12 May An Open Letter To Gov. Holcomb: Autonomy on Taproom/Tasting Room Table Service is Needed Now
May 12, 2020
Indiana, through your leadership, is entering a phase of re-opening the economy after nearly six weeks of greatly reduced activity. As part of this re-opening, a focus should be on Indiana’s more than 500,000 small businesses that employ more than 1.3 million people. A significant part of this business segment is the craft beverage industry (beer/wine/spirits) and the craft bars that focus on those products.
The “Back On Track” plan for opening up Indiana’s businesses uses a fluid timetable and malleable definitions to carve up businesses into different groups. In these divisions, the government must be aware of the “strict scrutiny” review, in which individual rights granted by the Constitution cannot be infringed upon unless the government has a compelling interest and the action is the least restrictive method of accomplishing that government interest. In practice, this has many implications, including the constraining of one group’s actions when a similar group is not so constrained. This would not be acting in the least restrictive manner and disparate treatment is not in the government interest.
One group that is caught between groupings of the Back on Track plan is the craft beverage industry, with restaurants/brewpubs opening at one time and brewery/winery/distillery tasting rooms and craft beverage bars opening a month later. For example, restaurants/brewpubs in most of the state are allowed to open at half capacity on May 11. Yet tasting rooms, taprooms, and bars won’t be allowed to open for on-site consumption sales until at least June 13. This added month of carryout sales only will undoubtedly lead to the permanent closing of multiple craft beverage producers and sellers.
The craft beverage industry is not a minor portion of the Indiana economy. Using 2016-2018 data, craft alcohol adds at least $3 billion to the Indiana economy/year and employs over 15,000 Hoosiers. If you include the ancillary businesses that surround each facet of this industry – distributors, draft line designers, maltsters, etc., these numbers soar higher. The loss of even a portion of these businesses will have a lasting effect on the state’s economic health. Already, several breweries and/or the kitchens associated with them have closed permanently due to the pandemic shutdown. It behooves Indiana to allow these businesses to take in as much revenue as possible during the re-opening of the state.
We at Indiana On Tap work to support Indiana craft beverage producers and those businesses that work at the edges of Indiana craft beverages. As such, we have recently spoken with many producers about re-opening. The issues involved in making decisions about how to balance safety of customers and employees, limiting costs and increasing revenues in order to survive long term are complex and interconnected. Based on our recent conversations, Indiana On Tap suggests the following items be taken under advisement by the state:
1) Allow craft bars, brewery taprooms, and winery/distillery tasting rooms to open at half capacity in Stage 2 of the Back On Track plan, matching restaurants and brewpubs (breweries that serve food) that can sell craft beverages for on-site consumption in mid-May.
2) The earlier opening date for craft bars, taprooms, and tasting rooms to open at half capacity in Stage 2 of the Back On Track plan will permit the conditions of PPP loan forgiveness to be more easily met.
3) Temporarily allow craft beverage-serving establishments to use more outdoor space for seating in order to increase capacity and to provide a more healthy service environment.
4) Temporarily permit open alcohol containers near craft beverage serving establishments to increase capacity and to provide a more healthy service environment.
In a clarification of the Stage 2-4 plan as it applies to restaurants and bars, the ATC said on May 6, “The Indiana Alcohol & Tobacco Commission states that a bar or tavern is a premises that prohibits the entry of anyone under the age of 21 and is not in the business of providing in-person full dining service. A business that merely meets the minimum food requirements outlined in 905 IAC 1-20-1 of having hot soups, hot sandwiches, coffee, soft drinks and milk available does not qualify to open for on-premises sales during stage 2.” Taprooms and tasting rooms would be considered bars, so they would have to wait until June to open at 50% capacity.
The arbitrary portions of this “clarification” are two; the age differentiation and the food differentiation. Under the plan as clarified, adults can legally manage the risk for a child by taking them to an all ages brewpub or restaurant in May, but they aren’t allowed to manage the risk for themselves in a taproom for an additional month. Likewise, food may be served in both restaurants and tasting rooms, but the number of food choices in a tasting room that makes them legal under normal conditions somehow makes them an untenable risk when there is a virus present?
In the restaurant situation, an adult can order just a beer or mixed drink, making it function essentially as a bar, and yet they can’t do that at a brewery or distillery tasting room. The only true difference between the two situations is that a restaurant selling an alcoholic beverage means that the producer makes less money because of the cost of distribution. Craft beverage producers’ best margins come from product sold in their own taprooms/tasting rooms. Prohibiting a brewery from selling a pint of beer to someone at their tables while a restaurant is allowed to do so seems unwarranted and unnecessarily restrictive. And what’s worse, that additional month that taproom/tasting room/craft bars have to wait to have on-site sales will kill many of them.
To increase the chances that craft beverage producers and retailers can survive this shutdown, the Back On Track plan should allow craft beverage serving establishments to open at half capacity a week after beginning Stage 2. This action would have many benefits; service industry employees would come off unemployment earlier, craft beverage companies would increase their revenue in time to save their businesses, production could be increased thereby creating work for ancillary businesses around craft beverages, and businesses would more easily meet the stipulations of PPP (calculating recall rate by June 30, utilizing 75% or more of PPP funds for employee compensation, and spending all the money within eight weeks of receipt). Allowing them to open in Stage 2 would also help this plan pass the strict scrutiny review by treating functionally equivalent groups equally.
It is true that some breweries/wineries/distilleries/craft bars may choose to remain on curbside/carryout sales only for health, economic, or process reasons. However, that choice should be the small business owners’ to make. Added burdens have been placed on the small business owners during this period, but their autonomy should reign supreme as they work to remain viable.
In addition to opening as early as possible and eliminating blocks to who can open, increased outdoor seating to overcome the 50% capacity issue must be addressed. While social distancing might make a difference in transmission rate, the reduced capacity will most definitely damage revenue for the craft beverage businesses and restaurants. In essence, the plans are limiting the money businesses can make by 50% or more while doing nothing to reduce the costs of re-opening. A business owner can’t pay half their rent, cool their walk-in refrigerator halfway, or deep clean half their establishment, but they will be limited to generating revenue from only half of their square footage.
One way in which this problem can be combated is by increasing outdoor seating space at alcohol serving establishments. Unfortunately, many restaurants and the like are severely limited in their outdoor space due to state or local regulations. If oversight and regulations were relaxed for a period of time so that more tables can be placed outside, then bars, breweries, etc. would be able to serve more people safely – perhaps even more safely. Since light, heat, and humidity reduce the time that the virus can remain infectious in air or on surfaces (as is the case with most infectious particles), serving more people outdoors would be healthier than serving them indoors.
Lastly, another mechanism by which all alcohol-serving businesses could increase service without sacrificing social distancing would be to grant temporary open container permission around establishments that sell draft Indiana craft beverages or poured drinks. This was permanently established in parts of Indianapolis for the Super Bowl in 2012 with no negative effects. This would increase useable service space and increase the healthy outdoor service. Both increased outdoor seating and open containers could be temporary, but they could be crucial to the survival of these important Indiana small businesses in the meantime.
In summary, the craft beverage producers of Indiana are in need of assistance in their attempts to remain viable in this difficult time. The items suggested in this letter would help businesses navigate this most difficult period, a time perhaps more treacherous than the shutdown itself. The craft producers of Indiana could be helped by the measures outlined and explained in this document. We urge you to consider them seriously and soon; time is of the essence for the survival of these Indiana small businesses.
To the reading public: If you feel strongly about Indiana craft beverage small businesses being able to welcome patrons back as soon as possible and with the tools that will best help them survive this period, please contact the Governor to say so:
Governor Eric J. Holcomb
Office of the Governor
Indianapolis, IN 46204-2797
or by email: http://www.in.gov/gov/2752.htm
Please share tag Governor Eric J. Holcomb at @GovHolcomb and @HolcombForIndiana on Facebook, govholcomb and holcombforin on Instagram, and @GovHolcomb and @HolcombForIN on Twitter.
Chateau de Pique Winery, Brewery – Seymour