You’re a winery, so of course, you’ve heard of tied-house laws. These pesky rules are not new, having been around since 1935. However, within the past six years, it seems violations keep popping up in the media. With the evolution of and omnipresent use of social media, tied laws are front and center. Why are tied-house laws important? Failure to comply with these laws on any level can result in both fines and suspension of operating permits that could have disastrous financial consequences.
Let us first preface this advice by stating that WGM is not a law firm, but our clients frequently ask us for social media posting guidelines. How many times have you looked at articles and blogs on statutory policies, and your eyes start to glaze over at the judicial jargon? Hopefully, this blog post makes it easier to understand the premise of why tied-house laws are important and how they affect social media.
Initially enacted in the post-Prohibition era of 1935 during the Federal Alcohol Administrative Act, the TTB’s definition via the FAA (Federal Alcohol Administration) of a “tied-house” is a practice whereby a producer convinces a retailer to purchase its alcohol beverages. In the simplest of terms, a tied-house is any retail outlet connected to a particular alcohol manufacturer for any reason.
Tied-house laws are federal and state laws that attempt to prohibit brewers, distillers, wineries, and other alcohol beverage suppliers from exerting undue influence over retailers. Three agencies regulate tied-house laws: TTB (Tobacco Tax Bureau/Federal), FTC (Federal Trade Commission/Federal), and ABC (Alcohol Beverage Control/State). Keep in mind that ABC laws vary from state to state so while this article contains specifics to the California ABC, it's best to verify state-specific rules before posting about retail partners.
Tied-house laws state that “a winegrower cannot give a thing of value to an on-sale (restaurant) or off-sale (retail store) alcohol retailer.”
Some of you might remember when the beverage industry was sent into a tizzy in 2014 when a California winery re-tweeted about an upcoming event naming a single retailer with a link to purchase tickets (https://www.sacbee.com/food-drink/chris-macias/article3605295.html ). A simple re-tweet catapulted tied-house laws into the limelight because eight wineries and breweries ended up under investigation by the CA ABC. Eventually, those eight wineries and breweries were giving one year of probation.
Why? Advertising was always considered “a thing of value” in the interpretation of this law. But, if you fast forward from 1935, we now operate within a previously unforeseen landscape that includes social media content. And it seems the TTB considers that content valuable as well.
According to a TTB Industry Circular, “content created by a third party (the retailer) and reposted by an industry member (the winery), as part of the fan page is considered to be part of the original advertisement (by the retailer).” Therefore, the TTB considers re-tweeting, reposting, and sharing another’s post as adopting the content as your own marketing.
While that is a bummer, let’s focus on the positive and start with a few examples of things that you CAN do on social media in California when posting.
On your social post, you can:
Using the example of a winemaker’s dinner social post, you cannot:
When you are creating social media posts, other items that fall under the can not/do not category include:
You can list the names and addresses of 2+ unaffiliated retailers provided:
Clear as mud? We hope you’ve found this information helpful, and as a result, you can post and share more confidently and safely.
Nothing herein is designed or intended to constitute legal advice. For legal advice, please consult an attorney.
The California Business and Professional Code starting with section 25500, is a great resource!
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