Requiring businesses serving liquor to earn majority of their revenue from food, non-alcoholic drinks

S.536, which received a committee hearing Wednesday, would require businesses serving liquor-based drinks to earn at least 51% of their total revenue from food and non-alcoholic beverages.

The bill would expand South Carolina’s already restrictive liquor laws, which don’t recognize traditional bars or nightclubs.   

Instead, any business (with exceptions for hotels and micro distilleries) seeking a license to serve liquor drinks must be engaged “primarily and substantially” in the preparation and serving of meals. In fact, the Department of Revenue – which issues liquor licenses in South Carolina – states that “liquor by the drink” licenses may only be issued to restaurants. 

Businesses are also required to:

• Provide seating for not fewer than 40 people
• Be equipped with a kitchen ready to serve food at normal meal times
• Have a Grade A Restaurant license issued by DHEC
• Have readily available menus
• And follow other rules found here

This, of course, has posed a challenge for business owners, many of whom are facing pressure to meet the law’s high bar to serve liquor. Recent legal battles involving bars in Columbia’s Five Points neighborhood have brought new attention to the food service requirement, and several have closed in the process.

But S.536 is not restricted to one city or region. The bill’s strict formula would jeopardize any applicable business in South Carolina that fails to hit the 51% food and beverage target, which could result in the loss of their liquor license and closure of their operations.  

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The bill has not passed the Senate (and therefore did not meet the April 10 crossover deadline) meaning it is unlikely to become law this year. However, as this is the first year in a two-year session, progress made on the bill will carry over into 2022.