Chapter 04. Alcoholic Beverage Trade Practices

“Advertising sign” means a printed board, poster, placard, or similar material provided by a supplier or licensed wholesaler to promote a particular alcoholic beverage product or supplier.

“Alcoholic beverage list” means a list or other advertising piece which is provided to a specific licensed retailer or group of licensed retailers and includes:

Brand Identifiable Advertising Material.

“Brand owner” means a person or entity, including but not limited to a brewery, distillery, rectifier, bottler, manufacturer, vintner, or winery, who has:

“Bureau” means the Alcohol and Tobacco Tax Bureau of the Comptroller of the Treasury.

“Charity or nonprofit group” means an organization which qualifies for an exemption from federal income taxes under Internal Revenue laws and regulations.

“Commission” means the Alcohol, Tobacco, and Cannabis Commission.

“Comptroller” means the Comptroller of Maryland or the Comptroller’s designee.

“Consumer” means an individual of legal age who buys, possesses, keeps, or transports lawfully acquired alcoholic beverages for personal use only and not for sale.

“Contest” means a competition which is rated or scored by independent judges to determine a winner and when the winner is chosen by some skill, ability, or knowledge.

“Coupon” means:

Executive Director” means the Executive Director of the Alcohol, Tobacco, and Cannabis Commission for the State of Maryland or the Executive Director’s designee.

“General advertising” means a printed, spoken, or visual public announcement paid for by a supplier or wholesaler to promote a particular alcoholic beverage product or supplier and does not identify or benefit a particular retailer or group of retailers.

Licensed Retailer.

“Nonresident dealer” means a person or entity that holds a nonresident dealer permit issued pursuant to Alcoholic Beverages Article, Annotated Code of Maryland.

“On-premises advertising” means point-of-sale material in the form of a sign, placard, display, or other item provided by a supplier or licensed wholesaler placed on a licensed retailer's premises and intended to promote a particular product or supplier of alcoholic beverages.

“On-premises promotion” means an activity:

Personalized Material.

“Representative” means an individual who is employed by or acts as an agent of a brand owner, nonresident dealer permittee, supplier, or licensed wholesaler and includes the holder of a solicitor's permit.

“Retailer” means a person or entity that holds an alcoholic beverage retail license pursuant to Alcoholic Beverage Article, Annotated Code of Maryland.

Supplier.

“Sweepstakes” means a drawing where the winner is chosen by lottery, matching game pieces, or a game of chance, or similar type of event which does not require any skill, ability, or knowledge in order to be selected.

“Third party” means an independent advertising or promotional agency, or any other person who is contracted by a supplier or a licensed wholesaler to conduct promotional activities on the premises of an alcoholic beverage licensed retailer.

Wholesaler.

A coupon may only be provided to the consumer:

A licensed wholesaler and retailer and their employees and immediate families may not participate in supplier-sponsored coupon promotions.

A licensed wholesaler and retailer may provide application forms and coupon books to be displayed on retail premises.

A licensed retailer may promote supplier-sponsored coupons in its advertising.

A coupon offer shall have a definite expiration date printed on the coupon certificate.

Multiple coupon offers are permitted.

Coupons shall have wording stating that only individuals 21 years old or older may redeem coupons.

Redemption shall require a proof of purchase.

A monetary coupon offer may not exceed the supplier-to-wholesaler price during the period the coupon offer is in effect.

A coupon offer shall be submitted to the Executive Director upon request.

A coupon offer which the supplier considers questionable shall be submitted to the Executive Director for review before its use in Maryland.

Records Availability.

Record Requirements.

Records Designation. A supplier shall:

Except as provided in this regulation, a supplier, licensed wholesaler, or person connected with a supplier or licensed wholesaler may not furnish, procure, or otherwise prepare an alcoholic beverage list for a licensed retailer.

A licensed retailer may prepare and provide the retailer's own alcoholic beverage list if there is not an exclusive arrangement with consideration given by a supplier or licensed wholesaler to the licensed retailer.

A supplier may procure alcoholic beverage lists for a licensed retailer. The supplier shall charge the licensed retailer fair market value or higher.

A list sold to a licensed retailer is not limited on the quantity and type of products listed.

A licensed retailer and licensed wholesaler shall maintain documentation on their respective premises for a period of 2 years for lists sold to a licensed retailer.

Charitable organization;

Nonprofit group or association;

Trade association; or

Group of retailers by invitation.

On the licensed premises of a licensed wholesaler or supplier;

On nonlicensed premises; or

In a private room, not open to the public, which is located on licensed retail premises.

The premises of a licensed wholesaler or supplier; or

Nonlicensed premises.

The product is provided by the licensed retailer;

Representatives of wine and distilled spirits suppliers or licensed wholesalers have a valid solicitor's permit for:

Details on the proposed tasting are submitted to the Executive Director as provided by Regulation .12 of this chapter.

For the purpose of market survey or analysis:

By a supplier or licensed wholesaler for nonalcoholic beverage products on licensed retail premises, if the tasting is:

Full particulars of each tasting; and

A list of all persons who attended.

A consumer's source of supply is a licensed retailer.

A representative or agent of a supplier or licensed wholesaler may provide to consumers in trivial quantities:

A licensed wholesaler or supplier may furnish samples for use by any bona fide religious, fraternal, civic, veterans, hospital, or charitable organization if it is a nonprofit organization which does not hold an alcoholic beverage retail license.

A supplier or licensed wholesaler representative may have contact with consumers as permitted by Regulation .12 of this chapter.

Only an employee of a licensed retailer may directly solicit an order for alcoholic beverages from a consumer.

A promotion or contact for an order that entails personal solicitation of a consumer away from licensed retailer's premises is prohibited.

A supplier or licensed wholesaler representative may have casual conversations with consumers away from the licensed retail premises concerning the merits of products if the conversations or discussions are not for the purpose of selling or offering for sale alcoholic beverages to the consumers.

A solicitor or salesperson may buy a consumer a drink at licensed, on-sale retail premises if:

A supplier or licensed wholesaler may have mailings of advertising materials to consumers as permitted by this chapter.

A third party, acting on behalf of a licensed supplier or licensed wholesaler, may not engage in a promotional activity that would not be approved if it were submitted by the licensed supplier or wholesaler.

A supplier, licensed wholesaler, or third party may not use a charitable or nonprofit organization, a person or entity affiliated with or related to a licensee, or another third party, as a surrogate to circumvent the alcoholic beverage statutes or regulations.

A charitable group may engage in independent fund-raising activities on licensed retail premises.

A charitable group may receive a legitimate, non-product donation from a supplier or licensed wholesaler when the charitable group does not possess a retail license.

A representative of a third party who engages in an approved alcoholic beverage promotional activity on behalf of a supplier or licensed wholesaler shall obtain a Maryland solicitor's permit in accordance with COMAR 14.23.01.07.

Information pertaining to promotional activities involving the direct or indirect involvement of a supplier or licensed wholesaler shall be submitted in accordance with Regulation .12 of this chapter.

When a third party is used to submit a proposal on behalf of the licensee, the proposal shall be accompanied by a letter signed by the licensee or, in the case of a corporation, by a corporate officer of the licensee indicating the licensee's:

Proposals for conducting a sweepstakes or contest in the State shall be submitted to the Executive Director in time to be approved 14 days before the start of the contest or sweepstakes.

A supplier or licensed wholesaler may sponsor a sweepstakes or contest in accordance with this chapter.

A third-party promotional agency may sponsor a sweepstakes or contest if it complies with Regulation .07 of this chapter.

A sweepstakes or contest may be advertised on radio, in newspapers, or in magazines if the licensed retailers are only referred to in general and not by name.

A sweepstakes or contest held by a supplier or licensed wholesaler is not limited to a specific licensed retailer or group of licensed retailers.

Instant winner vouchers shall be randomly placed in alcohol product packages if the licensed retailer has no knowledge of the placement and a record is kept of all parties who redeem a voucher.

A licensed retailer may not participate in a sweepstakes or contest sponsored by a supplier or licensed wholesaler, or a third party representing a supplier or licensed wholesaler, except to display point-of-sale materials and provide entry blanks.

A means of entry may be provided on neck hangers, or on or in caps, cap liners, corks, containers, label cartons, cases, or other material obtained by purchasing alcoholic beverages, if an alternative means of entry that does not require a purchase of alcoholic beverages is provided.

Sweepstakes and contest participants shall be of legal drinking age.

A supplier, licensed wholesaler or retailer, or their families or employees are not eligible to participate or receive prizes.

A purchase of alcoholic beverages is not required to enter a sweepstakes or contest.

Contest rules shall state:

Advertising when paid for by the supplier or licensed wholesaler may not identify a particular licensed retailer, the retailer's employees, or the retailer's licensed premises.

A licensed retailer or group of licensed retailers may not benefit, directly or indirectly, more than licensed retailers in general for advertisements when they are paid for by the supplier or licensed wholesaler.

A licensed wholesaler or retailer may not participate, directly or indirectly, in the cost of promoting or advertising wine or distilled spirit products unless the licensed wholesaler or retailer is the brand owner.

A supplier or brand owner may not undertake any plan or design which directly or indirectly results in the purchase of wine or distilled spirits advertising materials, supplies, or services by a licensed wholesaler or retailer.

Radio and Television Advertising.

Print Advertising.

Billboards.

Giant Inflatable Balloons, Bottles, Cans, and Mobile Displays.

A neon or other sign, poster, placard, device, or graphic display bearing advertising matter, or any other form of advertising, for use in windows or elsewhere on the licensed premises, may be given by a supplier or licensed wholesaler to licensed retailer if:

Generally, the total cost of advertising items for products produced by a given brand owner on the premises of a given licensed retailer may not exceed $600 by a brand owner of wine or distilled spirits.

Advertising or promotional materials, such as paper cups, matches, brochures, leaflets, circulars, napkins, placemats, calendars, or similar items, may be furnished to licensed retailers if the:

Advertising items, displays, and other promotional materials for nonalcoholic beverage products shall meet the same criteria and be subject to the same limitations as alcohol products if provided by a supplier or licensed wholesaler. To do otherwise could be construed as providing the licensed retailer with something of value contrary to applicable provisions of Alcoholic Beverages Article, Annotated Code of Maryland.

An alcoholic beverage advertising sign, display, or item on a licensed retailer's premises is subject to confiscation if it is contrary to the provisions of Alcoholic Beverages Article, Annotated Code of Maryland, or any regulation under this subtitle.

Advertising items may be furnished to licensed retailers in connection with a bona fide promotion as permitted by this regulation.

An advertisement may not be personalized for a particular licensed retailer or a licensee's retail promotion.

Advertising material for an activity common to all licensed retailers that is mass produced and contains prominent and permanent material is permissible if:

A manufacturer, malt beverage supplier, nonresident dealer permittee, or a licensed wholesaler may not provide newspaper, radio, or television advertisement to a licensed retailer directly or indirectly.

A sign, display, or other form of advertising shall contain brand identifiable advertising material that is prominent, permanent, and equal to the life and value of the utilitarian character of the advertising item.

An advertising sign, poster, or point-of-sale material may contain personalized material for a particular licensed retailer if the personalized material is not more than 50 percent of the total dimension of the sign, poster, placard, or other material.

An advertising sign, poster, or other point-of-sale material which contains personalized material shall contain brand identification which is equal to or greater than the personalized portion of the advertising sign, but in no case shall brand identification constitute less than 1/3 of the total area of the advertising sign.

If an advertising sign, poster, or other point-of-sale material has no personalized material, the limits and restrictions set forth in §C(3) and (4) of this regulation do not apply.

Nonpersonalized items, such as trays, coasters, mats, paper napkins, cups, and similar items that advertise a supplier's brand, are permitted to be given to a licensed retailer in trivial quantities.

Specialty items may not be provided with a licensed retailer's name or logo placed on the item.

Retailer advertising specialties do not relieve the licensed retailer of an ordinary business expense.

Nonpersonalized items in excess of trivial quantities shall be sold to the licensed retailer at fair market value or higher if documentation of the sale is maintained.

Hats, towels, t-shirts, glassware, and similar items that have manufacturer or supplier advertising shall be sold to licensed retailers at fair market value.

A product display includes wine racks, bins, barrels, casks, shelving, and similar items, the primary function of which is to hold, shelve, or display product.

A product display may not exceed the dollar limitations as described in Alcoholic Beverages Article, §§2-216 and 2-315, Annotated Code of Maryland.

A display may not contain merchandise contained in a consumer offer program.

A representative of licensed wine and liquor suppliers or wholesalers may not build displays on a licensed retailer's floor in excess of 15 cases. A display may be built anywhere on the licensed premises but may not be built onto a part of the existing shelving system at the retailer's establishment. A wine and liquor salesperson or merchandiser, or both, may build displays in excess of 15 cases but must make the appropriate charge back to the supplier. A beer salesperson may build displays and is not limited as to quantity if the advertising value of the display exceeds any secondary service provided to the licensed retailer.

A supplier and wholesaler representative may not use a licensed retailer's fixtures or equipment to build or maintain displays.

Except as provided in §E(10) of this regulation, when a display has been built, a salesperson or merchandiser may not rebuild the display, and a licensed retailer may not require a salesperson or merchandiser to move the display from one area of the licensed premises to another.

A salesperson or merchandiser may not use licensed retailer-supplied equipment, supplies, computers, etc. to make or prepare product or other signs at a licensed retail establishment. It is permissible for a supplier or wholesaler representative to place “bottle neckers” on their products if no licensed retailer-supplied equipment or materials are used.

An advertising item permitted by this regulation used in the display shall have brand identification that is conspicuous and permanent.

An advertising item with a utilitarian value shall be altered or disabled in a manner as to render it not usable for its normal purpose.

When a beer or malt beverage product display has been built, a salesperson, merchandiser, or driver may replenish or rebuild the display for purposes of product rotation at the time of a regularly scheduled delivery, merchandisers call, or sales call, subject to the provisions of Alcoholic Beverages Article, Annotated Code of Maryland.

A brand owner may furnish for display and use by a licensed retailer up to a total of 12 umbrellas advertising alcoholic beverages or nonalcoholic beer products, if:

Umbrellas permitted under this section shall be displayed on the licensed retailer's premises.

Umbrellas removed from the licensed retailer's premises may be returned to the brand owner.

It is not necessary to submit to the Executive Director for approval point-of-sale advertising items that are used consistent with this chapter.

The burden of proof that all on-premises advertising items meet the requirements of this chapter rests with the supplier or nonresident dealer permit holders.

A supplier shall submit for approval to the Executive Director advertising items of a questionable nature to assure they are operating within the provisions of this chapter.

Before an alcoholic beverages supplier or malt beverage wholesaler enters into a contract for advertising and promotional services that will occur on the premises of a retail licensee in exchange for a sponsorship fee or other consideration, a copy of the contract, with supporting documentation, shall be submitted to the Executive Director for review.

A supplier or wholesaler shall receive approval from the Executive Director prior to entering into a contract under §A(1) of this regulation.

Except as provided in COMAR 14.23.01 or this chapter, a brand owner, supplier, nonresident dealer permittee, or licensed wholesaler may not provide something of value to a licensed retailer as prohibited by provisions of Alcoholic Beverages Article, Annotated Code of Maryland

A brand owner, supplier, nonresident dealer permittee, or licensed wholesaler may not provide a service or item of utilitarian value which would relieve a licensed retailer of an ordinary business expense.

A supplier or licensed wholesaler may not move, stock, rotate, dust, or otherwise alter or disturb a competitor's products on a licensed retailer's premises.

A brand owner, supplier, nonresident dealer permittee, or licensed wholesaler may discuss in general and specific terms with a licensed retailer shelf-management concepts and programs which benefit the licensed retailer in marketing all of the licensed retailer's alcoholic beverage products.

A supplier or licensed wholesaler may provide, publish, and generally make available data on market sales and analysis.

A brand owner, supplier, nonresident dealer permittee, or licensed wholesaler may provide and suggest shelf-management plans or schematics which are personalized for a specific licensed retailer or group of licensed retailers.

Implementation of a suggested shelf-management plan shall be done solely by the licensed retailer.

A supplier or licensed wholesaler representative may not participate in stocking or rearranging shelves in connection with a shelf-management plan.

A supplier or licensed wholesaler may not stock shelves, price items, or arrange any products including its own, for a licensed retailer except as provided in this chapter.

A supplier or licensed wholesaler may rotate products, when rotation is performed to ensure product freshness and to take advantage of limited shelf life products.

Limited rotation does not include any of the following activities:

Beer, malt beverage products, wine coolers, and spirit coolers differ somewhat from other alcoholic beverages due to limited shelf life. A driver or salesperson may rotate a licensed wholesaler's own product that is meant to be accessible by the consumer so that the current delivery is placed in the position of being “first in, first out”.

A supplier or licensed wholesaler that distributes nonalcoholic beverage products, for example, sodas, teas, bottled water, juices, and other items, may stock shelves at a retail licensed premises with those products. This shelf stocking of nonalcoholic beverage products may not include nonalcohol beer or nonalcohol wine products.

A licensed wholesaler may furnish at no charge to a licensed retailer minimum services to beer or wine draft systems, such as cleaning lines and minor repairs and parts such as washers, nuts, or clamps, and may provide the necessary equipment to take beer from the keg to the stanchion station if the parts and equipment are minimal in cost.

A licensed wholesaler may provide items such as:

A licensed wholesaler may not give any refrigeration or draft equipment to a licensed retailer. A licensed wholesaler may rent or lease refrigeration or draft equipment to a licensed retailer at fair market value or higher.

A licensed wholesaler may perform the labor service part of draft system installation or alterations and may repair equipment such as refrigerators or compressors if the licensed wholesaler charges at least fair market value, or higher, for labor and parts.

A licensed wholesaler representative may be present at a special event where alcoholic beverages are dispensed from rented refrigerated trucks, but may not dispense or provide other assistance before, during, or after the event except to:

A salesperson may take inventory of the salesperson's company's products for purposes of recommending a purchase order. Orders may not be taken for products not in the licensed wholesaler's inventory.

A salesperson may not place a licensed retailer's inventory in or on a licensed retailer's computer or other records of the licensed retailer, and a salesperson may not develop a customized product or price list for a particular licensed retailer or group of licensed retailers but may provide a generic diskette which shall be made available to any licensed retailer who requests a generic diskette.

Locations of Deliveries.

Deliveries shall be made on the invoice date or the next delivery date to that area. If the delivery is not made, the order shall be canceled and a new order prepared with the appropriate price and conditions of sale for the date of the most recent order.

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

An on-premises promotion includes tastings:

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.

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.

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

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.

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 $200 for the purchase of alcoholic beverage products at a licensed retail establishment at the regular price charged by the licensed retailer, including a reasonable and customary tip directed to service staff who are not owners, officers, partners, or named as license holders of the retailer.

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.

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.

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.

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

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

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.

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

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.

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

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

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

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.

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 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.

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.

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.

Regular monthly reports are not acknowledged by the Executive Director.

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.

Amended Report. An amended report:

If an accurate and timely report is not submitted: