Posted on | June 27, 2013
Written by | Keven Danow
The Alcohol and Tobacco Tax and Trade Bureau (“ TTB”) Industry Circular 2013-01, issued on May 13th, provides guidance on the application of TTB’s advertising regulations to internet activities. It is important to understand that in general TTB regulations do not apply to the retail tier; rather these regulations are addressed to suppliers, importers and wholesalers, known in TTB parlance as “Industry Members.”
Federal regulations require the Industry Member, who is the responsible advertiser, to include certain Mandatory Statements in all advertisements. In the case of wine, the Mandatory Statement includes the name, city and state of the responsible advertiser as well as the class, type and distinctive designation of the product. In the case of spirits, the Mandatory Statement includes the name, city and state of the responsible advertiser, the class and type of the product, alcohol content, percentage of neutral spirits and the name of the commodity. Some of the information may be omitted when the advertisement is addressed to a broad category of beverages rather than to a specific product.
In addition, Federal Regulations forbid the inclusion of any statement that is false, disparaging to a competitor’s product or creates a misleading impression as to the effects on health.
In its May Circular, the TTB warns that advertising regulations apply to the types of advertisements listed in the regulations and advertisements in “any other media.” When an Industry Member creates a Facebook page, uploads videos to YouTube, creates an internet blog or sets up a Twitter account for consumers to follow, its purpose is to induce sales in interstate or foreign commerce. Therefore, these are considered advertising and are subject to the TTB regulations.
When using blogs, Facebook and other webpages, which combine into one document with sub-tabs, the TTB recommends that the responsible advertiser place the Mandatory Statement on the “profile” or “about” page.
The TTB recognizes that it is not practical to require the Mandatory on each statement sent out on a micro blog such as Twitter. However, the Mandatory Statement must still be placed on the responsible advertiser’s “profile” page.
If the Industry Member provides a link from one website to another, the Mandatory must be placed in each website. If the purpose of a posting or action is to drive consumers to the product or to keep the consumer loyal, it is an advertisement and comes under the regulations.
Governor’s Summit Impact Continues
Governor Cuomo hosted a summit on New York’s Alcoholic Beverage industry in October of 2012. Following through on one of the summit’s topics, the administration has sponsored legislation to spirits producers in the state.
The legislation is clearly intended to boost New York’s agricultural community. Products manufactured substantially from ingredients grown in New York are designated as “New York Labeled” and have special tasting and sales privileges. In addition, manufactures, except distillers, are authorized to sell a great number of souvenirs and additional products.
The proposed legislation also would allow producers to otherwise use areas of buildings and equipment not fully employed in the production of an alcoholic beverage, when such use (i) is reasonably necessary to realize the maximum benefit from the premises and equipment and/or reduces the overhead of the [licensee]; (ii) is in the public interest because of emergency conditions; (iii) involves research projects related to equipment, materials, processes, products, by-products or wastage; or (iv) in the judgment of the authority, will not impede the effective administration of the ABC law.
The proposed bill also codifies a portion of the SLA Advisory related to marketing/supplier permits. Under the proposed legislation, these permits will be available only to manufacturers and importers from sister states.