ABC Power Trip: SF Clubs Face Financial Ruin

By Amy Kniss

California is a fairly lax state when it comes to regulating the sale of alcohol – we sell hard liquor in supermarkets, we sell it on Sundays, we sell it until 2:00 a.m. and in many places we begin selling it again at 6:00 a.m. Businesses make money when people drink. No big deal.

That laid-back attitude may be changing, in San Francisco of all places!

California’s Department of Alcoholic Beverage Control (ABC) is taking a closer look at local music venues that host shows without age restrictions. Venues like Slim’s, Bottom of the Hill, the Great American Music Hall, Cafe du Nord and the Fillmore are all at risk, according to an article in today’s SF Gate: State goes after legendary all-ages music clubs.

At issue is a seemingly obscure enforcement power claimed by the ABC, which if you want to get technical isn’t actually a matter of “law.” Despite the absence of a statute requiring clubs that hold music events open to minors, the ABC is insisting that half of such establishments’ revenue come from food sales – rather than (disproportionate) alcohol sales.

Fans and promoters of the local music scene are understandably concerned that ABC’s new “rules” will negatively affect emerging talent and clubs’ ability to preserve their livelihoods by attracting large audiences.

"Without these businesses, there's no local music scene - it's that simple," said Jordan Kurland, co-owner of San Francisco's Noise Pop music festival in an interview with The Chronicle. "It's such a special experience when you are young to see a band you love in an intimate place ... where they are able to charge a more reasonable ticket price. These small-capacity venues are very generous about paying bands, and, like any club in the world, they predominantly make their money off the bar, not off ticket sales."

What the ABC isn’t acknowledging is that California law explicitly permits minors to enter establishments licensed to sell liquor, so long as the establishment has the capacity to serve meals (California Business & Professions Code §§ 23787, 25665). Such establishments may maintain bars on the premises and function more as nightclubs, particularly late at night. According to California Business & Professional Code (§§ 23787): “The operation of such premises is limited solely to the service of meals and beverages at prearranged events of a social or business nature and where admission is by ticket only.” Notice the code mentions no age restriction on ticket purchasers, nor does the code specify any ratio requirement for food-to-alcohol-sales for venues providing ticketed admission.

Serving food allows bay area and California clubs to host as all-age events. This continues to be the case. The San Francisco Entertainment Commission doesn’t take kindly to assaults on its businesses, especially when it comes in the form of enforcing non-legislated “rules” (requiring equal sales of alcohol and food at all-age events) targeting revenue and limiting the operating conditions.

Look for this fight to continue as a legal battle arises over the ABC’s authority to impose restrictions that are not a matter of law.