Worcester Business Journal

4 Worcester Business Journal | October 26, 2020 | wbjournal.com Introduction M any of Massachusetts' thriving commercial corridors were built on rivers of liquor. Bars and restaurants can turn a neighborhood into a destination for any combination of nightlife, fine dining, culture or tourism. Establishments with liquor licenses are important economic development drivers, and many cities and towns try to convince proprietors of such businesses to set up shop in their communities. Serving liquor is a complicated industry, though. Heightened public health and safety implications combined with the regulations that govern any businesses that serves food or beverages mean Massachusetts' liquor license laws are complex and comprehensive. ey cover everything from who is eligible to hold a license, to what different types of liquor licenses allow one to do, to—perhaps most notably—how many liquor licenses a city or town is allowed to maintain. Worcester is one of 25 Massachusetts cities and towns that do not cap the number of pouring licenses based on population. While 318 communities do enforce a cap, usually in the name of public safety or public health, this oen creates a secondary market where potential business owners are required to purchase existing liquor licenses rather than applying for a new one from the city or town. is can make starting a business in one of these towns more expensive and difficult than in municipalities that can grant licenses directly to businesses. Worcester and other communities without a cap have calculated that the lack of such restrictions will create an incentive for bars, restaurants and other related businesses to open in their community. Data from the Massachusetts Alcohol Beverages Control Commission (ABCC) shows that these "no quota" communities oen do have more liquor licensed establishments than areas with a cap. is report provides an overview of liquor license patterns across the state and an in-depth look at Worcester's liquor licenses. It aims to show how being a no-quota community has affected bars, restaurants, culture and entertainment options, and ultimately, the local economy. Terminology Classifications of retail liquor licenses • On-premises or "pouring"—these licenses are granted to establishments where patrons consume the alcohol onsite, like bars and restaurants. is report focuses on these licenses. • Off-premises—these licenses are granted to establishments where customers do not consume alcohol onsite, like package stores. • Special—these licenses are usually granted temporarily for events, and are sometimes called "one-day licenses." Categories of retail liquor licenses • All Alcoholic Beverages—these licenses allow the sale of distilled spirits, wine and malt beverages like beer. • Wine and Malt Beverages—these licenses do not allow the sale of spirits. They can also be separated ("wine only" or "malt beverages only"). Types of pouring licenses • Restaurant—for establishments that also serve food. • Club—for private organizations like country clubs. This license restricts service only to members of the club and their guests. • General On-premises—for establishments that do not serve food, like some bars. • Hotel—for businesses that provide lodging to guests. • Other—less-common licenses include continuing care retirement community and veterans' club. Licensing authorities • Alcoholic Beverages Control Commission (ABCC)—a state agency that oversees all aspects of the alcoholic beverages business, both directly and by working with municipalities. • Local Licensing Authority— the organization that grants and oversees licenses in a municipality. In Worcester this role is filled by the three-member Worcester License Commission. Laws and Regulations Because pouring licenses are regulated under section 12 of chapter 138 of the Massachusetts General Laws, the formula that regulates how many pouring licenses a city or town is allowed to have is sometimes called the "section 12 quota." In equation form, the quota for any city or town can be expressed as ... … where fractions are rounded up and the minimum result is 14 (and the second half of the equation is changed to zero if negative). is effectively gives communities a minimum cap of around one liquor license per thousand residents. In addition to the normal quota, cities and towns have a separate quota for licenses authorizing the sale of wine only, malt beverages only, or wine and malt beverages only. In equation form, the wine and malt beverages license quota can be expressed as … … where fractions are rounded up and the minimum result is five. is effectively gives communities a minimum cap of 0.2 restricted licenses per thousand residents. Boston is governed by different liquor license cap laws that apply to Population 1,000 Population - 25,000 10,000 + e Impact of the (Lack of a) Section 12 Quota on Bars and Restaurants A Top Shelf Liquor License Policy Population 5,000 Licenses Relative to License Quota

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