Ban on paid in-store alcohol ads under review

Californian legislation banning alcohol producers from paying retailers for in-store advertising could be overturned, after an appeals court revived a challenge to the law.

A US court has revived a challenge against a law banning producers paying for in-store advertising

On Thursday 7 January, a unanimous panel of the Ninth Circuit deemed the law must be re-examined due to a 2011 US Supreme Court decision to set a higher standard for restricting commercial speech.

“The Supreme Court has since made clear that the First Amendment does not allow the government to silence truthful speech simply for fear that adults who hear it would be too persuaded,” Judge Consuelo Callahan wrote for the majority in Retail Digital Network v. Appelsmith, as reported by The Recorder.

The law is part of a collection of ‘tied-house’ statutes passed during Prohibition, in an effort to promote abstinence, prevent monopolies and keep alcohol distributors from acquiring too much control over bars where their products are served.

“We cannot say on the record before us that the state’s Prohibition-era concern about advertising payments leading to vertical and horizontal integration, and thus leading to other social ills, remains an actual problem in need of solving,” Callahan continued.

The panel remanded the case and urged the district court to be cautious about the effectiveness of the ban.

“The record before us does not demonstrate that a prohibition on paid point-of-sale advertising materially advances the goal of temperance,” Callahan wrote.