Craft Beverages: Social Media Marketing the Effective and Compliant Way

On April 1, 2015, I stood before a packed room of distillers at the American Distilling Institute’s (“ADI”) annual conference in Louisville, Kentucky to deliver the message that there is a right, effective and compliant way to do state of the art social media marketing.  The best and brightest distilled spirits newcomers and craft favorites are members of ADI and over 1500 were at the national conference.  While every one of them recognized the importance of social media, the legalities and best practices for using social media are a mystery to many.  For those of you who couldn’t be there, here are some highlights and takeaways:

1. Which laws apply to social media?

Alcohol advertising is regulated by the federal regulators (TTB, FDA) and state ABC agencies, meaning there is dual jurisdiction and the potential for cross-violations from federal and state agencies.  There are no general rules, every state is different, and if an advertising or marketing practice is not specifically permitted, it’s often prohibited.  If it is permitted, it must follow both state and federal laws, rules and guidelines.  When marketing on social media and online, brands should tailor national advertising compliance to the most restrictive states, and event advertising is state-specific so each market needs to be reviewed for compliance before activation of event programs.

The TTB has released guidance on social media advertising here, and social media posts sponsored or conducted by brand accounts and those representing brands must comply with the federal advertising requirements in 27 CFR Parts 4, 5 and 7.  The FTC also published a study on alcohol advertising, available here.

There has been limited state guidance regarding the use of social media.  Some states, like California and Illinois, have addressed social media advertising as a potential thing of value to retailers when posts mention a specific retailer and have filed accusations against supplier licensees in these cases. Bills are proposed in both states, which, if they pass, would provide a social media exception to the tied house laws and permit this practice going forward. This state interpretation contrasts with states like Texas that have explicitly permitted retailer locators in social media.  Other states, like Washington and Oregon, permit social media as long as it does not appeal to or solicit viewers under 21 and as long as it complies with other laws (like Oregon’s Happy Hour restrictions).  Still other states, like Kentucky and North Carolina, permit social media advertising without additional guidance, and many more states provide no guidance about social media at all but fall back on the federal government’s regulations.

For still more information on social media, check the material from your relevant industry association, DISCUS, Wine Institute and Beer Institute for their social media and marketing guidelines.

2. What is the biggest social media trap to avoid?

Advertising Retailers!

  • Be cautious of advertising events involving retailers, like the now infamous California accusations against suppliers who advertised the Save Mart Grape Escape in Sacramento, a charity event that did not take place at Save Mart, but was sponsored by them.
  • There are specific state exceptions that permit you to advertise events you are attending at retail accounts – such as wine tastings and bottlesignings in California.  Every state is different though, so you want to understand what events you can and can’t advertise in every market.
  • Federal law and some state laws permit advertising two or more unaffiliated retailers (retailer locators), but the specific information you can share varies.  Some states, for example, don’t permit names, only addresses, where your product can be found.  Here’s a good example of how to do a post with multiple retailers listed without any images or extra advertising material that is not permitted in many markets:

3.       What are some best practices to follow?

  • Place ads responsibly and consider age-gating with DOB

The industry associations strongly recommend this, as does the FTC, and it’s a way of the industry self-policing and demonstrating responsible business practices.  They also strongly advise confirming age prior to engaging in a dialogue with consumers on social media.

  • Create responsible content and monitor posts by others

While there is a safe harbor for posts by others, if your brand account retweets or reposts this content, it becomes yours.  Use privacy settings actively so that you don’t have content on your page or wall that doesn’t represent your brand or promotes the irresponsible use of your product.

  • Educate your partners

Many industry members should know better, but don’t.  Don’t assume that the industry members you’re doing business with know the restrictions on their alcohol social media and marketing.  Also recognize that each company has different risk tolerances, so even the more established industry members may have made the business decision to take advantage of the lack of enforcement in a particular market or the gray areas within the regulations.

  • Create clear privacy policies and a company social media policy

It’s important to control who can represent your brand on social media and in your online marketing, so create policies to determine your social media strategy and compliance rules and use privacy policies and restrictions to protect your customers’ information and how you monitor your own posts.  Make sure employees or paid agents (especially third party providers like delivery platforms and event companies!) who are posting about your brand disclose their affiliation or sponsorship and understand your policies, branding priorities and the regulatory parameters around your product.

If you have additional questions, we are here to help!

Rebecca Stamey-White presents Emerging Issues in Wine Law

On Wednesday, February 18th, Hinman & Carmichael LLP partner Rebecca Stamey-White gave a continuing legal education presentation to the Business Law Section and Intellectual Property Committee of the Palo Alto Area Bar Association (PAABA) on Emerging Issues in Wine Law.  During her presentation, Rebecca gave an overview of the complicated legal history of alcohol beverage regulation in the United States; a primer on tied house law, the three-tier system and investment/investor qualification considerations; and discussed other issues that may affect business and intellectual property counsel working with wineries and other licensee clients. Rebecca covered some of the emerging trends in the industry, including recent legal shifts in the regulation of private and control labels, the growth of unlicensed third party providers (such as online marketers, special event companies and local delivery platforms), the legal complications facing wineries advertising on social media and the growth of the legal cannabis industry and how it may affect California wineries if cannabis is legalized in the state.  The presentation was well-received with a lively discussion from the participants and of course was complemented with winetasting, which always pairs best with wine legal education!

  1. TTB Protocols, Procedures and Investigations
  2. Wine in a 250 ML can – the Mystery of the TTB packaging Regulations and Solving the Problem by Amending the Regulations
  3. The Passing of John Manfreda of the TTB: a Tragedy for his family and a Tragedy for the Industry he so Faithfully Served for so Long.
  4. Pride in a Job Well-done, or Blood Money? The Cost of Learning the Truth from the TTB about the Benefits to Investigators from Making Cases Against Industry Members
  5. How ADA Website Compliance Works – The Steps You Can Take to Protect Yourself, Your Website and Your Social Media from Liability
  6. Supplier and Distributor Promotional “Banks,” Third Party Promotion Companies and Inconsistent TTB Enforcement, Oh My!
  7. “A Wrong Without a Remedy – Not in My America” – The TTB Death Penalty for Not Reporting Deaths
  8. Is a 1935 Alcohol Beverage Federal Trade Practice Law Stifling Innovation?
  9. Decoding the BCC’s Guidance on Commercial Cannabis Activity.
  10. Prop 65 - Escaping a "Notice of Violation"
  11. TTB Consignment Sales Investigations - What is Behind the Curtain of the TTB Press Releases?
  12. Heads Up! The ABC Is Stepping Up Enforcement Against Licensees Located Near Universities
  13. Coming Soon: New Mandatory Training Requirements for over One Million “Alcohol Servers” In California – September 1, 2021 will be here quickly
  14. 2019 Legislative Changes for California Alcohol Producers – a Blessing or a Curse?
  15. A Picture (On Instagram) Is Worth A Thousand Words
  16. Playing by the Rules: California Cannabis Final Regulations Takeaways
  17. Hinman & Carmichael LLP Names Erin Kelleher Partner and Welcomes Gillian Garrett and Tsion “Sunshine” Lencho to the Firm
  18. Congress Makes History and Changes the CBD Game for Good
  19. Pernicious Practices (stuff we see that will get folks in trouble!) Today’s Rant – Bill & Hold
  20. CBD: An Exciting New Fall Schedule… or Not?
  21. MISSISSIPPI RISING - A VICTORY FOR LEGAL RETAILER TO CONSUMER SALES, AND PASSAGE OF TITLE UNDER THE UNIFORM COMMERCIAL CODE
  22. California ABC's Cannabis Advisory - Not Just for Stoners
  23. NEW CALIFORNIA WARNINGS FOR ALCOHOLIC BEVERAGES AND CANNABIS PRODUCTS TAKE EFFECT AUGUST 30, 2018, NOW INCLUDING ADDENDUM REGARDING 2014 CONSENT AGREEMENT PARTIES AND PARTICIPANTS
  24. National Conference of State Liquor Administrators – The Alcohol Industry gathers in Hawaii to figure out how to enforce the US “Highly Archaic Regulatory Scheme.”
  25. Founder John Hinman Honored with the Raphael House Community Impact Award
  26. ROUTE TO MARKET AND MARKETING RESTRICTIONS - NAVIGATING REGULATORY SYSTEM CONSTRAINTS
  27. Alcohol and Cannabis Ventures: Top 5 Legal Considerations
  28. ATF and TTB: Is Another Divorce on the Horizon? What’s Going on with the Agency?
  29. STRIKE 3 - YOU REALLY ARE OUT! THE ABC'S STRICT APPLICATION OF PENALTIES FOR SALES TO MINORS
  30. TTB Temporarily Fixes Problem with Fulfillment Warehouse Tax Credits - an “Alternate Procedure” for Paying Taxes & Reporting
  31. CUSTOMERS WHO HAVE HAD ONE TOO MANY - THE FREE TRANSPORTATION DILEMMA
  32. The Renaissance of Federal Unfair Trade Practices - Current Issues and Strategies
  33. ‘Twas the week before New Year’s and the ABC is out in Force – Alerts for the Last Week of 2017, including the Limits on Free Rides
  34. Big Bottles, Caviar and a CA Wine Strong Silent Auction for the Holidays!
  35. The FDA and the Wine and Spirits Industry – Surprise inspections anyone?
  36. NORTHERN CALIFORNIA WILDFIRES: UPDATED REGULATORY AGENCY DISASTER RELIEF RESOURCES AT A GLANCE
  37. NORTHERN CALIFORNIA WILDFIRES: REGULATORY AGENCY DISASTER RELIEF RESOURCES AT A GLANCE
  38. Soon to come to your Local Supermarket– Instant Redeemable Coupons of the digital age!
  39. The License Piggyback Dilemma – If it Sounds Too Good to be True, it Probably is
  40. A timely message from our Florida colleagues on the tied house laws, the three-tier system and the need for reform
  41. ABC Declaratory Rulings – A Modest Proposal Whose Time has Come
  42. More on FDA Inspections - Breweries, Distilleries and Questions
  43. WHY THE FDA IS INSPECTING WINERIES
  44. Senate Bill 378—The Proposed Demise of Due Process for Alcohol Licensees
  45. ABC Enforcement - Trends and Predictions
  46. The Corruption Chronicles – Volume One: A New Hope
  47. New Alcohol Delivery Oversight on the Horizon
  48. Michigan: Canary in the DtC Coal Mine?
  49. California ABC and Federal Credit Laws – Active Enforcement and Lots of Questions!
  50. Big Bottles For The Holidays - The Highest Calling Of The Winemaker's Art
  51. FINAL COMMENTS TO TTB NOTICE 160 DUE ON WEDNESDAY DECEMBER 7TH – WE ARE ASKING THE TTB TO EXTEND THE COMMENT PERIOD AGAIN TO ALLOW FOR INDUSTRY NEGOTIATION AND ALIGNMENT OF INTERESTS
  52. SONOMA COUNTY WINERY USE PERMITS, EVENT RESTICTIONS AND DTC
  53. New TTB Labeling Requirement Regulations: Out-of-State Bottling Is Not Created Equal and Consumers Right to Know Where the Grapes in their Wine Come from is Compromised
  54. Isn't A Written Agreement With A Distributor Worthless In A Franchise State?
  55. Crowd Funding for Alcohol Producers and Retailers – Down the Rabbit Hole with the Tied House laws
  56. Everything you ever wanted to know about the BPA Warning Statement but were afraid to ask
  57. AB 2082 - A Hunting License for Police and a Lethal Weapon for Politicians that Deprives Licensees of Currently Available Due Process Rights
  58. “Better Late Than Never”-- Judge in Illinois Dismisses 201 Sales Tax Cases against Retailers
  59. The Day the Music Almost Died: The Story of the BottleRock ABC Accusations, the ABC Appeals Board and a Victory for a Common Sense Interpretation of the Tied House Laws
  60. The Arsenic in Wine Class Action Dismissal – what it means
  61. Counterfeit or Artisanal Mexican Spirits? Pick your Poison, or your lime wedge
  62. Warning - CA ABC enforcement teams are on the prowl this weekend!
  63. RELIEF AT LAST! ILLINOIS MOVES TO FIX THE SALES TAX LAWSUITS AGAINST OUT-OF-STATE SELLERS BUT PROPOSES TO PENALIZE WINERIES AND RETAILERS THAT SHIP WITHOUT PERMITS
  64. The TTB Speaks on Category Management or, be Careful What you Ask for Because you might Get it!
  65. Hinman & Carmichael LLP Announces the Addition of Jeremy Siegel to its team of top beverage law lawyers
  66. 2016 LEGISLATIVE UPDATES: Part IV
  67. 2016 LEGISLATIVE UPDATES: Part III
  68. 2016 LEGISLATIVE UPDATES: Part II
  69. 2016 LEGISLATIVE UPDATES: Part I
  70. Hinman & Carmichael LLP is Hiring!
  71. John Hinman Presents NBI Webinar on Basics of Alcohol Beverage Law
  72. ABC DISMISSES SAVE MART GRAPE ESCAPE ACCUSATION BUT REFUSES TO ADOPT JUDGE’S DECISION FINDING NO STRICT LIABILITY FOR ABC VIOLATIONS
  73. Speakeasies are still with us, and proliferating!
  74. The War for the Soul of Sonoma County – the Winery Working Group Battle
  75. Santa Claus isn’t the only one coming to town this Christmas!
  76. Arizona's Direct to Consumer Shipping Rules - An Exercise in Complexity
  77. AB 780 - Social Media and the ABC: The California Legislative “Fix” that Fails
  78. Illinois Finally Offers Certainty and Relief for Victims of Sales Tax Lawsuits, but Prompt Action is Required in Pending Cases
  79. A Modest Proposal – Adopt the federal rule on Tied-House liability in California
  80. The Grapes Escaped - Why the First Amendment Matters
  81. Appellate Court Ruling Strikes Blow Against State’s Arbitrary Beer Label Ban
  82. Illinois Attorney General's Office Announces Intention to Dismiss False Claims Act Against Liquor Retailers
  83. Commercial Speech And Alcoholic Beverages - Part III
  84. Commercial Speech And Alcoholic Beverages - Part II
  85. Craft Beverages: Social Media Marketing the Effective and Compliant Way
  86. Commercial Speech And Alcoholic Beverages - Part I
  87. A LAYPERSON LOOKS AT ARSENIC IN WINE
  88. The Biggest Retailer in the World vs. the TABC
  89. Rebecca Stamey-White presents Emerging Issues in Wine Law
  90. Top Beverage Alcohol Law Firm Adds and Elevates Partners
  91. Illinois Qui Tam Lawsuits—Private Enforcement Of a State Claim: A Bonanza For A Plaintiff’s Lawyer And A Rip-Off Of Retailers
  92. BOOZE RULES OF SOCIAL MEDIA: The Retailer Right to Pay Exception
  93. LIONS AND TIGERS AND TWEETS, OH MY!
  94. AB 2004: Brewer's Incremental Parity with Wine Makers
  95. Expanding, Proud Of It, and Wanting to Tell the World
  96. DC Weighs in Strongly on Third Party Marketer Delivery Services
  97. “Visual Links” between Beer, Wine and Spirits Labels and Retailers Ruled Unlawful in California — the tied house laws run amok
  98. Hard Cider Legislative Update
  99. New Marketing Model for New York – Lot 18 and the NYSLA
  100. Sweeping Changes in Proposed NYSLA Bill Include Expansion for Craft