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By John Trinidad and Dr. Liz Thach
Originally published in winebusiness.com.
How well do you think you know the legal regulations for using social media for a winery? Before you answer, please complete this short true/false quiz. (By social media, we mean any online channel in which the interaction between wineries and consumers is public. This may include posts your winery's Facebook Fan Page, tweets on Twitter, comments on wine discussion boards and wine apps, YouTube videos, blogs , and many other online communication vehicles.)
1. The TTB views social media used by a winery as an advertising mechanism. (T/F?)
2.Wineries can only use social media channels that have at least 80% of the audience being of legal drinking age. (T/F?)
3. If a winery gives a blogger free wine samples and the blogger writes about it, then the winery is responsible for making sure the blogger discloses the free samples. (T/F?)
4. It is permissible for a winery to list on a social media channel, such as Facebook, the name of a single wine shop or restaurant where consumers can find their wine. (T/F?)
Is Winery Social Media Considered Advertising?
If you answered True to Question #1, then you are correct. The TTB (U.S. Department of Treasury's Alcohol and Tobacco Tax and Trade Bureau) considers a wine industry member's use of social media to be "advertising." Advertising is defined as the direct or indirect publication or dissemination of any written or verbal statement, illustration, or depiction that is in, or calculated to induce sales in, interstate or foreign commerce.
"What!" you may exclaim. "But I'm just having a conversation with my customers." Maybe so, but the conversation is public, and therefore anyone can read or listen to what you've documented. Therefore it is considered advertising.
So what does this mean? It means that wineries are required to take the same precautions with social media as they do with traditional advertising to comply with TTB regulations. As TTB made clear in a 2013 Industry Circular, this entails:
1. Including winery name, city and state in a location where viewers are likely to find information about the brand/company, such as Facebook Fan Page profile or "about" section, Twitter profile section, YouTube profile page, etc. (Not required on each individual post or tweet)
- If material can be downloaded by users, then the winery must include this information some place on the material.
2. Avoiding use of certain prohibited content, including but not limited to:
- False, untrue, or misleading statements.
- Disparaging statements about a competitor's products.
- "Obscene or indecent" statements, designs, or representations.
- Representation of analyses, tests or guarantees that ("irrespective of falsity") may be likely to mislead consumers.
- Statements, designs, or representations that wine has intoxicating qualities.
- Certain health-related statements.
Which Social Media Channels are OK?
If you answered False to Question #2, then you are correct. The Wine Institute's Digital Marketing Guidelines require that any media used by wineries should have an audience comprised of at least 71.6% of the audience is of drinking age.
"What?" you may ask again, and then "Where do I find this 71.6% data?" The answer is to look for reliable statistics on audience data. Currently, the use of Facebook, Twitter, Instagram, Pinterest, and most wine apps meet the 71.6% requirement. However, social media sites such as Snapchat do not. Therefore, wineries need to regularly check the audience data on these sites to insure they are only giving and collecting information from those of legal drinking age.
Also keep in mind that even if you only place ads using social media that meets this 71.6% threshold, your ads should not contain content that "has particular appeal to persons below the legal drinking age." This includes the use of models or celebrities "who are or appear to be" underage.
Bloggers, Free Samples & Disparaging Statements
If you answered True to Question #3, then you are correct. It is permissible under Federal Trade Commission regulations for a winery to provide a wine blogger or other wine journalist/critic samples of wine for review. If the blogger chooses to write about your wine, he/she must divulge that is was a complimentary sample. If the blogger fails to do so, then both the winery and blogger may be in violation of FTC guidelines aimed at promoting transparency in sponsored advertisements and endorsements.
Furthermore, if a blogger praises your wine, but also includes disparaging remarks about a competitor's wine or contains other content prohibited by TTB, your decision to "retweet" or post the article to your social media site may be considered a violation. This is because, in TTB's eyes, you are disseminating, promoting, and in essence making this third party content your own advertisement.
Can You List a Retailer on Your Social Media Sites?
If you answered False to Question #4, then you are correct. It is NOT permissible for a winery to list the name of a SINGLE retailer on a social media site, but it is allowed to provide a list of retailers. This is because of a potential violation of California's "Tied House Laws" --- laws adopted to prevent suppliers from acts that may raise the risk of a supplier exerting undue influence over a retailer. Under California's tied house laws, a supplier cannot provide a thing of value to a retailer, with certain exceptions. In this hypothetical case, the supplier's social media post mentioning a retailer is a free advertisement for the retailer - it is a "thing of value" - and violates state tied house law unless there is an explicit exception that would allow for this action.
One exception to state tied house laws applies to advertising instructional events or winemaker dinners at retail premises. In this case, a winery may include the following in an advertisement for said event:
1) Name and address of retailer (name "inconspicuous" relative to rest of ad)
2) Name of wines featured at event
3) Time, date, location and "other information about" the event
4) BUT advertisement CANNOT include: retail price of wine; any other reference or laudatory statement about retailer; pictures or illustrations of retailer's premises
Note, however, that this is an exception under California law. If you are advertising for a retailer in another state, you will have to abide by that state's tied house laws.
So what if a customer writes a post asking where they can purchase your wine? In response to consumer inquiry, a winery can provide the name, addresses, telephone #, email address, and website URL, so long as it involves two or more retailers (not controlled by same entity). However, the winery cannot list the price of the wine. Also, keep in mind that listing more than one retailer on your website is fine, because the California ABC considers the customer's clicking on a page identified as "where to find our products" as a customer inquiry.
So Did You Pass the Quiz?
If you passed the quiz, congratulations. These are not easy regulations to stay up to date with, and they are evolving every year. If you didn't pass, don't despair, but do pay attention to what is happening in the social media realm and remember to follow basic advertising rules. Since the federal, and many state, governments view social media as advertising, then if you follow the same advertising guidelines you have in the past, you should be fine. And look on the bright side -there are many ways for your winery to adopt a compliant social media strategy to connect with your customers and market your wine.
About the Authors
John Trinidad is an Attorney with Dickenson, Peatman & Fogarty based in Napa, California. He may be contacted at firstname.lastname@example.org. Dr. Liz Thach, MW is a Professor of Wine Business & Management at Sonoma State University in the Wine Business Institute. She may be contacted at Liz@lizthach.com.