BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2134
                                                                  Page  1

          Date of Hearing:   April 12, 2010

                   ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
                                   Joe Coto, Chair
                AB 2134 (Chesbro) - As Introduced:  February 18, 2010
          
          SUBJECT  :   Alcoholic beverage control: tied-house restrictions:  
          instructional events: beer.

           SUMMARY  :   Allows craft brewers to conduct and participate in  
          events called "Beer Maker Dinners" for consumers held at retail  
          accounts (restaurants that purchase a craft brewer's products)  
          featuring craft beers paired with food.  This measure creates a  
          tied house exception very similar to one in existing law for  
          winemakers.  Specifically,  this bill  : 

          1)Allows licensed beer manufacturers and holder's of a beer and  
            wine importer's general license, or any director, partner,  
            officer, agent, or representative of that person, to conduct  
            an instructional event held at an on-sale retail licensee's  
            premises featuring beer, subject to specified conditions. 

          2)Provides that no alcoholic beverage may be given away in  
            connection with the instructional event, as specified.

          3)Includes provisions that, if violated, would result in a  
            misdemeanor, would impose a state-mandated local program.

           EXISTING LAW  :

          1)Establishes the Department of Alcoholic Beverage Control (ABC)  
            and grants it exclusive authority to administer the provisions  
            of the ABC Act in accordance with laws enacted by the  
            Legislature.  This involves the licensing and regulation of  
            businesses involved in the manufacture, importation, and sale  
            of alcoholic beverages in the state.

          2)Permits an on-sale retail licensee of wine or distilled  
            spirits to conduct "instructional" consumer tastings on the  
            licensed retail premise provided the following conditions are  
            met:  a) no more than ounce of distilled spirits is offered in  
            one tasting; b) no more than one ounce of wine is offered in  
            one tasting; and, c) no more than three tastings are offered  
            to an individual in one day.  An instruction may include the  
            history, nature, values and characteristics of the product  








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            being offered, and the methods of presenting and serving the  
            product.  

          3)Authorizes beer manufacturers and wholesalers to offer beer  
            samples (not to exceed eight ounces per person, per day) to  
            individuals of legal drinking age at on-sale retail licensed  
            premises under specified conditions.  

          4)Permits a licensed winegrower, manufacturer, importer, or  
            wholesaler to provide samples of the alcoholic beverages,  
            which are authorized to be sold by the licensee in accordance  
            with rules prescribed by the ABC.  A retail licensee, however,  
            is not authorized to provide any free samples of alcoholic  
            beverages.  Moreover, ABC regulations provide that samples of  
            alcoholic beverages may only be given away to licensees or  
            employees of licensees who are in a position to purchase the  
            product or who are in need of additional information about the  
            product, as specified.

          5)Authorizes distilled spirits manufacturers to conduct tastings  
            and provide distilled sprits without charge for events  
            sponsored by nonprofit organizations.  Only persons affiliated  
            with the nonprofit organization, including up to three guests,  
            may attend.  No distilled spirits may be sold or solicited for  
            sale at the tasting, and the organization must obtain a permit  
            from ABC prior to the event.

          6)States that the "Tied-House" Law, separates the alcoholic  
            beverage industry into three component parts of manufacturer,  
            wholesaler, and retailer.  The original policy rationale for  
            this body of law was to prohibit the vertical integration of  
            the alcohol industry and to protect the public from predatory  
            marketing practices.  Generally, other than exemptions granted  
            by the Legislature, the holder of one type of license is not  
            permitted to do business as another type of licensee within  
            the "three-tier" system.
           
          FISCAL EFFECT  :   Unknown

           COMMENTS  : 

          According to the sponsor, the California Small Brewers  
          Association, this bill will allow beer manufacturers and  
          importers the privilege of participating in "Beer Maker Dinners"  
          at licensed on-sale retail premises (i.e. restaurants) and  








                                                                  AB 2134
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          communicating the date, time and location of these events to  
          their customers.  

          The sponsor states, these events will provide a unique  
          opportunity for brewers and their representatives to personally  
          meet with consumers and provide instruction on existing and  
          emerging craft beer products while being paired with food.   
          Unfortunately, under current law, several restrictions make it  
          difficult for craft brewers to engage in these types of  
          instructional events for consumers.  Current law requires: 1)  
          The brewer and/or their representatives must be paid an  
          "honorarium" by the retail account to attend; and 2) The brewer  
          cannot advertise the location of the "Beer Maker Dinner" to  
          interested parties.

          Under current law, winegrowers are able to conduct "Wine Maker  
          Dinners" at licensed retail accounts.  The law allows a  
          winegrower representative to conduct the educational event  
          without compensation from the retail establishment; and allows  
          the winegrower to advertise the event under specified  
          conditions. 

          This measure will allow California craft brewers to conduct  
          "Beer Maker Dinners" with the same privileges and protections  
          currently enjoyed by winegrowers when they conduct "Wine Maker  
          Dinners" under current law.  Specifically, the craft brewer or  
          their representative can: 1) Participate in the "Beer Maker  
          Dinner" without having to be paid an "honorarium" by the retail  
          account; and 2) Advertise the location of the "Beer Maker  
          Dinner" to interested parties.  
          The one exception is that under this bill no alcohol may be  
          given away at the "Beer Maker Dinners."

           Clarifying amendment  :  To clarify the intent of the bill, the  
          author might want to consider the following amendment: Page 3,  
          Line 10, Strike ", without limitation," and Page 3, Line 11,  
          after the word "licensee", add "to the consumer"

           Prior legislation  :  AB 1245 (Torrico), Chapter 629, Statutes of  
          2008.  Modifies an existing provision of the Alcoholic Beverage  
          Control Act (ABC Act) to allow beer manufacturers to give adult  
          consumers promotional advertising items valued up to $3.  

          AB 2293 (DeLeon), Chapter 638, Statutes of 2008.  Allows a  
          manufacturer of distilled spirits, winegrower, rectifier,  








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          distiller, bottler, importer, or wholesaler of distilled spirits  
          or wine or its authorized agent to entertain consumers by  
          invitation at private parties and events in connection with the  
          sale or distribution of wine or distilled spirits, subject to  
          certain conditions.  

          SB 1548 (Murray) Chapter 670, Statutes of 2006.  Authorizes beer  
          manufacturers and wholesalers to offer beer samples (not to  
          exceed eight ounces per person, per day) to individuals of legal  
          drinking age at on-sale retail licensed premises, as specified.   


          AB 2285 (V. Brown) Chapter 248, Statutes of 1998.  Allows  
          on-sale retail licensees to offer limited tastings of wine or  
          distilled spirits at the licensed establishment.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          California Small Brewers Association

           Opposition 
           
          None on file
          

          Analysis Prepared by  :    Eric Johnson / G. O. / (916) 319-2531