The message that I write tonight is not going to make many people happy especially if you own a winery or do winery marketing. I will start with some nuanced good news. According to Michael Kaiser from WineAmerica, the new $484 billion coronavirus relief bill signed by President Trump today contains language that makes
“agricultural enterprises” eligible for SBA EIDL loans.
Before this new bill, “agricultural enterprises” were ineligible and there was ambiguity surrounding how a winery that also has a vineyard operation could be eligible. This new bill should eliminate that ambiguity.
The next thing that I must share will make you: smack your forehead, grab your pitch forks and torches, consider a trip to New York City to give me a piece of your mind, and get twisted with rage. I applaud the efforts of many New York wineries who want to provide support to charitable organizations and healthcare providers doing important COVID-19 relief work. Depending on how a winery chooses to market or promote its charitable giving could violate New York State’s Alcohol Beverage Control Law. I know that that this sounds ludicrous given the times and the good intentions behind a winery’s charitable giving plan.
This dilemma came to my attention this week when I participated on a call with the board of Long Island Wine Country. Their members had questions on how they could properly promote their charitable giving on their wine labels and communications. I contacted the SLA to seek clarification:
Sam Filler to NY State Liquor Authority (NYSLA):
Wineries across the country have started creating promotions that tie the sale of wines to charitable giving to support COVID-19 relief. There are some New York wineries and distributors who have begun promoting them too. For example,
Inman Family Wines in California
has this posted to their website, “First, pick one or more of our 3-packs of wine and
5% of your purchase will go straight to Meals on Wheels.
Shipping is included on all packages, so it's a good time to stock your cellar.” I understand from Stefan Fleming (ESD One Stop Shop) that these type of promotions/arrangements are not permissible because a winery cannot “avail” their license to another business or organization. I would like to inform the wine industry on how they can accomplish their charitable goals/intentions without violating New York’s ABCL. A winery also shared with me today that they received TTB approval for label that says 100% of the proceeds from the sale of the wine is going to support their local hospital. Is this also an example of “availing” one’s license and not permissible? If the TTB does not have a problem with this type of assertion on the label, why would it be an issue in NYS?
Sam, I’m sure you know that other states and the federal government have different purviews, different approaches to regulation, and different statutes that govern such regulation. What the feds or other states have done on this matter is irrelevant to the extent the matter at hand is governed explicitly by the ABC Law and NYSLA practice. That said,
while it’s clearly impermissible to provide a non-licensed party a specified portion of a sale of alcoholic beverages for obvious reasons, a business entity donating to charity is not impermissible.
So, as Stefan made clear, it’s a matter of formulation of their message. If they want to say they will be donating some proceeds to a charitable cause (without a direct percentage/connection to the sale) or want just generally say XX manufacturer supports YY charitable cause, then that’s fine. This is not just a matter of semantics –
it is unlawful in New York to have revenues from the sale of alcohol delivered to a person or entity not on the license.
But anyone can donate profits/assets to a charity and can announce its intention to do so in advance, at least from the SLA’s perspective.
To help clearly show what is an unlawful promotion versus a permissible promotion, I have provided examples below from California so as not to incriminate anyone in New York who I have seen with unlawful promotions: