The Arizona State Legislature passed a bill earlier this year allowing licensed restaurants, bars, and liquor stores the opportunity to sell mixed cocktails to-go. This new market will expand Arizona’s to-go and delivery industry.
To-Go Alcohol 2021 was one of the largest changes to Arizona Liquor law in the form of HB 2773 according to the Arizona Restaurant Association. The bill will provide any business that obtains an approved lease the ability to sell mixed cocktails for off-premise consumption.
Following the onset of the COVID-19 pandemic, restaurants, bars, and liquor stores across the state faced closures and shut-downs, but Gov. Doug Ducey signed an executive order in March 2020 legalizing the sale of spirits to-go. The sale of alcohol to-go becomes permanent with the implementation of HB 2773, even after the pandemic ends.
Upon signing HB 2773 Gov. Ducey said, “House Bill 2773 will make sure restaurants and bars have the opportunity to expand operations and meet the needs of their customers, especially after weathering the effects of the pandemic.”
The bill gives businesses two different ways to access this new market, one for mixed cocktails and one for packaged goods. Mixed cocktails refer to any drink combined on the premises of the business that contains liquor and one other ingredient. Packaged goods refer to liquor, wine, beer, or other types of spirituous liquors that are in the original container.
The legislation was sponsored by Chander state Rep. Jeff Weninger, a restaurateur.
“Many businesses were hard hit by the pandemic, but smart policies like permitting to-go beverages helped keep many afloat,” Weninger said at the time of the bill’s passage. “House Bill 2773 will help bars, liquor stores and restaurants grow, and it will attract new businesses to our state. This is a major win for Arizona’s food and beverage industry, and I thank Governor Ducey for signing this legislation.”
Beginning October 1, bars and liquor stores were able to start selling mixed cocktails to-go. Restaurants that are licensed to sell alcohol are able to apply for a lease granting them the ability to participate in this new way of selling. If a restaurant is approved by the Department of Liquor Licenses and Control (DLLC), the business will be assigned an automatic yearly renewable lease for to-go cocktails. Restaurants will have to pay a fee of $200 for the application and a fee of $2,500 for the lease.
The to-go mixed cocktails must be sold in a container that is clean, approved by the national sanitation organization, and does not exceed 32 ounces. There is no limit to how many containers one can buy in an order, but each individual container must be under 32 ounces. These containers must only be filled with the drink on the premises of the business after it has been ordered. It must also have a ‘tamper-proof seal,’ all government warning labels, and the business’s logo or name.
In a similar fashion to restaurants, any bar is given the ability to sell packaged goods to restaurants for off-premises consumption on a lease. The DLLC must approve the lease and there is a $200 application fee. Beer and wine bars only can sell beer and wine, whereas bars can sell beer, wine, and other spirituous liquors to restaurants.
Both bars and restaurants are also given the ability to do alcohol deliveries, directly from the business or utilize a third-party delivery system only during the hours of 6:00 am to 2:00 am of the next day. Any third-party service must register with the DLLC before starting to deliver alcohol on behalf of businesses.
Any time an order is placed for both to-go cocktails and packaged goods, a business or third-party delivery system is allowed to ask for age verification and documentation requirements.
The new law still ensures that restaurants follow certain regulations regarding alcohol distribution. Restaurants must maintain a 40/60 ratio of food to alcohol, all employees must be given liquor training, restaurants may receive no more than 30% of their total alcohol sales from to-go sales, and they must make sure that all to-go alcohol sales include food.
The Arizona Restaurant Association has cheered the new law.
“Restaurants, bars and liquor stores throughout the state will have the opportunity to drastically expand their operations thanks to the signing of House Bill 2773,” Arizona Restaurant Association President and CEO Steve Chucri said. “To-go cocktails will help businesses bring in revenue and attract new customers, and it will draw new restaurants and bars to our state. My thanks to Representative Weninger for sponsoring the legislation, and to Governor Ducey for signing it.”
Further information and guidelines are expected to come out from The Department of Liquor Licenses and Control and the DLLC later this month.If you’d like to read more, check out To-Go Alcohol.
Author: Flannery Sloan, Arizona Junior Fellow