Monday, July 2, 2012

Pa. beer rules force Iron Hill to retool Mug Club

A popular brewpub customer rewards program is being forced to end, thanks to beer industry regulators in the Keystone State.

The 11,000 members of Iron Hill's Mug Club got an email on Monday informing them that decisions by alcoholic beverage regulators meant the brewery-restaurant chain would have to end the 10-year-old customer loyalty program at its nine locations.

At issue, among other things, is the awarding of points to club members upon purchases of beer.

That practice is being stopped immediately for beer, but will continue for food. Under the program, those points would accrue, and credits (i.e. 25 bucks off your next Iron Hill tab) were awarded at certain thresholds.

Monday's email, signed by co-owner Kevin Finn, says the mug club is being revised to meet regulators' concerns. Iron Hill is exploring its options and expects to offer a replacement program this fall.

"Whether we agree with these decisions or not, or why after 10 years the Mug Club has become an issue, is not up to us to decide," Kevin says in the email. "What is important is finding a solution quickly and doing what’s best for our most loyal customers. We want to comply with all the laws and regulations in the states we operate, but our primary focus is providing guests handcrafted beer, creative food and attentive service."

Kevin also outlined other key changes being put in place while Iron Hill recasts the program:

    •    We will no longer accept new members during this transition.
    •    Current members due for renewal will have their memberships extended until the new club is active.
    •    Current members will receive 500 points immediately. This is our gift for past loyalty and patience during this transition.
    •    Members can continue to drink from the Mug Club mug, but must pay the same price as non-club members, an additional 50 cents over the current price of a pint. The free 8 ounces of beer that Mug Club members received was another major issue for the regulators.

Customers who signed up for the club paid a fee and were given a dated souvenir 24-ounce ceramic mug to take home and were served their beer orders in the same types of mugs during visits to Iron Hill.

Thankfully, it wasn't a heavy hand from New Jersey regulators that forced the changes. But since Pennsylvania's Liquor Control Board threw the cold water on the party, Iron Hill is checking rules for the Garden State and Delaware, the state where it was founded and has its home office.

"Officially, it is currently the PA LCB, where we received a letter," co-owner Mark Edelson says by email, responding to some questions about the club changes. "Since all states have liquor laws that prohibit some types of 'enticements,' we are verifying what the other states say. But regardless, 70 percent of our Mug Club is in Pennsylvania, and the logistics of running different deals in different states would lead to a nightmare trying to keep things straight, especially as it pertains to awarding points and checking points online."

Mark continues: "Specifically in Pennsylvania, the regs clearly state that you cannot serve a larger portion of beer without a proportional increase in price. Thus, filling the mug at the pint price is specifically illegal.

"Awarding redeemable points for the purchase of alcohol is considered an 'enticement' to purchase alcohol and is therefore illegal. Although redemption of an earned award on alcohol is NOT illegal.

"Charging a fee for joining the club in which you can get discounts not afforded the general public is also considered and "enticement" and is therefore illegal."

Iron Hill has six locations in Pennsylvania, two in Delaware and one here in New Jersey, in Maple Shade. A 10th location is projected to open in Voorhees in Camden County around the end of this year or the start of 2013.