California ABC Issues Tied-House Reminder for Alcohol Beverage Sponsorships
POSTED BY Bahaneh Hobel, John Trinidad
The California Department of Alcoholic Beverage Control issued an Industry Advisory (Tied House Advertising Exceptions Remain Subject to Specific Statutory Conditions) reminding licensees of tied-house laws that generally prohibit suppliers from giving things of value to retailers. The advisory reminds industry members that activities such as joint advertising between a supplier and a retailer where it is not expressly permitted by an exception in the ABC Act, or “pay to play” (whether directly or indirectly), have always been and continue to constitute violations of the tied-house laws. While it is unclear whether a specific event prompted the Department to issue the new advisory, the following passage suggests that partnerships or sponsorships related to the World Cup (and other future big events such as the 2028 LA Olympics) may have something to do with it:
Business and Professions Code sections 25500 and 25502 … prohibit suppliers from furnishing, giving, or lending money to a retailer. These prohibitions extend to retailers holding permanent licenses as well as temporary licenses or permits, such as for festivals or special events like FIFA World Cup or the Olympics, even if the venues they occur in have some sort of exception. Requiring sponsorship or some joint advertising at an event to have product sold there is a violation of the ABC Act.
While there are a number of ways that special events and festivals can be conducted that allow for industry member sponsorship, and in some cases even joint advertising between suppliers and retailers, the tied-house restrictions prohibiting “pay to play” still apply.
Please contact Bahaneh Hobel (bhobel@dpf-law.com) or John Trinidad (jtrinidad@dpf-law.com) if you are considering sponsorships or promotional relationships to ensure that both your participation and marketing are compliant.
