ILLINOIS HAPPY HOUR REGULATIONS

On May 31, 2015, the Illinois legislature passed Senate Bill 398 (the “Bill”), amending the Liquor Control Act of 1934 (the “Act”).  The Bill became effective when Governor Rauner signed the Bill into law on July 15, 2015.

The Bill makes the following changes to the Act with regard to the “Happy Hour” laws:

• A licensee may sell more than one drink of alcoholic liquor at one time to one person.
• A licensee may sell a pitcher, bucket of bottled beer (generally, five to six bottles), carafe, a flight, bottle of wine or bottle of spirits to one person.
• A licensee may offer Happy Hour specials by temporarily reducing the price of drinks at its establishment for a period of four hours per day, fifteen hours per week, to be divided as the licensee chooses, provided:

The price charged must still reflect the quantity purchased (e.g. no 2 for 1 sales).

A retail licensee of a hotel may:

• the discounted price remains the same during the discounted period;
• the discounted period may not take place between 10:00 p.m. and closing; AND
• the licensee posts on the licensed premises or the licensee’s public website, notice of its intent to provide the discounted drinks of alcoholic liquor during the specified time, at least seven days prior to the specified time.
• include drinks of alcoholic liquor as part of a hotel package;
• negotiate drinks of alcoholic liquor as part of a hotel package; and
• provide room service to persons renting rooms at a hotel.

The Act permits a retail licensee to include drinks of alcoholic liquor as part of a “meal package.”  A meal package is defined as a food and beverage package, which may or may not include entertainment, where the service of alcoholic liquor is an accompaniment to the food, including but not limited to:  a meal, tour, tasting, or any combination thereof for a fixed price by a retail licensee or any other licensee operating within a sports facility, restaurant, winery, brewery or distillery.  Although the Act is not clear as to whether the number of drinks of alcoholic liquor included as part of the “meal package” is unlimited, the ILCC issued a newsletter stating that there is NO limit to the number of drinks included with a meal package.

• Food” is considered to be any food, including snacks and other so-called ‘finger food, ‘as long as the food and alcoholic drinks are sold as a package for a fixed price.

The Act allows unlimited drinks of alcoholic liquor to be sold as part of a “party package.”  A party package is defined as a private party, function or event for a specific social or business occasion, either arranged by invitation or reservation for a defined number of individuals, that is not open to the general public and where attendees are served both food and alcohol for a fixed price in a dedicated event space.  The party package must follow the below guidelines:

• Duration of the party package is limited to no more than three hours;
• Party package invitees must be limited to a dedicated event space which is clearly delineated for the exclusive use of the invitees.

Furniture, stanchions and ropes, or other room dividers may be used to clearly delineate a dedicated event space.

• The food and alcohol must be offered in the dedicated event space; and
• Wristbands, lanyards, shirts or other wearable items designating the party package attendees must be distributed.

A party package differs from that offered to “private functions” such as weddings, private corporate events, fund raising functions and similar private bookings, where guests in attendance are served in a designated room or rooms that are used exclusively for the private party, function or event and are NOT subject to a time limit.  Please note that the ILCC intends to issue rules, which we understand will clarify these limitations and the differing private events.

Beyond the Happy Hour provisions, the Bill also makes the following changes to the Act:

• The Act allows the Illinois Liquor Control Commission (the “ILCC”) to issue a single retailer’s license to a hotel operator for multiple locations within or adjacent to the hotel if all of those locations are owned and managed by the hotel operator.
• A retail licensee shall maintain a schedule of prices charged for all drinks of alcoholic liquor to be served and consumed on the licensed premises.
• Flights are no longer limited to the same quantities as the sample quantities (¼ ounce of distilled spirits, 1 ounce of wine, or 2 ounces of beer), provided that the licensee is selling the flights and not giving them away.

The price of the drink of alcoholic liquor must remain commensurate with the size of the drink (e.g. a “double shot” costs two times that of a single shot).

The Act defines an “infusion” as a spirit where ingredients, including, but not limited to, fruits,spices, or nuts, are added to naturally infuse flavor into the spirt.  It also provides the requirements for a retail licensee preparing an infusion, which are as follows:

Infusions may not be sold “to go” or for off-premises consumption; infusions may only be  served and consumed on the licensed premises.

• licensee must mix and store the infusion on the licensed premises;
• the container in which the infusion is stored must have a lid and be in sanitary condition;
• the infusion must not be aged for more than fourteen days;
• the infusion must be destroyed within twenty-one days after the end of the aging process;
• cleaning records for the storage container must be available for inspection by agents of the ILCC; and
• the container must have a label that provides the production date, base spirit, date the infusion will finish the aging process and the date it must be destroyed

This above is provided as general information and is not intended, nor should it be considered, to be legal advice.

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