One Small Step: Easing Restrictions on Advertising in Social Media

On October 1, Governor Brown signed into law AB 780, which updates Business and Professions Code provisions concerning restrictions on manufacturers’ ability to identify or list on-sale or off-sale retail locations where their products are sold. The new law goes into effect January 1, 2016.

In an earlier post, “Social Media is Advertising: Know the Basics”, I warned that under then-current law, posting where your product is sold generally ran afoul of restrictions on “giving something of value” to retailers, but was allowed in response to a direct consumer inquiry, and so long as you listed more than one unaffiliated retailer.

With the passage of AB 780, wine manufacturers will no longer need to wait for a direct consumer inquiry to post the names and contact information of retailers who sell their product, so long as the listing is made, produced, or paid for exclusively by the manufacturer, includes two or more unaffiliated retailers, and does not contain any mention of retail price.

AB 780 should not be taken as an indication of the demise or weakening of California’s tied-house restrictions. AB 780 explicitly sets forth the Legislature’s finding that tied-house restrictions are both “necessary and proper… to prevent suppliers from dominating local markets through vertical integration, and to prevent excessive sales of alcoholic beverages produced by overly aggressive marketing techniques.” Nevertheless, AB 780 is a small, but important step for manufacturers, who can now feel much more secure posting where their products can be found.


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