BAC talk puts sales at riskBAC talk puts sales at risk

In May the National Transportation Safety Board surprised many in the restaurant industry when it recommended that the legal threshold for drunken driving be reduced from the current 0.08 percent blood alcohol content, or BAC, to 0.05 percent in all 50 states.

Citing a goal of saving 500 to 800 lives a year and reaching zero deaths attributed to alcohol impairment, NTSB chairman Deborah Hersman declared that “each alcohol-impaired death is preventable. Alcohol-impaired deaths are not accidents; they are crimes.”

The restaurant industry quickly pushed back against the recommendation, however, arguing — as it has for decades — that decreasing the rate would only serve to penalize social drinkers who are not responsible for the majority of drunken-driving accidents.

At stake for restaurant operators are sales. The NTSB’s recommendation and renewed focus on BAC levels come as full-service restaurants are finally beginning to rebound from the recession, and new waves of alcoholic beverages in the form of craft beers, signature cocktails and local wines are emerging as solid revenue generators and key differentiators.

The adult beverage industry in 2012 reached $199.8 billion in annual sales, up 3.6 percent from a year earlier, with restaurants and bars driving much of that growth, according to research firm Technomic Inc. On-premise dollar growth of 3.9 percent outpaced off-premise dollar growth of 3.4 percent as restaurant customers spent more money on higher-quality libations and operators raised prices, Technomic found.

Industry officials contend that stricter BAC standards would punish the many restaurateurs who seek to make responsible beverage alcohol service part of the overall dining experience and would have little or no impact on the central cause of drunk-driving accidents. A stricter BAC rate also could lead to higher liability insurance costs for restaurateurs in some states, further pressuring already fragile bottom lines, they said.

Driving the issue

While the NTSB’s recommendations do not carry the force of law, the board remains influential at all levels of government when it comes to public safety. And while there has been little movement to date at the state level to reduce the BAC limit, several lawmakers have said that they plan to address the issue next year when the legislatures are back in session.

The specter, however, of increased efforts to reduce the legal BAC from 0.08 percent to 0.05 percent “is the latest example of anti-alcohol activist overreach,” said Sarah Longwell, managing director of the American Beverage Institute, a trade group representing about 8,000 restaurants.

“A woman can reach [0.05-
percent] BAC after consuming a single drink, but that doesn’t mean she poses a risk to public safety if she drives,” she said. “Activists are wrongly focused on eliminating responsible social drinking instead of targeting the hard-core drunk drivers, who cause over 70 percent of all alcohol-related traffic fatalities.

“After years of public awareness campaigns and increasingly stringent laws, we’re down to hard-core abusers who don’t respond to public appeals,” Longwell said. “The problem isn’t the responsible driver who has a glass or two of wine with dinner.”

The industry’s largest trade group, the National Restaurant Association, agreed.

“As responsible members of the community, our industry is very concerned about drunk driving,” said Scott DeFife, executive vice president of policy and government affairs for the NRA. “However, we feel measures addressing it should be focused on repeat, chronic offenders who drink excessively then drive, and not the millions of Americans that enjoy an adult beverage in a responsible manner with their meal.”

Along with its recommendation regarding lower BAC limits, the NTSB also is advocating the universal use of steering locks on automobiles of convicted drunk-driving offenders, requiring that a driver blow into a breathalyzer to start a car.

Meanwhile, in South Carolina Sen. Gerald Malloy, D-Hartsville, introduced legislation in May to establish the recommended 0.05-percent limit as the state’s new threshold for driving under the influence, or DUI.

Lawmakers in Washington recently passed a bill to strengthen the state’s DUI penalties and said they would probably address the NTSB’s recommendations next year.

In Hawaii the governor established a Hawaii Impaired Driving Taskforce to look into reducing the BAC limit to 0.05 percent, while Tennessee Rep. Jeremy Faison, R-Cosby, told the local media that he plans to sponsor a measure next year to reduce the legal limit to 0.05 percent.

And Florida’s Rep. Irving Slosberg, D-Boca Raton, said he is “contemplating introducing similar legislation” in the Florida state house.

About 100 countries have BAC limits of 0.05 percent or lower for drivers.

Sobering possibilities

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Industry opponents insist, however, that lowering the legal limit here won’t necessarily decrease drunk-driving fatalities; rather, it will frighten already temperate restaurant customers from ordering a drink or two with their food. The ABI cited a study conducted in Denmark after a law was passed there in 1998 reducing the BAC limit to 0.05 percent. The study found an increase in the number of drivers who said they would curtail the ordering of any alcoholic beverages to avoid violating the law but not a reduction in alcohol-related crashes.

According to the study, interviews revealed that the proportion of drivers who would not drink at all or order only one drink rose from 71 percent to 80 percent after the law’s passing. Drivers who had changed their drinking habits most often mentioned the lower BAC limit as their chief reason for doing so. The study also found the lower BAC limit did not result “in a marked decrease in the proportion of injury accidents with impaired motor vehicle drivers compared to all injury accidents.”

While new battle lines are being drawn, the struggle over BAC has been going on intermittently for years. In 1968 the Transportation Department reported that more than 25,000 Americans died each year because of drunk driving. In the 1980s groups like Mothers Against Drunk Driving succeeded in convincing lawmakers at the federal and state levels to take a stand against drunk driving and lower the BAC limit, which had been as high as 0.15 percent in some states.

By 2004, under pressure from the federal government, all 50 states and Washington, D.C., had decreased the BAC limit to 0.08 percent. In 2011 the number of crashes attributed to alcohol-impaired drivers was less than 10,000.

However, opponents claim that another decrease in the BAC limit won’t reduce this number any further, but will instead damage the tenuous improvement being felt by the full-service restaurant sector.

David Henkes, vice president of Technomic, said the Chicago-based research firm has found that while consumers scaled back their purchases during the recession, they’re now demonstrating “that they feel better about the situation and are returning to the alcohol category” at casual-dining and fine-dining restaurants.

Technomic said the sale of on-premise alcohol is expected to rise another 4 percent in both 2013 and 2014. Beverage alcohol sales in restaurants totaled $102 billion in 2013, Technomic said.

“It’s been rough, but it’s getting better,” Henkes said.

While the easing of the downturn is helping, so are new trends in merchandising alcoholic beverages. Consultant Robert Hardy, a founding partner with the Bellwether Food Group in Topsfield, Mass., said signature cocktails prepared by expert mixologists, craft beers and locally produced wines are helping to drive sales among consumers looking for something new and different.

“Casual-dining brands, in particular, see them as an opportunity for growth,” he said.

Fred LeFranc, chief executive and president of Results Thru Strategy, a consultancy in Charlotte, N.C., agreed.

“There’s a new awareness of alcoholic beverages,” he said. “It’s not a shot and beer anymore. People are getting to try new drinks.”

Technomic’s Henkes said the average casual-dining concept generates about 15 percent or more of sales from alcoholic beverages. Consequently, he said, “If people consume less, it can have a pretty serious effect on the business.”

Still, he conceded, it’s difficult to know exactly what the impact would be.

At the same time, restaurateurs could potentially see an increase in their third-party insurance if the BAC limit were to be lowered to 0.05 percent. Robert Bookman, senior partner with the New York law firm of Pesetsky & Bookman and the counsel for the New York City Hospitality Alliance, said, “My guess is insurance costs would rise.”

Bookman also pointed out that lowering the BAC limit likely would impact restaurants across the country unequally. For example, restaurants in a highly urbanized area like New York would be more immune to a lower BAC limit because fewer people drive to restaurants.

“They take cabs or walk or take the subway,” he said.

Restaurants located in the suburbs or small cities, on the other hand, “would take the brunt, and they could probably least afford the insurance,” he said. “Anyone with a big parking lot should be concerned.”

Not everyone believes a lower BAC limit will inhibit alcoholic beverage sales, however. Zane Tankel, chairman and CEO of the 37-unit Applebee’s franchisee Apple-Metro Inc. in Harrison, N.Y., said he thinks a lower BAC standard would have little impact. Alcoholic beverages account for about 18 percent of sales at his restaurants, he said.

“I don’t think it will have much of an effect on the customer who comes in and orders two drinks,” Tankel said. “I don’t think they will cut it to one [drink].”

Tankel added, however, that restaurants need to train servers on how to handle guests who might become inebriated.

“[Apple-Metro has] an entire alcohol training process,” he said. “This is a litigious industry, and it’s getting more so by the day.”

Contact Paul Frumkin at [email protected].
Follow him on Twitter: @NRNPaul.