Liquor law updates are here – what you need to know

It’s been a rollercoaster year regarding liquor law (see all our coverage here), culminating in a tumultuous past three months of legislative intrigue; well the wait’s now over, the 2022 session is finished, and with it, a raft of liquor code updates that will hit the streets come June 1st.

In the omnibus liquor bill there’s of course the headline news that roughly fifty percent of hard seltzers will be vanished from grocery store shelves; but you might rightly wonder what else is hidden away in the detail of the bill. With the help of DABC staff and the always fabulous Utah liquor lawyer Tanner Lenart – I’ve compiled the full list of all the updates you can expect to see in 2022.

More bars, kinda, ish, almost

Through 2021 I’ve written with increasing incredulity that Utah’s bar license inventory has inched ever closer to complete exhaustion. That came this year in February, with the legislature relatively unmoved to remedy the dire status.

The final liquor bill for 2022 sees an update to how hotel and resort licenses function. To quote the DABC, “Bar sub-licenses within a hotel or resort license do not count toward the quota of total allowable bar licenses in the state. Resort and hotel license holders are required to hold sub-licenses for individual establishments within their licensed areas. Bar licenses that become sublicenses of either a hotel or a resort no longer count toward the state quota of allowable bar licenses.”

The net effect of that update? Nine more bar licenses as soon as the letter becomes law this Summer. As a reminder, leaving the February DABC meeting, fourteen business where seeking licensing over the coming year – seven ready to swing their doors open to a thirsty public right now if only they could get a license that is.

Those nine licenses (accentuated by one more from population increases in May) will certainly relieve some of the pressure from the bubbling pot, but frankly, it only delays the inevitable. The issue desperately needs resolution and is ultimately now punted to 2023.

Beer me

This update now allows customers to take beer to go from both bars and restaurants. The caveats are that the beer most be:

  • 5% ABV or under
  • Sold in a sealed container
  • The container is no larger than two liters

For restaurants, if you wish to take advantage of the above, you first need to have dined. In both instances there’s no limit to how much you can take to go. This doesn’t effect existing growler rules and wine/cider to go; as a reminder there, if you order wine/cider in a restaurant or bar, provided you sample the product you’re fine to reseal the bottle and take it to go when you leave.

Praise be, it’s Sunday

Many don’t know that YES – you can buy liquor, strong beer and wine on a Sunday. Currently if you want to get booze on the sabbath you need to head to a local manufacturer that holds a Type 5 Package agency license. The laws around those are now set to be relaxed ever so slightly.

Currently Type 5 PAs require the applicant to additionally operate a bar or restaurant at the same location as their manufacturing facility. The 2022 update sees this nixed. This potentially opens the floodgates for any local brewer, distiller or winemaker to apply for a Type 5 PA and sell you the good stuff on Sundays and holidays.

What’s in a name

The 2022 legislation sees DABC become DABS. That’s Control to Services which according to the currently monikered DABC, “emphasizes the service-oriented nature of the department.”

That’s not a beer, this is a beer

What exactly is a beer then? Well now, it’s any that is labelled as the following:

(A) beer; (B) ale; (C) porter; (D) stout; (E) lager; (F) a malt; (G) a malted beverage; or (H) seltzer. As Lenart notes, “Remember in Utah beer is 5% ABV or less and can be sold in groceries and on tap. Changes – now must be “clearly marketed, labeled and identified as beer” and cannot contain any liquor or wine or TCH-type ingredients. None. Not even a trace amount of any of these items.”

You get nothing, good day sir

For those keeping track, I’ve been warning this one will come to pass, and now it has. It’s now illegal to sell bar licenses as part of a private sale. With licenses becoming rarer than ruthenium, recent months have seen licenses swap hands for a much as $75K. The DABC write, “All DABC license holders are prohibited from selling their license. Additionally, licenses will not automatically transfer with a building or business sale, as only the Alcoholic Beverage Control Commission has the authority to grant alcohol licenses.”

This raises a fabulous mess of complicated questions – will it even be possible to legally sell a bar as a going concern in Utah? “Let me sell you my fabulously profitable business… But errr, I can’t sell you the legal permit to keep it open, and um, err, you can’t actually apply for a new one either because the supply has run out…” So there’s that.

Permit me to allow that

Event planners will love to see that the number of allowable single event permits has been increased. Single event, 72-hour permits that may be issued in a calendar year increase from 12 to 24 permits.

Wanna join my club

Much has been written about the new wine club laws. Essentially our soon to be updated law will allow customers to purchase wine from out of state suppliers – wine of the club subscriptions and the like. Naturally it comes with some caveats and the DABC notes, “The individual pays the cost of the subscription, taxes and fees, plus the 88 percent markup as required under Utah law. Customer picks up their orders from a state store or package agency.”

While some might initially recoil at spending another 88% on top of out of state list prices, I think some caution should be exercised here. I would imagine that the 88% will be levied INSTEAD of out of state taxes, rather than ADDITIONALLY to them. Ever bought a car out of state and had it shipped to Utah? That’s exactly what happens, you don’t get dinged twice by multiple state taxation. If this holds true for wine, it means the resulting price won’t be anywhere near as punitive as many imagine. I ran this by DABC staff and they confirmed that the final details still need to be ironed out. I’ll keep you posted.

Special order wheels to be greased

According to DABS (thought I’d try it out and see how it feels), “Goals are to create a faster special order process so consumers could receive their order in days, instead of weeks, and customers can order smaller amounts as allowed by the product vendor.” Fabulous. Knowing several alcohol brokers as I do, I expect many to seize on any opportunity to help their clients boutique wines and spirits access our state that much easier.

The current special ordering process is a tad byzantine and requires you order a full case of wine or liquor – then wait for weeks and months for its arrival. Curiously you don’t need to actually pay up front in the current system either. As part of the new update, customers will be able to purchase special orders in whatever bottle minimum the out of state suppler sets. Again, expect savvy brokers to advise their clients to create product SKUs that allow for single bottles as part of their product line up.

Beer me, again

Ever craved a beer while soaking in your hotel spa – now you can. The DABS (ooh it’s kinda cool, look I did it again), “Hotels that are licensed to sell alcohol can serve in their spa areas with the required sub-license. Expands the ability to serve alcohol in a spa to hotel licensees that obtain a spa sublicense. Hotels that are already licensed to sell alcohol on-premise may also serve within their spas, in a designated service area.”

Build baby build

Utah recently also hit a wall in terms of resort licenses as well, this has now been increased from four to eight. The full report on the updates lists “Resort licenses are available to areas associated with a ski area and have many amenities such as lodging, bars, and restaurants, within their footprint. There are now eight total resort licenses allowed in the state of Utah.”

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1 COMMENT

  1. My thought is that wine clubs are going to be dead in the water under the new rules. A lot of the reason wineries do clubs is to sell their wine at retail directly to consumers, so they can take the distributor and retailer margins for themselves. In the unlikely event there are wineries who are willing to offer FOB pricing to their Utah customers, the pricing will be OK. If on the other hand, the winery offers club wine at the same price to Utah customers as other states, with the DABC markup on top, pricing will be very onerous and almost no one will be interested.

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