Relief package ‘not nearly enough’ to save US on-trade

The US pandemic funding bill failed to provide enough support for bars and guarantees the closure of businesses, trade group the American Beverage Licensees has warned.

From March 2020 to December 2020, on-trade sales of beer, wine and spirits are expected to fall by US$74bn

On Monday (21 December), the US Congress passed a US$900 billion package of Covid-19 aid, which included the Craft Beverage Modernization and Tax Reform Act (CBMTRA). The tax cut for small distillers was made permanent following a one-year extension at the end of 2019.

The relief package included additional Paycheck Protection Program (PPP) funding, an expansion of the employee retention tax credit and a business meal tax deduction. It also included funding to help struggling independent music venues.

However, the legislative package excluded the Restaurants Act, a US$120bn fund to support struggling bars and restaurants affected by the pandemic.

Trade association the American Beverage Licensees (ABL), which represents independent retail beverage alcohol license holders across the US, said the relief package does not provide the support needed to save on-trade venues that have been hit the hardest by Covid-19.

“Every bit of aid helps, but let’s be clear: this is not nearly enough to save America’s bars and taverns as we know them,” said ABL executive director John Bodnovich.

“Just as it did for the automobile industry during the Great Recession, Congress had the chance to provide a devastated industry a lifeline by passing the Restaurants Act. Sadly, many local bars and taverns are now all but guaranteed to shutter their businesses, lay off their employees and leave a hole in their communities.”

The ABL said the pandemic continues to cause more shutdowns and restrictions for the on-trade, resulting in permanent venue closures.

“While not deemed ‘essential services’, bars and taverns are unquestionably essential for the millions of people they employ,” added Bodnovich. “We need them to be able to keep their doors open so they can lead what we hope is a strong economic recovery from the pandemic.”

From March 2020 to December 2020, bar and restaurant sales of beer, wine and spirits are expected to fall by US$74bn, ABL said. This equals a loss of 52.7 million 12-ounce (350ml) servings of beer, 3.3bn five-ounce (150ml) glasses of wine, and 8.8bn 1.5-ounce (40ml) pours of spirit.

In addition, the industry has lost more than 909,000 on-trade jobs and more than US$24bn in lost wages for bar and restaurant workers, according to ABL data in September 2020.

The ABL noted that many venues have spent thousands of dollars on making their sites and employees safe. But, despite this, bar owners ‘feel unfairly targeted and scapegoated by state and local governments’ as the industry has not been provided with evidence that venues should close.

Bodnovich added: “While this relief package did not go far enough to adequately address Covid-19’s impact on the hospitality industry, bar and tavern owners will look to build on this step and continue to work with members of Congress, the White House and other hospitality industry groups to secure the pandemic relief that is needed to save America’s bar and tavern businesses.”