BILL NUMBER: AB 1798 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 5, 2010
INTRODUCED BY Assembly Member Evans
FEBRUARY 10, 2010
An act to amend Section 25237 of the Business and
Professions Code, relating to alcoholic beverage control.
An act to amend Sections 23086 and 25503.15 of the Business and
Professions Code, relating to alcoholic beverag es.
LEGISLATIVE COUNSEL'S DIGEST
AB 1798, as amended, Evans. Alcoholic beverages: wine
labeling. Alcoholic Beverage Control Appeals Board:
tied-house restrictions.
(1) Existing law requires the Alcoholic Beverage Control Appeals
Board to issue an order within 60 days after an appeal is filed.
This bill would require the board to issue an order within 75 days
after an appeal is filed.
(2) Existing provisions of the Alcoholic Beverage Control Act,
known as "tied-house" restrictions, generally prohibit a winegrower
from having an ownership interest in an on-sale alcoholic beverage
license, with limited exceptions. Among other exemptions, existing
law exempts from the tied-house restrictions any licensed winegrower
who meets specified conditions, including that the winegrower, or his
or her officer, director, or agent, enters into an undertaking,
approved by the Department of Alcoholic Beverage Control, that makes
specified statements regarding the sale or furnishing of wine by the
winegrower, or any officer, director, or agent of the winegrower.
This bill would retain the requirement that the winegrower, or the
officer, director, or agent of the winegrower meet the specified
conditions regarding the sale or furnishing of wine under the
circumstances described above, but would eliminate the requirement
that statements describing these conditions be made pursuant to an
undertaking approved by the department.
Existing law makes it unlawful to make any representation that a
wine is produced entirely from grapes grown in specified counties
unless the representation is true. Existing law specifies that those
provisions apply to representations made on labels, advertising
matter, letterheads, invoices, tags, signs, business cards, and all
other representations of any kind whether oral, written, or printed.
This bill would make a technical, nonsubstantive changes in those
provisions.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 23086 of the
Business and Professions Code is amended to read:
23086. In all cases, the board shall enter its order within
60 75 days after the filing of an
appeal.
SEC. 2. Section 25503.15 of the Business
and Professions Code is amended to read:
25503.15. (a) Notwithstanding any other provision of this
division, a winegrower who manufactures, produces, bottles,
processes, imports, or sells wine only, or any officer, director, or
agent of that person, may hold the ownership of any interest in any
on-sale license, or the business conducted under that
license, provided that the person or the officer, director, or agent
of that person, shall have entered into an undertaking approved by
the department stating both of the following if both
of the following conditions are met :
(1) That neither Neither
that person nor any officer, director, or agent of that person
shall sell or furnish sells or furnishes
to the holder of the license any wine, or permit
permits the sale pursuant to that license of any
wine, manufactured, produced, wholesaled, bottled, processed,
imported, or sold by that person or that person's principal for as
long as that ownership continues.
(2) That neither Neither that person
nor any officer, director, or agent of that person shall
enter enters into any collusive scheme whereby
he or she unfairly sells or promotes, in his or her on-sale
businesses, the wine of another winegrower who manufactures,
produces, bottles, processes, imports, or sells wine only, in return
for his or her wine being unfairly sold or promoted in the on-sale
businesses of that winegrower.
(b) Notwithstanding any other provision of this division, any
licensed winegrower or any winegrower who has a wholesale license, or
any officer, director, or agent of that person, may hold, directly
or indirectly, the ownership of any interest in an on-sale license,
provided that each of the following conditions is met:
(1) The on-sale licensed premises are licensed as a bona fide
public eating place as defined in Section 23038, or as a bona fide
bed and breakfast inn as defined in Section 24045.11.
(2) The on-sale licensed premises purchases all alcoholic
beverages sold and served at the on-sale licensed premises only from
California wholesale licensees, other than the licensed winegrower
who has a wholesale license and an interest in an on-sale license,
unless one of the following conditions is met:
(A) The wine purchased is produced or bottled by, or produced and
packaged for, the same licensed winegrower that holds an interest in
the on-sale license.
(B) The wine is produced or bottled by, and is purchased from, a
licensed winegrower who sells no more than 125,000 gallons of wine
per year for distribution in this state under all brands or trade
names owned by that winegrower.
(C) The wine is purchased by an on-sale licensee in whose on-sale
license a licensed winegrower holds an interest, provided that the
winegrower sells no more than 125,000 gallons of wine per year for
distribution in this state under all brands or trade names owned by
that winegrower.
(3) The licensed winegrower and any officer, director, or agent of
that person, whether individually or in the aggregate, do not sell
and serve the wine products produced or bottled under any brand or
trade name owned by that winegrower through more than two on-sale
licensed premises in which any of them holds an ownership interest.
(4) The number of wine items by brand offered for sale by the
on-sale licensed premises that are produced, bottled, processed,
imported, or sold by the licensed winegrower or by any person holding
any interest in the winegrower does not exceed 15 percent of the
total wine items by brand listed and offered for sale in the licensed
bona fide public eating place selling and serving that wine. This
paragraph does not apply to a bona fide bed and breakfast inn.
(c) The Legislature finds that it is necessary and proper to
require a separation between manufacturing interests, wholesale
interests, and retail interests in the production and distribution of
alcoholic beverages in order to prevent suppliers from dominating
local markets through vertical integration and to prevent excessive
sales of alcoholic beverages produced by overly aggressive marketing
techniques. The Legislature further finds that the exceptions
established by this section to the general prohibition against tied
interests must be limited to their express terms so as not to
undermine the general prohibition, and intends that this section be
construed accordingly.
SECTION 1. Section 25237 of the Business and
Professions Code is amended to read:
25237. It is unlawful to make any representation that a wine is
produced entirely from grapes grown in the counties mentioned in
Section 25236 unless the representation is true. This section shall
apply to representations made on labels, advertising matter,
letterheads, invoices, tags, signs, business cards, and all other
representations of any kind that are oral, written, or printed.