In the winter of 1968, a wave of events smashed American sensibilities.
In November, officers on “Star Trek” fell into an interracial kiss. John Lennon and Yoko Ono bared their backsides for the cover of Rolling Stone magazine.
And the next month, in a bar in Norfolk, a bouffant-haired waitress served a patron a vodka, neat.
It was decades after Prohibition ended. Finally, you could get a legal drink in a Virginia restaurant or bar.
But limits abounded: Bars and restaurants had to be in the same room, meaning no cocktail lounges. Ordering a drink while standing or walking with it from one table to another was strictly taboo. And by the end of each month, the owner had to have sold more food than alcohol.
Go ahead. Stand up and have a drink now. Virginia ABC says it’s A-OK.
But bar and restaurant owners still abide by a food-to-booze ratio that many complain is arbitrary and archaic.
During the nearly half-century since the state permitted mixed drinks, the law has taken some herky-jerky turns, nearly resembling a customer who’s had a few too many.
In 1978, for instance, patrons were allowed to stand and order. Twelve years later, bars and restaurants caught a big break: The state, heeding requests from owners on the Oceanfront, excluded beer and wine from the food/alcohol calculations.
So the ratio applies only to the sale of hard liquor. That means restaurants that don’t carry spirits can sell as much beer and wine as they want and still conform to the law.
But the hard numbers of the ratio have dropped only a dram.
In 1980, the state reduced the minimum required sales coming from food and nonalcoholic beverages to 45 percent of the total from 51 percent. That is where it has stayed.
A bill sponsored by Del. Bill DeSteph, R-Virginia Beach, to reduce the minimum only slightly, to 43 percent, was passed by the Virginia House this year.
The proposal died in the Senate. It faced opposition from a coalition of Richmond restaurants and summoned an unflagging fear, first voiced by President Franklin Roosevelt when Prohibition ended 82 years ago, of “the return of the saloon.”
“I can’t find a logical reason why that should be the way it is today,” Del. Scott Taylor, another Republican from the Beach who supported DeSteph’s bill, said of the current ratio. “It’s antiquated, it’s anti-local, it’s anti-competitive, and I want to change it.”
A companion law even governs the type and amount of food that must be sold: A bar or restaurant must register $4,000 monthly in food sales, at least half of which must be “in the form of meals with substantial entrees.”
Bars and restaurants that don’t hit the 45 percent mark or the food minimums face potentially crushing penalties – thousands of dollars in fines and suspension or revocation of lucrative liquor licenses.
Even one week without liquor can kill a business, said Tom Lisk, legal counsel for the Virginia Restaurant Association:
“Many of the dining public will be reluctant to go to a restaurant if they can’t get a cocktail; they will go somewhere else.”
Plus, with a reduction in tips, employees may look elsewhere for jobs.
Since July 2013, 14 bars and restaurants in South Hampton Roads have been penalized for failing to meet the ratio and related laws, according to records from the Virginia Department of Alcoholic Beverage Control. Nine have since closed. Restaurant owners suspect many more fail to meet the ratio but aren’t caught.
“I know from other people there are ways to fudge the figures,” said Shirley Stephenson, owner of Jokers Bar and Grille in Chesapeake, who paid a $1,000 fine for missing the ratio. “My figures are true. I do the best I can with what I’ve got.”
Here is one way Lisk said restaurants skirt the law: They charge customers $20 for a buffet, including unlimited food and drinks. Even if the customer doesn’t eat a bite, the restaurant lists the money under “food sales” in its report to the ABC.
Or how about a Red Bull and vodka? said Mike Standing, owner of Waterman’s Surfside Grille, a busy Oceanfront restaurant that has no problem meeting its monthly ratios. An owner struggling to comply might subdivide the drink, counting the Red Bull as food and the vodka as alcohol, a no-no, according to ABC spokeswoman Valerie Hubbard.
Today, disparities in pricing lead to lopsided ledgers. Identical highballs cost $5 in some restaurants and $15 in others. The higher the price of the drink, the more food the restaurant must sell.
“The fallacy with the ratio is that it measures alcohol sales by gross dollar, not in terms of volume,” Lisk said. “It doesn’t make sense to us as an industry that an establishment would have to sell three times as much food simply because they have higher-priced cocktails.”
Standing agrees.
“I believe people should have to serve some food. But ratios? Who cares?”
At 2:30 on a recent Thursday, a handful of men sat around the dimly lit bar at Jokers Bar and Grille. It’s in a concrete building with a dirt parking lot a mile and a half from the Gilmerton Bridge in Deep Creek.
Inside, the two pool tables, busy during league matches, sat empty. A hockey game played on TV.
The bar was cited for missing the 45 percent mark in 2011 and fined $1,000 in that case in 2013. Stephenson said she bought Jokers in the middle of 2011 and pushed to sell more food but reached only 33 percent.
It’s not easy at a neighborhood bar.
“We’ve got to convince them to eat; they’re going home to eat,” she said of her customers. “You’ve got to train your staff – the first question you ask is ‘What would you like to eat?’ not ‘What would you like to drink?’ “
The menu is limited. Her tight kitchen is equipped with a flat-top grill, two deep fryers, a microwave and a toaster oven.
Like many small bars, Jokers offers specials to pump up food sales. Some nights, tacos or barbecue sandwiches go for $1 apiece.
That’s a Catch-22, Stephenson said. The discounts entice food purchases; they also cut deeply into profits.
Even with the specials, Stephenson struggles. Last year, Jokers fell short of the monthly food minimums and is awaiting its penalty from the ABC.
This year, she predicted, “I think we’ll make our 45 percent, just barely.”
Many owners say the ratio’s not a hardship. But they feel the domino effect of specials that other restaurants like Jokers offer to drum up food sales.
“I’m losing a dinner sale,” said Bill Dillon, owner of Abbey Road Pub & Restaurant on the Oceanfront. “Once a tourist has eaten their food, they aren’t coming to Abbey Road.”
With Virginia’s exemptions for beer and wine sales, the law can’t easily be compared with those of other states. But a Virginian-Pilot review found only seven states that require more than 45 percent of sales from food.
Utah was tops at 70 percent. North Carolina demands 30 percent; Maryland has no statewide minimum.
Some areas recently reduced their ratios: Montgomery County, Md., outside Washington, last year dropped from 50 percent to 40 percent food. Minneapolis eliminated its 70 percent food requirement this year.
DeSteph’s bill would have changed how the formula is calculated in Virginia. In terms of the current ratio, the requirement would have edged down to 43 percent.
“I wanted to simplify it so that it would be easy to understand and easy to calculate, and people wouldn’t have an excuse to cheat,” DeSteph said.
Mothers Against Drunk Driving and the Family Foundation of Virginia stayed out of the fray.
Richmond’s Downtown Business Group fought the bill. The ratio, though imperfect, allows the state to police trouble spots, said Myles Louria, who lobbied the General Assembly on behalf of the Richmond association.
That’s not what should be changed, he said:
“Our main thrust is, there’s a problem with enforcement. We have seen a number of bad actors continue to operate despite public safety problems. What established restaurants want is a level playing field, where everybody is playing by the same rules.”
(Illustration by Adrian Bohannon | The Virginian-Pilot)
The MBAR helps bars and restaurants – and the ABC – keep tabs on their progress.
It’s short for Mixed Beverage Annual Review, a form that owners submit to the agency listing monthly sales breakdowns by food and types of alcohol. The MBAR must be accompanied by an inventory form identifying brands and container sizes of beer, wine and alcohol served.
If anything appears amiss, the ABC agent assigned to the business might drop by to see how much customers are eating – and drinking – or do more research such as scouring through sales receipts.
An ABC hearing officer reviews the case and makes a recommendation, and the agency’s three-member board, appointed by the governor, issues a ruling. It may be appealed to a Circuit Court.
The agency had no guidelines for ratio penalties until a law took effect in 2014. For instance, for a first offense in which the ratio falls between 30 percent and 45 percent, a bar is subject to a 30-day liquor-license suspension – which can be cut to 15 days if it pays a $1,000 fine.
But the penalties are still sometimes negotiable, said Chris Goodman, deputy director of enforcement at the ABC.
Like Louria, Lisk said some restaurants are falling short of the ratio and getting away with it.
“We as an association have been concerned about a lack of uniform enforcement,” he said, though he says ABC has intensified its efforts in the past two years. “Some establishments bend the rules or outright break them.”
Goodman said: “We work hard to ensure that there is consistent enforcement…. Are there enough of us to look at every MBAR and investigate every licensee for complete 100 percent veracity? We have never had that level of manpower.”
Even critics of the ratio and its enforcement caution against blaming the ABC. The General Assembly sets the laws, including the ratio, not the agency. And the legislature also determines its budget.
But while the agency’s budget and workforce have risen in the past decade, the number of agents has seesawed, going from 127 in 2004 to 90 in 2009 and then up to 100 last year. Meanwhile, the number of restaurants and bars with mixed-beverage licenses in the state shot up to 4,312 from 3,584 in 10 years. That comes to an average of 43 liquor-serving businesses per agent, compared with 28 in 2004.
The department left “a number of enforcement positions” unfunded because of the economic uncertainty, said Hubbard, the ABC spokeswoman. “It has been only recently that the agency has been able to address its enforcement-personnel needs.”
The bloody arrest of a University of Virginia student by an ABC agent in March could divert attention from the ratio and enforcement issues, warned Curtis Coleburn, a former chief operating officer at the agency. But local delegates promised to renew their campaign to loosen the ratios next year and foresee brewing momentum.
“We are very slow to change in the state of Virginia,” said Del. Barry Knight, a Virginia Beach Republican who leads the House’s ABC subcommittee. “But I’m thoroughly convinced we’ll change the ratios in the next year or two.”
Philip Walzer, 757-222-3864, phil.walzer@pilotonline.com
Lorraine Eaton, 757-446-2697, lorraine.eaton@pilotonline.com
