The wine industry scored a small win in Sacramento recently, bringing a handful of post-Prohibition laws up to date in the age of social media.
Signed by Gov. Brown in late September, Assembly Bill 2452, which takes effect in January, will let wineries freely use social media to promote certain events hosted by retailers that plan to feature their wines. The bill was the work of Assemblymember Cecilia Aguiar-Curry, state Sen. Bill Dodd and the Napa Valley Vintners trade group.
The existing rules, called “tied-house” laws, have long kept wineries and other suppliers from advertising events being held by retailers like restaurants and wine shops. The new bill amends several exceptions in the laws that previously allowed wineries to promote events like winemaker dinners or instructional tastings hosted by retailers, but also limited what a winery could include in its promotion.
Whereas previously a winery could promote such an event, for instance at a restaurant, it could not use a picture of the restaurant in its advertisement, and could not include an email address for the restaurant, or its web address.
“The rules around how suppliers could communicate about these events that they were authorized to have were really limited,” said Michelle Novi, associate director of industry relations at the Napa Valley Vintners. Novi managed the Vintners’ effort to bring the reforms into law.
“They’re still limited, don’t get me wrong,” Novi added. But, she noted, the new law now allows wineries to use pictures of the retailer premises in their posts. They can also now provide the retailers’ email and web addresses.
“Essentially what we’ve done is we’ve made it a little bit easier for wineries to communicate more authentically in the online space using images and information,” Novi said.
“Tied house” laws were designed to prevent unfair business practices between alcoholic beverage manufacturers and retailers, in part by limiting the influence the former can have on the latter. In this, the laws have blocked suppliers from giving retailers “anything of value,” including free advertising.
In the age of social media, those laws have extended to block wineries from posting about such events on any of the many platforms at hand.
For wineries that slip up, the cost can be steep. In 2014, a Sacramento-area winery landed in hot water with the California Department of Alcoholic Beverage Control after tweeting about an upcoming event at a Sacramento SaveMart. As reported in the Sacramento Bee, the winery was given a choice of a 10-day suspension of its liquor license that would have amounted to thousands of dollars of lost revenue, or probation for a year, during which time another slip up would result in that 10-day suspension.
Even with the new law, some restrictions are still in place. For one, a winery can make no “laudatory statements” about a retailer in a post. Videos also remain prohibited.
“But at least now when they make their Instagram posts or create their Facebook notification, they can put a picture of the venue in to show what the atmosphere is like and potentially entice them to attend,” Novi said.
“At the end of the day, ‘tied house’ is all about keeping suppliers and retailers separate,” she added. “And what we know is in 2018, the wine world is about relationships. So it’s challenge because you’re existing in this space that’s very visual and communicative and relationship-based, but you have all of these rules placed on you, limiting how you can express yourself.”
The Napa Valley Vintners will host a workshop in November to bring member wineries up to speed on the new law.