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Alcohol Marketing Practices FAQs

The questions in this FAQ reference different sections of the Texas Alcoholic Beverage Code and TABC Administrative Rules.

General Questions

The Alcoholic Beverage Code mandates that the three tiers of the alcoholic beverage industry — manufacturers, distributors/wholesalers and retailers — should operate independently of each other. This is one of the key principals that govern all TABC rules and conduct as an agency.

Marketing practices relate to the relationship between members of the upper tiers — manufacturers, wholesalers and distributors — and the retail tier in ways that influence business practices. When a member of the upper tier provides unfair or unlawful services, benefits and gifts to a retailer so they can obtain a better position in the marketplace, this is considered unfair competition or unlawful trade practices. Gifts, services and benefits are examples of areas that are regulated in marketing practices.

Marketing practices advisories provide guidance for the alcoholic beverage industry so that the law is interpreted and applied consistently across the state. These advisories reflect our staff’s opinions on questions we receive. We review these opinions and issue new advisories when statutes, situations and industry trends change. You can find them on the Marketing Advisories page.

Cooperative Advertising

TABC has historically interpreted it to mean any form of advertising by a supplier or wholesaler that draws attention to or promotes a specific retailer or group of retailers. It includes any form of advertising that lists a retailer’s trade name, logo, trademarks, etc. 

 

See TABC Administrative Rule 45.110(c)(3).

Yes, as long as the retailer does not receive any benefit from the manufacturer or distributor for using the brand name in the advertisement. The retailer must also pay the full cost of the ad.    See Alcoholic Beverage Code, sections 102.15, 108.05 and 108.06.

Manufacturing and wholesaler tiers can advertise retail locations where their products are sold. But no financial remuneration, incentive, inducement or compensation for advertising is allowed between a member of one tier and a member of another.

See Marketing Practices Bulletin MPB0049, which allows manufacturers and wholesalers to do this activity, and Alcoholic Beverage Code Section 108.09, which allows the activity for wineries as well.

No. A sign provided by a distributor or authorized manufacturing tier member may not bear the name, logo or trademark of a specific retailer. A retailer also can’t place their name on a sign provided by a distributor or manufacturer. Unique signs that can’t be used by any other retailer generally violate this rule. 

See TABC Administrative Rule 45.113(d)(3).

Exclusive Product Sales

No. A supplier or wholesaler, including a local distributor, may not enter into any exclusive purchase agreement with a retailer orally or in writing.

See Alcoholic Beverage Code sections 102.16, 102.13, 102.07 and 108.06.

Yes. But the retailer might be investigated to determine if they’ve been illegally induced to make this decision.

Donations, Temporary Events and Unlicensed Persons

Yes. Members of the manufacturer or wholesaler tiers can provide liquor or other things of value to unlicensed persons who are not affiliated or employed with the holder of a retail license or permit. However, the manufacturer or wholesaler that made the donation may not attend the event to promote their products or serve samples. Manufacturers and wholesalers are generally prohibited from serving and/or promoting their products at unlicensed venues.

See Title 16 Texas Administrative Code sections 45.117(b)(4) and 45.113(b)(5).

The distributor may give the beer to an unlicensed group but can deliver beer to licensed locations only. That means unlicensed groups must pick up the donated beer from the distributor.

See Alcoholic Beverage Code Section 64.01.

Upper tier members can donate non-alcoholic beverage items (such as a picnic table or barbeque pit) to a nonprofit that does not hold a TABC license or permit. Nothing prevents the nonprofit from auctioning off or selling the non-alcoholic beverage item. These items can display the brand.  

See TABC Administrative Rule 45.113(f) and Alcoholic Beverage Code Section 109.58.

Administrative Rule 45.113(f) addresses gifts to unlicensed civic, religious and charitable organizations and Rule 45.110(c)(4) deals with manufacturers, wholesalers and distributors providing entertainment to retailers with a $500 limit. The $500 limit does not apply in this situation.  

Gifts to charities under Rule 45.113(f) must be made with no strings attached and of the manufacturer/wholesaler/distributor’s own accord. Any device or scheme used by a retailer to "punish" the distributor for not giving gifts could place them in violation of Section 104.03 of the Alcoholic Beverage Code. Upper tiers are sometimes asked to provide promotional items such as golf bags, hats, shirts with brand recognition, which are then awarded to retailer employees or given as awards by the retailer at the charity event. This practice conflicts with Rule 45.113(c), the prohibition against giving away promotional items. Retailers should purchase these items from members of the upper tiers in this situation.

Yes. See Alcoholic Beverage Code Chapter 53.

Yes. If the temporary permit holder is a civic, charitable or religious organization, they can receive draft beer-dispensing equipment to use at the temporary event. The jockey box may not be given in exchange for an exclusive sales privilege.

See TABC Administrative Rule 45.113(f)(3).

Alcoholic beverage industry members can advertise at charitable and civic events to show their participation or sponsorship. All sponsorship proceeds must go directly to a nonprofit with no TABC license or permit. The sign should be temporary in nature.

Pricing and Promotions

Some businesses sell their product at a loss to lead customers into the establishment. This practice is called the “loss leader” and in itself is not illegal. However, TABC will investigate these situations on a case-by-case basis.

Two-for-one sales at on-premise retailers are illegal. But there is no similar rule for off-premises establishments such as convenience stores or grocery stores. Two-for-one at an off-premise retailer may or may not be legal, depending on how the pricing is structured. Rule 45.101(a) says that no retailer may offer an incentive or inducement with the purchase of an alcoholic beverage, so advertising a free 24-ounce can of beer with the purchase of one 24-ounce can would likely be prohibited.    In contrast, it's been the agency's historical position to not regulate pricing structures of a retailer provided no excessive discount exists. So if a 24-ounce can of beer ordinarily cost $2 and the retailer wants to discount the second can by 50% and assess a charge of $3 for two cans of beer, nothing would likely prohibit the discount as long as it does not involve a coupon offer. 

See TABC Administrative Rule 45.103(c)(1).

There is nothing in the law that prohibits establishments from doing this. But any door charge or "buy-in" that reduces drink prices violates TABC Administrative Rule 45.103 for On-Premises Promotions.

It depends on the situation. Our rules state that happy hour prices must end at 11 p.m., but nothing prevents a retailer from offering a drink special from opening to closing time. But if these sales cause a customer to drink to excess or cause the retailer to not be able to monitor or control alcohol consumption, the retailer will be liable. 

See TABC Administrative Rule 45.103 and Title 16 Texas Administrative Code 45.103(c)(11).

Yes. They can purchase alcoholic beverages for consumers if they are consumed on the licensed premises in the purchaser’s presence, and if the purchase is not excessive. This is called "bar spending." Manufacturers, wholesalers and distributors can prearrange and preannounce the promotional activities.  

"In the presence of the purchaser" means that the purchaser and consumer are in each other’s company. In the case of a corporation, this refers to the agents, servants or employees of the corporation. In other words, the purchaser can’t open a tab and then leave. They must remain at the location until they close their tab. 

See Alcoholic Beverage Code Section 1.04(6) and TABC Administrative Rules 45.113(b)(3) and 45.117(b)(3). 

Coupons

Yes. A rain check is a document from a retailer guaranteeing the customer can return and make a one-time purchase at an advertised price once the item is back in stock. A retailer can issue a rain check to an adult of legal drinking age (21 or older). A rain check does not qualify as a coupon, which isn’t allowed because it limits the offer to the coupon bearer rather than everybody. 

See TABC Administrative Rule 45.101.

No. Giving out coupons or rebates for the purchase or discount of alcohol is not allowed.  It is also illegal to advertise alcohol on a flyer distributed on a public street. On-premise retailers can offer a discount or complimentary alcoholic beverage as part of a meal package, but they cannot require the consumer to present a coupon to receive the offer. The retailer can also advertise the offer on their website or through social media as long as the consumer doesn’t have to present the offer to receive the discount.

See 16 TAC 45.101(b) and (d), and Alcoholic Beverage Code Section 108.02.

No. Anyone who holds a manufacturing, wholesaler or retailer license or permit may not give any rebate or coupon redeemable for the purchase or discount of alcohol. A retailer may give one complimentary beverage to a person of legal age per business day but not through a drink ticket or coupon.  

See Title 16 Texas Administrative Code sections 45.101(b) and 45.103(c)(3).

Product Tastings

No, it does not violate the law. A winery may charge for tastings. It may also give the glass to the customer after the tasting because the cost of the glass is generally included in the tasting fee. 

See Texas Alcoholic Beverage Code Section 102.07.

Yes. A Nonresident Seller’s Permit (S) holder can conduct a tasting for retailers at a permitted location in order to promote products. Only samples of the manufacturer's or wholesaler's product and complimentary food can be provided. All the wine at the event must be purchased from the retailer where the event is held.     See TABC Administrative Rule 45.117(d)(2).

Inter-Tier Relationships

Services Provided to Retailers

Products that were damaged while in the retailer’s possession cannot be replaced or refunded. If a distributor or wholesaler delivers damaged product, the retailer is allowed to make a claim for its replacement. 

See Alcoholic Beverage Code Section 104.05(d).

No.

Yes. When rearranging cold boxes, they must not move their competitor’s product. They can also travel in an unmarked vehicle while wearing an unmarked uniform.

See TABC Administrative Rule 45.109.

Reset means to rearrange an existing display or shelf of products. Restock means to refill a product that has been removed from a shelf or display by a consumer. A reset violation would involve the manipulation of other industry products by someone other than the retailer or the appropriate distributor or wholesaler.

Yes.

Yes, as long as there’s no threat to the retailer’s independence.

Yes. But they can’t remove and touch a competitor’s product to clean the area. They can only clean the shelf space that his or her product is being moved to, and not the entire area.

Also see MPA063 — Limits on Merchandising Services Provided to Off-Premise Retailers.

Yes, as long as there’s no threat to the retailer’s independence.

Wholesalers, distributors and members of the manufacturing tier who are allowed to sell directly to retailers can organize and construct displays of their product on retail premises. With the retailer’s permission, competitors’ products that are arranged in floor or end cap displays may be moved while doing this.

See TABC Administrative Rule 45.113(c). 

TABC rules ban the movement of a competitor's product, but our agents will enforce the rule with common sense and consider the intent. The rule exists to ensure wholesalers and distributors can effectively market their product without giving the retailer too much free labor. It isn’t meant to include innocuous or incidental movement of a product.

 See TABC Administrative Rule 45.109.

Yes, as long as they don’t move a competitor's product.

No. See TABC Administrative Rule 45.109(c)

Illegal Inducements

No. See Alcoholic Beverage Code Section 102.07(a)(5).

No. This is an example of an illegal inducement. See Title 16 Texas Administrative Code 45.110(c)(2).

No. Co-packs are alcoholic beverages packaged along with other items for consumers. The additional items should have no value or benefit to the retailer other than potentially promoting sales. Co-pack sales are not considered a coercion of the retailer to buy product they do not want in order to buy what they do want. Keep in mind that a retailer can’t break apart a co-pack in order to sell the non-alcohol items separately from the alcoholic beverage. But a retailer may break apart co-packs and throw away the non-alcohol item or give it away. This is a common practice after seasonal sales to free up shelf space.

See Alcoholic Beverage Code Section 102.07(a)(5) and Title 16 Texas Administrative Code TAC 45.110(c)(2).

A seller's low prices could be considered an inducement if it is discriminatory. This means the seller does not offer the prices to all retailers in the local market on the same terms without business reasons to justify the difference. For example, TABC allows members of the wholesale tier to price their product based on volume of sales. Keep in mind that excessive discounts to a retailer aren’t allowed. 

See Administrative Rule 45.110(d)(6) and Alcoholic Beverage Code Section 102.07(a)(7).

An occasion is an event or series of events that happen closely in time. For example, one occasion would be a multi-day hunting trip or having dinner at a restaurant followed by attending a sporting event. See TABC Administrative Rule 45.110(c)(4).

We measure the dollar limit for each occasion by the reasonable market value of the food, beverages, entertainment and recreation provided. See TABC Administrative Rule 45.110(c)(4).

No. See TABC Administrative Rules 45.110(c)(4), 45.113(e)(2) and 45.117(d)(2). 

Yes, as long as they aren’t provided as an illegal inducement.

No. The upper tier member must be present when the retailer consumes the food, beverage, entertainment and recreation given to them. See TABC Administrative Rule 45.110(c)(4)(B).

No. The distributor must accompany the retailer to the event because the retailer has been given a thing of value and would probably be investigated for improper use of a gift. Assuming the distributor gave the tickets to the retailer in good faith (expecting them to attend the event), the distributor has done nothing wrong.

No. Members of the upper tiers can’t “furnish” services or things of value to members of the retail tier, which includes sale. The only exception is in TABC Administrative Rule 45.110(c)(4,) which allows upper tier members to provide limited amounts of food, beverages and entertainment to retailers.

See Alcoholic Beverage Code sections 102.07(a)(2) and 102.15(1).

Yes. The “$500 per person per occasion” is measured by the reasonable market value of the food, beverages, entertainment and recreation, including the cost of the tickets.

An organized group of retailers is a collection of license or permit holders in the retail tier of the alcoholic beverage industry. Examples include trade associations like the Texas Package Stores Association or Texas Restaurant Association. It does not include groups like a retailer's managers or several retailers arranged by the distributor. 

See TABC Administrative Rule 45.110(c)(6).

Product Standards

No. If the U.S. Department of Treasury, Alcohol and Tobacco Trade Bureau issues a Certificate of Label Approval (COLA) for a malt beverage for the container size in question, it’s allowed in Texas.

No. Some ready-to-drink cocktails contain distilled spirits and others are wine-based. A wine and beer retailer may not possess or sell cocktails with distilled spirits.

Alcoholic beverages may be co-packaged with other items if the package is designed to be delivered intact to the ultimate consumer and the additional items do not have any value or benefit to the retailer other than attracting purchases and promoting sales. Both the manufacturer and wholesaler may assemble co-packs. Whoever is sponsoring the gift is usually responsible for assembling the package. Wholesalers or suppliers aren’t allowed to assemble such a package at the retail level. 

See Title 16 Texas Administrative Code 45.120 and Alcoholic Beverage Code Sections 102.07(a)(5) and 108.035. 

Yes to the first question. A winery can manufacture wine for a customer in amounts of up to 50 gallons a year per person and up to 35,000 gallons annually to all customers for off-premise consumption. A customer can also participate in the manufacturing or bottling process. See Alcoholic Beverage Code Section 16.01(b). 

No to the second question. Wineries can’t sell product without TABC-approved labels. The winery could instead choose to obtain approval of a prototype label that will give them the flexibility to change the customer name.

A wholesaler can sell liquor in containers of less than 6 fluid ounces to package stores in units of unbroken, sealed cases. A retailer with a Mixed Beverage Permit (MB) can sell miniature bottles with between 1 and 2 fluid ounces (29-59 mL) of alcohol to a customer for on-premise consumption.

See Alcoholic Beverage Code sections 101.46(a) and 28.01. 

Beer Novelty Gifts and Promotional Items

The questions in this section refer to TABC Administrative Rule 45.113, Gifts, Services and Sales (Beer).

The difference comes down to how the items are used. Manufacturers and distributors can provide promotional items to the retailers that are designed for use by consumers only. Upper tier members can’t set a retailer up in business with low-cost equipment because this could result in the retailer’s overdependence on a specific supplier, which goes against the industry’s three-tier principle. For example, giving items like shelves, refrigerators and stoves is not allowed.  

Even promotional items can be supplied a way that violates the three-tier system. TABC looks at situations under the standards established by TABC Administrative Rule 45.110 and Alcoholic Beverage Code sections 102.12 and 102.13. 

"Bar supplies" is not a term used in the Alcoholic Beverage Code or TABC Administrative Rules, but distributors and manufacturers can sell promotional items to retailers. These items must:

  • Be designed to promote a specific product or brand. 
  • Be designed for a consumer’s use, either on or off the retailer's premises.
  • Bear a manufacturer's logo, brand or product name.

Promotional items may not be sold for less than the item manufacturer's regularly published wholesale price. Payment must be in cash, paid on or before delivery. Under this definition, items that are referred to as "bar supplies" may also be promotional items in some instances.

Utilitarian includes items such as bottle openers that have a practical use in addition to advertising.

Yes. The rules require promotional items to be designed for the consumer’s use on or off the premises. But if a promotional item doesn’t have a utilitarian function, it isn’t considered designed for the consumer’s use. If the item meets this and other requirements in TABC Administrative Rule 45.113(c), it should be legal.

They refer to the promotional item manufacturer’s wholesale price.

Allowing this would also allow price manipulation. The item’s cost to the retailer would be provided by the industry member rather than determined by the item’s actual value . It would promote the kind of competition between industry members that state laws are designed to prevent.

In these situations, TABC determines what the regular available wholesale price was at the time of purchase.

  • These items must promote a product and display the manufacturer's logo, brand or product name.
  • The retailer doesn’t have to be currently purchasing the product or brand.
  • Items can be used when seeking sales.

Keep in mind the items may not be used as an illegal inducement under the code or rules. Promotional items may only be sold, and not given, to retailers.

A retailer who purchases caps and T-shirts from a distributor or manufacturer and gives them to employees would be committing a violation since promotional items must be designed for use by consumers.

Yes. Retailers can’t require a distributor to purchase a specific type of price gun or label, but the distributor may purchase one for their own use. 

No. Even if the glassware meets the definition of promotional items, it must be sold to the retailer and not given. The retailer can then offer the promotion as long as there are no violations of TABC Administrative Rule 45.103. 

No. Even if the wristbands meet the definition of promotional items, they must be sold to the retailer and not given.

Yes, if the glassware promotes a specific product or brand. The manufacturer or distributor can also sell the item to a retailer as a promotional item but can’t give it to them.

Umbrellas are considered a promotional item that must be sold. 

No. A sign given to a retailer must be for an alcoholic beverage brand or product. 

Liquor Novelty Gifts and Advertising Specialties

The questions in this section refer to TABC Administrative Rule 45.117, Gifts and Advertising Specialties (Liquor).

The limit ensures that members of the upper tiers do not provide retailers with items that cause the retailer’s excessive dependence on a specific supplier. See Alcoholic Beverage Code Section 102.07(b). 

Yes. Only buyers and sellers of liquor may deal in advertising specialties. See Rule 45.117(a)(2). 

Yes, as long as the total is under the $101 limit per brand, and the items are designed to advertise and promote a specific product or brand.

The limit applies per permitted location.