Category archives for “Alcohol Regulations”

Off-Premise Retail Caps - Are They Constitutional?

May 02, 2017

A South Carolina law preventing an entity from holding an interest in more than three off-premise retail liquor licenses was deemed unconstitutional earlier this year. The South Carolina Supreme Court accepted an argument by Total Wines & More that the state’s cap on liquor stores had no legitimate basis. Numerous bills had been filed with the state legislature over recent years to have the cap overturned, but without success. The Supreme Court majority, however, found that the state had not offered a persuasive argument on why the restriction was a proper use of its general police power. The only justification provided by the state in the case was that the law was designed to support small businesses, and preserve the right of small, independent liquor dealers to do business, which the court identified as simple economic protectionism.

A number of other states have caps on ownership of retail off-premise liquor licenses, particularly across the Northeast. Similar laws have survived constitutional challenges in states like New Jersey, New Hampshire, and Massachusetts. In these states, justifications for these laws have included reasons such as intensifying the dangers of liquor sales stimulation through retail concentration, preventing monopolies, avoiding indiscriminate price-cutting and excessive advertising, and discouraging absentee ownership. The success of the suit in South Carolina is likely to encourage a new wave of challenges to these laws, as the chain stores focus more efforts on expansion of their model in the region. The ongoing legislative and judicial dispute between Total Wine & More and the State of Connecticut, for example, on the statutory minimum pricing restrictions there, follows a similar path of seeking to open up a market more friendly to chain store liquor retail.

Since the decision was handed down on March 29, the South Carolina Senate has already approved a move to legislate around it, by passing an amendment to the state budget. The change would delay the implementation of the court’s decision for a year, and would require an applicant for a fourth store to pay the equivalent of a year’s gross sales from one of its current stores before it could get the new license. The amendment now passes to the General Assembly for consideration. In the interim, the state has publicly said
that they are accepting liquor store applications in light of the new ruling.

It goes without saying that the elimination of the retail cap in South Carolina is likely to significantly alter the retail liquor landscape there, and that other similar decisions in other states would affect the retail market nationwide. If you want more information on retail liquor licensing, please contact one of the attorneys at Strike & Techel.


California ABC Announces 2016 New License Authorizations

August 15, 2016

It’s that time of year when the ABC announces priority applications, and this year’s numbers are sure to make a lot of retail business owners very happy! Every year the California ABC announces which counties are eligible for new on-sale and off-sale general licenses based on population growth versus existing license ratios within each county. The 2016 figures have been released, and the numbers this year are higher than usual.

What is a Priority application?

General retail licenses authorize the sale of beer, wine, and distilled spirits. They are restricted by county population and must typically be purchased on the open market from an existing licensee, often for a very high premium. Licenses are usually confined to the county in which originally issued, so prices vary drastically across the state. Every year, the ABC announces a ‘priority application period’ when they will accept new license applications. In addition, they announce a number of inter-county transfer allowances – where a business owner in a priority county can purchase a general license from a licensee in any other county and transfer it into the priority county.

If you’re in the market for an Off-Sale General Package Store License (Type 21), an On-Sale General Eating Place License (Type 47), or a Special On-Sale General Club License (Type 57) within a county where licenses are available, you should apply.

Licenses Available by County

The maximum number of priority applications the ABC typically authorizes for each category (new on-sale, new off-sale, inter-county on-sale, inter-county off-sale) is twenty-five. The ABC has authorized the maximum number of priority applications in several counties, including Alameda, Contra Costa, Los Angeles, Orange, Riverside, Sacramento, San Bernardino, and San Diego. For a complete list of license available by county, click here.

2016 Filing Period

ABC District offices will accept priority applications by mail or in person from September 12-23, 2016. If by mail, it must be postmarked on or before September 23rd. If the ABC receives more applications than licenses available, a public drawing will be held at the District office. Successful applicants will have 90 days to complete a formal application for the specific premises.

Fees

Priority application fees are $13,800 for new general licenses and $6,000 for inter-county transfers. A certified check, cashier’s check, or money order must be submitted along with the priority application. Unsuccessful applicants will be refunded the application fee, minus $100 service charge.

Residency Requirements

Every applicant must have been a resident of California for at least 90 days prior to the scheduled drawing. Exact drawing dates vary by District office, but all are in mid-late October. For corporations, limited partnerships, and limited liability companies, the 90-day residency requirement starts ticking upon registration with the California Secretary of State. Individual and general partnership applicants must submit proof of California residency.

If you’re interested in applying for a new or inter-county on- or off-sale general priority license, contact an attorney at Strike & Techel.


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.


California Brewpub Licenses: What You Need to Know

October 08, 2015

Craft beer continues to be all the rage in California and across the country. With the increase in demand for local craft beers, we’ve been getting a lot of questions about how to get licensed as a brewery in California. The California Department of Alcoholic Beverage Control (“ABC”) issues three primary license types that permit beer production, including Beer Manufacturer licenses (Type 1), Small Beer Manufacturer licenses (Type 23) and the increasingly popular On-Sale General Brewpub license (Type 75). The license privileges of each type of brewery license vary, and the brewpub license is a good choice for brewers that primarily want to operate a brewpub or microbrewery restaurant rather than sell their beers for consumers to drink off the brewery’s premises.

A Type 75 brewpub license authorizes the sale of beer, wine and distilled spirits for consumption at a bona fide eating place, which essentially requires that the facility be a restaurant with its own kitchen that serves meals. The ability to sell distilled spirits as a brewpub is a privilege that many find attractive in deciding between brewery licenses. Type 1 and Type 23 breweries may, but are not required to, operate bona fide eating places, but they are limited to beer and wine, and cannot sell distilled spirits. Additionally, beer, wine, and distilled spirits restaurant licenses (i.e., Type 47 On-Sale General for Bona Fide Public Eating Place) are often extremely expensive as the number of licenses issued is limited per county based on population. There is no cap on the number of Type 75 licenses that can be issued, so the Type 75 license can be an attractive option for businesses that want to sell distilled spirits, although all Type 75 licensees must meet certain brewing requirements.

Brewpubs must produce at least 100 barrels of beer per year and can produce no more than 5,000 barrels of beer per year. That production cap is substantially lower than the production allowances for Small Beer Manufacturers (less than 60,000 barrels per year) and Beer Manufacturers (60,000 barrels per year or more). Additionally, a Type 75 brewpub premises must have brewing equipment that has at least seven-barrel brewing capacity. The ABC has recently been looking into the brewing equipment of Type 75 licensees and enforcing against brewpubs that aren’t actually brewing beer or don’t have the requisite brewing capacity.

Other key features of Type 75 brewpub licenses include the following:

• Cannot make sales from the brewpub premises for off-premises consumption. This means that a brewpub cannot sell bottles, cans, growlers or other containers for consumption away from the brewpub.

• Can sell beer produced by the brewpub to California licensed wholesalers.

• Must buy all wine, distilled spirits, and beer not produced by the brewpub from a licensed wholesaler or winegrower. Note that brewpubs cannot buy or sell beer or other alcoholic beverages from other brewpubs or retailers.

The initial fee for a brewpub license is currently $12,000, which is more expensive than most California license types. The annual fee is determined by the population where the brewpub is located, and varies between approximately $500 and $1,000 per year. Additionally, local rules where the brewpub is located may require additional permitting or other approvals before the brewpub can operate. Lastly, all breweries, including brewpubs, must obtain a brewery basic permit from the Alcohol and Tobacco Tax and Trade bureau, the federal agency that regulates alcoholic beverages. There is no fee for the federal permit, but a bond is required.

Contact one of the attorneys at Strike & Techel if you have any questions about starting a brewery!


Changes to Small Brewery, Winery and Distillery Bonding, Reporting and Filing Requirements

March 11, 2015

The general rule for excise tax reporting for alcohol producers is that returns must be filed semi-monthly (i.e. twice a month). A special exception to that rule allows a small producer, who does not reasonably expect to be liable for more than $50,000 in excise tax in the year, to file quarterly returns. Each small producer is required to make a choice of whether to file quarterly or semi-monthly, with that choice impacting the bonding requirements for the production facility. The less frequent the excise tax payment, the higher the required bond amount. Very small wineries currently benefit from even longer reporting and tax deadlines. Wineries that expect to pay less than $1,000 in wine excise taxes in the coming year may file excise tax returns annually. Operations reports may also be filed annually if the winery doesn’t expect to produce more than 20,000 gallons of wine in any one month in the calendar year.

Now, under recent guidance from the Alcohol and Tobacco Tax and Trade Bureau (“TTB”), small brewers will be forced to file returns quarterly rather than semi-monthly. This change will affect around 90% of licensed brewers. With the mandatory quarterly filing, the required bond is set at a flat $1,000 amount (previously, the bond for a brewer paying $50,000 in excise tax would have been $5,000 if filing semi-monthly, and close to $15,000 if filing quarterly). A brewery filing quarterly tax returns must also file a quarterly report of operations. To further lessen the burden of reporting for both brewers and TTB employees, the information required in the reports has been revised, with two sections removed. To see the full guidance, click here.

In addition to the TTB changes for small breweries, there is also a bill pending in the Senate that could reduce the compliance burden for all small producers. It would exempt small breweries, wineries and distilleries (i.e. not liable for more than $50,000 in excise tax in the year) from all current bonding requirements and would allow any small producer – not just small wineries—owing less than $1,000 a year to file annually. The proposal passed the Senate Finance Committee on February 11, 2015, and is awaiting consideration on the Senate floor. It has not yet been introduced in the House.

If you have any questions about brewery, winery or distillery operations reporting or taxes, contact an attorney at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2015 • All Rights Reserved •


Compliance Check-In: 2014 TTB Beverage Sample Program Results

February 02, 2015

Each year, the Alcohol and Tobacco Tax and Trade Bureau (TTB), conducts a random sampling of alcoholic beverages, known as the Alcohol Beverage Sample Program. TTB agents purchase alcohol products from retail stores and take them back to the TTB lab for review. The survey identifies compliance issues with the tested beverages, including incorrect alcohol content levels, and Certificate of Label Approval (COLA) discrepancies. The TTB recently released the results of their 2014 review, finding 139 out of 450 total products sampled to be non-compliant.

The most commonly identified issue was mislabeled alcohol percent by volume (ABV), in which the ABV stated on the label was either above or below the actual tested alcohol content. In distilled spirits products, 42 of the 190 beverages sampled were found to contain an ABV over the advertised content, while 14 products contained a lower ABV than advertised. Aside from misleading the consumer, incorrect ABVs can lead to regulatory action from federal tax authorities if the actual alcohol content would place the product in a different tax class.

Another common compliance issue was a discrepancy between the product’s label information and the information listed on the product’s COLA. When a bottler or importer applies for label approval with the TTB, they are issued a COLA and their product’s label must match the information provided on their COLA application (with the exception of some limited information which can be changed without a new COLA). Of the 139 non-compliant products, 40 had labels with missing or added information that did not match their approved COLA.

Other prevalent compliance issues included no COLA for the product, errors in the mandatory government warning message, and incorrect statements of class or type of alcohol. Possible TTB actions in response to incorrectly labeled products could include monetary fines and other regulatory penalties, and at a minimum, would require that the non-compliant labels be corrected. To see the full results of the sample program, click here.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2015 · All Rights Reserved ·


TTB Updates its Position on Gluten-Free Label Claims

February 11, 2014

On Tuesday, the Alcohol and Tobacco Tax and Trade Bureau (“TTB”) issued an Announcement regarding its treatment of “gluten-free” claims on alcoholic beverage labels. As we previously blogged here, TTB has been looking into the issue of gluten-free labeling since at least 2012, and TTB Ruling 2012-2 implemented a policy of allowing the term “gluten-free” only on the labels of products that are produced without any ingredients that contain gluten. For products made from gluten-containing materials, the 2012 Ruling implemented several requirements, including: a) a statement that the product is “Processed or Treated or Crafted to remove gluten;” b) a qualifying statement to inform consumers that (i) the product was made from a grain that contains gluten, (ii) there is currently no valid test to verify the gluten content of fermented products, and (iii) the finished product may contain gluten; and, c) a detailed description of the method used to remove gluten from the product.

TTB explains in its most recent announcement that it has finished its review of the FDA’s rule on gluten-free labeling, and has updated its requirements accordingly. TTB will continue to allow the term “gluten-free” only on the labels of products that are produced without any ingredients that contain gluten. However, for products made from gluten-containing materials, TTB has lessened the labeling requirements, and now provides that such products may be labeled with a statement that the product was “processed, “treated” or “crafted” to remove gluten, if that claim “is made together with a qualifying statement that warns the consumer that the gluten content of the product cannot be determined and that the product may contain gluten.” Labels no longer require a detailed description of the method used to remove gluten from the product.

If you have any questions about alcoholic beverage labeling, contact one of the attorneys at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2014 · All Rights Reserved ·


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 ·


Governor Cuomo Signs Law Allowing New York Wine to be Sold at Local Farmers’ Markets

October 10, 2013

On October 1, 2013, Governor Andrew Cuomo signed into law S. 267/A.1512, creating a new venue for New York wineries to sell their wines to consumers. As of March 26, 2014, farm market stands may apply for a new “roadside farm market license” to sell New York State labeled wine that is produced by no more than 2 licensed farm wineries, micro-wineries or special wineries located within 20 miles of the roadside farmers’ market.

This law is in keeping with Governor Cuomo’s efforts to bolster the New York wine industry. In a statement released after enacting the new law, Governor Cuomo said: “These new laws will build on our continuing efforts to promote New York’s wine industry across the state and beyond, boosting tourism, local economies and job growth. We are increasing market opportunities for local producers and farmers…Our state is home to hundreds of wineries that produce some of the best wine in the world, and we want both New Yorkers and visitors to come and enjoy them.”

The new law does not include tasting privileges at the farm stands, which is probably not surprising, given the possible connection between wine tasting at a roadside stand and driving a car. We’ll be interested to see if other states follow New York’s lead and enact legislation to license farm stands.

For the full text of the new law, click here.

Contact one of the attorneys at Strike & Techel if you have questions about licensing in New York or any other state.

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


California On Sale General Public Premises (Type 48) Licensees Must Post Human Trafficking Notificat

September 24, 2013

To raise awareness and provide resources to potential victims of human trafficking, California Civil Code Section 52.6 now mandates that, as of April 1, 2013, all On Sale General Public Premises (Type 48) retail licensees, along with certain other types of businesses, must post a notice about human trafficking. The United States Department of State estimates that 14,500-17,500 victims are trafficked into the United States each year, with California as one of the country’s top four destination states.

The notice must be posted in a conspicuous place (near the public entrance or in clear view of the public and employees), measure at least 8.5 inches by 11 inches, and the following message must appear in at least size 16 font:

“If you or someone you know is being forced to engage in any activity and cannot leave—whether it is commercial sex, housework, farm work, construction, factory, retail, or restaurant work, or any other activity—call the National Human Trafficking Resource Center at 1-888-373-7888 or the California Coalition to Abolish Slavery and Trafficking (CAST) at 1-888-KEY-2-FRE(EDOM) or 1-888-539-2373 to access help and services. Victims of slavery and human trafficking are protected under United States and California law.

The hotlines are:

Available 24 hours a day, 7 days a week.
Toll-free.
Operated by nonprofit, nongovernmental organizations.
Anonymous and confidential.
Accessible in more than 160 languages.
Able to provide help, referral to services, training, and general information.”

This notice must be in English and Spanish, and a model notice is available here. Depending on the county, the notice may also be required in another language. A list of those counties is available here.

For more information on this posting requirement, call the Victim Services Unit at the California Attorney General’s Office toll free: (877) 433-9069.

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


California ABC Announces New License Authorizations

August 08, 2013

Looking for a California ABC retail license for a county in which none are available? You may be in luck! Every year, the California ABC issues a list of the counties in which new licenses – called “Priority” licenses—will be made available based on population growth in those counties. ABC Headquarters has just announced the authorization for the issuance of new on-sale general and off-sale general licenses for 2013 and new licenses are available in many California counties.

What is a Priority application?

California “General” retail licenses authorize the sale of beer, wine and distilled spirits. The number of General licenses that the ABC can issue in a county is restricted based on county population. If your county is already at its maximum, you can’t get a new General license from the ABC and instead must buy one from an existing licensee in your county, typically at a significant premium. However, in counties where growth has occurred, the ABC permits new General licenses within the county once per year during a ‘priority’ application period by allowing both new issuances of licenses in the county and intercounty transfers of licenses. An intercounty transfer means a business owner in the priority county can buy a General license on the open market anywhere in the state and transfer it in to the priority county. A person can apply for one of the priority General license spots in the county, or for one of the priority intercounty General license transfer spots, or for both.

Anyone that anticipates the need for an Off-Sale General Package Store License (Type 21), an On-Sale General Eating Place Restaurant License (Type 47), or a Special On-Sale General Club License (Type 57) within the next year in a county with licenses available should apply.

Licenses Available by County:

For a complete listing of licenses available by county, click http://www.abc.ca.gov/press/PR2013/PR13-23.pdf

2013 Filing Period:

ABC District Offices will accept in-person or mail-in priority applications from September 9-20, 2013. Mail-in applications must be postmarked September 20 or earlier in order to be accepted. If the Department receives more applications than licenses available (which it typically does), a public drawing is held. Applicants are typically notified two weeks later of their priority status. Once approved for priority, the applicant has 90 days to complete the full formal license application for the identified premises.

Fees:

Priority application fees are $13,800 for new general licenses and $6,000 for intercounty transfers. Only a certified check, cashier’s check or money order will be accepted, and it must be submitted with the priority application. Unsuccessful applicants’ fees will be refunded, less a $100 service charge, within 45 days of the drawing.

Residency requirements:

Every applicant must be a resident of California for at least 90 days prior to the drawing. The 90 day clock starts ticking upon registration with the California Secretary of State for corporations, limited partnerships, and limited liability companies. Individuals and partners must submit proof of California residency.

If you are interested in applying for a new on or off-sale general priority license, please feel free to contact the attorneys at Strike & Techel.

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


TTB Issues Guidance on Social Media Advertising

July 09, 2013

The Alcohol and Tobacco Tax and Trade Bureau (“TTB”) recently released Industry Circular 2013-1, “Use of Social Media in the Advertising of Alcohol Beverages.” Most importantly, TTB dispels any notions that the advertising regulations in 27 CFR parts 4 (wine), 5 (distilled spirits), and 7 (malt beverages) don’t apply to social media, and confirms that those rules “apply to all advertisements… in any media, including social media.” The Circular goes on to address unique issues for advertising within specific social media platforms, including Facebook, Twitter, and YouTube.

TTB regulations define an advertisement as “any written or verbal statement, illustration, or depiction which is in, or calculated to induce sales in, interstate or foreign commerce, or is disseminated by mail, whether it appears in a newspaper, magazine, trade booklet, menu, wine card, leaflet, circular, mailer, book insert, catalog, promotional material, sales pamphlet, or any written, printed, graphic, or other matter accompanying the container, representations made on cases, billboard, sign, or other outdoor display, public transit card, other periodical literature, publication, or in a radio or television broadcast, or in any other media.” Content that qualifies as an advertisement must contain certain information, including a responsible advertiser statement that includes the name and address of the industry member responsible for the ad, as well as the product’s class, type, or distinctive designation. Certain content is also prohibited from appearing in ads, such as statements that are false, that disparage a competitor’s product, or that are obscene or indecent.

TTB’s Circular addresses how the advertising regulations apply to specific social media platforms. Particularly relevant points include the following:

- Facebook: A “fan page” constitutes one advertisement, so mandatory statements need to appear only once on a page, and should appear on the industry member’s “profile page;” rules on prohibited content apply to all material posted by the industry member, including material the industry member re-posts.

- Twitter: Mandatory statements are not required in each tweet, and instead must appear on the industry member’s profile page or equivalent.

- YouTube and other video-sharing websites: Videos that fit the definition of an advertisement must include mandatory statements within the actual video, not only on the page where the video is located.

- Blogs: Industry member blogs qualify as ads to which the rules on mandatory and prohibited content apply.

- Mobile Applications: Apps must include the company name or brand name of the product advertised.

The main take-away from TTB’s Circular is that industry members should monitor all social media channels to ensure that content complies with TTB regulations. Consult TTB’s guidance or call one of the attorneys at Strike & Techel for guidelines on advertising through a particular social media platform.

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


TTB Says Alcohol Content Can Move to the Back Label for Wine

June 10, 2013

Announced today, and effective August 9, 2013, the Alcohol and Tobacco Tax and Trade Bureau (the TTB) has announced changes to its labeling requirements for wine. Amending 27 CFR 4.32, the alcohol content for wine no longer must appear on the brand label, and instead it may be printed on the brand label or on other labels affixed to the bottle, including the back label. The TTB also amended 27 CFR 4.36 to the effect that wines with alcohol content of at least 7 percent and no more than 14 percent may still be labeled with either (a) the designation of “light wine” or “table wine” on the brand label, or (b) the numerical alcohol content of the wine. The new amendments do not permit the “light wine” or “table wine” designations to appear on any label other than the brand label. A new COLA is not required if the only change made to an approved label is the relocation of the alcohol content statement. If you have any questions about labeling, contact an attorney at Strike & Techel.

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


Strike & Techel Welcomes Dan Kramer, Linda Gago-Seco and Manny Diaz

December 12, 2012

Strike & Techel is pleased to announce three recent additions to its alcoholic beverage licensing practice.

Daniel Kramer joins Strike & Techel as a partner. Mr. Kramer represents local and national hotel, restaurant and general retail companies in all aspects of alcoholic beverage licensing, including license acquisitions and transfers, entity structuring, and the preparation of concession agreements, interim management agreements, and restaurant purchase and sale agreements.

Linda Gago-Seco joins Strike & Techel as a paralegal. Ms. Gago-Seco has spent the last 14 years as an alcoholic beverage licensing specialist and previously worked for the California Department of Alcoholic Beverage Control.

Manny Diaz joins Strike & Techel as a consultant. Mr. Diaz previously worked for the California Department of Alcoholic Beverage Control for over 30 years, including as Assistant Director of the Northern Division, before becoming a licensing consultant.

We are thrilled to have Dan, Linda and Manny join us.

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


Maybe That’s Not Beer You’re Drinking

August 16, 2012

A professor once told me: “Always define your terms.” That statement rings true in much of the law and it turns out, also for beer. In today’s age of health consciousness and gluten intolerances, beers crafted from sorghum, rice, or wheat are starting to make inroads into the mainstream market. But from the perspective of the Alcohol and Tobacco Tax and Trade Bureau (“TTB”), those products don’t qualify as “malt beverages.” Only beverages made from both malted barley and hops meet the definition of “malt beverage” under the Federal Alcohol Administration Act (“FAA Act”). Thus, the labeling regulations that apply to these non-traditional beer products actually come from the Food and Drug Administration, as opposed to the TTB. Some TTB/FAA Act requirements do still apply – namely the government health warning and product classification required by the Internal Revenue Code to ensure proper tax classification and collection. Additionally, formula approval may be required through the TTB.

Wine beverages containing less than 7% alcohol by volume, such as many wine coolers and cider products are also subject to FDA labeling requirements because their low alcohol content causes them to fall outside of the TTB/FAA Act definition of “wine” and therefore outside of TTB’s labeling jurisdiction. Note that although sake is made from rice, it’s considered a wine product for labeling purposes and a malt beverage for tax purposes (confusing, right?), so it falls under the TTB/FAA Act labeling requirements, provided the product contains 7% or more alcohol by volume. How to identify these new products as “gluten-free” remains difficult as no final guidance has yet been issued by the FDA or TTB about the true definition of “gluten-free.” For more information about using “gluten-free” on alcoholic beverage labels, see our post from earlier this year. The landscape for labeling these non-traditional products is complicated. If you have questions, feel free to contact a Strike & Techel attorney.


California’s New Limited Off-Sale Wine License Now Available!

January 30, 2012

California Business and Professions Code Section 23393.5 went into effect on January 1, 2012, authorizing the state’s new limited off-sale wine license. The new “Type 85” license, which we first discussed here, will allow licensees to make direct sales of wine to consumers over the internet and via direct mail and telephone, without requiring the licensee to maintain a brick and mortar retail location or to hold a beer and wine wholesaler license. Up until now, businesses looking to focus on internet wine sales have been required to obtain both an off-sale beer and wine retail license and a beer and wine wholesaler license, commonly referred to as a 17/20 license combination. With a 17/20 combination, licensees are able to sell wine via the internet, but also must meet the requirements of a wholesaler licensee, including selling wine to other retailers.

The California ABC recently posted an Industry Advisory on the new off-sale wine license. The advisory makes clear that Type 85 license holders may not maintain a brick and mortar store that is open to the public, and all sales must be made via direct mail, telephone or the internet. Additionally, the ABC confirmed that the new license alleviates the need for a beer and wine wholesaler license for retailers focused on selling wine via the internet, but the ABC will continue to process applications for 17/20 license combinations. If you would like more information about the license, please feel free to contact any of the attorneys at Strike & Techel.

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


UPDATE: New Jersey Senate Passes Direct Shipping Bill

December 19, 2011

Updating our post of late last week, the New Jersey Senate last Thursday voted 23 to 13 in favor of Bill S-3172, permitting wineries to ship directly to New Jersey consumers. Now that it has passed the Senate, the New Jersey Assembly has to vote on the bill by January 9, 2012, the last day of the legislative session. Under the bill, New Jersey Farm Wineries, New Jersey Plenary Wineries that produce 250,000 gallons or less of wine a year, and out-of-state wineries that produce 250,000 gallons of wine or less each year and that obtain an out-of-state shipping license would be able to ship up to 12 cases of wine per year to any New Jersey consumer. If passed, New Jersey would become the 39th state to allow direct shipping. Check back in early 2012 for an update!

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2011 · All Rights Reserved ·


To Bag up the Booze or Not. Your Call.

November 10, 2011

The California Department of Alcoholic Beverage has clarified in a recent industry advisory that alcoholic beverages do not have to be bagged prior to handing the beverages to consumers, unless a local ordinance requiring bagging exists. Thus, Californians can opt to “save a bag” and use their own tote bag or other carrying device when shopping for alcoholic beverages in most jurisdictions.


New Limited Off-Sale Retail Wine Licenses in California

October 19, 2011

Beginning January 1, 2012, a new license will be available for direct-to-consumer wine sales. The new license is the result of approval of Assembly Bill No. 623, which revises California’s Business and Professions code to add Section 23393.5 authorizing the license. Sales may only be made to consumers. All sales must occur through direct mail, telephone or Internet; they may not be conducted from a location that is open to the public. The licensee must take possession and title to all wine sold. All wine must be delivered to the consumer from the licensee’s premises or a licensed public warehouse. The application and annual fee are the same as those applicable to a Type 20 off-sale beer and wine license. The key differences between the new limited off-sale retail license and a type 20 license are that the type 20 requires a brick and mortar store that is open to the public and a type 20 license also allows the sale of beer for consumption away from the licensed premises. If you would like more information about the license, please feel free to contact any of the attorneys at Strike & Techel.


No More Alcopops in California

August 03, 2011

On Monday Governor Jerry Brown signed Senate Bill 39 banning the production, importation, and sale of beer to which caffeine as a separate ingredient has been directly added. Senator Alex Padilla, a Democrat from the San Fernando Valley, introduced the Bill last December. In order to enforce the prohibition, licensees may be required by the California Department of Alcoholic Beverage Control to provide product formulas. All formulas provided will be considered confidential trade secrets and not subject to disclosure under the California Public Records Act. The new law can be found in Section 25622 of California’s Business and Professions Code. The law does not prohibit beers where caffeine is a part of the brewing process itself, such as a coffee porter. It is aimed instead at the Progressive Adult Beverages (PABs) (also commonly referred to as Ready to Drinks (RTDs) and Flavored Alcoholic Beverages (FABs)) that have been in the news since last fall. See our prior coverage here, here, here, and here. This puts California in line with states like New York, Massachusetts, Washington, Michigan, Kansas, and Utah, which have also banned such beverages.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·


Spirits Tastings Approved In Tennessee

June 27, 2011

Earlier this month, Tennessee became the 35th state to allow spirits tastings, with the passage of Senate Bill 1224, which will permit restaurants, bars, and liquor stores to offer limited alcohol sampling. The bill, which was signed into law on June 10thand is codified at Tennessee Code Annotated Section 57-3-404(h)(2), will allow spirits retailers to conduct tastings for “sales, education, and promotional purposes.” Similar to tasting laws in most other states, spirits wholesalers may not take part in the events, and are specifically precluded from directly or indirectly providing any “products, funding, labor, support or reimbursements to a retailer.” The Tennessee Alcoholic Beverage Commission will be establishing rules specifying how tastings must be conducted.

Tennessee is among a growing list of states that have authorized limited tastings since 2009, joining California, Maine, Michigan, New Jersey, Vermont, Virginia, and Washington.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·


TTB Regulators Double Down in Las Vegas

May 12, 2011

Apparently, the TTB doesn’t agree that “anything goes” in Vegas. Just ask Diageo, Pernod Ricard, Moet Hennessey, Bacardi, Future Brands, and E. & J. Gallo Winery. According to the TTB, these companies allegedly violated the FAA’s tied-house “slotting fee” restrictions. A slotting fee has nothing to do with slot machines (good guess), but instead is anything of value a supplier provides to a retailer in exchange for favorable product placement. The TTB’s allegations included “that the companies collectively furnished nearly $2 million in inducements” with the purpose “to obtain preferential product display and shelf space (also known as slotting fees) at Harrah’s Hotels and Casinos.” In an industry guidance circular released shortly before the announcement of the offers in compromise, the TTB reminded industry members that while providing promotional items etc. to retailers might be legal in some contexts, doing so as an inducement for better product placement was a violation of FAA tied-house laws in general and slotting fee prohibitions specifically (at least when the elements of interstate commerce, exclusion of other brands, and, in the case of malt beverages, similar state law are present).

Under the terms of the offers in compromise, none of the companies admitted to any wrongdoing and collectively paid out $1.9 million in fines - the largest set of offers in compromise ever accepted by TTB for trade practice violations. Jackpot.

The TTB’s recent guidance on tied-house rules and slotting fees can be found here: http://www.ttb.gov/trade_practices/ttb-g-2011-3-tied-house-guidance.pdf

The TTB’s announcement and details of the offers in compromise can be found here: http://www.ttb.gov/press/fy11/press-release-fy-11-4-faa-oic.pdf

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·


Streamlined COLA Process Announced by TTB

May 09, 2011

In a bid to streamline the Certificate of Label Approval (COLA) process, the TTB has announced that it will no longer examine COLA applications to determine whether the label images included in the applications meet the applicable type size, characters per inch, and contrasting background requirements. They will continue to review all submitted labels for inclusion of mandatory information and exclusion of the prohibited, but the TTB has asked industry members to self police when it comes to the technical character and background requirements. This does not mean, however, that the requirements can now be ignored. In the circular announcing the new policy, the TTB reserved the right to deny and return applications on type size, etc. grounds when it “deems necessary.” To that effect, the following statement will be included on new approved COLA applications:

QUALIFICATIONS: TTB has not reviewed this label for type size, characters per inch or contrasting background. The responsible industry member must continue to ensure that the mandatory information on the actual labels is displayed in the correct type size, number of characters per inch, and on a contrasting background in accordance with the TTB labeling regulations, 27 CFR parts 4, 5, 7, and 16, as applicable.

The official reason TTB has given for making the change in procedure was to reduce the time wasted in the COLA process due to image distortions in submitted electronic files. The good news is that the label approval process should be faster with this new policy in place. But the flip side is that the importers and bottlers submitting COLA applications bear greater responsibility for ensuring the labels are in compliance with the labeling regulations. In addition to reserving the right to reject non-compliant labels, TTB also has the power to revoke COLAs it has previously issued, so non-compliant labels that obtain an approval still could be rejected – even after being applied to bottles. The associated costs and logistics problems of a COLA revocation make it important to continue to pay close attention to the minutiae when creating new labels.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·


When Wine is Not Wine for California Tax Purposes

April 14, 2011

Although it has not been extensively covered in the media, those involved in the manufacture and importation of certain wine products should be aware of the California Board of Equalization’s (“BOE”) proposed Regulation 2558.1, involving the definition of “wine” for excise tax purposes in California. The regulation should not affect typical wine producers; however, those that create alternative wine products where a portion of the alcohol within the product is derived from, for example, apples or malt grains, instead of grapes, but the product is marketed as a typical grape wine product, should be aware of the proposed Regulation. Enactment of the Regulation essentially means that a sangria product that is classified as “wine” by the ABC could be classified as a distilled spirit by the BOE, and thus be taxed at $3.30/gallon (the rate for distilled spirits that are 100 proof or less) as opposed to the $0.20/gallon rate applied to wine. That constitutes a tax increase of 1650%. The proposed Regulation would define “wine” for BOE purposes as products that do not include more than .5% alcohol by volume derived from the distillation of fermented agricultural products other than the main agricultural product from which the wine is made. This is different that the California Department of Alcoholic Beverage Control’s (“ABC”) definition, which defines wine as:

…the product obtained from normal alcoholic fermentation of the juice of sound ripe grapes or other agricultural products containing natural or added sugar or any such alcoholic beverage to which is added grape brandy, fruit brandy, or spirits of wine, which is distilled from the particular agricultural product or products of which the wine is made and other rectified wine products and by whatever name and which does not contain more than 15 percent added flavoring, coloring, and blending material and which contains not more than 24 percent of alcohol by volume, and includes vermouth and sake, known as Japanese rice wine.

Essentially the ABC’s definition looks at wine as a product to which only a certain amount (15%) of “other” material can be added, while the BOE’s definition is based on a requirement that 95.5% of the alcohol in the product be derived from a single commodity. The process of this change began at the BOE’s November 17, 2010 meeting, wherein it authorized an informal rulemaking process and proceeded on an expedited basis. On December 17, 2010, after preparing an initial draft of the proposed change, an interested parties meeting was held. During the meeting, it became clear to the staff that there was an industry divergence regarding what constituted legitimate “blending material” under the ABC’s definition and what should be included under the BOE’s definition. Thus, the BOE decided that further interested party meetings would not be useful and they settled on a BOE definition that did not derive from the blending viewpoint, but rather from the alcohol derivation viewpoint. On February 23, 2011, the final proposed regulation was issued. A 45-day comment period then began and the next step is a public hearing in front of the BOE in May 2011. The proposed Regulation is scheduled to go into effect on January 1, 2012.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·


Still No Certiorari Decision from the Supreme Court on Wine Country Gift Baskets.com Case

February 28, 2011

The pins and needles many in the alcoholic beverage industry were on this morning remain, as the Supreme Court’s orders list issued this morningwas silent on the certiorari decision for Wine Country Gift Baskets.com, et.al., v. John T. Steen, Jr., et.al.Cases are typically distributed among the Supreme Court Justices on Fridays for their conferences, during which they discuss whether or not to grant certiorari. Orders are then typically issued the following Monday. If a case that goes to conference on a Friday is not among the order list published on the following Monday, it usually means the case is being discussed among the Justices, with a few but not a majority, arguing for the grant of certiorari. However, once a case has gone to conference more than once without a subsequent order being issued, it tends to mean that the votes for the certiorari grant are not and will not be there. This is now the second time Wine County Gift Baskets.com, et.al., v. John T. Steen, Jr., et.al. has gone to conference (first on February 18, 2011 and second on February 25, 2011) and not been included in the following Monday’s orders. Thus, it is unlikely that the case will be granted certiorari, although not impossible. If the case is denied certiorari, the Fifth Circuit’s decision will stand. For a summary of the Fifth Circuit’s decision, see our prior post here.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·


Have Wine, Will Travel

February 25, 2011

It is called everything from the bombastic “corkage” to the everyperson “BYOB,” but it means the same across all fifty states and beyond: bringing ones own bottle of alcohol to a restaurant for consumption with ones meal. Not every state allows the practice, but Virginia is on the brink of joining the list of states where brown-bagging is permissible. On February 8th, the Virginia Senate passed SB 1292 (27-Y, 13-N) and the bill passed the House on February 22nd (78-Y, 18-N), leaving only Governor Robert McDonnell’s signature to make it official. The bill was introduced by Republican state Senator Jeffrey McWaters, who argued passage of SB 1292 would help boost Virginia’s restaurant and wine industries. SB 1292 will add Section 16 to § 4.1-201(A) of the Code of Virginia, thereby allowing licensed restaurants to permit customers to consume legally acquired wine on a restaurant premises and allowing the restaurant to charge a corkage fee if desired.

Each state that allows BYOB has its own unique set of regulations. Virginia’s neighbor to the South, North Carolina, has a “brown-bagging” permit, which allows customers in permitted establishments to bring and consume on the premises “up to eight liters of fortified wine or spirituous liquor, or eight liters of the two combined.” Restaurants, hotels and community theaters are only allowed such permits if they are located in a county where the sale of mixed beverages has not been approved. Eight liters of fortified wine, which in North Carolina is defined as 16-24% alcohol by volume, or distilled spirits, may seem like an exorbitant amount of alcohol. However, unlike Virginia’s SB 1292, North Carolina’s law is not about enjoying a glass of ones own wine with dinner, but rather about consuming a gin and tonic at ones local haunt when such establishment is not allowed by law to sell gin. Attending “liquor locker” provisions in North Carolina allow patrons to store their brown-bagged alcohol in individual lockers at licensed facilities, so that they can drain their provisions over time. Traditional bottle opening fees do not apply in such situations, rather the restaurant makes money selling the mixer used by the patron, commonly referred to as a “set-up.”

The North Carolina arrangement would be defined as an illegal “bottle club” in California. California only allows people to bring their own alcohol to a licensed premises, and one can only bring alcohol that could have been sold by the licensee at the establishment. So if a restaurant only sells beer and wine, one cannot bring in vodka. Also, in California any unfinished portion of the BYOB must be left at the restaurant, so if you bring a bottle of expensive wine to a restaurant, bring enough friends to drink it all!

As we head into the weekend, we’ll leave you to ponder these burning questions: Is it counterintuitive for California to forbid people from bringing wine to restaurants that do not serve it, but permit patrons to bring wine to restaurants with the exact same bottle available for sale on their wine list? Also, who pays more in BYOB alcohol costs—North Carolina patrons bringing in eight liters of distilled spirits or New York patrons (blind item) dining at a well known restaurant with a $90 corkage fee?

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·


Vertical Integration in California (“Tied-House” Laws)

February 17, 2011

The general rule with alcoholic beverage licensing is that you cannot be involved in more than one “tier” of the industry, meaning that suppliers and importers can’t be wholesalers, wholesalers can’t be retailers, retailers can’t be suppliers, and vice versa. The objective, which came about following the repeal of prohibition, was to promote the organized and responsible distribution of alcohol. It was thought that by keeping the three tiers separate, suppliers would not exert undue influence over retailers, consumers would not be encouraged to over consume, and the societal ills that led to prohibition in the first place would not be repeated. In the 75+ years since the creation of the three-tier system, dozens of exceptions have found their way into the California ABC Act. The tiers are no longer entirely separate and some licensees are permitted to hold licenses in other tiers. For example:

12/18 (Distilled Spirits Importer)/(Distilled Spirits Wholesaler)

17/20 (Wine and Beer Wholesaler)/(Wine and Beer Retailer)

9/17/20 (Wine and Beer Importer)/ (Wine and Beer Wholesaler)/(Wine and Beer Retailer)

There are restrictions on operating under each of these combinations, but the ability to hold them in combination remains a privilege available in California that is not available in many other states. The “tied-house” rules have implications that extend well beyond the licensing structure. If you are interested in learning more about tied-house issues, feel free to contact any of the attorneys here at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·


TTB’s Permits Online System Up and Running; Expedited Review a Thing of the Past

February 14, 2011

Today the Alcohol and Tobacco Tax and Trade Bureau (TTB) launched their Permits Online system, which is available here. The system is a counterpart to the Formulas Online and COLAs Online systems. The Permits Online system allows the application procedure for federal alcohol and tobacco business permits to be completed entirely online. The system allows one to prepare, submit and track applications through the TTB’s online portal, available 24 hours a day, 7 days a week. But as with many technology innovations and advances, there is often a corresponding down side. A few weeks ago, the TTB announced that they are no longer accepting “Expedite Requests” or “Informal Reviews” for certificate of label approvals (COLAs) and formula approvals. The former expedite option allowed for rapid turnaround of approvals that was especially helpful for the industry at large.

With a dramatic increase in approval requests over the years, coupled with shrinking governmental budgets, the TTB decided that all applications will be reviewed on a first-come, first-served basis, without any expedite availability. Further, the TTB stated that applicants should plan for a full 90-day review period, which does not include any additional time that could be necessary if label or formula changes are requested. The TTB did note that online applications are processed about twice as fast as paper applications, so there is a real incentive to using the online portals. If you have an upcoming formula approval or COLA, be sure to factor in enough time for the TTB’s review given that the expedite option is no longer available. If you have questions about formula or label approvals, please feel free to call any of the attorneys at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·


TTB Considers New Grape Varieties for American Wines

February 10, 2011

Only a grape variety name approved by the TTB may be used as a varietal “type” designation for American wine. The TTB is considering adding more than 50 names to their list of approved varietals to catch up with the explosion of U.S. wines made from obscure grape varietals. The full list of varietals up for public comments is here.

Some of the proposed varietals are not so obscure (e.g. Blaufränkisch, Carignan, Garnacha, Grenache blanc, Grüner Veltliner, Lagrein, Vermentino), but others are extremely unusual, particularly the submissions from the Minnesota Grape Growers (Louise Swenson, Sabrevois, St. Pepin), which highlighted the cold-weather resiliency of the grapes

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·


California ABC Stakeholder Meeting

February 08, 2011

Last week, partners Barry Strike and Kristen Techel attended the California ABC’s annual Stakeholder Meeting in Sacramento. The meeting covered everything from furlough status and budget to planned action items for 2011 and 2012. Stakeholder working groups were established to further investigate and provide recommendations to the new ABC Director, Jacob Appelsmith. The four groups will cover issues related to Third Party Providers, Brands and Trademarks and other Things of Value, Licensing Process and Industry Training, and Public Convenience or Necessity.

Interestingly, during the meeting Matt Botting, General Counsel to the ABC, indicated they had not seen many applications for the new tasting permit for off-sale retailers, which we originally discussed here and here. If you’re interested in learning more about or applying for the new instructional tasting license, please feel free to contact any of the attorneys here at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·


Extended Comment Period on TTB Notice 109: Use of Winemaking Terms

January 14, 2011

The deadline has been extended for comments on the Alcohol Tax and Trade Bureau’s (“TTB”) proposed amendment to regulations regarding common winemaking terms used on wine labels and advertisements. Written comments are now due by March 4, 2011. The TTB set out their proposed new regulations in Notice 109, “Use of Various Winemaking Terms on Wine Labels and in Advertisements”, published November 3, 2010 in the Federal Register. The comment period was extended at the request of Napa Valley Vintners (“NVV”). NVV has formed a subcommittee to research and survey members on the proposed new regulations.

There are four main proposals set forth by the TTB in Notice 109. First, the TTB proposes requiring the use of the terms “estate grown,” “estate,” and “estates” to meet the higher threshold definition it currently ascribes to “estate bottled.” Second, the TTB proposes codifying its policy of only allowing the terms “proprietor grown” and “vintner grown” if 100% of the grapes used in a wine are grown on vineyards owned or controlled by the bottling winery. Third, the TTB proposes to codify its current position that “single vineyard” may only be used when 100% of the grapes used in the wine come from one vineyard. Further, it would extend that reasoning to the terms “single orchard,” “single farm,” and “single ranch.” Fourth, the TTB is considering codifying definitions for the following terms: “Proprietors Blend,” “Old Vine,” “Barrel Fermented,” “Old Clone,” “Reserve,” “Select Harvest,” “Bottle Aged,” and “Barrel Select.” The TTB made the proposals in an effort to ensure that consumers are not misled by wine labels and advertising. Should these changes occur the TTB could revoke its approval of previously approved labels.

The Federal Alcohol Administration Act (“FAA Act”) sets forth the regulations for alcohol labeling and advertisements, including wine. The TTB is responsible for the administration of the FAA Act and the promulgation of regulations thereunder. The specific wine labeling and advertising regulations can be found in Title 27 of the Code of Federal Regulations.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·


ABC Violation Round-Up - Buggy Bottles

June 26, 2010


The California ABC actively enforces the alcoholic beverage laws of the state. We’ll be posting a series of “ABC Violation Round-Up” items discussing some of the violations we have seen in recent enforcement actions.

This week…. Buggy Bottles!

The Violation: Alcohol served at licensed premises cannot be contaminated, and insects such as fruit flies are considered contaminants. When the ABC does a sting on a licensed premise, it is common for the investigators to shine flashlights into the back bar liquors to check for the presence of insects. If they find insects, the bottles will be confiscated and a violation may be filed.

How to Avoid It: Check your bottles regularly for insects, especially the sugary items most likely to attract bugs. Get rid of anything with inclusions. Have your bar staff keep a log of their regular checks. Also keep records of any visits from the Department of Health. In the event you get a violation, the log from your staff or a recent “clean” visit from the Department of Health may help you get a mitigated penalty.

Statute: Penal Code 347b

Standard Penalty: Five day suspension

Imbiblog is published for general informational purposes only and is not intended as legal advice.


Pay Close Attention: H.R. 5034

June 21, 2010

House Bill 5034 has been making the news since its introduction in mid-April. If you are in the business of alcoholic beverages, you need to be watching this bill. It could be a game changer.

The bill is referred to as the CARE Act, which is short for Comprehensive Alcohol Regulatory Effectiveness Act of 2010. If passed, the bill will strengthen state control over alcoholic beverage regulation by making it nearly impossible to challenge state alcoholic beverage laws, even if there is a conflicting federal law.

Though it is a short bill, it has three very significant elements:

1) State laws are presumed valid

2) Any person challenging a state law has the burden of proving the invalidity of the state law by clear and convincing evidence in all phases of the legal action

3) The state law will be upheld unless the challenging party proves the law has no effect on:

  1. The promotion of temperance
  2. The establishment and maintenance of orderly alcoholic beverage markets
  3. The collection of alcoholic beverage taxes
  4. The structure of the state alcoholic beverage distribution system
  5. The restriction of access to alcoholic beverages by those under the legal drinking age

You can track the bill by entering HR 5034 under “bill number” here: http://thomas.loc.gov/

Imbiblog is published for general informational purposes only and is not intended as legal advice.


CLOSE

Browse posts by category: