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Governor Newsom PRESS RELEASE (imagined)

Tue, 06 Jan 2026 21:14:12 GMT

(Insight in the “Drunk, Drunker, and High-Risk Drunkenness” series)

PRESS RELEASE (imagined)
Contact:
Office of Governor Gavin Newsom
Phone: (916) 445-2841
Email: press@gov.ca.gov
Website: www.gov.ca.gov

Governor Newsom Announces, "Saving Lives Together" Initiative to Combat Harmful Effects of High-Risk Alcohol Intoxication (imagined)

SACRAMENTO — Today, Governor Gavin Newsom introduced Saving Lives Together , a comprehensive new initiative aimed at reducing the harm caused by high-risk alcohol intoxication in California's valued hospitality industry. The innovative program aims to reduce DUI-related deaths by 20% and cut costs associated with alcohol abuse by 20% over the next ten years. This multi-faceted approach will not only save thousands of lives but will also generate billions of dollars in savings for the state.

“Alcohol abuse continues to be a major public health crisis, and it’s taking a toll on our communities. Saving Lives Together is about more than just reducing motor vehicle crashes—it’s about protecting lives, improving public safety, and promoting healthier communities across California,” said Governor Newsom. “This initiative brings together public, private, and nonprofit sectors to work collaboratively in creating sustainable, long-term solutions.”

State agencies that will support the program include the Department of Alcoholic Beverage Control, the Office of Traffic Safety, the California Highway Patrol, the California Department of Health Services, the Department of Motor Vehicles, and the Department of Transportation (Caltrans).

The program will engage stakeholders from all sectors —including hospitality businesses, local planning departments, and law enforcement agencies—to develop and implement Best Practices for reducing the harm caused by alcohol. These best practices will be shared transparently with all parties involved to ensure a unified approach that maximizes effectiveness.

The goals of Saving Lives Together are clear:

Improve Public Safety and Health: Implementing strategies that reduce the number of alcohol-related incidents and improve overall community health, including a 20% reduction in DUI deaths.
Reduce State and Local Public Safety Expenses: Lowering the economic burden of alcohol abuse by reducing law enforcement and healthcare costs by 20%.
Improve Business Viability: Helping hospitality businesses create safer environments for their customers while boosting long-term profitability and community engagement.

“By working together, California can set an example where public health is prioritized, public safety is improved, and businesses thrive in safer environments,” Governor Newsom added. “This program is a win-win for everyone.”

About Governor Gavin Newsom
Governor Gavin Newsom was elected the 40th Governor of California in 2018. A lifelong public servant, Governor Newsom is committed to building a more equitable, sustainable, and prosperous future for all Californians.

For more information on Saving Lives Together , please visit www.gov.ca.gov.

How Businesses Can Reduce Obvious Intoxication and Increase Cut-offs, Part 2

Fri, 12 Dec 2025 01:21:40 GMT

(Insight in the “Drunk, Drunker, and High-Risk Drunkenness” series)

Recap of Prior Insight

You can encourage your city’s alcohol businesses to adopt new approaches designed to decrease obvious intoxication and improve timely service cut-offs. For a successful rollout, however, owners and managers must first clearly understand both how these new approaches benefit their business and what those approaches involve.

The 42-page Best Practices for Nightlife Establishments booklet is the operator’s roadmap to more profitability and fewer calls for service.

When businesses replace legacy practices with best practices, your public safety expenses decrease and community safety increases.

Short on time? Skip to the recap below!

How to replace legacy practices with best practices

Systemic problems in any business often stem from two root causes:

A lack of best practices , or
A lack of monitoring to ensure those practices are followed.

The same challenges exist for ABC-licensed businesses. Alcohol-related incidents and compliance issues are common. Yet, owners and managers have had limited access to practical, field-tested risk management strategies (best practices). Effective preventative policies and procedures are missing from traditional hospitality management curricula. My Advanced Bar Management Workshop was designed to bridge this knowledge gap, though its current availability is limited.

The 42-page Best Practices for Nightlife Establishments booklet solves the problem by making these practices accessible to all.

What’s in the booklet?

Full-color pages that take the guesswork out of operating responsibly.

Six helpful pages explaining how obviously intoxicated customers put the ABC license at risk and quietly drain profits
Three pages in the Appendix devoted to insurance and lawsuit basics
One crucial page featuring the “relative crash risk” chart and seven reasons why cutting off customers at the first signs of obvious intoxication benefits the business
One eye-opening page highlighting the substantial financial gains from eliminating industry-wide overpouring of spirits, a practice that also reduces profit, tips, and increases customer risk
Two pages of best practices for redu cing intoxication and increasing cut-offs (introduced in our previous Insight, “How businesses can . . . Part 1”)
A thought-provoking, powerful appendix, " A Culture Around Doing the Right Thing," which is about creating an ethical workplace culture. Fraud experts note that 80% of employees are influenced by workplace culture to act either ethically or unethically. In the alcohol industry, moral behavior carries particularly high stakes. Staff must not steal cash sales or give away drinks; remain calm with difficult customers; check IDs reliably; and, critically, cut off obviously intoxicated customers, including off-duty staff. When management consistently cuts off intoxicated customers, they model the expectations they want staff to uphold. This strengthens the ethical culture that is essential to a safe, profitable business.
An easy-to-follow table in the appendix showing the math on how cutting off drunk customers reduces customer churn and improves sales

Customer churn: an overlooked cost of overservice

All businesses experience churn, i.e., lost customers. In the hospitality industry, churn is uniquely amplified because customers often visit in groups. And one bad experience can ripple across entire social circles.

While churn can result from many factors (moving away, aging out, service issues, competition), alcohol-driven negative experiences are a leading, but under-recognized, cause.

Guests may leave permanently after:

Arguments started by a drunk customer
A fight
Witnessing an ugly confrontation

Importantly:

45% of customers share negative experiences on social media
One negative review can drive away 30 customers

The Best Practices for Nightlife Establishments booklet explains how cutting off intoxicated customers impacts churn—and how dramatically this reduces profit. For example:

Improved sales by cutting off drunk customers

Consider a business that decides to enforce a cut-off policy and that policy results in five more obviously intoxicated customers being cut off per day :

If open 365 days:

$1,820 additional cut-offs annually
$13,650 loss in immediate drink profit
($10 drink with a 25% pour cost = $7.50 drink profit lost)
($7.50 profit per drink × 1,820 = $13,650)

Now consider the cost of not cutting them off:

If just 1 in 20 intoxicated customers who were not cut off drives away one regular customer who visited monthly for three drinks:

91 customers lost annually (1,820 ÷ 20)
$24,570 in lost annual profit
(91 customers × 36 drinks × $7.50 = $24,570)

The net gain from enforcing cut-offs:

+$10,920 annual profit increase
+$21,840 profit increase if each lost customer takes just one friend with them.

Albeit some of those cut-off customers would have purchased more than one more alcoholic drink, the above calculation is conservative. Research shows one negative experience can ripple outward far beyond one or two customers, especially when groups make nightlife decisions collectively.

The true financial benefit of cutting off intoxicated customers is significantly higher.

Additional benefits of cutting off obviously intoxicated customers

Businesses that enforce responsible alcohol practices see improvements across every major risk category:

1. Fewer general liability claims

Most liability claims originate from drunk customers. Each claim:

Costs the business its deductible.
Raises premiums and deductibles for years.

2. Fewer Workers’ Compensation claims

Many staff injuries involve intoxicated patrons, especially in late-night businesses.

Claims raise the business’s Experience Mod (higher Mod = higher premiums).
In California, a single major claim can trigger a “shock factor” that dramatically increases costs for several years.

3. Fewer credit card walkouts and chargebacks

Most are caused by intoxicated customers who should have been cut off.

4. Less damage to property

Both inside the business and in the surrounding areas.

5. Far fewer calls for service

Intoxicated customers are the leading trigger for police and other first responders. Repeated calls can result in the business being deemed a disorderly house , drawing increased scrutiny or penalties.

In my Advanced Bar Management workshop, I discuss these numbers and their implications in depth—often producing “lightbulb moments” for participants.

The Best Practices for Nightlife Establishments booklet captures the most critical insights from that training and our combined decades of experience in hospitality management and alcohol regulation.

It’s never been easier to help your alcohol establishments do better.

Next in this series

Our final Insight in the “Drunk, Drunker, and High-Risk Drunkenness” series:

Press Release from Governor Newsom (imagined)

FINAL RECAP

All businesses and organizations have churn, i.e., lost customers. Alcohol businesses often lose customers because of unfortunate experiences fueled by a drunk customer.

The Best Practices for Nightlife Establishments booklet shows alcohol business owners how drunk customers who are not cut off can result in lost customers and reduced profit.

The benefits from cutting off drunks far exceed the financial gain resulting from reduced customer churn. These benefits include:

Fewer general liability insurance claims. Almost all claims are caused by obviously intoxicated customers; claims that cost the business the amount of their deductible and often result in higher premiums and deductible expenses for five years.

Fewer Workers’ Compensation claims. These claims often involve injured staff from altercations with drunk customers. Claims increase a business’s Experience Mod. The higher the Experience Mod, the greater the risk to the insurance company, and the business pays more in the form of a surcharge on its premium.

In California, a single large claim can trigger a “shock factor” calculation, resulting in a sudden and severe increase in payments for several years.

Fewer credit card walkouts and chargebacks, most often generated by obviously intoxicated customers.

Less damage to the business and surrounding properties.

Far fewer calls for service. It’s typically the obviously intoxicated customers who generate these calls, which can trigger state and local authorities to take action against a business for being a disorderly house (§ 25601 CA Business & Professions Code).

How Businesses Can Reduce Obvious Intoxication and Increase Cut-Offs, Part 1

Mon, 24 Nov 2025 21:32:18 GMT

(Insight in the “Drunk, Drunker, and High-Risk Drunkenness” series)

Recap of Prior Insight

Customers are overserved alcohol and rarely cut off because:
The ABC doesn’t enforce the law against serving an obviously intoxicated person (§25602a Business & Professions Code).
Staff who might enforce a cut-off policy are unaware of the rise in insurance costs due to claims involving drunk customers.
Staff aren’t exposed to the research that quantifies customer harm at higher BAC levels.

Business owners are unaware of many practices that can reduce high-risk intoxication inside their establishments.

The siloing of information between the alcohol research community and the hospitality industry harms all stakeholders.

The broad sharing of information from research studies would provide business owners and managers with the knowledge, tools, and motivation to serve alcohol more responsibly.

Short on time? Skip to the recap below!

How you can help businesses replace ineffective legacy practices with new, best practices

It’s no surprise. The overconsumption of alcohol and related problems are the norm at most nightlife venues. Clearly, the practices of those alcohol businesses aren’t working.

You can motivate businesses to adopt new, responsible business practices. Ones that reduce the number of customers who become obviously intoxicated and that increase timely cut-offs.

Business owners and managers need to understand:

How the new approach benefits the business.
What the new approach looks like in practice.

Giving the Best Practices for Nightlife Establishments booklet to your city’s alcohol businesses provides them with the motivation and essential tools to improve their operation. The 42-page booklet includes, for example :

Six helpful pages on the risks of overservice — how drunk customers endanger the ABC license, harm your profits, and increase liability risks.

A two-page addendum, Insurance & Lawsuit Essentials for Hospitality Staff

One crucial page with a “relative crash risk” chart and seven reasons why cutting off customers benefits the business.

One eye-opening page on the financial impact of reducing overpouring, a common but costly industry issue that reduces profits, tips, and increases risk to the drinker.

Two pages that share our ten best practices to reduce intoxication and properly handle drunks.

Below, from the booklet, are the ten best practices to prevent and deal with customer intoxication:

1. Choose effective responsible beverage service (RBS) training

Select a course that goes beyond laws and penalties. The best training connects intoxication to real business outcomes. This includes increased insurance claims, higher liability exposure, and reduced profits. It also provides actionable methods to prevent overservice. Very few courses include this vital content.

2. Reinforce expectations during hiring and onboarding

Discuss the importance of never serving obviously intoxicated customers. Do this during both the interview and onboarding processes.
Review how overservice affects your license, liability, and insurance rates. Use real examples.
Incorporate a documented cut-off procedure and include role-playing in staff training.
Make it clear that serving an obviously intoxicated customer can cost the employee their job.

3. Adopt a gatekeeper mindset

If security staff are posted at the door, establish and enforce a policy that prohibits entry to obviously intoxicated individuals. Maintain a banned customer log, noting the date, reason, and length of the ban, and a brief description and name, if known. This builds accountability and protects staff and customers.

4. Post overservice notices

Display signage at entrances, behind the bar, and on menus stating,

“It is illegal to sell or serve alcohol to a person who is obviously intoxicated. Thank you for your cooperation.”

A New Zealand study found that sharing this message reduces intoxication levels and empowers staff to uphold the law.

5. Display “drinker guides” highlighting the pleasure zone

Provide guides showing the research-based “pleasure zone” of moderate intoxication. The guide encourages guests to monitor their BAC with mobile apps. This promotes responsible enjoyment, demonstrates social responsibility, reduces the risk of an insurance claim, and reminds staff to avoid overpouring.

6. Designate cut-off specialists

Assign experienced staff to handle customer cut-offs when other staff feel uncomfortable doing so. When servers can rely on trained cut-off specialists, cut-offs happen more often and with less conflict, ensuring smoother outcomes for both customers and staff.

Display thank-you cards or emails from customers who have expressed their appreciation for being assisted home safely. This reinforces a culture of care and professionalism.

7. Maintain a daily cut-off log and review it

Document all refusals of service and denied entries due to intoxication. Record the date, reason, description, and name, if known. Management should regularly review cut-off logs to confirm consistent enforcement.

8. Price drinks responsibly

Use Profit Per Alcohol Serving© when setting drink prices to balance profitability and responsibility. Avoid promotions, games, or contests that encourage rapid or excessive consumption.

9. Prevent overpouring

Secret shopper studies show that most bartenders overpour spirits, reducing sales, profits, and tips, and putting the customer at higher risk of harm. Train bartenders and managers on proper pouring levels. Have managers certify and monitor the bartender’s ability to pour correctly and consistently.

10. Track and celebrate a clean insurance record

Maintain and display your claims record. Celebrate milestones, such as one year without an alcohol-related claim. Recognizing these achievements boosts morale and reinforces your culture of responsibility and excellence.

Stay tuned for future insights on Drinker Guides and Profit Per Alcohol Serving©, and how these essential tools can enhance business profitability and community safety.

Your city’s businesses will thrive with better practices

By implementing some or all of these ten best practices, your city’s businesses will become more profitable and experience fewer drunk-related problems and calls for service.

Most importantly, public safety in your community will improve.

COMING UP IN THIS SERIES

How businesses can reduce obvious intoxication and increase cut-offs (part 2)
Press Release from Governor Newsom (imagined)

FINAL RECAP

You can motivate businesses to adopt new approaches to reduce the number of customers who become obviously intoxicated and increase timely cut-offs. But first, business management need to understand:
How the new approach benefits the business.
What the new approach looks like.

The 42-page Best Practices for Nightlife Establishments booklet is the operator’s roadmap to more profitability and fewer calls for service.

When your city’s businesses replace legacy practices with best practices, your public safety expenses decrease and community safety increases.

Information Silos: How They Harm All Stakeholders

Mon, 10 Nov 2025 14:50:49 GMT

(Insight in the “Drunk, Drunker, and High-Risk Drunkenness” series)

RECAP OF PRIOR INSIGHT

Chronic alcohol-related problems, such as violence, DUIs, and neighborhood disruption are largely preventable by reducing overconsumption.

There are three proactive steps cities can take to effectively change the behavior of existing businesses, especially those with long-standing bad habits.

Step 1: Prepare to meet with the business. Obtain performance data and develop your written talking points.

Step 2: Meet with the business. Share performance data. Connect any issues to proven solutions. Emphasize the link between intoxication and calls for service. Review the ten “best practices to reduce overconsumption” in the Best Practices for Nightlife Establishmentsbooklet. Recommend and review cut-off logs to encourage accountability. Schedule a follow up in 30-45 days to review progress.

Step 3: Use Enhanced Bar Checks. They reinforce the city’s expectations, build trust, and strengthen partnerships. Where possible, reference case examples of enforcement to underscore accountability.

As improvements take hold, extend this 3-step process to other high-risk venues in the city.

Short on time? Skip to the recap below!

First, the real reasons that drunks aren’t cut off

Depending on which study you read, only 3% to 15.5% of customers who are identified as obviously intoxicated are cut off. Why so few? Usually, it’s not because the server wants more tips or the business wants more sales. The real reasons are systemic.

The law isn’t enforced . The Alcoholic Beverage Control rarely enforces the law against serving an obviously intoxicated person, §25602(a) of the Business & Professions Code. Imagine if traffic speed laws were never enforced. Chaos would follow. That’s the norm inside many late-night venues with excessive drinking.

Cut-offs are unpleasant . Refusing service can be awkward or confrontational. Few servers enjoy doing it. And if managers don’t require cut-offs, many servers tend to avoid them.

Lack of information and knowledge. Owners and managers often don’t realize how intoxicated customers drive up insurance premiums, deductibles, and customer churn (turnover). In the automobile insurance realm, studies show that higher insurance premiums motivate most drivers to improve. Likewise, if alcohol business owners understood how drunkenness affects their insurance costs, it could motivate them to operate more responsibly. Those who pay the insurance bill aren’t the ones making cut-off decisions.

Ethically, of course, staff should cut off intoxicated customers. But ethically, enforcement agencies should also enforce the law. Instead of finger-wagging, let’s solve the problem.

Internal information silos hinder learning in the business organization

Most alcohol businesses suffer from information silos, where critical information and knowledge are trapped in management layers, never reaching those staff members who need it.

For over a decade, I’ve led Advanced Bar Management workshops, in-person and, for my Johns Hopkins University clients, via Zoom.

A standard poll question that I ask participants is:

“How many years does an insurance claim stay on your record?”

Almost no one knows the answer: five years. And few people understand how multiple insurance claims can compound premiums and deductibles. I wasn’t surprised that my workshop attendees didn’t know this. After all, as a restaurant owner and general manager, I didn’t know, either. I only learned it after years of insurance claims made my insurance unaffordable.

That’s the journey many alcohol business owners take. Learning the hard way, if at all.

External information silos lead to missed opportunities

The same void in information sharing exists beyond the business’s walls. Research that could inspire alcohol business operators to reduce the intoxication levels inside their business is never shared with them. Here are a few examples:

Overpouring Studies
Research on the overpouring of spirits and wine shows its massive negative impact on sales and profit margins. In my Advanced Bar Management training, when business owners and managers learn about these findings, they often become eager to implement my “profitable pouring” practices. These actions reduce waste, improve profits, and lower intoxication levels inside establishments. The result is a more profitable business and a safer community.

The Biphasic Response (“The Pleasure Zone”)
During my Advanced Bar Management training, participants are captivated when we explore the biphasic response to alcohol. That is, at first, alcohol produces pleasurable feelings, but over time, the effects become more depressant in nature. [1] Understanding the BAC level at which alcohol consumption shifts from pleasurable to negative and risky empowers both servers and customers. This new knowledge debunks the myth that “more is better,” and it affects attitudes and beliefs about drinking. Nearly every operator who learns this concept asks me for a complimentary Drinker Guide to display for guests. We’ll discuss the guide in a future Insight, but the key takeaway is simple. When customers understand the pleasure zone, that knowledge follows them out the door.

Studies on High-Intoxication Harms
Decades of research demonstrate the steep rise in harm as intoxication increases. My Advanced Bar Management workshops are filled with these findings—studies I never encountered during my own years as a late-night club operator and that other hospitality professionals have never seen. These studies were buried in academic journals, far from the people who could benefit from them the most.

What do you think is more effective?

Telling servers to cut off drunk customers because too much alcohol consumption is unsafe.

Showing them the “relative crash risk” [1] chart that indicates a customer being cut off, whose BAC is .07, is twice as likely to get into a vehicle crash as a nondrinker. And if the customer is not cut off and their BAC rises to .15, the driver is now 22 times more likely to crash.

Information sharing breaks silos

Stay tuned because our next two posts will discuss how sharing the Best Practices for Nightlife Establishments booklet with businesses shatters information silos and triggers critical change. When best practices replace legacy practices:

1. Public safety is increased.

2. City public safety expenses are reduced.

3. Business profitability is improved.

COMING UP IN THIS SERIES

Business Best Practices to Reduce High-Risk Intoxication (Part 1)
Business Best Practices to Reduce High-Risk Intoxication (Part 2)
Press Release from Governor Newsom (imagined)

RECAP

Customers are overserved alcohol and rarely cut off because:
The ABC doesn’t enforce the law against serving an obviously intoxicated person.
Staff who might enforce a cut-off policy are unaware of the rise in insurance costs due to claims involving drunk customers.
Staff aren’t exposed to the research that quantifies customer harm at higher BAC levels.

Business owners are unaware of many of the practices that can reduce high-risk intoxication inside their establishments.

The siloing of information between the research community and the hospitality industry harms all stakeholders.

The broad sharing of information from research studies would provide business owners and managers with the knowledge, tools, and motivation to serve alcohol more responsibly.

[1] R.D. Bloomberg, et al., Journal of Safety Research 40 (2009) 285-292.

How Cities Can Influence Cut-offs at Existing Businesses

Wed, 29 Oct 2025 16:07:52 GMT

(Part of the “Drunk, Drunker, and High-Risk Drunkenness” series)

Recap of Prior Insight

For every $1 a city spends to reduce intoxication, it saves $260 (Levy & Miller)

At every step in the process of evaluating and conditioning new alcohol businesses, the city should deliver a consistent message: “Your business future depends upon not serving obviously intoxicated customers.”

A key condition of approval requires the business to maintain a cut-off log, available for inspection by law enforcement or code enforcement.

The Best Practices for Nightlife Establishments booklet is a ready reference for city planners, commissioners, and enforcement officers when working with new, existing, or disorderly/otherwise noncompliant businesses.

Written talking points for city officials connect the city’s conditions of approval to specific alcohol best practices, which improve business viability, protect city resources, and guard public safety.

Short on time? Skip to the recap below!

Introduction

In our last Insight, we explained how cities can guide new alcohol businesses towards responsible alcohol management and making cut-offs happen.

Today’s post focuses on how cities can help existing businesses , especially those with long-standing bad habits, to responsibly manage their business and increase their cut-offs of obviously intoxicated customers.

REDUCING INTOXICATION AT EXISTING BUSINESSES

Nearly all chronic problems with nightlife venues—violence, sexual assaults, neighborhood complaints, and excessive DUIs—can be mitigated by reducing overconsumption, i.e., cutting off customers. Other issues, such as gang activity, drug sales, or nuisances, require different solutions and will be the focus of a future post.

Below are the three steps you can take to influence responsible behavior by your existing businesses. To keep costs down, start with the one or two establishments that are causing the most problems. These are usually your high-volume, late-night venues.

Step 1: Prepare to meet with the business

Review the business’s record of calls for service.

Consult code enforcement about the business’s compliance and any complaints from neighbors.

Have law enforcement meet with the ABC district office to review the licensee’s file, which includes information on the applicant, the premises (planned operation/diagram), police reports, and any disciplinary matters.

Review the business’s conditional use permit and entertainment permit, if applicable.

Examine the venue’s online presence for risky promotions, images of intoxication, or gang symbolism.

Review your Best Practices for Nightlife Establishments booklet. Pinpoint the specific best practices that will help resolve the problems exhibited by the business.

Develop your written talking points from the bulleted list under Step 2, below.

Step 2: Meet with the business

Include ownership, as appropriate, management, and the security lead.

During the meeting, discuss the following:

The mutual goal is to reduce problems, protect public safety, and make the business more viable.

Your key business performance concerns

The fact that most calls for service relate to over-intoxication

Any risky drink promotions or marketing tactics

Security Best Practices can help mitigate problems.
A gatekeeper mindset at the entrance to prevent those people who are already intoxicated or behaving unruly from entering.
A policy of banning violent or habitually drunk customers
Early, friendly engagement with customers who are behaving in a concerning manner. Do not wait until the customer gets more unruly and more intoxicated.

Since most business problems stem from intoxicated patrons, focus on the best practices that reduce drunkenness.
Eliminate overpouring of spirits by following profitable pouring practices, which reduce intoxication and related issues while increasing profits.
Cut off obviously intoxicated customers.
Ask:
How many customers are typically cut off on a busy night?
Are cut-offs documented?
Does management review cut-off logs to ensure cut-offs are done regularly?
Does the business want law enforcement officers to review logs to ensure cut-offs are occurring?

A cut-off specialist that the staff can turn to do cut-offs; someone who has the people and temperament skills to manage the responsibilities. When staff can turn to others to perform cut-offs, the cut-offs skyrocket.

Review the other practices shared under "Ten Best Practices to Reduce Overconsumption" in the Best Practices for Nightlife Establishments booklet.

Serving obviously intoxicated customers is illegal and enforceable by ABC and local law enforcement.

Enhanced bar checks (EBCs) raise staff awareness about cutting off intoxicated customers.

Ultimately, the business needs to benefit all stakeholders. Otherwise, the city will be required to pursue remedial actions.

Before ending the meeting, schedule a follow-up in 30–45 days to review progress.

Step 3: Conduct enhanced bar checks

An enhanced bar check (EBC) involves a team of law enforcement officers walking through a licensed premises with the establishment’s manager on duty. Unlike a typical bar check, which is enforcement-oriented and has no specific focus, an EBC is prevention and education-oriented, focusing on spotting overserved customers.

EBCs help management and staff to stay in compliance with the law against serving alcohol to obviously intoxicated customers. EBCs should significantly reduce the number of customers who reach high-risk levels of intoxication, .15 percent BAC or higher.

Typical EBC sequence:

Upon arrival, officers request to speak with the manager on duty
Explain the purpose of the visit: to check for overserved customers and support responsible service.
Conduct a walk-through with the manager, looking for:

Intoxicated customers who are being served
Presence of obviously intoxicated individuals

After the walk-through, officers review the cut-off log, if your city requires cut-off logs.

Is it being maintained?
Are incidents accurately logged?

Share observations and positive feedback with management.
Remind management that repeated overserving could lead to undercover investigations by ABC or local law enforcement.
Reference any known examples of ABC violations for overservice.
Thank the manager for cooperating with law enforcement.

After a few EBCs, most managers begin conducting self-checks , walking through their venue proactively, to identify intoxicated patrons.

Naturally, EBCs have more impact when businesses know that laws against overserving are actively enforced.

As improvements take hold, extend this process to other high-risk venues (e.g., high volume, late night).

FINAL RECAP

Chronic alcohol-related problems, such as violence, DUIs, and neighborhood disruption, are largely preventable by reducing overconsumption.

There are three proactive steps cities can take to effectively change the behavior of existing businesses, especially those with long-standing bad habits.

Step 1: Prepare to meet with the business by obtaining performance data and developing your written talking points.

Step 2: Meet with the business to share performance data. Connect any issues to proven solutions. Emphasize the link between intoxication and calls for service. Review the ten "Best Practices to Reduce Overconsumption" in the Best Practices for Nightlife Establishments Booklet. Recommend and review cut-off logs to encourage accountability. Schedule a follow-up in 30-45 days to review progress.

Step 3: Use enhanced bar checks to reinforce the city’s expectations, build trust, and strengthen partnerships. Where possible, reference case examples of enforcement to underscore accountability.

As improvements take hold, extend this 3-step process to other high-risk venues in the city.

Coming Up In This Series

Information Siloing

Business Best Practices to Reduce High-Risk Intoxication (Part 1)

Business Best Practices to Reduce High-Risk Intoxication (Part 2)

Press Release from Governor Newsom (imagined)

How Cities Can Influence Cut-Offs of Alcohol Service at New Businesses

Tue, 14 Oct 2025 21:29:04 GMT

(Part of the “Drunk, Drunker, and High-Risk Drunkenness” series)

RECAP OF PRIOR INSIGHT

Enforcing the law against serving obviously intoxicated customers benefits businesses .

The ABC issued just six violations last year—for its more than 94,000 licensed businesses.

Studies show that enforcement significantly increases cut-offs and improves public safety.

Officer observation time of a drunk customer before being served, for a successful prosecution, can be as little as 20-30 minutes, or longer.

Three years after California’s Responsible Beverage Service training law took effect, the ABC has posted or publicized no enforcement actions against licensees whose alcohol managers and servers have not been trained.

Short on time? Skip to the recap below!

Why it matters that cities are visionary with new alcohol businesses

Research indicates that the more proactive city officials are in addressing overconsumption in licensed businesses, the lower the public safety expenses and community harms.

For every $1 invested in reducing over-intoxication, cities save $260 (Levi & Miller).

Fewer intoxicated customers mean fewer 911 calls, fewer injuries and deaths, less strain on first responders, and less public safety expenses.

Police and fire services are the two largest expenses for California cities (Public Policy Institute of California, 2024).

In California, one arrest for aggravated assault costs a city over $14,000 —not including court costs (RAND Corporation).

Cities that analyze the impact of alcohol abuse in their communities find a relationship between alcohol and arrests. Newport Beach found that 1,143 (32%) of their arrests were due to alcohol. Ventura found that alcohol was involved in 43% of arrests and 60% of violence arrests.

Historically, the lack of best practices for key stakeholders (business owners and managers, planners, planning commissioners, and law enforcement) has exacerbated the challenge to minimize these problems.

The gap in the alcohol licensing process

City officials often assume that during the licensing process, the Department of Alcoholic Beverage Control (“ABC”) gives the license applicant explicit expectations for responsible alcohol management.

In reality, the licensing process is just paperwork. No clear-cut expectations are set . Although on-sale alcohol servers and their managers are required to attend ABC-certified training, the licensees (owner-operators) lack information and training on best practices for managing their drinking environments.

The gap at ABC during the licensing process leaves cities to fill the void in helping the applicant manage the drinking environment from the start. If the business is mismanaged, it’s the public that suffers , and city resources that are drained .

Below are 9 proactive actions that cities can take to protect all stakeholders:

Nine key city actions for approval of alcohol businesses

Cities can have a profound influence on a business’s practices before a license is approved. This strategy includes consistent messaging to applicants and meaningful conditions of approval during the Conditional Use Permit process.

The following are low-cost preventative steps for city leaders to take:

1. Alcohol Pledge Form. T he property owner and applicant sign this form. It contains key expectations on responsible alcohol management. It covers the importance of cut-offs and keeping a cut-off log. If a city would like to use the pledge form that we created, they can contact us.

2. Planner Meeting . The applicant meets with a planner in person to submit the application package. During the meeting, the planner gives the applicant the Best Practices for Nightlife Establishments booklet. Th e planner uses written talking points to connect the dots between the best practices in the booklet and increased public safety, fewer calls for service, and improved business profitability and viability. The planner emphasizes the applicant's duty to cut off obviously intoxicated customers and maintain a cut-off log that law enforcement and code enforcement will review.

The planner tells the applicant to be prepared to address, during the public hearing, how they plan to add the best practices into the business’s training and policy and procedure documents.

3. Conditions of Approval . The planning department, with law enforcement input, prepares meaningful conditions of approval that when followed, prevent the business from becoming disorderly and a problem for the city. One key condition, and one we’ve never seen imposed unless we’ve contracted with the city, is:

The business must maintain a daily cut-off log and present it to law enforcement or code enforcement upon request .

4. Study session . If the city invites the applicant to a study session before the public hearing, again, the applicant hears about and then commits to the key expectations on responsible alcohol management. The session should emphasize the need to cut off obviously intoxicated customers and maintain a cut-off log that law enforcement and code enforcement will review. The city asks the applicant if they have reviewed the Best Practices for Nightlife Establishments booklet and tells them to be prepared to address, during the public hearing, how they plan on incorporating the practices into their business’ training and policy and procedure documents.

5. Public hearing . Each planning commissioner uses their own written talking points to ensure that they cover key topics with the applicant at the public hearing. Each planning commissioner references specific practices in the Best Practices for Nightlife Establishments booklet and asks the applicant how they plan to incorporate the best practices into the business.

There’s an emphasis on preventing overservice, the need to cut off obviously intoxicated customers, documenting cut-offs, and regular city review of the cut-off logs. Planning commissioners make it clear to the applicant that if approved, the approval is conditional and noncompliance will result in changes to the privileges, including possible revocation.

6. Pre-opening meetings . City law enforcement and code enforcement meet with alcohol business owners and managers to review the conditions of approval and key best practices from the Best Practices for Nightlife Establishments booklet . This connects the dots between selected best practices and fewer calls for service and improved profitability. Critical topics include practices to prevent overservice, the need to cut off alcohol service when appropriate, and review of the cut-off logs. It’s recommended that law enforcement officers document their talking points to ensure consistency.

If the business has a security department, law enforcement should hold a similar pre-opening meeting with business management and security staff. Security, when staffed, is often tasked with doing cut-offs.

The law enforcement officer connects the dots between the security best practices in the Best Practices for Nightlife Establishments booklet and fewer calls for service. The officer emphasizes the need to cut off when appropriate, the use of a cut-off log, and that the logs are reviewed by law enforcement upon demand. We recommend that the officer use written talking points to ensure consistency.

7. Follow-up meeting . This meeting is held within thirty days of the business opening. The meeting includes city law enforcement, code enforcement, and business management. The purpose is to review performance using documented talking points. The focus should be on observations specific to customer intoxication and cut-off logs.

8. Bar checks . During routine visits and calls for service, officers examine the cut-off logs.

9. Enhanced bar checks . Per a documented law enforcement protocol, the business floor manager leads a team of officers through the business. The primary purpose is to look for overconsumption and to review the cut-off logs. We’ll cover the details of enhanced bar checks in our next Insight.

If problems arise, such as excessive calls for service or signs of overservice, the city should order the business to return to the planning commission for probation, new conditions, or revoked privileges.

The above recommendations on how to influence the performance of new businesses also apply to existing businesses that seek to (a) change their operation in a way that can trigger changes to their conditional use permit or (b) add an entertainment permit.

Of course, not all businesses require a conditional use permit or entertainment permit.

The main message from the city to new business owners should be . . .

“Your business future depends on not serving obviously intoxicated customers.”

A final word . . .

Drunk patrons cause lawsuits, neighborhood complaints, assaults, and DUI tragedies, which in turn drain city safety budgets. Consistent cut-offs protect the public, business, and city.

If the city follows the above recommendations, it’s unlikely that a new business will fail to conform to city expectations and standards.

A more challenging situation is getting a business with bad habits to change its ways. We’ll discuss that in our next Insight.

Coming up in this series

How cities can influence cut-offs at existing businesses
How to guide businesses to increase cut-offs
How cut-offs reduce "churn" (customer turnover)

RECAP

For every $1 that a city spends to reduce intoxication, it saves $260 (Levi & Miller)

At every step in the process of evaluating and conditioning new alcohol businesses, the city should share consistent messaging. The main message is “Your business future depends upon not serving obviously intoxicated customers.”

A key condition of approval requires the business to maintain a cut-off log and to present the log to law enforcement and code enforcement upon demand.

The Best Practices for Nightlife Establishments booklet is a ready reference during meetings between the businesses and planners, by planning commissioners, and by law enforcement when dealing with new, existing, or disorderly/problem businesses.

Documented talking points connect conditions of approval with specific best practices that improve business viability while protecting city resources and public safety.

How the CA Alcoholic Beverage Control Can Influence Cut-Offs

Mon, 29 Sep 2025 21:52:39 GMT

(Part of the “Drunk, Drunker, and High-Risk Drunkenness” series)

Prior Insight Recap

It is illegal to serve alcohol to someone who is obviously intoxicated.
Businesses can remain profitable by serving only customers who are not obviously intoxicated.
Hospitality staff members report that most obviously intoxicated customers are not cut off.
Studies show that only 3% to 17.5% of obviously intoxicated customers are cut off.

Short on Time? Skip to the Recap Below!

Why Isn’t the Law Being Enforced?

I’ve struggled to keep my emotions in check while writing this. Every day, my Google alerts bring news of yet another DUI tragedy in California.

Place-of-last-drink studies consistently show that about half of DUI tragedies involve drivers who had just left an ABC-licensed alcohol business.

Yet, it is rare—and that’s being generous—for the California Department of Alcoholic Beverage Control (ABC) to enforce the law against serving an obviously intoxicated customer. This law constitutes a criminal offense applicable to servers and sellers at both on-sale and off-sale establishments. Business operators face a separate administrative accusation against their ABC license.

While researching my book, A Business Approach to Reducing Drunk Driving, I found that in 2011, Orange County’s 6,000+ licensed businesses had received zero ABC accusations for this offense.

Has it improved? No.

According to ABC’s most recent annual report (year ending June 30, 2025), it filed only six accusations for this violation across more than 94,000 licensed businesses statewide.

Meanwhile, ABC says that excessive alcohol consumption costs the state's economy $35 billion annually.

A National Highway Traffic Safety Administration (NHTSA) study [1] on sales to intoxicated people (“SIP”) in Louisiana, California, and New Mexico found that " The single most notable finding from the qualitative enforcement research is that SIP enforcement is relatively rare."

The study's key findings for California's SIP enforcement included these statements:

"Weak enforcement of SIP laws results primarily from lack of sufficient resources to cover the costs of proactive investigations. Agency resources are geared primarily to the State's underage drinking laws."

"The [State and local law enforcement] authorities consulted for this case study were in agreement that SIP violations in California are a problem that merits greater attention from policymakers and enforcement administrators. . . . they recognized that the chief barrier to enforcement was lack of financial resources and, perhaps, lack of understanding about the relationship of sales to intoxicated people and crime."

In a recent email to me, [2] former California ABC official Lauren Tyson wrote:

“The NHTSA study findings for California ring true. ABC has always considered ‘service to obvious intox’ violations as one of its highest priorities. However, enforcement operations by ABC agents are, and always have been, complaint-driven. And most of the complaints to ABC tend to be about the service of alcohol to minors."

“A 1991 study by McKnight (1991) found that it took 1.5 hours of observation for officers to witness a request for alcohol service by an intoxicated person. However, in my experience at the ABC in the 1980s, we filed numerous accusations against bars based on investigations made by the LAPD, where officers made their observations of a drunk over only a 20- to 30-minute time frame. During the ABC-conducted investigations, our observations did not take 1.5 hours. In any case, an officer or investigator must observe the patron's outward signs and symptoms of intoxication and note that the server saw, or had the opportunity to see, those manifestations before serving the drink. And the person doesn’t have to be falling-down drunk to be considered obviously intoxicated.”

"I'm certain that with greater awareness of hospitality practices on the lack of cut-offs, the benefits of SIP enforcement, and an earnest commitment, ABC leadership can overcome any obstacles to SIP enforcement."

Not enforcing the service-to-obviously-intoxicated persons law is costing lives, whereas enforcement benefits businesses. When management focuses on the unpleasant task of performing cut-offs, the business reaps financial rewards.

How Cut-Offs Financially Benefit Businesses

Cutting off obviously intoxicated customers isn’t just the right thing to do—it’s smart business. Cut-offs help establishments by:

Reducing fights and disruptions that drive away customers and harm revenue
These incidents often trigger negative social media posts and poor online ratings, which studies show can directly impact sales and lawsuits.
Preventing costly liability claims that can bankrupt a business
Reducing walkouts (customers leaving without paying)
Reducing chargebacks (customers reversing a charge on their credit card)
Limiting property damage caused by highly intoxicated patrons

Most importantly, cut-offs protect public safety by:

Reducing DUI-related fatalities and injuries
Reducing sexual assaults
Reducing violence inside alcohol businesses

They also save cities money by reducing calls for service related to:

Noise complaints from nearby residents
Fights and medical emergencies in or around alcohol establishments

The Most Effective Way to Increase Cut-Offs

The single most effective way to increase cut-offs is for the ABC to enforce the law against serving alcohol to obviously intoxicated customers.

There is no faster or more effective way to reduce alcohol-related harm than by preventing customers from reaching high-risk intoxication (.15% BAC or greater).

Innovative strategies exist that help reduce high-risk intoxication and increase cut-offs—and we’ll explore them in future posts—but the quickest and most powerful impact comes from enforcing existing law.

What the Studies and Experience Show

McKnight & Streff study : Enforcement increased cut-off rates from 17.5% to 54.3% (later stabilizing at 41%) and reduced the share of arrested drunk drivers coming from bars/restaurants from 31.7% to 23.3%.
McKnight study : On average, it took 1.5 hours of observation “to witness a request for alcohol service by an intoxicated patron.” Lauren Tyson, former ABC District Administrator, reports that in her experience, successful administrative accusations against licensees have occurred where police officer and ABC investigator observations of a patron's drunkenness occurred over only a 20- to 30-minute period before the drunk patron was served.
Sweden study : Combining RBS training with consistent law enforcement increased refusal rates from 5% to 70% and reduced violent crimes near bars by 29%.

Please! Enforce the law against serving obviously intoxicated customers.

Lives will be saved. Public safety will improve. Businesses will face fewer lawsuits. And city, county, and state public safety costs will go down.

Share this article at your next staff meeting.

More Feedback to the ABC

Compliment:

The California ABC sets the national standard for Responsible Beverage Service (RBS) training curriculum requirements. I’ve reviewed other states, and California is head and shoulders above the rest. I do have some recommended tweaks. You know how to reach me.

Question:

When will the ABC start enforcing the law requiring alcohol servers and managers to be trained? In three years, I’ve found no posted violations, and none reported by people in the hospitality industry.

Based on the ABC’s own estimate of one million people needing certification (which I believe was low), its reported training numbers, and the hospitality industry’s high turnover, it’s likely at best that only 50% of industry staff members are compliant with the law.

Recommendation:
Require new licensees to provide current email addresses for owners and managers. Automatically email them press releases about enforcement actions. DUI checkpoints are publicized because research shows their greatest benefit is raising awareness—not the arrests themselves. The same principle applies here: if businesses know enforcement is happening, they’ll prioritize compliance.

Imagine if the law against serving obviously intoxicated customers were actually enforced—and businesses knew it.

Here's hoping that truth and compassion guide our efforts.

Coming Up in This Series

How cities can influence cut-offs at new businesses
How cities can influence cut-offs at existing businesses
Why do businesses cut off so few customers?
How businesses can reduce intoxication and increase cut-offs

Recap

Enforcing the law against serving obviously intoxicated customers benefits businesses .
The ABC issued just six violations last year—for its more than 94,000 licensed businesses.
Studies show that enforcement significantly increases cut-offs and improves public safety.
Officer observation time of a drunk customer before being served, for a successful prosecution, has been as few as 20-30 minutes or longer.
Three years after California’s Responsible Beverage Service law took effect, the ABC has posted or publicized no enforcement actions for noncompliance.

[1] National Highway Traffic Safety Administration. “Laws Prohibiting Sales to Intoxicated Persons.” https://www.nhtsa.gov/sites/nhtsa.gov/files/811142.pdf

[2] Email from Lauren Tyson, former ABC district administrator, September 28, 2025

Cut-offs and Reality.

Wed, 10 Sep 2025 20:49:40 GMT

(Part of the “Drunk, Drunker, and High-Risk Drunkenness” series)

PRIOR INSIGHT RECAP

Cutting off service to obviously intoxicated customers is critical. The risk of harm increases dramatically as intoxication rises.
When a fatal alcohol-related vehicle crash occurs, 70% of the time the driver’s BAC is .15% or higher .

Increasing cut-offs reduces DUI tragedies, sexual assaults, and calls for service.

Short on Time? Skip to the Recap Below!

Serving Obviously Intoxicated Customers is Illegal

In California, it is illegal to serve someone who is obviously intoxicated, whether it's for consumption on or off the premises.

The California Department of Alcoholic Beverage Control (ABC) defines “obviously intoxicated” as when an average person can clearly see signs such as:

Being overly friendly, argumentative, or belligerent
Using foul language
Slurred speech or slow, deliberate movements
Swaying, stumbling, or drowsiness
Red, watery eyes
Noticeable smell of alcohol

Penalties range from staff fines and jail time to business fines, license suspension, and even possible license revocation (for three violations within three years).

Considering such penalties, ABC license holders and their staff must take the cut-offs of those who are obviously intoxicated very seriously.

Said no one in the industry.

(That’s the topic of our next Insight.)

What Hospitality Staff Acknowledge

In my bar management workshops, I ask participants these two questions:

1. If your business actually cut off every obviously intoxicated customer, how many more guests would be cut off per day? Please average your slow days with your busy days.

The answers are all over the map.
Security staff always give the highest numbers.
Servers, managers, and owners consistently report far fewer.
Excluding security “outliers,” the average is 11 more customers cut off per day .

2. What percentage of obviously intoxicated guests do you think are cut off, according to research?

a. 50%
b. 17.5%
c. 3%

Most professionals guess 3% . Some say 17.5% . Nobody says 50% .

What do research studies tell us? It depends upon the study.

What Research Shows

McKnight & Streff (Michigan) : 17.5% were cut off; 82.5% were served more alcohol.
Grube, Krevor, & DeJong : Only 10% refused service to drunk patrons.
San Diego survey : 20% admitted being drunk in the past month, but only 3% reported being cut off—meaning 97% were still served.
Norwegian Institute : 95% of “drunk” women’s late-night orders were filled; 67% of men’s before midnight. I agree that men are more likely to be cut off due to aggressive behavior, forcing intervention.

From my three decades of interviewing and training thousands of servers, the San Diego study is closest to reality: only about 3% of obviously intoxicated patrons are denied more alcohol.

While we’ll explore how drunk customers create tremendous liability for alcohol businesses in later Insights, let’s examine a few numbers to prove that an establishment can be very profitable by serving responsibly.

Profitably and Responsibility

Per the table below, which ABC uses, most drinkers appear obviously intoxicated at a BAC of .06–.10% . Tolerance among drinkers varies, but here’s what that means in terms of the number of standard drinks (over 2 hours):

Most bars would be thrilled if guests averaged three drinks ordered . In reality, it’s closer to two drinks, late at night.

This means:

Businesses can stay profitable and responsible by refusing service to those who are obviously intoxicated.
Yet cut-offs remain rare.

That should make us all angry.

MADD

According to numbers shared by Mothers Against Drunk Driving, “two out of three people will be impacted by drunk driving in their lifetime.”

Not surprising when:

California has 48,690 on-sale alcohol businesses .
Staff acknowledge that on average, 535,590 drunk customers leave daily without being cut off.
Each drunk puts themselves and the public at risk—and drains city resources through excessive calls for service.

This should prompt all of us to be concerned about the safety of those we love.

In the Insights that follow, we’ll explore what each stakeholder can do to significantly increase cut-offs, which will save city public safety dollars and, most importantly, save lives.

FUTURE TOPICS IN THIS SERIES

How the ABC can influence cut-offs
How cities can influence cut-offs at new businesses
How cities can influence cut-offs at existing businesses
How to guide businesses to increase cut-offs
How cut-offs reduce customer churn (turnover)

RECAP

It is illegal to serve alcohol to someone who is obviously intoxicated.

Studies suggest only 3% to 17.5% of obviously intoxicated customers are cut off from additional alcohol service.

Businesses can be profitable by only serving customers who are not obviously intoxicated.

Hospitality staff acknowledge that the vast majority of obviously intoxicated customers are not cut off from additional alcohol service.

Why Cut-Offs Matter

Mon, 25 Aug 2025 23:23:08 GMT

(Part of the “Drunk, Drunker, and High-Risk Drunkenness” series)

Three Truths of Cut-Offs

Cutting off obviously intoxicated customers saves lives .
Whether you’re a city official, employed in law enforcement, work for the ABC, a member of the hospitality industry, or someone who can influence these organizations—you have the power to significantly increase cut-offs of drunk customers.
In other words: YOU can save lives .

Let that sink in.

Understanding Relative Crash Risk

It’s been eye-opening — and sometimes jaw-dropping — when I hear versions of this question in meetings with DUI task force members, police chiefs, mayors, or other city officials:

“Why are you so focused on cutting off people who are already drunk? Isn’t it already too late?”

As a person’s blood alcohol content (BAC) rises, the risk of harm to themselves and others rises exponentially .

The chart below illustrates the sharp increase in crash risk as a driver’s BAC climbs, compared to the baseline risk of a non-drinking driver.

Relative risk compares the likelihood of harm in an "exposed" group to that of a "non-exposed" group. In this case, the exposed group consists of drivers who have consumed varying amounts of alcohol; the non-exposed group are drivers who have not been drinking.

Let’s zoom in on the lower BAC levels:

At a BAC of .07% , a drinking driver is 2.1 times more likely to crash than a non-drinking driver.

A drinker who consumed enough alcohol to progress through the initial eight BAC levels (.00 to .07) is 2 times more likely to crash than before drinking. If that drinker isn’t cut off and continues to drink enough alcohol to progress through the next eight BAC levels (.08 to .15), the driver is now 22 times more likely to crash than before drinking.

High-Risk Intoxication is Often Deadly

When a death occurs in an alcohol-related crash, 70% of the time the driver’s BAC is .15% or higher —a level considered high-risk intoxication .

Alarmingly, about half of alcohol-related crashes involve drivers who had their last drink at an ABC-licensed business , according to "place-of-last-drink" studies.

How Cut-Offs Save Lives and City Resources

Cutting off obviously intoxicated customers can dramatically reduce deaths caused by impaired driving. The benefits go beyond reduced DUI tragedies:

Reduced calls to first responders for disturbances and fights inside alcohol establishments, in surrounding neighborhoods, and where drunk customers arrive afterwards

Fewer public safety issues caused by intoxicated individuals

It’s Sad, But True

Despite the tremendous benefits that cut-offs bring to everyone—customers, businesses, communities, and public safety—they rarely happen.

We’ll explore why in our next Insight.

INSIGHT RECAP

Cutting off obviously intoxicated customers is critical because the risk of harm surges exponentially as intoxication rises.

When a death occurs in an alcohol-involved vehicle crash, 70% of the time, a driver had a BAC of .15% or higher.

Increasing cut-offs will reduce DUI tragedies, public harm, and police calls for service.

YOU can take action to save lives.

Coming in This Series:

Cut-offs and Reality
How the ABC Can Influence Cut-offs
How City Officials Can Influence Cut-offs at New Businesses
How City Officials Can Influence Cut-offs at Existing Businesses
How to Guide Businesses to Increase Cut-offs
How Cut-offs Reduce Customer “Churn” (Turnover)

You’ve Entered the Entertainment Zone (Part 2)

Mon, 04 Aug 2025 23:18:14 GMT

Has anyone ever hired a third party to analyze the financial impact of Entertainment Zones?

PRIOR RECAP IN SERIES

Why is it impossible to find a study on the financial impact that Entertainment Zones have on cities and community safety? A study that includes both the financial benefits and detriments.

An oversaturation of alcohol businesses in an area negatively impacts the profitability of those businesses.

An alcohol business that is financially struggling has the potential to become a much higher safety risk to customers and the community.

The official who approved publication of NYC’s Nightlife Economy—Impact, Assets, and Opportunities report should be fired, replaced by anyone who has ever worked at 3M.

Fullerton intentionally grew the number of alcohol businesses in their Overlay District to 49, significantly increasing foot traffic and the problems, resulting in the 49 businesses creating an annual deficit of close to one million dollars.

Short on Time? Skip to the Recap Below!

The San Francisco Experience

The smashing success of San Francisco’s entertainment zone experiment fueled the passage of Senate Bill 969, California’s new Entertainment Zone law. Celebratory crowds--most drinking--packed the streets, driving up sales for the alcohol businesses within the party zone.

While my gut tells me this one-off event in San Francisco was a net financial gain for the city, it’s still important to know:

— If it really was a financial winner for the city. In other words, what were the added expenses resulting from the event?

— How did the event impact community safety? The data is there, but someone needs to review and share it.

— How much did funneling so many people into this event negatively impact other alcohol businesses in the city?

A driving force behind Entertainment Zones is getting customers to return to the alcohol businesses that line downtown city streets. I get it. For my friends who live in SF and LA, the amount of homelessness in the area significantly influences where they go to eat and drink.

As I said in Part 1 of this article, I am not against the concept of Entertainment Zones. To maximize the chances that an Entertainment Zone is positive for all stakeholders, consider d ocumenting a Project Justification report. The report would include a cost-benefit analysis and a safety analysis that identifies risks and mitigation plans.

Risk mitigation is the perfect segue to discuss what California documented in Senate Bill 969 to ensure public safety is guarded in Entertainment Zones. How did the State do?

The short answer:

“An amazing job! Impactful state requirements were documented, while also providing cities with factors to consider when defining local controls and conditions,” said no one who read Senate Bill 969.

The Longer Answer

Here are the standard conditions the State places on alcohol businesses operating in an Entertainment Zone:

— “No alcoholic beverages purchased at a participating licensed premises may leave the premises in an open glass or metal container.”

— “Delivery of alcoholic beverages to consumers within the entertainment zone by the licensee or by any third-party delivery service is expressly prohibited unless the delivery is to a residential building or private business that is not a licensee.”

Here is what the State requires of a city or county that establishes an Entertainment Zone:

— “Establish a process or procedure by which persons in possession of alcoholic beverages in the entertainment zone may be readily identifiable as being 21 years of age or older.”

— Communicate to the ABC, “The approved nonglass and nonmetal containers in which alcoholic beverages may be authorized.”

There are additional administrative requirements, but I’ve covered the controls required by the State.

Evidently, the State will be comfortable with whatever additional conditions a city or county does or doesn’t mandate, as long as adults are identified, and no one is drinking from glass or metal containers.

There are zero requirements for businesses, cities, or counties to address:

-Minors drinking alcohol in Entertainment Zone

Staffing from the businesses, cities, or counties to monitor who is drinking the alcohol that is now permitted to leave a business and be consumed in likely large spaces—spaces where the business can’t legally deliver drinks (which would have enabled them to see if minors were consuming alcohol).

-How overservice and overconsumption will be controlled in Entertainment Zones.

Staffing from the businesses, cities, or counties to identify obviously intoxicated customers and cut them off from additional drinks. Since servers can’t legally deliver drinks, there won’t be eyes on those drinking outside.

-Limiting customers who are leaving premises with alcohol to only one drink, and selling only one alcoholic drink at a time.

As the law is written, a customer can order a dozen (or more) shots made from Bacardi 151, exit the business, and share with whomever that customer chooses, with no monitoring. Minors or stumbling drunks might get those shots.

-The requirement for ridesharing stations along the perimeter of the Entertainment Zone.

These stations would encourage more attendees to attend the event by ridesharing, which has been shown to reduce DUI crashes. Ridesharing reduces the risk of customers parking in neighborhoods or taking commercial and retail parking.

The ABC website should contain a checklist of Best Practices for Entertainment Zones.

There’s so much more that can be done to protect all stakeholders, starting with using common sense.

The Answers Are Out There

Creating Entertainment Zones offers a tremendous opportunity for government officials, law enforcement, and the alcohol businesses to agree on new operating conditions if an Entertainment Zone is to be approved.

Conditions that protect city resources, guard public safety, and improve business viability.

This Insight is not designed to list the fifty-plus practices in Best Practices for Nightlife Establishments, and then identify which can be reworded into meaningful conditions, versus those best practices that should be shared but not mandated.

In theory, Lauren and I are not against the concept of Entertainment Zones. We believe:

An independent analysis of existing ongoing Entertainment Zones would be helpful to cities and counties considering permitting such zones. The analysis would include the city revenue and expenses connected to the zone; the impact on public safety; how businesses were impacted within and outside the zone; and lessons learned from Entertainment Zones.

Entertainment Zones offer an opportunity for the various stakeholders to agree on new, innovative conditions and practices that benefit all groups.

RECAP

Still asking . . . Why is it impossible to find a study on the financial impact Entertainment Zones have on cities and community safety? A study that includes both the financial benefits and detriments.

San Francisco’s entertainment zone experiment during its 2024 Oktoberfest party was a huge success in attracting customers and supporting local businesses. It’s unknown how it impacted businesses outside of the zone, city resources, and public safety.

The driving force behind the approved Entertainment Zone bill was to attract more visitors to downtown businesses.

The State of California requires minimal from businesses that operate within Entertainment Zones. The State places almost no requirements and provides no meaningful guidance to cities or counties approving Entertainment Zones.

Entertainment Zones should be independently studied for their impact on city resources, public safety, and businesses inside and outside the zone.

Entertainment Zones offer a unique opportunity for all stakeholders to agree on new, innovative conditions and practices that benefit all parties.

You’ve Entered the Entertainment Zone

Fri, 25 Jul 2025 17:09:58 GMT

Has anyone ever hired a third party to analyze the financial impact of Entertainment Zones?

Alcohol Businesses & Math

Occasionally, with my clients who own alcohol businesses, I’ll do a deep dive where I analyze every component of their business. This includes policies, pricing, staffing, menu, and marketing. In doing so, I get complete access to all their financials. It's common for me to identify a promotion that makes no financial sense. While I understand the concept of loss leaders to get customers in the door, these promotions are intended to generate profit.

The problem is nobody did the math before initiating the promotion to evaluate the possible outcomes. Sometimes, the math shows that the promotion offered no realistic path to profitability.

City Officials Don’t do the Math

This is the same mistake cities regularly make when approving a new alcohol business: not doing the math to see if the business will be a financial net gain. The later a business stays open, the more unlikely the business is a financial winner for the city.

That doesn’t mean the business shouldn’t be approved. The community needs places for people to work and socialize. It does mean the city should look closely when approving late-night businesses. For example, the city should apply additional, meaningful conditions on the business’s conditional use permit or entertainment permit. Meaningful.

For the record, my first business--The Shark Club in Costa Mesa--had 32 conditions of approval, and we were in complete compliance with all of them for the first ten years we were open. Yet, we were a “disorderly” [1] business. Over the next ten years, with the same city conditions, we became a model operator by implementing my own, meaningful best practices.

Cities should also keep in mind, when they are approving a new alcohol business, especially a late-night business, they are essentially robbing Peter to pay Paul. Zero sum game. My clients in congested downtown bar scenes talk about the good old days when there were enough bars to draw customers to the area, but before the approval of so many bars that most bars are barely hanging on.

A struggling bar is significantly more likely to be a public safety risk . The first staff that get cut are security. The bar is less likely to cut-off customers. The bar is less likely to ban troublemakers. The bar is less likely to help financially strapped drunk customers get home by paying for a taxi or rideshare service. The bar is far more likely to offer extreme drink promotions to get people in the door (even if those promotions make no financial sense).

Which brings us to Entertainment Zones, which ultimately results in more alcohol businesses crammed into an area.

[1] In violation of Sec. 25601 CA Bus. & Prof. Code

Entertainment Zones & Math

To be clear, and this often drives people in the alcohol harm prevention community crazy, I am not against the concept of the Entertainment Zone.

In the right location and with meaningful conditions , an Entertainment Zone, in theory, can make dollars and sense, while the risk of harm can be effectively managed. In fact, meaningful conditions will result in these businesses being more responsibly managed and profitable than those businesses outside the zone.

Are meaningful conditions applied to businesses in Entertainment Zones? Not that I’ve read or heard of.

Please, someone, prove me wrong.

Has anyone ever hired a third party to analyze the financial impact of an Entertainment Zone?

I can’t find any. Again, if someone has such a study, please guide me to it.

I’m not interested in papers on the financial windfall that zones produce, IF, the paper doesn’t also include an analysis of the additional expenses created by a zone. Such papers should not be sponsored by those with a vested interest in the outcome of the data.

An example is the Oxford Economics report, The Concerts and Live Entertainment Industry—A Significant Economic Engine. While “Oxford Economics” is on every page of the report, it’s on the last page that we learn that Live Nation Entertainment commissioned the report.

Interestingly, within the 19-page Oxford Economic report, you will not find the word “safety” anywhere.

You will also not find the words “profit,” “profits,” or “profitability” anywhere. While it was clear the report had no interest in analyzing how concerts and live entertainment financially impact local governments, I would have expected a pitch that live entertainment makes a business more profitable. I expect too much.

At least the NYC’s Nightlife Economy—Impact, Assets, and Opportunities study, commissioned by The Mayor’s Office of Media and Entertainment, does eventually address business profitability. In the Executive Summary, we learn that the total number of nightlife establishments was growing annually.” On page 57, we learn:

18% of the establishments reported an increase in profits over the last three years.
47% of the establishments reported a decrease in profit over the last 3 years.

The NYC’s Nightlife Economy—Impact, Assets, and Opportunities 80-page study is a promo piece on the financial benefits derived from New York’s nightlife. Yet, there is zero analysis or mention of the expenses caused by these businesses. Meaning, we have no idea if NY’s nightlife businesses are a net financial positive or negative for the city. Why does this expensive-to-create study exist?

Every industry would appear financially attractive if only sales were publicized, not expenses.

According to a 2024 Financial State of the Cities report, NYC leads the nation in debt.

When I was working at 3M, the book Quality is Free by Philip B. Crosby was published. This book, along with his others, revolutionized the business world, including how 3M conducted its business. Crosby used case studies to demonstrate that sales and customer foot traffic might be impressive, but if expenses are too high, the company goes under.

Cities also go under.

According to the 2024 Financial State of the Cities report, 50 of the top 75 American cities are in a substantial deficit.

Has anyone ever hired a third party to analyze the financial impact of an Entertainment Zone?

The closest thing I could find that might help evaluate the financial impact of an Entertainment Zone is Fullerton’s Restaurant Overlay District. As intended, the District expanded its number of alcohol businesses to 47 and saw an increase in foot traffic, drawing 4,000 people, even on weeknights.

Four years after approving the Restaurant Overlay District, and sensing things weren’t turning out as planned, the city hired an outside auditing firm to analyze the financial impact the District was having on city finances. The report revealed:

The District cost the city $935,500 more annually than it earned.
The largest expenses came from police, fire, and maintenance services.
The report anticipated the deficit would grow to over a million dollars, with the need to add four new police officers costing $412,000 per year.

Our next Insight will review California’s new Entertainment Zone law.

For the record, I love live music.

RECAP

Why is it impossible to find a study on the financial impact Entertainment Zones have on cities and community safety? A study that includes both the financial benefits and detriments.

An oversaturation of alcohol businesses negatively impacts the profitability of these businesses.

An alcohol business that is financially struggling has the potential to become a much higher safety risk to its customers and the community.

The official who approved publication of NYC’s Nightlife Economy—Impact, Assets, and Opportunities report should be fired and replaced by anyone who ever worked at 3M.

Fullerton intentionally grew the number of alcohol businesses in their Overlay District to 49, significantly increasing foot traffic and problems, resulting in the 49 businesses creating an annual deficit of nearly one million dollars.

People Behind the Numbers

Fri, 17 Jan 2025 02:37:15 GMT

(6th in the "It’s Not Magic, It’s Math" series)

Why Numbers Matter

Statistics are frequently used through the It’s Not Magic, It’s Math blog series. Numbers help quantify problems and opportunities. Studies and empirical evidence tell us when alcohol businesses follow best practices, especially the profitable pouring practice, there will be fewer incidents where first responders are called to handle violence inside businesses and DUI crashes on our roads.

Fewer incidents in which first responders are needed mean our friends, family, and community are safer.

MADD references a NHTSA study when stating: “2 out of 3 people will be impacted by drunk driving in their lifetime.”

A Personal Connection

It was in the 80s, and I was in my twenties when I first experienced the impact of a DUI crash on someone’s life.

It was also my first crush on an older lady (if you ignore all my female teachers). Charlotte, her name, Human Resources her game. I looked for opportunities to cross paths with Charlotte, with her librarian way—all-knowing, helpful, yet reserved. Then one day, she was gone.

She went on disability after a drunk driver killed her sister and her sister’s two young daughters.

Many months later, a person named Charlotte returned to the workplace, but she wasn’t the same person. She was a walking billboard for sadness, and soon, she left for good.

A few years ago, I met with a wonderful HB police lieutenant to discuss my upcoming best practices for a security workshop for the city’s downtown alcohol businesses when he shared what he knew about the following tragedy:

Dylan Mack, 18, and Brooke Hawley and A.J. Rossi, both 17, were killed by a drunk driver. A fourth occupant, Alexis Vargas, was severely injured.

The drunk driver survived; her BAC was .30 when eventually tested. I understand the driver was never cut off from alcohol service before she left a Newport Beach restaurant.

Profitable pouring would likely have prevented this tragedy.

According to one of my secret shoppers, the restaurant the driver left has a reputation for overpouring. Very few businesses do not overpour. In several years of operating a secret shopper service, only once did my spotters find a business with an average one-spirit overpour of less than 20%. In fact, the results were so odd we speculated that the bar staff was tipped off about our visit.

In future blogs we’ll share details on some of the 49 other best practices shared in our booklet on Best Practices for Nightlife establishments. When helpful, I will continue to use statistics and numbers to help communicate the size of problems and the need for change.

Remember the People Behind the Numbers

We must never forget those numbers often represent people. Many who are injured, some are killed, and others, like Charlotte, whose lives are forever haunted.

And know, most harm caused by over-intoxication inside alcohol businesses can be prevented.

My 14-million-dollar Mistake

Thu, 16 Jan 2025 02:25:55 GMT

(5th in the "It’s Not Magic, It’s Math" series)

Short on Time? Skip to the Recap Below!

The Problem

In the early 2000s, The Shark Club hired its first promoters (after more than ten years in business) to increase our business on Friday nights. While the promoters did a great job bringing in more customers, they were surprised our bar sales weren’t higher. These same promoters worked at another venue on Saturday night pulling in similar headcounts to our Friday night. According to the promoters, despite similar headcounts and pricing structures, our Friday bar sales were $5,000 lower than those at the other venue they promoted.

I ignored their input, figuring it was promoter-speak (it’s a thing).

In 2006, we hired Jeremy Jackson of Baywatch fame (who played Hobie) to promote our Saturday nights. It was a huge success. Jeremy Jackson, who also promoted another venue on Friday nights, was shocked that our bar sales weren't much higher. We added a bartender to the schedule. After the second Saturday night with long lines to enter, Jeremy again proclaimed our bar sales were way too low.

We acted; after all, our Friday and Saturday promoters said the same thing: our bar sales were thousands lower than expected for our headcounts. We squeezed in another well behind the main bar to add yet another bartender. We added a portable bar near the dance floor. We also added a beer bar in the lounge.

Sales barely increased.

I figured it might be a theft issue, so I added expensive towers to our POS stations to display transaction sales totals and hired spotters to look for theft.

It wasn’t a theft issue.

I gave up.

The Revelation

Years later, maybe in 2008, at the end of a slower Thursday night, I watched my son, who was bartending his way through college, pour a vodka tonic. My jaw dropped when I saw him pour a double but only ring in the price for a single. I went behind the bar, pulled him aside, and told him I witnessed him pouring a double but charging for a single. Unperturbed, he corrected me and said, “It wasn’t a double, more like an 80% overpour,” Then he added, “We all do that.” I refocused on the other bartenders pouring. He was 80% correct.

The overpouring stopped that night.

 The Impact

The most immediate impact of eliminating overpouring was noticed the next night at 1 am, before we ran our sales report at night end, before eventually noticing an increase in sales.

Normally, on our packed weekend nights, positive energy is tangible by 11 p.m. as customers loosen up and become more social. The energy usually peaks at midnight and quickly wanes as too many customers become overly intoxicated, triggering more negative emotions (look for our future blog on the Pleasure Zone study).

By 1:00, most of the staff is on edge, scanning the floor for drunks, altercations, people stumbling, or possibly getting sick.

This night, the first night, we weren’t giving our customers an almost full alcoholic drink free for every drink they ordered; the energy stayed comfortable all night, with very few customers we needed to monitor closely as they left at 2 a.m.

I was shocked. After more than a decade of bracing myself as midnight came, this night was a breeze. It continued future nights. Were all the problems gone? It is impossible with a dance club with over 1,000 customers through the doors. We didn't have a single insurance claim from the day we eliminated overpouring.

It would be difficult to overstate the positive change in energy we experienced after eliminating overpouring . Studies tell us that it’s generally not those with BACs below .06% who cause harm to themselves and others. Our experience confirms those studies.

Naturally, to no surprise, eliminating overpouring significantly reduced our spirits inventory expenses while at the same time increasing our spirit sales.

I tortured myself by calculating how much the overpouring cost the business. Yes, it’s $14,000,000. (Notice, this isn’t capitalized.)

The sad truth is, before our Friday and then Saturday promoters mentioned our bar sales were way too low for our headcounts, for years, my managers would occasionally mention in our biweekly manager meetings that the bartenders were overpouring. What did I do? Simply turn to my bar manager and say, tell the bartenders to stop overpouring. Did I get back to my bar manager to confirm that action was taken? No. Did I monitor the bartender pouring? No. Despite my managers periodically reminding me that the bartenders were overpouring, I never connected the dots between our low bar sales and overpouring. I can be an idiot.

I’ve made profitable pouring a key part of my best bar practices workshop and our Best Practices for Nightlife Establishments. Overpouring is our industry's most common and significant problem (for businesses permitted to sell spirits). Eliminating overpouring:

· Increases business profits and sales.

· Reduces intoxication inside the business (reducing insurance claims and calls for service).

· Results in far fewer customers driving drunk.

Upcoming in the It’s Not Magic, It’s Math series:

The People Behind the Numbers

Case Study: Boosting Profits and Safety by Eliminating Overpouring

Wed, 15 Jan 2025 02:13:11 GMT

(4th in the "It’s Not Magic, It’s Math" series)

Short on Time? Skip to the Recap Below!

 The Problem: Overpouring Costs

In December 2013, after secret shopper visits revealed a client’s bartenders were significantly overpouring spirits, I was hired to conduct a best bar practices workshop. In the workshop, I shared with his bar staff how my OPulator (Over Pouring Calculator—an Excel spreadsheet populated with simple algorithms that used client sales information and secret shopper findings) guesstimated the client might increase monthly profits by $11,000 if overpouring was eliminated. The gathered bartenders also heard how the increased profits would be a result of a reduction in the cost of goods purchased and a bump in sales since some customers would order another drink once overpoured drinks were eliminated—meaning the bartenders would also make more in tips (as would the servers).

The Results: Increased Profitability

In January 2015, the client (the business owner) called me for help. He had submitted the needed business records to his tax attorney for filing his return, but his attorney was uncomfortable. The attorney couldn’t understand how the client purchased noticeably fewer spirits from vendors but sold significantly more spirits to his customers. Naturally, I agreed to help. The client emailed to connect me to his tax attorney.

That was followed by me emailing the tax attorney (Vicki) some training information, and then a 40-minute phone conversation. It turns out the client made a bit over $10,000 more profit a month after his bartenders eliminated overpouring . Once I shared information about the spotter reports and the OPulator, Vicki was satisfied and impressed, declaring everyone needed to do this! Yep.

The Broader Impact: Enhanced Public Safety

Years later, Lauren and I were meeting with Riverside Sheriffs. We were recommending the bar best practices workshop for their businesses. An officer asked, “How do you know the training improves public safety?” Fair question.

I did a public records request for the $10,000 more profit a month business, seeking calls for service records for the two years prior to my best bar practices workshop and the two years after the workshop.

In the two years following the best bar practices workshop, the business’s call for service dropped by 25%.

Years later, I came across a bulletin from Partners Specialty Insurance that stated bars with strict pouring controls experience around half the number of insurance claims compared to bars that do not have strict pouring controls.

It’s very simple: customers who are less intoxicated are less likely to start a fight or create an incident that results in a call for service and an insurance claim.

It’s not magic, it’s math.

Upcoming in the It’s Not Magic, It’s Math series:

My $14,000,000 Mistake
The People Behind the Numbers

Profitable Pouring Guards the Customer & Community

Tue, 14 Jan 2025 02:00:06 GMT

 (3rd in the "It’s Not Magic, It’s Math" series)

Short on Time? Skip to the Recap Below!

How Overpouring Affects Customer BAC

While it’s easy to appreciate how not giving a customer a more potent alcoholic drink (from overpouring) results in a lower BAC level, let’s take a look at just how much of a difference it makes.

The charts below demonstrate how overpouring increases the average BAC inside a business. The calculations are based on a business full of average-sized males (195 pounds) who ordered and consumed, on average, three vodka tonics (a popular one-spirit cocktail) over two hours.

The left shows a BAC distribution chart when the vodka tonics were properly poured. The mean BAC is .03 percent (standard deviation .02). Only 4 percent of the customers have a BAC at or above .08 percent.

On the right is a BAC distribution chart for when the vodka tonics were overpoured by 42%. The mean BAC is .06 percent (standard deviation .03). Now, 40 percent of the customers have a BAC at or above .08 percent.

Charts for average-sized females (165 pounds) who ordered and consumed, on average, two vodka tonics (versus three for males) over two hours, show similar BAC distributions:

AVG drinks consumed: 2 3.15

Mean BAC .04 percent .08 percent

Patrons .08+ BAC 7 percent 50 percent

The charts reflect common sense: When customers get significantly less alcohol in their drinks because bartenders properly pour the cocktails, customer intoxication goes way down. When customers are less intoxicated, problems and calls for service go down .

Why it Matters

Research and experience confirm that overconsumption leads to:

Increased aggression and severe injuries: Moderate drinkers are less prone to injury and violence than heavy drinkers.
Higher insurance claims: According to insurance broker Sandy Baldinger, 99% of claims from alcohol-serving businesses stem from excessive consumption.
More dangerous DUI incidents: In 70% of fatal DUI crashes, the driver’s BAC was 0.15% or higher.

Drinkers Spend Less to Reach Dangerous Levels of Intoxication

The table below shows how many vodka tonics an average-sized male would need to consume (and spend) over three hours to reach a BAC of .15%, if the drinks were properly poured versus overpoured.

Common sense and price elasticity studies tell us that for most people, the more they need to spend to drink, the fewer drinks they purchase.

If that male customer ordered six vodka tonics and the drinks were not overpoured, his BAC would be .08% (versus .15%), and he and others would be significantly safer when he drove.

Secret shoppers often find bartenders overpouring multi-spirit cocktails, especially the three- and four-spirit ones, by 100% or more.

Let’s examine the increased risk an average-sized female (165#) is exposed to thirty minutes after finishing one Adios cocktail.

After consuming one overpoured Adios, she is now four times more likely to be involved in a vehicle crash than an average-sized female who consumed a properly poured Adios.

Upcoming in the It’s Not Magic, It’s Math series:

Case Study: Overpouring Eliminated
My $14,000,000 Mistake
The People Behind the Numbers

The Staggering Costs of Overpouring

Mon, 13 Jan 2025 01:27:57 GMT

(2nd in the "It’s Not Magic, It’s Math" series)

Short on Time? Skip to the Recap Below!

Why Focus on Business Impacts First?

Why begin with the negative impact of overpouring on businesses versus the adverse impact it has on community safety, or how it increases calls for service?

By understanding how eliminating overpouring tremendously benefits businesses, we appreciate how likely businesses are to embrace the profitable pouring practice shared in the Best Practices for Nightlife Establishments booklet.

For a best practice to be useful, it's critical to connect the dots between it and its business benefits.

The Math of Overpouring

In a business selling 7 one-spirit cocktails for every 3 multi-spirit cocktails , this is the calculation to determine a weighted average overpour.

The Financial Impact

A 53% overpour means 35% of spirits purchased are effectively given away for free .

Calculation:

y = Desired pour level

x= Actual pour

% Overpour = (x-y)/y

% Poured that was waste = (x-y)/x

Given the constraint that % overpoured = 0.53:

(x-y)/y = 0.53

x/y-1 = 0.53

x/y = 0.53+1

x/y=1.53

Thus, y/x = 1/1.53

or y/x = 0.65

We know from the constraint that y/x=0.65, thus, % of what was poured that was waste = (x-y)/x or: (x-y)/x = 1-y/x = 1-0.65 = 0.35 or 35%

Using derived ratios, 65% of each poured spirit is used effectively, and 35% is wasted , translates as:

For a typical business, more than a third of the spirits they purchase are given away free.

Lost Revenue (Opportunity Cost)

Overpouring reduces the opportunity to sell more drinks because customers get intoxicated faster, consuming fewer beverages overall.

Input from my clients who have significantly reduced or eliminated overpouring suggests that around 1 out of 8 customers orders an additional drink after adopting profitable pouring practices. The number of extra drinks sold depends on the level of the initial overpouring.

This means bartenders and servers make more money once overpouring stops because it increases sales and tipping opportunities.

Let’s consider how eliminating overpouring might impact profits if the business:

· T ypically overpours its spirit cocktails by 53%.

· Historically sells on average 2.5 spirit cocktails per customer.

· Finds that 1 out of 8 customers now orders an additional cocktail.

Final Thoughts

Even customers who order additional drinks after overpouring stops remain less intoxicated because they consume slower, metabolizing more alcohol in the process.

Note:

Before opening restaurants, I worked for 3M's Orthopedic Division as a Quality Assurance Technologist, conducting statistical analysis.

Upcoming in the It’s Not Magic, It’s Math series:

Profitable Pouring Guards the Customers & Communities
Case Study: Overpouring Eliminated
My $14,000,000 Mistake
The People Behind the Numbers

The Industry Plague: Overpoured Spirits

Sun, 12 Jan 2025 23:00:37 GMT

(1st in the "It's Not Magic, It's Math" series)

Short on Time? Skip to the Recap Below!

Day One Practice Number One

Over 14 years ago, I began conducting best practices workshops for alcohol business owners and managers. To identify best practices for the workshop, I interviewed my peers, ABC officials and other law enforcement officers, hospitality lawyers, insurance professionals, and alcohol harm prevention specialists. But, from day one in putting together the curriculum I knew sharing information about profitable pouring would be critical.

After 20 years of owning and operating restaurants and nightclubs, I’ve learned that mastering profitable pouring both:

Drastically improves profitability and sales , and
Reduces issues from overconsumption , which are the root of most serious problems in alcohol businesses operating past 10 PM.

Overconsumption leads to costly insurance claims and frequent first responder calls.

I wish I could say that reducing overconsumption also protects a business’s ABC license, but I can’t since the law against overserving alcohol is rarely enforced in California. Truth. More about that in another blog.

The Case for Profitable Pouring

I was thrilled to find a study confirming what I had suspected: my initial mismanagement of spirit pouring, resulting in a $14,000,000 mistake , was an industry-wide issue.

Here’s the study’s takeaway:

One-spirit cocktails are overpoured by an average of 42%.
This means 29% of purchased distilled spirits are effectively given away for free.

Calculation

y = Desired pour level (1.50)

x= Actual pour (2.13)

% Overpour = (x-y)/y (.42)

% Poured that was waste = (x-y)/x (.29)

Given the constraint that % overpoured = 0.29

Following client demand, I launched a secret shopper service to evaluate bartender pouring. Results confirmed the 42% overpour average for single-spirit drinks. However, the real shock came with multi-spirit cocktails:

Multi-spirit drinks were overpoured by an average of 80% , often exceeding 100%!

Upcoming in the It’s Not Magic, It’s Math series:

The Staggering Costs of Overpouring
Profitable Pouring Guards the Customers & Communities
Case Study: Overpouring Eliminated
My $14,000,000 Mistake
The People Behind the Numbers

Is Your City Losing $1,000,000 to Its Alcohol Footprint?

Sat, 11 Jan 2025 22:52:01 GMT

Most city leaders see alcohol businesses as reliable sources of tax revenue. However, many cities unknowingly carry a financial burden called the Alcohol Footprint —the net cost to the city after accounting for all revenue from alcohol businesses versus the expenses they generate.

The Hidden Costs of Alcohol Businesses

Take Fullerton, California, as an example. In 2002, the city created a Restaurant Overlay District downtown, eventually housing 49 alcohol-licensed establishments. While this boosted nightlife, it also brought increased demand for city services. A 2006 report revealed the District cost the city $935,500 more annually than it earned.

The largest expenses came from police, fire, and maintenance services. The report anticipated the deficit would grow with the need to add four new police officers costing $412,000 per year. Fullerton officials deserve credit for identifying the problem, but what about the Alcohol Footprint for an entire city? The numbers can be staggering.

A Broader Issue

One client city recently calculated its Alcohol Footprint across all 300 of its alcohol-serving businesses and discovered losses “significantly more than $1,000,000 annually. ” If your city is like most, with alcohol businesses that mostly close by 10 PM, some by midnight, and a few staying open until 2 AM, it likely carries a substantial Alcohol Footprint.

Why does this happen? It’s often due to a lack of best practices:

Inadequate Conditions of Approval: Many cities fail to include effective regulations for alcohol businesses in permits due to insufficient training in urban planning programs.
Limited State Flexibility: California’s Alcohol Beverage Control (ABC) is constrained by State liquor laws on what conditions the agency can document for a new licensee.

Insufficient Police Training: California police officers receive just two hours of ABC law training in their Basic Academy, which includes no guidance on preventing disorderly alcohol establishments.

Knowledge Gaps in the Industry: Most alcohol business operators and food-and-beverage managers lack access to training in best practices.

The Solution: Best Practices for Alcohol Businesses

Despite these challenges, there’s a clear path forward. Our Best Practices for Nightlife Establishments booklet equips alcohol businesses with strategies to reduce intoxication, lower service calls, and improve community safety. Research by Levy and Miller found every $1 spent on controlling over-service saves cities $260.

We’re passionate about supporting well-run alcohol businesses—they bring communities together for meals, entertainment, and memorable moments. But they need to operate responsibly to protect public safety and city resources.

Learn more through our Insight series, It’s Not Magic, It’s Math.

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Governor Newsom PRESS RELEASE (imagined)

How Businesses Can Reduce Obvious Intoxication and Increase Cut-offs, Part 2

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Customer churn: an overlooked cost of overservice

Improved sales by cutting off drunk customers

If open 365 days:

The net gain from enforcing cut-offs:

How Businesses Can Reduce Obvious Intoxication and Increase Cut-Offs, Part 1

Information Silos: How They Harm All Stakeholders

How Cities Can Influence Cut-offs at Existing Businesses

REDUCING INTOXICATION AT EXISTING BUSINESSES

How Cities Can Influence Cut-Offs of Alcohol Service at New Businesses

(Part of the “Drunk, Drunker, and High-Risk Drunkenness” series)

Why it matters that cities are visionary with new alcohol businesses

Research indicates that the more proactive city officials are in addressing overconsumption in licensed businesses, the lower the public safety expenses and community harms.

The gap in the alcohol licensing process

How the CA Alcoholic Beverage Control Can Influence Cut-Offs

How Cut-Offs Financially Benefit Businesses

The Most Effective Way to Increase Cut-Offs

What the Studies and Experience Show

More Feedback to the ABC

Recap

Cut-offs and Reality.

What Research Shows

Why Cut-Offs Matter

You’ve Entered the Entertainment Zone (Part 2)

﻿

You’ve Entered the Entertainment Zone

People Behind the Numbers

Why Numbers Matter

A Personal Connection

Remember the People Behind the Numbers

My 14-million-dollar Mistake

Case Study: Boosting Profits and Safety by Eliminating Overpouring

Profitable Pouring Guards the Customer & Community

The Staggering Costs of Overpouring

The Industry Plague: Overpoured Spirits

(1st in the "It's Not Magic, It's Math" series)

Is Your City Losing $1,000,000 to Its Alcohol Footprint?