statement that a copy of the application has been forwarded to the appropriate local law enforcement agency;
· A statement by the licensee that the temporary authorization follows state and local directives regarding operating an on-site food service; and
· A non-refundable application fee of $100.
Temporary Catering Authorizations will be valid until cancelled by the termination of the program, or by the ABC or other law enforcement for a violation of ABC law, disturbance of neighbors’ quiet enjoyment, or other reasons in the discretion of the Department and/or law enforcement.
2. Extension of Regulatory Relief for Type 50, 51 and 52 Club Licenses
Private Club 50, 51 and 52 licensees may temporarily sell and deliver alcohol to members under the same rules temporarily extended to other licensees, including that the alcohol be delivered together with a bona fide meal. This will be especially beneficial to golf courses, sailing clubs, clubs that feature speakers and civic engagement activities (such as Masons, Rotary, Lions and Veterans Clubs) and similar private club licensees.
The ABC also reiterated its temporary COVID-related suspension of enforcement of some legal prohibitions in the 13 previously announced categories of ABC rules and regulations:
1. Returns of Alcoholic Beverages
2. Retail-To-Retail Transactions
3. Extension of Credit
4. On-Sale Retailers Exercising Off-Sale Privileges
5. Sales of Alcoholic Beverages To-Go with Food
6. Drive-Thru Windows for Off-Sale Transactions
7. Hours of Operation for Retail Sales
8. Deliveries to Consumers
9. Free Delivery
10. Monday-Saturday Delivery Hours Extended to Midnight (unless your license specifies otherwise)
11. Certain Charitable Promotions & Sales
12. Distilled Spirits Manufacturers Providing High-Proof Spirits for Disinfection Purposes
13. Virtual Wine Tastings
The full text of the ABC’s May 15, 2020 blog is available here.
You can read our blogs about the ABC’s three previous rounds of rule changes here, here and here.
Remember, these rule changes are only temporary! The ABC can and will end this temporary relief on 10-days notice at the time of its choosing.
We urge licensees to keep close track of their experience using all the regulatory relief tools so that when the COVID 19 crisis passes, that experience can be used to justify turning the temporary relief into appropriate permanent regulatory relief.