PUBLIC PROTECTION CABINET

Department of Alcoholic Beverage Control

(Amendment)

 

      804 KAR 1:100. General advertising practices.

 

      RELATES TO: KRS 244.130, 244.500, 244.590

      STATUTORY AUTHORITY: KRS 241.060, 244.130

      NECESSITY, FUNCTION, AND CONFORMITY: KRS 244.130 authorizes the Department of Alcoholic Beverage Control to regulate the advertising of alcoholic beverages. This administrative regulation establishes standards for advertising in a manner consistent with modern marketing practices.

 

      Section 1. Definition. "Social media" means all forms of electronic communication through which users create online communities to share information, ideas, personal messages, and other content.

 

      Section 2. (1) A licensee may use outdoor advertising.

      (2) If outdoor advertising is used by a manufacturer, producer, brewer, winery, distributor, or wholesaler, it shall not:

      (a) Include a retail licensee's name or business designation (DBA); or

      (b) Refer to a retail licensee in any other way.

 

      Section 3. A licensee may advertise in material directed to the home or business of a consumer if the advertising material is in conformity with KRS 244.130 and this administrative regulation.

 

      Section 4. (1) Except as provided by subsections (2) and (3) of this section, advertising novelties may be used.

      (2) A licensee shall not require the purchase or consumption of an alcoholic beverage as a condition for the sale, gift, or reduction in price of an advertising novelty.

      (3) Except as provided by KRS 244.590(2)(a), a malt beverage distributor shall not sell, give away, or furnish advertising novelties, in any manner to a retail licensee.

 

      Section 5. A licensee may advertise by means of radio and television.

 

      Section 6. A licensee may advertise by means of the Internet and social media.

 

      Section 7. (1) A licensee may sponsor or cosponsor athletic leagues, tournaments, contests, and charitable events if the consumption or purchase of alcoholic beverages is not a requirement for participation.

      (2) A licensee sponsoring or cosponsoring an event described in subsection (1) of this section upon a retail licensed premises shall not require the retail licensee to purchase, sell, or distribute the products of the sponsoring licensee as a condition for participation in or in connection with the event.

 

      Section 8. A licensee shall not use the terms "free", "complimentary", or any other terms, which imply or suggest giveaways in the advertising of alcoholic beverages.

 

      Section 9. A licensee shall not advertise a product, service, or activity if the licensee is prohibited by statute or administrative regulation from selling, providing, or conducting it.

 

FREDERICK A. HIGDON, Commissioner

ROBERT D. VANCE, Secretary

      APPROVED BY AGENCY: May 14, 2014

      FILED WITH LRC: May 15, 2104 at 10 a.m.

      PUBLIC HEARING AND PUBLIC COMMENT PERIOD: A public hearing on this administrative regulation shall be held on June 23, 2014, at 9 a.m., EDT, at the Kentucky Department of Alcoholic Beverage Control, 1003 Twilight Trail, Frankfort, Kentucky 40601. Individuals interested in being heard at this hearing shall notify this Department in writing by June 16, 2014, five working days prior to the hearing, of their intent to attend. If no notification of intent to attend the hearing is received by this date, the hearing may be cancelled. This hearing is open to the public. Any person who wishes to be heard will be given an opportunity to comment on the proposed administrative regulation. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to be heard at the public hearing, you may submit comments on the proposed administrative regulation. Written comments shall be accepted until June 30, 2014. Send written notification of intent to be heard at the public hearing or written comments on the proposed administrative regulation to the contact person.

      CONTACT PERSON: Trey Hieneman, Special Assistant, Department of Alcoholic Beverage Control, 1003 Twilight Trail, Frankfort, Kentucky 40601, phone (502) 564-4850, fax (502) 564-7479.

 

REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT

 

Contact Person: Trey Hieneman

      (1) Provide a brief summary of:

      (a) What this administrative regulation does: This administrative regulation establishes standards for advertising in a manner consistent with modern marketing practices.

      (b) The necessity of this administrative regulation: KRS 244.130 authorizes the Department of Alcoholic Beverage Control to regulate the advertising of alcoholic beverages.

      (c) How this administrative regulation conforms to the content of the authorizing statutes: KRS 241.060(1) authorizes the board promulgate administrative regulations governing advertising of alcoholic beverages.

      (d) How this administrative regulation currently assists or will assist in the effective administration of the statute. This administrative regulation enables the board to execute its KRS 241.060(1) duty by establishing parameters for advertising of alcoholic beverages.

      (2) If this is an amendment to an existing administrative regulation, provide a brief summary of:

      (a) How the amendment will change this existing administrative regulation: This amendment to this administrative regulation specifies limitations on outdoor advertisements.

      (b) The necessity of the amendment to this administrative regulation: This amendment to this administrative regulation is necessary to reestablish prohibitions against outdoor advertising by certain sectors of the alcoholic beverage industry.

      (c) How the amendment conforms to the content of the authorizing statutes: KRS 241.060 (1) authorizes the board promulgate administrative regulations governing advertising of alcoholic beverages.

      (d) How the amendment will assist in the effective administration of the statutes: The amendment to this administrative regulation allows the board to regulate advertisement, pursuant to KRS 241.060 (1).

      (3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation: This amendment to the administrative regulation will affect all manufacturers, producers, breweries, wineries, distributors, and wholesalers in Kentucky.

      (4) Provide an analysis of how entities identified in question (3) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment:

      (a) List the actions that each of the regulated entities in question (3) will have to take to comply with this administrative regulation or amendment: The previously mentioned businesses will not have to take any actions to comply with this amendment. This was an error that resulted from an amendment to this administrative regulation that was enacted in 2013. This regulation simply corrects language to ensure compliance.

      (b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (3): No cost is associated with this amendment.

      (c) As a result of compliance, what benefits will accrue to the entities identified in question (3): The previously mentioned businesses will receive no additional benefits to comply with this administrative regulation.

      (5) Provide an estimate of how much it will cost to implement this administrative regulation:

      (a) Initially: No extra costs are anticipated to implement this administrative regulation amendment.

      (b) On a continuing basis: None.

      (6) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation: Agency funding is used for the implementation and enforcement of the administrative regulation.

      (7) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change, if it is an amendment: There is no anticipated increase in fees or funding necessary to implement this administrative regulation amendment.

      (8) State whether or not this administrative regulation establishes any fees or directly or indirectly increases any fees: This administrative regulation amendment does not directly or indirectly increase any fees.

      (9) TIERING: Is tiering applied? No tiering is applied. There are no costs associated with administering this administrative regulation.

 

FISCAL NOTE ON STATE OR LOCAL GOVERNMENT

 

      1. What unit, part, or divisions of state or local government (including cities, counties, fire departments, or school districts) will be impacted by this administrative regulation? The Kentucky Department of Alcoholic Beverage Control is the only government entity affected by this amendment.

      2. Identify each state or federal statute or federal regulation that authorizes the action taken by the administrative regulation. KRS 241.060(1) authorizes the board to promulgate administrative regulations relative to advertising of alcoholic beverages.

      3. Estimate the effect of this administrative regulation on the expenditures and revenues of a state or local government agency (including cities, counties, fire departments, or school districts). This amendment will have no affect on expenditures or revenue of any level of government.

      (a) How much revenue will this administrative regulation general for the state or local government (including cities, counties, fire departments, or school districts) for the first year? No revenue will be generated by this administrative regulation.

      (b) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for subsequent years? No revenue will be generated by this administrative regulation.

      (c) How much will it cost to administer this program for the first year? The cost to administer this amendment should be minimal, if any.

      (d) How much will it cost to administer this program for subsequent years? The cost to administer this amendment should be minimal, if any.

      Note: If specific dollar estimates cannot be determined, provide a brief narrative to explain the fiscal impact of the administrative regulation:

      Revenues (+/-):

      Expenditures (+/-):

      Other Explanation: Additional costs to administer these regulatory changes at the local government level for this year or subsequent years should be minimal or none.