Beer and Liquor Licensing Is Its Own Animal
Rachel Schaffer Lawson talks the legal business of alcohol
Rachel Schaffer Lawson is owner of Schaffer Law Firm, which launched in March 2011.
A triple major in marketing, entrepreneurship and music business at Northeastern University in Boston, Lawson would go on to attend Loyola University College of Law in New Orleans, studying business law, intellectual property law and entertainment law. While living in The Big Easy, she undertook an internship with the National Football League’s New Orleans Saints.
Lawson’s practice focuses, in large part, on the food and beverage industry. The Post recently caught up with her for a quick chat.
You provide legal counsel for numerous craft breweries, bars and restaurants. What legal considerations do folk starting such a business have that may be different from those of other businesses?
Pretty much every business I work with has needs in the following four areas: intellectual property (i.e. copyright, trademark, patent), corporate formation, contracts and employees. For my hospitality businesses, there are certain areas within each of these we need to focus more of our attention on.
Specifically, intellectual property is very important for hospitality businesses, especially for my breweries. It seems that everyone today is running to the United States Patent and Trademark Office with their beer or brewery names. So making sure the name you want is available for use is critical. I tell many of my brewery clients that as soon as a name pops into their head for a beer, we need to search it immediately. No business owner wants to take time out of their day to deal with a cease and desist letter.
From a corporate formation perspective, my hospitality businesses carry much more risk than some of my other clients. It is important they be as protected as possible with an LLC or corporation and with the proper insurance as well. Businesses that serve alcohol need to make sure they carry Dram Shop coverage, which covers them in the event that someone drinks too much at their establishment, drives and kills or seriously injures someone. That liability can come back on the bar or restaurant owner if they should have cut that person off. Finally, beer and liquor licensing is its own animal. The laws can be confusing and have been changing at a rapid pace.
What Tennessee craft beer-related law do you wish would be changed or eliminated?
That is a tough question. Fortunately, many of the laws that have been a thorn in most of my clients’ sides have started to change. Changing the definition of beer from 5.25 percent alcohol by volume to 10.1 percent ABV has been a monumental change. And it makes sense. Prior to January of this year, if you made beer over 5.25 percent, you needed to get another licensed from the Tennessee Alcoholic Beverage Commission as a brewer of high-gravity beer.
Beer is beer. Whether it is 5 percent ABV or 20 percent, the process is generally the same. It should not matter what the alcohol content of the beverage is. Beer should be governed by one body and liquor by another. If you have a distance issue (i.e. are within 100 feet of a school, religious institution or single-family residence), you need to go to the Metro Council to get your beer permit. Until about a year ago, you needed to have your liquor license before you could even submit anything to the council. Again, very arbitrary rule.
Some changes I would love to see would be an open container area on Lower Broad, the ability for unconventional businesses to get beer permits, leniency on the food service requirement. A pipe dream would be for breweries to have the ability to self distribute throughout the state.
On that theme, some state-based brewery owners are concerned that state laws prohibit them from self-distributing outside the counties in which they operate. What do you hear regarding this?
This is the law of our great state: A brewery is allowed to self-distribute only in the county in which it is located. They need to register with the Department of Revenue and pay wholesaler’s tax should they decide to go this route. It would be extremely beneficial for breweries to distribute wherever they wish within the state. It is an arbitrary rule to only allow it within the county in which they are located.
What is the single-greatest strength of the state’s alcoholic beverage production sector and what is its main challenge?
The Southeast has an enormous amount of opportunity for growth. In craft beer, the region has the lowest number of breweries per capita of anywhere else in the country. That makes our area prime for growth and for many more producers to come in and be successful.
As to a challenge, there is a huge demand and need for space to open distilleries and breweries. And that can be hard to come by these days.
You’re teaching an introduction to law class at Middle Tennessee State University this semester. What do you want the students to best understand from that class?
I am so fortunate to be teaching Digital Media Law this semester at MTSU, and I really appreciate the school and communications department giving me the opportunity. I want the students to take away a working understanding of legal issues they may encounter in their fields when they graduate. They have been exposed to legal concepts in other area of media, but I want to make sure we dive into issues within the digital sphere. It is very important that the class stay as relevant as possible because this landscape is changing at a breakneck pace.
What are some of the key takeaways from your new book, Marriage Without the Sex: An Uncommon Approach to Business Relationships?
My goal with this book has always been that if just one business is saved or is made stronger by the information in my book, I will have succeeded. I want people to view entering into a business relationship as they would any other significant relationship in their lives, like marriage. There is so much care and planning that is undertaken when finding your spouse. You need to do the same with your business partner.
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