Efforts on Beacon Hill to pass a new relief package for beleaguered restaurateurs have run into an unexpected foe: the package store industry.
When legislators crafted a bill early in the COVID-19 pandemic to let restaurants sell beer and wine for off-premises consumption during the pandemic, the Massachusetts Package Stores Association was supportive.
But then the House of Representatives passed a broader bill in early June that would, among other things, allow restaurants to offer cocktails to go with meal purchases through the end of February 2021, or the end of the state of emergency, whichever comes later.
This restaurant rescue package sparked a firestorm of lobbying this week, as members of the Massachusetts Restaurant Association e-mailed and called their senators urging support, while package store association members tried to put a cork in it.
Rob Mellion, executive director of the package store group, sent a two-page letter to senators on June 30, saying the “cocktails-to-go” provision isn’t only a temporary lifeline for restaurants. He wrote that it’s also “opening Pandora’s box to making the privilege permanent.” The package store association strongly supports reasonable relief for restaurateurs, he wrote, but such legislation shouldn’t jeopardize the livelihoods of the entire package store industry.
Then, Senator Diana DiZoglio attempted to attach a to-go cocktails bill that she has sponsored to a supplemental budget to pay for coronavirus expenses. Mellion lobbied to stop that, as well. The amendment was withdrawn before the Senate voted to approve the $1.1 billion spending bill on Thursday.
But the broader rescue bill remains in play. It is currently before the Senate Ways and Means committee. When asked about the measure’s prospects, a spokesman for Senate President Karen Spilka would only say that the Senate has “had productive discussions with many stakeholders and we will continue to do so.”
In an interview, Mellion said he specifically has issues with the volume of spirits that would be allowed per transaction in the House rescue package (up to 64 ounces), as well as the 2021 deadline. He also said the language in the beer-and-wine legislation allowed breweries with limited menus to deliver beverages to customers’ homes, bypassing the packies. He fears the same right would be given to distilleries.
Mellion’s industry dodged an expensive battle when a state ballot question backed by Cumberland Farms to expand alcohol sales at food stores was dropped about a week ago. But his members still face competitive threats from big chains, out-of-state wine shippers, and deep discounts at New Hampshire stores.
“This is about preserving mom-and-pop, brick-and-mortar retailers,” Mellion said, referring to his group’s resistance to the House’s restaurant rescue bill. “They have a right to fight for their existence. … We were told this was going to be a bridge to help restaurants from closing down. It became something else.”
Bob Luz, chief executive of the restaurant association, would disagree. Luz and Mellion worked cooperatively on the bill for beer-and-wine sales, which Governor Charlie Baker signed into law on April 3. But now that the sequel is here, they find themselves in opposing camps. While package stores were allowed to stay open during the pandemic, restaurants were limited to takeout and delivery for a long stretch.
“We’re just trying to give small lifelines to an industry that was closed for 100 days,” Luz said.
The restaurant association implored its members in a June 30 e-mail to contact their state senators and ask for help in passing the House rescue package. Also included in that bill: the elimination of interest on deferred meals tax payments, and a cap on fees charged by delivery companies such as Grubhub and DoorDash during the pandemic.
Luz said the restaurant industry is generating minuscule amounts of revenue from the beer and wine deliveries allowed under the first bill. As restaurants reopen their doors, there are significant capacity constraints that will be in place for the foreseeable future. The restaurants, he said, need these changes to help stay afloat in the face of the new distancing restrictions. Package stores, he said, actually benefit from this surge in takeout meals because most alcohol consumed at home will continue to be bought at those stores.
Mellion, though, said he sees other forces at work in the cocktails-to-go provision of the bill. He points to the lobbying being done in numerous states by the Distilled Spirits Council of the United States, aka DISCUS. In a press release celebrating the Massachusetts House victory on June 3, the trade group noted that 33 states and Washington, D.C., allow restaurants or bars to sell cocktails or bottled spirits to go, and 18 plus D.C. allow deliveries in some form.
Mellion said groups such as DISCUS are trying to take advantage of the pandemic to get controversial bills passed that loosen restrictions on alcohol, under the guise of helping restaurants. “We want restaurants to get relief,” Mellion said. “[But] we know there are bad actors that intend to abuse this.”
At the very least, Mellion said, he wants to see the cocktails-to-go language sunset by the end of 2020, or have it explicitly limited to the duration of the emergency. “If you’re going to move this to a step toward being permanent, we’re not so cool with that,” Mellion said.
Jay Hibbard, vice president of government relations for the national distillers group, disagrees with Mellion’s characterizations. Hibbard said his group is motivated by the need to help the battered restaurant industry during a time of crisis, not to permanently change state laws. He noted that Michigan legislators extended their cocktails-to-go allowance until 2025, and Iowa lawmakers made it permanent. Hibbard said the distillers didn’t initiate either of those two dramatic changes.
Sam Hendler, president of the Massachusetts Brewers Guild, said his brewery, Jack’s Abby in Framingham, isn’t taking advantage of the newfound ability to deliver beer to customers. But he said it’s been helpful for other craft brewers. Hendler said he sells most of his beer through package stores but also knows restaurateurs need all the help they can get.
“We don’t need to figure everything out for the next 30 years,” Hendler said. “Let’s just try to get a helping hand out to the businesses that are suffering right now.”