Marketing Practices Tabbled Booklet

texas alcoholic beverage commission
marketing Practices
Marketing Practices
512-206-3411
[email protected]
Disclaimer:
This guide is for informational purposes only and reflects the agency’s attempt to address the most commonly
requested information. The information contained in this guide was current as of March 1, 2014 but is subject to
change at any time.
The guide was prepared by the TABC staff as a starting point for research by industry members. Staff has found that
the answer to a question is frequently affected by the individual factual circumstances that provide the context for
the question and therefore it is often impossible to provide a definitive answer that applies in all situations. Industry
members should not rely on or make business decisions based solely on the statements in this guide.
The guide should not be considered as legally binding either the TABC or anyone subject to TABC’s regulation.
Industry members are bound by and are responsible for adhering to the Texas Alcoholic Beverage Code and the Texas
Alcoholic Beverage Commission Administrative Rules, both of which may be found on the TABC website at: http://
www.tabc.state.tx.us/laws/index.asp.
The statements in this guide have not been approved by the Commissioners and do not constitute statements
of general applicability that implement, interpret or prescribe law or policy. Nor do the statements in this guide
constitute statements of general applicability that describe the procedure or practice requirements of TABC.
Contributors
Contributors:
TEXAS ALCOHOLIC BEVERAGE COMMISSION
MARKETING PRACTICES
Thomas Graham, Texas Alcoholic Beverage Commission-Tax/Marketing Practices, Director
Mindy Carroll, Texas Alcoholic Beverage Commission-Education/Prevention, Director
Design:
Jacki Jackson, Texas Alcoholic Beverage Commission-Education/Prevention, Education Coordinator
Merideth Munoz, Texas Alcoholic Beverage Commission-Marketing Practices, Supervisor
To order additional copies:
Texas Alcoholic Beverage Commission
Marketing Practices
P.O. Box 13127
Austin, Texas 78711-3127
(512) 206-3411
[email protected]
www.2young2drink.com
www.legal2drink.org
©2013
This publication is in the public domain. Authorization to reproduce it in whole or in part is granted. While permission to
reprint publication is not necessary, the citation should be:
[2013]Texas Alcoholic Beverage Commission Marketing Practices
A Publication by:
The Texas Alcoholic Beverage Commission
Table of Contents
TABC CONTACT INFORMATION
TABLE OF CONTENTS
Websites:
Facebook:
Twitter:
You Tube:
Three -Tier System........................................................................................................................ 3
License and Permit Types.............................................................................................................. 4
Product Marketing and Promotion/Signage.................................................................................. 5
To request speakers or information about Marketing Practices, contact the Tax/Marketing Practices
Division.
Phone:
E-mail:
Fax:
Signage......................................................................................................................................... 6
Consignment Sale........................................................................................................................
7
Point of Sale/Advertising Specialties............................................................................................ 9
Point of Sale/Promotional Items.................................................................................................. 10
Lubbock
(817) 652-5912
Coastal Bend Region
District Three Office:
Houston
(713) 426-7900
San Antonio
To sign up for Marketing Practice
Advisories:
Go to www.tabc.state.tx.us/
publications/join_our_email_list.asp
Excise Tax:
[email protected]
Phone number: 512-206-3410
(512) 451-0231
(210) 731-1720
Label Approval:
[email protected]
Phone number: 512-206-3410
District Five Office:
Complaints
E-mail
Mail:
Go to www.tabc.state.
tx.us/marketing_practices/
bulletinsonline/bulletins
Marketing Practices:
[email protected].
tx.us
Phone number: 512-206-3411
Border Region
District Four Office:
Austin
FAQs............................................................................................................................................ 14
(806) 793-3221
District Two Office:
On-Premise Promotions Happy Hour............................................................................................ 12
Temporary Permits/ Special Events............................................................................................... 13
512-206-3411
[email protected]
512-206-3349
For additional Information:
North Texas Region
District One Office:
Arlington
Inducements................................................................................................................................. 11
www.tabc.state.tx.us (main)
www.2young2drink.com
www.legal2drink.org
www.facebook.com/txabc
www.twitter.com/texasabc
www.youtube.com/tabcchannel
[email protected]
Texas Alcoholic Beverage Commission
Enforcement Division
P.O. Box 13127
Austin, TX 78711
www.tabc.state.tx.us/mobileapps/
Fax:
512-206-3449
In Person:
At your local TABC office.
To find your local office, go to: www.tabc.state.tx.us/contact_us/local_field_office.asp
2
TABC Contact
Information
TABC Contact Information............................................................................................................. 2
THREE-TIER SYSTEM
3 Tier System
The TABC oversees the three-tier system and the licensing of each member of the three-tier system in Texas.
LICENSE AND PERMIT TYPES
(Chapters refer to the Texas Alcoholic Beverage Code)
Liquor Permits
Wholesaler’s Permit (W) Chapter 19
Agent’s Permit (A) Chapter 35
General Class B Wholesaler’s Permit (X) Chapter 20
distributors (beer). The second tier buys alcohol from the manufacturers and sells the alcoholic beverage to
Airline Beverage Permit (AB) Chapter 34
Local Class B Wholesaler’s Permit (LX) Chapter 21
retailers (third tier). The retailer sells the alcoholic beverage to the ultimate consumer.
Beverage Cartage Permit (PE) Chapter 44
Wine and Beer Retailer’s Permit Excursion Boat (V) Chapter 25
Bonded Warehouse Permit (J) Chapter 46
Wine and Beer Retailer’s Permit Railway Car (Y) Chapter 25
Bonded Warehouse Permit Dry Area (JD) Chapter 46
Wine Bottler’s Permit (Z) Chapter 18
Brewer’s Permit (B) Chapter 12
Wine Permit (G) Chapter 16
Brewer’s Self Distribution Permit (DA) Chapter 12
Winery Festival Permit (GF) Chapter 17
Carrier’s Permit (C) Chapter 41
Winery Storage Permit (GS) Chapter 45
Manufacturers produce and sell alcohol to those in the second tier-wholesalers (ale, wine or liquor) and
Caterer’s Permit (CB) Chapter 31
Tier 1:
Manufacturers
(Breweries,
Wineries, Distillers)
Daily Temporary Mixed Beverage Permit (TB) Chapter 30
Daily Temporary Private Club Registration Permit (TN) Chapter 33
Direct Shipper’s Permit (DS) Chapter 54
Distiller’s Agent’s Permit (DK) Chapter 36
Distiller’s & Rectifier’s Permit Chapter 14
Tier 2:
Distributors (Beer)
Wholesalers (Wine, Distilled Spirits & Ale)
Tier 3:
Retailers
(Bars, Restaurants, Clubs, Package Stores,
Off-Premise Beer/Wine Retailers, Private
Clubs, Brewpubs)
Beer Licenses
Food and Beverage Certificate (FB) Chapter 25
Special Three-day Wine and Beer Permit (SB) Chapter 27
Brewpub License (BP) Chapter 74
Agent’s Beer License (BK) Chapter 73
Forwarding Center Authority (FC) Administrative Rule 35.6
Branch Distributor’s License (BC) Chapter 66
Industrial Permit (I) Chapter 38
General Distributor’s License (BB) Chapter 64
Local Cartage Permit (E) Chapter 43
Importer’s License (BI) Chapter 67
Local Cartage Transfer Permit (ET) Chapter 42
Local Distributer’s Permit (LP) Chapter 23
Importer’s Carrier’s License (BJ) Chapter 68
Local Distributor’s License (BD) Chapter 65
Local Industrial Alcohol Manufacturer’s Permit (LI) Chapter 47
Manufacturer’s License (BA) Chapter 62
Manufacturer’s Agent’s Permit (T) Chapter 36
Manufacturer’s Self Distribution License (DB) Chapter 62
Market Research Packager’s Permit (MR) Chapter 49
Manufacturer’s Warehouse Licenses (MW) Chapter 62
Minibar Permit (MI) Chapter 51
Nonresident Manufacturer’s License (BS) Chapter 63
Mixed Beverage Permit (MB) Chapter 28
Permits and licenses for each tier are prohibited from having financial ties with those in other tiers. This process
creates an appropriate balance between control and access of alcohol throughout the state.
Notes/Questions _______________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
Mixed Beverage Permit w/ Food and Beverage (RM) Chapter 28
Food and Beverage Certificate (FB) Chapter 25
Mixed Beverage Late Hours (LB) Chapter 29
Brewpub License (BP) Chapter 74
Nonresident Brewer’s Permit (U) Chapter 13
Beer Retailer’s Off Premise License (BF) Chapter 71
Nonresident Seller’s Permit (S) Chapter 37
Beer Retailer’s On Premise License (BE) Chapter 69
Package Store Permit (P) Chapter 22
Retail Dealer’s On Premise Late Hours License (BL) Chapter 70
Package Store Tasting Permit (PS) Chapter 52
Storage License (SL) Chapter 75
Wine Only Package Store (Q) Chapter 24
Temporary License (BH) Chapter 72
Passenger Train Beverage Permit (PT) Chapter 48
Temporary Charitable Auction Permit (CA) Chapter 53
Private Carrier’s Permit (O) Chapter 42
Temporary Wind and Beer Retailer’s Permit ( BH/HP) Chapter 27
Private Club Exemption Certificate Permit (NE) Chapter 32
Wine and Beer Retailer’s Permit (BG) Chapter 25
Private Club Registration Permit (N) Chapter 32
Wine and Beer Retailer’s Off Premise Permit (BQ) Chapter 26
Private Club Beer and Wine Permit (NB) Chapter 32
Private Club Late Hours Permit (NL) Chapter 33
Private Storage Permit (L) Chapter 45
Promotional Permit (PR) Chapter 50
Public Storage Permit (k) Chapter 45
3
4
License & Permit
types
Agent’s Manufacturing Warehousing Permit (AW) Chapter 55
PRODUCT MARKETING AND
PROMOTION
Product
marketing
SIGNAGE
and Promtion
The Marketing Practices Section of Texas Alcoholic Beverage Commission aids in the enforcement of laws
regulating the marketing of alcoholic beverage products and marketing relationships among alcoholic beverage
retailers, wholesalers, and manufacturers. Section 5.31 of the Texas Alcoholic Beverage Code charges the TABC
with ensuring fair competition within the alcoholic beverage industry. In order to assist the TABC in this task the
Code places restrictions on product marketing and promotions of upper-tier members.
The TABC regulates various types of promotions and product marketing methods including but not limited to:
• Signage provided to retailers by other tier members;
SIGNAGE
Manufacturers, distributors and wholesalers can promote their products at the retailer level.
Section §102.01 of the Texas Alcoholic Beverage Code regulates the relationship between
retailers and other industry members for advertising purposes.
Manufacturers, distributors and wholesalers are prohibited from improving or adding value
to the retailer location. This can include, but is not limited to:
• Painting;
• Improving the retail space or premises;
• Remodeling the retail space or premises.
• Displays and promotional point of sale items provided to
retailers by other tier members;
Some examples of violations could include:
• Retailer on-premise promotions;
• Inducements to retailers;
• Product placement at the retail level;
Custom signage provided for internal or external use;
Providing signage to the retailer advertising that retailer’s brand;
Building permanent structures;
Supplying materials that add value to the premises.
Signage
•
•
•
•
• Media and in print advertising;
• Point of sale materials and promotional items;
• Co-packing advertising specialties with alcoholic
beverages;
• Novelty items;
• Pricing promotions such as sales, coupons and rebates;
• Donation of alcohol to charities and unlicensed entities.
Two of the signs below, A and B are appropriate advertising because they are not retailer specific, nor do they
improve or remodel the premises. The signs are readily removable from the premises as well. The other sign, C, is
not appropriate advertising because it is considered an improvement or remodel. The sign is not easily removable
and includes custom neon lighting and expensive metal background which provides an improvement to the
premises.
SIGNAGE
The primary purpose of signage is to advertise a brand, product or price. TABC does regulate signage provided by
an upper tier member. If a sign is provided to the retailer by a manufacturer, distributor or wholesaler, the sign
may not contain the:
Retailer’s Name;
Retailer’s Logo; or
Retailer’s Trademark.
A
B
Notes/Questions _____________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
5
C
6
Consignment Sale
Alcoholic beverage product damage a.k.a. “Chips and Flats.”
Consignment Sale
Illegal consignment Sale - YES or NO
1. A retailer fails to notice damages that clearly occurred at the time of delivery and later notified the wholesaler who
agrees to replace it.
2. A retailer damages a product and the wholesaler accepts it back and exchanges for another product.
3. The retailer sells a product that the consumer returned because it was “bad.” The retailer and wholesaler agree that
it was not appropriate for consumption at the time of delivery and it is replaced.
4. The consumer returns a product to the retailer because she changed her mind or did not like the taste.
5. Wholesaler caused the damage when rotating or stocking the product and replaced it.
Consignment Sale
6. The wholesaler replaces out of date product by purchasing it at full retail price plus tax.
7. The wholesaler guarantees customer satisfaction and the customer returns the product to the retailer. The
wholesaler buys it back from the retailer (open or not) for the wholesale price.
8. The wholesaler gives the product to retailer with the understanding the retailer will pay the wholesaler once the
product has been sold to a consumer.
Reports of consignment sale violations will be investigated by the TABC. If a retailer is found to be in violation, the TABC
may suspend their permit or charge a civil penalty.
Chips – chipped bottle
Flats – flat beer
Chips and Flats Section 104.05 Alcoholic Beverage Code
Texas consignment laws prohibit upper tier members from replacing alcoholic beverage products sold to retailers
if the product was damaged after the retailer took possession of the product. This applies to ale, malt liquor, beer,
distilled spirits and wine.
7
1. NO 2. YES 3. NO 4. NO 5. NO 6. NO 7. YES 8. YES 9. YES
TABC will not take action against parties if:
• Credit or exchanges were provided for product shipments that contained concealed damage upon
delivery or that were determined to be unfit for consumption upon delivery.
• Alcohol was determined to be unfit for consumption and returned to the retailer by the ultimate
consumer.
• A refund or credit was provided for a delivery that was inconsistent with the order originally placed
with the retailer - within 48 hours of delivery to a retailer.
• The licensed distributor at the time of delivery and with the permission of the retailer withdrew a
quantity of beer, ale or malt liquor that was: in its original packaging, replaced with the same product,
withdrawn before the date considered by manufacturer to be inappropriate for sale to consumer and
did not exceed 25 cases of 24 twelve-ounce containers.
8
Consignment Sale
9. The wholesaler buys back product the retailer did not sell.
Point of Sale
Point of Sale
Advertising Specialties
Promotional Items
Advertising specialties are designed to promote a specific product or brand of wine, ale or distilled spirit. These
items may have a utilitarian function in addition to product promotion.
The total cost for an advertising specialty may not exceed $101 per brand per
calendar year. A group of wholesalers may not “pool” their limits together
to create an approved advertising specialty that exceeds $101. Advertising
specialties must also be provided to the retailer at no charge. The cooler to the
left is legal since it cost under $101 and was provided to the retailer at no cost and
has a practical purpose beyond just advertising the product.
Point of Sale
Upper-Tier Promotions at a Retailer’s Premises
Upper-tier members may purchase beer, wine, ale and distilled spirits for consumers
for consumption on a retailer’s licensed premises. The upper-tier member may not
be at a site location for more than three hours. The promotion to the left was not
an approved event by TABC because the bartender was provided by the upper-tier
member, as well as the equipment where the event lasted more than three hours.
Promotional items are designed to promote a specific product or brand of beer. The items are to be used by
consumers on or off the retail location. Novelty gifts that fall into the promotional category for TABC are specific
to the beer industry.
Promotional Item vs. Equipment
Promotional items are to be used by the consumer, and must include the manufacturer’s
logo, brand or product name. Distributors and members of the manufacturing tier
authorized to sell alcoholic beverages to retailer may sell promotional items to retailers.
The item must be sold to the retailer at not less than the manufacturer’s published
wholesale price.
If an item is primarily used by the retailer, it is considered equipment even if it is
promoting a brand or product. Equipment cannot be sold or given to a retailer by the
manufacturer, distributor or wholesaler. This includes things like shelves, refrigerators
and stoves. The shelf system to the left is advertising a brand, but is used as a display by the retailer. Therefore,
it is only legal if it is loaned to the retailer and used as a part of a temporary display. It cannot remain in the
establishment longer than the promotional campaign, and the rack cannot be a permanent fixture or sold to the
retailer.
Co-Packs
Point of Sale
Co-packs of alcohol are designed by upper tier members and intended for resale to the ultimate consumer. Copacks include an alcoholic beverage and an additional item, i.e. glassware, decanters, shot glasses, bottle openers,
etc. The additional item cannot have value or benefit the retailer other than having the potential to attract
purchases and promote sales. Upper-tier liquor producers, importers and wholesalers may co-package items. For
beer, only beer manufacturers can co-package itme, not beer distributors. Retailers may not:
Novelty Items
• Sell the co-pack for more then they would sell the individual bottle.
• Break apart the co-packs and sell the additional item separately.
9
Upper-tier members may furnish novelty items to consumers that have a utilitarian purpose or practical use
in addition to being advertisement for the brand or product. Beer branded novelty items cannot exceed $1.00
wholesale cost while liquor branded novelty items must be of a limited value.
10
Inducements
“Tied House” provisions, in the Texas Alcoholic Beverage
Code, prohibit overlapping ownership or other prohibited
relationships between alcoholic beverage permittees of
different levels. For example, a beer manufacturer cannot
also own a retail establishment. The same provisions
prohibit upper-tier members from providing things of
value to retailer permittees to induce them to sell their
brands over the brands of another manufacturer. In other
words, upper-tier industry members cannot supply items
of value such as product displays, point of sale advertising
materials, equipment and other supplies in exchange for
favorable product shelf or display space.
On-Premise Promotions
Happy hour
Texas has a comprehensive set of regulations prohibiting on-premise promotions that encourage a person to
consume alcohol to excess. The TABC Field Operations Division proactively enforces these laws. Compliance with
these regulations reduces alcohol-related harm throughout the state.
The following are some examples of on-premise promotions or happy hour laws enforced by the Texas Alcoholic
Beverage Commission:
Industry members may provide certain promotional support items such as temporary product displays,
promotional items and advertising specialties provided these items are given or sold in accordance with
state law. These items cannot be furnished to the retailer in a manner that would induce the retailer
to give favorable treatment to the furnishing manufacturer’s product or exclude the sale of another
manufacturer’s products.
Paying for preferential
product display and shelf
•
•
•
•
•
•
•
•
•
“Two for one” or other discounted multiple alcoholic beverage sales.
Increasing the volume of alcohol in a drink without increasing the price.
Serving more than one free alcoholic beverage to any identifiable segment of the population.
Fixed pricing or “all you can drink” sales.
Selling alcoholic beverages at a reduced price for a fixed “buy in” price.
Selling alcoholic beverages at a price contingent on the amount consumed by the individual.
Reduced drink prices after 11 p.m.
Selling more than two drinks to a single consumer at a time.
Imposing an entry fee for the purpose of recovering financial losses incurred because of reduced
drink prices.
• Drinking contest or awarding alcoholic beverages as prizes.
• Any practice that is reasonably calculated to induce consumers to drink to excess, or that would
impair the ability of the licensee to monitor or control the consumption of alcohol by their
customers.
Serving to an antoxicated person can result in suspensions or fines.
space is known as “slotting
fees.” This is an illegal
Inducements
practice.
On-Premise
Promotions and
Happy Hour
11
12
Temporary Permits/Special Events
DAILY TEMPORARY MIXED BEVERAGE PERMIT (TB)- Chapter 30 of the Texas Alcoholic Beverage Code authorizes
the sale of mixed beverages for consumption on the permises for which the permit is issued for and may
be issued to the holder of a Mixed Beverage Permit for a picnic, celebration or similar event. The permit
may also be issued for a political party or political association supporting a candidate for public office or a
proposed amendment to the Texas Constitution or other ballot measure, to an organization formed for the
specific charitable or civic purpose, to a fraternal organization in existence for over five years with a regular
membership, or to a religious organization. If issued to an organization, the organization may not hold more
than 10 temporary permits in a calendar year.
DAILY TEMPORARY PRIVATE CLUB PERMIT (TN)- Chapter 33 of the Texas Alcoholic
Beverage Code authorizes the service of alcoholic beverages for consumption on
the premises for which the permit is issued and may be issued only to the holder
of a Private Club Registration Permit, Private Club Wine and Beer Permit, Private
Club Exemption Certificate Permit or to a Nonprofit Corporation for a location in
the same county where the permit or the corporation is located. It may only be
issued for a picnic, celebration, or similar event sponsored by a charitable or civic
organization or fraternal organization with the regular membership in existence
more than five years, a religious organization, or for a fundraising event for
nonprofit coorporation. No more than two daily temporary private club permits
may be issued to the private club permittee in each calendar year for events
sponsored by the same party, association, or organization. A nonprofit event may not last longer than eight
hours. It may only be issued in the county where the nonprofit corporation is located.
TEMPORARY WINE AND BEER RETAILER’S PERMIT (BH OR HP)- Chapter 27 of the The Alcoholic Beverage Code
Temporary Permits
and Special Events
authorizes the holder of a temporary wine and beer retailer’s permit to sell to the ultimate consumer for
consumption on or off premises beer, ale, and wine containing alcohol in excess of one half of one percent
(1/2 of 1%) by volume not more than 14 percent or 17 percent by volume (depending on type of local option
election). A temporary wine and beer permit may be issued for a period not to exceed four days and shall
be issued only for a picnic, celebration or similar event. The permit may be issued only to a Wine and Beer
Retailer’s Permit or Mixed Beverage Permit or to a nonprofit historic preservation organization that has been
in existence for at least 30 years. (HP code is used if permit is issued to a nonprofit historic preservation
organization.)
SPECIAL THREE-DAY WINE AND BEER PERMIT (SB)- Chapter 27 of the The Alcoholic Beverage Code authorizes
the holder to sell to the ultimate consumer for the on-premises consumption of wine, beer, and ale containing
alcohol in excess of one-half of one percent (1/2 of 1%) by
volume but not more than 14 percent or 17 percent (depending
on type of local option election) by volume. A Special Three-Day
Wine and Beer Permit may be issued to a nonprofit charitable,
civic, or religious organization for the temporary serving of wine
and beer at a picnic, celebration, or similar event sponsored by
that organization.
FAQs
QUESTION: Can banners be given to retailers with the trade name of the retailer on it? Can a retailer purchase
signs from a distributor and place the retailer’s logo on the sign? ANSWER: As stated in Rule 45.113(d)(3): “(d)
Signs provided to retailers…(3) A sign furnished by a distributor or authorized member of the manufacturing
tier may not bear the name, logo or trademark of a specific retailer.” A retailer may not have their trade name
on a sign (or banner) furnished by a distributor or manufacturer and may not place their name on a sign
provided by a distributor or manufacturer. Signs which are unique and cannot be used by any other retailer are
generally in violation of this rule.
QUESTION: Can signs that are made by a distributor and given to retailers contain specific prices that may be
unique to that retailer? ANSWER: Signs which are unique and cannot be used by any other retailer are generally
in violation of this rule; however, a specific situation may be examined to determine if the sign is in conflict with
the rule.
QUESTION: If a beer distributor gives a gift (such as a picnic chair or barbecue pit) to a civic organization, can
the organization then auction off the item at a live auction to raise funds for their organization? ANSWER:
TABC rule 45.113(f) supported by 109.58 of the Code allows an upper tier member to make donations “of any
kind” to a bona fide charitable organization that does not possess a TABC license or permit. Further, nothing
shall preclude the organization from auctioning off or selling the non-alcoholic beverage items. Considering the
items will be auctioned off, and the items are not intended for the purpose of signage during the event, nothing
shall preclude the non-alcoholic items from being brand identified. If there will be no alcoholic beverages or
alcohol advertising at this event, nothing shall preclude the charity from holding this function in a dry area.
QUESTION: What is allowable on outdoor signage at a temporary licensed premise? ANSWER: Advertising
by members of the alcoholic beverage industry is permitted at charitable and civic events to indicate the
participation or sponsorship of the event. However, all proceeds from sponsorships must go directly to a nonlicensed charity or civic group and cannot be given to a TABC-licensed retailer. All signs or advertising medium
should be temporary in nature and may be within 200 feet of a retail establishment.
QUESTION: Can a bar have a $2 vodka well drink from opening until 2:00a.m.? ANSWER: TABC Rule 45.103
requires that “happy hour” prices end at 11:00 p.m. Nothing would preclude a retailer from offering a drink
special from opening to closing time; however, if such practice induces a consumer to drink to excess or causes
the retailer to not be able to monitor or control consumption by consumers, the retailer will be liable for
engaging in a practice to induce a consumer to drink to excess. 16 TAC 45.103 (c)(11).
QUESTION: Can a bar or restaurant mail drink coupons to customers? For example, “Bring this postcard in for
two complimentary drinks”? ANSWER: No, the holder of a manufacturing, wholesale, or retail level license
or permit may not give any rebate or coupon redeemable by the public for the purchase of or for a discount
on the purchase of any alcoholic beverage. A retailer may give one complimentary beverage to an individual
consumer during the course of one business day but may not do so by redeemable drink ticket or coupon.
Reference 16 TAC Section 45.101(b) & 45.103(c)(3)
QUESTION: If a winery charges a fee to take part in the tasting room, and the winery gives the customers the
glass they have used to taste the products, are they in violation of Section 102.07? ANSWER: No. By charging to
take part in the tasting room, the winery is essentially selling the glass which is legal.
FAQ’s
13
14
QUESTION: Can a distributor/wholesaler pick up or replace beer or liquor that has been damaged or has gone
bad? ANSWER: Section 104.05(d) prohibits replacement of damaged product that was damaged while in the
possession of the retailer. Section 104.05(d) states: “(d) Nothing in this code prevents a retailer from making
a claim for the replacement of alcoholic beverages delivered to the retailer by a wholesaler or distributor in a
damaged condition. A wholesaler or distributor may not give a refund for or replace alcoholic beverages that
were damaged while in the possession of the retailer.”
QUESTION: If packaging gets torn while in the possession of the retailers, can the distributor take the beer back?
Can a wholesaler give credit to a retailer for product damaged in the retailer’s possession? ANSWER: No.
QUESTION: Can a beer distributor purchase beer that is out of date from a retailer at the same price any
consumer would pay? ANSWER: Yes.
QUESTION: When, and under what conditions, may a wholesaler or distributor move a competitor’s product
in a retail establishment? ANSWER: Rule 45.113(c) allows wholesalers, distributors and members of the
manufacturing tier authorized to sell directly to retailers to organize and construct displays of their product
on retail premises. Competitors’ products that are arranged in floor or end cap displays may be moved, with
the retailer’s permission, in order to perform this function. Other than the exception described above, upper
tier members may not alter or disturb competitors’ products in the course of stocking or resetting a retailer’s
shelves.
QUESTION: Can a wholesaler require a retail customer to purchase one product as a prerequisite to purchase
another product or to receive a discount on another product? ANSWER: No. A member of the manufacturing or
wholesale tier may not require a retailer to purchase one product as a prerequisite to purchase another product,
nor can they require the purchase of one product to receive a discount on another product. In accordance
with 16TAC 45.110(c)(2), it is considered an unlawful inducement: “45.110 (c) Inducements. Notwithstanding
any other provision of these rules, practices and patterns of conduct that place retailer independence at risk
constitute an illegal inducement as that term is used in the Alcoholic Beverage Code. Examples of unlawful
inducements are: (2) Requiring a retailer to purchase one product in order to be allowed to purchase another
product at the same time;…”
QUESTION: What if a distributor does not wish to, or cannot afford to give away a large volume of novelty items?
ANSWER: Novelty items may only be furnished to consumers. Items may be sold to retailers if they qualify as
“promotional items” under Rule 45.113(c). Promotional items are those things designed to promote a specific
product and for use by the consumer on or off the licensed premises. Promotional items must be sold for not less
than the item manufacturer’s regularly published wholesale price.
QUESTION: May table umbrellas that have an alcoholic beverage logo be sold or given to a retailer? ANSWER: If
the umbrella is branded with a beer logo, it must be sold to the retailer at no less than the wholesale cost (Rule
45.113). If the umbrella is branded with a liquor logo, the upper-tier member may give to the retailer provided
the cost of the umbrella does not exceed $101 (Rule 45.117). Please note, an upper-tier member may not provide
more than $101 in advertising specialties to a retailer per brand per year.
QUESTION: Can a beer distributor make signs for a retailer for product or service other than what he/she sells
(Soda, Happy Hour, Open/Closed, etc.)? ANSWER: No. As defined by Rule 45.113(d)(2) a sign authorized to be
given to a retailer must be for a “brand” or “product.” This implies signs given to retailers promote some type of
alcoholic beverages.
QUESTION: Why are liquor wholesalers limited to a total of $101.00 on promotional items? ANSWER: The
restriction is contained in Section 102.07(b) of the Alcoholic Beverage Code which exists to insure that members
of the upper tiers do not provide retailers with items of such value as to create an excessive dependence by the
retailer on a specific supplier.
QUESTION: What is the definition of “bar supplies” as opposed to “promotional items”? ANSWER: “Bar supply”
is not a term used in the The Alcoholic Beverage Code or rules. Promotional items are defined in Rule 45.113(c)
as: “(c) Promotional items sold to retailers. Distributors and members of the manufacturing tier authorized to
sell to retailers may sell promotional items to retailers. (1) Promotional items are things designed to promote
a specific product or brand and are further designed for use by the consumer, either on or off the retailer’s
premises. (2)
Promotional items sold must bear a manufacturer’s logo, brand or product name. (3) Promotional items may not
be sold for less than the item manufacturer’s regularly published wholesale price. Payment must be in cash, paid
on or before delivery.” Under this definition, items which are sometimes referred to as “bar supplies,” in some
instances, may also be promotional items.
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FAQs
FAQs
QUESTION: What is the difference in “promotional items” and “equipment”? ANSWER: The difference is defined
by the use of the item by the consumer. These promotional items designed for use by the consumers may
only be sold to the retailers, §45.113(c). Members of the upper tiers should not be able to set a retailer up in
business with low cost equipment. This results in an over dependence by the retailer on a specific supplier and is
therefore contrary to the code’s three-tier principle. Items like shelves, refrigerators and stoves are primarily for
use by the retailer and are barred by this rule. Of course, even promotional items can be supplied in such a way
as to violate the three-tier system. The agency will look at those situations under the standards established by
Rule 45.110 and Section 102.12 and 102.13 of the Texas Alcoholic Beverage Code.
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Texas Alcoholic Beverage Commission
P.O. Box 13127
Austin, Texas 78711
512-206-3333 (Information)
1-888-THE-TABC (Complaints)
512-206-3420 (Education & Prevention)
TDD/TTY: 711
TABC Contact
Information
www.tabc.state.tx.us
www.2young2drink.com
www.legal2drink.org
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