As discussed in the Licensing Section, above, a farm winery licensee may conduct tastings with or without cost in its hospitality suite, and can also sell wine by the glass or by the bottle for on-premise consumption, as well as wine by the bottle for off-premise consumption. Winery licensees may only provide no-cost tastings, although the additional licensure discussed above may allow them to sell for on- and off-premise consumption as well.
Farm wineries, under the privileges granted in §4.1-207(5), can sell at retail not only wine produced on site, but wine purchased through a wholesaler from any other winery, regardless of where that winery is located. This wine is not considered part of your production, and is therefore not considered in the 51% calculation for farm winery fruit sourcing. This wine is received taxpaid, and therefore needs to be kept separately in your winery from your in-bond wine produced either on site or through a contract winemaking arrangement. This wine should only be stored in your tax paid areas.
TASTING ROOM: Your ABC permit needs to be posted in your tasting room where it is visible to the public. You also need to have a list of your ABC Managers, and keep that list current at all times. There must be an ABC Manager present at the winery at all times, so ensure that you have a sufficient number of ABC Managers. ABC Managers must be 21 years old, but other employees serving and selling wine can be 18. There is not an application process to become a named ABC Manager, and you do not have to notify ABC in advance of appointing someone an ABC Manager, but ABC can disapprove someone as an ABC manager if they have certain criminal backgrounds. If you wish to hire an individual who has a criminal record please contact you assigned Compliance Agent for advice. An ABC Manager is responsible for ensuring that no ABC laws are violated, however, so the persons named need to be people you trust to protect your license, which is ultimately your livelihood. The ABC Manager is also the person who will respond to ABC inquiries during a drop by inspection, (see Ongoing Requirements , below), so all ABC managers should be familiar with the various areas of the winery, including the location of the VWDC space, as well as the process for removing wine from bond and general tasting room operations.
Agritourism: Farm wineries are considered agritourism businesses so are entitled to statutory liability protections in VA. The agritourism provisions acknowledge that agricultural premises have inherent risks like uneven ground, holes, etc. and, in an effort to encourage agriculture-based businesses to invite tourists to their businesses, limits visitors’ ability to sue for accidental injuries due to these inherent risks. In order to gain these protections, a farm winery MUST have a sign posted in a clearly visible location at the entrance to the agritourism business location and again at the site of the agritourism activity, so one at the entry to the winery and again where visitors would likely enter the vineyards with the language listed below. Additionally, every written contract for “professional services, instruction, or rental of equipment to participants” in agritourism activities should also contain the warning below. If you don’t post it and include it in contracts, you lose the protections, so it’s safer to over-include it in contracts, including your event contract, than to not include it.
“WARNING: Under Virginia law, there is no liability for an injury to or death of a participant in an agritourism activity conducted at this agritourism location if such injury or death results from the inherent risks of the agritourism activity. Inherent risk of agritourism activities include, among others, risk of injury inherent to land, equipment, and animals, as well as the potential for you to act in a negligent manner that may contribute to your injury or death. You are assuming the risk of participating in this agritourism activity.”
Food Service: We were able to get VDACS and Virginia Department of Health (“VDH”) to better define what food service is permitted without needing additional licensure from VDH. A copy of that statement is attached in the Resources , below. They also clarified that a licensed caterer may bring heated food (chili and Brunswick stew were the 2 specific items asked about), set it up on a heating tray, and leave it there for service at the winery without the winery crossing the line and needing to get VDH licensure. In addition, a winery can heat up bread, including frozen bread, brown and serve rolls, as well as cut cheese with a single-use disposable plastic knife and still remain under VDACS jurisdiction. The term “temperature control for safety” refers to foods that must be kept either hot or cold to control bacterial growth. It is not related to the heating or baking of bread.
BMI/Music: There are 3 companies which have been charged with protecting copyrighted music from copyright infringement: ASCAP, BMI, and SESAC. It is a venue’s responsibility to ensure that if it will be playing any copyrighted music (which is essentially all music written in the last 75 years), that it has the necessary licenses in place. ASCAP, BMI, and SESAC issue those licenses. The licenses are based on the way music is used at the venue, and calculated based on maximum occupancy of the space in which the music will be used. If there is not an occupancy certificate issued for the space (and there isn’t for most farm wineries), the formula for calculation of maximum occupancy is 20 sq. ft. per person. If a 1000 sq. ft. tasting room is where music is generally played, the occupancy for calculation of licensing fees would be 50 people. If a winery uses music in its tasting room in 2 different ways, playing pre-recorded music such as CDs or the radio as well as with a periodic live musician, the winery would be subject to fees for each of those uses. There may be an additional fee if an admission fee is charged to patrons to come listen to the live musicians. The specific fees, as well as the applications for licensure can be found on these websites: BMI ; ASCAP ; SESAC .
BMI, ASCAP, and SESAC each has a different catalog of music which they oversee. Which company has a particular piece of music depends on which company the copyrighted musician hired to protect their rights. Unfortunately, you may have multiple copyrights on the same song, for the songwriter, the musician who originally recorded it, and potentially even another musician that made famous a version being performed. So potentially a single piece of music could have all 3 companies protecting the rights associated with the song. As a result, you likely need to be licensed with all 3 companies if you use music at the winery. While the expense may seem unnecessary (each of the licenses will be upwards of $350), the penalties for violating copyright law are $25,000 per illegal use, and these companies are not afraid to sue for those penalties. The VWA has secured a 5% discount off license fees with BMI for VWA members. There is an additional 5% discount for online registration, and an additional discount for payment of license fees in full.
If you use a paid commercial subscription music provider, like Sirius Commercial, the license fees are included in your subscription fee, and you may not need to pay license fees if you don’t use music (i.e. live musicians and DJs) on site. Note that Pandora does not count. There is current litigation between BMI and Pandora for violations of the copyright laws.
Donations: With limited exceptions, it is prohibited under 4.1-325 and 3 VAC 5-70-100 for a licensee to give wine away or donate it. Having this statutory prohibition gives you an easy out for going down that road. You could donate hats, glasses, or cash; the prohibition is only against giving alcohol itself.
If you have a cause to which you strongly feel that you want to be able to contribute wine, you can do it in one of the following ways: (1) There is no prohibition against an individual making a donation of alcohol, so one of the owners could buy the wine from the winery and then donate it personally; (2) have the charity purchase the wine (it can be sold from your tasting room so long as it’s not sold below cost) and the winery can make a corresponding cash donation to the charity.
Some festivals are requiring donations in addition to the booth fee for participation in their festivals. It is acceptable for the fee for the booth rental to include a specific amount of wine in lieu of cash payment, but a donation in addition to payment is not permissible. So the key is getting the contracts worded in a way that keeps the transaction compliant with ABC law. A letter to send to festival organizers requesting wine donation as a condition of participation in attached in the Appendix below.
If offering a free glass of wine for wine club members that came into the winery to pick up their shipment; it can’t be posed as a “free glass of wine”, you could certainly say “your payment of $xxx includes 2 bottles of wine and 1 glass of wine at the time you pick up your quarterly order” without running afoul of the prohibitions on free wine.
Farm wineries may now provide a patron a gift of one alcoholic beverage or a bottle of wine to two or more patrons provided such gifts are made to patrons to alcoholic beverages may be sold. No subsequent gift shall be made to the same patron(s) within 24 hours. Such gifts are to be consumed on the premises with the exception of a partially consumed bottle of wine which may be removed from the premises provided that it has some type of closure.
Tasting Fees: As noted above, farm wineries and wineries can offer complimentary tastings in their tasting room as the licensed premises. Farm wineries can also charge a fee for tastings in their tasting room and must charge for wine sampled at remote locations under a remote license.
Groupon/Living Social: Groupon and Living Social deals which involve include any sales or service of alcohol are illegal in Virginia, even tastings which could be complimentary if offered by the winery directly. It is illegal for an unlicensed entity to sell alcohol. The definition of “sale” in §4.1-100 includes “soliciting or receiving an order for; keeping, offering or exposing for sale; peddling, exchanging or bartering; or delivering otherwise than gratuitously, by any means, alcoholic beverages.” The money for these “deals” is paid to Groupon (or other similar promotional entity) first, and then after that company takes their cut, the remainder of the money is then forwarded to the winery licensee. The solicitation and receipt of the order and money for the sale of alcohol in these situations is the third party “deal” provider, who is not licensed. A winery may offer a Groupon for a special tour, glassware, food products, etc., but not alcohol. A Groupon may also be offered for a gift card for the winery, PROVIDED that the winery carries non-alcoholic items available for sale, and the gift card is not specifically issued for alcoholic beverages.
Third-Party Tasting: Similarly, B&Bs or tour companies (with the exception noted below) cannot “pre-pay” tasting fees for their customers, or pay the fees as a group as a courtesy for their clients. Because of the definition of “sale” in §4.1-100, these companies cannot collect the money for the purchase of any alcohol, including tasting fees, even if they will just be turning around and paying it to the winery.
Discounts can be made at the discretion of the winery for sales to consumers, so long as the price does not go below the actual cost of the wine being sold. These discounts can be used effectively to create an incentive for customers to buy a specific product, a specific quantity of product, or even come visit on a specific day of the week. ABC does not get involved in, or need to be notified of discounts being offered to consumers at the winery. This type of discounting can be offered on site at the wineries to persons who are members of certain clubs, or are staying in the county where the winery it located, etc., but may not be advertised by the club or hotels in the area, beyond saying “special discounts are available at ABC winery with proof of club membership or hotel key.
As a cautionary note, if the third party is another ABC licensee, you cannot give that licensee a benefit which is not available to other licensees. This is a “Tied-house” violation and is prohibited under both federal and state law. This would extend to both free items as well as discounts. Offering a discount to guests of the Main Street B&B would not be permissible; offering a discount to anyone staying at any B&B is ok.
Effective July, 2014, the ABC Department will be authorized to issue an permit to any sight-seeing carrier or contract passenger carrier as defined in §46.2-2000 which are transporting individuals for compensation to a licensed winery, brewery, or restaurant. This permit will allow the carrier to collect tasting fees from tour participants for the sole purpose of remitting such fees to the licensee. ABC is currently working on the permitting process for these tour companies, as well as what type of documentation they will need to show you in order for you to accept payment from them for tastings to their customers. We’ll update as soon as the information becomes available.
Barrel Tastings: Farm wineries may pour wine from barrels for use at these tastings under 3 VAC 5-40-30(A) , regardless of whether there is a fee for the event, into a decanter or directly into glasses, PROVIDED that you measure all wine used for the tastings, record the amount used and report the same to ABC, and pay the appropriate tax on that wine. Best practices for ensuring that these provisions are met are as follows:
ü Develop a standard, written, procedure for these types of events, so that regardless of which winery employees are involved, you know that the appropriate information is collected and recorded.
ü Use a standard pre-measured container into which the wine is poured, so that you can accurately record how much of each wine is drawn from the barrel for use at the barrel tasting. It can be an etched line on a decanter or glass, or any other means, so long as it is easily used by all members of your staff, is being used to keep track of the amount poured, and is being used consistently by all employees so that accurate calculations and recordkeeping is maintained. Remember that each wine must be reported separately on your monthly purchase order, so make sure that the volume used is calculated and then recorded separately for each wine.
ü Include the amount removed from the barrels, to the nearest standard fill quantity (375ml or 750ml most commonly) in the same manner you record other removals from bond for ABC reporting. For instance, if 2.5 liters of Cabernet Franc is pulled out of a barrel for use in a barrel tasting, you would report this as 3 750s and 1 375 of the Cabernet Franc.
ü Include these amounts on your monthly Purchase Order filed with ABC each month, along with the other wine you move from your winery to your retail space. Remember that each bottle size for a product gets its own line on the purchase order, so if your normal bottle size for Cabernet Franc is a 750ml, and the closest measure for the amount you used is a 375ml, you’ll need a separate line item for that. Realize though that the tax owed on the difference between a 750ml and a 375ml bottle is $.15, so if it’s easier for you to just use the single 750ml line item, the financial benefit from breaking it out may be outweighed by the hassle in splitting it out by bottle size. Remember you need to keep accurate inventory records for both federal and state requirements.
ü Report the amount removed on your monthly ABC report, and pay the tax accordingly.
Slushies/Frozen Wine Drinks: Cooler/frozen drink machines that dispense beverages that have been premixed by winery licensees are not required by ABC to be approved. Those devices that automatically add or mix wine to a beverage as it is being dispensed are required to be approved. A list of dispensers that have been approved by ABC can be found in Resources.
If the dispenser you plan to use is of the type that automatically adds or mixes wine to a beverage as it being dispense and is not on the approved list you can request that it be added by emailing compliance@abc.virginia.gov , providing the name of the manufacturer, make, model and specification for the device, which can be generally found on the manufacturers website.
Growlers: Farm wineries, wineries who hold a winery off premises license and gourmet shop licensees may sell wine and cider in growlers. Growlers are defined as “a resealable container made of glass, ceramic, metal or other materials approved by the Board.” Wine may be sold in growlers with a capacity that does not exceed 64 fluid ounces (two liters if in metric size); cider may be sold in growlers with a maximum capacity that does not exceed 128 fluid ounces (four liters if in metric size). A growler is the only container upon which the original closure has been broken in which wine can be sold in Virginia for off premises consumption. If a growler is filled on demand of a customer, it is essentially considered a big glass and does not need to go through the labeling and product approval processes. If growlers are being pre-filled and kept on the shelves for the public to purchase they are considered bottles and MUST go labeling and product registration processes noted in Labeling above .
Kegs: Wine can be kegged for sale through wholesalers to retailers, or kegged for use in the tasting room. You do not need to get a new product registration for a kegged version of an existing product. It should appear as a separate line item on your monthly PO with the same VABC code as the underlying product. Enter the number of kegs and corresponding volume for those kegs to ensure tax is correctly calculated and submitted.
Sangria and Mulled Wines: As of July 1, 2013, sangrias and mulled wine can be premixed in any size container. The only limitations on selling these items are: (1) there can be no spirits added; (2) the wine used to mix the sangria must be taxpaid; and (3) it can be sold for on-premise consumption only. The product CANNOT be bottled onsite for a customer to take home either at the winery or offsite at a festival. Note that serving the sangria in a container with a closable top or cork is construed as selling it for off-premise consumption. As a result, sangria can NOT be sold in growlers. If you want to sell this product for off-premise consumption, you need to go through the formula and COLA approval process and register the finished product with the state.
Remote Licenses: Farm wineries are entitled to have 5 additional remote retail locations at any given time. Note that these are RETAIL locations, so no production, bottling, or labeling may be done under a remote license. It’s also important to note that only SALES are permitted under remote licenses, so complimentary tastings may not be given at remote retail locations.
Remote licenses can be temporary (for a festival, farmers market, or a specific event) or permanent (for a full-time remote tasting room). Application can be made for remote licenses at https://www.abc.virginia.gov/licenses/industry-resources/farm-winery-request-for-remote-license on the ABC website . There is no fee for these licenses. Apply at least 10 days in advance of the event but not more than 2 months ahead of time. If applying for a permanent remote license, you’ll need to submit a lease showing the specific area to be licensed as a remote tasting room. NOTE that remote licenses will not be granted for events taking place on a premises that is otherwise licensed by the ABC, other than a banquet special event license.
EVENTS/FESTIVALS:
On-site Events: Under ABC law, a farm winery hay hold events on its licensed premise and there are not specified limitations on those events. NOTE, however, that many counties are currently implementing ordinances that impose restrictions and limitations on the attendance/frequency/times/types of events being held at farm wineries, often requiring some additional form of special event permit or zoning clearances for these events. While the legality of some of these requirements is questionable, and in many cases is being either challenged or negotiated, be sure to check your county ordinances before hosting on-site events to make sure you aren’t in violation of local rules.
Off-site Events: As discussed above, farm wineries may participate in festivals off-site by using one of their 5 remote privileges.
Special Event/Banquet Licenses: There are 2 primary types of banquet special event licenses under which a farm winery may participate in a festival.
ü Non-Profit Hosted Banquet Special Event License: This type of license is only issued to duly organized not-for-profit corporations and associations raising money for athletic, charitable, educational, political, or religious purposes. The non-profit must apply for the license, and upon issuance of the license, it may purchase wine at retail from farm wineries, or wineries with additional Retail-Off Premise Winery licenses, to be sold by the non-profit either as part of their admission fee or for consumption on-site at the event. Farm wineries may obtain a remote license for use at this type of banquet special event and may sell wine for on- or off-premise consumption through their remote license. Check with the event organizer, as they may be obtaining a “Group Remote” which will include all participating wineries rather than each participating winery needing to get an individual remote license.
Remember that complimentary tastings can only be given in the hospitality suite at the winery. Wine used for tastings which is included in the event ticket price must be sold and invoiced to the non-profit. You may then pour that wine in your booth on the non-profit’s behalf to educate consumers on the products, in addition to sales under your remote license as discussed above.
ü Manufacturer’s Banquet Permit: A wine manufacturer can apply for a manufacturer’s banquet permit up to 8 times per year without regard to the number of wineries owned or operated by such manufacturer. Each permit can be valid for up to 3 consecutive days for the service of wine or beer, with the purpose of educating the public about wine and beer. This banquet permit operates just like a non-profit banquet permit usually used for festivals, but you do not need to have a non-profit apply for the license. The host winery, who would obtain this license, can buy wine for tastings from the other participating wineries directly or can buy beer at retail from a brewery (and pick it up from the brewery) for on-premise sales. NOTE that all banquet permits allow only for on-premise consumption. Sales of other wineries’ wines for off-premise consumption would have to take place under a remote permit obtained by each participating farm winery. Since breweries do not have remote privileges, sales of beer for off-premise consumption are prohibited under this license.
There are 2 ways to apply for and operate under this type of license:
a) The host winery can be the sole applicant and holder of the license. In this situation, the host winery can buy wine for tastings to be provided under a joint event ticket from the other participating farm wineries directly at retail or through a wholesaler, or can buy beer either at retail from that brewery (and pick it up from the brewery) or through a wholesaler. The beer is then owned by the host winery as the holder of the license, and the host winery may sell it at whatever price they choose for on-premise consumption. At the end of the scheduled event, any remaining beer must be removed from the premise. NOTE that the brewery rules above apply to the inclusion of a commercial winery/meadery/cidery, provided that those licensees have winery off premise retail licenses. Other participating farm wineries must get a remote permit for the event to allow on- and off-premise sales.
b) The host winery can apply jointly with other beer and wine manufacturers and each manufacturer can sell can sell their own product for on premise consumption. NOTE, however, that the downside of this scenario, since this is a jointly held license, is that if ANY manufacturer allows violations of ABC laws, ALL the manufacturers on the license will be penalized. Depending on the violation, penalties can range from a monetary fine to suspension or revocation of your farm winery license. So, it’s absolutely in your best interest to ensure that all the other manufacturers on the license take compliance with the laws as seriously as you do before holding a joint event license with them. Participating farm wineries may obtain remote permits for the event for off-premise sales only, since all on-premise sales will already be allowed under the MSEL.
Whether the license is held solely by the host winery or jointly with other manufacturers, the following requirements apply:
a) The license allows only for on-premise consumption. Sales of other wineries’ wines for off-premise consumption would have to take place under a remote license obtained by each participating farm winery. Since breweries do not have remote privileges, sales of beer for off-premise consumption, including growlers, are prohibited under this license.
b) The license must take place in a designated space, which must be specified in the application. The license holders are responsible for ensuring that no alcohol purchased at the event leaves the designated area, and no open wine purchased outside of the event space may be brought into the designated space, so some form of physical containment for the event (think “beer and wine garden”) is recommended.
c) All wine used at the event should be recorded as removed from bond in the same way sales from your tasting room or at festivals. Records must be kept for sales at the event separately from the sales records of the farm winery. As you do for traditional festivals, you should have records that show what your total sales were at the event, and maintain those records for 2 years.
Third party private events and events for which a wine manufacturer has obtained a Manufacturers Multi-Day Banquet license may be held in the interior of the retail sales area (tasting room) provided the following conditions are adhered to:
· The retail privileges afforded to the winery or farm winery licensee are not exercised during such events in the tasting room.
· Prior written notification is provided to the Department five days in advance of the event. The notification should contain the date, hours and nature of the evet by email to compliance@abc.vrginia.gov
· During the times such events are being conducted, no sales by winery or farm winery may occur and the inventory must be secured.
· Any third-party event held upon a manufacturers licensed premises at which alcoholic beverages are sold or consumed must be appropriately licensed by the Department if such licensing is required by law.
Festival Best Practices:
ü You must have a remote license for each festival or off-winery event in which you participate. Apply at least 10 days in advance of the event, but not more than 2 months beforehand. ABC is hesitant to issue a remote for a festival that has not received a banquet special event license yet. Also check with the event planner to see if a group remote is being requested for the event; if so, you don’t need to apply for a remote, but should make sure that your name has been tendered to ABC for inclusion on that group remote license.
ü You must have a copy of the remote license with you at the event (and available for inspection should ABC ask, so put it somewhere you can easily lay hands on it) as well as a copy of your ABC Managers List, which lists the person(s) present and in charge at the event. Remember that there must be an ABC manager present in your booth at all times, so ensure that you have at least 2 named for when volunteers take breaks. The ABC Manager is responsible for ensuring that no ABC laws are violated, however, so the persons named need to be people you trust to protect your license, which is ultimately your livelihood.
ü Your manager at the event must be at least 21 years old, and anyone selling or serving wine must be at least 18.
ü The same limitations that exist at your licensed premises exist in your booth at the festival. Other alcohol is not permitted in your space and you are not permitted to drink while you’re serving alcohol.
ü Always remember that whoever sells/serves the alcohol is ultimately responsible for making sure that alcohol is not served to persons under the age of 21 or to someone who is intoxicated. Even if the event is staffed by police officers checking IDs at the gate and stamping or giving armbands to those of legal drinking age, you should still ask for ID from anyone that appears to be under the age of 21. ABC views the gate check/stamping/armbands procedure to be a deterrent to under age consumption, but ultimately it is the wineries themselves that are responsible for making sure they’re only serving to people of legal drinking age and to people who are not already intoxicated. Serving an underage person or an intoxicated person at a festival can jeopardize your winery license.
Paying Volunteers with Wine: You can pay volunteers directly in wine. The definition of “sale” within the ABC code includes “exchange” and “barter.” In paying your volunteers, you are exchanging or bartering their time for wine, which is completely permissible. Just remember to keep records on the amount used for this purpose. You will need to pay both excise and use tax on all wine used to pay volunteers, and report accordingly. NOTE: Paying volunteers in wine is likely a violation of the Fair Labor Standards Act, as you are not providing minimum wage. See the Labor section, below, for more information.
Process for Handling Reimbursements for Festival Tasting Wine: In order to be compliant with ABC law, all wine used for tastings at a festival must be sold to the non-profit who has obtained a banquet special event license for the event. Sales tax is due (and must be remitted) on these transactions unless an exemption certificate or tax exempt certificate is provided to the winery by the non-profit. The following process should be followed.
ü All wine used for tastings should be invoiced by each participating winery to the non-profit who holds the banquet special event license for the event.
ü An ST-10 exemption certificate (or tax exempt certificate if the non-profit is exempt from payment of state tax) should be presented to the winery by the non-profit to justify the exemption from payment of sales tax. This only needs to be provided once to each winery by the non-profit and is not specific to a single transaction, so if it is a festival where the same group of wineries participates each year and the same non-profit is the host each year, you don’t need a new form for each year.
ü The non-profit pays the winery the agreed upon rate for the wine used for tastings.
ü The winery keeps a copy of the invoice and a copy of the ST-10/Tax Exempt Certificate for their records, and reports the amount paid for the sale of this wine as they would any other sale on their sales tax return.
ü The event host pays sales tax on the admission price of the ticket as part of its sales tax return (unless it’s a tax-exempt organization.)
From a pragmatic standpoint, exchange of all this paperwork can happen at the end of the festival, and a template invoice can be hand filled based on the amount of wine sold for tastings at the festival. It used to be standard procedure to exchange POs and reimbursement money at the end of the event; a similar process works here. At the end of the day, a representative of the event walks around and swaps an invoice from the winery for an ST-10/Tax Exempt Certificate and a check from the event.
MARKETING/ADVERTISING
There are several over-arching premises under from which all advertising restrictions flow. First, “tied house” laws prohibit a manufacturer or wholesaler from giving “anything of value” to a retail licensee, unless specifically permitted. This includes any kind of joint marketing, publicity or advertising given by a manufacturer to one retail licensee over another (like a winery Facebook post saying “Go see our friends at ABC wine shop. They’re great!”), providing of free goods, or any other benefits to the retail licensee. Labels, websites, Facebook pages, and Twitter feeds are all considered advertising, and the same rules apply.
Wineries were considered to have retail privileges but not to be retail licensees for the purposes of the advertising regulations, but a recent decision by ABC now makes these regulations applicable to the wineries and farm wineries in the same way they apply to other retail licensees like restaurants and wine shops.
Some specific areas of inquiry that have come up are:
ü Samples to Retailers: In Virginia, both producers and wholesalers can provide samples to retailers which have a license to sell their products (ie: wine sample to someone with an ABC license allowing sales of wine). If a VWDC agent wants to provide samples to a retailer, the maximum bottle size for a sample is 1.5 liters per product, and it must be clearly marked “Sample – Not for Sale”. The agent must document the sample with a Wholesale Wine Distributor’s Invoice. Both federal and state excise taxes (state will be paid through the wholesaler) must be paid on wine used for samples to retailers, and accurate records should be kept to ensure accurate reporting to the respective agencies. These types of samples should also be included in your calculations for use tax.
ü Winemaker Dinners: A farm winery may attend an on-premise licensee’s event to provide education to the patrons and assist with the pouring of wine samples up to two ounces in size to patrons at least 21 years old. The farm winery does not need to obtain a remote permit for this type of event, as wine served at the event must come from the retailer’s inventory purchased through a wholesaler. The farm winery cannot bring any wines or supply any other items for the event. The farm winery cannot currently advertise their presence at this event, even on social media, as such advertising has been deemed to be an illegal “thing of value” given to a retailer under Tied-House laws, but this position is currently under review at ABC. There can be NO joint payment for advertising.
ü Gourmet Shop Tastings: Farm wineries may participate in tastings conducted by off-premises retail licensees provided that the retailer’s license contains the “Gourmet Shop” designation. No remote license is required as all wine served must come from the retailer’s inventory purchased through a wholesaler. Farm wineries may not supply the wine for the tasting or any other items including cups, crackers, cheese, or novelty items. The farm winery may assist the retailer by providing education to the patrons and assisting with the pouring of wine samples up to two ounces in size to patrons at least 21 years old.
ü Coupons: Coupons can only be of the rebate variety; instantly redeemable coupons for alcoholic products are not permitted in VA. They need to be mailed to, and redeemed by, the manufacturer or a third party clearinghouse; they may not be redeemed at a retail location. They can also only apply to sales for off-premise consumption, and cannot be for more than 50% of the normal retail price of the alcoholic beverages. Coupons cannot be customized for a particular retailer. Persons must be at least 21 years old to redeem the coupons.
ü Contests and Sweepstakes: You cannot offer alcohol as a prize in a contest or sweepstakes (contests have an element of skill where sweepstakes are pure luck), and there MUST be an alternative way to enter the contest/sweepstakes without having to make a purchase. Participants must be at least 21 years old to enter the contest/sweepstakes. Retailers may display and distribute entry blanks but they cannot be customized for a specific retailer. Drawings may not take place on a retailer’s premises.
ü Sponsorship of Events: As manufacturers, you can sponsor both charitable events and public events like races, concerts, and cultural events. You cannot sponsor college or younger sporting events as an alcohol licensee. Contributions and awards of alcohol are not allowed, but you may sponsor with money, signage, or advertising novelties. You cannot sponsor an event that is organized by a retail licensee. Brand-specific novelty items given to the public at these events cannot exceed $10.00 wholesale value. Items in excess of this value may only be given to participants or entrants in connection with the sponsored event and only to persons at least 21 years old.
ü University Affiliations: A number of wineries have asked about the permissibility of doing a private label wine for a university, booster club, or alumni association using university logos, mascots or landmarks. Advertising, including labeling, cannot picture or refer to any current or former athlete or athletic team. As long as you have a licensing agreement with the university to use their mascot or logo on the labels, that is permissible.
ü Cooperative Advertising: It is not permissible to share the advertising expenses with a retail licensee, or reimburse a retail licensee, directly or indirectly, for costs associated with any advertising.
ü Promotion of Retail Licensees Carrying your Product: It is permissible to list the retailers carrying your products on your website so long as ALL retailers carrying your products are listed, rather than emphasizing any specific retailer(s) in any information provided. For instance, it is NOT permissible to say on your website “Find our products at Main St. Wine,” but it is permissible to say “Click here to see where you can find our wines in your area!” and provide a full list, with the exceptions listed next.
ü Use of Social Media: ABC issued a circular letter (15-03) providing guidance on the use of social media by manufacturers. Three-tier and cooperative advertising restrictions continue to control, not only in Virginia, but across the country. However, Circular Letter 15-03 acknowledges the growing use of social media in the sale and promotion of alcohol. ABC will allow manufacturers to post information listing at which retail establishments their products are available for purchase, so long as the information posted is limited to: “(1) the retailer’s name, address, phone numbers, and website, and (2) all retailers that carry the products are included in the listing.”
Further, manufacturers may post information concerning upcoming events to be held at a retail establishment so long as they will participate in the event and the event involves the manufacturer’s products, it’s the type of event that licensee is allowed to participate in. For farm wineries, that generally means a tasting event, including a winemaker’s dinner. The information that may be posted in these situations is limited to the general details about the event (what it is, where it is, when it is, and where they can get more information.) Just the basics, Folks. The retailer may post detailed information about the event on their website/Facebook page, and you can direct viewers to their website/Facebook page for additional information. You may include their website or event page address in your post. Note that if it’s a ticketed or RSVP event at a retailer like a winemaker’s dinner, the farm winery may NOT sell tickets or take reservations. You can direct them to the retailer’s page and they can make their purchase or reservation there.
Finally, you are responsible for your social media, but aren’t held responsible for what other people post or tweet that references you. For instance, a farm winery and its principals CANNOT post or tweet “Go to Main Street Wine Shop to buy our wines” unless you also advise all the other retailers at which your wine may be purchased because it would violate tied house restrictions. Similarly, you can’t plant people to make such posts or tweets on your behalf, as they’d be deemed to be acting as your agents.
A winery can re-tweet a tweet about your product or an event, provided you abide by the conditions below, even if it references a retailer (i.e. Mary Beth tweets “Yay! I just saw ABC Winery’s wines at the Main Street Wine Shop.”), you MAY retweet that. Similarly, if you’re participating in an event at a retailer, and someone else, including the retailer, tweets about it, you may retweet it. THE CONDITIONS: (1) If there is anything illegal within the original content, don’t endorse it by sharing it; (2) There can be no compensation for the underlying tweet, whether it’s to an individual or the retailer; (3) the retweeting of the retailer’s content cannot be part of your agreement to have the event there, and can’t be a condition of the contract or terms of agreement for the event; and (3) there cannot be cooperation between you and the retailer to create the tweet to post and have you retweet.
ü Happy Hour: “Happy Hour” is defined as a specific period of time (within a day) during which alcoholic beverages are sold at prices reduced from the customary price set by a retail licensee. Happy Hour is specific to the on-premise sale of alcoholic beverages, but does not apply to prearranged private parties, functions, or event not open to the public, where the guests thereof are served in a room or rooms designated and used exclusively for private parties, functions or events.
Some things to note as these regulations apply to wineries:
· Happy hours may not run later than 9 PM
· Special prices of food are not governed by the “happy hour” regulations
· The sale of wine for off premises consumption is not effect by the “happy hour” regulation. You are permitted to offer discounts on off premises sales. i.e. “all active or retired military personnel get 20% off the purchase of 3 or more bottles of wine on Memorial Day.
· Happy hour may be advertised in the media (including electronic media and print and broadcast), flyers and any other lawful exterior advertising and may include the following:
§ Times at which reduced prices of drinks are offered
§ The terms Happy Hour or Drink Specials
§ The names of drinks that are offered during happy hour
Note – No Happy Hour advertisement appearing outside of the licensed premises can contain any mention of any special (reduced) prices offered on alcoholic beverages.
The table that follows gives some specific examples of acceptable promotions under the happy hour regulation.
| Statement | Acceptable |
| Happy hour from 4–7 p.m. daily | Yes |
| Join us for happy hour drink specials | Yes |
| We offer drink specials from 3–8 p.m. Monday–Friday | Yes |
| Offering the best happy hour in Chesapeake | Yes |
| Drink Specials featuring our margaritas from 4–7 p.m. | Yes, Drinks offered during happy hour may be listed but prices of them may not. |
| Beer and wine specials from 5–9 p.m. daily | No. Drink types may not be listed (beer and wine). |
| $2 off highballs | No. Reduced prices may not be listed |
| Thirsty Thursday: beer specials from 4–8 p.m. | No. Only the terms “happy hour or drink specials” and list of the alcoholic beverages featured may be listed. |
| 2-for-1 rail drinks during happy hour | No. 2-for-1 drink specials are illegal anytime and any place |
| Valentine’s Day package: shared appetizer, pasta entrée, and dessert plus a bottle of Virginia-made wine for $50 per couple | Yes. Food and alcoholic drink package pairings may be promoted if an exact amount of alcohol is specified |
| Happy hour 6–10 p.m. daily | No. All happy hours and discounted drink offerings must end by 9 p.m. |
| New Year’s Eve package: One night at a hotel, dinner and brunch for two, and unlimited champagne for $175 | No. Licensees may not offer unlimited alcoholic beverages |
| Introducing our new drink, The Pilot, featuring Barcardi Limon rum. Only $7 | Yes. If The Pilot is always $7 (anytime on any day), the drink may be advertised with both the cost and alcoholic beverage included as long as no manufacturer or wholesaler money is involved in the retailer’s advertising |
| 20 wings and pitcher of Bud Light for $15.99 from 5–7 p.m. | Yes. If the beer is regular menu price and the ad is not being paid for by a manufacturer or distributer, discounted food may be advertised |
VDOT Signs and the Different Programs/Requirements:
ü In order to be eligible for Tourist Oriented Directional Signs (TODS) signage, wineries will be required to meet the standard TODS requirements: located within fifteen (15) miles of the intersection of a non-limited access state primary system highway where the initial TODS panel is to be located at the nearest primary intersection along the selected route; hours of operation requirements (6 hours per day, 5 days per week for at least 12 consecutive weeks each year), licensed, and Agree to abide by all rules, regulations, policies, procedures and criteria associated with the program.
ü Wineries will be eligible for LOGO signage (attractions category) on limited access highways. To be eligible for LOGO signage, a winery must be a maximum of fifteen (15) miles from the interchange facility, will be required to meet the standard hours of operation requirements (open 8 hours per day, 5 days per week), possess licensing, utilize no other supplemental guide signs at the same location, offer sanitary restroom facilities, provide adequate parking, and to pay the standard annual fee for the logo program.
ü Wineries will have the option to display the “grape cluster” logo (in color) on TODS or LOGO signs, upon request.
Existing Signs:
ü When an existing Supplemental sign is damaged, or for any other reason needs to be replaced, the replacement sign may be a Supplemental sign or a Tourist Oriented Directional Signs (TODS) sign. The fee to install the Supplemental sign will be the standard installation fee. The requesting entity will thereafter be required to pay the standard annual fee for Supplemental signs or TODS signage, whichever is applicable.
ü In the event an existing Supplemental sign for a winery needs to be replaced, and there is insufficient space on the appropriate TODS structure for an additional TODS panel, or the sign is in an area where TODS signs are not permitted, a replacement Supplemental sign may be installed. In this event, the requesting entity will be required to pay all costs related to the replacement sign and thereafter be required to pay the annual fee for Supplemental signs.
Signage for Wine Trails: A wine trail shall consist of a group of three or more wineries that have declared their intention to be a wine trail and published joint marketing materials.
ü To participate in either the TODS or LOGO program, each winery on a wine trail must meet the hours of operation and licensing requirements for that program. The driving distance between one winery and the next wine trail facility shall not be greater than fifteen (15) miles.
ü To be eligible for participation in the TODS program, the first and last facilities on a wine trail must be located within fifteen (15) miles of the intersection of a non-controlled access state primary or secondary system highway where the initial TODS panel is to be located.
ü To be eligible for participation in the LOGO program, the facility at one terminus of the wine trail must be located within fifteen (15) miles of the interchange. The facility at the other terminus must be eligible for either TODS or LOGO signage.