Much of New Jersey’s laws from the Department of Law & Public Safety: Office of the Attorney General: Division of Alcoholic Beverage Control (ABC) deal with how and with what methods bars (retail licensees) may offer complimentary drinks. The general rule is that a licensee cannot sell any alcoholic beverage, whether in original package or by the drink, which would fall below the cost of that beverage to the retail licensee.

Cost to the retail licensee is determined by the actual total price on the invoice from the wholesaler. This price shall include all applicable taxes. Then, the cost of the given bottle or drink is determined by dividing the total price by the number of bottles or single drinks included in the total figure. If the cost figure works out to a fractional cent, the lowest amount at which the bottle or drink may be sold by the retailer is the next highest cent. Then, the invoice is determined by the last-in-first-out method that is generally utilized by accountants and book keepers.

Not included in the law prohibiting the sale of alcohol below cost is complimentary drinks. While generally prohibited, there are three (3) exceptions under which it is allowed:

    1. A retail licensee may “buy a drink” for a patron as a gesture of good will. This is a long-standing practice that is allowed so long as the retail licensee does not advertise the practice of buying a drink based on the purchase by the patron of a certain number of drinks.
    2. A retail licensee may also utilize “free drink coupon.” Only one open container drink per day per patron is allowed through utilization of a coupon or similar advertising device.
    3. A retail licensee may also include one alcoholic beverage drink to be given complimentary with or included in the price of a meal. In this situation, the licensee is allowed to advertise the fact that the drink is complimentary to the meal. However, the patron must be allowed the option of choosing a non-alcoholic beverage in lieu of the complimentary drink. Furthermore, only one free or complimentary drink can be offered with the meal.

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Filed under: ABC HandbookThe Division of Alcoholic Beverage Control FAQs