Happy Hour laws were passed in the state of Illinois back in 1989, limiting the types of promotions and events that bars and restaurants can organize. These points have been subject to particularly intensive debate over the last couple of years. Is a change in happy hour law on the horizon?
Happy Hour Returning to Illinois?
Recently the media has inundated us with articles and blogs concerning the possible return of Happy Hour to Illinois after an almost 26 year absence. At the end of this spring’s legislative session, both the House and Senate approved the Culinary and Hospitality Modernization Act or Senate Bill 398. This bill has not yet been sent to Governor Rauner for his review and possible signature, which he will have 60 days to review once it is sent to him. Although it is unclear why the bill has not been sent to the Governor as of yet, it is clear that the bill had widespread support in the legislature, as it was passed on a near unanimous vote.
The bill will do numerous things that will bring the hospitality industry into step with modern times, while also maintaing some concerns of the original act, as mentioned in a press release from the Illinois Restaurant Association
The key points of SB 398
- Maintains home rule jurisdiction allowing local units of government to keep local control of alcohol related ordinances.
- Maintains prohibition on 2 for 1 sale of alcoholic drinks.
- Maintains prohibition on increasing the volume of alcohol in a drink without proportionally increasing the price.
- Requires mandatory Beverage Alcohol Sellers and Servers Education and Training (BASSET) for all alcohol servers in Illinois.
- Streamlines the process for hotels to manage and pursue a single liquor license on premises owned and operated by the hotel.
- Defines and permits meal packages, entertainment packages, and party packages, including wristband deals.
- Permits discounted drinks during a specified time period of the day, with stipulations on the following:
- Drinks may not be discounted for more than 4 hours per day and not more than 15 hours per week.
- Notice of the discount of alcohol drinks must be made publicly available 7 days prior to the specified time.
- The drink may not be discounted between the hours of 10:00 p.m. and the licensed premise’s closing hour.
- The price of alcoholic drinks must not be changed during the time that it is discounted.
One important note is that the Home Rule Jurisdiction is maintained, which allows local units of government to keep local control of alcohol related ordinances. Essentially, this means that the City of Chicago can impose more strict regulations than the state, much like the minimum wage hike passed in the City of Chicago earlier this year and smoking bans that were passed piecemeal in the ‘90s. It will be very interesting to see how Chicago will react if this becomes law.
With all of this as a background, I have been asked repeatedly how Bottleneck feels about this legislation and whether we will be offering Happy Hour specials, if this becomes law. For full disclosure, Bottleneck is a member of the Illinois Restaurant Association and I am on the Board of Directors, currently.
It has been abundantly clear to us at Bottleneck Management that the laws were outdated and confusing. Interpretations of the existing happy hour laws were often different depending on who you asked, which created much uncertainty and anxiety at the business and restaurant level.
One of the most debated portions of the current Happy Hour Law was the interpretation of what constituted a “Meal Package.” Namely, how many drinks could be included in said package, as well as how substantial the food needed to be to meet the definition of a “Meal Package.” The newly passed bill does a much better job of eliminating the confusion and makes it clear that “meal packages, entertainment and party packages” are legal, which includes “wrist band deals”, which are necessary to keep track of which patrons are part of a party group. Cleaning this language up and allowing Illinois restaurant groups to be competitive with most other states in the Union, will eliminate unnecessary confusion. This is something we whole heartedly support and are very appreciative that our legislative leaders agreed with the industry view on this.
Another area that Bottleneck clearly supports is the requirement for mandatory Beverage Alcohol Sellers and Servers Education and Training (BASSET) for all alcohol servers in Illinois. Additional training for our servers, bartenders, managers and staff to recognize signs of impairment is good for everyone.
With regard to the crux of Happy Hour, our support is tepid at best. We are most concerned about the unintended consequences of this change. Could it drive business at times that are typically slower? Of course that could happen and would certainly be viewed as a positive, but does that just mean that people get started earlier and go home earlier? If so, the net effect is negligible, except for the fact that the business flow has changed and margins have dropped on the product consumed due to the discounting. The more worrisome outcome would be if people came out earlier, but stayed out longer since they have more buying power due to the Happy Hour discount. Would this lead to more patrons being over-served?
At the end of the day, we feel that the net benefits of the recently passed bill outweigh the negatives, but we sincerely hope that this does not lead to some restaurant operators offering extreme deals to drive traffic. The unintended consequences of offerings like this could have negative or even tragic consequences on a guest, a business, an industry, or the public at large.