Prohibited Promotion ABC Violation
N.J.A.C. 13:2-23.16
N.J.A.C. 13:2-23.16 permits anyone who owns a liquor license (specifically retail consumption and retail distribution licenses) to engage in promotional activities. However, there are strict regulations on what kind of promotions may be offered. Most common is the free drink promotion. While a license may offer one free drink “on the house” to each customer in a 24 hour period, there are additional restrictions and regulations that licensee need to know. Bottomless brunches are another area of concern for licensees because they are not permissible under N.J.A.C. 13:2-23.16. If you or your restaurant received a Notice of Charges from the Division of Alcoholic Beverage Control, call 732-858-5857. Our firm Partner, William C. Fay, IV, was formerly with the Division of Alcoholic Beverage Control as Deputy Attorney General. Having spent part of his career prosecuting for the State, he now represents persons and business charged under ABC violations. Call today to schedule your consultation.
N.J.A.C. 13:2-23.16 Charges
The Prohibit Promotion regulation sets forth the following, under N.J.A.C. 13:2-23.16:
(A)Except for consumer alcoholic beverage tasting events conducted in accordance with N.J.A.C. 13:2-37, and promotion permitted in the section, no license, permittee or brand registrant shall, directly or indirectly, allow permit or suffer any practice or promotion that:
- Offers unlimited availability of any alcoholic beverages for consumption on a licensed premises for a set price, except for:
- (a)Private parties, not sponsored by the licensee, such as weddings and birthdays, and events held by social affair permittees; or
- (b)New Year’s Eve parties sponsored by a licensee where a set price for attendance includes an open bar;
- Offers to a patron or consumer a free drink, gift, prize or anything of value, conditioned upon the purchase of an alcoholic beverage or product, except for:
- (a)Branded or unique glassware or souvenirs in connection with a single purchase;
- (b)Consumer mail-in rebates offered in accordance with N.J.A.C. 13:2-24.11;
- (c)Manufacturer’s sweepstakes and contests not prohibited by law, where entry or opportunity to win is open to the public without requirement that a purchase be made;
- (d)Discounts offered by retailers to consumers on the purchase of alcoholic beverages for off premises consumption;
- (e)Offers of nor more than one free drink per patron, as a gesture of goodwill, in a 24 hour period, by on premise consumption license;
- (f)Offers of not more than one free drink coupon, ticket, or token, redeemable by a patron, once in a 24 hour period;
- (g)Offers a set price for a meal that includes a single alcoholic beverage drink; or
- (h)Offers a single bottle of wine or champagne to guests staying at a licensed hotel or motel as part of a specialty package, provided that the primary guests are of legal drinking age;
- Requires or allows a consumer to pre-purchase more than one drink or product at a time via tickets, tokens, admission fees, or the like, as a condition for entry into a licensed premises or as a requirement for service or entertainment thereon;
- Offers any prize, gift or award which consists of alcoholic beverages or coupons or gift certificates which may be redeemed for alcoholic beverages, such as two for one, and the like, except for a prize consisting of alcoholic beverages in sealed containers offered in a raffle licensed pursuant to N.J.S.A. 5:8-50. A coupon or gift certificate, other than a certificate purchased by a consumer for an amount equal to the dollar value of the certificate, shall expressly state that the certificate shall not be applied toward the purchase or consumption of alcoholic beverages; or
- Contains an instant win coupon, ticket, cap, game card or the like
(B) No prize or promotion shall be given to, nor shall any contest for consumers be open to, any person under the legal age to purchase or consume alcoholic beverage, any supplier, wholesaler, distributor or retailer; or affiliates, employees or members of the immediate family or household of any such persons or entities.
Section (a)(1) specifically refers to “Open Bar” promotions. Under ABC regulation, these are illegal promotions, except in certain contexts (private event or New Years Eve party).
Can I Give a Customer a Drink “On the House?”
Yes, but with certain restrictions. The general rule is that a licensee cannot sell any alcoholic beverage, whether in original package or by the drink, which would fall below the cost of that beverage. Generally, the offering of a free drink would cause it to be below cost and thus would be prohibited. There are, however, certain exceptions which permit a complimentary alcoholic beverage to be served to a patron and they are:
- Offering a patron a free drink as a gesture of goodwill (though there are advertising restrictions on this);
- The Division also permits retail licensees to offer a “free drink coupon”; and
- Alcoholic Beverage included as part of a meal.
NJ Attorney for ABC Charges
Our firm offers its clients a specialized focus on ABC regulations and liquor licensing laws. For Deputy Attorney General, William C. Fay, IV, spent part of his career with the Division of Alcoholic Beverage Control and has inside knowledge and experience regarding ABC laws and practices. For your complimentary consultation regarding your Notice of Charges, call 732-858-5857.
