March 6, 2008

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The $24,000 drink?
Cost of proposed tavern licenses worries some small bar owners
By Brian Early bearly@hippopress.com

A bill that’s working its way through the state legislature has some bar owners concerned that their livelihood will soon disappear.

HB 432 would create, for the first time, a tavern license in the state. Currently, New Hampshire law prohibits the existence of bars that solely serve alcohol (other than beer and wine). Most bars are either attached to restaurants or to bowling alleys or billiard rooms — each of which has its own kind of liquor license.

While many think the tavern license is a good idea, it’s the cost that worries them. For places with fewer than 50 seats, the cost would be $12,000 a year; over 50 seats, it would be $24,000 a year.

The most common license now is a restaurant license, which costs $1,200 a year.

Currently, if a restaurant serves $75,000 per year worth of food, its owners can serve as much alcohol as they want (a restaurant can serve less than $75,000 of food if its food and alcohol sales are equal). The new law would push that $75,000 to $150,000 and stipulate that if the food sales fall below that $150,000 threshold, then food sales would have to equal alcohol sales. If they don’t, the business would need to have a tavern license instead of a restaurant license. And that is what a lot of small operators fear.

Bill Mellor is one of those. He manages O’K Parker’s in downtown Manchester. The bar came short of the $75,000 limit this year in food sales, and a few percentage points short of the 50-50 limit. Mellor fears that he will be forced to apply for the tavern license. The current size of his establishment is over 50 seats, meaning the license would cost him $24,000 a year.

“My monthly bill would jump from $100 a month to $2,000 a month. In a place like this, it’s hard to do,” he said. “It doesn’t make much sense to me.”

Eddie Edwards, chief of enforcement and licensing at the Bureau of Liquor Enforcement, supports the proposed law and said it’s not out to put small establishments, like O’K Parker’s, out of business. He’s concerned about bigger clubs that operate under the restaurant license. These places currently make the $75,000 minimum in food sales but sell over a million dollars in alcohol. And these establishments, he said, take up the bulk of police calls, either at the bars themselves or in related drunk driving arrests or domestic abuse calls. Also, many of these clubs have 18-and-over policies, which means a possibility for underage drinking. Edwards said making these clubs into taverns would make it easier to make sure underage residents are not consuming alcohol because people under 21 would not be allowed in establishments operating under the tavern license (the tavern license also would prevent people under 21 from working in taverns).

There’s an amendment to the bill that would allow municipalities to opt out of granting tavern licenses altogether. The bill passed the commerce committee and is now working its way through the ways and means committee in the House.

David Barrett own three bars in the state — two Kilkenny Pubs, one in Milford and one in Keene, and the Twenty-One Bar and Grill, also in Keene. Kilkenny has more alcohol sales than food. He makes the minimum food sales now, but is quite certain that he won’t make the new minimum under the proposed law.

“I can see if they want to go to a tavern license, like every other sate in New England has, but they should put a reasonable price on it,” Kilkenny said. “It’s a real anti-business bill.”

Edwards assures that the license is not meant to put people out of business, and the Bureau of Liquor Enforcement would not force bar owners to get the new license. They would have three years to get food sales up, after which they would be forced to get a beer and wine license, which does not have food requirements, or get the tavern license. They would also be fined $100 for not making the food threshold.

But as Barrett sees it, it would put a lot of people out of businesses. A lot of people don’t like beer or wine and enjoy a cocktail instead. He envisions people being forced to head to “large fast food chain restaurants to enjoy a cocktail.”

Keith Murphy, owner of Murphy’s Tap Room in Manchester, isn’t concerned about the new requirements. He does enough food business.

“It would put a lot of businesses out of business, and that’s too bad,” Murphy said. While he acknowledges that could mean more sales for him, he said, “I don’t want to win that way.”