To make it worse, all alcohol labels have to be approved prior to use. The post makes no mention of whether they actually submitted their label for approval, but it may not have been approved within their time frame.
If it weren't approved, every venue their vodka was served at could face penalties, such as having their liquor license suspended or revoked.
The post makes no mention of whether they actually submitted their label for approval
From the article:
"The problem with this idea was two-fold: one, having previously worked in spirits marketing, I knew that spirits brands' turnaround time was way too long to get approval by February 14th"
Which seems to imply not only that they knew the law, but actively took it in to consideration.
Getting approval to partner with a company for marketing purposes is completely different to legal issues that there may or may not be relating to the labeling of drink bottles.
I read it as them seeking approval for a sponsorship or promotion of sorts. (" . . . and two, if we used a company’s name to promote ourselves without permission, we could get sued.")
I take that to mean they're talking about the turn-around of the marketing department; not the nuances of alcohol labeling and bottling.
It is worth mentioning, the recipients were all house parties and loft parties, which was our specialty for our previous product - find and discover secret events.
I think the actual story itself is fake. Meaning, they didn't actually give anyone any vodka. They just made those bottles and filmed a few friends pretending to pour it at parties to use in their film clip.
I'd strongly prefer believing this too, but the part that mentions them receiving 'an email from Mercy Hangover Prevention' and then the picture showing their vodka + the 12-pack of Mercy makes me think the story is real, unless Mercy is owned by friends of theirs.
Isn't this a federal felony? I am not positive, but as a former bar owner, it is for sure a federal felony to mislabel booze; I am not sure about how things play out, if you are not selling it.
Edit: Not to pile on, but as someone who has poured a shit load of money, sweat and blood into a bar in the past, if I read something like this, I would stay as far away from you as possible as I wouldn't want to open myself up to the liabilities your company is sure to cause an establishment.
Our company is a little different these days. We had a team change and pivoted to a more professional customer segment (and from events to venues.) I thought this would be an entertaining story to share with HN from a scrappier time, though :)
Not really an excuse in my opinion, no good can come from posting something like this. Granted we all make dumb mistakes at some point, but very few are felonious, and even fewer try to use it as a marketing avenue.
Yeah, I don't want to do business with someone who is indifferent to their legal responsibilities. I've run raves and stuff like that without a permit, but I was on site at all times to supervise what was going on (along with partners), and we bent over backwards to make sure we were providing a safe environment.
What you did was really irresponsible. by your own admission, you rebottled the cheapest vodka you could find. What if you had unknowingly handled a contaminated batch, and someone was injured as a result of consuming it? How would they go about tracing it back to the source? An unlikely event, to be sure, but alcohol is heavily regulated precisely because there are so many incentives for bad actors to pull a fast one on the public.
If I were this company, I would seriously consider taking this article down and not mentioning it in public again. I think it's fairly likely that this conduct it quite seriously illegal. I hope you guys don't get into any trouble.
As many others have pointed out, this stunt is almost certainly illegal. In addition to the obvious violations of Federal law, state and local laws were probably violated as well. This is not a matter of "failing to comply with regulations." This is a matter of operating a Distilled Spirits Plant without a license.
Regarding labels, all labels are subject to approval by the TTB. (Not ATF. TTB, or more fully, the Alcohol and Tobacco Tax and Trade Bureau, was split off from what is now ATFE, in the Homeland Security re-organization of 2003.)
Simply to submit a label for approval, you must have a Federal Basic Permit, along with various other federal approvals. Even if you're simply a "rectifier" (someone who blends and bottles, with no distilling) you need state and local permits as well. Labels generally have to be registered on the state level as well. This varies by state, but usually involves submitting your COLA (TTB certificate of label approval) to the relevant state agency and paying a fee.
There are also standards of fill and alcohol content, although that's kind of irrelevant, as the operation was illegal from the get-go.
As others note, the labels themselves probably weren't compliant with applicable law, (CFR 27) although again, that's also beside the point. For those curious, download the TTB's "Beverage Alcohol Manual, Volume 2, Distilled Spirits." It explains all the requirements. There's a learning curve. Even if you follow all the rules, your label may get sent back for revisions. I have yet to get one through on the first try.
Even if you give spirits away, some states have laws regarding advance notification of the state alcohol authority. You might also need to have bartenders with "responsible vendor" certification pouring the drinks. Of course, you have to be licensed to submit this notification, although some jurisdictions allow for unlicensed parties to obtain "special event" permits.
In summary, OP most likely broke a bunch of laws. On the bright side, they will probably get away with it, as the TTB is overworked and probably won't bother with something this penny-ante. A more likely danger is the state alcohol agency.
My advice? Don't pull this kind of stunt again. If you really must, work with a licensed DSP (distilled spirits plant).
This is a great illustration of regulatory capture: immense regulatory complexity that obstructs even the most innocuous giveaway program, thereby protecting the incumbent companies who have already invested the time and money to cope with it.
And yes, I know that these regulations exist to protect consumer safety from bad actors, but that doesn't mean I'm wrong. Well-intended regulations and regulatory capture are not mutually exclusive concepts.
I think that those laws are there not to protect the busines of destillers but the huge business that drinkable alcohol sales means to the government. They want to milk every aspect of the process. I don't know if it is "difficult" to obtain such licenses, I suspect it is just expensive.
how is that regulatory capture? I can see over regulation, maybe, but what did any of that have to do with the regulating agency doing the bidding of those its regulating instead of acting for the public good?
The best clue it is regulatory capture is that despite the regulations obviously being so burdensome and slow, an incumbent business is supportively enumerating them rather than complaining about them.
Why? Because the barrier to competitors is more valuable to them than the burden of the regulations.
Regulatory capture refers to the effect, not the motivation. Even if done with the best of intentions (and even at the protest of the industry), regulation almost always has the effect of increasing barrier to entry, therefore causing regulatory capture if there is enough of it.
On what scale do you distill? I don't see mention of it on your gallery page.
A few years back I'd looked into importing spirits from central Asia only to conclude that it was much too capital intensive: overland transport, hazardous cargo shipping, import duties, a bonded warehouse, not to mention the risk of local labor unrest and temperance organizations.
This isn't a stunt, this is harmless. Only those with Stockholm Syndrome w/r/t the regulators see this as anything other than harmless. (Regrettably, this may include prosecutors.)
But seriously, this just ain't a big fuckin' deal.
While the stunt is illegal (in many ways) and there was a likelihood of getting into serious trouble I'd say the "big fuckin' deal" is bragging about it with the plan to get lots of attention on HN. That's even more reckless than the actual stunt.
It's funny how clearly this entire comments page shows the schism between the consequentialist/aesthete "hacker" mode of thinking people here operate with on their own (I recall the MIT Lockpicking Guide being upvoted here every time it was posted, after all), and the liability-focused "business" kind of thinking people switch into as soon as they've got a product or service to hawk.
Laws, in the end, are just legal levers people can use--if they feel impinged-upon, and see no more personal recourse--to seek justice. At scale, you don't have personal relationships with your customers, so you have to obey every letter of every law. Before then, though--when you're small, and when you know each customer well-enough that you could call them friends--those customers have other ways to seek justice for things you do to them. Like, say, complaining to you.
This case is very similar to another I remember reading about on HN: an "extremely exclusive restaurant" in New York, which is not only invitation-only, but whose location is a well-protected secret. Why is it a secret? Because the "location" is an apartment! No restaurant license; just a "retired" five-star chef, cooking for you out of his own house. Completely illegal--all sorts of regulations are being broken--but much-beloved by all involved.
This is the kind of thing you can do when you have personal relationships with your customers. This is what you do that gets customers to love you--and can bootstrap into a big, legitimate business if you want. This is what people mean by "hustling", but everyone is afraid to say. It's going out on a real limb--not just sacrificing your own financial nest-egg, but giving your customers the ability to blackmail you or put you in jail if they decide they really don't like you. But this is what makes magic happen.
(Note that I'm totally not advocating the other kind of "hustling", the one done by grey-hat SEO "growth hackers." If you're a small, scrappy startup breaking laws that protect people from bad businesses in their service, and to earn their gratitude, then you'll likely be okay; but if you're breaking laws to "achieve growth" but earning people's spite in the process (you know, those "people who weren't gonna be your customers anyway, so screw 'em"), then please don't follow my advice. Don't go out on any limbs. Stay well inside, where we won't have to deal with you.)
Interesting. I've always thrown in with the hacker crowd, but everything about this PR stunt has led me to believe speakeasy.is the type of business I want nothing to do with.
The laws this thread contends they're violating strike me as falling into the category of public safety, e.g. proper labeling of spirits, Department of Health guidelines (http://blog.speakeasy.is/day/2013/07/23), etc. Viscerally, these don't strike me as the type of laws we want to championing start-ups into breaking.
But fuck laws, right? What really kills me about these guys is that they represent the cancer that is killing HN - all hustle, no authenticity. Instead of coordinating with local distilleries for a co-promotion event they fill Ikea bottles with "a cheap, mass-produced Russian vodka" and stick a fake label on the side. This is the definition of "grey-hat SEO 'growth hackers.'"
I was making the point on principle: there are quite a few Ain't Nobody's Business If You Do-type laws[1] on the books, which indeed protect people from scammers that don't have their best interests at heart; but where, if you do have people's best interests at heart (and know what you're doing enough to not, say, use unsterilized bottles), the laws are actually giving consumers a suboptimal result, and people will be grateful for the things you can do for them by skirting them.
For an example of what I do think is a valid "hustle", say you're holding an event and selling tickets. You have the idea of getting your friend--who owns a nicely pimped-out bus, and who has a commercial driver's license (so you know they can drive that thing safely)--to come around and pick people up and take them to the event as a free service. You're probably still breaking all sorts of little laws there--taxi or limo laws, certainly--but the customers who take you up on that service are getting a better experience than if they had to arrange transportation separately.
This, on the other hand, is closer to the line. I think, if they had been doing anything "food-processing-y" to the vodka, like adding a flavorant or something, I'd be less okay with it; as it was, though, they just did a bottle-filling and a labeling, which anyone with experience in home kit-wine/kit-beer making knows how to do safely. I would say that, in my own mind, at least, it's similar to buying bulk-ketchup at Costco and then printing up ketchup packets with your brand-logo on them and giving them away at your restaurant.
This is the best comment I have read on HN in quite a while!
It reminds me of a story from one of Malcolm Gladwell's books. I forget the point he was trying to make but something went wrong with a patients surgery so he approached a lawyer and said he wanted to sue the surgeon. After reviewing the details, the lawyer said the surgeon is not at fault and that his family doctor should be the one that the lawsuit should be directed at for a poor recommendation.
The client responded "But I don't want to sue my doctor - I like him."
Personally, I don't find anything ethically wrong with what they did. And I think a lot of people on this thread have not lived in other countries that aren't completely over regulated.
Wow, so many problems with this. As others have mentioned your label likely doesn't conform to federal standards. Also, you can't just give away alcohol from what I understand, there are permits and procedures that need to be followed. The fact you "manufactured" alcohol without a permit is a huge one as well. Even though you were only relabelling, I'm sure there is some tax you have to pay.
You don't want to mess with the ATF. They are notorious for bringing down the hammer. Let's hope they don't go to their trust method of "Always Think Forfeiture"
There are indeed laws relating to proper labeling of food and alcohol that you sell. They're not selling it.
There are indeed laws that prohibit people who manufacture alcohol from also being the ones who sell it to consumers. They're not selling it.
You can label things any damn way you want to label them, if you're not selling them. If you want to go home tonight and print out a label that says "Vinegar", and paste it on your Vodka bottle, I promise you won't be breaking any laws. If you then give that Vodka to your friend, you're still not breaking any laws, provided your friend is an adult.
The level of hysterical paranoia by other posters in this thread is confusing.
If we ignore the fact that they are "trading in-kind" the vodka for services, they are still distributing it.
There are a multitude of laws governing alcohol. I had a friend host a party with a cover. He was giving away the alcohol. The local alcohol control board showed up and listed the numerous laws he was violating.
Don't forget that anyone who distributes alcohol has to be permitted. They need to comply with laws that govern access to the underaged, tracking of alcohol taxes, etc.
Here is an example from Missouri law:
When is a liquor license required?
It is unlawful for any person to manufacture, distribute or sell intoxicating liquor without a state license issued by the state supervisor of the Division Alcohol and Tobacco Control. However, Section 311.055 is an exception, which allows 200 gallons to be manufactured per household, per calendar year if there are two or more persons over 21 years of age in the household, or 100 gallons per calendar year if there is one person over the age of 21 in the household. The products manufactured under the Section 311.055 exception are only for personal and family use.
> There are indeed laws relating to proper labeling of food and alcohol that you sell. They're not selling it.
> There are indeed laws that prohibit people who manufacture alcohol from also being the ones who sell it to consumers. They're not selling it.
They are offering it "in exchange for hosting a party on Speakeasy". Offering a product as in-kind exchange for something else of value very often is legally considered "selling" the product.
There are also laws prohibiting bottling alcohol by anyone other than the (properly licensed) manufacturer of the alcohol without a permit, and they were bottling it (and weren't the manufacturer).
But the venues receiving the vodka are most definitely selling it, proven by the fact that it ended up included in bottle service.
If it was a donation to an individual, you could get away with ignoring the rules, but they're giving vodka away to businesses, knowing that the business likely intends on selling it.
There's already a ton of businesses who sell custom wine labels for you to use to relabel your own wine. The main customers of these companies are businesses who use them as gifts to their customers, as a form of marketing/advertising.
I agree, there are so many responses in this thread that make me feel like the blog post didn't adequately convey that the vodka was being given away—and not being resold by anyone at any point. It was a gift to event hosts who were throwing private events.
What exactly did they actually (in an objective sense) do wrong though?
If the only thing they did wrong was "failing to comply with regulations", then maybe those regulations are wrong. The same way that googling certain terms isn't wrong, putting labels on bottles of liquid isn't wrong. And, if someone comes to your door with guns in their hand because of this, then they're in the wrong - not you.
> You don't want to mess with the ATF. They are notorious for bringing down the hammer.
Wow, the tone people use to describe these various gov't agencies just keep making them sound more and more like common gangsters...
> If the only thing they did wrong was "failing to comply with regulations", then maybe those regulations are wrong.
Tell that to a judge. You sound like you are 14 years old. If you run a business, you should follow the laws of the nation the best you can since employees, investors, partners, and customers all depend on you.
Like Uber doesn't? Obeying a dumb law might make your position more stable, but it eliminates the enormous potential return on choosing to behave outside the norm.
Laws are just incentive structures, and subject to the same risk analysis as everything else.
> putting labels on bottles of liquid isn't wrong.
That's naive, it most certainly can be wrong and in this case it was. Alcohol regulations exist to protect the consumer and violating them is most definitely wrong.
You won't get an argument from me that various federal agencies are riding the line of "gangsters".
However wrong these agencies might be, the OP has to face the consequences. My guess is the ATF might knock on his door and give him a lesson on alcohol regulations, nothing more, but at least he should be aware of what the potential consequences are.
Or state ABC authorities. If nothing else, liquor licensing is a pretty important revenue stream, and if nothing else (and there certainly is more) that's a pretty big motivation to not cut a lot of slack, especially for highly publicized violations.
This is pretty dumb. You're taking the "move fast and break things" playful mantra to the real world with real regulations and real dangers. It's cute that you're playing it off like "ohh we need a lawyer, help us" but seriously this is stupid from all angles.
Interesting idea, great hustle, scary to repackage food in non-food facilities. You check the laws for repackaging alcohol? I'm wondering if your friendly local ATF agents will be paying a visit soon. Something to keep in mind...
A little off-topic but in blind taste tests (I'll have to find the link) people weren't able to tell the difference between top and bottom shelf vodkas.
I looked over those articles, and they really didn't scrape the bottom of the barrel. Speaking authoritatively as a Russian (heh), I think -all- vodka tastes like rubbing alcohol filtered to remove anything that might resemble redeeming qualities. This is proper: vodka is supposed to be repeatedly distilled with no head added back in afterward: it's supposed to basically be distilled alcohol and water (with some aficionados claiming you can taste the underlying whatever, but I think they're full of shit).
But - but! - the cheapest stuff I've found to date, which I used as an ethanol extraction solvent - was absolutely and identifiably different. Not due to flavor, merely, but clearly due to inferior distillation processes. How can I tell?
Because no other vodka burned my esaphogus and stomach so long, or with so much intensity. It was like eating coal, and chasing it with lava.
I bought this stuff at 11$ for a handle, and if you put a gun to my head, I wouldn't drink it again.
Yes, if someone passed me that stuff at a bar, I would know.
From my chemistry background I know you could extract anything with solvents but I didn't realize that you would use that method to get a potable alcohol! I don't doubt you would be able to taste the difference.
Sorry, I didn't mean that I was using ethanol extraction to make alcohol. I mean that I bought the cheapest vodka I could find to use it as the ethanol for an ethanol extraction. I was actually using it to make vanilla extract, which is absurdly overpriced when you buy it normally (buy 25$ worth of vanilla bean, stick it in the cheapest vodka you can find, and put it in your freezer for 3 mos. Strain.)
This is strange, because you definitely are able to. The better vodka's quality, the smoother and less smelly it is. Another thing is that your "top-shelf vodka" could be sourced from the same barrel, but use different brand.
My best experience so far was with moonshine actually. It was properly distilled and treated and was an absolute delight to drink.
I'd be very interested in that, because I would put money on me being able to tell the difference. Maybe not all top and bottom shelf vodkas, but I bet I can tell the difference between a vodka I like and a vodka I don't like. (For instance Grey Goose vs. Smirnoff)
Here's a couple articles that are talking about blind-tests either they did or from someone else. I've seen better articles with more test details but I can't seem to find them again.
The New York Times similarly blind taste-tested 21 vodkas. Grey Goose and Ketel One failed to finish in the top 10. The winner? Smirnoff. The lowest priced vodka placed highest. [1]
Smirnoff is nowhere near the cheapest vodka. That's not a bottom shelf vodka. It is literally not on the bottom shelf of liquor stores. C.f. Popov vodka for literally _half_ the price of Smirnoff (and literally on the bottom shelf). Popov, by the way, is undrinkable.
Any vodka which is twice as expensive as another vodka cannot be called "bottom shelf."
If, every time you've ever drunk vodka, the liquids had been swapped between the bottles (or if Grey Goose was cheaper than Smirnoff and everyone always went on about how bad Grey Goose is, and how great Smirnoff is) would you perhaps prefer the Smirnoff taste, and still be able to tell the difference?
Certainly anyone who can't tell the difference between vodkas hasn't drunk much vodka (obviously some may be very similar to each other). I suspect the testing grandparent is thinking of would show that price does not correlate with quality, not that they are all equally good. I'm not a vodka expert (my taste sounds similar to yours, in that I prefer GG over Smirnoff, and a couple of others, but I don't drink it often), but I'm pretty big on wine and whisky, both of which it's very much the case that price doesn't always correlate to quality.
I suspect the testing grandparent is thinking of would show that price does not correlate with quality
Correct. Of course there was a difference in taste, but it was clearly within statistics that there was no correlation between favorite to least favorite and most expensive to least expensive (top-self vs bottom-shelf).
That said, I am not a Vodka drinker although my wife is. She has tried them all and prefers Svedka currently for it's taste and price.
Can you ask her for me: do high priced vodkas taste, on average, nicer than cheaper ones?
In wine I think that is not the case, at least in personal experience, and I believe research agrees with me though don't have sources for that. Champagne less so... I do prefer more expensive for that.
Whisky (single malt scotch, to be precise) I do think that on average, more expensive is nicer. Not to the extent that I would always buy more expensive if I don't know two bottles, and there are plenty of examples of cheaper being better (some of my favourites are in the £40-£60 range), but the higher end of the price range opens up some fantastic drinks as well, and typically the 5-10 bottles I have at home will range from £40 up to £500, because I personally think some are worth that. Whereas I'd never go that high with wine, unless I wanted to drink it purely for the sake of drinking something expensive. (Of course, a bottle of scotch lasts longer than a bottle of wine, but.. I'd never spend £60 on a bottle of wine at shop cost, and most of the time drink £5-£20 bottles.)
Vodka is a pretty unique beast with respect to alcohols. It's defined as 'colorless, odorless, and tasteless' alcohol. While the tasteless part is not necessarily true, other alcohols are specifically designed for taste, which means that the different tastes of wine, whiskey, tequila, etc., are important aspects and can require more time and cost to make - and thusly cost more.
Bottom shelf tequila is bad, no blind taste test is going to prove otherwise. However, if you are just going to be mixing it into a margarita to get people lubricated, it's probably fine.
Whiskey is generally just drank chilled over ice or stones (or nothing), so flavor matters greatly.
While that's what vodka is often thought of, most people (of people I know, 100%) who have tried vodka at least once will say that they dislike the taste of either some or all vodkas. And there are certainly vodkas that I like the taste of (though admittedly, not enough that it's a drink of choice for me). Most of the time that I drink vodka now it would be with an energy drink, and in that mix I can still like or dislike the vodka. But generally I won't care too much after a few drinks, and if I'm drinking vodka redbulls then chances are the first few drinks will flow quickly.
Whisky, like vodka, if mixed (say a whisky and coke) is very noticeable what the taste is - though I'm not a fan of this at all, as I consider it a waste of whisky if it's good, and an inferior drink to other mixers if it isn't.
Have to say that when drinking cocktails (as opposed to mixers) I've never paid too much attention to the specifics of the spirits in them.
Thanks! If we were transferring milk I might be a little more concerned, but we sterilized everything in the dishwasher beforehand, and were using vodka to keep it extra-sterile ;)
Consumer dishwashers do not standardize to a commercial standard. I have a pretty nice new dishwasher at home with a "sterilization" feature but there's a warning on the control panel that says that it won't achieve commercial standards.
At best this is ethical grey area territory. It's disturbing, all and the more disturbing that there are people cheering it on. I hope I don't end up at a party where the consumables have been manually swapped out by clever (desperate?) marketing people. Sorry, I'm just not rock and roll enough to appreciate deceit when it comes to things we eat and drink.
You sure have a lot of trust in 'sometimes as little as $9 for half a gallon' vodka that you planned to serve to other people.It shows how young you are, and not in a good light. Unfortunately while this move might've been regarded as a success for your company, it could've very well damaged your personal brand.
Because there are some of the harshest/confusing laws around alcohol (for anything legally sold) in the United States? Its easier to legally sell a handgun to a friend than sell a bottle of wine.
So we can't have nice things because people want to obey laws that tend to be extremely strictly enforced?
I actually think this promotion was extremely on-brand for what this startup is (or was) doing. I can't speak to the regulatory compliance angle, but the fact is that this was clever, effective, and well-placed customer contact. It's not the risk profile that I would personally look for, but it is a little sad to see so many on HN rushing to condemn it.
We can't have nice things when people who claim to be "disruptive" are actually busy pursuing safe, risk-averse targets.
Indeed. Our market back then was quasi-legal loft parties and house parties, so this was idea was definitely to fit the mood of the "modern speakeasy." Thanks!
I don't really care about ATF regulations, but there is no moral high ground here. This was just plagiarism. These people pretended to have done something that they did not do. They took credit for someone else's work.
So "we can't have nice things" here means "we can't plagiarize vodka"? Well you can't plagiarize Steven King either. Deal with it.
It would be if you lied to people and told them that you made the pens.
The example you chose is deliberately one in which it would be assumed that you were not asserting authorship. Frankly, choosing that example shows you're dishonest.
What if this was a fake story up about how they created a fake product to promote there startup and sell it as a real story to drive traffic to their startup? Either way a dangerous idea.
"The video was viewed 500 times, almost entirely by people in Las Vegas according to the analytics. It was a huge hit, and we thought we left a pretty good impression.
Hey Michael,
Yes—our require.js dependency chain relies on Facebook connect loading.
So Ghostery is breaking things. I'll consider how I'm going to fix this. I suppose the most obvious solution is not making it a dependency.
The label doesn't look like it includes all of the required information ( http://www.ttb.gov/pdf/brochures/p51902.pdf ).
This could be bad, very bad, if something like this happens ( http://www.bbc.co.uk/news/uk-england-16742167 ) who is responsible?