Proposed Bill Would Loosen Required Food to Alcohol Ratio for Restaurants

The current requirements can be difficult for restaurants and bars in the Commonwealth to meet, especially small businesses and those selling high-end liquor. The ratio is based on gross receipts, not quantity, so more expensive drinks require more food sales to keep the ratio, said Robert Melvin, senior manager of state government affairs at the R Street Institute. 

“If you’re selling like a $100, $200, $300 glass of whiskey, in order to try and meet the ratio you need to sell a significant amount of food for just that one drink. So, that’s what the challenge is,” he said. Melvin, who used to work for the Virginia Restaurant, Lodging & Travel Association, attended the meeting Jan. 18 to speak in favor of the bill. 

Liquor stores in the Commonwealth are state-run, so prices are determined by the state. When the price of liquor increases, food prices sometimes must be raised as well in order for restaurants to maintain the required food-to-beverage ratio. 

“I would describe it as a stealth tax on food for consumers in the commonwealth. Folks that don’t even drink end up having to pay more in food as a result,” Melvin said…

There have been several attempts in the past decade to amend the ratio, but none were successful. This year could be different. Roughly one third of members are new to the General Assembly, providing a fresh perspective on the issue. 

“It’s moved further than I’ve seen in the past four to five years,” said Melvin.