Reviewing the Bills Regarding Alcohol Service in New Mexico Restaurants-A Mid-Legislative Session Report

The challenges of the Covid-19 Pandemic have been nothing if not disruptive. With disruption comes change—and opportunity.

In an attempt to assist restaurants struggling under closures and limited seating, there has been discussion of allowing home deliveries of alcoholic beverages along with food by restaurants and 3^rd party delivery services. And that has led to discussions on the overhaul of IDLs (Inter Local Dispensers Licenses), which allow restaurants and bars to serve alcoholic beverages on premises. IDLs and Dispensers Licenses (which allow the sale of packaged liquor as well as on-site service) are the two main categories of licensing for hard liquor sales available in New Mexico. Both allow private ownership and resale of the licenses (with state approval of any changes in/transfers of ownership).

Both sellers and buyers of restaurant/bar-related businesses are impacted by this legislation. This document has been prepared to provide some information, based on my research to date, that may assist with planning over the next couple of months.

Current legislation under consideration (SB 6 and HB 255) discusses changes to the IDLs—establishing other, less expensive licensing that allows restaurants to sell alcohol consumption on site, with food. It appears IDLs and Dispensers Licenses would still be required for bars (whose main business is liquor sales, not food sales) and package stores/retail outlets for packaged liquor.

HB255 seems to be the bill that is receiving the most attention and it has undergone numerous amendments since it was first introduced. It is too early in the legislative session to know the end result, which leaves restaurants with IDLs in limbo. (If the new licensing opportunities are approved, one hopes there will be some sort of compensation or transition period for restaurants currently holding expensive IDLs that would be likely to lose considerable value.)

Dispensers Licenses will remain untouched at this time. Most legislators and their constituents seem to believe that the current quota system for licenses allowing package liquor sales is good for the state.

If your business holds or is considering purchasing and IDL, or if your restaurant business may want to serve hard liquor in addition to beer and wine, HB 255 and SB 6 deserve watching. I recommend that you discuss your concerns and interests with your legislative representations, and also consult with your legal and financial advisors as to the potential impact to your business.

Until resolved, the proposed legislation may impact negotiations of IDLs.  Please don’t hesitate to reach out to me if you’d like to discuss further.

Disclaimer: The author believes the information provided is accurate, however, the author is not an attorney or accountant and cannot make guarantees regarding the impact of the legislation to specific situations. If you believe that this legislation may impact your business, please consult your legal and financial advisors. The New Mexico Restaurant Association is also closely tracking this legislation.