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Major Changes to the Sale of Alcoholic Beverages in New York State Amid the Covid-19 Pandemic: What Business Owners Need to Know
In times of crisis, there are no easy solutions. However, the New York State Liquor Authority (“NYSLA”) has issued a new set of emergency guidelines for restaurants and bars effected by the Covid-19 pandemic to ease the burden on their businesses by:
- Permitting restaurants, bars and other food service businesses to continue to operate on a mandatory take-out and/or delivery basis; and
- Permitting on-premises licensees the ability to sell alcoholic beverages for off-premises consumption.
Governor Cuomo issued an Executive Order which requires nonessential businesses throughout New York to close their doors to the public until further notice. Nonessential businesses must have 100% of their workforce working remotely, unless otherwise provided by applicable law. Governor Cuomo has declared that all restaurants and food establishments are essential businesses and are exempt from this prohibition. Nevertheless, bars and restaurants that historically serve customers on-premises can no longer do so. Pursuant to the Order, all restaurants, bars, and related businesses may only sell food and beverages, including alcohol, for consumption off-premises. The Order affords an intended benefit to “on-premises” liquor license holders by allowing the “off-premises” sales of alcoholic beverages.
Under the new guidelines, serving alcoholic beverages to the public is still a viable business opportunity for licensed retails. However, the way bars and restaurants go about doing this has changed. Perhaps the most important change for business owners is that the NYSLA has temporarily permitted businesses to sell alcoholic beverage typically sold only on-premises in a to-go manner, for off-premises consumption. A restaurant or bar with a full on-premises license can now sell beverages, such as beer, wine and liquor, including mixed drinks, to customers for off-premises consumption. It is important to note that an on-premises licensee may only sell products for off-premises consumption that it is permitted to sell for on-premises consumption.
Aside from being sold directly to customers for take-out and/or curbside-pickup, restaurants, bars and manufactures are now also permitted to deliver alcoholic beverages directly to consumers for off-premises consumption. Pursuant to the new guidelines, deliveries must be done by either a verified third-party delivery service, or in a vehicle owned and operated, or hired by the licensee. Importantly, the sale of the alcoholic beverage must be accompanied by the sale of food.
These new guidelines, along with the Order, are beneficial in that they allow restaurateurs to continue to operate throughout this difficult time. It also allows the public the ability to “go out” for dinner and drinks, while still “flattening the curve” and supporting locally run businesses which are in need of assistance. While different than the traditional in-person sales methods, the new guidelines give business owners an opportunity to maintain their businesses and even attract new customers who may not have previously visited their restaurants.
It is important for business owners to be aware that the NYSLA will continue to enforce liquor laws through the temporary COVID-19 regulatory period. Licensees found to be in violation of the law are subject to fines and risk having their licenses suspended or revoked. Business owners should take care to notify their customers that they, too, remain subject to the laws concerning the purchase and consumption of alcoholic beverages, including open container laws.
David W. Pernick is an Associate Attorney at Brown & Altman, LLP. He contributed to the writing of this article.