Wines & Vines

March 2015 Wines&Vines 19 wine industry news S acramento, Calif.—Some of the most important—if con- fusing—issues facing wine sellers are regulations about direct- to-consumer, social media and third- party sales channels, the subject of a Jan. 28 session moderated by at- torney John Trinidad at the Unified Wine & Grape Symposium. Traditionally, wine has been sold primarily through the three- tier system, but the Internet has introduced a number of new play- ers to this mix, including fulfill- ment, shipping, order processing, compliance and third-party mar- keters and providers. "The Inter- net allows consumers to bypass the three-tier system," noted Trini- dad, who practices wine law at Dickenson, Peatman & Fogarty in Napa, Calif. Likewise, the rise of social media has created issues: The TTB regards social media from a winery as advertising and bur- dens it with the same restrictions as print or broadcast ads. It can even evoke other laws, such as tied-house laws, which govern relations between wineries and resellers. Trinidad cited an example: A "fan" posts a link on a winery's Facebook page to an article prais- ing its newest Chardonnay, but the same article calls a competitor's Chardonnay "disappointing" and "flawed." TTB rules prohibit nega- tive comparisons in ads, so should the winery remove the link? In a well-publicized case in California, a winery was cited for mentioning a wine fair at a re- tailer, a violation of laws that prohibit suppliers from provid- i n g s o m e t h i n g o f v a l u e t o resellers. All of these issues create un- certainty for wineries—and some people are even exploiting these uncertainties, like a Chicago law- yer suing wineries over Illinois' unusual application of sales tax to shipping, or online retailers who may not be following the rules and could threaten licensed wineries. Theresa McCarthy, assistant administrator of headquarters op- erations for the U.S. Alcohol and Tobacco Tax and Trade Bureau, also addressed social media, reit- erating that the TTB considers it advertising. She suggested winer- ies review TTB Industry Circular 2013-1, which provides guidelines. She defined social media to include social network services such as Facebook, video-sharing sites like YouTube, blogs, micro- blogs like Twitter, mobile applica- tions, links and QR codes. The same mandatory informa- tion requirements apply as in other forms of advertising, such as identification and address of the source. (It doesn't have to be complete in each tweet; on the website is OK.) The same legibility requirements apply, and the same practices are prohibited. (These include health claims—even "glu- ten-free," since no tests for this are approved.) Considering these guidelines, wineries have to be very careful of not only their own posts, and those of their employees, but also third-party or user-generated c o n t e n t t h a t t h e y r e p o s t o r reTweet. The winery isn't respon- sible for what others say—unless they post it. —Paul Franson Wineries Cautioned About Internet 'Ads' at Unified A winery was cited for mentioning a wine fair at a retailer, a violation of laws that prohibit suppli- ers from providing something of value to resellers. www.alainfouquet.com alainfouquet@aol.com AlainFouquet_Jul06 5/17/06 11:01 AM Page 1 Call Toll Free: 800-POS-1290 We Pair Well Sell From Anywhere, Manage it Everywhere! Use your mobile device to process transactions, print and email receipts, while tracking sales and inventory.

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