PORTSMOUTH, Va. — If you're drinking liquor at a restaurant in Virginia do you order enough food? In a recent lawsuit one Portsmouth restaurant argues that the guidelines that set the ratio for food-drink sales are too restrictive.
Restaurants with mixed-beverage licenses can't have more than 55 percent of sales coming from alcohol, excluding beer and wine. That rule is enforced under state law when restaurants submit MBARs, or reviews, to Virginia Alcoholic Beverage Control Authority.
"To give you perspective, to meet that ratio, if I do a million dollars in liquor sales, I have to do a minimum of $820,000 in food. For every dollar spent in spirits you have to spend 82 cents in food," said William Baldwin, who owns a number of restaurants around Tidewater including the Edge, and Twist Martini. "We lose money every year to meet our ratio."
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Baldwin said most area restaurants are struggling to sell enough food to meet the ratio and some are even closing.
"It's pretty common if you're out with friends, you are going to a show you might go out and have some martinis, cocktails and maybe an appetizer before you go to the center across the street to the show. Martinis range anywhere between 10 dollars and 20 dollars depending on what spirit you choose. But if you have two high end martinis and it was 40 dollars are you going to order, and say everyone at the table had that, are you going to order the same amount of food to compensate for that?" explained Baldwin.
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To cope, he lowers drink prices at his establishments.
"It's money I could offer in better pay, it's money I could offer in employee benefits," explained Baldwin.
And, he added, it can be hard to compete when others aren't required to follow the same guidelines.
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"Most people don't realize amphitheaters don't have to meet the ratio. Casinos don't have to meet the ratio. They have a whole separate license where they don't have to file an MBAR," said Baldwin. "You can't say it's about public safety and it's important for public safety when you allow amphitheaters and casinos and breweries to operate without it."
"Every time you turn around it's the small guy getting kicked in the teeth and it's time it stopped and that's why we picked this case up to see what we could do with it," said Louis "Mike" Joynes II, Joynes and Gaidies attorney.
Joynes represents Portsmouth restaurant Fish & Slips Marina Raw Bar & Grill in a lawsuit against Virginia ABC and Virginia Governor Glenn Youngkin.
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"The ultimate goal is to get rid of the MBAR," said Joynes. "We believe this is an illegal tax that is being forced on the restaurateurs of Virginia."
The lawsuit claims the MBAR law doesn't achieve the original goals of the regulation — which Joynes said has roots in the Prohibition era.
The filed lawsuit can be read in full here.
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"They didn't want, they being the powers that be, the government, did not want to have bars, saloons, speakeasies. They wanted to eliminate those and the way they did it was by coming up with the need to serve food at the same time you're serving alcohol, which is why Virginia does not have a bar. At least they didn't. Everything was called a restaurant," said Joynes. "[Now] there's no need for this MBAR. There's no need for this ratio."
He believes that the MBAR requirement impacts the freedom of restaurants to set the price of goods.
Virginia ABC said they're "aware of the litigation, however the Authority has not been served."
