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Changes to TABC Regulations

The TABC revised regulations governing all liquor licensees.  Our Alcoholic Beverage Group is pleased to highlight the major changes for you.  Grouped by the license held, the summaries should not replace consultation or full review.  Contact Will Cheek or Chris Raybeck with questions.

General Applicability—All Types of Licensees

  • Responsible Vendor Mitigation Program:  The TABC has established an informal program for licensees, similar to that of the responsible vendor for beer retailers.  Licensees following the program may have fines alleviated (by up to half) for any citations.  The program requires a written policy that all employees complete a course in alcohol awareness (including training on applicable laws and regulations) and annual refresher courses.
  • Prior Approval of Advertisements:  In most cases, prior TABC approval of advertising copy is no longer necessary.
Liquor-by-the-Drink (“LBD”) and Catering
  • Advertising.  The ABC eliminated the rules prohibiting advertising happy hour and drink prices.  Licensees may now advertise both, provided the happy hour on liquor ends at 10:00 p.m. and the drink price covers the cost of the ingredients.  Outside signs and billboards may advertise the name of a licensed establishment and the name of a particular brand of alcohol, as long as the LBD licensee pays for the advertising.  Also, availability of alcoholic beverages can be advertised on radio and TV, subject to the same restrictions imposed on other types of licensees.
  • Marketing.  While licensees are still prohibited from giving away alcohol, the term “give” has been refined by replacing the word “drink” with “alcoholic beverage or wine.”  Also, LBD licensees have been removed from the regulation restricting advertising novelties and specialties to consumers, broadening the types of items LBD licensees may give to customers.
  • Managers:  The TABC has specified that new managers and assistant managers have seven days to submit questionnaires to the TABC or face a citation.  Also, all managers and assistant managers should expect to need their own server permits, if they supervise those who serve alcohol.
  • Seating:  The TABC has specified that seats at bars will be counted toward the minimum 75-seat restaurant requirement if the bar is big enough and if meals are regularly served there.  Patio seating that is not heated and cooled year-round will not count toward the minimum seating requirement but will count toward the seat count for license fees.
  • Server Permits:  Temporary server permits will no longer be issued.  Also, LBD licensees must have available for review documentation of the date of hire (dated employment application, dated W-4, etc.) of all servers and managers on premises.  Without it, it will be assumed the employee has been working for more than 61 days.
  • Changing Locations:  For LBD licensees who want to change locations, an abbreviated application process is now available.
  • Catering.  For the first time, there are regulations explicitly governing catering licensees.
Retail Licensees (Off-Premises Consumption)
  • Direct Mail:  Retailers now only need a written request authorizing direct mail, eliminating the requirement of signing the request on–premises.  The rules require removal of recipients within 30 days of the second request to remove.
  • Donations to 501(c)(3) Organizations:  Retailers are authorized to make withdrawals from inventory for donations to non-profits with 501(c)(3) exempt status.
  • Tastings / Consumer Education:  Written notification to the TABC is required for tastings where the retailer hosts, sponsors, or provides an employee to work at the tasting (not just where alcohol is consumed).  The $50 processing fee for notifications has been eliminated.  Also, employee-only tastings may be held on the retailer’s premises in areas not accessible to the public.
  • Marketing:  Retailers may sell gift cards to consumers.
Manufacturers / Importers and Wholesalers
  • Visits to Retailers:  The regulations have been revised to allow manufacturers and importers to visit retailers—on and off-premises consumption—for the purpose of promoting products or attending to displays.
  • Non-Resident Sellers:  For the first time, there are regulations that explicitly govern non-resident importers and application requirements.
  • Wholesaler Deliveries:  Employees of wholesalers may now deliver up to 20 cases of alcohol in vehicles that are not owned or leased by the wholesaler, and the wholesaler name need not be affixed to the vehicle.  But, the employee must possess documentation with the seller and purchaser identity and type and size of delivery.  Also, the regulations have removed the restriction that a wholesaler may deliver to another wholesaler only if in the same county.
  • Retail Orders; Wholesaler Employee Permits:  Wholesalers are expressly prohibited from delivering and invoicing part of an order made by one retailer to another retailer.  Wholesaler employee permits are not explicitly valid for 5 years.
  • Tied-House Provisions:  The regulations prohibiting tied-houses now include references to third-party marketing entities, which are not allowed as intermediaries between industry members (manufacturers, importers, and wholesalers) and retailers.  The regulations now explicitly prohibit arrangements that result in exclusion of brands.  The monetary value of items that may be provided to retailers by industry members is now aligned with TTB amounts.  Industry members may supply outside signs to retailers, and the allowable point-of-sale advertising materials have been updated.  Industry members may provide retailers with routine business entertainment (meals, events, parties), subject to restrictions.
  • Donations:  Industry members are authorized to withdraw from inventory donations to special occasion permittees; manufacturers must do so through wholesalers.
  • Record-Keeping:  Records regarding the source of all agricultural products used in wine production must be kept for three years.  All Tennessee-licensed wineries must file, with the TABC, their contracts with Tennessee grape growers regarding their intention to purchase grapes.
  • Sale on Premises:  The 15,000 gallon / 20% rule for annual on-premises sales has been deleted in favor of the amounts allowed by state statute.
  • Samples; Selling Non-Wine Products:  The regulations now provide that wineries may provide samples to winery visitors in certain limited areas of the winery.  Also, wineries may now sell gift-related items with wine themes or related to wine drinking.
Beer Permittees / Responsible Vendor Program
For the first time, there are regulations that explicitly govern off-premises beer permittees that have enrolled in the Responsible Vendor Program.  Many of the regulations simply articulate the TABC’s past practices.

Non-Profits (Special Events)
Regulations have been made explicitly governing special occasion permits, one-day permits allowing alcohol service in a specifically designated area by “qualified entities” (non-profits).  A formal application process is set forth, and proceeds from the special event must be deposited with the special occasion
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