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Issue link: https://read.dmtmag.com/i/33721
LEGAL MATTERS By Michael Newman Negotiating Social Media’s Legal Pitfalls Is There an Application for Beverage Alcohol Regulations? A lthough it is relatively new, it has become diffi cult to think of a time when we did not have social media, so pervasive has it become in our world. Th is is no diff erent for operators in the beverage industry. Moreover, for those restaurants and bars that off er beverage alcohol, the challenge to remain legally compliant when using or participating in social media tools and channels is great because it is a new form of promotion and new forms of promotion do not always translate well in the beverage alcohol regulatory environment. Take the recent example of the problem that Groupon, a social media site that off ers 24-hour deep discounts to consumers, and a Boston-area restaurant ran into when Groupon off ered a voucher deal of $60 worth of food and drinks at the restaurant for a cost of far less than $60. In March 2011, the Massachusetts Alcoholic Beverage Control Commission cracked down on Groupon and the restaurant and asked them to pull their on-line promotion. Th e State ABCC claimed that the voucher promotion violated both the state’s happy hour promotion regulations (by off ering beverage alcohol at too great a discounted price) and the state’s beverage alcohol licensing regulations (by creating an interest for Groupon in the licensed business of the restaurant). While happy hour regulations governing the discounting or off ering of “free drinks” by a bar or restaurant on a nightly basis vary greatly from state to state as to the degree and extent of such discounts or off ers, the licensing issue raised in Massachusetts may have further reaching implications for restaurants participating in Groupon and other social media daily deal sites such as LivingSocial or BuyWithMe. Th e Massachusetts ABCC apparently took the position that Groupon’s collection of the payment for the food and drinks voucher from the customer and the holdback of a portion of the payment constituted a share in the proceeds from the sale of beverage alcohol, something that the ABCC asserted constituted an interest in the restaurant’s license. It remains to be seen how other state beverage alcohol regulators view or will view this activity when it occurs in their state, but it is indicative of the complications that arise in any context when any type of social media or on-line promotion involves the sale of beverage alcohol. Th is will remain a challenge for bar and restaurant operators as they increasingly use social media to promote their accounts. A NEW FRONTIER We have seen both the manufacturer and brand-owner players in the industry make extensive use of Facebook and Twitter to increase brand awareness for their products. Bars and restaurants, however, use Facebook and Twitter and other social 20 | JUNE 2011 www.cheersonline.com