Moonshiners Case Reveals 50/50 Rule Problems – What Legal Loopholes Are Distillers Exploiting?
Statesboro City Council Grapples with ’50/50 Rule’ Amid Moonshiners License Drama
October 1, 2025 – In a heated session that exposed deep flaws in Statesboro’s alcohol regulations, the City Council has granted more time to Moonshiners, a self-described “sports restaurant” at 125 Gata Drive, to submit accountant-certified sales reports clarifying compliance with the controversial “50/50 rule.” The rule, part of the city’s Alcoholic Beverages Ordinance adopted in December 2011, mandates that establishments with pouring licenses—such as restaurants and sports bars—derive at least 50% of their revenue from non-alcoholic sources like food and soft drinks. Tuesday’s hearing, the first enforcement action under the rule in five years, revealed inconsistencies in reporting practices and sparked debates among officials about the ordinance’s fairness, enforcement, and financial impact on the city. Meanwhile, the council suspended alcohol licenses for three other businesses, including one owned by Moonshiners’ manager, underscoring broader compliance issues in Statesboro’s hospitality scene.
Moonshiners, formerly known as Club 125 in its quarterly reports, operates without a full kitchen but offers sub sandwiches and can facilitate food deliveries from neighboring Gata’s Sports Bar & Grill, both under owner Farid Gharachorloo. Unlike typical underage sales violations, Moonshiners’ case centers on alleged over-reliance on alcohol sales. Gharachorloo’s initial April 2015 report showed 75% of first-quarter revenue from alcohol (52.5% distilled spirits, 22.5% malt beverages and wine), with only 25% from food and non-alcohol. The July report indicated 70% alcohol sales (50% spirits, 20% other). These figures violated the 50/50 threshold, prompting the city’s review. Gharachorloo, appearing with attorney Wes Taulbee, admitted the reports were inaccurate due to lumping mixed drink prices entirely as alcohol sales, ignoring non-alcoholic mixers like Coke or Red Bull.
In amended returns submitted after a September 18 letter from CPA John L. Fulcher, Gharachorloo revised the figures to 45% alcohol for Q1 and 41% for Q2 by separating mixer costs. Fulcher’s letter noted the error but did not certify the amendments, prompting council skepticism. Taulbee argued the ordinance’s ambiguity on mixed drinks created confusion, calling it “poorly written and nonsensical.” He requested an extension to implement a new accounting system that apportions drink prices between alcohol and mixers, a practice he said could align Moonshiners with compliance. Councilman Phil Boyum, however, defended the original reporting: “If you put Red Bull and vodka in one glass, you don’t separate it out… That is a $3 drink; you tax it at $3.” Boyum criticized the rule’s uneven enforcement, noting many businesses inflate non-alcohol sales with “Coke and ice and napkins and $500 hot dogs” to meet the threshold, while punishing transparency. “He’s probably been about as forthcoming… as anybody has been the last five years,” Boyum said of Gharachorloo.
The hearing highlighted systemic issues with the 50/50 rule, which authorizes on-premises alcohol only for restaurants and “sports restaurants” (no kitchen required but same revenue split). Bars are outright prohibited, forcing venues like Moonshiners—a club now restricted to patrons 21+—to navigate gray areas. City Attorney Alvin Leaphart agreed the rule’s wording is unclear on mixed drinks but emphasized its tie to the 3% city excise tax on full drink prices, including mixers. He revealed widespread non-compliance is costing Statesboro “enormous amounts of revenue,” with the city collecting only a third of due excise taxes as businesses manipulate reports to hit 50% non-alcohol. Leaphart presented a draft ordinance over a year ago to eliminate the rule, but after revisions and work sessions, no adoption has occurred. Councilman Travis Chance suggested requiring CPA certification for reports, turning Moonshiners’ case into a test: “It’s a great opportunity to have one presented to us.” The three present council members unanimously continued the hearing to November’s first meeting, instructing Gharachorloo to submit dual certified reports—one with whole mixed drinks, one separated—one week prior.
This leniency contrasts with stricter actions against other violators. Gata’s Sports Bar & Grill, managed by Gharachorloo, had its license suspended Thursday through Saturday for a second underage sales offense within 12 months. Gate Station No. 226 at 240 South Main St. faced a similar three-day suspension for its second underage violation. Shenanigans at 1 University Plaza agreed to a 10-day suspension (seven days waived) under a no-contest plea for second and third offenses. Applebee’s and Big Show Burgers received warnings for first offenses. Lt. James Winskey of Statesboro Police, who presented the cases, noted discrepancies in Moonshiners’ amended reports extended to wine and beer sales, reduced from 20% to 7% of total revenue due to “key entry errors.”
The Moonshiners saga, unrelated to Discovery Channel’s Moonshiners TV series despite the name coincidence, underscores ongoing tensions in Statesboro’s alcohol landscape. The city, home to Georgia Southern University, has grappled with balancing economic growth from hospitality with public safety. A 2017 proposal to eliminate the 50/50 rule and create a clear “bar category” for 21+ venues stalled, per WJCL reports. Recent council actions, like approving a micro-distillery ordinance in September 2025 despite public opposition, signal evolving attitudes. Councilman Boyum’s frustration echoed broader critiques: the rule incentivizes creative accounting, depriving the city of taxes while burdening honest operators. Leaphart’s revenue loss estimate—potentially hundreds of thousands annually—adds urgency to reform.
Gharachorloo, who owns multiple venues including Gata’s, emphasized Moonshiners’ pivot to a 21+ club to boost non-alcohol sales through events, though he admitted food orders are rare. Taulbee’s extension request highlights practical hurdles: reclassifying historical sales without retroactive penalties. As November approaches, the case could catalyze change, with Chance’s certification idea gaining traction. Statesboro’s next municipal election on November 4, 2025, for mayor and council seats, may influence outcomes, per city records.
For now, Moonshiners operates under scrutiny, its fate hinging on certified reports. The hearing, attended by a mix of locals and business owners, reflects a community divided: supporters see the rule as outdated protectionism, while critics fear lax enforcement invites chaos. As one council member quipped, “We’re punishing the honest guy for playing by the rules everyone else bends.” With Statesboro’s hospitality sector booming—fueled by university crowds and tourism—the 50/50 rule’s future hangs in the balance, potentially reshaping how the “Moonshine Capital” pours its drinks.
