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North Bay Business Journal

Monday, July 29, 2013, 6:00 am

Feds target alcohol on social media

Rules on ‘microblogs,’ Facebook fan pages unclear

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    The Alcohol and Tobacco Tax and Trade Bureau recently unveiled new guidelines for how wineries, distilleries and breweries can market themselves and their products on social media, making the formal distinction that all activity on social media for such businesses is a form of advertising and thus subject to oversight.

    Jay Behmke, Rick Van Duzer, Nick Donovan

    Jay Behmke, Rick Van Duzer, Nick Donovan

    While the decision didn’t surprise legal experts or most businesses already using such platforms for promotion, the new guidelines do mean that alcohol-producing businesses — especially smaller, startup companies — should take careful note to make sure they are in compliance to avoid potential fines for errant activity, attorneys in the North Bay said.

    “What they’re saying now is all social media is advertising. That’s the fundamental decision, and so then you need to know what the regulations are,” said Jay Behmke, a partner at Santa Rosa-based Carle, Mackie, Power & Ross who focuses on alcoholic beverage law.

    Has your alcoholic-beverage company changed its policies with the new federal guidelines deeming social media interaction to be advertising?

    • Yes (75%, 3 votes)
    • No (0%, 0 votes)
    • Don't know (25%, 1 votes)

    Total voters: 4
    Polling period: August 14, 2013 @ 12:00 pm – August 21, 2013 @ 11:59 am

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    Have more to say? Leave your thoughts in the Comments section below.

    Under the new guidelines, released in May, social media is defined as any “service, platform, or site where users communicate and share media, such as pictures, videos, music, and blogs with other users,” according to the industry circular. That broad definition includes sites like YouTube, any form of blog and also “microblogs” such as Twitter or Tumblr and mobile applications.

    Although the TTB did acknowledge that disclosures would be difficult on outlets with limited character counts, it simultaneously said, “character limitations have no effect on the application of regulations regarding prohibited practices or statements … thus, they must be followed for each mircoblog post.”

    Rick Van Duzer, who focuses on the wine industry among others for Farella Braun + Martel in St. Helena and San Francisco, said the conflicting message on microblogs would probably cause wineries to simply avoid such mediums altogether.

    “They want to be thinking about whether or not they want to use those tools in their marketing,” Mr. Van Duzer said, adding that enforcement of the provision is not yet clear either. “I don’t think it’s going to be possible to comply with it if you’ve got to have the disclosure information in every blog post. You may see people retreating from that type of media because it’s so hard to comply.”

    With the expanded definition of what mediums constitute advertising, alcohol-producing companies must provide some form of disclosure to users that the product is geared specifically toward adults, while also having to take reasonable measures attempting to ensure most web visitors are 21 years of age and up.

    For large-scale businesses with advanced marketing practices, the new rules probably don’t present much of a difference, but smaller, boutique wineries, brewers and distillers, if not cognizant of the changes, could easily get tripped up for seemingly minor discretions, according to Nick Donovan, an attorney with Napa-based Gaw Van Male who focuses on the wine industry.

    “My first reaction to all of this is there is just a really big difference between established wineries that know this and were probably already doing this, versus (those with) smaller labels,” Mr. Donovan said. “Aside from making wine, which is expensive, (smaller wineries) are not thinking of putting ads up, but they do all want to set up a Facebook page. They’re the ones who would get tripped up by this, by not appreciating that there are federal rules.”

    In addition, a winery cannot link to an article via Facebook, Twitter, blog or any other medium that says, for example, drinking red wine in moderation can have positive health effects, because the TTB prohibits alcohol advertising that suggests the product is healthful, Mr. Behmke said. With the proliferation of social media, such a scenario is far from unheard of, he said.

    Mr. Van Duzer and Mr. Donovan both similarly said the issued guidance is vague on Facebook fan pages, where wineries and other companies could seemingly be responsible for third-party information that ends up on the page.

    “That issue is one I think people need to be careful about — where they’re directing people from Facebook pages,” Mr. Van Duzer said.

    Given the widespread proliferation of all forms of social media as advertising, it’s important for wineries and other business to stay on top of the quickly changing landscape, the attorneys said.

    “Some wineries in particular went to a lot of trouble to engage people in social media to create a community,” Mr. Behmke said. “When you’re doing all of that, you have to be mindful.”

    Enforcement actions can and have happened to companies, often adding up to the tens of thousands of dollars, he said.

    Mr. Van Duzer noted that the wine-drinking demographic is increasingly younger, meaning social media avenues can be a key access point to an emerging block of consumers, especially for some of the smaller wineries with smaller marketing budgets.

    “It’s a great equalizer in many ways, because it allows the smaller wineries to compete,” he said.

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    Comments

    4 Comments

    1. July 31, 2013, 9:45 am

      by Erik Johnson

      Under this definition, shouldn’t non-technology social interactions like winery tours and any time a winery talks to a group of people in person also now be considered “advertising”? If a group of 20-year-olds show up at a winery not to taste but just ask questions about the business and wine production, is that allowed? Not sure where the line stops when you get away from paid advertising and down the slope into social interaction.


    2. August 1, 2013, 9:50 am

      by Jeff Quackenbush, Business Journal Staff Reporter

      It will be interesting to see how the TTB clarifies the boundaries of “publication” of “advertising.”


    3. August 19, 2013, 9:11 am

      by John Trinidad, Dickenson Peatman & Fogarty

      There seems to be a misunderstanding regarding the TTB guidelines re mircoblog (Twitter, Tumbler) posts.

      As you noted, alcohol beverage companies must refrain from engaging in prohibited practices or making prohibited statements via their microblog accounts.

      However, TTB explicitly stated that the required disclosure — i.e, the name and location of the advertiser — do not need to be included in each microblog post. TTB stated that this information can be located on the “profile” section of an alcohol beverage company’s microblog account. There is no requirement that industry members “have the disclosure information in every [micro]-blog post.”


    4. March 17, 2014, 9:37 am

      by Mark Buckley

      I believe these guidelines are so worthless as to just not be enforceable. Young teens aren’t barred from looking at the effects of certain prescription drugs, how is that different from reviewing information on what is contained in wine? Barring youth from educating themselves about a “Legal” product just makes it more enticing. Foolish that age gating is their solution? Asking a youth if they are 21 without any way to actually prove it is worthless and just lip service to the lawyers.

      The sad thing is that only a few readers actually read this article based on the 4 voters that actually took the time to vote. Just my 3 cents, hope that government stops trying to impose restrictions they will never be able to enforce and common sense prevails.


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