Category archives for “Texas”

Texas ABC Releases Advisory on Third Party Marketers

June 23, 2013

The Texas Alcoholic Beverage Commission (“TABC”) just released Marketing Practices Advisory MPA056, available here, which addresses the use of third party advertisers and payment processors by out-of-state wineries that hold permits to ship direct to Texas consumers (“Direct Shippers”). The Advisory provides similar guidelines to those provided by the California ABC in its 2011 Industry Advisory, which we commented on here. The use of third party providers by wineries has been a hot topic since the release of the California advisory, but few states have provided guidance on the issue. Now that Texas has weighed in, it will be interesting to see if other states follow suit.

The TABC’s Advisory allows Direct Shippers to use third party service providers provided that certain conditions are met. As in California, the TABC’s touchstone is that the Direct Shippers remain in control. Key points include:

- Direct Shippers are always responsible for compliance with the TABC code and regulations, payment of taxes, and must remain “in control of the product and every stage of the transaction.”

- A third party provider may advertise wines and prices for a Direct Shipper.

- A third party provider may process an order for wine placed by a Texas consumer by redirecting the order to a Direct Shipper. The Direct Shipper may then accept or reject the order.

- Fulfillment should be managed by the Direct Shipper, and single packages containing bottles from multiple Direct Shippers are not allowed. Note: the TABC disfavors models where a third party provider acts as both an advertiser or payment processor and a warehouseman.

- A third party provider may collect payment once an order is accepted by the Direct Shipper, but the Direct Shipper must maintain control over the funds.

- There should be a written agreement between all Direct Shippers and their third party providers in order to demonstrate that the Direct Shipper remains in control. The TABC will ask a Direct Shipper for a copy of its agreement in the event that it has reason to investigate an arrangement with a third party provider.

We’ll keep you posted on any further developments on third party providers in Texas and other states. Call one of the attorneys at Strike & Techel if you have any questions about direct shipping or the use of third party providers.

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


Beer Suppliers and Distributors May Now Preannounce Retail Visits in Texas

February 11, 2013

On February 7, 2013 the Texas Alcoholic Beverage Commission (“TABC”) issued an advisory, MPA053, entitled Promotional Activity Prearrangement/Preannouncement for Beer, which announces an amendment to 16 Tex. Admin. Code § 45.113, allowing beer manufacturers and distributors to prearrange and preannounce promotions at all on and off premise retail locations. Existing law (Tex. Alco. Bev. Code Ann. § 102.07(g)) permits distilled spirits and wine manufacturers and wholesalers to prearrange and preannounce promotional activities at retail premises (see MPB023), but beer manufacturers and wholesalers were excluded. Bar spending, sampling, appearances by agents, etc., could not be prearranged with the retailer or preannounced to consumers for beer; they had to be spontaneous. With this amendment, beer manufacturers and distributors are put on equal footing with spirits and wine suppliers and will be allowed to preannounce, or advertise, their promotional activities to consumers by means of email, TV, print, and digital media. These announcements may include event details, such as the date, time and location of the event. The amendment will enable beer manufacturers and distributors to more effectively prearrange their promotional activities.

The attorneys at Strike & Techel are available to answer questions about promotions and other industry trade practices.

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


Texas Advertising and Labeling Laws Found Unconstitutional

January 10, 2012

“The practice of law is often dry, and it is the rare case that presents an issue of genuine interest to the public. This is just such a case, however.”*

The First Amendment and beer aren’t typical dance partners, but they dosey doed on December 19, 2011 when the United States District Court for the Western District of Texas granted summary judgment in part for plaintiffs in Authentic Beverages Co., Inc. v. Tex. Alcoholic Beverage Comm’n. In granting partial summary judgment, the Court found in favor of plaintiffs’ arguments that the First Amendment was violated by Texas’ statutes and regulations that (a) prohibited breweries and distributors from telling customers where their products can be purchased, (b) prohibited advertising the alcoholic content of malt beverages or any suggestions of alcoholic strength, and (c) mandated the use of “beer”, “ale” and “malt liquor” labels on malt beverages with such terms statutorily defined in a manner inconsistent with the ordinary use of those terms.

The Texas Alcoholic Beverage Commission decided not to appeal the District Court’s decision and instead published Marketing Practice Bulletin 49, Changes to Current Regulations – Advertising and Labeling, on January 6th (available here). The Bulletin will eventually be superseded by formal rulemaking from the Commission after a stakeholders’ meeting on January 27, 2012. Until new rules are in place, the Bulletin allows manufacturers and distributors to advertise the retail locations where their products can be bought, provided such advertising is not cooperative. Additionally, manufacturers and distributors may refer to alcoholic content, including using words like “full strength” and “strong” in advertisements. Finally, brewers may continue to label malt beverages in accordance with the definitions of “beer,” “ale” and “malt liquor” provided in §1.04 of the Texas Alcoholic Beverage Code, or they may provide the percentage of alcohol by volume (“abv”), stated to the nearest 1/10th of a percent, on the label. If abv is stated, the product may also be labeled with whatever term for such product is commonly recognized in the brewing industry. For purposes of Texas regulatory matters products labeled 5.1% abv or less will be considered beer by the Commission.

* Authentic Beverages Co., Inc. v. Tex. Alcoholic Beverage Comm’n, No. A-10-CA-710-SS (D. W.D. Tex., December 19, 2011), available at http://pdfserver.amlaw.com/tx/abc.pdf.

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


TABC Steps Up Enforcement Against Direct to Consumer Wine Shipments by Retailers

June 07, 2011

The Texas Alcoholic Beverage Commission (TABC) issued a press release on Friday, June 3rd advising that it has entered into agreements with FedEx and UPS to halt the shipment of wine by out of state retailers to Texas consumers.

The direct shipping situation in Texas has been in a state of flux for years following the seminal Granholm v. Heald decision, which opened up many states to direct shipment of wine by wineries in 2005. Following Granholm, plaintiffs in a number of states have filed lawsuits to determine the scope of the court’s ruling, particularly whether it applied to retailers or only wineries.

Lawsuits filed in Texas alleged that Texas laws preventing direct to consumer sales by out of state retailers violated the commerce clause of the U.S. Constitution because retailers within Texas were permitted to make such shipments. The cases were decided last year on appeal to the Fifth Circuit Court of Appeals, which ruled that Texas was not required to allow out of state retailers to ship wine to Texas consumers, but could continue to permit in-state retailers to do so.

Following the Court of Appeals’ ruling, the TABC began notifying retailers that shipments to consumers in Texas were not legal. More recently, the TABC has provided FedEx and UPS with the names of out of state retailers who have recently shipped wine to Texas consumers (TABC has not said how it came to identify such retailers.) FedEx and UPS in turn have agreed to notify the listed retailers that such shipments violate the retailers’ shipping agreements with the companies and may lead the shippers to refuse to ship packages for the involved retailers. For its part, TABC says it will contact the retailers directly and may also contact the alcoholic beverage control agencies in the retailers’ home states in cases where the retailers fail to comply with the TABC’s requests.

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


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