Is your winery online? If you have an internet or social media presence, it’s important to know what kind of information you’re allowed to post, and what is prohibited. Any social media platform is considered, as a whole, an advertisement. What this means is that your entire Facebook page, website, Twitter page, YouTube channel, etc. is considered, for the TTB’s and ABC’s purposes, one advertisement. Each page on your website is not considered a separate advertisement. There is required information necessary for all advertisement of wine, and that information must appear on the social media somewhere, but does not have to appear on  each and every Facebook or Twitter post, (plus it would be tough to fit into 160 characters!). In order to stay in compliance, your winery should include all required information on the “About Us” (or similar) section of the social media:

  • Always include your winery name, city and state
  • Avoiding use of certain prohibited content, including false or misleading statements, disparaging statements about a competitor, “obscene or indecent” statements, or any statements about the intoxicating nature or any health benefits of wine.

For more specific dos and don’ts, see the TTB’s 2013 Industry Circular You should also remember that you, as the winery owner, are ultimately responsible for the social media statements made by your employees.

There are many hurdles an online retailer must overcome in order to be able to direct mail wine to your home. The Liquor Law Repeal and Enforcement Act, also referred to as the Webb-Kenyon Act, prohibits shipments of alcoholic beverages from one State into another State in violation of any law of the receiving State. Currently eight states absolutely prohibit shipping alcohol. They are Alabama, Delaware, Kentucky, Mississippi, Oklahoma, Pennsylvania, South Dakota, and Utah. The remaining states allow direct shipment of wine, although some impose limitations. Hawaii for instance limits the shipment of wine to six cases per family per year. Idaho limits direct shipment of wine to 24 cases per year.

If the receiving state allows shipment of wine there are additional individual state permit requirements that must be met. Each state has its own system for issuing permits for on-site and off-site wine shipments[i]. For example, Arizona does not require a permit for on-site shipments, but does require a permit for off-site shipments.  Ohio requires  a permit for both, but only wineries producing less than 250,000 gallons annually are allowed to ship to consumers.

The lack of uniformity in state law as well as the differing permit requirements make direct shipping of wine by a large online retailer quite complicated, so it may be a while before you can have a drone deliver you wine.

 

[i] On-site shipments are made on behalf of a customer who places the order while visiting the winery.  Off-site shipments are made on behalf of a customer who places the order via phone, internet or fax.

Predictably, if you own a beauty salon or a barber shop and want to serve alcohol then you currently need to apply for a license from the Department of Alcoholic Beverage Control (“ABC”). Assembly Bill 1322 is meant to change that. AB-1322 is a groundbreaking new law rolling through the state legislature this year that will have a major impact on alcohol distribution in the state of California.

Existing law makes it unlawful for any person other than an ABC licensee to sell, manufacture, or import alcoholic beverages in California. Interestingly, however, Section 23399.5 of the Business and Professions Code allows the serving of alcohol without a license in a limousine or as part of a hot air balloon ride service, provided there is no extra charge or fee for the alcoholic beverages.

AB-1322 would amend Section 23399.5 to allow the serving of beer or wine without a license as part of a beauty salon or barber shop service if the following requirements are met:

(1) There is no extra charge or fee for the beer or wine. For purposes of this paragraph, there is no extra charge or fee for the beer or wine if the fee charged for the beauty salon service or barber shop service is the same regardless of whether beer or wine is served.

(2) The license of the establishment providing the beauty salon service or barber shop service is in good standing with the State Board of Barbering and Cosmetology.

(3) No more than 12 ounces of beer or six ounces of wine by the glass is offered to a client.

(4) The beer or wine is provided only during business hours and in no case later than 10 p.m.

To date, AB-1322 passed unanimously in the House and is working its way through the Senate this year.

The intent behind AB-1322 is to legalize and regulate an already common business practice. According to David Miller, a spokesman for Assemblyman Tom Daly (D-Anaheim), who authored the bill, the service of alcohol at beauty salons and barber shops is “one of those areas of law which needs to be updated to reflect modern realities.”

However, there are critics that oppose the law. According to alcohol industry watch groups, the state’s ability to enforce AB-1322’s requirements at over 45,000 new venues serving alcohol (a 41% increase) remains unclear. And because these businesses are not required to register with the ABC, identifying non-compliant businesses will be far from easy.

In any event, AB-1322 is a bill to keep an eye on in 2016.

California wineries can breath a sigh of relief after the California Legislature addressed some of the critical shortcomings in California’s Paid Sick Leave Law only a few weeks before it was to go into effect.

The original Paid Sick Leave Law (codified in Labor Code Section 246) provided that employees shall accrue paid sick leave at a rate not less than one hour for every thirty hours worked. To determine the amount of pay, employers were required to divide the total pay within the last 90 days by the total hours worked.

One of the critical flaws of the original Paid Sick Leave Law – readily apparent to anyone in the hospitality business – is that many employees have fluctuating pay rates. For example, a server paid mostly from tips or a sales employee paid based on a draw and commission structure wouldn’t fit the rigid 90 day calculation.

Fortunately, Assembly Bill 304, recently signed by Governor Brown, amended the Paid Sick Leave Law to provide greater flexibility for employers.

First, the amended law permits employers to offer one hour of paid sick leave for every thirty hours worked or offer three paid sick leave days per year up front.

Second, and perhaps most crucial to the hospitality and wine industries, the amended law provides greater flexibility in calculating pay rates for paid sick leave. Specifically, Labor Code Section 246(k) was amended to provide that the amount of pay can be the same regular rate used for overtime pay or the same rate used for other forms of paid leave, such as vacation. As a result, employers have greater flexibility in calculating pay rates for paid sick leave for employees with fluctuating pay rates, such as servers and sales employees.

As tax day approaches for individuals in the U.S., it is always fun to think about the integral part that tax has played in forming our nation’s identity and its laws, particularly where alcohol has been involved.

The first source of income tax for our new Republic was an excise tax on distilled spirits levied in 1791. These taxes under the Washington presidency, as called for by Alexander Hamilton, paid off our nation’s debt in the Revolutionary War. However, the tax caused some uproar (I’m looking at you, Pennsylvania) and the Treasury Department found itself in the middle of the Whiskey Rebellion, an event that would come to stand as the first true test of our Federal government’s legitimacy. During the events of the Whiskey Rebellion, Washington sent militia troops into Pennsylvania with instructions to protect the judicial courts, assist the civil magistrates in executing the laws, and aid them in suppressing the disturbers of peace. These instructions would later be cited as one piece of historical evidence behind the Supreme Court’s ruling that military tribunals could not sentence civilians to prison in Hawaii in 1945. See Duncan v. Kahanamoku, 327 U.S. 304, 321 (1946). The events of the Whiskey Rebellion also contributed to the formation of political parties in the United States, a process already underway. The whiskey tax was repealed after Thomas Jefferson’s Republican Party, which opposed Hamilton’s Federalist Party, came to power in 1801.

Later, the U.S. Treasury collected taxes and issued stamps for alcohol and tobacco products in order to finance the Civil War. And during the early part of the twentieth century, the Treasury Department used agents like Eliot Ness to enforce the Eighteenth Amendment (while certain moon shiners who escaped the law began stock car racing). The Alcohol and Tobacco Tax and Trade Bureau (or “TTB”) is the bureau that collects excise taxes on alcohol, tobacco, firearms, and ammunition today. TTB was created in January of 2003, when the Bureau of Alcohol, Tobacco and Firearms was reorganized under the provisions of the Homeland Security Act of 2002. Although the levying and filing of taxes can seem mundane, like most things, when alcohol is mixed in, the results have been tumultuous in U.S. history.

Sources:

http://www.ttb.gov/about/history.shtml

Duncan v. Kahanamoku, 327 U.S. 304, 321 (1946).

http://www.mountvernon.org/research-collections/digital-encyclopedia/article/whiskey-rebellion/

http://www.ttb.gov/public_info/whisky_rebellion.shtml

In evaluating a new name or label for your wine, it is important to keep in mind that in the USPTO’s opinion, all alcoholic beverages are related. One of the main purposes of the Lanham Act (the U.S. Trademark Laws), is to protect a brand’s distinctiveness by prohibiting the use of other marks that are so similar they are likely to cause confusion among customers. In deciding whether there is a strong likelihood of confusion (which could lead to the refusal to register a proposed trademark or worse, liability for trademark infringement), one of the key factors that is considered is the relatedness of the products offered under the similar marks. Last month, the Trademark Trials and Appeals Board (“TTAB”) refused registration of the mark “Masquerade” for sparkling wine, finding that it was confusingly similar to the registered mark “Mascarade” for “mixed beverage containing alcohol and fruit juice.” (See In re 8 Vini, Inc., Serial No. 85857391 (January 16, 2015).) The TTAB has recently issued similar holdings in cases concerning proposed trademarks for beer that were similar to existing registered marks for wine as well. (See, e.g., The Bruery, LLC, Serial No. 85656671 (September 24, 2014).) In the latter, the TTAB noted that it believed it was not uncommon for craft/microbreweries to also produce wine in issuing its decision.

As these recent cases make clear, it is not enough that the marks are not identical (or that you are using a correct, as opposed to misspelled, word) if you want to avoid an adverse ruling from the TTAB. A trademark attorney can assist you in evaluating the likelihood that your proposed new name or label will face challenges, and in filing the appropriate disclaimers to avoid refusal, while still assuring protection of your brand.

Often, wine novices are told to select a wine based on the appeal of the design of a wine’s label. But, beyond font, color, and the brand (producer), what particular language should consumers look for when selecting a bottle?

Vintage Date: A vintage date on the label means 95% of the wine is made from grapes grown in that year.

Alcohol Content: Alcohol content is the percentage of alcohol by volume. By law, wines must have a minimum of 7% and a maximum of 14% alcohol. Ports must be between 18 to 20% alcohol and Sherries must be between 17 to 20% alcohol.

Reserve: “Reserve” has no legal meaning, so wineries may use this term to indicate a special bottling or limited production.

Champagne: Sparkling wines are produced worldwide, but laws usually reserve the term “Champagne” exclusively for sparkling wines from the Champagne region in France. The United States bans the use of the word “Champagne” from all new wines produced in the United States.

Estate Bottled or Grown, Produced, and Bottled By: This means that 100% of the wine came from grapes grown on land controlled by that winery. In one operation, the winery crushes and ferments the grapes, finishes, ages, processes, and bottles the wine.

Made and Bottled By: This means that a minimum of 10% of the wine in the bottle was fermented at the winery.

Holiday Cheer

September 26, 2014 | Leave a Comment

As the holidays approach, so too does the season for office parties. Oftentimes, alcohol will also be present at office parties, which can present some issues for companies who want to thank their employees (and their families) for another year of hard work, but also need to protect themselves from a liability standpoint. There are several options which can allow for cheerfully boozy yet safe celebration for all.

Have your event off-site. Using an offsite venue may reduce the likelihood of overconsumption as it will be the sites staff’s responsibility to monitor and handle those who may have had too much. Offsite venues will also be responsible for obtaining the proper licensing materials, taking that responsibility out of your hands as an employer.

Don’t host an Open Bar. Limit the amount of alcohol any guest may have by providing a limited number of drink tickets, or providing an open bar for a short period of time.

Make it optional. Making the party optional can protect employers from potential wage and overage claims. Also, this can serve to limit your business’s liability for the acts of any employee who may get too merry, by carving out that the event was not within the scope of employment. It may also be best to avoid making the event out to be an extension of your business, such as handing out bonuses or making speeches related to business success of the past year. Keeping it light and informal will not only potentially be more enjoyable for attendees, but it will maintain a sharp distinction between the event and the workplace, protecting against vicarious liability claims.

Provide safe rides home. Many employers are now offering cab vouchers or arranging for shuttles to and from office parties, to keep their employees and others on the road safe.

Holiday parties are a time to celebrate the year gone past and to show appreciation to employees. Alcohol can safely be a part of that celebration with some minor precautions. Cheers to the upcoming holidays.

Until recently, California enology and viticulture students under the age of 21 had to use their imagination when it came to wine and beer tasting. But earlier this summer, on July 28, Governor Jerry Brown signed into law what has become known as the “Sip and Spit” law, which allows students in accredited wine-making or beer-making courses to taste wine and beer, so long as they spit it out after tasting.

At UC Davis, one of the nation’s top viticulture and enology programs, wine production classes have gone without the ability to sample the beverage as it evolves. The university, and others with similar programs, have been forced to hold off on offering tasting classes until the student’s final semester, when he or she is likely to be at the legal drinking age of 21.

Now, students can experience firsthand the evolution of flavors in a wine as it goes from vine to table. Proponents of the law hope that by removing the legal obstacle which may deter some aspiring young vintners, the already robust and high volume levels of wine production in California will continue to grow, and to attract a younger, hipper audience.

With schools across the nation starting their fall sessions, the first potential crop of students to enjoy the limited exception the law provides is no doubt excited for the opportunity to explore this new aspect of their education.

In our last post, we considered the problems faced by Brandywine as they set about trying to get off the ground as a new alcohol producer in California. The licenses allowing them to do all that they wanted to do were challenging to obtain, because the California Department of Alcoholic Beverage Control (the ABC) was concerned that they were trying to get around certain restrictions on serving brandy in a distillery tasting room. However, even convincing the ABC that Brandywine would meet the requirements for serving brandy in their tasting room was not the end of the issue for the ABC. In addition to doing all the right things, Brandywine had to show that it was going to do them in the right places – an interesting challenge when the facility is not even fully designed yet.

To understand why this matters, we’ll have to return to the previous post, where we talked about the different types of licenses the ABC issues: some for serving, some for selling, some for producing, and others besides. A licensee needs to be able to show the ABC not only that they are doing all the things required by each license, but also that certain things are physically separated from one another: tasting and sales is one instance; storage is another. When applying for a new license, the ABC will want to be able to see that your facility is set up in such a way that, once operations start, you will be able to comply with these physical constraints.

When Brandywine submitted their application, their facility was little more than a gleam in an architect’s eye. The ABC recognized that it was a new business with a new building, but was not content with Brandywine’s assurances that they would be able to adapt the space once it was completed. But where the agency and the client saw an impasse, we found an opportunity. By facilitating communication between our client and the ABC, a process emerged allowing the ABC to make suggestions which would design regulatory compliance right into the plans for the new building.

Working with regulatory agencies can be an enormous challenge for some businesses. By recognizing and taking advantage of the opportunity to make one a partner rather than an adversary means goodwill now, and long-term savings throughout the life of the business.