Groupon, online discounters can’t offer alcohol deals

Restaurant deals from Web sites such as Groupon, LivingSocial and BuyWithMe are enticing: Get $40 worth of food and drinks for just $20.

But those discounted deals are in violation of the state’s so-called “happy hour” regulation, according to the Massachusetts Alcoholic Beverages Control Commission.

The regulation prohibits restaurants from selling alcoholic drinks at a discount from the price regularly charged during the same week, and from selling discounted drinks to anybody on a given day at prices less than those charged the general public.

The ABCC has asked Groupon for a list of all Massachusetts restaurants that offered such drink deals since the Chicago company launched locally two years ago, including the volume of sales and revenue generated.

The ABCC determination came after the Hyatt Regency in Cambridge asked for an advisory opinion on a proposed Groupon promotion for food and drinks, according to ABCC legal counsel William Kelley. Under the terms presented, such deals are illegal, he said.

Groupon declined comment on the specifics of the ABCC letter, saying it’s notifying restaurants that might be affected. “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,” said Ryan Miller, Groupon’s director of merchant services.

The ABCC also found fault with how Groupon collects money from consumers who buy the deals, takes a cut and then pays the restaurants, because it “unlawfully transfers” an interest in the restaurants’ liquor licenses to it.

“If licensees engage in the promotional activity ... without the prior approval of the commission ... they do so at their sole risk,” said Kelley, who noted it was “difficult to speculate” if the ABCC would grant such approval.

Salem’s Victoria Station had been offering a Groupon deal of $60 worth of “fresh seafood and drinks.” The deal sold out with 1,192 buyers, but was changed to cover just seafood after the Herald called the restaurant.

“Normally we don’t offer any kind of discounted or promotional free alcohol, but offering it with Groupon, we were under the impression through them that it was OK,” a manager said.

Kelley said it was premature to say what, if any, penalties the participating restaurants might face. Any action against Groupon would be up to the attorney general’s office or Federal Trade Commission, he said.

The outcome stands to affect other daily-deal sites that have the same business model. Boston-based BuyWithMe declined comment.