California recently enacted a new law that removes previous restrictions on the value of prizes that could be awarded to consumers in California by importers, manufacturers, and suppliers of alcoholic beverages. Effective January 1, 2013, licensees will now be able to conduct sweepstakes and contests in the state, subject to a number of conditions applicable to both types of promotions. These conditions include: entry or extra chances to win shall not be made available via the purchase of an alcoholic beverage; a contest may not involve consumption of an alcoholic beverage; and alcoholic beverages may not be awarded as prizes. In addition, caps, corks, labels, cases, packaging, and other similar materials may not be used as an entry or as a means of determining the amount or size of the prize or winner and entry removable entry forms shall not be used on containers or packages (except for a limited exception for neck hangers on wine and spirits). The law also requires that an alternate method of entry be made available that does not require a visit to the licensed premises must be provided. And of course all promotions must be limited to consumers who are 21 years of age or older. The law does allow for promotions in which a consumer scans or electronically enters codes to a chance to win, provided those codes are permanently affixed to the label or packaging and are not required to be removed as a permitted form of entry. The use of neck hangers on wine and spirits is also permitted as a method of entry, provided that proof of purchase shall not be required and an alternate means of entry is available.

Tip: Effective January 1, 2013, alcohol companies may be able to include residents of California in many national sweepstakes that were previously not permitted in California. However, there are many restrictions under the new law, including but not limited to the restrictions described above. You should carefully review those restrictions and consult with legal counsel in this area regarding these restrictions before including California residents in your national promotions.