Md. Code Regs. 14.23.04.12

Current through Register Vol. 51, No. 24, December 2, 2024

Section 14.23.04.12 - On-Premises Promotions

A. Description.

(1) An on-premises promotion is an activity to promote a brand owner's product that includes:

(a) Brand owner promotions;

(b) Charity promotions;

(c) Radio station promotions; or

(d) Licensed retailer promotions.

(2) An on-premises promotion includes tastings:

(a) That are open to the public and held in conjunction with a reception or dinner; and

(b) At which a representative of a supplier or licensed wholesaler:

(i) Is present;

(ii) Discusses the characteristics and merits of a particular brand or type of alcoholic beverage;

(iii) Interacts with the attendees; and

(iv) May pour the representative's own products.

B. Brand Owner Promotional Activities.

(1) A brand owner or supplier, third party, or wholesaler acting as a brand owner's agent may sponsor, organize, or participate in up to 24 promotional activities in a calendar year on behalf of the same licensed retailer. The limit is per brand owner or supplier and not per brand.

(2) An event conducted by or on behalf of a licensed off-premises retailer at a licensed on-premises retail account may not be construed as one of the licensed on-premises retailer's promotions if the licensed on-premises retailer's sole involvement is to cater the event and provide the alcoholic beverages. In these instances, it shall be considered one of the events allotted to the licensed off-premises retailer.

(3) A brand owner may provide brand identifiable prizes or give-away items to be used at approved on-premises promotions if:

(a) The total number of cumulative items or prizes for any given promotion does not exceed 50 percent of the maximum capacity of the licensed retailer's premises as determined by the Fire Marshal;

(b) The unit cost of any one item or prize does not exceed $10;

(c) A brand owner or agent does not expend more than $150 in incidental expenses for any given promotion;

(d) All prizes and other incidentals not used in connection with an approved promotional event are removed from the retail licensed premises at the conclusion of the event; and

(e) Documentation on the expenses is maintained for each event and is available for inspection.

(4) A brand owner, supplier, or licensed wholesaler may not provide alcoholic beverage products at no cost to a licensed retailer. All products shall be provided and paid for through the normal distribution channels.

(5) A representative of a brand owner, supplier, or licensed wholesaler may attend and participate in an approved on-premises promotional activity and may spend up to $100 for the purchase of alcoholic beverage products at a licensed retail establishment at the regular price charged by the licensed retailer.

(6) In addition to pre-planned and pre-announced promotions that are permitted, a supplier or licensed wholesaler may make short, spontaneous, and unannounced visits to a licensed retailer's premises for the purpose of promoting a brand owner's product. Brand identifiable items or prizes provided during these visits shall be of nominal value and distributed in trivial quantities. See Regulation .06B(4) of this chapter.

C. Charity Promotions.

(1) A charity or nonprofit group which holds a temporary alcoholic beverage license is considered a licensed retailer and is generally subject to all the restrictions and responsibilities of any other licensed retailer regarding trade practices.

(2) A charity group which does not hold a retail license may receive legitimate donations from suppliers or licensed wholesalers when engaging in legitimate fund raising or other activities.

(3) Holders of a charity wine auction permit may receive alcohol from other sources as provided in Alcoholic Beverages Article, Annotated Code of Maryland.

D. Radio Station Promotions.

(1) Radio stations are considered third parties and are subject to Regulation .07 of this chapter.

(2) When acting as a third-party agent for a supplier or licensed wholesaler, radio stations may not engage in any promotion on a licensed retailer's premises on behalf of a supplier or licensed wholesaler unless the supplier or licensed wholesaler is authorized by the Executive Director to conduct the promotion.

E. Retail Promotions.

(1) A licensed retailer may sponsor promotional activities on the retailer's own premises.

(2) All expenses related to the promotion which include, but are not limited to, prizes, entertainment, support materials, staff, media advertising, and alcoholic beverages, shall be paid by the licensed retailer.

(3) Except as otherwise permitted in this chapter, a supplier or licensed wholesaler may not participate at a licensed retailer-sponsored promotion.

(4) Supplier and licensed wholesaler personnel may be on the premises of a licensed retailer-sponsored promotion for observation purposes only.

(5) A licensed retailer may not participate in the cost of advertising or promoting a wine or distilled spirits product.

(6) A licensed retailer may use advertising items including "bar kits" which are purchased from a brand owner or licensed wholesaler as authorized by Regulation .10 of this chapter.

(7) A supplier or licensed wholesaler may rent to a licensed retailer promotional materials approved by the Executive Director to be used at a licensed retailer-sponsored event if:

(a) The daily cost of the rental is at least 5 percent of the original value of the materials;

(b) A minimum daily charge is $20; and

(c) Both parties to the rental agreement maintain documentation which is available for review by the Executive Director.

F. Approvals.

(1) A person or entity who engages in on-premises promotional activities as authorized by §B of this regulation shall file a report on forms provided by the Executive Director.

(2) A wholesaler or third party may file a promotional activity form on behalf of a brand owner only if they have written authorization to act as a representative of the brand owner and the authorization is provided to the Executive Director.

(3) The report filed with the Executive Director shall list all proposed events and shall be filed not later than the 20th day of the month preceding the month in which the proposed event will be conducted.

(4) Regular monthly reports are not acknowledged by the Executive Director.

(5) A brand owner or supplier, as well as any wholesaler or third party acting as an agent of the brand owner, is responsible for complying with all provisions of this chapter including limitations on the number of events conducted.

(6) Amended Report. An amended report:

(a) May be accepted up to 5 days before the planned promotional activity if unusual circumstances warrant; and

(b) Shall be approved by the Executive Director.

(7) If an accurate and timely report is not submitted:

(a) Each promotion shall be submitted to the Executive Director for approval; and

(b) An acknowledgment must be received from the Executive Director before conducting the event.

Md. Code Regs. 14.23.04.12

Regulation .12 amended and recodified from 03.02.05.12 effective 49:26 Md. R. 1080, eff. 12/26/2022