Five Trade Practice Tips and Traps

December 15th, 2015 • by Jackie Sudano
Jackie Sudano

Jackie Sudano

    Jacqueline Sudano advises beverage alcohol clients on compliance with federal and state level alcohol regulations and statutes related to the marketing and promotion of brands and products. She works with suppliers, importers, wholesalers and retailers in the wine, malt beverage and spirits industries. These businesses are navigating a maze of international, federal and state laws, rules and regulations impacting their products, so I offer litigation, transactional and regulatory counsel that helps them achieve their goals while offering a great product. Her practice also includes the management of nationwide liquor license applications and approvals for client acquisitions and corporate restructuring, as well as industry-related contests and sweepstakes.

    As holiday season sales are in full swing and your beers are flying off the shelves, your brewery might think of adding some fuel to the fire by kicking your marketing and advertising up a notch. Here are five common issues that confront beverage alcohol suppliers that maybe don’t seem to be a problem on the surface, but are viewed as violations of the law and regulations by the New York State Liquor Authority and under federal law:

    • Sending a tweet or writing a Facebook post about one or two retail locations that carry your product.
      • Why is this a problem? This is viewed as an “unauthorized gift to a retailer”—basically, the “gift” here is that you are driving traffic to that retail account and have singled them out in doing so.
      • Don’t discriminate: Don’t mention particular bars, restaurants or liquor stores that carry your product unless you mention several and then also provide a link to an exhaustive list of all of the retailers that carry your product. It’s better to include too many than single some out and be seen as “playing favorites.” When in doubt, ask your attorney for their input and stay on the right side of the law.
    • Giving away alcohol as a contest or sweepstakes prize, online or some other way, to adult winners who are age-verified.
      • Why is this a problem? No U.S. state permits the award of an alcoholic beverage as a prize or giveaway.
      • A better alternative: Get some branded merchandise instead and give it away as prizes or to consumers onsite. It lasts longer and if the winner wears it or uses it, it’ll help get your name out there without them even saying a word. Just be careful about the total dollar values and nature of the product if you’re doing this across several markets—check with your attorney to see what’s okay and what’s not okay.
    • Going to a retail account that carries your product and re-arranging shelves and displays.
      • Why is this a problem? While you can do this with your own product, you definitely can’t touch OTHER producers’ products. That’d be a violation of federal law.
      • What to do about it: Keep your hands on your own products and instruct your employees to do the same.
    • Creating an expensive, beautiful product display for liquor stores to show off your product and boost sales.
      • Why is this a problem? There are limits on the dollar amounts you can spend on product displays. Dealer loaders are not allowed under NY law.
      • Stay within the limits: Keep your display costs under $300 per account at any given time. That $300 is the actual cost of the display, not including transportation fees.
    • Sending people from your top retail accounts on an all-expenses-paid trip for making such a high number of sales.
      • Why is this a problem? This is an unauthorized gift to a retailer, which is forbidden by the ABC law.
      • How to show your gratitude: Thank your retailers for doing such a great job selling your product. Throw a party where you invite all of your wholesalers and retailers and their employees as a thank you, but consult with your attorney to figure out what the rules are for holding such an event.

    The above are just some examples of seemingly harmless activities that can run afoul of the law. If you have a particular marketing idea or activity in mind, make sure you run it past your beverage alcohol counsel before implementing it. It’ll save you time and money, and most of all, stress. And during the holiday season especially, who needs more stress?!?