Legislators in Massachusetts want to bring back happy hours after a 38-year ban, but the state’s restaurant industry doesn’t think that’s such a good idea.
The Massachusetts Restaurant Association has come out strongly against the proposal because of fears the re-legalization of two-for-one drink specials and other afterwork drink promotions will do more harm than good.
For one thing, the move will likely send insurance rates soaring as the threat of server liability lawsuits escalates back to the pre-ban level of the early 1980s, MRA CEO Stephen Clark said in a letter sent Tuesday to state legislative leaders.
“These days, liquor liability insurance is relatively inexpensive and is mandated,” Clark wrote. “A return to the old days will result in skyrocketing costs for all.”
In addition, restaurants with bars “don’t want to get into price wars,” he said in an email to Restaurant Business.
Massachusetts’ consumers would understandably welcome an opportunity to get two drinks for the price of one, Clark said in his letter to lawmakers. “Consumers would take two-for-one gas, two-for-one concert tickets, really two-for-one anything if you asked them,” he wrote.
But operators would be walloped by the negative impact on sales. Two-for-one drinks means cutting the revenues in half. They could also foster what Clark described as a race to the bottom.
Before drink promotions were outlawed in 1984, “better establishments with higher costs found themselves competing with the bar across the street’s predatory pricing policies,” he explained. “There is no protection that this new legislative idea will not have the same impact on local restaurants trying to recover from the pandemic.”
And if the industry’s sales diminish, so do state sales-tax revenues, he noted.
All in all, concluded Clark, the industry would prefer to leave things as is.
“For the last four decades, the present public policy in Massachusetts has worked,” he wrote. “There has not been outcry from industry to change these laws.”
Legislative proponents of the pro-happy-hour measure say the ban should be reconsidered because the world has changed in 38 years. For instance, there were no low-cost cab-hailing services like Uber or Lyft available to happy hour revelers back in the early 1980s.
Plus, the measure passed by the state Senate would give control over happy hour rules to cities and towns, which could use the offer to bolster consumer traffic for local business areas.
Proponents also cite a 2021 poll that found 70% of Massachusetts residents favor a re-legalization of happy hour discounts.
It’s not clear if the state House of Representatives will adopt legalization. Gov. Charlie Baker has expressed opposition, but his office more recently indicated that Baker would consider the measure as approved by the Senate.
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