The Texas Alcoholic Beverage Commission (“TABC”) issues promotional permits to allow a person or company to enter into an agreement or contract with a manufacturing tier member such as a distillery, winery or brewery to promote their product to the ultimate consumer at retail level establishments such as restaurants or bars, convenience or grocery stores or liquor stores. The cost of a TABC promotional permit is $1200 for a two-year permit.
The statute creating TABC promotional permits was enacted by the Texas Legislature in 2007. Before 2007, you might have seen alcohol promoters in the bars and at special events, but they were employees or contract employees of the alcohol manufacturer or distributor. The passage of this legislation allowed upper tier members of the alcohol industry to contract with other companies to promote their brands and assist them in gaining or maintaining a presence in the market. A TABC promotional permit holder or an employee of a business with a TABC PR Permit is commonly referred to as a brand ambassador or influencer.
The holder of a TABC promotional permit (“PR Pemit”) may:
Promote alcohol brands at retail level businesses, such as bars, restaurants, grocery stores and liquor stores by entering into an agreement with a Texas distillery, brewery, or winery to assist them in gaining or maintaining a presence in the market. A TABC PR permit holder may arrange product promotions or samplings with a retail tier permit holder and interact with the ultimate consumer.
While a PR permit holder may be representing a brand, the promotional permit holder isn’t allowed to take product with them, and how promotional activities can be conducted depends on the type of business they’re promoting at. For example, if a promoter is offering product sampling at an on-premises location, such as a bar or restaurant, samplings are handled via what is referred to in the industry as “bar spending”. Bar spending means the promotional permit holder opens a tab with the business to purchase the brand they are promoting from the bar, and then allowing customers to sample the promoted product. Bar spend promoting must be conducted in presence of a PR permit employee, they can’t open a tab, announce the drinks are paid for, and leave. Employees of the promotional permit holder can also provide the consumer with trinkets or swag items which promote your brand.
If the promotional activities or samplings are being offered at an off-premise location, such as a grocery store, convenience store or package store (liquor store), the promotional permit holder must purchase any product being promoted off the retailer’s shelves prior to the sampling event and cannot charge the consumer for the sample. Samplings at liquor stores can be a bit quirky because the liquor store must post advance notice of the tasting, there are limits on the number of products that can be sampled at once and there are limits on the size of samples provided to a consumer.
To hold the TABC promotional permit, an applicant must be 21 years of age, may not have an ownership interest in, or be an employee of, a business with a manufacturing or distribution tier TABC permit, but does not have to be a Texas resident.
It is also a good idea, as the TABC promotional permit business owner, to ensure your employees have completed a TABC certification course and avoid a violation for providing alcohol samples to a person under the age of 21 or to anyone who is intoxicated.
