Buying cocktails to go with take-out meals could return to Arizona after legislators voted on Wednesday to allow restaurants and bars to resume those services.
The ability to sell cocktails to go was offered and later rescinded last year during the pandemic.
The vote is a win for restaurants seeking to make extra revenue through takeout orders as the coronavirus pandemic continues. Bars, however, see it as a loss because they pay more for their liquor licenses, which allow some off-premise sales.
The measure passed after a short discussion and the acceptance of five amendments to House Bill 2773.
The amendments outlined that customers must order food if they want to buy cocktails for takeout. Another requires that a company’s name or logo must be present on the cocktail container to identify where it was sold.
House Bill 2773 is sponsored by Rep. Jeff Weninger, R-Chandler, who co-owns several restaurants. Currently, only bars can sell alcohol to go and it has to be packaged, not mixed drinks. Restaurants can’t sell any alcohol to go.
The bill also allows bars and restaurants to sell alcohol through home-delivery services.
After passing the House on a 34-26 vote Wednesday, it will transfer to the Senate.
Gov. Doug Ducey through an executive order allowed alcohol to-go sales last year when dining in restaurants was prohibited. The relaxed rules continued as dine-in eating was later allowed, though limited, because of the pandemic.
Many restaurants around metro Phoenix and the state took the opportunity and sold cocktails in jars and plastic containers, along with full bottles of beer and wine.
But bar owners, who pay substantially more for their liquor licenses than restaurants, and who were not allowed to reopen if they weren’t serving food, were not thrilled.
Bar owners pay close to $100,000 for their liquor licenses, and, as Rep. Brenda Barton, R-Payson, brought up during the vote, restaurants pay much less. One of the benefits of bars’ costlier licenses is the ability to sell packaged liquor to go.
Many bar owners joined a lawsuit challenging the governor’s closure order and, as a tangent, protested the to-go sales Ducey allowed for restaurants.
Allowing restaurants to sell takeout alcohol undermined their businesses and devalued their licenses, the bar owners’ lawsuit argued.
Maricopa County Superior Court Judge Pamela Gates in November ruled that Ducey’s order regarding to-go sales was not legal, so state liquor regulators told restaurants they would no longer allow them.
But people liked alcohol to-go with takeout food, prompting Weninger to bring the idea back to the Legislature.
Restaurant and bar owner Matt Fulton, whose properties include the Whining Pig and others that have a variety of liquor licenses, spoke in favor of the bill at a February hearing.
Like the bill’s sponsor, he said the measure would help eateries recover economically from the pandemic.
“This has been an incredibly difficult year for us for the restaurants and also the bars,” Fulton said.
He said it doesn’t make sense for one of his properties with one type of license to be allowed to sell to-go cocktails while another can’t.
“I think it’s fun for them to come and get that cocktail,” he said of customers.
Bars, which usually have a series 6 liquor license, normally can serve alcohol without serving food, though that is restricted during the pandemic. They can sell packaged beer, wine and liquor to go, but not mixed cocktails. The bill allows them to sell mixed cocktails to go under Weninger’s bill.
When asked by lawmakers about the difference in license expenses, Fulton said that it costs about $100,000 to $115,000 for a series 6 license for a bar, allowing to-go alcohol with no food requirements.
He said a series 7 costs $40,000 to $45,000 for the same type of license for beer and wine but excluding hard alcohol.
Series 6 and 7 licenses are “quota” licenses issued through a lottery and often are sold from one business to another within the same county.
Restaurants that serve alcohol usually use a series 12 license requiring they generate at least 40% of their revenue from food to sell alcohol or they must forfeit that license and obtain a more expensive one. Under the bill, they could apply for a permit allowing them to sell cocktails to go.
Fulton said acquiring a series 12 license costs about $5,000.
The Arizona Restaurant Association supports the measure.
Bars, through the Arizona Licensed Beverage Association, continue to oppose allowing restaurants to sell to-go alcohol.
Lobbyist Don Isaacson for the Beverage Association said at a Feb. 9 hearing on the bill that restaurants “never anticipated or planned for the right to sell liquor to go.”
He said they got that right as a “gift” from the governor, “and now want it for free, or not the fee that is paid for by others.”
Also speaking in opposition to the bill in February was Daryl Chester, owner of Jester’s Billiards and Rino D’s Pizza and Wings, who has had various liquor licenses in the state since 1989.
Chester said he spoke to Weninger in April as one restaurant owner to another. Weninger co-owns Floridino’s Pizza & Pasta in Chandler and multiple locations of Dilly’s Deli, according to his state biography.
Chester said Weninger told him then that he was selling mason jar cocktails to go and scoffed at him when Chester asked if he would buy a series 6 license to keep doing it after the pandemic.
Weninger asked Chester if he could currently sell to-go cocktails and he said he didn’t want to.
“I think it’s dangerous,” Chester said. “Do you really think a cocktail is not going to be drank on the way home after you buy it to go?”