Presentation on theme: "ALCOHOL ADVERTISING William D. Ellerman Partner Jackson Walker L.L.P. 901 Main Street, Suite 6000 Dallas, Texas 75202 214-953-6033."— Presentation transcript:
1 ALCOHOL ADVERTISING William D. Ellerman Partner Jackson Walker L.L.P. 901 Main Street, Suite 6000 Dallas, Texas 75202 214-953-6033
3 The three-tier system Producers or “producers” distributors retailers – on-site – off-site – beer, wine and/or spirits
4 The three-tier system (continued) Each tier is governed by different rules, but there is some overlap. Each level has different advertising rules. The "steps" are intended to prevent vertical and horizontal monopolies
5 The Texas Alcoholic Beverage Code creates the Texas Alcoholic Beverage Commission ("TABC") Regulates all aspects of the alcoholic beverage industry in Texas Generally equivalent to federal law Has NO enforcement power over the broadcast media Broadcasters can help customers by knowing the general rules
6 General Categories of Rules Rules Applicable to Specific Types of Authorizations Rules Applicable to Specific Types of Alcoholic Beverages Rules Applicable Regardless of the Type of Authorization or Beverage Miscellaneous Rules
7 RULES APPLICABLE TO SPECIFIC PERMITS
8 Types of Permits There are 50 different types of permits and licenses in the TABC On-Premise and Off-Premise Permits Typical On-Premise Permit Holders: - Restaurants and Bars - Private Clubs Typical Off-Premise Permit Holders: - Parcel Shops – Other retail shops
9 Types of Permits (cont.) Typical categories of permits include: – Off-site permits for beer, beer and wine, spirits – On-site permits for beer, beer and wine, spirits – Packaging stores – Private clubs Unusual categories of permits include: – Hotel Minibar Permits - Medicinal Alcohol Permits
10 The General Rule A permit holder may advertise what he or she is legally allowed to sell Examples: - A package store may not advertise spirits alongside the drink - A bar may not advertise drinks "to go".
11 Outdoor Signage Permissible signage depends on type of permit A beer retailer may have ONE sign saying "Beer" or "Beer To Go" A wine and beer retailer may have a sign saying "Beer", "Beer and Wine" or "Beer, wine and ale." Only holders of an out-of-home permit may advertise "to go."
12 Exterior Signage (continued) A licensed package store may have a sign that reads: - "Package Store" - "Liquors"; or – “Wines and Spirits” – The words “to go” may be added as long as there is no on-premise license
13 Private Clubs Many "bars" are actually permitted private clubs Private clubs are allowed to sell alcoholic beverages in dry areas Advertising must state that alcoholic beverages are only available to club members
14 Price advertising Generally, companies that do not sell to the public must not advertise prices Producers and distributors must not advertise prices Bans on vertical monopolies Are restrictions on price advertising constitutional?
fifteen Price Advertising (continued) Local retailers may not advertise prices where the ad contains a brand name (e.g., "Coors Longnecks for $1.00") Local retailers may advertise prices where the ad does not contain a brand name (i.e., "Longnecks for $1.00") Off-premises retailers must advertise brand names when advertising prices
16 RULES APPLICABLE TO BEVERAGE TYPES
17 General Rules An ad may contain any item that is not expressly prohibited from being advertised. An ad must contain specific items. Any item that must be included in an ad must be eye-catching
18 Advertisements for spirits must include the name and location of the licensee, the class and type of beverage, the proof of alcohol content or percentage For all licensees who are not retailers, the percentage of "neutral spirits" and the commodity from which they were distilled
19 Advertisements for distilled spirits may not contain any false, deceptive, misleading, indecent or obscene statement. A statement disparaging a competitor. A statement that the spirit corresponds to an official permit. A statement that implies a higher alcohol content than normal
20 Distilled Spirits Ads Must Not Contain (cont.) A statement that the spirit is “pure” unless that word is part of the owner's name. A statement that the product has therapeutic or healing properties. Flags, seals, insignia, coats of arms, etc., indicating government affiliation Anything that contradicts the information that must appear on the product label
21 Ads for wine must include the name and location of the permit holder. If the ad contains the price, it must also contain the brand name and the class and type of the product. If the class and type are included, a full description must be provided
22 Advertising of wine must not contain a false, deceptive, misleading, indecent or obscene statement A statement disparaging a competitor A statement that the wine conforms to a regulatory approval A statement indicating that the intoxicating quality has been increased The alcohol content (Is this constitution?)
23 Advertising for beer must not contain any false, deceptive, misleading, indecent or obscene statement. A statement disparaging a competitor. A statement that the beer corresponds to an official permit. A statement that the beer has therapeutic or healing properties
24 Advertisement for the alcohol content of beer Cannot be called "beer" if it contains less than 0.5% alcohol. Can't be called "malt liquor" if it contains less than 4.0% alcohol (constitutional?) Can be called "low alcohol" or "reduced alcohol" if it contains less than 2.5% alcohol
25 Mixed Drink Ads No Special Rules Ads should not contain alcohol content. Ads should not promote the intoxicating quality of the drink
26 GENERAL ADVERTISING RULES
27 Stamps and Coupons No stamps or other incentives allowed No coupons or discounts for purchase or rebates, except: – Vouchers for the purchase of non-alcoholic products if not tied to the purchase of alcohol – Discount or a single free drink given to a meal, a hotel package, or airline program - A free drink for customers on special occasions
28 Happy Hour and Drink Specials Allowed but strictly regulated Advertising is allowed but should comply with regulations
29 Prohibited drink specials “Two for the price of one” Increased alcohol without increased price More than one free drink per day “All you can drink” Concession price tied to a fixed “buy-in” price Price depends on consumed Quantity No reduced prices after 23:00
30 Prohibited drink promotions (continued) More than two drinks for one customer at a time An entry fee or cover charge in exchange for reduced drink prices Contests determined by volume consumed Contests where alcohol is the prize
31 Permitted Drink Specials Complimentary or discounted dining when not tied to alcohol purchase. Free or discounted alcohol as part of a meal or hotel package consumers at a time
32 Gifts, Contests and Promotions Strictly Restricted and Prohibited Generally Some Exceptions: - Sweepstakes - Gifts - Lottery - Event Co-Sponsorship - Tastings
33 Sweepstakes The only competitions allowed at the manufacturing level Must be random with no purchase required Must not favor one retailer over another Prizes may not be awarded in retail stores Entry forms may be advertised as available in retail stores ONE PRIZE
34 Contests (continued) A retail tier member may offer a contest based on skill or creativity - Logo or slogan contests - Very fact specific request - Obtain pre-approval from TABC
35 Giveaways Manufacturers and retailers can give consumers less than $1.00 worth of items. Promotional items with a manufacturer's logo can be sold to retailers. Wine and spirits producers and retailers may give consumers low-value items to promote certain brands. Manufacturers and retailers may advertise retailer specials no more than $101 per brand per year
36 State Lottery Local retailers are only allowed to sell lottery tickets if they only sell beer. Private clubs cannot sell lottery tickets. Alien retailers can sell lottery tickets regardless of their inventory
37 Consequences for broadcasters The above rules apply to promotions jointly sponsored by broadcasters and entitled parties. A promotional gift of alcoholic beverages is not permitted unless the broadcaster purchases the product. When promoting the promotion, a brand name may not be mentioned if the entitled party is paying for the advertisement.
38 Tastings A tasting permit is required Wineries may only advertise tastings in on-site communications or direct mail. Package stores may promote tastings on-site, through direct mail, via email, and on the store's website
39 Long-distance transmissions A broadcaster may carry out long-distance transmission from a license holder's place of business. The permit holder may not pay for the remote control. Make sure the remote control doesn't appear to be promoting intoxication
40 Events and Concerts Manufacturers and retailers can sponsor and promote events, but drinks must be sold by independent concessionaires. Promotional materials may be placed in service areas. TABC specifically defines "public entertainment establishments."
41 Events and Concerts (continued) Public entertainment establishments do not include establishments whose primary purpose is the sale of food or alcoholic beverages. A manufacturer or distributor may not sponsor an event or concert at a retailer's location. Only one manufacturer may advertise in connection with horse racing. No bingo advertising allowed
42 Events and Concerts (cont.) Sponsorship of Unlicensed Civic, Religious, or Charitable Events - Manufacturers and retailers may donate money, services, or other items of value - May not donate alcoholic beverages - Alcohol may be sold by an independent retailer - The charity must be equal- or better be billed - avoidance of "hidden sales"
43 Cooperative advertising poses vertical and horizontal monopoly issues - Permit holders, regardless of tier, cannot share advertising - There is a small exception for promotions taking place on a retailer's premises
44 Signs and Billboards A retailer may provide a retailer with one sign per brand for display on the retailer's premises. Different products from the same manufacturer may be different "brands". Billboards must be at least 200 feet from where the product is being sold
46 Dry areas Public serving of alcoholic beverages is prohibited in dry areas. Radio advertising is allowed. Outdoor advertising is not permitted
47 Age limits The disclosure of legal age limits in advertising is not required. TABC estimates that ads promoting responsible drinking promoting "BYOB" events sponsored by non-eligible individuals do not need to be restricted by age
48 Depictions of alcohol consumption TABC does not prohibit the depiction of alcohol consumption in advertising Federal laws restrict consumption by athletes - Should not be shown drinking - Should not suggest that drinking improves athletic ability
49 Conclusion TABC regulates only license holders, not members of the broadcast media. In general, permit holders are allowed to advertise what they are legally allowed to sell. Promotions, giveaways and special offers are severely restricted. If in doubt, contact TABC for pre-approval
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