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As COVID-19 continues to shut down major parts of the American economy, legislators and industry groups are scrambling to create innovative ways to safely incentivize job retention and spending. One idea, which has caught on in 30 states plus the District of Columbia, is to allow restaurants and bars to sell cocktails and bottled spirits to-go.
On Tuesday, Iowa Governor Kim Reynolds signed into legislation HF 2540, which makes cocktails-to-go permanently legal for both takeout and delivery. Iowa is the first state to make the temporary relief measure permanent, but legislatures in Texas, Florida, Ohio, Oklahoma and the District of Columbia are also considering it.
“Iowa’s hospitality businesses have suffered greatly due to the harsh financial impacts of COVID-19,” said Dale Szyndrowski, vice president of state government relations at the The Distilled Spirits Council of the United States. “Making cocktails to-go permanent provides a much-needed source of stability and revenue for local bars, restaurants and distilleries as they begin to recover…Iowa is leading the way and serving as a model for other states looking for innovative ways to boost struggling hospitality businesses.”
Restaurants have lost nearly three times as many jobs as any other industry due to the pandemic. Eating and drinking establishments in the United States registered sales of $38.6 billion on a seasonally-adjusted basis in May, according to the U.S. Census Bureau, that’s down about $27 billion from sales in January and February, before COVID-19.
New York was the first state to launch drinks-to-go as a temporary economic relief measure in March and Governor Cuomo recently extended the order for at least another 30 days.
“We understand the positive impact this has had for businesses during this trying time and we intend to renew this option in an upcoming executive order,” Rich Azzopardi, Cuomo’s senior advisor said in a statement. A New York State Senator has created legislation to extend the act for two years, but it has not been acted on yet.
Sean Kennedy, the National Restaurant Association’s executive vice president of public affairs said in a statement that take-out drinks comprise about 10% of the restaurant industry’s current revenue.
More must-read retail coverage from Fortune:
- Stitch Fix’s new growth strategy: Letting non-clients shop directly, too
- E-book reading is booming during the coronavirus pandemic
- Why Lands’ End is betting on its new Kohl’s partnership to refuel growth
- How Chipotle’s past food crises prepared it for the COVID-19 outbreak
- The soda market is popping with new contenders. Will they stay or fizzle out?
