The Tweet Heard Round the Wine Industry: How-to deal with Tied House Laws and Social Media

CA Assembly Bill No. 780: A Step in the Right Direction for Social Media and Wineries:

On October 1, 2015, California Governor Jerry Brown signed an amendment to “AB-780: Alcoholic Beverages: tied-house restrictions: on-sale retailers advertising,” which will go into effect on January 1, 2016.

The bill is intended to provide California distillers, brewers, and wineries with an additional tool to promote their businesses through the use of “electronic media,” letting consumers know about two or more unaffiliated retailers that sell their alcoholic beverages. 

According to John Carr, Information Officer at the California Department of Alcoholic Beverage Control (ABC), “Electronic Media is a term to include all forms of electronic media, requiring the release of information to be provided in a direct communication to a consumer, including the manufacturers’ website, Twitter handle, Facebook page, Linkedin page, etc.” 

Break it Down

In simple terms, alcohol brands and employees who use social networks as brand ambassadors will be able to share content on where to purchase their beverages via social media, as long as the post meets the following conditions: 

(1) The listing does not also contain the retail price of the product.

(2) The listing is the only reference to the on-sale or off-sale retailers in the direct communication.

(3) The listing does not refer only to one on-sale or off-sale retailer or only to on-sale or off-sale retail establishments controlled directly or indirectly by the same retailer.

(4) The listing is made, or produced, or paid for, exclusively by the non-retail industry member. 

Brands still have to mention two or more retailers (unaffiliated on-sale or off-sale retailers) in a social media post, as to not play favorites and provide a “thing of value” to one retailer. While this bill loosens up the restriction on only being able to provide information in response to a direct question from a consumer, there are still a few missing pieces.

Let’s Rethink the Laws... 

Alison Crowe, a Napa-based consulting Winemaker for several wineries including Garnet Vineyards, Picket Fence, Buccaneer, and Major League Baseball Wines notes that social media is the way that many small brands keep in touch with their community, “this is simply communication and reflects the new world we live in. Laws regarding communication methods and cultural norms from almost 100 years ago need to be re-thought.” 

Also, electronic media only refers to text (names, addresses, telephone numbers, email addresses, or Internet Web site addresses, or other electronic media, sharing pictures from retailers, or retweeting them is still not allowed, since that would be sharing content from just one retailer. 

Examples of tweets that wineries are allowed to use: 

• Find our wine at @XXXXX wine shop in the San Francisco Mission District, & across the street at @XXXX wine bar.

• San Diego friends: Our new Zinfandel can be found in your area! Try a glass at @XXXX wine shop, or @XXXX wine shop. 

On October 6th, a week after Bill AB-780 was signed, Governor Jerry Brown signed Bill AB-776. This bill was meant to address (in part) the issues with the Grape Escape event (http://www.sacbee.com/food-drink/appetizers/article20880528.html) in Sacramento, CA. Under the new amendment, wineries may participate in “ an event conducted by, and for the benefit of, a nonprofit organization in which retail and nonretail licensees are involved as sponsors or participants,” subject to conditions. 

Wineries are still not allowed to give a retailer a “thing of value,” to retailers, including social media advertising, reposting, or sharing the information of the retailers involved beyond its sponsorship or participation in the event. 

Jeff Stai, Owner of Twisted Oak Winery in Calaveras County, CA focuses 90% of his marketing efforts on Direct to Consumer (DTC), but he still thinks there is a small benefit to the amended law, “you will be able to mention more than just the name and phone number of a retailer, wineries can link to their website, or tag them on social media. It is a bit more modern. What I love most is that you just have to mention a second retailer in the tweet; the retailer doesn’t even have to have our wine, just as long as I mention two retailers. You can have more fun with tweets, and I probably will.”

What this means for wineries is that the California government is paying attention to the fact that current laws still remain in the prohibition-era, and they are moving forward with amending them in this new digital world.