Pa. may lift prohibition on 'mug clubs'
HARRISBURG, Pa. — Mug club members can raise their pint glasses for a victory toast this week now that the discounts some once enjoyed on frothy beer are one step closer to a comeback.
The state House passed a bill Monday that would allow bars to offer discounts on food and malt or brewed beverages to patrons who are part of a club or group program offered by the establishment.
Commonly called “mug clubs,” the programs have been around for years. While offering exclusive tastes of new craft beer, T-shirts and other perks, some of them had even offered members discounts on brews, but that turned out to be a party foul under the state’s liquor code.
“Sometimes what you think would be OK turns out is not in Pennsylvania,” said Amy Christie, executive director of the Pennsylvania Tavern Association.
In 2012, the Pennsylvania Liquor Control Board cracked down on Iron Hill Brewery, finding its mug club offered an illegal inducement to buy beer and violated acceptable discount practices. At the time, Iron Hill was offering its mug club members a discount on their 24-ounce beers and allowing them to accrue reward points for alcohol purchases.
Iron Hill revised its mug club to alleviate the issues, but the PLCB’s opinion spurred other bars to evaluate whether their mug clubs, beer passports or other loyalty programs were legal.
All the while, customer loyalty reward programs have become ubiquitous everywhere from gas stations, grocery stores and book retailers, leaving the tavern industry feeling as if it was lacking a tool for business.
“It gives your patrons a reason to come back,” Christie said. “It’s so commonplace in the business industry that a lot of people just didn’t realize that what they were doing was apparently illegal according to the liquor code.”
House Bill 2069, approved 174-22 by the House, would reverse course and allow liquor licensees to offer discounts on brewed or malt beverages. It’s sponsored by state Rep. Kurt Masser, R-Northumberland. He didn’t immediately return a message seeking comment.
The bill still has to clear the state Senate before it could become law.
It’s no surprise that Iron Hill, which has six locations in Pennsylvania, “wholeheartedly” supports Masser’s bill. Loyalty clubs that include alcohol are legal in all of the states that border Pennsylvania, said Mark Edelson, Iron Hill’s director of brewing operations.
“The current prohibitions exclude traditional Mug Clubs from being used as a way to promote loyalty and this isn’t fair to the customer,” he said in a statement. “Loyalty programs play, and have always played, a vital role for tavern and restaurant owners seeking to grow their business.”
An amendment to Masser’s bill would prohibit bars from offering the club discounts or disproportionate serving amounts from midnight to 2 a.m., when bars must close for the night in Pennsylvania.
That’s not a problem in Christie’s opinion.
State law already limits the time bars can devote to happy hours to 14 hours a week and a maximum of four hours a day. Those specials must be over by midnight anyway, Christie said.
“It’s nothing new,” she said. “We’re all pretty used to that.”
The Pennsylvania Independent is a public interest journalism project dedicated to promoting open, transparent, and accountable state government by reporting on the activities of agencies, bureaucracies, and politicians in the Commonwealth of Pennsylvania. It is funded by the Franklin Center for Government and Public Integrity, a libertarian nonprofit organization.