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By October 8, 2013 0 Comments Read More →

Wine Industry Still Grappling With TTB Regulations on Social Media

By Elizabeth Hans McCrone

New TTB Rules

When the Alcohol and Tobacco Tax and Trade Bureau (TTB) issued a circular last May that identified social media platforms as sources of advertising for the first time, many in the industry were expecting it.

“We weren’t surprised that the TTB was finally making some recommendations. After all, social media has been around for quite a while,” acknowledges Jordan Winery’s Communications Director Lisa Mattson. “The problem is, I don’t know if I really understand what it is we’re supposed to do.”

Six months after the communication was issued, Mattson and others like her are still trying to sort out what the recent ruling means and what impact it can have on their ability to continue to do business in the largely unregulated world of the Internet.

The TTB circular that was distributed May 13, 2013 advised:

… industry members and others on the Alcohol and Tobacco Tax and Trade Bureau’s (TTB) position that the advertising provisions of the Federal Alcohol Administration Act … apply to all advertisements … in any media, including social media.”

Social media is defined as outlets that include but are not limited to “ … social network services such as Facebook or MySpace, video sharing sites such as YouTube or Flickr, weblogs or “blogs,” forums or comment sections directly on websites, and applications (apps) for mobile devices.”  Network site fan pages are included in the definition.

In simple terms, the directive means that the mandatory statements and prohibited language governing print and broadcast ads also apply to any Internet outreach companies are doing to attract consumers. But those media are layered and interactive, unlike the one-dimensional world of traditional advertising, which is anything but simple.

“There wasn’t any clear direction or examples specific to the different platforms we work with,” Mattson notes. “If the goal is to get wineries to comply quickly, why not provide us with screen shots of five different pages and circle the places to post the required information? Then we could say, ‘OK, we’ve got it.’”

Commonsense Rules

Kristen Techel is an attorney with Strike & Techel, a San Francisco based firm that specializes in alcohol beverage law. She acknowledges that the TTB regulations are confusing to some of her clients, but suggests that the open-ended nature of the communication might be appropriate for the mercurial world of social media.

“Social media is always evolving. It’s changing faster than regulators can keep up with, so maybe it’s good not to have hard and fast rules,” Techel says. “Yes, it’s normal to feel some struggle or angst. But in this instance, I think the TTB is trying to give the industry permissive guidance, rather than threaten with enforcement. It’s their preemptive attempt to let the industry know that social media is a form of advertising just like any other.”

Techel calls the guidelines “pretty much common sense.” She advises her clients that anything they do online as a brand is considered advertising that must contain mandatory statements and avoid prohibited language.

In the case of wineries, mandatory statements include the winery’s name, city and state, as well as the wine statement of class or distinctive designation; i.e., “red wine.” Prohibited language governs statements like claiming the health benefits of drinking, such as “red wine can prevent heart disease.”

Techel understands that the whole industry is going through an adjustment period.

“Social media has always been good for getting messages out there fast,” she says. “I tell my clients now that everything’s an ad, they need to try to create a system to slow things down a little bit and make sure to have gatekeepers on board who know the rules.”

Enforcement

But, what if the rules get broken? What are the penalties if an alcohol beverage company knowingly or otherwise fails to adhere to the new TTB standards?

In an online article for Brewbound, a beer industry network site, social marketer Terry Lozoff expressed skepticism about the agency’s ability to actually enforce the new regulations when they were first released.

“The TTB can regulate advertising,” Lozoff stated.  “But can they really oversee millions of social media conversations?”

However, some attorneys have cautioned that TTB enforcement is indeed possible and violations can cost businesses up to tens of thousands of dollars.

Jay Behmke, a partner at Santa Rosa-based Carle, Mackie, Power & Ross noted in the Marin-based North Bay Business Journal that “What they’re saying now is all social media is advertising. That’s the fundamental decision and so … you need to know what the regulations are.”

Techel advises those in the industry not to overreact at this point in the process.

“I don’t think the TTB has a timer on this where they’re going to start putting people in jail,” she says. “They’re just putting people on notice, saying these are the guidelines, so get it right.”


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