A Brief History of Virginia's Mixed Beverage Ratio
Virginia legalized liquor by the drink only in 1968, and in a state full of moralistic fears, a liquor license came with lots of bizarre strings attached. It’s not 1968 anymore, though our mixed beverage license laws might lead you to think it is.
1968: General Assembly Approves Liquor-by-the-Drink
It had been a long 52 years since a Virginian restaurant had last legally sold a liquor drink, in 1916. But after much squabbling, the Virginia General Assembly finally approved an act that provided for counties, cities, and towns to hold voter referendums on allowing mixed beverage sales. Within a matter of weeks, 42 localities had eagerly applied to put the question on their upcoming ballots, and the vast majority of the measures were successful. The first legal drink was served on October 17, on a Chesapeake & Ohio Railway train bound for Charlottesville as it passed through Bath County, the first locality to approve liquor-by-the-drink, and the rest was history.
The 1968 Mixed Beverage Act, though, was no simple, cut-and-dry piece of legislation. The fears of church-affiliated pressure groups, warning Virginia would be overrun with seedy houses of ill-repute were liquor to be authorized, pushed the drafters into including a vast number of compromises and conditions attached to the sale of mixed beverages.
Per this act, those that were lucky enough to get mixed beverage licenses could not:
- Serve from a bar. Mixed drinks could only be ordered or served to people seated at a table.
- Allow “immoral, indecent, or profane language.” Licensees were not permitted to serve liquor to foul-mouths.
- Have fewer than 50 seats at tables. Small restaurants were considered unworthy of selling liquor.
- Have investors. The act specifically required that licensees not “allow any person to receive a percentage of the income of the licensed business or have any beneficial interest in such business.”
- Hire certain kinds of people. “No licensee … shall knowingly employ in the licensed business any person who has the general reputation as a prostitute, homosexual, panderer, gambler, habitual law violator, person of ill repute, user of or peddler of narcotics or person who drinks to excess or any “B-Girl”
Most of these silly provisions were quietly stricken over the years, but one stubbornly remained: the ratio.
“[W]hich license may be granted only to persons operating a restaurant […] whose gross receipts from the sale of full meals cooked, prepared and served on the premises […] shall exceed its gross receipts from the sale of alcoholic beverages and mixed beverages”
While not giving an exact percentage, the law said, in line with the other provisions that sought to severely restrict the number of places authorized to sell liquor, that if you made more money from alcohol than from food, then you were not qualified to sell alcohol, implying a 51% ratio. The original measure included every alcohol in this definition – beer, wine, and spirits – so if a restaurant sold $5,001 in beer plus wine plus liquor in a year but $4,999 in food, it would be in violation and face a revocation of its license.
That’s how it stood basically until …
1980: 51% becomes 45%, Beer and Wine stop being “alcohol”
After 12 years, the Virginia restaurant industry had a chance to adapt to the new reality of being allowed to serve mixed beverages, but found itself unable to adjust to the onerous requirement that food sales exceed those of alcoholic beverages. This isn’t surprising, of course – neither legislators nor restaurateurs can force their customers to buy something they don’t want, and sometimes people want food, sometimes they want a drink, but they don’t always want both.
In an attempt to slightly nudge the ratio to allow restaurants to be more successful, a Fairfax senator introduced a bill which would make two small tweaks to the existing Mixed Beverage Act:
- 50-50 split becomes 45-55. Instead of having to earn over 50% of receipts from sale of food, restaurants would be required to make a slightly lower 45%.
- Beer and wine stop counting towards alcohol. Mysteriously, even though a standard beer, a glass of wine, and a shot of most distilled spirits have the same amount of alcohol in them, the bill eliminated the requirement that restaurants fit their beer and wine sales to any ratio, and kept it in place for liquor only.
While the same forces that decried the 1968 law authorizing the sale of liquor at all turned out in force to oppose this slight relaxation of policy, repeating their “no saloons” battle cry, additional opposition to this measure came from hotel lounges aiming to protect their own turf from further competition.
Despite the controversy though, the Virginia House of Delegates and Senate both approved the bill, and Governor Dalton signed it into law.
Little did any of them know that this would be the last time Virginia’s legislature would successfully tweak this ratio for the next 35 years. Which, foreshadowing, brings us to …
1981-2015: Lots of exceptions get carved out for big businesses and every attempt to level the playing field for small ones gets crushed
Improbably, even as attitudes favoring a return to legal prohibition fizzled into history, laws elevating the consequences for irresponsibly serving or drinking alcohol flourished, and consumer tastes changed to strongly prefer more expensive branded spirits over their rail counterparts, the 45% ratio got stuck somewhere.
Though legislators cheerfully worked up straight-out exceptions from the food requirement only for certain properties – Bristol Motor Speedway and the Jiffy Lube Live Pavilion in Prince William County, for a couple examples – small businesses were stuck with a requirement that just didn’t make sense.
In this 35 year time span, delegates and senators filed 22 bills seeking to in some way lower the mystical 45% ratio that their constituents kept telling them was causing them serious problems with their businesses and preventing them from starting new ones. Every single one of them failed.
Now the opposition to a more accomodating, small-business-friendly ratio doesn’t come from the long-dissolved “anti-saloon leagues,” but rather from entrenched large operators that fear competition from small and new restaurants with a spirit of innovation and novelty, eager to serve Virginia consumers and tourists the specialty cocktails they love but hamstrung by a requirement drafted before many of them were even born.
That makes it even more critical than ever that Virginians tell their legislators this session that enough is enough. We’ve had it with three decades of policy that provides no benefit to the Commonwealth, and we’re ready to see a change that makes more space for small businesses to thrive in Virginia.