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Groupon discounts that include alcohol violate ABCC rules [moved from Boston]

There's an article in the Herald today saying that the state ABCC has determined that allowing Groupon-like discounts to apply to alcohol violates ABCC rules. In particular, they say that it violates the "happy hour" rule," and may also unlawfully transfer an interest in the liquor license ownership.

It was a nice ride while it lasted...

http://www.bostonherald.com/jobfind/n...

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  1. Dangit! Now I am going to have to order like four Cubanos from Chez Henri before June 30.

    1. I had a feeling this was going to happen. Next there will be a class action suit from owners if AG/ABCC holds them personally responsible. Having never used a Groupon, do they tax you on your total bill? Or discounted portion?

      3 Replies
      1. re: T.Clark

        Groupon is a form of payment, like a gift card. So the tax is on the total bill.

        I've enjoyed more than a few groupons that paid for more cocktails than food. Hope that my go-to places don't read the Herald.

        1. re: C. Hamster

          I agree.

          1. re: C. Hamster

            OK, but Restaurants (meals tax vendors) must report gross receipts from the sale of alcoholic beverages and non-alcoholic beer SEPARATELY from food and other beverage sales on the appropriate lines of their meals tax return. It's a bit of semantics but it's up to the restaurant to decide how the Groupon was used, then tax accordingly.

            If a restaurant offers a patron, upon presentation of a coupon (which I think you can argue Groupon is), two meals for the usual price of one (which the restaurant could argue is the case), the price of the free meal, or portion of the discounted meal is excluded from the meals tax. The tax is due only on the actual amount the restaurant charges the patron, except when it comes to alcohol, in which case you cannot use a coupon to pay for alcohol, or taxes.

        2. Not set in stone.

          1. Absolutely stupid.

            3 Replies
            1. re: jgg13

              I don't even drink and I think this is stupid too.

              1. re: kobuta

                It really has nothing to do with the tax. I think it falls under the "Happy Hour" law. You cannot discount booze for some people and not others, or you have to maintain the same price for 7 consecutive days.

                1. re: csammy

                  You actually can't charge a lower price for a drink than you have charged in the same calendar week. You can increase prices all the time.

            2. This make absolutely no sense (not that anything the ABCC does makes any sense- are we the only major city in the US that doesn't allow happy hour?! Or allow drinks on a patio!?- one of the few things I miss about Denver).

              Groupons function as a discounted gift certicate. Are they not going to allow restaurant.com certificates to be used for booze? Or even gift certificates in general?

              5 Replies
              1. re: Kirs

                Gift certs are typically $x for $x value unlike the deals and such. So if a place had a coupon it should fall under the same umbrella that groupons and such are.

                1. re: jgg13

                  Restaurant.com gift certificates are usually discounted.

                  1. re: eireann

                    And most of them say right on the gift cert that you can't use it for alcohol. I'd consider resto.com as being pretty much in the same boat as groupon though.,

                2. re: Kirs

                  Welcome to the Nanny State. Also, a brilliant move that will help stifle the economy!

                  Just wait until someone gets sick from a bad tureen of head cheese - all the charcuterie joints will have the hammer brought down.

                  1. re: Bob Dobalina

                    I thought that's already started happening. Didn't bisonette have to dump a few hundred pounds of house cured meat last year?

                3. This is completely stupid (but typical of local government)...all they needed to do was require that food be part of / majority of the purchase.

                  2 Replies
                  1. re: Ralphie_in_Boston

                    Since local gov't is often distinguished from state gov't, I just want to point out that these ABCC rules are a state thing.

                    It seems like any promotion with a third party that involves alcohol could get a little sticky. I too figured that as long as the amount of alcohol was restricted to the Groupon purchase price you'd be in the clear, but it seems that the ABCC is also concerned about the potential interest in the license that Groupon may gain by arranging the promotion. But it sounds like the devil is in the details there...

                    1. re: emannths

                      you're right I meant State.

                  2. Although I don't support the strict laws the ABCC imposes and Menino backs they are pretty simple.

                    An establishment must offer alcohol to everyone for the same price for 7 days (or until they "run out") at the point of sale.

                    That being said there are a few places that get away with happy hours and I don't know how. Exchange St Bistro has a Mon-Fri 4-7 $5 cocktail, $3 beer, $4 wine thing available at the bar. As far as I know it's totally illegal.

                    9 Replies
                    1. re: Unfoodie

                      I'm surprised that more places don't use availability as a way to skirt the happy hour rule. As far as I can tell, it's perfectly legal to sell something only during specific hours, so there would be nothing to stop a bar from offering a happy hour cocktail menu of drinks that are simply not offered at other times. But this seems so simple that the fact that it doesn't happen would seem to indicate that the ABCC has outlawed this too.

                      1. re: emannths

                        KO Prime and McCormick & Schmick's sell $5 cocktails that are only available from 5 to 7. And isn't that the principle behind B&G Oysters' dollar Narragansetts (or is it PBR) at lunch?

                        -----
                        KO Prime
                        90 Tremont Street, Boston, MA 02108

                        1. re: robwat36

                          M&S will give you those $5 drinks anytime you ask, they only promote them from 5-7. I'm sure it's the same at the other places mentioned.

                        2. re: emannths

                          From the ABCC

                          "Alcoholic beverages must be sold to all persons at the same price for a calendar week. An on-premises licensee cannot change its prices -- up or down -- during the week."

                          And from L.Staff's link below:

                          "Therefore, licensees may not legally offer an “open bar” to customers for a fixed price or offer discounted prices for drinks during a limited time period."

                        3. re: Unfoodie

                          Could you point me in the direction that you have seen the statement "or until they run out"? I've never heard that part.

                          1. re: T.Clark

                            It's not stated in the regulations but it happens all the time.

                            Just wait until the ABCC makes it so that large retailers won't be able to use their buying power to sell items for much less then mom and pop stores!

                            1. re: Unfoodie

                              That's a joke, right?

                              1. re: Unfoodie

                                Assuming we're talking about a pouring license not a package store license, I'd be surprised if it happens all the time. The ABCC is not an authority you would want to mess with. Licenses in the City of Boston are expensive, hard to get and easy to lose. If a place was running any sort of discount program and consistently "ran out" of product as suggested they'd get busted. Actually they would probably get ratted out by the bar owner down the street.

                                As for retailers: In Mass Wholesalers must advertise their retailer discounts with the ABCC by the 5th day of every month. All retailers are given the same discounts if they choose to buy in the same quantities required by the wholesalers. In other words, no special deals to stores regardless of their size. Large stores can sell for less because they're selling in volume at lower margins, or they are taking advantage of deals that the little guy may not have the cash flow to do.

                                http://www.mass.gov/abcc/regs/reg2040...

                                1. re: T.Clark

                                  "...they are taking advantage of deals that the little guy may not have the cash flow to do."

                                  This is what the ABCC has proposed to take away by restricting retail prices to be no less then the single bottle wholesale price. So a retailer taking in 50 cases of a product wouldn't be able to use that leverage to sell it for way cheaper then smaller store. Usually a large purchase of 50-100 cases drops the whole anywhere from 40% - 70% and this is why it's cheaper at the big stores. All store go by the industry standard markup (give or take 5%).

                          2. Here is a link to the abcc interpretation of the "happy hour" law.

                            http://www.mass.gov/abcc/pdf/HAPPYHOU...

                            1. 204 CMR 4.00:
                              PROHIBITION OF CERTAIN PRACTICES

                              204-4.03: Certain Practices Prohibited

                              (1) No licensee or employee or agent of a licensee shall:

                              (a) offer or deliver any free drinks to any person or group of persons;

                              (b) deliver more than two drinks to one person at one time;

                              (c) sell, offer to sell or deliver to any person or group of persons any
                              drinks at a price less than the price regularly charged for such drinks
                              during the same calendar week, except at private functions not open to
                              the public;

                              (d) sell, offer to sell or deliver to any person an unlimited number of
                              drinks during any set period of time for a fixed price, except at private
                              functions not open to the public;

                              (e) sell, offer to sell or deliver drinks to any person or group of
                              persons on any one day at prices less than those charged the general
                              public on that day, except at private functions not open to the public;

                              (f) sell, offer to sell or deliver malt beverages or mixed drinks by the
                              pitcher except to two or more persons at any one time;

                              (g) increase the volume of alcoholic beverages contained in a drink
                              without increasing proportionately the price regularly charged for such
                              drink during the same calendar week;

                              (h) encourage or permit, on the licensed premises, any game or contest
                              which involves drinking or the awarding of drinks as prizes.

                              (2) No licensee shall advertise or promote in any way, whether within or
                              without the licensed premises, any of the practices prohibited under 204 CMR
                              4.03.

                              1. Just an FYI that if you go to print out any previous Groupons purchased before this alcohol ban took effect where the groupon was previously good towards alcohol the details have all been re-written to say "Not valid towards alcohol". This was done without any notification from Groupon.

                                2 Replies
                                1. re: NahantNative

                                  Yeah I noticed that. Isn't that great? Not really Groupon's fault overall but they could have sent a notification.

                                  It made me think that I should have printed them out first. But it wouldn't have mattered once I took it to the restaurant anyway.

                                  I emailed Groupon customer service and they did offer to refund the groupons that got changed. Still not sure whether I want to or not!!

                                  1. re: Ralphie_in_Boston

                                    I decided I want my money back and filled out a ticket on their website. I haven't heard back. Not fair at all - only Groupon is being targeted by the ABCC(as of this moment) but not fair of Groupon not to notify Boston consumers with Groupons for restaurants with liquor licences that the restrictions had been altered.

                                2. Here is a direct quote from a groupon that I just received:

                                  'When we first offered this deal, it was advertised as valid for both food and alcohol. We recently received notification from the State of Massachusetts that Groupons cannot be used toward the purchase of alcoholic drinks and beverages, so these Groupons can no longer be used towards alcohol. We have already updated the Fine Print to reflect this. We understand how disappointing it is to make this kind of change to a great deal after it has closed and we are sincerely sorry for any inconvenience this causes. Fortunately, these businesses are still more than happy to honor your Groupon in full for any of the food items on their menus.

                                  Of course, if you would like a refund for your Groupon based on this new information, please email us at support@groupon.com and we'll make sure you get your money back. Though we hate it when something like this happens, you can always count on us to have your back and make sure you're getting what you paid for, or a complete refund."

                                  Sounds like they are definitely going to give refunds. I hope this doesn't impact them too negatively, since it has been great to have an opportunity to try some new (or familiar) places at such reasonable prices.

                                  I think I'll keep most of my used ones, but it will definitely change how I buy in the future. Bummer.

                                  3 Replies
                                  1. re: bear

                                    I just got a similar email today listing my restaurant groupons and that message.

                                    I probably won't have a problem using them up without ordering alcohol, but I agree that it will change how I buy future Groupons.

                                    1. re: bear

                                      We have a Sushi and Sake deal from Rue La La at Basho, I wonder if we'll be able to use it as granted, or if it can only be used on food?

                                      1. re: L2k

                                        Well, if you define Sake as raw salmon, then yeah!

                                    2. Today's list of Groupons includes one from Bull McCabe's Pub in Union Sq Somerville -- this one doesn't exclude alcohol (as of this morning) . What gives - is this a mistake? I'm surprised to see this given that it's been just days since Groupon retroactively added fine print to prior deals that had included alcohol.

                                      3 Replies
                                      1. re: JP RS

                                        It says "Food and Drink" but pretty clearly does exclude alcohol:

                                        Expires Nov 22, 2011
                                        Limit 1 per person, may buy 2 additional as gifts. Limit 1 per table, 2 per table of 4 or more. Limit 2 per visit. Dine-in only. Not valid for alcohol. Not valid toward specials. Not valid with other offers.

                                        1. re: C. Hamster

                                          Yep, they updated it so it now does have the alcohol exclusion. When they originally posted it it didn't have the alcohol exclusion, which was odd. They must have written the copy for it before the recent hoo-ha.

                                          1. re: JP RS

                                            I recall it also being there yesterday when I looked, because I thought the same thing you did ... but whatever ...