Sec. 03.02.05.10. On-Premises Advertising

A. In General.

(1) 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:

(a) The utilitarian value is secondary and only incidental to the value as an advertisement;

(b) The total value of any single advertising item furnished for use in a licensed retail establishment at any time does not exceed $150 except, however, that a malt beverage sign manufactured by a beer wholesaler and provided to a retailer may not exceed $50; and

(c) The cost of installation of an item does not exceed that which is usual and customary in that particular locality.

(2) 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 $450 by a brand owner of wine or distilled spirits. However, on a case by case basis, the Comptroller may authorize total cost of up to $600 for advertising items by a given brand owner and may establish additional requirements of such authorization.

(3) 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:

(a) Advertising is general in nature;

(b) Advertising does not identify a particular licensed retailer or licensed premises;

(c) Promotional item is provided in trivial quantities; and

(d) Promotional item does not relieve the licensed retailer of an ordinary business expense.

(4) 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 Article 2B, Annotated Code of Maryland.

(5) 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 Article 2B, Annotated Code of Maryland, or any regulation under this subtitle.

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

B. Distilled Spirits and Wine Advertising.

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

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

(a) A licensed retailer is not identified; and

(b) The utilitarian value is secondary and only incidental to the value as an advertisement.

C. Beer Advertising.

(1) 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.

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

(3) 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.

(4) 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.

(5) 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.

D. Retailer and Consumer Advertising Specialties.

(1) 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.

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

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

(4) 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.

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

E. Product Displays.

(1) 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.

(2) A product display may not exceed the dollar limitations as described in Article 2B, §12-104, Annotated Code of Maryland.

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

(4) 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.

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

(6) 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.

(7) 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.

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

(9) 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.

(10) 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 Article 2B, §11-102, Annotated Code of Maryland.

F. Umbrellas.

(1) 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:

(a) Each umbrella costs $50 or less; and

(b) No single brand is represented by more than six umbrellas.

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

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

G. Approvals of On-Premises Advertising.

(1) It is not necessary to submit to the Bureau for approval point-of-sale advertising items that are used consistent with this chapter.

(2) 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.

(3) A supplier shall submit for approval to the Bureau advertising items of a questionable nature to assure they are operating within the provisions of this chapter.

H. Approval of Advertising and Promotional Contracts.

(1) 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 Bureau for review.

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