The proposed rule amendment substantially rewords the existing rule to clarify and redefine approved advertising and promotional gifts related to the sale of alcoholic beverages.

 

DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION
Division of Alcoholic Beverages and Tobacco

RULE NO: RULE TITLE
61A-1.010: Approved Advertising and Promotional Gifts
PURPOSE AND EFFECT: The proposed rule amendment substantially rewords the existing rule to clarify and redefine approved advertising and promotional gifts related to the sale of alcoholic beverages.
SUMMARY: The proposed rule amendment substantially rewords the existing rule with regard to approved advertising and promotional gifts related to the sale of alcoholic beverages.
SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS: No Statement of Estimated Regulatory Cost was prepared.
Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
SPECIFIC AUTHORITY: 561.11, 561.42(8), (12) FS.
LAW IMPLEMENTED: 561.08, 561.42 FS.
IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN FAW.
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Christina Norman, Senior Attorney, Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco, Office of the General Counsel, 1940 North Monroe Street, Suite 42, Tallahassee, Florida 32399, [phone]

THE FULL TEXT OF THE PROPOSED RULE IS:

(Substantial rewording of Rule 61A-1.010 follows. See Florida Administrative Code for present text.)

61A-1.010 Approved Advertising and Promotional Gifts.

(1) The chart below provides definitions, including where appropriate descriptions, and conditions that shall not be considered unlawful gifts, loans of money or property, or rebates for purposes of Section 561.42, F.S.

 

DEFINITION/DESCRIPTION	CONDITIONS AND LIMITATIONS
“PRODUCT DISPLAYS” Wine racks, bins, barrels, casks, and shelving used exclusively to hold and display factory sealed products for sale to the customer.	The total value of the “product display” shall not exceed $300.00 per brand, not including transportation and installation costs. The value of the “product display” is the actual costs to the industry member who initially purchased the “product display.” Shall bear conspicuous, permanently-inscribed or securely-affixed product information. A minimum purchase to complete the display may be required. The vendor's name, business name and address may be a part of the product display.
SHELF PLANS AND SCHEMATICS OF SHELF SPACE	None
“POINT OF SALE ADVERTISING ITEMS” “Point of sale advertising items” are those items designed to be used on the licensed premises of the vendor to attract consumer attention to the advertised product. The following are approved “point of sale advertising items:” Trays, coasters, mats, menu cards, paper napkins, foam scrapers, back bar mats, thermometers, clocks, calendars, alcoholic beverage lists or menus, and paper cups.	Malt beverage manufacturers and distributors shall sell the items to the vendor at a price not less than the actual cost to the manufacturer or distributor who initially purchased the item.

 

DEFINITION/DESCRIPTION	CONDITIONS AND LIMITATIONS
“CONSUMER ADVERTISING SPECIALTY ITEMS” “Consumer advertising specialty items” are items intended to be carried away by the consumer from the licensed premises of the vendor. The following are approved “consumer advertising specialty items”: Trading stamps, matches, non-alcoholic mixers, pouring racks, ash trays, bottle or can openers, cork screws, shopping bags, printed recipes, pamphlets, cards, leaflets, blotters, post cards, pencils shirts, caps, and visors.	Malt beverage manufacturers or distributors shall not be permitted to provide items advertising malt beverages as gifts to a vendor.
SAMPLES of new products.	Must meet the requirements of Rule 61A-4.046, FAC. Manufactures or distributors of beer shall not conduct any sampling activities that include tasting of their product at a vendor’s premise licensed for off-premise sale only.
NEWSPAPER CUTS, mats, or engraved blocks.	Shall be available to all vendors without limitation.

 

DEFINITION/DESCRIPTION	CONDITIONS AND LIMITATIONS
Advertising services: the listing of the names and addresses of two of more unaffiliated vendors in a manufacturer’s or distributor’s advertisement. For the purpose of this rule, affiliated vendors are those with any common ownership, members of the same pool buying group or members of the same advertising cooperative.	Advertisements shall include two or more unaffiliated (through common ownership, members of the same pool buying group, or members of the same Advertising Cooperative Identification of vendors shall not exceed 10 percent of the total space in the advertisement. Manufacturers and distributors shall not underwrite any vendor's publications or events through the purchase of advertising. Manufacturers and distributors of beer shall not enter into cooperative advertising with vendors.
INSIDE SIGNS ADVERTISING BRANDS.	Shall not include any reference to a vendor's event. Vendor's name, business name and address may be printed on the item. May include the price or space for price of the alcoholic beverage product being advertised on the sign. Vendors shall not have more than one neon or electric sign per manufacturer in their window or windows.
COMBINATION PACKAGES (non-alcoholic beverage products packaged with alcoholic beverages).	The combination package shall be intended for sale to consumers.
EDUCATIONAL SEMINARS.	Shall relate to alcoholic beverage products, alcoholic beverage laws and regulations, or responsible service and sales of alcoholic beverages. May give away instructional materials, snacks, beverages, meals, and tours of a distributor's or manufacturer's facility. May be hosted at any location. Transportation or lodging to or from the seminar shall not be paid by the manufacturer or distributor.
POINT OF SALE COUPONS A “coupon” is a certificate with a stated value used when purchasing a specific product which reduces the price of the product at the time of retail  sale. “Scan backs” are electronic coupons. For the purpose of this rule a “rebate” is not a “coupon.” “Rebates” are cents off a product and require the consumer mail the “rebate” to the manufacturer, distributor or clearinghouse for reimbursement directly to the consumer.	Any coupon promotion, including paperless scan backs, must be structured to show a direct cash rebate to the consumer and must be supported by a verifiable audit trail. Manufacturers, distributors and vendors must maintain records that contain sufficient information to verify the nature of any payments to a vendor, even if made by a third party. Vendor’s records must be sufficient to establish the payment received from the manufacturer, distributor or third party was for the coupon reimbursement by the vendor to the consumer. With “scan backs”, there must be a conspicuous point-of-sale signage notifying the consumers of the electronic coupon; the notice shall be displayed at all times during which the “scan back” promotion is offered; and the notice shall advise of the amount of cents off at the cash register. Malt beverage distributors shall not provide malt beverage coupons to vendors; however, they may deliver manufacturers' coupons to vendors. Reimbursement to vendors shall not exceed the face value of the coupon and the customary handling charge (the handling charge shall be the same for all vendors during the coupon period). Shall be redeemable by all vendors who wish to participate. Shall be available to all vendors in the market area as defined below who wish to participate and on the same terms and conditions. For the purposes of this rule, the market area is that geographic location within the state designated by the manufacturer or distributor as the “market area” for the promotion offering the “coupon” or “scan back.”

 

DEFINITION/DESCRIPTION	CONDITIONS AND LIMITATIONS
TRADE SHOWS AND CONVENTIONS sponsored by retail association(s).	May provide display of products. May rent display space at normal trade show rate. May provide own hospitality (independent of sponsored activities by the association or any member vendors). May pay normal registration fees. May purchase tickets to functions. May provide samples to attendees. May conduct tastings for attendees. May purchase advertisements in publications distributed during conventions and trade shows (Payments for all such advertisements shall not exceed $300 per year to any retailer association). Malt beverage manufacturers and distributors shall not provide any gifts to retailer associations which advertise malt beverages.
PREMIUM OFFERS. Products offered to consumers with proof of purchase.	Shall be offered to all vendors who wish to participate in the similar quantities at the same time. May provide point-of-sale advertising and order forms. Products shall not be given or loaned to the retailer for display.

 

DEFINITION/DESCRIPTION	CONDITIONS AND LIMITATIONS
SWEEPSTAKES, DRAWINGS, OR CONTESTS.	Section 849.094, F.S., which is administered by the Department of State, Division of Licensing, The Capitol, MS#4, Tallahassee, Florida 32399-0250 requires registration of consumer games where prizes are awarded in excess of $5,000. Shall be open for the general public to participate; however, no vendor shall participate. Shall be offered to all vendors who wish to participate in the similar quantities at the same time. May provide entry forms, rules, and point-of-sale advertising pieces. Shall not require proof of purchase to enter. Vendor shall not collect completed entry forms. Live or electronic contests sponsored by manufacturers or distributors shall not be held at a vendor's place of business.
Contests or sweepstakes that include as a prize the vendor’s property.	Tickets and room rentals shall be purchased by the manufacturer or distributor for normal rates. Shall not be a joint venture with a vendor. Reference to a vendor shall not exceed 10 percent of the total space in the advertisement pieces or entry forms. May use the names and pictures of vendor's properties (passenger carriers, lodging establishments, theme parks, and tourist attractions) which are prizes to consumers who win contests or sweepstakes.
TOURNAMENTS AND COMPETITONS Vendor sponsored tournaments and competitions.	Manufacturers and distributors may participate and pay normal entry fees. Manufacturers and distributors shall not advertise, co-sponsor, underwrite, or contribute in time, money, or gifts.

 

DEFINITION/DESCRIPTION	CONDITIONS AND LIMITATIONS
INSURANCE COVERAGE	May provide vendors proof of insurance for manufacturers or distributors personnel, equipment, and products; however, they may only issue “hold harmless” or “indemnity” agreements involving product liability or copyright and patent infringement for acts or omissions of the manufacturer or distributor. Manufacturers or distributors shall not issue “hold harmless” or “indemnity” agreements directly or indirectly insuring or co-insuring acts or omissions of vendors.
DRAFT EQUIPMENT Draft cleaning service of equipment installed by a manufacturer or distributor.	None
NO CHARGE ALCOHOLIC BEVERAGES Gifts to manufacturer's and distributor's employees; charitable organizations; market testers; and non-profit civic organization permittees.	Alcoholic beverage products shall be invoiced to the individual or organization as a no-charge invoice. Shall not be provided to a vendor however, individuals or organizations may arrange for delivery of alcoholic beverage products to their function in care of a licensed vendor's place of business provided the alcoholic beverages do not become the property of the vendor.

 

DEFINITION/DESCRIPTION

CONDITIONS AND LIMITATIONS

RETURNS OF DAMAGED products by vendors to distributors.

Vendors shall notify distributors of damaged products received from the distributor within 10 days after delivery in order to obtain a credit or exact exchange. Distributors shall maintain records of request by vendors for return of damaged products, with reference made to the original invoice showing the delivery date and any credit memo issued. Damaged products shall be verified by the distributor's representative prior to issuing a credit. Damaged products shall be exchanged in exact quantities with products of near equal value made by the same manufacturer and in the same size containers unless a credit or cash is issued at the time of the return with a supporting document. A transaction record of all exchanges shall be made and kept by the distributor detailing the date, the licensed vendor, business name and address, the vendor’s license number, and the product exchanged for products, cash, or credit.

 

DEFINITION/DESCRIPTION	CONDITIONS AND LIMITATIONS
PRIVATE LABELS	Beer, wine, and spirituous liquors may be manufactured under a vendor’s trademark. A vendor shall not set the price of private labeled products with the manufacturer, importer, or distributor. Pricing shall be independently established by the manufacturer, importer, or the distributor. The vendor may be paid royalties and other contractual payments if the right to the trademark is sold by the vendor. The vendor may be the exclusive outlet for the product if the vendor maintains ownership of the trademark. The vendor may petition the division for an exception to the outside sign prohibition when their business name is the same as a brand name, and such petition shall be granted if the purpose is clearly to promote the business name and not an alcoholic beverage brand.
RETURN OF PRODUCT Vendors may return product but no consignment sales shall be made to a vendor.	Vendors who make a request for return of products to a distributor within 5 days of the delivery date shall be entitled to cash or a credit within 10 days of the request and at the same time the distributor picks up the products. The request shall be documented by the distributor on the credit or refund memo (The 5-day requirement excludes days that either the vendor or the distributor are closed for business.)
WAREHOUSING	Distributors of wine and spirituous liquors may deliver those products during the same calendar week, which shall begin on Sunday, as the products are ordered. The prices of the products shall be set at the time of the order and shall not be adjusted based on additional products ordered during the same week as the original order after the first delivery is loaded.
SPLIT CASES	Distributors may offer split cases (boxes that contain more than 1 brand of alcoholic beverage products or more than one size of the same brand) to vendors, provided it has a written policy applying to all vendors regarding the add-on charge for all split cases, if any vendor is required to pay such a charge for any case.
KICKBACKS	No manufacturer or importer of alcoholic beverages shall give any licensed distributor any rebate on any order placed by, or on behalf of, a licensed vendor or group of licensed vendors.

 

(2) Any other gifts, loans of money or property, or rebates not included in the “Approved Advertising and Promotional Gifts Chart”, or specifically authorized by Florida Statutes, shall not be provided to a vendor.

(3) Manufacturers and distributors shall keep and maintain records for a 3-year period on their licensed premises, or other division approved location, of any gift, loan, assistance including all product displays, equipment and supplies, samples, consumer coupon promotions, scan back promotions, participation in retailer association activities, and the acquisition or production cost of and selling cost of merchandise items given, sold, or loaned to vendors. These records shall show:

(a) The name and address of the vendor;

(b) The vendor’s license number;

(c) The date furnished;

(d) A description of the item;

(e) The manufacturer’s or distributor’s cost of the item (determined by the original purchaser’s invoice price). This information is not required if no value restrictions exist;

(f) The charges to the retailer for the item, if applicable;

(g) If a scan back (electronic coupon) was offered, the amount of the discount offered to the consumer for each “market area”;

(h) If a coupon promotion, a copy of the coupon; and

(i) A description of the “market area” for the promotional event.

(4) Vendors shall keep and maintain for a 3-year period on their licensed premises, or other division approved location all records of any credits, money or other forms of assistance provided to the vendor under subsection (3) of this rule. These records shall show:

(a) The name and address of the manufacturer or distributor providing the credit, money, or other form of assistance;

(b) The date the credit, money or other form of assistance was furnished;

(c) The date(s) the promotion was offered;

(d) A description of the item;

(e) If a scan back (electronic coupon) was offered, the amount of the discount offered to the consumer and a copy of the point of sale sign reflecting the discount;

(f) A copy of the coupon provided to the vendor by the customers;

(g) The number of each type of coupon received by the vendor for money off the product;

(h) The amount of assistance, reimbursement, payment, credit, or money received by the vendor and the name of the distributor, manufacturer or third part acting on behalf of the distributor or manufacturer;

(i) Sales receipts reflecting the original price of the product, the amount of the coupon or discount, and the sales price after applying the coupon or discount.

Specific Authority 561.11, 561.42(8), (12) FS. Law Implemented 561.08, 561.42 FS. History–Formerly 12-19-74, Amended 3-1-76, Formerly 7A-1.10, 7A-1.010, Amended 6-5-97,________.

NAME OF PERSON ORIGINATING PROPOSED RULE: Christina Norman, Senior Attorney, Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco, Office of the General Counsel, 1940 North Monroe Street, Suite 42, Tallahassee, Florida 32399, [phone]
NAME OF SUPERVISOR OR PERSON WHO APPROVED THE PROPOSED RULE: Secretary Holly Benson
DATE PROPOSED RULE APPROVED BY AGENCY HEAD: March 14, 2007
DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAW: March 31, 2006