Understanding the rules and regulations of the Texas Alcoholic Beverage Code (TABC) means also understanding unique phrases or wording that is included within it. One such phrase is a “corkage fee” and it’s important for bars and restaurants to understand this term and how it impacts their businesses. Below, we’ll break down what a corkage fee is and how it may apply to your establishment.
Corkage fees are essentially a fee that customers pay an establishment in order to bring their own alcoholic beverage inside of the establishment. For example, a bottle of champagne that someone asks to have at their table with their meal while eating in a restaurant. This can be common for things like special occasions, such as proposals or birthday parties, and is one way that the establishment can make up some revenue that would be otherwise lost by the party consuming their own alcoholic beverages.
However, while that is the essential “what” behind a corkage fee, there are still some specific regulations that establishments need to follow.
Who Can Charge Corkage Fees?
Whether your establishment can charge a corkage fee depends on the type of TABC liquor license or permit that your business holds.
Some of the basic restrictions include:
- If your business holds a Private Club Permit, then patrons are NOT allowed to bring in their own alcoholic beverage.
- If you are a bar with a Mixed Beverage Permit, which allows for the sale of distilled spirits, then patrons are NOT allowed to bring in their own alcoholic beverages.
- If your establishment does not sell distilled spirits and/or does not have a license to sell alcoholic beverages, then you can allow for outside alcohol and charge a corkage fee.
- Establishments that only sell wine and beer can charge a corkage fee.
If you are unsure whether you are restricted due to your TABC permit type, then it is best to consult a lawyer who specializes in Texas liquor law. Failure to comply with the correct restrictions and regulations regarding your liquor license or permit can result in fines, revocation or suspension of your license, and, in some cases, even jail time.
How Much Can You Charge for Corkage Fees?
While you are not required to charge a corkage fee if you allow for outside beverages, if you are free to do so, then you may wonder how much you are able to charge legally.
In the state of Texas, there is actually no restriction on the amount of these fees. Some restaurants may charge the equivalent of the cost of a wine bottle while others may charge a nominal fee that is the same across the board for customers who bring their own beverage. Restaurants may also choose how many bottles they allow a customer(s) to bring inside during a single visit, as well. Others will waive the corkage fee if the customer also buys drinks on premises. Deciding on the correct fee to charge is something you may also wish to discuss with your lawyer.
For guidance on TABC regulations and ensuring compliance with corkage fees, give us a call at (713) 880-2992 today. Our team is ready to help your business navigate Texas liquor laws with confidence!