The Franklin News/Post
Franklin, VA

​RICHMOND A major legislative change to Virginia's liquor laws is reshaping how Virginia bar-restaurant hybrids do business.

House Bill 975 took effect July 1, replacing decades-old food-to-beverage sales requirements that determined whether restaurants could keep their mixed-beverage licenses. 

For hospitality businesses that rely more on cocktail sales than dinner service, losing a mixed-beverage license could effectively put them out of business. 

Supporters say the law doesn't make it easier to open bars. Instead, it gives hospitality businesses with more complex operating models greater flexibility by no longer forcing them to fit the financial profile of a traditional sit-down restaurant. 

What was the food-to-beverage ratio that governed Virginia's liquor laws? 

Before HB 975, restaurants and caterers with mixed-beverage licenses had to show that at least 45% of monthly sales came from food and nonalcoholic beverages, while mixed drinks could not exceed 55% of total monthly sales. 

The requirement traces its roots to Virginia's post-Prohibition liquor laws and had remained largely unchanged since the 1980s. Owners of more complex hospitality businesses explained that the old liquor laws forced money-wasting business decisions simply to meet the 45% minimum on food sales, while capping liquor sales they needed to make to stay in business. 

Natalie McNamara is CEO and managing partner of Harry's at Hofheimer in Scott's Addition. The three-story, 14,000-square-foot venue combines a restaurant, bars, private event space and a rooftop with its own bar that draws large crowds during warmer months. While customers may come for dinner, an event or rooftop cocktails, Virginia's previous rules evaluated the business like a traditional restaurant. 

That became a problem two years ago when Harry's failed Virginia ABC's annual Mixed Beverage Annual Review, or MBAR, partly because of a reporting error and partly because its business model didn't produce the required food-to-beverage sales ratio. 

Each year, Virginia ABC uses the MBAR to determine whether mixed-beverage licensees comply with the required sales ratios. A failed review could ultimately jeopardize a business's mixed-beverage license. 

"I was failing it because I have a very complicated business," McNamara said. "I'm being compared to a typical restaurant when I'm a three-story building and a destination that people come to to have a drink on the rooftop." 

In her case, the MBAR was forcing the restaurant to discount food so it could sell enough to meet the minimum sales requirement. 

One example, she said, was selling late-night pizza on the rooftop not because customers were asking for it, but because the business needed additional food sales. 

"Last year, one of my strategies was to sell pizzas on the roof when it got a little bit later and people didn't want to eat. We still needed to serve food, though, and I lost so much money on labor and cost of goods to serve that stupid pizza. It wasn't a good business decision, but I had to make these types of decisions just to appease ABC and this old bill," she said. 

How the new food-to-beverage ratio works 

HB 975 changes that system. 

Rather than applying one standard to nearly every restaurant, the law creates different requirements based on a business's average monthly food sales. 

Businesses averaging at least $48,000 in monthly food sales no longer have to meet a food-to-beverage ratio, and the cap on mixed-beverage sales is eliminated. 

Those averaging at least $25,000 but less than $48,000 must maintain a 30% food-to-70% liquor sales ratio. 

Those averaging at least $4,000 but less than $25,000 generally remain under the existing 45%-food-to-55% liquor ratio, although some smaller venues may qualify for the 30% standard. 

The bill also requires restaurants to maintain at least as many table seats as counter seats. 

Eric Terry, president of the Virginia Restaurant Lodging and Travel Association (VRLTA), said, "VRLTA supported the legislation this year as the fundamentals of the restaurant industry have changed dramatically. Alcohol consumption is down significantly and with the rise of fast-casual restaurants, many offer spirits-based drinks to patrons. In addition, many of our select service hotels were having issues with the MBAR ratio as well. As Virginia's Restaurant and Lodging Association for over 75 years, we represent all businesses, not just a few who want to stifle competition." 

For smaller operators, the shift brings relief rather than reinvention. 

"We've already built our business around managing those food-to-drink ratios, so HB 975 doesn't really force us to change how we operate day to day," Kevin Liu, owner of The Jasper, a cocktail bar in Carytown, said. "What it does is take away that yearly anxiety of being off by a fraction of a percent and facing big consequences." 

For McNamara, the change means operations can better reflect how customers actually use the space instead of being built around fear of an annual compliance calculation. 

Mike Byrne is the director of operations at the Tobacco Company Restaurant and the director of the Richmond Restaurant Association. He is against the new laws. He said, "What you're taking is a very healthy industry that is being challenged by the cost of food, and by the cost of labor, and you're eliminating a lot of that overhead for the bar operator who doesn't have to have that staff and that investment." 

Complaints about the old ratio rule, and HB 975 

Supporters of the change argue the former rule pushed restaurants into costly, inefficient behavior. 

Owners could feel compelled to expand menus, staff kitchens or design specials around compliance rather than customer demand. 

McNamara framed the old system bluntly: "Now, I can make decisions based on what is good for my business and to keep my employees employed not just to meet some law." 

HB 975, she said, gives operators more control over drink-heavy nights, events and programming without the same fear that one annual review could shut down the business. 

Critics, however, have questioned whether loosening the ratio could change the business model by blurring the lines between bars and restaurants. 

Byrne said, "eliminating the ratio [changes] the model. If I don't have to worry about the ratio, then I open up a bar and I serve sandwiches, pizza, I serve food for two or three hours, and then I shut down, and I'm just a bar until close." 

He continued, saying, "Bubba opens a bar from 10 p.m. until 2 a.m., and didn't have any of that overhead, so the guy who has the restaurant with the inventory, the staff and the training now has to charge more to pay his bills. He's at a distinct disadvantage because the bar-only operator is operating on probably 8% payroll, whereas the restaurant operator is working on a margin of maybe 35% to 40% payroll." 

Tommy Herbert, director of government affairs for the VRLTA, said, "Mr. Byrne has raised these concerns before, but the idea that an operator could average $48,000 per month in food sales by selling pizzas or sandwiches for a few hours a day is simply not in the realm of reality." 

Does Virginia ABC plan to track bill's impact? 

Virginia ABC remains central to the new system. 

Virginia ABC will continue overseeing annual compliance reviews under the new law. It also must study how the revised standards affect food sales and compliance, then report its findings to the General Assembly by Nov. 1, 2027. 

Byrne feels that the new law will shift Virginia from a restaurant-centered cocktail model to a bar-heavy landscape, giving low-overhead bars an edge and putting full-service, food-focused restaurants under more economic pressure. 

McNamara believes much of the debate surrounding HB 975 stems from misunderstandings about what the law actually does. 

"When you get all these people that don't actually understand the bill, they start having assumptions and beliefs, and opinions that aren't correct." 

Beginning July 1, restaurants will start finding out what the law changes in practice. For operators like McNamara, the answer isn't whether they can sell more alcohol it's whether they can make business decisions based on customers instead of compliance formulas.

By: WTVR CBS 6 Web Staff 
Posted July 10, 2026
RICHMOND, Va. — A handful of new alcohol-related laws went into effect on July 1 in Virginia. The Virginia Alcoholic Beverage Control Authority (ABC) provided the following list of new laws and a brief description of their impact:
Store Tastings and Products: HB 385, which will go into effect July 1, 2026, will allow Virginia ABC staff to conduct tastings as part of organized tasting events at our stores. Prior to this legislation, only suppliers could conduct tastings at our stores. In addition, HB 385 clarifies existing law that allows Virginia ABC to sell products that are used in connection with distilled spirits beyond simply garnishes or items approved by the Virginia Tourism Corporation.


Distilleries Selling Spirits for On-premises Consumption: SB 424, which will go into effect July 1, 2026, doubles the volume of spirits a distillery - which sells spirits as an agent of Virginia ABC - may sell and serve to a customer. The approved amount increased from three to six ounces of spirits per customer per day for consumption on the premises. Distilleries making on-premises spirits sales will be required to have food reasonably available for patrons, although such food could come from food trucks or the patrons themselves.
MBAR Ratio Requirements Modified: HB 975, which will go into effect July 1, 2026, leaves in place the general contours of the MBAR (Mixed Beverage Annual Review) Ratio, but mixed beverage restaurants selling significant amounts of food and smaller restaurants will be subjected to a less onerous MBAR Ratio. Mixed beverage restaurants selling at least $48,000 of food each month will not be subject to the MBAR Ratio, and mixed beverage restaurants selling at least $25,000 but less than $48,000 of food each month and certain low-occupancy restaurants will be subject to a reduced 30% MBAR Ratio. All other mixed beverage restaurants will remain subject to the current 45% MBAR Ratio.
Late Tax Report Penalties Limited: SB 788 places limitations on penalties for late filings. The bill also requires Virginia ABC to implement an online system for filing wholesale wine tax reports, though this requirement does not go into effect until Jan. 1, 2027.

Food Republic
By Nikita Ephanov  March 14, 2026 1:17 pm EST
 
Drinking booze alongside a meal has been a part of American culture for centuries. Yet although an engrained practice nationwide, it's all too easy to forget that states – not the federal government – take the lead on legalities of imbibing. Such regional regulation creates a wide array of laws, which can drastically impact the customer experience — sometimes in unusual ways.

For example, stop by any restaurant in Virginia, and food plus non-alcoholic drink transactions must comprise at least 45% of sales. Enforced for businesses with mixed beverage licenses, this essentially applies to eateries big or small that sell cocktails, beer, wine, and spirits to accompany food. Intriguingly, Virginia only hands out on-premise beer and wine licenses, not for spirits, meaning even traditional bars must operate as restaurants. Currently, beer and wine don't count towards the sales tally.

Subsequently, how businesses choose to attain such a ratio varies. For one, the state government mandates the constant sale of food amidst opening hours; so no tipple sans snack. Given that the typical American full-service restaurant generates 21% of total sales from alcohol, per 2023 data from the National Restaurant Association, food focused establishments don't struggle. Yet, as the ratio applies universally to restaurants of all sizes and styles, others must turn creative. For instance, a whiskey-focused business, small drinking-centric Japanese izakaya restaurant, or Virginia cocktail bar need to employ savvy strategies, or else the concept simply won't survive in the state. Some adjust prices, market food-focused happy hours, or cut-off drinkers to attain the ideal mix.

The backstory of Virginia's regulated food and alcohol sales

As with most of America's peculiar alcohol laws, origins trace back to Prohibition. The state already contained a multitude of dry counties by the start of the 20th century, which escalated to a total ban of booze production and sales by 1916. Then, the passage of the 18th Amendment in 1920 commenced Prohibition, cementing a rigid stance on alcohol in Virginia. Even for decades following the repeal, the states' restaurants couldn't sell a drop of liquor, until the 1968 Mixed Beverage Act. This legislation initiated the ratio rule, first scaled at 51% food sales until a rework to its current form in the 1980s. 

The mandate never fully normalized. With changing alcohol trends — like the rise of cocktail culture – business owners are fighting back, with a potential bill rework still on the table (as of March 2026). Yet for now, Virginians are used to ordering a bite on a night out and you still won't find a dive bar or other bars focused solely on the booze in Virginia. Reminiscent of the drinking rule you'll have to follow at restaurants in Utah, it's one of the more unusual alcohol policies in the U.S.

February 27, 20226
Axios,  Karri PeiferAdd Axios on Google
Legislation that would lower the Virginia restaurants' food-to-liquor sales ratio is headed to Gov. Abigail Spanberger's desk. 

Why it matters: Many in the restaurant industry have been pushing for a ratio change for more than a decade. 
State of play: The bill would create a tiered structure to replace the long-standing rule that requires at least 45% of restaurants' sales to come from food and no more than 55% from liquor.

• If enacted, the new food-and-liquor ratios would be based on a restaurant's size, rather than the existing system with one ratio for all.
• Per the bill, size is determined by average monthly sales or, for the smallest restaurants, sales and the number of seats — with the caveat that a restaurant must have the same number of seats at tables as it does at the bar. 

Zoom in: Under the pending legislation:

• Large restaurants — ones with at least $48,000 in average monthly food sales — would have no ratio.
• Medium restaurants — with $25,000 - $47,999 in average monthly food sales — would move to 30%-food-to-70% liquor sales ratio.
• Small restaurants — with $4,000 - $24,999 in average monthly food sales — would keep the existing 45%-food-to-55% liquor ratio.
• Smallest restaurants — with $24,999 or less in average monthly food sales, plus fewer than 30 seats and an overall occupancy for 60 people or less — would have to meet a 30%-food-to-70% liquor ratio.

The intrigue: Under Virginia's liquor laws, wine and beer don't count as food or booze and therefore affect either ratio.

• But soda, tea, coffee and other nonalcoholic beverages count toward food sales. 
• That would remain unchanged in the legislation the General Assembly passed this year. 

Of note: The rise of craft cocktails and high-end spirits — where one drink can cost as much as a dinner entree — is what's driven the push for legislative change for more than a decade.

• But past legislation has failed to make it out of the General Assembly.

Flashback: Virginia's food-to-liquor ratio is from post-Prohibition Virginia and a mid-20th-century fight for restaurants to even be allowed to sell liquor.

• The ratio originated with the 1968 Mixed Beverage Act, which allowed restaurants to start selling liquor and mixed drinks. Before that, liquor sales were only allowed in state-run ABC stores or private clubs.
• That law set it at 51%-food-to-49% liquor, where it stayed until the 1980s, when it shifted to the existing 45%-food-to-55% liquor ratio, per the think tank R Street Institute.
• In 1990, the legislature removed wine and beer from the ratio.

What we're watching: Whether the governor signs the new ratio legislation.​​

By TRIBUNE NEWS SERVICE | Tribune News Service
PUBLISHED: December 21, 2025 at 12:09 PM EST | UPDATED: December 21, 2025 at 5:43 PM EST

​By Trebor Maitin, Centre Daily Times
After a slow year, Harrisburg had a spurt of productivity in December, with state legislators sending a half dozen bills to the governor’s desk.
The bills, likely to become law after clearing the Legislature with veto-proof, bipartisan majorities, would ban vape products not approved by the federal government, expand the number of places where alcohol can be served and provide a new avenue for municipalities to fill vacancies.
The bills would largely take effect in the first half of the new year, if signed soon.
A spokeswoman for Gov. Josh Shapiro said the office did not have anything to share “at this time” about the status of outstanding legislation. In Pennsylvania, bills the governor does not sign or veto automatically become law 10 days after the office receives them.
Additionally, a number of signed new bills will be in effect in the coming weeks, including changes to Medicaid coverage for GLP-1 weight loss drugs, requirements for employers to cover mammograms and more.
Here’s a rundown of Pennsylvania bills likely to become law soon.
New DUI offenseA bill on the governor’s desk would create the new offense of driving under the influence of alcohol or controlled substance following diversion.
Those who were booked for a DUI but avoided trial by agreeing to treatment would be able to be charged for driving under the influence within 10 years of completing the diversion program if the bill were to become law.
The law would take effect immediately upon receiving the governor’s signature.
Liquor license reformsA bill that easily passed the House and Senate would strike a rule requiring caterers to give at least seven-day advance notice to authorities if they plan to serve alcohol at funerals.
The rule change would especially affect Jewish and Hindu funerals, as the dead in those faiths usually must be buried within a day. Muslims have similar burial rules but largely abstain from alcohol.
This portion of the bill would take effect two months after receiving the governor’s signature, or late February if it is signed soon.
Other reforms included in the bill would allow nonprofits to sell alcohol during fundraising events, allow stadiums to sell alcohol outside their premises during major sporting events, allow the state liquor authority to auction off licenses that failed to receive bids during previous auctions and allow alcohol to be consumed in spaces adjacent to a given seller’s premises, like a common seating area, if the property owner gives permission.
The auction portion of the bill would take effect immediately upon receiving the governor’s signature and the sporting event portion would take effect in one month, roughly the end of January if the bill is signed soon.
The rest of the bill would take effect two months after being signed.
Vacancy-proofing municipalitiesA bill on the governor’s desk would allow the court of common pleas to fill vacancies in sparsely-populated townships when the townships’ vacancy board is unable to act or itself has a majority of seats vacant.
The bill, if it becomes law, would affect all townships in Centre County starting two months after it is signed.
Unemployment benefits reformA bill awaiting the governor’s signature would require unemployment benefit claimants to make a good-faith effort to get a job, clarifies how overpayments are treated and add protections for people who left a job due to domestic violence.
All the provisions start two months after the bill’s signature.
The bill would also double the earnings requirement needed for unemployment claimants who lost benefits for disqualifying reasons to requalify starting one year after the bill is signed.
Ban of unapproved vape productsThe most controversial bill awaiting the governor’s signature (having received 56 no votes from House Republicans) would ban vape products not approved by the federal government. It fines up to $500 for each illegal product sold by a retailer on first offense. Subsequent violations can result in fines up to $1,500 and nicotine license revocations.
The bill would take effect four months after receiving the governor’s signature, or April if it is signed soon.