Brewery Advertising in the Age of Social Media
Advertising is based on one thing, happiness. And you know what happiness is? Happiness is the smell of a new car. It’s freedom from fear. It’s a billboard on the side of the road that screams reassurance that whatever you are doing is okay. You are okay. - Don Draper, Mad Men.
If advertising is based on happiness, Ohio's craft breweries should have no need for it as craft beer makes everyone happy! The reality of course is that most Ohio craft breweries advertise in one form or another, even if they don't realize it. As with most things involving the manufacture and sale of alcoholic beverages in Ohio, nothing is as simple or straightforward as one might expect. To launch our 1st Quarter Topic of "Not So Obvious Operations and Legalities of Running a Brewery/Distillery" as part of our 2016 Blog Series, we tackle Brewery Advertising in the Age of Social Media.
Ohio has done a tremendous job over the past four years enacting new and amended legislation that contributed to the expansion of craft beer in our State. Many states still refuse to provide the benefits, economic and otherwise, Ohio has provided to its craft breweries. However, not all regulations pertaining to the manufacture and sale of alcoholic beverages in Ohio have changed with the times. The specific Ohio Administrative Code section pertaining to advertising was originally enacted in 1950. While it's been amended five times since then, it was last touched in 2004!
What has changed since 2004? To name a few, "The Facebook" was launched, "blog" was named Merriam-Webster's word of the year and Google went public in 2004. YouTube was created in 2005, Twitter launched in 2006 and the iPhone was introduced in 2007. (As an aside, if you would have told me Twitter was created before the iPhone, I would have called you a liar!) The advances in technology since 2004 create a potential cross-road between the manner in which breweries now advertise and how the Ohio Department of Liquor Control ("DOLC") may regulate those advertisements based upon outdated law.
Let's start with the basics. What is an advertisement? Well, both Ohio and the Federal government define it differently, but there are similarities. Taken together, an advertisement is generally a written or verbal statement, illustration or depiction, created to induce sales, through letters, pictures or other similar means, in promotional material, mail, television, radio or in any other media. It does not include labels or independent new releases. Read the definitions literally, one could argue anything a brewery puts on paper and/or disseminates to the public in any form would be an advertisement. For an Ohio brewery to put itself in the best position to avoid unintentionally violating the law, it may not be a bad way of looking at it. However, such a position could drastically restrict a brewery's use of technology and social media.
Now that we know what an advertisement is, we need to peel the layers back a little more to understand 1.) what a brewery is required to put in an advertisement, and 2.) what a brewery is not permitted to do with its advertisement. First, what's required. Under Federal regulations, all advertisements (except labels and independent news releases) must contain:
- the name and address (street name/number not required) of the brewer; and
- an obvious statement of the class to which the product belongs
These mandatory statements must be:
- in lettering and type size sufficient to be obvious and legible;
- clearly part of the advertisement and not separated in any manner from the remainder of the advertisement; and
- stated so as to be readily apparent to the persons viewing the advertisement.
In most forms of advertisement, a brewery has no issue including the mandatory statements in the form and manner required. Remember when I told you Ohio laws regarding brewery advertising are behind the times since they haven't been updated since 2004? Well, most of the Federal regulations pertaining to brewery advertising haven't been touched since 1984 - over 30 years! Gone are the days of print, television and radio as the only forms of advertising. Here to stay - electronic and social media. So how do these 10-30 year old laws apply to the operation of a brewery in Ohio?
Thankfully, the TTB provided some direction in May 2013 on the use of social media in the advertising of alcohol beverages. The TTB considers all types of social media to be subject to the laws adopted in 1984. To our knowledge, the DOLC has not provided similar guidance, but Ohio breweries should proceed as if the DOLC views social media the same way. Therefore, all brewery advertising in social media must contain the mandatory statements in the form and manner described above. According to the TTB, breweries should consider the following "best practices" when using social media.
- Facebook, LinkedIn, YouTube, Twitter and/or Instagram - mandatory statements should appear in the "profile" and/or "about" section of the home page.
- Brewery blogs discussing products or the industry in general - mandatory statements should appear on the home page.
Specific to video sharing sites (YouTube and now Twitter, Instagram and Periscope), the TTB suggests mandatory statements be included within the videos themselves if the video can be downloaded by viewers. In today's digital age, it is safe to assume all video placed on the internet or posted through social media can be downloaded or embedded into another website. If so, the Federal regulations can be interpreted to require mandatory statements in all videos a brewery shares on Twitter, Instagram and the like. How many Instagram videos have you watched from Ohio breweries showing their brewers at work? I've seen hundreds and any without the mandatory statements in the video itself, they may violate Federal regulations. The TTB does not require each tweet to include mandatory statements due to the 140 character limitation. However, if Twitter expands its character limit to 10,000 as reported, breweries would arguably be required to include mandatory statements with each tweet. You can start to see how outdated laws can potentially cause Ohio breweries headaches when using technology and social media.
Let's now turn to what an advertisement can't be. Both Ohio and the TTB do not allow advertisements which are false, untrue, deceptive or likely to mislead a consumer. An advertisement cannot disparage a competitor's product, contain obscene or indecent material, encourage the excessive use of alcohol or portray intoxication. You may have read an article about Founders having to remove the baby from its popular Breakfast Stout label from its products in Michigan. Michigan liquor control rules state "an advertisement or label affixed to a container, covering, carton, or case of containers of alcoholic liquor shall not depict or make reference in any manner to minors." Similarly, Ohio doesn't allow any advertisement to "represent, portray, or make any reference to children." (As an aside, Michigan later allowed the baby label to return earlier this year). Ohio law even prohibits the representation, portrayal and reference to Santa Claus in advertisements! Note the distinction between Ohio and Michigan regarding reference to children. Michigan doesn't allow it on labels. Ohio doesn't allow it in advertisements, which do not include labels. Label approval is of course subject to TTB discretion.
Ohio also has a default prohibition against breweries telling the public where their product can be purchased. Specifically, Ohio Administrative Code 4301:1-1-44(F) states no brewery "shall state in any way or give the name or address of any permit holder where alcoholic beverages handled by such manufacturer (brewery), . . . may be obtained or purchased." Let that sink in for a second. Read literally, a brewery cannot tell consumers or publish a list of where its products can be purchased. This however is the default rule. Ohio permits a brewery to provide such information only when a brewery meets ALL of the following requirements:
- Brewery is responding to a direct inquiry from a consumer received by telephone, mail, an electronic inquiry, or in person.
- Brewery provides the names of two or more unaffiliated retail permit holders.
- Brewery provides written text only, graphics or images being prohibited.
- Brewery lists only the following information about the unaffiliated retail permits holders: a) the name of the retail permit holder, b) the permit premises address, c) web site address, d) email address, and e) telephone number.
- Brewery provides no other information about the retail permit holders, including but not limited to, product prices, description of retail permit holder's services and links to retail permit holder's web site.
- Brewery provides the information on each retail permit holder in identical format.
- Brewery pays all costs for the production of the provision of the information and my not accept compensation or any other thing of value for the provision of the information.
Now consider the above requirements and apply them to the following sample tweets based upon real tweets by Ohio breweries and make your own judgment on whether they are in line with OAC 4301:1-1-44(F).
An argument can be made that any tweet identifying a retail permit location where a brewery's beer may be found violates OAC 4301:1-1-44(F), UNLESS the tweet is in response to a consumer's inquiry via twitter. What about a "beer finder" map placed on a brewery's webpage, does that violate OAC 4301:1-1-44(F)? Perhaps, as one could argue the beer finder map was not provided in response to an inquiry rather, it was affirmatively provided to the public at large. If even legal, the beer finder map shouldn't include links to retail permit holders' websites.
In addition to the above, Ohio Revised Code 4301.24(A) prohibits a brewery from aiding or assisting a wholesale or retail permit holder "by gift or loan of any money or property of any description or other valuable thing, or by giving premiums or rebates." Is a tweet, a beer finder map or other form of social media from a brewery similar to the examples above providing a retail permit holder an "other valuable thing?" At the end of the day, it comes down to how the DOLC decides to interpret the law. If the DOLC decides to interpret RC 4301.24(A) similar to California, Ohio breweries may need to seriously reconsider how they use social media.
In 2014, the California's Department of Alcoholic Beverage Control ("ABC") determined a winery who retweeted the following post from the Sacramento Convention & Visitors Bureau violated California law.
The similarities to the winery's tweet and the Ohio examples set forth above are undeniable. Like Ohio's RC 4301.24(A), California's Business and Professions Code 25502(a)(2) stated no winery shall "furnish, give, or lend any money or other thing of value, directly or indirectly, to . . . any person engaged in operating, owning, or maintaining any off-sale licensed premises." By simply identifying a retailer in a tweet, the winery violated California law. The penalty? 10-day suspension of their license or admit to the violation and be placed on a one-year probation. The winery accepted the one-year probation, but will suffer a 10-day suspension if any further violations occur. How the ABC heard about the tweets - a large-scale multbillion-dollar wine producer made a complaint.
If the DOLC interprets RC 4301.24(A) similar to California's ABC and determines an Ohio brewery's tweet violates the law, the DOLC can revoke or suspend their permit, or in lieu of a suspension, issue an order allowing the brewery to elect to pay a fine for each day of the suspension as follows:
- If no violation in the past 2 years, $100-200 fine per day of suspension
- If one violation in the past 2 years, $200-400 fine per day of suspension
- If two violations in the past 2 years, $300-no cap fine per day of suspension
- If more than two violations in the past 2 years, $500-no cap fine per day of suspension (DOLC and not the brewery elects whether a fine will be permitted in lieu of suspension)
California eventually enacted new law giving more social media freedom to alcohol producers, but Ohio's law remains. This example is a sobering reality of how Ohio's antiquated advertising laws could potentially cause Ohio breweries to unknowingly and unwittingly violate the law through their use of social media.
Ohio is a great place to start and operate a brewery and many advantages are available to allow craft beer to continue its growth in our State. However, the larger the industry becomes, the more close the DOLC (and possibly the macro breweries) is likely to pay attention to, and scrutinize our breweries and their use of social media. A brewery should consider its use of social media as advertising, regulated by the TTB and Ohio. Education, knowledge and training of those responsible for social media accounts is essential. Social media has been, and will continue to be, an important piece to the continued success and growth of craft breweries and ignorance of the law will be no defense in the face of an alleged violation.
Contact OBC with any questions.