Bars and Restaurants Challenge Michigan Law Banning Promotional Products, Part 2

Click here for part one of "Bars and Restaurants Challenge Michigan Law Banning Promotional Products."

The Michigan Liquor Control Code Act (MLCCA) of 1998 places a lot of restrictions on how liquor and beer companies can advertise, and in some ways is the most restrictive alcohol advertising legislation in the country. One of the regulations states that Michigan's bars and restaurants cannot use certains kinds of promotional products that feature alcohol company logos, a practice that is common in the other 49 states.

The Michigan Licensed Beverage Association (MLBA), which represents the state's bars and restaurants, wants its members to have the same rights as pubs in other states to use promotional products. Scott Ellis, executive director of MBLA, said that the federal government's Alcohol and Tobacco Tax and Trade Bureau already has comprehensive laws regulating what promotional merchandise can be given to bars and restaurants, and his association is asking Michigan to replace the current flat ban with those policies.

In a conversation with Promo Marketing, Ellis said his association is taking baby steps. The state's laws prohibit manufacturers or wholesalers giving "aid and assistance," such as secondary use promotional products, to retailers. "We're not even asking for that," he said, referring to free items from manufacturers. "We're asking for the ability to purchase. We don't want it for free. We want to be able to use them, period."

It isn't just the bar industry that wants a more open policy. In a statewide poll conducted by the MLBA and the Michigan Restaurant Association, 75 percent of respondents said they would either strongly support or somewhat support a change in the law that would allow logoed barware at bars and restaurants.

"These items are allowed under federal statute, but they are prohibited from use in an establishment under Michigan's archaic liquor code and rules," Ellis explained.

The retailers want to use the product and the wholesalers want to uphold the prohibition, but what does the last part of the three-tier system want? Michigan has a strong brewer's culture: the state is home to more than 100 craft breweries, and Grand Rapids was just named "Beer City USA" in a national poll. Shouldn't these proud companies want to, and be able to, promote their products in their home state?

The answer to that question, it turns out, is hard to find. When contacted for this story, no brewery would speak on the record about the MLCCA or the use of promotional products in the state's taverns. One source, speaking on the condition of anonymity, said some manufacturers are working with the state and the wholesalers to change different MLCCA provisions that limit a brewery's ability to expand. The beer makers don't want to take on another battle, especially one that would put them at odds with their wholesaler partners.

Craft breweries and microbreweries also have another reason not to change the regulations regarding branded merchandise: they're exempt from the laws. Brewpubs owned and operated by a manufacturer are allowed to use promotionals with beer-centric logos, meaning they are free to advertise product using pint glasses and napkins in ways other bars cannot.

Caught in the middle of this are Michigan's promotional products professionals, who are effectively cut out from one of the most popular markets for logoed merchandise. The state is home to hundreds of supplier and distributor companies who are contending with laws no one else in the country faces. As Paul Kiewiet, executive director for the Michigan Promotional Products Association (MiPPA) said, "If they were to try to limit advertising on other media, there would be outcries for violation of the First Amendment."

Fortunately, change may be coming in the future. Michigan governor Rick Snyder has reached out to local business owners and asked them to review the state's liquor laws and make recommendations for changes. One of the proposals before Snyder's committee requested that the state "remove all prohibitions on Secondary Use items that are provided by suppliers." The committee voted 12-6 in favor of that recommendation, and while not binding, it does give hope.

As of now, nothing has formally moved beyond the exploratory phase, so there is still time to act. Michigan distributors who have been impacted by the laws can write their local representatives to explain how the MLCCA negatively affects the promotional products industry. Interested parties can find a list of all of Michigan's senators and representatives on www.legislature.mi.gov.