Serving Alcoholic Beverages in UTAH A Summary Guide To State Licensing Requirements

INTRODUCTION Serving Alcoholic Beverages in Utah This guide is prepared to assist the owners and operators of restaurants and other establishments where alcoholic beverages are served to understand the various options they have to serve alcoholic beverages under Utah law. Utah is one of 18 liquor control states and regulates both the wholesale and retail distribution of liquor and wine. It also, along with local authorities, exercises regulatory oversight over the sale of beer. While Utah's alcoholic beverage laws are strict and there are pitfalls for the unwary, it is not difficult for a professionally-run operation to obtain a license to sell aloholic beverages in Utah. Utah law recognizes that alcohol is a legal product and, that people who choose, have a right to responsibly consume it. Utah law categorizes alcoholic beverages into two categories: liquor and beer. Liquor is difined as distilled spirits, wine and any beer, malt liquor or malted beverage that has an alcohol content of more than 4% alcohol by volume or more than 3.2% by weight. Beer is defined as any alcoholic beverage that has not more than 4% alcohol by volume or 3.2% by weight. A person desiring to sell alcoholic beverages at an establishment for on-premise consumption in Utah has three options available: (1) a private club liquor license; (2) a restaurant liquor license; or (3) an on-premise beer license to sell 3.2 beer. Each of these licenses is issued by the Utah State Alcoholic Beverage Control Commissiion, a five member part-time Commission which meets monthly. Alcoholic beverage laws are administered by the Utah Department of Alcoholic Beverage Control ("DABC") which assists licensees in compliance with the laws and regulations. There are several prerequisites to obtaining any of the above three types of licenses to sell alcoholic beverages. Each type of license requires local consent of the city or town in which the establishment is to be licensed. Salt Lake City also requires local licenses. Each establishment must carry public liability insurance and dram shop insurance. The DABC will not issue a license to any establishment that is within close proximity (usually 600 feet) of a school, church, public library, public playground or park. A license will not be granted to any establishment whose proprietor, partner, managing agent, officer, director or major shareholder has been convicted of a felony, crime of moral turpitude or crime regarding the sale, manufacture or distribution of alcoholic beverages. A license will also not be granted to any applicant who has had any liquor license revoked within the last three years. This guide summarizes the principal differences between private club liquor licenses, restaurant liquor licenses and on-premise beer licenses. This guide is intended only to highlight the differences among the types of licenses which can be obtained in Utah. Specific questions about each type of license, the application process for obtaining such licenses and operational restrictions thereof should be addressed to a legal adviser. More detailed information is also available by calling the numbers listed below. PRIVATE CLUB LIQUOR LICENSES Private club liquor licenses (subject to a quota of 1 per 7,000 residents) are available for on-premise consumption of any alcoholic beverages. Alcohol beverages may be ordered and served without the purchase of food. There is no restriction on the percentage of alcohol to food sales. Permitted hours of liquor: 10 am to 1 am Monday - Saturday, and noon to midnight on Sundays and holidays. No liquor sales on election days until after the polls close. Alcohol may be consumed anywhere on club premises, including at the bar or away from tables. Clubs may have open displays of liquor, such as wine, beer or liquors. No restrictions as to the number of drinks a patron may have before him at the table. Sealed containers of 3.2 beer may be taken from the club premises. Clubs may promote alcohol beverages inside the club premises on menus, table tents, signs, etc. Servers may ask customers if they want alcoholic beverages. Clubs may advertise to their members food, entertainment, and hours of operation via television, radio and print media. Advertisements must state they are directed to members. Advertising to members via direct mail may promote any facet of the club's operation, including alcohol. Clubs are open to members, visitors, and guests as defined by law. Memberships may be purchased at the door for a nominal fee. Additional revenue is earned through the sale of memberships and visitor cards (a temporary 2 week membership.) A visitor may bring up to five additional visitors on one visitor card. The Utah Clean Air Act allows smoking in private clubs. RESTAURANT LIQUOR LICENSES Restaurant liquor licenses (subject to a quota of 1 per 4,500 residents) are available for the on-premise consumption of alcoholic beverages at dining establishments. Alcohol beverages (including beer) may be ordered and served only in conjunction with an order of food. At least seventy percent (70%) of the restaurant's business must be from the sale of food. Permitted hours of liquor and wine sales: noon to midnight daily. No liquor sales on election days until after the polls close. Alcohol may only be consumed at or near the patron's table. No alcohol sold by the restaurant may be served or consumed at the place where it is dispensed. (No over-the-bar bartender service.) No liquor may be stored where it is visible to patrons of the restaurant. A restaurant patron may only have one alcoholic beverage at a time before him at the table. No alcohol purchased from the restaurant may be removed from the restaurant premises. Liquor, wine and strong beer may not be listed on a restaurant's food menu. Food menus may only reference the availability of a separate alcoholic beverage menu. A server may not ask if a customer wants to see a wine list or inquire if the patron would like alcohol beverages until the customer asks first. No signage referencing liquor may be used. Restaurants may advertise food, entertainment, hours of operation to the public via any media. No reference to liquor is allowed in any restaurant advertising. A restaurant can advertise that it is a state liquor licensee. Restaurants are open to the public. There is no membership required. The Utah Clean Air act does not allow smoking in restaurants. ON-PREMISE BEER LICENSE An unlimited number of beer licenses are available for the on-premise consumption of 3.2 beer at cafes, bars, taverns and other establishments. 3.2 beer may be ordered and served without the purchase of food. There is no restriction on the percentage of beer to food sales. Permitted hours of beer sales: 10 am through 1 am daily. Beer can be sold in restaurants and private clubs during such hours. Beer sales allowed on election days, unless prohibited by local ordinance. Beer may be consumed anywhere on the premises. Beer may be openly displayed. There is no restriction on the number of drinks a patron may have before him at the table. Beer sold in sealed containers, not exceeding two liters, may be removed from the premises. On-premise beer retailers may advertise the availability and price of beer. An on-premise beer establishment may advertise food, entertainment and hours of operation to the public via any media. On-premise retail beer establishments may advertise beer in newspapers, magazines, yellow pages, circulars, programs, and printed materials but not in university or school newspapers. On-Premise beer establishments are open to the public. There is no membership required. The Utah Clean Air act does not allow smoking in most on-premise beer establishments. Prepared by The Boyer Company 127 South 500 East Salt Lake City, Utah 84102 (801) 521-4781 Questions Regarding Utah Alcoholic Beverage Laws can be directed to: Jerry D. Fenn BLACKBURN & STOLL, LC 77 West 200 South, Suite #400 Salt Lake City, Utah 84101 (801) 521-7900 jfenn@blackburn-stoll.com Information as of July 1, 1999