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On July 1, 2020, Governor Whitmer: 1) issued Executive Order 2020-143, which closes certain food service establishments for indoor service that are located in regions that are in Phase 4 of the Michigan Safe Start Plan; and 2) signed House Bill 5811, which allows certain retail liquor licensees to sell alcohol to go and for delivery.

NO INDOOR SERVICE FOR CERTAIN FOOD SERVICE ESTABLISHMENTS WITH ON-PREMISES RETAIL LIQUOR LICENCES:

Executive Order 2020-143 closes certain food service establishments for indoor service if: 1) such establishment holds an on-premises retail liquor license;  and 2) earns more than 70% of its gross receipts from the sale of alcoholic beverages. Under the Michigan Food Law, “Food service establishment” includes restaurants, taverns, bars, nightclubs, rental halls, theaters, or similar places in which food or drink is prepared for on-premises consumption or elsewhere, and any other eating or drinking establishment or operation where food is served or provided for the public.

Since the definition of food service establishment broadly encompasses any place of business where food or drink is prepared and sold, determining whether your bar or restaurant must close for indoor service should involve review of your type of liquor license and calculation of gross receipts.

Importantly, the prohibition against indoor service applies to food service establishments that hold on-premises retail liquor licenses. These retail liquor license types include: Class C, Tavern, A-Hotel, B-Hotel, Brewpub, Club, and G-1 or G-2 licenses. The prohibition against indoor service does not apply to food service establishments that hold manufacturer licenses, as manufacturers of alcohol are specifically excluded from the definition of “Retailer” under the Michigan Liquor Control Code. However, breweries, wineries, and distilleries choosing to remain open for indoor or outdoor service must, at all times, comply with the Executive Order’s social distancing requirements set forth below.

With regard to calculating gross receipts for purposes of the 70% threshold, the Executive Order instructs food service establishments to base their determination on gross receipts from 2019; or, if the establishment was not in operation in 2019, then gross receipts from the date the establishment opened in 2020.

SOCIAL DISTANCING REQUIREMENTS FOR ALL FOOD SERVICE ESTABLISHMENTS:

Regardless of whether the Executive Order prohibits your business from engaging in indoor service, any food service establishment that serves alcoholic beverages for on-premises consumption must, both indoors and outdoors:

• Require patrons to wear a face covering except when seated at their table or bar top (unless the patron is unable medically to tolerate a face covering);
• Require patrons to remain seated at their tables or bar tops, except to enter or exit the premises, to order food, or to use the restroom;
• Sell alcoholic beverages only via table service, not via orders at the bar except to patrons seated at the bar;
• Prohibit access to common areas in which people can congregate, dance, or otherwise mingle; and
• Follow all the applicable workplace safeguards established in Executive Order 2020-114 and any order that may follow from it, including the provisions limiting capacity to 50% of normal seating and requiring six feet of separation between 4 parties or groups at different tables or bar tops.

FOOD SERVICE ESTABLISHMENTS CLOSED FOR INDOOR SERVICE:

Food service establishments that are closed for indoor service, but remain open for outdoor service must:

• Prohibit patrons from entering the establishment, except to walk through in order to access the outdoor area, to leave the establishment, or to use the restroom; and
• Require patrons to wear a face covering while inside, except for patrons who are unable medically to tolerate a face covering.

ALCOHOL SALES TO GO AND FOR DELIVERY:

On July 1, 2020, despite closing certain food service establishments for indoor service, Governor Whitmer also signed House Bill 5811, which allows certain qualified liquor licensees to fill and sell qualified containers of alcohol to go and for delivery.

“Qualified Licensees” include: 1) retailers holding a license, other than a special license, to sell alcohol for consumption on premises; and 2) manufacturers that hold an on-premises tasting room permit, an off-premises tasting room license, or a joint off-premises tasting room license.

“Qualified Container” means a clean, sealable container that is for the sale of alcohol for consumption off premises, that has a liquid capacity of less than 1 gallon, and that, after it is filled, is sealed with a device or material that is used to fully close the container securely with no perforations or straw holes.

Qualified licensees engaging in to go sales of alcohol for consumption off premises must comply with the following conditions:

• The qualified licensee must not fill the container in advance of the sale;
• The qualified licensee must comply with all applicable rules of the Michigan Liquor Control Commission;
• The qualified licensee must properly seal the qualified container; and
• Except if the qualified licensee holds an SDM license, the licensee is prohibited from selling alcoholic liquor in its original packaging (e.g., six packs or other unopened bottles of beer, wine, or liquor).

Qualified licensee engaging in delivery sales must comply with the following:

• The qualified licensee must comply with all applicable rules and laws, including the prohibition on sales to minors;
• The qualified licensee stamps, prints, or labels the outside of the qualified container “Contains alcohol. Must be delivered to a person 21 years of age or older.”;
• The recipient of the delivery must provide identification verifying his or her age is over 21;
• If the qualified licensee is a retailer, the delivery must be made by the licensee’s employee or a licensed third-party facilitator;
• If the qualified licensee is a manufacturer, delivery may only be made by the manufacturer’s employee; and
• The same prohibition regarding sales of alcohol in original packaging also applies to deliveries.

CONCLUSION

As always, please do not hesitate to contact us if you have additional questions about how Executive Order 2020-143 or House Bill 5811 impacts your business. Our dedicated team is continuing to monitor the situation as it develops.

This communication is not intended to constitute legal advice. Since the emergency regulations and guidelines are evolving rapidly and each of your circumstances are unique, we encourage you to reach out to us if you have questions about how this or other COVID-19 prompted government actions apply to your place of business.