Law Offices of John P. Connell, P.C.: Sellers and manufacturers of alcoholic beverages have seen a crack down in enforcement of advertising regulations recently. Throughout the nation, alcohol industry authorities have made the news in their efforts to ban certain alcoholic beverage advertising practices. While some of those advertising violations were upheld, others proved unsuccessful and merely provided more publicity to the alcoholic beverages behind them.
The federal Alcohol and Tobacco Tax and Trade Bureau (“TTB”) defines “advertisement” as any written or verbal statement, illustration, or depiction which is in, or calculated to induce sales in” commerce. This definition is stated to include “any written, printed, graphic, or other matter accompanying the container; markings on cases … broadcasts … or other media.” Yet which advertising practices are allowed and which restrictions on advertising activity are enforceable in this industry?
In The News
In September, the New Hampshire Liquor Commission (“New Hampshire Commission”) prohibited the sale of a certain brand of beer after finding its label in violation of a New Hampshire statute governing “advertising restrictions”. The statute in question provides that “[a]dvertising of liquor or beverages shall not contain … any reference to minors, pictorial or otherwise.” See New Hampshire Revised Statutes §179.31. Accordingly, the New Hampshire Commission denied approval of the label for Founders Brewery of Michigan’s Breakfast Stout, which features a picture of a young boy eating oatmeal. The beer is thus prohibited from being sold in any New Hampshire liquor store and must be sold on tap in New Hampshire bars and taverns.
In Virginia, similarly, the Alcohol Beverage Control Board (“Virginia ABC”) enforced a prohibition against alcoholic beverage advertisements in college newspapers. Pursuant to Virginia Administrative Code §5-20-40, which states that “[a]dvertisements of alcoholic beverages are not allowed in college student publications”, the Virginia ABC demanded that such advertisements be removed from several college newspapers such as Virginia Tech’s “Collegiate Times”. In response, these college newspapers brought an action for violation of their First Amendment rights to Free Speech. The Virginia ABC maintained that “the purpose of the [regulation] is to combat underage and abusive college drinking”, however, in September, the U.S. Court of Appeals for the 4th Circuit ultimately found the regulation unconstitutional and unenforceable, emphasizing that the majority of the readers of these college newspapers were over the age of 21. See Educational Media Co. v. Insley, No. 12-2183, page 5 (September 25, 2013).
In Massachusetts
Which advertising practices should manufacturers and sellers of alcoholic beverages in Massachusetts be wary of? The General Laws of Massachusetts authorize the Alcoholic Beverages Control Commission (“ABCC”) to make regulations for carrying out “all advertising of alcoholic beverages, except such advertising as appears in publications which are circulated to the liquor trade and not to the public.” See M.G.L. c. 138, §24. Yet the advertising regulations in Massachusetts seem to have much broader language than those found in the news, as described above.
Unlike in New Hampshire, for example, no law exists in Massachusetts that explicitly prohibits against advertisements that “reference minors”. The Regulations of the ABCC simply state that “[t]he use of any advertising matter of an improper or objectionable nature is prohibited” and that a licensee in the alcohol industry may not advertise or promote any “practices prohibited”. See 204 CMR 2.03 and 4.03(2). While broad and seemingly inclusive, historically these state regulations have been used to prevent sellers of alcoholic beverages from advertising certain activities like “happy hour”: a notorious “practice prohibited” in the Commonwealth.
CONTRIBUTED BY COURTNEY N. McGEE
© Law Offices of John P. Connell, P.C., 2013.