Wine Law by the Case: Advertising Rules

Like nearly every other facet of the alcohol beverage industry, advertising has historically been carefully regulated.  For instance, in Missouri, regulations pertaining to advertising address topics from font size to content, and those specifically relevant to wine address statements regarding age and bottling date.

As technology continues to change and new forms of potential advertising media come into play, new questions are presented about the advertisement of alcohol beverages. Specifically, the rise of social media has impacted nearly all businesses, and has forced alcohol beverage regulators to take a look at the applicability of the current regulations in these forums.

On May 13, 2013, the Alcohol and Tobacco Tax and Trade Bureau (TTB) issued industry circular number 2013-01 on the Use of Social Media in the Advertising of Alcohol Beverages. In the circular, the TTB made it clear that its position is that the advertising provisions of the Alcohol Administration Act and its implementing regulations apply to social media.

While the TTB notes that it evaluates specific advertisements on a case-by-case basis, the circular provides general information regarding forums such as Facebook, YouTube, blogs, Twitter, mobile applications and links and quick response codes. So this means the TTB considers fan pages of industry members on social network services, like Facebook, to be advertisements.

As advertisements, they require the inclusion of all mandatory statements found in the regulations.  Mandatory statements are disclosures and explanations that need to appear with advertising. Sections 4.62 to 4.65 of the Federal Alcohol and Administration Act define these compulsory inclusions and related prohibitions for advertising of wine.

For example, if a fan page refers to a product, there needs to be a specific statement of what exactly that product is. Another rule requires that the advertiser state its name and address. In circular 2013-01, the TTB states that the regulations do not require that the mandatory statements appear in a particular place on the fan page, which includes the home page and all sub or tabbed pages associated with the home page.

However, the TTB strongly recommends that advertisers consider placing the statements ‘in a location where a viewer would most logically expect to find information about the brand or the company” for the benefit of consumers. With regard to video sharing sites, such as YouTube, videos posted by industry members are considered advertisements by the TTB if they come within the regulatory definition of advertisement ‘as a written or verbal statement, illustration, or depiction that is in, or calculated to induce sales in, interstate or foreign commerce.”

According to the circular, if a video meets this definition, then the requirements regarding mandatory disclosures and prohibited practices or statements apply to the video and associated channels created by an industry member.  The TTB recommends placement of the mandatory statements in a similar location as that recommended for social media sites. If a winery maintains a blog about itself and discusses issues related to its company or its products or the industry in general, the TTB considers the blog to be an advertisement and compliance with the advertising provisions is required.

Due to character limitations in microblog services, like Twitter, circular 2013-01 states that it is impractical to require the mandatory statements in every post made by an industry member, but they must appear in a conspicuous, readily legible manner in the advertisement and may be included on the member’s microblog home page. Mobile apps created by wineries related to alcohol beverages are also considered advertisements.  However, because they are downloaded by a consumer to a mobile device, the TTB considers them to be a ‘consumer specialty advertisement,” and the only mandatory statement required is the company name or brand name of the product.

Finally, according to the circular, links posted to other websites or pages by industry members on their social media advertisements are considered by the  TTB in view of the total message presented by the advertisement and the links contained in it to determine if the content of the links will be considered part of the advertisement to which the mandatory information and prohibited practices or statements requirements apply.

As the exchange of information becomes more rapid and takes new forms, it will be interesting to see whether the rules will change or whether regulators will continue to find ways to make the current rules apply. In the meantime, for more details on how TTB’s position may impact your use of social media as an industry member, take a look at the TTB circular 2013-01.

Jamie J. Cox, is an associate with the law firm Brydon, Swearengen & England P.C. in Jefferson City, Missouri. Jamie practices primarily administrative law and represents professionals before the Administrative Hearing Commission, as well as a number of Missouri licensing boards.