New Push to Revise Food-to-Liquor Ratio in Richmond Restaurants: What You Need to Know!

A proposed bill would loosen the state’s rules on food-to-liquor sales ratios for restaurants. (BizSense file)

A new effort is underway to change an old law that has frustrated many bars and restaurants in Virginia. This change comes through Senate Bill 1163, which aims to lower the food-to-liquor sales ratio required for mixed beverage licenses.

Currently, restaurants must earn at least 45% of their revenue from food sales. This means they can use up to 55% for liquor. The proposed bill, led by Republican Sen. Ryan McDougle, would give businesses more freedom. They could sell more liquor or even drop the food requirement completely if certain sales thresholds are met.

For those earning between $4,000 and $20,000 in monthly food sales, the bill suggests a reduced requirement of 35% food sales. If a restaurant makes over $20,000 in food sales each month, they would have no food-to-liquor ratio to worry about.

Businesses would calculate their ratios based on their gross receipts from food and nonalcoholic drink sales compared to their overall sales, including liquor. For caterers, the calculation would work the same but focus on earnings from events.

Beer and wine sales are not affected by the current liquor ratio laws.

This bill has been introduced in the current General Assembly session and is awaiting a hearing. If it gains approval, it will move to a full Senate vote.

For years, this law has sparked debate among restaurant owners. Many claim the 45% requirement is tough to meet. Attempts to change this law have been made previously, but they have often stalled. Last year, a similar bill failed after passing in the Senate, largely due to challenges in the House.

This year’s legislation aims to include more businesses than the failed effort from last year, where only restaurants with at least $35,000 in monthly food sales could escape the food ratio rule.

The push for change follows a lawsuit from the restaurant Fish & Slips in Portsmouth, challenging the liquor law’s constitutionality. This ongoing legal matter may impact the new bill, as legislators typically avoid passing laws while litigation is pending.