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California Wineries will be allowed to post photos to social media ahead of special events

by Kerana Todorov
October 09, 2018

California wine producers who want to promote an upcoming tasting at a hotel, bar, restaurant, wine shop or other licensed retailer in the state may soon be able to post a photo on social media of that venue before the event on social media.

Assembly Bill 2452 which Gov. Jerry Brown signed into law on Sept. 22, gives wineries and alcohol producers the opportunity to post the photos ahead of the special event. The new law takes effect Jan. 1.

The bill was introduced to update tied-house rules that prohibited alcohol producers from posting photos of a venue hosting a special wine tasting event. Posting a photo of such a venue was prohibited advertising – an illegal gift of “something of value” to the retailer under “tied-house” rules.

Assemblywoman Cecilia Aguiar-Curry, D-Winters, sponsored the bill, saying the tied-house law is outdated.

"In today’s world of technology, social media, and fast-paced communication, prohibiting a winery or brewery from utilizing the full scope of social media is a competitive disadvantage. By allowing the limited use of photographs and sharing of website information, A.B. 2452 brings the law into the 21st century,” Aguiar-Curry said in an email.

Napa Valley Vintners and Wine Institute were among the trade associations supporting the bill.

“We live in a very visual world,” said Michelle Novi, associate director of industry relations at Napa Valley Vintners.

“At the end of the day, these changes are about making the laws better reflect the digital and visual world we live in,” Novi wrote in an email.

“People use social media to connect and engage with friends and companies. For a brand to be limited so drastically with how they communicate just because they are a winery is looking at the world through an old pair of glasses,” Novi said.

“Wineries should be able to let consumers know about upcoming events using social media in an authentic and modern way. A.B. 2452 is one positive step in that direction,” Novi said.

Still, there are familiar restrictions. Tastings’ social media posts cannot show the venues during or after the special events. The staff can take wine orders at tastings but cannot sell bottles of wine at the special event.

Guests also cannot be served more than three tastings of up to an ounce of wine.

The new social media rules also affect other alcohol producers, including beer and distilled spirits companies. However, the rules regarding which venue can be advertised on social media vary depending on whether the company sells beer or distilled spirits.

The California Department of Alcoholic Beverage Control has pursued wineries for giving a “thing of value” – advertising – to retailers in violation of the tied-house rules.

Save-Mart Grape Escape in Sacramento was cancelled in 2015, a year after state regulators investigated vendors at the event on suspicion of violating tied-house, including social media their participation in the event run by the Sacramento Convention and Visitors Bureau, a nonprofit organization, according to news reports.

Renwood Winery appealed and won, according to Hinman & Carmichael LLP. Another 10 wineries settled.

A state bill passed and signed into law in 2015 to amend tied-house rules related to social media to advertise an event run by a non-profit organization.

The bill, A.B. 776, by Assemblyman Jim Cooper, D – Elk Grove, does discuss social media. However, unlike AB 2452, it does not outline exactly what can be done, according to Rebecca Stamey-White, partner at Hinman & Carmichael LLP.

“In alcohol law, it’s a maxim that if it’s not specifically permitted, it’s prohibited, so while I think it’s unlikely that the ABC would go after suppliers for including pictures of retail premises where non-profits host events or sharing the retailer’s website or social media handle, the statute does not clearly authorize doing this the way the legislature has done under AB 2452,” Stamey-White said in an email. “There is ambiguity created about what suppliers can and can’t do when some laws are very explicit about the permitted advertising and other laws are not.”

BottleRock faced tied-house rules violations after its first Napa event in 2013. The music festival which draws thousands of fans to Napa Valley Expo rebounded the following year under different ownership.

“ABC’s enforcement of these laws is usually driven by complaint, although when it comes to events and social media violations, in some cases the ABC will receive call from would-be sponsors concerned about the licensing structure and will investigate the event that way,” said Stamey-White.

“With the exception of the Save-Mart Grape Escape accusations, we haven’t seen many accusations that just involve social media advertising; it is far more common for the event itself to be investigated and the advertising of the event is just one count in a larger accusation involving the event structure, flow of funds and generally exceeding the privileges of these event-based exceptions to tied house laws. This was the case in the BottleRock cases, where social media violations found their way into the larger investigation,” Stamey-White said.

“A.B.-2452 expands the options available for suppliers wishing to advertise their participation in tasting events on retail premises, which is an important way to get consumers to the events to try their wines, beers and distilled spirits,” Stamey-White said.

Tied-house rules may continue to be amended in Sacramento.

"We are in the process of researching possible bill ideas and putting together our 2019 legislative package right now. The tied house law and policies related to winegrape growing, winemaking, and wine business are and will remain a priority of mine,” Aguiar-Curry said in a statement Monday.

Wine Institute supported A.B. 2452 and participated in negotiations with regulators with ABC, according to the trade association.

The passage of A.B. 2452 will be included in ABC’s annual ‘Summary of Chaptered Legislation’ report, according to the agency. “This report is posted on our public website for our licensing stakeholders to read,” John Carr, spokesman for ABC, wrote in an email.

“This bill is consistent with previously enacted legislation for ‘tied-house’ exceptions, so it will conform to existing practices regulated by the Department,” Carr said.

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