What the new Illinois “of value” regulations say about tap takeovers and donations to charitable causes. (Illinois’s new “of value” standards Part 3.)
In our first part of this series about Illinois’s new “of value” regulations we directed your attention to some additions on advertising, sampling and signage. In the second, we discussed the new “of value” standards’ regulation of social media.
In this third installment, we want to bring your attention to what the new Illinois “of value” regulations say about industry member promotional events at retail locations and about product donations.
Under the new Illinois regulations, promotional events like tap takovers, product launches, tastings, samplings, etc., are allowed with some provisions:
Industry Member Promotional Events at Retailer Locations. Any promotional event sponsored by an industry member at a retailer’s premises that primarily promotes the retailer’s business and does not promote, or only incidentally promotes,the industry member’s brand or brands of products violates the “of value”provisions of Section 6-5 of the Act. Industry member promotional events held at retailer premises must focus on the industry member or brands being promoted and all reference to the retailer in any advertisement shall be limited to the name and address of the retailer, which shall be relatively inconspicuous in relation to the advertisement as a whole. Promotional events include, but are not limited to, tastings, samplings, bottle signings, public product launch events,or other similar methods of brand promotion. The promotions shall be available to all similarly situated retailers without a purchase requirement imposed upon a retailer.
Some important caveats here, such as limiting references to the retailer in an advertisement about the event to the name and address of the retailer and the importantly vague and nonsensical edict that such references must be “relatively inconspicuous” in relation to the advertisement. Perhaps more of a challenge is the notion that the “promotions” shall be available to all similarly situated retailers. This isn’t an admonishment against someone doing something like having every bottle release at a local liquor chain, but it very well could be interpreted that way. What is a retailer to do? Have multiple “limited” releases? More than on initial launch? Is it a violation if the same two retailers get the initial release of your barrel aged stout every year the day after Thanksgiving and no other retailer does?
For product donations, Illinois’s new “of value” standards say donations are fine, but not to events where the charity or organization you’re donating to holds a state retail license and with some other important provisos:
Product Donations. An industry member may make contributions of cash, alcoholic liquor products, non-alcoholic products, services, equipment or signs to a not-for-profit organization, including but not limited to charitable organizations, religious organizations, trade associations, political organizations, and fraternal organizations. An industry member may not make contributions of alcoholic liquor products to any not-for-profit organization that has a local municipal and State of Illinois retail license. These donations shall be subject to the following conditions:
A. Donations of alcoholic liquor products may not be given for commercial purposes. The proof of donative intent is on the industry member;
B. An industry member must maintain invoices on its licensed premises for a period of three years for all alcoholic liquor products donated to not-for-profit organizations;
C. Signage dollar limitations contained in Section 6-6 of the Act do not apply to signage and advertising materials donated to a not-for-profit organization; and
D. Advertising and signage referencing the industry member must be reasonably commensurate with a donative intent to ensure that the charitable donation is not being made for a commercial purpose, in violation of Section 100.280. The proof of donative intent is on the industry member.
The liquor license issue is probably the biggest issue here, donating to someone’s bar or licensed festival is going to present a problem, but donating to an event they’re hosting that’s unlicensed is not. But if this prohibition is limited strictly to donating alcohol, and donating money is still allowed, why wouldn’t an industry member donate the money for the not-for-profit to purchase the alcohol for the licensed activity? And if that’s the case, why have this part of that regulation at all? Avoiding the “commercial purposes” pitfall comes in a close second – as everything is a commercial purpose when you’re a business. Offering no other guidance except that apparently if a sign is big it might be a commercial purpose is so uninformative and unhelpful one wonders why have a regulation at all if it’s going to so vague as to be unenforceable.