Latest News

Cal ABC Warns on Internet Wine Sales

The California Alcoholic Beverage Control Department (ABC) has issued an advisory warning wineries (and other licensees) that they should be cautious in dealing with unlicensed third parties who offer to promote or sell their products for them on the internet. The ABC notes that some such activities are permissible but, in their view, others are not without a license.

The problems basically stem from the fact that California\’s laws define the \”sale\” of alcohol to include (amongst other things) the solicitation or receiving of orders for alcohol. The ABC\’s position is that anyone who is soliciting or receiving orders for alcohol is engaged in the \”sale\” of alcohol and therefore should be licensed as a seller (even if the activity is done on behalf of another business, like a winery, that is licensed).

These interpretations raise obvious compliance issues in respect of many internet businesses such as wine clubs and other promotional services that seek to sell wine on behalf of a winery (and who would previously have been relying on the fact that the winery was licensed to make the sale).

This article in Wines & Vines describes the problems and also notes that there are practical issues of enforcement including jurisdictional problems. It\’s likely that either some legislative reform or a court case will be necessary before the issues are resolved.

British Columbia\’s wineries may want to give some attention to this issue. Although the Liquor Control and Licensing Act in B.C. does not define the \”sale\” of alcohol to include solicitation, it does include a similar provision at s.51 where it states the following:

A person must not canvass for, solicit, receive or take orders for the purchase or sale of liquor, or act as agent for its purchase or sale, except as provided under this Act.

As a result of this provision, we likely have similar issues here in regards to whether an activity constitutes a sale or solicitation (which must be authorized under the law) or whether it simply constitutes advertising and marketing. The dividing line between these types of activities likely is not that easy to define and there will be a substantial grey area. In B.C., we don\’t have the vast array of internet wine marketing services that they have south of the border, so it\’s much less likely that wineries will be involved in such activities. However, some caution is advisable. Wineries should ask providers of such services if they can provide assurances of the legality of their services and at the very least, it would be wise for wineries to get their own advice before participating in such a service.

Leave a Reply