Tips for product tastings: hosting a spirits, wine or beer tasting can be great for business, but only if the business first does its homework on the legal do's and don'ts

Cheers, March, 2008 by Elizabeth A. DeConti

Consumer product tastings is a popular form of beverage alcohol marketing used to showcase new products and drive traffic to restaurants and bars. Manufacturers, wholesalers and on-premise establishments may participate in product tastings together subject to various conditions.

Consumer tastings is a recognized tied house exception under federal law pursuant to 27 C.F.R. [section] 6.95. Under the rule, industry members such as manufacturers and wholesalers may conduct tasting activities at restaurants and bars. The industry members may even purchase the products for the tasting from the hosting establishment as long as it's at the ordinary retail price. Note that each state also has its own rules regarding tastings, which, in most cases, is far more restrictive than Section 6.95.

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Almost every state has a statute or regulation addressing wine tastings, and rules addressing malt beverage and spirits tastings may be different from wine rules depending upon the jurisdiction.

Sponsors of a product tasting should look at several issues that may or may not be specifically addressed in their state's laws, as well as any administrative policies set by state regulatory agencies that may supplement the laws.

WHERE, WHO AND HOW

The majority of the rules address the "where," the "who" and the "how" of tastings. As for "where," most tastings must occur at a licensed on-premise location, although some states permit tastings at off-premise locations or a wholesaler's licensed premises. Some states also allow tastings at non-licensed premises for special events. Finally, some states require that the sponsor and/or the host obtain a special permit or prior approval before holding a tasting. Louisiana requires prior notice, for example. Record of the quantities served also may be required. In Virginia, for instance, manufacturers must keep detailed records for two years after each tasting.

The "who" relates to who may attend the tasting and pour product for consumers. For example, in some states only wholesalers may pour, whereas both manufacturers and wholesalers may do so in others. Some states allow manufacturers to be present as long as they do not pour, while other states do not. The degree to which the restaurant or bar may participate also is regulated.

The "how" component, or the manner in which a tasting is conducted, is where we see the most variation from state to state. First and foremost, there likely are regulations regarding where the products being tasted originate. Depending upon the state, the restaurant or bar may have to purchase the product from the wholesaler specifically for the tasting, such as in Nebraska, or it may have to use its own inventory, as is the case in Mississippi. In some states, such as Tennessee, the wholesaler may give the product in set quantities for the tasting as a tied house exception. Be mindful of leftover product, too; if the wholesaler brought the product to the event, he or she usually must leave with the leftovers.

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Every state regulates the quantities that may be given to consumers--the number and size of tastes per person--as well as the length in hours that the tasting may last. In some jurisdictions, there also may be regulations about the specific time of day tastings can be held.

These are only a few of the myriad restrictions that should be determined before holding a beverage alcohol tasting. Operators should carefully determine applicable restrictions in their jurisdiction before taking advantage of this popular marketing technique.

Elizabeth DeConti is a shareholder in the Tampa, Fla. office of Gray Robinson, P.A. Her law practice focuses on the unique issues surrounding the beverage alcohol and food industries. She can be reached at edeconti@gray-robinson.com or www.hospitalitylawyer.com. The information provided is for educational purposes, and should not be considered legal advice.

RELATED ARTICLE: Tasting vs. Sampling

This article addresses product tastings for consumers, not product samplings for licensed restaurants or bars. Although the term "tasting" is used interchangeably for both events in some states, generally a "tasting" is for consumers only and a "sampling" occurs when a wholesaler allows restaurant or bar employees to taste products not carried in the on-premise establishment's inventory for the purpose of selling the product to that establishment. Most states do treat the two concepts separately; therefore, this article does not address sampling rules.