16 TAC §45.106
The Texas Alcoholic Beverage Commission adopts amendments
to §45.106 with changes to the text as originally published in the May
12, 2000, edition of the
Texas Register,
(25 TexReg 4269-4270). The text as published was changed by adding the last
sentence to new subsection(j) of the rule.
Sections 102.07(e) and 108.061 of the Alcoholic Beverage Code allows members
of the manufacturing tier of the alcoholic beverage industry to offer prizes
to consumers through sweepstakes promotions so long as those promotions are
simultaneously conducted in 30 or more states and no purchase or entry fee
is required for participation in the sweepstakes. Such methods of product
promotion are common throughout the country, although the promotion may award
prizes by random chance or on the basis of some demonstrated knowledge or
skill by sweepstakes participants.
The amendment adopted to subsection(b) of the rule defines the statutory
term "sweepstakes" to include either of these methods of awarding prizes.
This definition comports with commonly accepted meanings of the word "sweepstakes"
and allows industry members greater latitude in determining how best to promote
their product. Moreover, the amendment comports with the relevant objectives
of the Alcoholic Beverage Code in that there was no information before the
commission indicating that allowing industry members to compete in this manner
would have an adverse effect on public temperance or that such methods of
competition would serve to establish tied-house relationships between the
tiers.
The Coors of Longview beer distributorship announced in opposition to the
amendments on the grounds that they would serve to allow large industry members
to compete on terms which smaller members could not match. Further, this commenter
expressed concern that contest style sweepstakes could be used as a means
to establish tied-house relationships.
The commission disagreed with this comment. The statutory provisions cited
above places conditions on sweepstakes promotions which many smaller producers
cannot satisfy and the amendments adopted here do not alter those conditions.
Also, while sweepstakes promotions have been lawful since 1993, the commission
has no experience indicating that such promotions have been used to establish
tied-house relationships. If sweepstakes promotions were to be used in this
way in the future, that use would be regulated and constrained by §102.01(h)
of the Alcoholic Beverage Code and perhaps other provisions of the code and
rules of the commission.
The Wholesale Beer Distributors of Texas suggested that the rule be amended
to distinguish between acceptable and unacceptable forms of contest in that
contest style sweepstakes can be conducted in such a way as to benefit specific
retailers contrary to the tied-house principles of the Alcoholic Beverage
Code.
The commission disagreed with this comment in that manufacturers that conducted
contest style sweepstakes to the benefit of a specific retailer would quite
likely act in violation of §102.07(a)(2) and §102.15(1) of the Alcoholic
Beverage Code and perhaps other provisions of the code and rules of the commission.
Subsection (j) of the rule is adopted to make this constraint clear.
The Beer Alliance of Texas suggested that the rule be amended to require
sweepstakes sponsors to place a definite and reasonable time limitation on
specific promotions. The commission judged this to be an unnecessary restriction
on industry members in that there is no information before the commission
indicating that the duration of sweepstakes promotions has had an adverse
effect on public temperance or inter-tier relations.
The Beer Alliance also suggested that sweepstakes sponsors be required
to report proposed promotions to the agency prior to implementation in Texas.
The commission disagreed with this suggestion because it would impose an unnecessary
administrative burden on both industry members and agency staff. Typically,
industry members capable of conducting a promotion in 30 states are also capable
of determining the parameters of acceptable conduct under Texas law. Further,
agency staff routinely gives informal advice about such matters to requesters.
Finally, sweepstakes promotions are widely advertised to the public. Thus,
there is only small likelihood that an unlawfully conducted sweepstakes would
escape the attention of agency staff.
Anheuser-Busch commented that the amendments could be interpreted to preclude
industry sponsorship of events offered by non-industry entities, such as charity
events, rodeos, car races and boxing matches. Accordingly, Anheuser-Busch
suggested removing the reference to "the sponsor" in subsection (b).
The commission determined this suggested amendment to be unnecessary. The
rule clearly refers only to sweepstakes promotions sponsored by industry members
under the authority of §102.07 and §108.061 of the Alcoholic Beverage
Code. Other types of promotional activities are regulated by other provisions
of the code and the commission's rules such as those cited above and §45.100
and §45.113. Those provisions are not affected by this rule amendment.
These amendments are adopted under Alcoholic Beverage Code, §5.31,
which provides the commission with the authority to prescribe and publish
rules necessary to carry out the provisions of the Alcoholic Beverage Code.
Cross Reference: Alcoholic Beverage Code,§102.07 and §108.061,
are affected by this rule.
§45.106.Sweepstakes and Games of Chance.
(a)
This rule relates to §102.07 and §108.061 of
the Alcoholic Beverage Code.
(b)
For purposes of the above referenced provisions of the
Alcoholic Beverage Code, sweepstakes shall include prizes that are awarded
to consumers on the basis of random chance or on the basis of some knowledge
or skill demonstrated by the sweepstakes participant, as determined by a judge
or judges selected by the sponsor for that purpose.
(c)
The holder of the following licenses and permits may offer
a prize to a consumer if the offer is part of a nationally conducted promotional
sweepstakes activity legally offered and simultaneously conducted during the
same time period in 30 or more states:
(1)
manufacturer's license;
(2)
non-resident manufacturer's license;
(3)
brewer's permit;
(4)
non-resident brewer's permit;
(5)
distiller's and rectifier's permit;
(6)
winery permit;
(7)
wine bottler's permit; or
(8)
non-resident seller's permit.
(d)
Any sweepstakes promotion must be legally offered and simultaneously
conducted during the same time period in 30 or more states.
(e)
A person affiliated with the alcoholic beverage industry
may not receive a prize from a sweepstakes promotion.
(f)
A person must be 21 years of age or older to enter a sweepstakes
promotion.
(g)
No game piece, or other form of instant win device may
be packaged with, within, or printed on any packages of alcoholic beverages.
All sweepstakes entries are prohibited from requiring a purchase of an alcoholic
beverage or the validation of any kind which requires a purchase of any alcoholic
beverage.
(h)
No sweepstakes entry may be packaged with, within, or printed
on any packages of alcoholic beverages unless there is provided at the point
of sale identical entries available to the consumer. All sweepstakes entries
are prohibited from requiring a purchase of an alcoholic beverage or the validation
of any kind which requires a purchase of any alcoholic beverages.
(i)
Except as specifically authorized by this section, and
the Alcoholic Beverage Code, §102.07 and §108.061, it shall be unlawful
for any person to sell or distribute any alcoholic beverage in a container
bearing any label, crown, or covering upon which there is printed or marked
any word, letter, figure, symbol or character representative of or suggesting
any game of chance, or to use or display any advertising so printed or marked.
(j)
Any sweepstakes promotion that includes prizes that are
to be awarded on the basis of some knowledge or skill demonstrated by the
sweepstakes participant may not be held or conducted on the licensed premises
of a retailer or private club. Sweepstakes sponsors may, with the retailer's
permission, place sweepstakes entry forms on retail premises.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on August 1, 2000.
TRD-200005357
Doyne Bailey
Administrator
Texas Alcoholic Beverage Commission
Effective date: August 21, 2000
Proposal publication date: May 12, 2000
For further information, please call: (512) 206-3204