Bars and Restaurants Challenge Michigan Law Banning Promotional Products, Part 1
Decorated glassware, imprinted coasters and branded chalk boards are effective promotional products and staples in bars and restaurants across the country—except in Michigan, where local law prohibits the use of many items featuring alcohol brand logos. Several of the service industry's mainstays have been banned across the state for years, but now some businesses in Michigan are lobbying to change those laws.
The Michigan Liquor Control Code Act (MLCCA) of 1998 prohibits a liquor manufacturer or vendor from providing anything with a "secondary value" to a retailer, a definition that extends to bars and restaurants. Logoed coasters, glassware, uniforms, ashtrays, napkins and more all provide another function beyond advertising, and therefore cannot be given to the local watering hole.
It isn't just the giveaways that are regulated. Tavern owners can buy these products either blank or with the name of their own establishment printed on them, but they can't use pint glasses featuring a beer brand, even if they've purchased them from a store or distributor. Even permitted items, like posters and point-of-sale displays, are limited to specific dimensions and uses. No items under any circumstances can be co-branded with the name of both a bar and a beer.
The labyrinthian laws exist for two reasons: one, to discourage the over-consumption of alcohol, and two, to support the "three-tier system," a state-mandated business model designed to control liquor sales by separating the market. Under the rules, governed by the Michigan Liquor Control Commission, a business can register only as a supplier (brewers, vintners and distillers), a retailer (bars and restaurants) or a wholesaler that acts as a middleman between the other two. The relationships flow one way: Suppliers can only sell to wholesalers, who can only sell to retailers, who can only sell to the public.
Many states have strict and often archaic laws regulating the sale and distribution of alcohol, yet Michigan is alone in its level of control over promotional products, preventing retailers not only from receiving logoed merchandise but also from buying it. The question is, why?