You get it by the main gates in org or by south west ah in sw. Grab a mug from table and fill from keg. If the toasting glasses are on the table wait and sooner or later it will be a mug instead.
Oh the item is bugged. Just noticed... stocking up on them they just disappear when you log, except for one. xP
It does empty though. You get many uses of it, and then it runs dry and makes you sad. This time I was hoping I could stock up more of them, but nope, guess not...
Bump, get your Mug tomorrow. For some reason ive had the same one since last year and it never ran out. Its glitched and after it empties you're left with Empty Festive Mug - Item - World of Warcraft, and a new Filled Festive Mug - Item - World of Warcraft is spawned randomly in your bags. Keep in mind it might delete items in your bags, however i havent seen anything missing in mine -yet- just items moved around so far. Like the OP said, this brew gives you slowfall. Cheers!