A new law passed earlier this month modernizes a provision in Michigan’s liquor control code that many craft beverage producers were unknowingly violating in recent years.
Prior to the new legislation, the liquor control code barred beverage manufacturers from posting information on social media about events such as tap takeovers at retailers that carried their products. The law also prohibited brewers from posting about their beers being on tap at a certain location, said Scott Newman-Bale, partner at Bellaire-based Short’s Brewing Co.
“If I was sitting at Applebee’s and I posted something like, ‘Enjoying a beer at Applebee’s. Who knew they had Short’s?’ that would be illegal even if I put it on my Facebook because I’m licensed as a sales person and it applied to sales people as well,” Newman-Bale told MiBiz. “(But) it was one of those things that everyone was doing.”
Short’s became familiar with the law after receiving a warning from state regulators who noticed a posting on the Northern Michigan brewer’s social media accounts that promoted a tap takeover event, Newman-Bale said. After receiving the warning, the company approached the Michigan Liquor Control Commission (MLCC) to discuss the law.
“Everyone agreed that (the law) probably violated First Amendment rights for free speech,” Newman-Bale said. “So everyone was committed to finding a solution.”
Public Act 106, which was signed into law by Gov. Rick Snyder on May 3 and will go into effect Aug. 1, allows alcoholic beverage producers, wholesalers and others to use unpaid social media to promote tastings, product location information or on-premise brand promotion events such as tap takeovers.
While local brewers rallied behind this new legislation, Scott Graham, director of the Michigan Brewers Guild, notes that the regulation of promotions on the whole is important to avoid pay-to-play scenarios.
“I think it’s worth noting that the (original) law saying you can’t (advertise) does tend to make for a more fair playing field for small breweries,” Graham said. “That’s the core of it.”
In particular, the regulation bars large brewers from exerting their influence on an on-premise retailer like a bar or restaurant. They couldn’t buy advertising to support the restaurant in exchange for gaining control of tap handles, he said.
State Rep. Klint Kesto, R-Commerce Township, was the primary sponsor of the legislation to modernize the code. The update was necessary because when the original law passed as part of the state’s liquor control code in 1976, lawmakers had no concept of social media or the internet, making the regulations antiquated in today’s world, according to industry sources.
“It was a pretty obvious situation where (the law) wasn’t serving a purpose, everyone was doing it anyway (and) it was negatively affecting the consumer if they couldn’t find information on events,” Newman-Bale said. “It was a big deal and was something that was hanging over every single brewery’s head.”