What should wineries, craft brewers, and distillers know about advertising and labeling involving athletes and sports?

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Between the TTB, the FDA and local and state regulation, there are an incredible amount of rules and regulations regarding advertising and label content that wineries, craft brewers and distillers need to be familiar with.

The recent 7th Circuit decision in Jordan v. Jewel Osco allowing Michael Jordan’s lawsuit against a grocery chains that used his image without his permission has sparked some renewed interest the rules regarding the use of athletes, athletic activities and events in advertising alcoholic beverages like wine, craft beer and spirits.

We’ll address the 7th Circuit decision in an entry in a few days, but the TTB’s position on the use of athletes, athletic activities and events in advertising or labeling wine, beer and liquor merits a quick overview.

You might not remember it, but for a time, the ATF/TTB completely banned the depiction of individual athletes of public prominence (locally or nationally) on liquor bottles or the labels on such bottles finding that they were misleading, in that they conveyed the erroneous impression that the consumption of the alcohol contained therein was conducive to the development of athletic prowess or success in a particular athletic endeavor.

In 1995, the ATF/TTB revised this view and came up with a less rigid standard that function more as an “I’ll know it when I see it” test.  The 1995 ruling has a preamble laying out the continuing position of the agency on its role in regulating the behavior of brewers, vintners and distillers in their advertising practices:

ATF is neither a health nor a social service agency. To prohibit a label or advertisement based solely upon social responsibility or the possible impact on youth, without the “false and misleading impression” relationship, is beyond the scope of ATF’s statutory authority. Therefore, for ATF to take action against a label or advertisement which is “socially irresponsible,” it must be shown that the label or advertisement in question is false, deceptive, misleading, or conveys an erroneous impression.

After discussing the goals of not encouraging underage youth to drink or drink and drive, the ruling issued the following guidance with two caveats – the first was that the TTB reviews everything on a case by case basis, and the second is that disclaimers shouldn’t be used to try and comply with the ruling – with those caveats in mind, the following guidance is as good as you’ll ever get for safe harbor guidance from the agency:

Accordingly, ATF offers the following examples of labels or advertisements which it considers to be unacceptable pursuant to sections 27 CFR 205(e) and (f) and implementing regulations:

(1) any label or advertisement which states that consumption of the alcoholic beverage will enhance athletic prowess, performance at athletic activities or events, health or conditioning;

(2) any label or advertisement which depicts any individual (famous athlete or otherwise) consuming or about to consume an alcoholic beverage prior to or during an athletic activity or event;

(3) any label or advertisement depicting consumption of an alcoholic beverage while the party consuming the beverage is seated in, about to enter, operating, or about to operate automobiles or other machinery.

Conversely, labels or advertisements which ATF generally finds acceptable pursuant to sections 205(e) and (f) and implementing regulations, so long as they do not contravene the above-mentioned principles and examples, include the following:

(1) depictions of or references to athletes, including famous athletes, whether in motion or not and whether in uniform or not;

(2) depictions of or references to motor vehicles or other machinery or equipment, whether in motion or not, whether occupied by a driver or not;

(3) team logos;

(4) schedules of athletic events; or

(5) depictions of, references to or commemorations of specific events (e.g., an automobile race), specific cars or other equipment, such as hockey sticks, footballs, golf clubs, and the like, on alcoholic beverage labels or advertisements.

So the tip here is to use good judgment and specifically avoid the big 3 listed above.  Which, given the recent Jordan decision and already existing laws on using someone else’s image for a commercial purpose, shouldn’t be that hard.