No happy hour dollar drafts here! The Alcoholic Beverages Control Commission (ABCC) enforces the Commonwealth’s ban on happy hour discounts on alcoholic beverages. The ban, in place since 1984, forbids a licensee from changing prices on alcohol during the same calendar week. Massachusetts was the first state to enact such a rule and is one of only a few with such a rule left on its books. (See Time Magazine's recent article regarding the last states standing strong with bans on happy hour.) Earlier this year Beacon Hill legislators withdrew a proposal to alter the ban, citing lack of support. (See a thorough explanation of both sides of the happy hour argument by Statehouse reporter Christian Wade here.)
Until the legislature or ABCC acts to repeal or limit the ban on promotional pricing, restaurants, bars, and retailers must be aware of the so-called “Happy Hour Regulations.” The regulation requires that all alcoholic beverage prices must remain the same for a calendar week. Private functions are the sole exception to the rule (which is another blog post in and of itself). If challenged, the licensee must prove that it qualifies for the private function exception based upon strict requirements set by the ABCC. The ABCC requires:
1. the private function has a host;
2. access to the private function is restricted to invited guests;
3. invited guests are not charged indirectly or directly;
4. the host is the only individual responsible for payment to the licensee;
5. the private function was not publicly advertised; and
6. written records containing the guest list exist and are available for inspection by the licensing authorities.
Regulations impact licensees in various ways. For example, licensees may not deliver pitchers to a single patron. Licensees may not allow or encourage drinking games. Licensees offering a “bucket” of beers violate the Happy Hour Regulation if the price per beer contained in the “bucket” is less than what the establishment charges for a single beer. (See Boston Nightlife Ventures, Inc., ABCC Decision, 1/13/09). To somewhat skirt the (un)Happy Hour rule, many bars and restaurants discount food in place of discounts on alcohol.
While the Happy Hour Regulation focus on on-premise licensees, off-premise licensees, by law, must “keep conspicuously posted in each room where any alcoholic beverages are sold a price list of such beverages.” Massachusetts General Laws, Ch. 138 § 15. Coupons offering discounts on alcoholic beverages are strictly forbidden as they alter the price offered from the establishment’s price list to which an off-premise licensee must adhere. The ABCC has imposed one day license suspensions on licensees caught accepting or distributing coupons in violation of this provision of Chapter 138. See Denrich Enterprises, Inc., d.b.a. Liberty Liquors, ABCC Decision, 1/24/97 (licensee had $1 off coupons printed on the back of grocery store receipts and had accepted at least six such coupons); West Mansfield, Inc., d.b.a. Rum Runner Wine & Spirits, ABCC Decision, 1/24/97 (licensee had 10% and 15% discount coupons printed on the back of Stop & Shop receipts, the ABCC rejected the argument that the coupons at issue were available to the general public).
Before engaging in a practice which may lower prices for short time periods, or for some, but not all customers, a licensee should seek legal guidance for the proper course of action, or it may be at risk for sanctions by licensing authorities.
What are your thoughts on special drink prices? Coupons? Happy Hour?