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Texas restaurants: Making alcohol to-go sales permanent 'a lifeline'

Lori Hawkins Shonda Novak
Austin American-Statesman

Serving up a to-go margarita with Maudie's Tex Mex fare "has been a lifesaver" for the popular restaurant chain over the past year, said Ryan Leugers, director of operations for the Austin-based company.

Mixed beverages for carryout, a temporary option afforded to Texas restaurants as the pandemic ravaged sales, have "improved the customer experience of our takeout program," Leugers said. "It has really been a lifeline to our customers, our staff and our business."

Leugers said the to-go alcohol option has boosted mixed-beverage sales 10% to 20% across the restaurant's six Austin-area locations.

Now, a bill headed to Gov. Greg Abbott's desk would make alcohol to-go sales at restaurants statewide a permanent option. Abbott last year expressed support for making such sales permanent.

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Maudie's manager Tracy Rassett prepares to-go frozen margaritas at one of the company's locations in Austin on Friday.  Maudie's says alcohol to-go sales have been a lifeline during the pandemic. A measure passed by the Legislature would make such sales a permanent option for Texas restaurants.

Under the bill, establishments could sell beer, wine and mixed drinks as part of pickup and delivery food orders.

"We fully support making the governor’s initiative permanent," Leugers said. "It will help our industry recover and, we believe, continue to enhance the Maudie’s takeout experience into the future.”

House Bill 1024 was filed by Republican state Rep. Charlie Geren, who owns a barbecue restaurant in Fort Worth. The House approved the bill in March, and the Senate gave final approval Wednesday.

If Abbott signs the bill, it will go into effect immediately. If he doesn't sign it and allows it to become law, it will take effect Sept. 1.

The Texas Restaurant Association applauded the legislation to make alcohol to-go sales permanent.

"This ability has saved thousands of restaurant jobs during the pandemic, and it will remain a critical tool as the industry rebuilds," the association said in a statement. "Even as business conditions start to improve with the distribution of vaccines, we must remember that the hospitality industry faces a multi-year recovery effort."

The to-go alcohol option has boosted mixed-beverage sales 10% to 20% across the six Austin-area Maudie's locations, said Ryan Leugers, director of operations for the Austin-based company.

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The Austin area's leisure and hospitality sector shed more than 60,000 jobs in the initial weeks of the coronavirus pandemic, dropping from about 134,000 jobs in February 2020 to about 70,000 in April 2020, according to data from the Texas Workforce Commission. The number of jobs filled in the sector rose to 112,000 as of March, but at still more than 20,000 below pre-pandemic levels the sector accounts for a significant piece of the region's continued pandemic-related job losses.

Michael Girard, who owns the Speakeasy bar and music venue in Austin, said permanent to-go sales will provide another much-needed source of income for restaurants.

"It's another potential revenue stream for restaurants that are constantly combatting rising taxes and rising occupancy costs," Girard said. "For some it will certainly help as they try to recover from COVID-19. I'm not sure if we'll embrace it, but I'll definitely consider it."

Alcohol being sold to go must be packaged in a tamper-proof container, meaning that once sealed it clearly shows whether it has been opened. Closed containers can also be placed in a bag and sealed with a zip tie or staple.

Al Fini, the chef at It's Italian Cucina on South Lamar Boulevard, said the prospect of being able to have to-go alcohol sales on a permanent basis is welcome news for restaurant owners.

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"We believe allowing restaurants to sell alcohol to go — and in our case wines to go — is a tremendous help to our industry," Fini said.

Abbott initially signed a waiver in March 2020 to allow alcohol to-go sales as the pandemic forced closures of indoor dining and pummeled the restaurant industry. The waiver initially was scheduled to last about two months but was extended indefinitely.

Alcohol to-go sales were not allowed before restrictions were placed on restaurants to slow the spread of COVID-19. Many restaurateurs said alcohol to-go sales have helped their bottom lines in an otherwise dismal business climate.

State lawmakers legalized beer to go in 2019, allowing manufacturing breweries to sell beer from taprooms for customers to take home.

For Magnolia Cafe, which sells beer and wine, alcohol to-go sales aren't likely to provide much of a boost, said Kent Cole, owner of the restaurant on South Congress Avenue.

"It's a very small percentage of our overall sales, so it's not a game-changer because there's little game," Cole said. "For others, it's another revenue center, and everyone is looking for that."

Last March, when the pandemic shutdown began and restaurants could sell food only to go or by delivery, sales at It's Italian Cucina plunged 80%, Fini said.

"Once we were allowed to sell alcohol to go, we increased our sales 20-25% but they were still 60% to 65% lower than the previous year," Fini said.

Fini said the restaurant subsequently implemented a policy of discounting to-go wines 50%, which remains in effect.

Overall, alcohol sales now are up 30% to 35%, Fini said, although most of the sales are for people dining in, which was not the case in the first six months of the pandemic.

"It is quite nice to be able to sell to dine-in customers, after they have enjoyed a nice bottle of wine, to take another (home) at half price," Fini said.

According to the Texas Restaurant Association, the industry still has a long way to go to recover from the pandemic.

Maudie's manager Tracy Rassett prepares to-go frozen margaritas at one of the company's locations in Austin on Friday.  Alcohol being sold to go must be packaged in a tamper-proof container, meaning that once sealed it clearly shows whether it has been opened. Closed containers can also be placed in a bag and sealed with a zip tie or staple.

Overall, 59% of Texas restaurant operators said their sales volume in March was lower than it would normally be in the absence of COVID-19. On average, respondents said sales were 12% below normal levels.

Meanwhile, costs are up and profits are down — 60% of operators said their total occupancy costs are higher than they were before COVID-19, while only 3% said costs are lower.

About 80% of Texas operators said their profit margin is lower than before the pandemic, and just 6% said their profit margin is higher.

Arik Skot Williams, general manager at Bartlett's in Austin, said HB 1024 won't affect the restaurant much, because Bartlett's has chosen not to go after to-go cocktail sales.

"For us, we felt that to-go cocktail kits were not going to represent what we do," Williams said. "No chilled martini glass, no way to make sure the right amount of ice was used when shaking the martini, no way to make sure the guest shakes the bejeezus out of the drink so there is a little raft of ice chips floating on the top. No bartender to make you another one when you are relaxed and enjoying your meal."

However, Williams said he supports the measure.

"If it does help other restaurants stay open and keep their people working, then I think it is a wonderful idea," he said. "It’s been a really rough year for a lot of people and a lot of businesses. We are blessed to have amazingly loyal guests that kept and keep us afloat and kept and keep our staff earning."