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Breweries and Mobile Apps

Marketing and advertising are key components of any successful business. Henry Ford said, “A man who stops advertising to save money is like a man who stops a clock to save time.”  Like Henry Ford back in the 1940s, today’s craft brewers are diligently finding ways to build their brands, to get the word out, to broaden their exposure to consumers.  One way the craft beer industry is doing so is through mobile apps (think Untapped, Pint Pass, Brewery Passport, TapHunter).  Mobile apps involve a host of legal issues of which the developer needs to be aware. But when a mobile app intersects with the craft beer industry, there is a complex web of laws governing advertising in the beverage-alcohol industry, and it’s important for the app developer to be aware of these regulations too.

Developing a mobile app raises several legal and regulatory concerns, including those relating to:

  • Intellectual property (IP) rights
  • Rights of publicity
  • End-user privacy
  • Advertising
  • Industry and self-regulatory guidelines

For instance, maintaining the privacy rights of consumers is of utmost importance when developing an app. Part of the consideration in maintaining the privacy rights of consumers requires that you provide certain notices and disclosures to the end-user.  The three most important things to tell the end-user are: (1) what data you collect, (2) how you use it, and (3) with whom you share it.  Typically, this information is provided in a privacy policy, which should contain a comprehensive overview of your data collection and use practices.

Not surprisingly, the FTC recommends that app developers have a privacy policy that is easily accessible through the app store, and provide just-in-time disclosures and obtain affirmative express consent before collecting and sharing sensitive information

The complexity and breadth of laws and regulations is even greater when a brewery itself wants to develop and distribute an app.  Under the Federal Alcohol Administration Act (“FAA Act”), a brewery is considered an “industry member” and, as such, is subject to a host of advertising laws and regulations, among others.  A brewery wishing to develop a mobile app needs to be keenly aware of such laws and regulations to ensure compliance with same. For instance, does a brewery’s mobile app need to comply with mandatory statements under 27 C.F.R. 7.52?  If yes, how does it do so?

This 2013 TTB Circular on the use of social media in advertising alcoholic beverages provides some helpful insight into complying with the FAA Act:

Additionally, many mobile apps offer coupons or rebates.  Companies operating in the beverage-alcohol industry that want to develop a mobile app that offers coupons and/or rebates should consider at least two other sets of laws and regulations:  (1) those pertaining to a manufacturer providing a retailer with a “thing-of-value;” and (2) those governing “consumer specialty advertising” or “consumer specialty items.”

If you have questions regarding advertising in the beverage-alcohol industry, I am happy to help answer them.

Alabama Supreme Court rules in favor of Sweetwater

“In 2012, the Atlanta brewer notified AlaBev (then called Birmingham Beverage Company) of its intent to switch to Supreme Beverage. AlaBev sued Sweetwater for breach of contract and alleged that the brewer did not follow the process laid out in Alabama law to switch distributors.

Under Alabama law, a beer producer can only have one wholesaler for a given territory, usually counties. The law requires a producer and a wholesaler have a territorial agreement in writing and on file with the state Alcohol Beverage Control Board.

[The lower court judge] cited in his 2015 ruling that there’s no evidence that a written territorial agreement between SweetWater and AlaBev ever existed or was on file with the ABC Board in his ruling for SweetWater.

The Alabama Supreme Court affirmed [the lower court judge’s] decision Friday. The court did not issue a written opinion with the decision.” — Kelly Poe,

Read More Here

Mississippi Brewers reach deal with Wholesalers, while Georgia brewers anticipate third year of legislative battle.

Press Release from Georgia Craft Brewers Guild:

Atlanta, Ga, September 21, 2016 – Today the Mississippi Brewers Guild announced a deal reached with the Mississippi Beer Distributors Association that will, upon passage of legislation, allow craft breweries in Mississippi to sell beer direct to the public among other concessions. Both the brewers and the wholesalers of Mississippi have shown tremendous leadership and partnership in the advancement of an industry that was in desperate need of attention.

Upon passage of this proposed legislation in Mississippi, Georgia will remain the sole state in the country where a brewery may not sell beer to the general public. As has been for decades now, the craft brewers of Georgia have one customer – their wholesaler. While consumers, economic developers, entrepreneurs, and state legislators have called for the ability to buy beer at a brewery, that privilege is reserved for the 13 businesses that wholesale Georgia craft beer.

The Georgia Craft Brewers Guild strongly supports legislation to allow Georgia’s breweries to sell beer in tasting rooms among other much needed modernizations to Georgia’s brewery laws. As always, and in the spirit of cooperation, we hope the Georgia Beer Wholesalers Association will have a change of heart and choose to support our legislative efforts this January.

Link to Jackson Free Press:

For additional comment contact Nancy Palmer.

DOJ closes investigation into AB-InBev’s purchase of Devils Backbone

“The U.S. Department of Justice has officially closed its investigation into Anheuser-Busch InBev’s acquisition of Devils Backbone Brewing Company, according to a statement issued today by Deputy Assistant Attorney General Juan Arteaga.

Citing conditions in a previously agreed upon settlement between A-B InBev and the DOJ — one that permits the world’s largest beer company to proceed with its acquisition of SABMiller — Arteaga said the ‘competitive implications of ABI’s acquisition of Devils Backbone are too uncertain at this time to warrant further investigation.’” — Chris Furnari, Brewbound

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Texas Beer Litigation

“Declaring it unconstitutional, a Texas state judge struck down the law that prohibited brewers from receiving monetary compensation from distributors for their distribution rights. The rule was part of the bundle of 2013 legislation that was otherwise a boon to Texas breweries.

Brewers and their fans are rejoicing this victory right now, but they’re still holding their breaths over two other beer-related cases in Texas courts. Soon, these should also have outcomes.

One involves an issue that brewers pushed for in the 2013 legislative session, to no avail. As a result, Dallas’Deep Ellum Brewing sued the Texas Alcoholic Beverage Commission last year to try and get breweries the ability to sell beer to-go from their facilities — something that wineries and distilleries in Texas are both able to do. (Brewpubs, which sell food in addition to beer, can as well.)

And before that lawsuit, Cuvee Coffee decided to go to battle with the TABC over the issue of whether retailers can sell crowlers, which the TABC argues are one-use cans, rather than aluminum growlers, that only manufacturers of beer can sell.” – Arianna Auber, Austin 360.

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Brewpub Growler Sales in Atlanta

It was very exciting to be involved with the first growler sale by a brewpub in the City of Atlanta! What’s even cooler? I got to take home a growler of “Taylor Harper Oatmeal Porter.” I’ve won cases…won motions…won appeals…but taking home a beer named after you most certainly is at the top of the list! Thanks to all who were involved in making this happen!

5 Seasons growler photo

From left to right: Crawford Moran (5 Seasons owner), Kwanza Hall (City of Atlanta Councilmember), me, David Larkworthy (5 Seasons owner), Dan Plevak (attorney with my firm), and Hunter Hill (State Senator).

The scarcity of Tropicalia

“It has become increasingly available on-tap in bars and restaurants, but six packs remain in short supply, leading some retailers to stash the beer away on delivery days for their best customers, prompting less well-connected shoppers to get creative.

‘We have a few guys who follow the delivery truck to the store,’ says Matt Walton, a former associate at Lucky’s Beverage World in Woodstock. ‘They know which distributor brings the Tropicalia and they study those delivery routes. As soon as the beer is offloaded, they will try to buy all the Tropicalia we received.'” — Adam Kincaid, MyAJC

Read More Here