Some Texas bars may have been systematically shortchanging customers by serving up lower-cost drinks in place of the top shelf brand names ordered by their clientele. The Texas Alcoholic Beverage Commission (TABC) is currently investigating claims made against 21 bars throughout the state that they substituted lower-cost alcohol products for the brands actually requested by their customers and that they charged those patrons at the higher rate for the drinks in question. Investigators indicated that four bars in the Houston area were involved in this activity. Serving counterfeit drinks could lead to the revocation of the Houston alcoholic beverage license held by these establishments and may result in added fines and penalties when the TABC investigation is concluded.

Operation Bottoms Up

After receiving numerous complaints from consumers, the TABC conducted an undercover operation this spring at 68 establishments across the state of Texas. At each stop, the investigators sampled top-shelf liquors and performed tests to determine that these drinks were genuine. At 21 licensed bars, counterfeit liquor was served to the undercover officials. Administrative notices have already been filed against 14 of the offending establishments; the remaining seven are under continuing investigation for multiple violations of the terms of their Texas liquor license. If these licenses are revoked, the bars in question will likely have to shut down for good.

Advanced Technologies Made Detection Possible

Prior to the spring of 2015, TABC investigators had no definitive way to detect the quality of liquor being served to customers in Texas bars. New technologies, however, made a clear identification possible and provided the impetus for Operation Bottoms Up. It is likely that bar owners were unaware of the new technology and were caught off guard by the investigation, allowing the TABC to nab a number of offenders that might have otherwise continued to defraud the public by serving less expensive drinks in the guise of brand-name liquors.

Texas Liquor License Regulations

To obtain a liquor license in the state of Texas, businesses must agree to follow certain rules and regulations, including the following:

• Prominent placement of health warnings, liquor license permit and other signage required by Texas law
• Restrictions for dry counties and communities
• Codes regarding the sale of package liquors and the allowable areas where these beverages can be sold or consumed legally
• Prohibitions against serving alcohol to minors and requirements to check ID for age and authenticity
• Hours allowable for alcohol sales
• Restrictions on the carrying of firearms in establishments that serve alcohol
• Sale of counterfeit alcohol

Failure to observe these rules can result in fines, shutdowns and the loss of the Houston liquor license held by these companies. After the recent round of investigations by the TABC, it is likely that more bars and taverns will be taking special care to comply with all applicable regulations to protect their business interests in the current regulatory environment.

Companies that specialize in delivering expert advice and guidance for bar owners in obtaining and maintaining their liquor licenses can often provide added help in navigating the complexities of the Texas Alcoholic Beverage Code. These firms typically offer a wide range of services, including the following:

• Assistance in qualifying to accept food stamps under the Texas Assistance for Needy Families or the nationwide Supplemental Nutrition Assistance Program
• Help in applying for liquor licenses from TABC and obtaining the required signage for establishments that serve liquor in the state of Texas
• Permission to sell and redeem Lotto tickets
  Assistance with other commercial license applications and compliance issues in the Houston business community

The professional help available from these companies can ensure the smoothest possible processing for license applications in Houston and the state of Texas. By enlisting the assistance of a liquor license service, bars and other drinking establishments can avoid losing their right to serve liquor to customers and can protect their business interests more effectively.

A restaurant or a bar that does not have a Texas beer license is leaving a great deal of money on the table. You may have neglected to obtain this essential document because the process is difficult, but Texas license services can help you secure the license and permits that you need. Before you apply for your Texas alcoholic beverage license, contact an alcoholic beverage licensing service to help you identify what licenses and permits will be needed for your business and to make the filing process easier.

Technomic’s 2013 BarTAB Report

Technomic, Inc. is a consulting firm that performs research on trends in the food industry. This Chicago-based research firm released its 2013 BarTAB Report last year in which the company outlined several interesting findings. One is the fact that more people are buying premium spirits and beers in on-premise restaurants and bars.

As the economy recovers, people continue to spend their money very carefully. However, they are purchasing more expensive beverages in current days than they have in the past. Technomic discovered this trend in 2012 when its researchers learned that the on-premise channel grew to 1.9 billion gallons of alcohol. Sales also increased by 3.5 percent to reach $97.3 billion. For 2013 and 2014, researchers predicted that the amount of alcohol that people consume would decline, but they also believed that the amount of money spent on alcoholic beverages would continue to grow.

An Explanation for Opposing Trends

Technomic’s director of research Eric Schmidt explained how volume could decrease but the amount of money spent on alcoholic beverages could increase. He states that people are taking fewer trips to bars and restaurants because they are spending conservatively. At the same time, they are interested in experiencing more sophisticated flavors, and this requires that they seek more expensive drinking choices. Some of these more expensive choices include craft beer, imported vodka and single-malt Scotch.

Technomic explained the trends another way. In the report, researchers stated that half of the sales of alcoholic beverages transpired in the on-premise channel. It also stated that one-quarter of the volume was consumed in bars and restaurants. Furthermore, Technomic researchers found that beer tops the category of the drink that is chosen most often by bar and restaurant patrons. It is also the beverage that earns the most money. In 2011, beer consumption decreased, but by 2012, this beverage started to make a comeback. However, it appears to be limited to certain types because in 2013, sales for major domestic beers continued to decline.

The Competition between Spirits, Beer and Wine

Beer has been doing very well recently, but spirits have been showing even greater improvement in bars and restaurants. In 2012, sales of spirits grew faster than any other beverage. Volume increased by 1.9 percent, and the amount sold in dollars increased by 5.6 percent. Technomic researchers believed that sales of spirits would be flat at the end of 2013. They also noted that sales of several high-end beverages are continuing to increase. Overall, wine sales are declining, except for one segment. Domestic table wine continues to be very popular, and more people are purchasing and drinking these wines on an increasing basis.

According to Technomic, whiskey categories collectively outperformed non-whiskey categorieswhen people make their way into bars and restaurants, and this appears to be due to the choices of the millennial generation. Specifically, this population is choosing between spirits and craft beers when they go out because they are seeking a particular flavor, or they are celebrating an occasion. In other words, they are not married to any particular type of drink, so they have a wide array of options open to them. As time marches on, they will continue to be the impetus of the major trends in the beverage industry.