California’s New Events-Based Tied House Exception and Why Everyone Is So Excited
The What: California expanded an alcohol supplier’s ability to advertise events at retail locations starting this year. Under AB 2452, suppliers may post photos (strangely, no video) of the retail premises on social media in connection with the following types of events:
Winemaker’s dinners (B&P Code Section 25503.4)
Tastings on off-sale retail premises with a type 86 tasting license (B&P Code Section 25503.56), and
Tastings at on-sale retail premises (B&P Code Section 25503.57)
Previously, the law only allowed suppliers to mention the location of the event and basic details, but you couldn’t explicitly include pictures of the retail premises, so it made it difficult (or folks had to take the risk) to actually promote events on Instagram, Facebook and on websites. Now it’s explicitly permissible to advertise these events with photos, which is helpful, since every social media platform these days focuses on photos and video.
Note too that the off-sale and on-sale retail premises tastings are now available to craft distillers per AB 1891, which means craft distillers can also post pictures of these retail tastings on social media.
AB 1891 provides that in connection with permitted tasting rooms, the authorized suppliers or their agents, with permission of the retailer, may list:
“the name, address, telephone number, email address, Internet Web site address, and any other electronic media of the on-sale retail license,
the names of the wines, beers or distilled spirits being featured at the instructional tasting event,
pictures, illustrations, and depictions of the retailer’s premises, personnel, and customers, and the time, date, and location of, and other information about, the instructional tasting event”
But only if “(1) The advertisement does not contain the retail price of the alcoholic beverages” and (2) the listing of the retailer’s information must be “relatively inconspicuous in relation to the advertisement as a whole. Laudatory references to the licenseholder in these advertisements are not authorized. Pictures, illustrations, or depictions shall be still pictures, illustrations, or depictions only and shall not include any video. The reposting of social media posts, including posts by the retailer, is permitted provided that the reposting complies with all the requirements of this section. Nothing in this section shall authorize an authorized licensee or its designated representative to share in the costs, if any, of the licenseholder.”
The Caveats: Note that this exception does not extend to charity events. So, if you are doing a non-profit licensed event, those events don’t have a similar explicit exception for photos on retail premises structured under B&P Code Section 25533.5. This new exception also doesn’t give the supplier a license to advertise the retailer with laudatory references or prices—with the explicit exception comes qualifications on that exception. In other words, if you’re trying to drive a truck through the exception, you will put your brand at risk of enforcement for a tied house violation.
The Why: Many may ask why this is even an issue that regulators are concerned with. Tied house laws have historically prevented suppliers from advertising their retailers (or even retailers they don’t sell to), viewing it as the kind of thing that would compromise a retailer’s independence and allow suppliers to unduly influence retailers to carry their products. These practices are commonplace for retailers that sell anything other than alcohol (and frankly usually requested by alcohol retailers used to other industries doing it), but because we viewed alcohol as fundamentally dangerous following Prohibition, these restrictions have stayed in place, subject to very specific exceptions. One of the primary exceptions adopted federally and by most states is the retailer locator exception, which permits a supplier to advertise the name and address information of at least two or more unaffiliated retailers that carry a supplier’s products.
This new California exception is in many ways unnecessary absent an intent to enforce, but it provides suppliers the certainty of knowing they can use the exception, in this modern era of Facebook and Instagram posts that heavily rely on photos, to promote the many tasting events they are participating in at retail premises across the state.
But What About Other States? The short answer is that suppliers posting photos of tasting events has not been a big priority in other states. No other state has been so explicit about social media advertising, tied house, and experiential events as California (except for Colorado, which goes the other direction, by specifically excluding social media from its tied house restrictions). We suspect many states don’t want to get to this level of detail on their exceptions, it’s not an enforcement priority, or they want to preserve their regulators’ discretion to enforce their own tied house laws according to the situation. If you don’t know the advertising restrictions around events, or a state has been seemingly silent, the options are either to not promote the event, or if you do, it’s a good practice to always focus on the supplier’s brand first, with any event information being limited to the basic details. Promoting, advertising or including laudatory references about a retailer can still be an unlawful thing of value, even if you’re working with an event advertising exception, as most are very limited in their scope.
We also recommend implementing a well-designed social media policy, with guidance about how to engage with retailers and events on retail premises specifically.
As always, consult your own legal counsel for specific advice in individual situations.