Category archives for “Alcohol Promotions”

Suppliers Now Allowed to Use Social Media to Support Certain Charity Events Sponsored by Retailers

February 17, 2016

Effective January 1, 2016, the California ABC Act contains a new section that loosens the restrictions suppliers face when mentioning a retailer in a social media post. Newly added Business and Professions Code § 23355.3 is aimed at clarifying how suppliers and retailers can co-sponsor nonprofit events. It was drafted, in part, as a response to the backlash that occurred after the ABC filed accusations against several wineries for advertising sponsorship of the “Save Mart Grape Escape” charity fundraising event in 2014. In that instance, several wineries posted or tweeted their support and sponsorship of the event on social media. The ABC reasoned that the suppliers were impermissibly advertising for Save Mart, a retailer, even though the event was held under a nonprofit permit issued to a bona fide nonprofit organization. The ABC alleged that by posting or tweeting about the event, the suppliers were giving a thing of value to the retailer, a practice that has long been considered a violation of California’s tied house restrictions.

California law has long permitted supplier licensees to sponsor nonprofit events if the nonprofit gets an event license, and the new law does not fundamentally change that. However, the new section clarifies that a supplier may advertise sponsorship or participation in such events even if a retailer is also a named sponsor of the event. Payments or other consideration to the retailer are still considered a thing of value, and are not allowed, but social media postings no longer fall under that broad category. There are restrictions on what the supplier is permitted to post about the retailer; posts cannot contain the retail price of alcoholic beverages and cannot promote or advertise for the retail licensee beyond mentioning sponsorship or participation in the event. The supplier can share a retailer’s advertisement for the event on social media, but the supplier is not permitted to pay or reimburse the retailer for any advertisement and cannot demand exclusivity of its products at the event. In short, the new section will allow exactly the type of supplier social media support that occurred in the Save Mart Grape Escape situation.


Clarifications from the ABC on Sweepstakes and Contests in California

October 17, 2013

On June 13, 2013, guests attending ShipCompliant’s “Direct 2013” conference heard from Matthew Botting, General Counsel to the California ABC, on supplier participation in sweepstakes and contests under California’s new law. We’ve previously blogged about the new law here and here.

California Code of Regulations Title 4, Section 106 (“Rule 106”) has always allowed suppliers to “sponsor” a contest, meaning suppliers could give money or otherwise participate when the contest was organized by “bona fide amateur or professional organizations.” Previously, the privilege was limited. Now, the privileges are broader: suppliers (including wineries) can now “conduct” a contest under recently enacted Business and Professions Code Section 25600.1, and conduct or sponsor a sweepstakes under 25600.2. Mr. Botting discussed the different available privileges and their limitations:

* “Conduct” means the promotion is managed and organized by the supplier.
* “Sponsor” means it is someone else’s sweepstakes or contest and the supplier is providing a prize or other sponsorship of the promotion.
* For the time being, suppliers can only sponsor a contest in accordance with the existing Rule 106, which means sponsorship is limited to a contest conducted by bona fide amateur or professional organizations.
* Sponsoring a sweepstakes and conducting a sweepstakes or contest is now covered by Business and Professions Code Section 25600.1 and 25600.2. Sweepstakes or contests cannot require a visit to a licensed premises of any kind, so there must be an alternate method of entry (“AMOE”) if entry forms are available at a licensee.
* Sweepstakes and contests cannot be conducted on retail premises (e.g., a grocery store, liquor store, bar or restaurant). A “retail premise” includes some locations you might not think of, such as: an unlicensed premises if a licensed caterer is present, or at an event held by a nonprofit under a one-day permit. The ABC considers events held with a caterer’s license or a nonprofit one-day permit to occur “at the premises of a retail licensee,” and therefore a supplier may only provide a means of entry at either of these types of events.
* While suppliers may provide a means of entry for the contest or sweepstakes, the contest or sweepstakes may not be conducted at a winery or brewery’s duplicate tasting room.
* A contest or sweepstakes can only be advertised at a retailer if it is advertised at a minimum of three different retailers, and winners shouldn’t be picked at a licensed retail event nor in a tasting room.

The full presentation by Mr. Botting can be seen here (starting at the 5:00 minute mark).

Before conducting or sponsoring any contest or sweepstakes, be sure to consult the relevant laws, Business & Professions Code Sections 25600.1, 25600.2, and, if applicable, Rule 106 (regarding contests), and pay particular attention to whether the supplier involved holds a license that allows it to participate.

Contact one of the attorneys at Strike & Techel if you have questions about contests and sweepstakes in California or other states.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·


Deceptive Retail Discounts: How Much is that Wine Really Discounted?

June 26, 2012

Among the brouhaha surrounding JCPenney these days is a proposed class action complaint that was recently filed in the Central District of California. In the complaint, the plaintiff alleges that she purchased items from JCPenney because the items were advertised as being on sale, but the prices were inaccurately advertised as discounted because the “original” price advertised was not the prevailing market retail price for the goods. As in many states, false and misleading claims in advertising are prohibited in California. See Cal. Bus & Prof. Code §§ 17500, 17508(a). California consumer protection law further state that:

No price shall be advertised as a former price of any advertised thing, unless the alleged former price was the prevailing market price as above defined within three months next immediately preceding the publication of the advertisement or unless the date when the alleged former price did prevail is clearly, exactly and conspicuously stated in the advertisement. Cal. Bus & Prof. Code § 17501.

Here the plaintiff asserts that the “original” prices, to which she compared the “sale” prices in order to make her decision to purchase numerous items, weren’t the prevailing market prices for the items at JCPenney for the three months immediately preceding the advertisement.

Pricing has become more difficult in this day and age of the “bargain.” Many people have come to expect an item to be always on sale or for there to always be some way to buy an item for less than what others are paying. While the pressures this creates on retailers are often great, retail prices cannot be amorphous. Advertising false “sale” prices could lead to lawsuits like the one filed against JCPenney. The Federal Trade Commission offers guidance about proper advertisements on its website, which can be found here. Regarding deceptive pricing, the FTC offers the following:

One of the most commonly used forms of bargain advertising is to offer a reduction from the advertiser’s own former price for an article. If the former price is the actual, bona fide price at which the article was offered to the public on a regular basis for a reasonably substantial period of time, it provides a legitimate basis for the advertising of a price comparison. Where the former price is genuine, the bargain being advertised is a true one. If, on the other hand, the former price being advertised is not bona fide but fictitious—for example, where an artificial, inflated price was established for the purpose of enabling the subsequent offer of a large reduction—the ``bargain’’ being advertised is a false one; the purchaser is not receiving the unusual value he expects. 16 C.F.R. § 233.1.

It’s hard to be a consumer goods retailer in any industry these days, but the wine industry in particular has seen substantial changes in consumer pricing expectations given the economic situation over the last few years. While trying to meet this consumer demand, it’s important to remember that when creating pricing structures, there’s a fine line between providing value and creating false value.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2012 · All Rights Reserved ·


Texas Alcoholic Beverage Commission Releases New Advisory in Connection with Authentic Beverages Com

March 21, 2012

As readers of this blog may recall, at the end of 2011 interesting new precedent came out of Texas when the United States District Court for the Western District of Texas granted partial summary judgment for plaintiffs in Authentic Beverages Co., Inc. v. Tex. Alcoholic Beverage Comm’n, No. A-10-CA-710-SS (D. W.D. Tex., December 19, 2011), and consequently struck down some Texas’ laws regarding beer labeling, advertising alcoholic content and suppliers telling consumers where their products can be found for purchase. (See our prior coverage of the case here.) About a month later the Texas Alcoholic Beverage Commission (“TABC”) issued Marketing Practices Bulletin 49 regarding the case (available here) and today they’ve just released Marketing Practices Bulletin 50 (available here). The new bulletin stresses that Texas’ stance on suppliers pre-arranging and pre-announcing promotional activities has not changed.

Texas allows liquor manufacturers and wholesalers to pre-arrange and pre-announce promotional activities, for example bar spending or sampling events, novelty item giveaways, and promotional appearances, but they do not allow beer manufacturers and distributors to do the same. While the Authentic Beverages decision resulted in the allowance for beer manufacturers and distributors to advertise retail locations where their products can be purchased (provided the advertising is not cooperative), it has not changed anything regarding pre-arrangement and pre-announcement of promotions. Those promotional activities by beer suppliers must be spontaneous, meaning they are not pre-arranged with retailers or pre-announced to consumers. The TABC is still in the process of formal rulemaking to deal with the effects of the Authentic Beverages decision, at which time Marketing Practices Bulletins 49 and 50 will be superseded by the new rules, but we do not expect that their position will change on this matter and violations are likely an enforcement priority for the TABC.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2012 · All Rights Reserved ·


IMBIBE+BLOG

May 30, 2010

Welcome to IMBIBLOG, the blog of Strike & Techel. We are attorneys specializing in the laws and regulations governing alcoholic beverages, also known as liquor law or alcohol law. Liquor law is a specialized area of legal practice. Compared to other areas of legal specialization, there are relatively few lawyers specializing in alcoholic beverage law. If you are considering starting a business related to alcohol, you will benefit from working with a competent liquor lawyer.

The team at Strike & Techel is experienced and can serve as your TTB lawyer, ABC lawyer, beer lawyer, wine lawyer or distilled spirits lawyer. We are familiar with TTB law as well as state ABC law in California and across the country. Preparing and applying for the necessary alcohol beverage licenses is a big part of the alcohol beverage practice and Strike & Techel is highly experienced with ABC license applications and TTB license applications.

We are based in San Francisco and are particularly familiar with the alcohol laws and regulations of our city. The attorneys at our firm practice alcoholic beverage law exclusively. This blog is our place to tell you about current issues of interest for those in the business of making, promoting, and selling alcoholic beverages.


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