Oregon, Washington, and California Take Action for the Hospitality Industry
Update April 29: This advisory has been updated to include the latest information on beer, liquor, and wine delivery permissions in Oregon, Washington, and California.
On March 17, 2020, in an effort to slow the spread of COVID-19, Governor Brown issued Executive Order 20-07, prohibiting on-premises consumption of food or beverages in Oregon. Off-premises sales, including curbside pick-up and retail and home delivery, are still allowed but must follow social distancing and Oregon Health Authority safety guidelines.
At its March 19, 2020 meeting, the Oregon Liquor Control Commission (OLCC) took action to ease some of the economic hardship faced by the hospitality industry due to the spread of COVID-19. The OLCC adopted temporary rules aimed at relaxing some requirements applying to the delivery of malt beverages, wine, and cider by licenses who qualify for same-day delivery. Additionally, the OLCC dedicated a section on its website to summarize rules adopted during the COVID-19 pandemic, and published a FAQ tailored to questions related to the pandemic and addressing delivery, pick-up, and returns of alcoholic beverages.
Who benefits from the rule changes?
While the rules only apply to licensees with off-sale privileges, the OLCC also adopted a streamlined process for limited on-premises sales (beer/wine/cider) and full on-premises sales (spirits/beer/wine/cider) licensees, such as restaurants and bars, to apply for off-sales privileges and start selling malt beverages, wine, and cider to-go.
Under the rules, a licensee may submit online a completed liquor license application for an off-premises sales license, entity questionnaires, and a same-day delivery form. Upon submission of the completed forms, the licensee is automatically granted the delivery privileges for 30 days while the OLCC reviews the application.
The OLCC will then issue a 90-day Authority to Operate (ATO) without requiring payment at this time. Payment will be required to issue the final license.
An application packet is available here.
What do the rule changes allow?
- The rule enables licensees with off-sale privileges and certain on-premises licensees with the ATO described above to deliver distilled spirits, malt beverages, wine, or cider as well as to offer curbside pickup to "a location that is within 100 feet of the boundary of the licensed premises."
- The rule extends the hours during which delivery is allowed, from 7:00 am to 2:30 am. New rules also allow sales of alcohol to begin at 6:00 am to accommodate Oregonians at higher risk who go to grocery stores during hours reserved for them.
- While an adult signature is usually required to complete delivery under OLCC rules, the temporary rules abandon this requirement.
- Licensees can utilize food and beverage delivery app couriers (such as DoorDash) so long as the payment for alcohol is immediately passed along to the licensee. If these couriers are also physically delivering the beverages as well as processing transactions electronically through mobile applications or websites, the couriers must still obtain approval as a for-hire carrier. OLCC may consider an expedited process to approve for-hire carriers.
- OLCC is allowing licensees to choose whether or not to maintain coverage of Liquor Liability Insurance and provided a process to stop and restart coverage.
- OLCC published guidelines for wineries to conduct "virtual wine tastings."
On March 13, 2020, Governor Inslee issued an emergency proclamation mandating the closure of all bars and restaurants, food courts and other similar venues.
Delivery or to-go orders are still allowed, and the Washington State Liquor and Cannabis Board (WSLCB) took measures to facilitate curbside service and delivery of alcohol.
Who benefits from the rule changes?
The temporary rules apply to alcohol licensees with “to go” or “home delivery” privileges for the sale of alcohol. Such licensees may immediately start selling their allowed products to customers outside of their business, but within the licensed property line. Licensees who do not have to go or home delivery privileges may apply by filing out the Temporary Allowed Activities Form on the WSLCB website and apply for an “Off Premise Endorsement.”
A full list of temporary allowed services is available here.
The WSLCB is working on waiving or accelerating the 20-day local review requirement. Stay tuned for an update on this.
What does this allow?
- The changes temporarily allow wineries to engage in curbside pickup activities, and breweries to sell unopened bottles and growlers at curbside, for example.
- Spirits, Beer, Wine Restaurant license holders with off-premise endorsements may sell closed, manufacturer-sealed bottles or cans of beer, wine and spirits along with food orders and may engage in curbside service or delivery of alcohol. This temporary allowance will be in place for the duration of the Governor’s proclamation temporarily banning on-premises dining.
- The WSLCB waived the signature requirement for home delivery, and licensees with the appropriate delivery endorsement may choose to photograph the customers ID or use other devices to scan the identification.
On March 16, 2020, the California Department of Public Health issued guidance requiring on-sale retail licensees to cease exercising on-sale privileges immediately. The California ABC issued a notice of regulatory relief on March 19, 2020, a second notice of regulatory relief on April 1, 2020, a third notice related to virtual wine tastings, and an updated FAQs to help answering questions related to this notice.. The ABC also provides a useful "Guidance by License Type" indicating the delivery and take-out activities temporarily allowed for each license.
What does the relief allow?
- Retail-to-Retail transactions: recognizing that many on-sale retailers may have greater inventories than they can use, and that supplies may be limited in their services, this allows off-sale retailers to purchase alcoholic beverages from on-sale retailers to the same extent they can purchase those beverages from authorized suppliers.
- Extension of Credit: Manufacturers, wholesalers, and other suppliers may extend credit to retailers beyond the 30 day limit. It is up to the parties to determine appropriate credit terms.
- On-Sale Retailers may sell alcoholic beverages for off-sale consumption in pre-packaged containers. For example, Type 47 and Type 41 licensees may start selling alcoholic beverages for off-sale consumption regardless of statutory prohibitions or license restrictions.
- Restaurants may sell beer, wine, and pre-mixed drinks or cocktails for off-premise consumption when sold in conjunction with meals prepared for pick-up or delivery.
- ABC adopted the FDA's Policy allowing production of hand sanitizer products by licensed distilled spirits manufacturers and craft distillers, and will allow providing such products for free to any person, including retail licensees, so long as they are not used to promote the manufacturer’s alcoholic beverage products. More details on federal guidelines for production of hand sanitizer can be found here.
Beverages must be packaged in a container with a secure lid or cap and in a manner designed to prevent consumption without removing the lid or cap. Licensees engaging in those practices must also post a warning notice to consumers regarding limitations on open containers.
Changes to California ABC Rules
- ABC suspended any conditions on licenses prohibiting making sales and deliveries to persons in a motor vehicle or through pass-out windows.
- ABC suspended any conditions restricting hours of operations, but maintained the prohibition against sales and service between 2:00 a.m. and 6:00 a.m. Additionally, manufacturers, winegrowers, and wholesalers may temporarily deliver alcoholic beverages to retailers between the hours of midnight and 8 p.m., unless a retail licensee has a condition expressly limiting the hours during which delivery is allowed.
- ABC suspended restrictions requiring off-sale transactions to occur on the licensed premises. This means that the regulations requiring that the order be received, and the payment processed at the licensed premises, are temporarily lifted. Licensees authorized to sell alcoholic beverages for off-premises consumption may accept payment at the point of delivery, including cash. Craft distillers may deliver to consumers away from the licensed premises, up to 2.25 liters per consumer per day.
- ABC suspended restrictions on free delivery of alcoholic beverages. Licensees may deliver to consumers free of charge.
- ABC suspended enforcement of prohibitions against providing things of value to retailers and providing premiums, gifts, or free goods in connection with the sale or marketing of alcoholic beverages to retailers to the extent that they relate to promotional donations in which a supplier advertises that a portion of the purchase price will be donated to a specified bona fide charitable organization. The promotion may not encourage consumption of alcoholic beverages or identify or advertise a retail license.
- The City of Los Angeles implemented the ABC rule changes to allow restaurants and bars to sell alcoholic beverages together with food for delivery and take-out, and to allow sales by retail stores of alcoholic beverages for deliveries from 6 a.m. to 2 a.m.
The facts, laws, and regulations regarding COVID-19 are developing rapidly. Since the date of publication, there may be new or additional information not referenced in this advisory. Please consult with your legal counsel for guidance.
DWT will continue to provide up-to-date insights and virtual events regarding COVID-19 concerns. Our most recent insights, as well as information about recorded and upcoming virtual events, are available at www.dwt.com/COVID-19.