The 2026 General Assembly gave Virginia restaurants their most significant operational reform in years — plus new compliance requirements on food allergy disclosure and a transition of tobacco permitting to ABC.
Why it matters: Higher-revenue restaurants get meaningful operational flexibility under the reformed food-to-beverage ratio. Smaller restaurants get clarity on the rules that still apply to them. All restaurants face new posted-notice requirements. And any business selling tobacco or vape products is moving to a new permit system.
The big win: food-to-beverage ratio reform (HB 975)
Under prior law, mixed beverage restaurants, caterers, and limited caterers had to maintain food revenue of at least 45 percent of total food and beverage revenue. The new tiered structure replaces that uniform requirement:
- Monthly food revenue $48,000 or more: No food-to-beverage ratio requirement
- Monthly food revenue $25,000 to $47,999: At least 30 percent
- Monthly food revenue less than $25,000: At least 45 percent — or 30 percent for venues with under 30 seats and capacity under 60
The bill also requires that restaurants have at least as many seats at tables as at counters.
Why this is significant: The 45 percent rule has been a long-standing burden for higher-revenue restaurants whose beverage revenue naturally outpaces food revenue — particularly cocktail-forward concepts and venues with strong bar programs. The new tiers reflect economic reality.
What to do: Pull your last 12 months of food and beverage revenue. Calculate your monthly food revenue average. Identify which tier you fall into. Adjust menu, marketing, and seating accordingly. The Virginia ABC Authority is required to collect compliance data and report to the General Assembly, so expect ABC examiners to test the new tiers in routine compliance checks.
New food allergy requirements
Conspicuous notice (HB 373/SB 248): The State Health Commissioner is publishing a multilingual notice on the Department of Health website with procedures restaurant staff should follow when a customer has a food allergy. Restaurants must post that notice in a conspicuous location, and must also include the phrase “If you have a food allergy, please notify us” — with translation if applicable — on menus or on a sign posted conspicuously in the restaurant.
Delivery and carryout markers (SB 183): The Board of Health is promulgating regulations requiring restaurants that alter or substitute food due to a consumer-identified food allergy or sensitivity to place an identifying marker on any altered delivery or carryout food item.
Celiac disease training (HB 380): The State Health Commissioner is adding celiac disease awareness and safety to the topics included in written restaurant personnel training materials.
What to do:
- Add the required allergy notification language to menus, or post a sign in the dining area
- Implement an internal marker system for delivery and carryout orders where allergens have been removed or substituted
- Review your staff training program to include celiac awareness
- Watch for the final notice and regulation language from the Department of Health
Tobacco and vape permitting moves to ABC (HB 308/SB 620)
Licensing and enforcement for liquid nicotine and retail tobacco products are transitioning from the Department of Taxation to a permit system administered by the Virginia Alcoholic Beverage Control Authority. Implementation is phased; portions take effect October 1, 2026.
New compliance reality: The ABC Board is required to conduct unannounced buyer operations at least once every 24 months to verify that permittees are not selling retail tobacco products to anyone under 21.
What to do:
- If your business sells tobacco or vape products, watch for ABC’s permit application process and timeline
- Update age verification procedures and train staff
- Expect compliance checks similar in nature to ABC’s alcohol underage sales operations
One mention: commercial lifestyle center licenses (SB 14)
Limited to municipalities with a population over 450,000 and a tourism fiscal impact of over $3.5 billion. Allows the ABC Board to grant a commercial lifestyle center license and a performing arts facility license in the same designated area, with the performing arts facility license limited to prescheduled events and no simultaneous use. Niche, but worth knowing if you operate in or around a qualifying mixed-use development.
The bottom line: The food-to-beverage ratio reform is the most consequential operational change for Virginia restaurants in over a decade. The allergy notice requirements are modest but require small operational updates by July 1. The tobacco transition has a longer runway but a more substantial process change once it goes live in October.
What’s next: Monday, we cover the energy, environment, and housing changes that affect property owners and commercial real estate.
This communication is provided for general informational purposes only and does not constitute legal advice. Statutory citations and effective dates reflect the bills as enacted by the 2026 Virginia General Assembly. Member businesses should consult qualified legal counsel for guidance on specific compliance obligations applicable to their circumstances.