Groupon Restaurant Discounts Under ABCC Scrutiny

The Boston Globe reports that Groupon Inc., the popular daily-deal coupon site based in Chicago, is re-evaluating its policies after the Massachusetts Alcoholic Beverages Control Commission informed the company that Groupon discounts for some Massachusetts restaurants may not be in compliance with state liquor laws and regulations.

In a February letter to Groupon, the ABCC said that a $100 Groupon coupon that a consumer could redeem at a Massachusetts restaurant with a liquor license appears to be an “example of discounting activity that fails to comply with all laws of the Commonwealth and the regulations of the Alcoholic Beverages Control Commission.”

Because Groupon takes a piece of transactions that involve the purchase of alcoholic beverages in Massachusetts, the transaction may “unlawfully” transfer “a direct or indirect beneficial interest in the retailer’s alcoholic beverages license to Groupon,” the commission wrote.

“I am hopeful that the long-established, clear, bright lines of the boundaries of legality have not vanished in the rear-view mirror of entrepreneurism driven by unbridled and imprudent, if not reckless, enthusiasm,” William A. Kelley Jr., the ABCC’s head legal counsel, wrote to Groupon in the February letter, as reported by the Globe.

Attorney Kelley has asked Groupon to provide him with information by March 1 about all discounting activities that Groupon has engaged in with retailers licensed to sell alcoholic beverages in Massachusetts. Groupon asked for an extension, which was granted.

In a statement, Groupon said: “Since we are pioneering a new industry, issues arise within our space that we must evaluate in the best interest of our merchants and customers. At this point we cannot comment on any specifics because we are in the process of communicating with those merchants who might be impacted.”

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