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Business owners fought back tears or bowed their heads Tuesday as they told of customers walking out of their restaurants or losing their life savings because of the state's acute shortage of liquor licenses.

During a meeting of the Alcoholic Beverage Control Commission, Chairman Sam Granato told the 25 entrepreneurs who didn't get the liquor licenses they asked for that Utah's quota system must be readjusted.

"Talk to your legislators," he said. "You've all filled every requirement, but without any more licenses to give, there's nothing we can do."

Lawmakers will decide whether to free up a few more licenses by tinkering with permit categories. But so far, key legislators are opposed to loosening quotas, which have remained unchanged for more than a quarter-century.

The shortage's implications became even more clear when two restaurants were forced to buy licenses to serve all types of alcohol when they only wanted to serve beer or wine. Under the current system, quotas are more stringent for beer-and-wine permits than for full-service bars.

On Tuesday, the state had only two beer-and-wine permits for 11 eateries applying for limited-service licenses. The two winners were Nuch's Pizzeria and Restaurant in Salt Lake City and Cafe Trang in Murray. Both have waited for months for the permits, which only become available when other restaurants go out of business or the state's population increases.

Owners also wanted to serve beer and wine at Taste of India 2 in West Jordan and Full House Asian Bistro in Park City. But owners said they were forced to pay an additional $1,200 for a license to serve all types of alcohol because more of them were available at the time.

Next month, however, those full-service permits are also expected to run dry when six applicants vie for the two remaining licenses.

Dining clubs and bars fared much worse: Four licenses were up for grabs for 19 applicants in Salt Lake City, Holladay, Taylorsville, Layton, American Fork, Draper, Murray, Beaver, Roosevelt, Price and Ogden.

Among the winners was Lori Bolton, manager of Le Sabre in American Fork, who said she would go out of business if she couldn't convert her tavern permit to a full-service bar. Le Sabre, open since 1941, lost 80 percent of its customers last year when the former owner lost his club license.

"I will personally lose everything if we do not get this license, and the community will lose a great monument," said Bolton, who has been applying for a club license since last September.

Other winners were Bayleaf Bar & Grub in Salt Lake City, an applicant for the past four months; Club Fahrenheit at the Davis County Convention Center; and Kristauf's in Holladay. Kristauf's owner Lisa Christopherson said the license shortage has pushed her to the financial brink. Kristauf's, 6405 S. 3000 East, is scheduled to open Feb. 4.

Among the losers was Outpost Grill at Eagle Point in Beaver. The ski resort opened in December. Graffiti Lounge in Salt Lake City also went away empty-handed. Owner A.J. Kekel said more than 100 people have walked out after discovering he can only serve 3.2 beer. Kekel said he's spent $160,000 remodeling the building, at 342 S. State St.

Owners of 'Bout Time said their newly opened eateries in Holladay and Taylorsville are losing customers because they can't get a full-bar license.

" 'Bout Time has an exemplary record of compliance and a fine reputation as a good neighbor," wrote Taylorsville Economic Development Director Keith Snarr. He said residents are more concerned about filling up empty storefronts than about alcohol sales in their community.

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