THE STONE BILL: FOOD FOR THOUGHT

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The Stone Bill is now the Stone Law. Yesterday, Governor Nikki Haley signed the bill and upon signing, it took effect immediately. But in the wake of everything lately, the conversation has shifted from how to get the bill passed to what it actually means. A few days ago, I attempted to explain what the passed bill (now law) means for you, the state’s brewers, and for outside brewing companies looking to come to South Carolina. You can check that out here: https://beerofsc.com/2014/05/28/the-stone-bill-what-the-compromise-actually-means/

To bottom line it: breweries are now allowed to serve food. If they serve food, they can sell as much of their own beer for on-site consumption as customers will buy (with usual dram shop restrictions) and may also sell the beer and wine of other producers that it purchases through a wholesaler. If a brewery doesn’t serve food, then nothing changes from the status quo, i.e., the Pint Law. But, what does serve food mean and what does the now Stone Law say? Let’s take a look.

Here’s the applicable portion:

 In addition to the sampling and sales provisions set forth in subsection (A), a brewery licensed in this State is authorized to sell beer produced on its licensed premises to consumers on site for on-premises consumption within an area of its licensed premises approved by the rules and regulations of the Department of Health and Environmental Control governing eating and drinking establishments and other food service establishments. These establishments may also apply for a retail on-premises consumption permit for the sale of beer and wine of a producer that has been purchased from a wholesaler through the three-tier distribution chain set forth in Section 61-4-735 and Section 61-4-940.

Now, there are other provisions. However, those aren’t important for this discussion. Basically, most of the Pint Law provisions apply and breweries can’t stay open at all hours like they are a Waffle House. So, on to the applicable language:

a brewery licensed in this State is authorized to sell beer produced on its licensed premises to consumers on site for on-premises consumption within an area of its licensed premises approved by the rules and regulations of the Department of Health and Environmental Control governing eating and drinking establishments and other food service establishments. 

What does that mean? The language is fairly broad, so it is open to interpretation. And certainly, certain government agencies will accept that invitation. We’ll await those interpretations, but let’s set the range of where that discussion will be. In its most strict construction, this statute can mean that a brewery can have a true restaurant on-site much like Stone Brewing wants to operate. On the other side, a liberal construction could read that if some area of the brewery premises has to be approved by the rules of DHEC, then simply having a food truck on-site could meet that requirement. So, what is the answer? It’s probably going to be somewhere in the middle for most breweries.

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The Stone Brewing model is certainly now legal in South Carolina, but such a setup isn’t feasible for most South Carolina breweries that are already in operation or who are in planning, as most don’t have the funding nor the desire to operate a restaurant. And that’s just fine. In no way do the state’s breweries have to use that model to take advantage of the new law. And again, breweries are certainly not required to have to have food now. They can operate as they have since the Pint Law. My focus is on the portion of the statute that states within an area of its licensed premises approved by the rules and regulations of the Department of Health and Environmental Control. It appears that the best way to capitalize on the new law is to do exactly what it says: be approved by DHEC. In other words, just get a permit and start selling more beer!

But, how do breweries get a permit? What’s involved? What kind of food operation does this have to be? Let’s take a look. The current DHEC food regulations are fairly restrictive for what a lot of brewers want to do to cash in on the new law. However, that will soon not be the case. On June 27, DHEC will have new regulations concerning food. And these regulations are very brewer-friendly. I’ve had discussions with DHEC and it appears that getting a permit isn’t very difficult and brewers will find the process very easy to navigate. It’s simply a matter of filling out the appropriate paperwork and passing inspection. But, again, what about the food?

The new DHEC regulations define a retail food establishment like this:

“Retail food establishment” means any operation that prepares, processes, packages, serves or otherwise provides food for human consumption, either on or off the premises, regardless of whether there is a charge for the food. These establishments include, but are not limited to, restaurants, delicatessens, snack bars, catering operations, ice cream parlors, school cafeterias, independent living food service operations, licensed healthcare facilities, temporary food establishments, grocery stores, retail meat markets, fish/seafood markets, retail ice merchants, shared use operations, mobile food establishments (to include the associated commissary and mobile units).

Something else of note. The following are not necessarily considered retail food establishments, and are not required to get a permit – Taverns that are primarily engaged in the sale of alcoholic beverages and do not engage in the preparation of food; Businesses that serve the following non-time/temperature control for safety foods that use the following considered to have low risk food processes, such as, but not limited to: (a)Popcorn, cotton candy, candy apples; (b)Sno-cones or shaved ice; (c)Soft drinks or beverages; (d)Nachos served with heated cheese product; and Vending machines, convenience stores or other businesses that offer for sale only pre- packaged food from a food processing plant.

Ok, so, if breweries don’t intend to operate a restaurant or function like a brewpub does in their food operation, or have a kitchen at all, then how can breweries take advantage of the Stone Law? Well, here’s the beauty of the statute – it only requires that in order to take advantage of it, a brewery need only get a permit. It doesn’t say anything about food. Wait, what?!

Yes, you heard correctly. DHEC has said that breweries can comply with the new law by simply having a food truck on the premises. Now, there is still the issue of the statute saying within an area of its licensed premises approved by the rules and regulations of the Department of Health and Environmental Control. So, does that mean breweries can serve beer out of their taprooms or do they need to set up jockey boxes directly next to the food truck? Certainly, jockey boxes would work. As far as the taproom, that remains to be seen. It is certainly more practical so long as people were in fact eating food truck food inside.

Don’t have a food truck or know someone who operates one? Well, then set up something simple – like selling hot dogs. DHEC has said they aren’t too difficult to deal with. Breweries will need a way to clean utensils and the equipment and that will require sinks or dishwashers, which they would already have for glasses and growlers. So, it doesn’t have to be complicated.

In summary, the food aspect of the Stone Law isn’t as difficult as it sounds. There are workarounds and there are different models that can be followed to take advantage of the new law. If a brewery wants to open a restaurant, then it can. If a brewpub wants to convert its license and food operation to a brewery and restaurant, then it can. If a brewery wants to have a hot dog maker and serve beer, then it can. If a brewery wants to just have a food truck and not deal with food while serving its own beers, then it can. Everyone wins here.

The Stone Law wasn’t about Stone, but all South Carolina craft brewers. Like the Pint Law, this is another step forward for the evolution of craft beer in our state. It is by no means the end. There is still much work to do.

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One response to “THE STONE BILL: FOOD FOR THOUGHT

  1. “a brewery licensed in this State is authorized to sell beer produced on its licensed premises to consumers on site for on-premises consumption”

    Just read your tweets about Blue Ridge not being able to brew at a production facility, and then retail their product at a downtown restaurant location as it would be a 3-tier violation. Has a brewery ever attempted to challenge this law using the application of the “Larger Parcel” laws?

    In real estate / eminent domain / condemnation, a property is defined as a single “Larger Parcel” if it has any two of the following three attributes:
    * Contiguity (as in ownership of adjacent property)
    * Continuity of ownership
    * Unity of use
    The example often cited is a paper mill. The mill may own timber land on one side of town, and a mill on the other. Any impacts to one parcel could have affects on the other; thus, the “larger parcel” is comprised of the two legal parcels that make up the paper mill’s premises.

    Couldn’t this be argued for brewers as well? Their “licensed premises” may not have Contiguity, but they most certainly have Continuity of Ownership and Unity of Use; and, in my opinion could qualify as a Larger Parcel.”

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