TPP-22 REVISED NOVEMBER 2011
NOTE: The final version of TPP-22 below does not show the revisions. Please click on www.state.il.us/lcc/DOCS/TPP-22revisions.pdf to review all revisions.
TPP-22 PROHIBITION OF CONSUMER DRINK SPECIALS, CONTESTS, GIVEAWAYS (Happy Hours Prohibited)
I. Purpose
This Policy statement establishes this Commission’s interpretation of 235 ILCS 5/6-28 of the Liquor Control Act, titled “Happy hours prohibited”.
II. Policy
It is the policy of this Commission to define the types of promotions and activities allowed and disallowed under the ”Happy hours prohibited” section of the Liquor Control Act, to monitor and verify compliance with those defined promotions and activities, and to enforce this policy as provided by law.
III. Definitions – Because the below written terms have not been defined by the Liquor Control Act, the Commission defines the terms as follows: A. MEAL PACKAGE • Any food, excluding snacks and other so-called “finger food,” that is served on the licensed premises, which includes the service of alcoholic beverages as part of such package is a meal plan The focus of the meal package must be on the meal itself with a compliment of alcoholic beverages.
• Offering a meal package does not permit a license holder to offer an open bar, unlimited or refillable drinks to be included with the meal. Meal packages that do not advertise a reasonable limitation on the number of drinks in the package are presumed to offer unlimited drinks.
• The burden is on the license holder to prove the drinks compliment the meal.
EXAMPLE: “All you can eat buffet and domestic drafts for $25” = PRESUMED VIOLATION
EXAMPLE: “All you can eat buffet which includes 2 domestic drafts for $25” = NO VIOLATION
• Meal Packages are not required to be offered for the entire day.
EXAMPLE: “Dinner and 2 drink special from 7pm-9pm” = NO VIOLATION
• Meal Packages may be limited to a defined, pre-determined number of packages if offered to the general public.
EXAMPLE: “Dinner and 2 drink special for $25 to the first 20 coupon presenters”
• Meal Packages may be offered at different prices during the same business day. NOTE: A limited number of coupons may be offered to the public for a discounted price as long as the primary focus of the coupon is on the meal with a defined and limited compliment of drinks.
EXAMPLE: “Food and Drinks for $25 with coupon.” = PRESUMED VIOLATION (because there is no limitation on the drinks).
EXAMPLE “Dinner and 2 drink special for $25 with coupon. Price without coupon is $50” = NO VIOLATION
B. DAY The period of time beginning from the opening of business to the close of business, not exceeding twenty-four hours.
IV. Current Law Prohibiting Happy Hour Promotions and Giveaways
The law prohibiting happy hour promotions and certain types of drink specials was enacted in 1989 to eliminate over service and over-consumption of alcoholic liquor by controlling drink specials and promotions at bars, restaurants and other on-premises liquor licensed locations.
Below, the Liquor Control Act’s happy hour prohibitions are reprinted in boldface type. Following the statutory language in bold, there is an Interpretative Statement which explains the Commission staff’s interpretation of referenced restated section 235 ILCS 5/6-28.
V. From Subsection (b) of 235 ILCS 5/6-28
“No retail licensee or employee or agent of such licensee shall: (1) serve 2 or more drinks of alcoholic liquor at one time to one person for consumption by that one person, except selling or delivering wine by the bottle or carafe;
Interpretative Statement
a. Service of two or more drinks to one person is prohibited if the license holder knew or should have known the drinks were intended to be consumed by that person.
b. Two (or greater) for one drink promotions are prohibited.
c. Pitchers, bottles or other serving containers of alcoholic liquor may not be served to one person unless the container is a standard sized bottle or carafe of wine.
d. Drinks that are commonly mixed like long island ice teas, a“shot and a beer” or “boilermakers” are considered one drink and can be served to one person for consumption by that person. It is expected that the cost of the drink be reasonably proportionate to the combined cost of each individual unit of alcoholic liquor contained in the drink on that given business day. [(see subsection (4)]
(2) sell, offer to sell or serve to any person an unlimited number of drinks of alcoholic liquor during any set period of time for a fixed price, except at private functions not open to the general public; Interpretive Statement a. Selling unlimited drinks to the public for a set price is illegal. “All you can drink” promotions are prohibited. Therefore, in all cases except private functions, alcohol must be sold to customers by the drink.
b. If a license holder sells alcoholic liquor pursuant to the private function exception, the license holder has the burden of proving they have complied with the conditions of the private function exception. The Act (235 ILCS 5/1-3.36) generally defines “private functions”:
Private function "Private function" means a prearranged private party, function, or event for a specific social or business occasion, either by invitation or reservation and not open to the general public, where the guests in attendance are served in a room or rooms designated and used exclusively for the private party, function, or event.
c. The following is the Commission’s interpretation of the definition of private function:
1. Private functions must be “prearranged”. Prearranged means that the license holder shall pre-arrange the event with the host before the event. The license holder should be prepared to provide written evidence to the Commission of the prearrangement. Proof of prearrangement will include a pre-signed agreement between host and license holder detailing
the hosts’ costs and alcoholic liquor to be included in the package. Proof of prearrangement also includes a predetermined, finite guest list of attendees. The licensee should be prepared to disclose all prearrangement evidence to the Commission for review upon request. The absence of the production of these prearranged agreements shall be deemed evidence that the function is not private.
2. Private functions must be held “for a specific social or business occasion.” The emphasis of the event must be on the event itself or on a beneficent purpose. The emphasis of the event cannot be on the sale or consumption of alcohol or as a promotional event for the license holder. The license holder should be prepared to provide information to the Commission on the purpose of the event. The absence of the production of information demonstrating the purpose of the event shall be deemed evidence that the function is not private.
3. Private functions must be “by invitation or reservation and not open to the general public.”
A. Event Advertising - For a function to be private, the party host will invite guests in a manner that is not advertised to the general public. Therefore, if the party host, license holder or other promoter of the event advertises or promotes the event through general or social media outlets or through any other public advertising means, it will be deemed as evidence that the event is not private.
B. Door Entry Fees/Tickets – If the license holder, party host, promoter or their agents charge or collect a door entry fee or ticket for the event, it will be deemed as evidence that the event is not private.
4. Private parties shall be “held in a room or rooms designated and used exclusively for the private party.”
A. License holders are responsible for ensuring that a private party is sufficiently physically separated from other portions of the licensed establishment in which the general public has access.
B. The use of wristbands as a means to distinguish who is not is not sufficient to designate physical separation required for a private event.
C. Organized Pub Crawls - Pub crawls that use wristbands to distinguish between members of the public and members of the pub crawl are an insufficient way to identify members of a private function. Pub crawls must be assigned a private room.
D. Birthday Parties – Birthday parties that use wristbands to distinguish between members of the public and members of the birthday party are an insufficient way to identify members of a private function. Birthday parties must be assigned a private room. Licensees that advertise that a person holding the birthday event can drink at no cost or for free are in violation of the ILCC Rule 100.280.
(3) sell, offer to sell or serve any drink of alcoholic liquor to any person on any date at a reduced price other than that charged other purchasers of drinks on that day where such reduced price is a promotion to encourage consumption of alcoholic liquor;
Interpretive Statement
a. No license holder shall sell one type of alcoholic beverage to one person for more or less than they have sold the same beverage to another person on the same business day.
b. Couponing/Special Discount programs (for the consumption of alcoholic liquor on the premises) – the offer of discounts to consumers redeeming a coupon privilege, including electronic forms of a coupon, is prohibited if:
1) the discount is offered for alcoholic beverages solely or;
2) if it is not clear on the face of the coupon or discount that the drinks are limited and included as part of a meal or hotel package.
c. “Happy Hour”/”Ladies Night” - A license holder shall not use the terms such as “Happy Hour” and “Ladies Night”
The license holder may additionally be held liable for violating 235 ILCS 5/6-17 of the Liquor Control Act, even if there is no discount on prices, if the license holder does not give access to the licensed premises to all persons on an equal basis (i.e. A license holder cannot give free entry to a woman while charge a cover for a man.). A liquor license holder may prohibit entry to a person for an underlying legal reason.
d. Multi-use Establishments - A multi-use establishment may charge different prices in different rooms provided that such prices remain the same all day and the license holder has been issued a separate liquor license for each room in which there are different prices.
e. Rewards Programs – Advertised offers rewarding frequent customers with free or discounted alcoholic beverages are prohibited as inducements to consume alcoholic liquor and violate ILCC Rule 100.280. If it is unclear whether or not the free or discounted redemption includes alcoholic drinks, it will be presumed that drinks can be redeemed as is thus prohibited. A bartender or another agent of a license holder may occasionally give away or buy a drink as a reward for a customer as long as the practice is not regular, promoted or advertised in any manner.
(4) increase the volume of alcoholic liquor contained in a drink, or the size of a drink of alcoholic liquor, without increasing proportionately the price regularly charged for the drink on that day;
Interpretive Statement
a. “Doubles/Triples” The license holder must increase the price of a drink in direct proportion to the increase of the amount of alcoholic liquor contained in the drink. In this case, the license holder will be expected to use a reasonable approximation calculation to increase the price of the drink in relation to the increase in the amount of alcoholic liquor. The baseline for such measurement will be the regularcost of a drink during the same business day for the same type.
b. No Cover Charge Drink Increases - Increasing drink prices in lieu of a cover charge if special entertainment, which is not regularly scheduled, is permitted at the licensed premises. This provision allows a licensee to increase drink prices, in lieu of an entertainment. However, this practice is not allowed for entertainment which is of the “house band” variety. If an establishment has various entertainment acts scheduled on a regular basis, this will also be considered to be of the “house band” variety.
(5) encourage or permit, on the licensed premises, any game or contest which involves drinking alcoholic liquor or awarding of drinks of alcoholic liquor as prizes for such game or contest on the licensed premises; or
Interpretive Statement
a. A licensee may not sponsor or permit, on its premises, games or contests which involve drinking alcoholic liquor or awarding drinks as prizes. If a licensee knows or should have known that their customers are engaged in drinking contests, they will be liable for a license violation.
b. A licensee may sponsor games and contests at its premises but they may not use the award of alcoholic liquor as a prize for winning such contests. In addition, the drinking of alcohol may not be part of the contest – for example, chugging contests, beer pong, power hour, flip cup, or other games, contests or promotions that include the consumption of alcoholic liquor. A licensee may offer coupons for winning a contest; however, the coupons may not be used for alcoholic liquor (e.g. drink coupons).
NOTE: A licensee must ensure they are compliant with all state gambling laws even if the consumption or award of alcoholic liquor is not involved in the game or contest.
(6) advertise or promote in any way, whether on or off the licensed premises, any practices prohibited under paragraphs (1) through (5).”
Interpretive Statement
a. Advertising a Prohibited Act is a Violation - Advertising any practice prohibited by the Happy Hour Law is also prohibited even if the act never takes place. The act of advertising a promotion which violates the Happy Hour Law is, itself, a violation.
b. 3rd Party Placement of Advertisements - Advertisements for illegal promotions at a particular licensed location will be presumed to have been placed by the licensee holder unless, the license holder can prove by a preponderance of evidence that they did not place the prohibited advertisement and the promotion did not occur at the licensed premises.
c. Event Advertising - Ads appearing on a licensed premises or in the media that advertise drink specials in conjunction with other specifically timed events (i.e. band, DJ, televised sporting event) shall indicate that the drink prices are for the entire day or it will be presumed that the drink prices are only available during the time period corresponding with the event and thus result in an advertising violation.
Example 1 One sign: “Band from 8-11. $2 domestic bottles” = Advertising Violation.
Example 2: One sign: “Band from 8-11. $2 domestic bottles available all day” = No Advertising Violation
d. Use of the Words “free” or “complimentary” in advertisement is prohibited.
This Commission takes the position that using the word “free” (or any form thereof) in any advertising promotion regarding alcoholic liquor (e.g. “buy a case, get a six-pack free”) is a violation of both 5/6-28 and Regulation 100.280. Such promotions encourage the over consumption of alcoholic liquor.
VI. From Subsection (c) of 235 ILCS 5/6-28
“Nothing in subsection (b) shall be construed to prohibit a licensee from: (1)offering free food or entertainment at any time Interpretive Statement
a. Offering discounts is subject to the provisions of the protections of 235 ILCS 5/6-17 (Civil rights in licensed establishment);
(2) . . . including drinks of alcoholic liquor as part of a meal package;. . .
a. See definition of Meal Plan in subpar. III
(3) . . . including drinks of alcoholic liquor as part of a hotel package;. . .
Interpretive Statement
a. Hotels may include a limited number of drink vouchers or tickets per day with the price of the room to be redeemed during the stay. The hotel or motel must not advertise that they offer “free” or “complimentary” drinks with the price of the room.
EXAMPLE: Room rate is $79.95 per night which includes coupon for two drinks at the hotel bar. = NO VIOLATION
EXAMPLE: Room rate is $79.95 per night which includes complimentary drink coupons at the hotel bar. = VIOLATION
(4) . . . negotiating drinks of alcoholic liquor as part of a contract between hotel or multi-use establishments and another group for the holding of any function, meeting, convention or trade show;. . .
Interpretive Statement– none
(5) . . . providing room service to persons renting rooms at a hotel;. . . Interpretive Statement– none
(6). . .selling pitchers (or the equivalent, including but not limited to buckets), carafes, or bottles of alcoholic liquor which are customarily sold in such manner and delivered to 2 or more persons at one time; or . . .
Interpretive Statement
a. Carafes, bottles or flights of wine may be sold to one person.
b. Beer towers containing more beer than is contained in the standard sized pitcher are prohibited.
c. Table Taps – Table taps are permitted under the condition that taps are restricted from dispensing more than the standard pitcher size to two or more persons and no more than 16 ounces of beer to one person.
(7) . . . increasing prices of drinks of alcoholic liquor in lieu of, in whole or in part, a cover charge to offset the cost of special entertainment not regularly scheduled.
Interpretive Statement
a. Increasing drink prices in lieu of a cover charge if special entertainment, which is not regularly scheduled, is permitted at the licensed premises. This provision allows a licensee to increase drink prices, in lieu of a cover charge, to defray the cost of non-regularly scheduled entertainment. However, this practice is not allowed for entertainment which is of the “house band” variety. If an establishment has various entertainment acts scheduled on a regular basis, this will also be considered to be of the “house band” variety.
VII. Illegal Giveaways of Alcoholic Liquor - ILCC Regulation 100.280. :
A. No individual, partnership or corporation shall give away any alcoholic liquor for commercial purposes or in connection with the sale of non-alcoholic products or to promote the sale of non-alcoholic products.
B. No licensee shall give or offer to give away alcoholic liquor in connection with the sale of non-alcoholic products or to promote the sale of non-alcoholic products. C. No individual, partnership, corporation or licensee shall advertise or promote in any way, whether on or off licensed premises, any of the practices prohibited under subsections (a) or (b) above.”