When it comes to operating your mixed beverage business in compliance with the Commonwealth’s alcohol regulations, the food and beverage ratio is paramount.
For the mixed beverage licensee, current Virginia ABC regulations stipulate that a minimum 45 percent of the total gross sales must be from food and nonalcoholic beverages. Conversely, alcohol sales should comprise no more than 55 percent of these sales.
In addition, monthly sales of food prepared and consumed on your premises must be at least $4,000, of which no less than $2,000 shall be in the form of meals with substantial entrees.
It sounds simple enough. But sometimes restaurants do not meet these minimum requirements. Your special agent is ready to help you avoid the costly consequences of not meeting the food-beverage ratio. In addition to ABC's standard inspections, special agents visit mixed beverage licensees during nontraditional meal times to advise you on ways you can follow the “45-percent rule.”
Agents should be able to order a menu item anytime during your operating hours to ensure food sales are being conducted in the proper way. (Prepackaged snacks aren’t the intent of the regulation regarding the 45 percent rule.) Agents also want to see food in your freezer and other food storage facilities.
Although buffets are convenient, they can be danger zones for the mixed beverage licensee trying to stay in compliance. It is incumbent upon the licensee, if using food from a buffet to meet the food beverage ratio, that the buffet fare is actually consumed by a customer. You must be able to document this.
When your special agent arrives for his or her visit, be prepared to discuss various points of your business. Keep regular, accurate records on site, that are immediately available for review. Meeting the food-beverage ratio requirement is important if you wish to avoid fines and suspension or revocation of your license.
When your business is operating correctly it’s good for you, and it’s good for Virginia’s business.
MIXED BEVERAGE ANNUAL REVIEWS
M-B-A-R. For the mixed beverage licensee, these four letters are very important.
The MBAR, or Mixed Beverage Annual Review, is the name of a report that documents the food and beverage sales of mixed beverage licensees. These licensees, who include restaurants, caterers and clubs, are required by law to submit an MBAR to Virginia ABC once a year on the anniversary of the issuance of their license.
The one-page form, provided by Virginia ABC, requires the sales totals for each month of the reporting year in four categories:
- food and nonalcoholic beverages
- mixed beverages
- wine and beer
In addition to this form, mixed beverage licensees must attach a list of all alcoholic beverages in their inventory on the last day of their reporting year. Virginia ABC also supplies forms for this purpose.
The information provided in the MBAR report is used to verify that a mixed beverage licensee is in compliance with the 45-percent rule that states food and nonalcoholic beverages must account for at least 45 percent of the total gross sales of mixed beverages and food.
Revised February 26, 2015