BILL ANALYSIS Ó Bill No: SB 1393 SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION Senator Roderick D. Wright, Chair 2011-2012 Regular Session Staff Analysis SB 1393 Author: Negrete McLeod As Introduced: February 24, 2012 Hearing Date: April 10, 2012 Consultant: Art Terzakis SUBJECT Alcoholic Beverages: returns DESCRIPTION SB 1393 makes the following changes to an existing provision of the Alcoholic Beverage Control (ABC) Act that currently allows a manufacturer or wholesaler of beer to accept the return of recalled beer for health or safety issues and exchange the beer or credit the retailer. Specifically, SB 1393: 1.Permits the return of recalled beer that is considered by a manufacturer, importer, or governmental entity to present health or safety issues if distributed, offered for sale or sold in the state. 2.Also, allows the seller of beer to exchange with the manufacturer or importer the returned beer and the seller of beer's inventory that was recalled or considered to present health or safety issue for identical product provided safe inventory is available. If safe product is unavailable then the manufacturer or importer must provide the seller of beer a refund or a credit memorandum. EXISTING LAW Existing law permits the return of beer for errors in delivery, health and safety recalls and the identical exchange of out-of-code products. SB 1393 (Negrete McLeod) continued Page 2 Existing law also authorizes a wholesaler or manufacturer of beer to accept the return of quantities of discontinued or seasonal brands of beer from a retail licensee, provided that the returned beer is exchanged for a quantity of beer of a brand produced or sold by the same manufacturer with a value not greater than the original sales price to the retail licensee of the returned beer. BACKGROUND According to the author's office, this measure is simply intended to allow a retailer to return beer that has been recalled or declared to pose a health and safety threat to the public by the manufacturer, importer, or governmental entity, for a full exchange, refund or credit memorandum. PRIOR/RELATED LEGISLATION SB 487 (Negrete McLeod) 2011-12 Session. Would add a new provision to the ABC Act that permits the return of unsold and unopened beer from an organization that obtained a temporary license. (Pending in Assembly G.O. Committee) AB 517 (Hall) 2011-12 Session. Identical to SB 487 (Negrete McLeod). (Senate Inactive File) SB 192 (Negrete McLeod) 2009-10 Session. Identical to SB 487 of 2011. (Gutted in the Assembly - California Firefighter Joint Apprenticeship Program - in late August and held in Rules Committee) Senate G.O. vote on 4/14/09 (13-0); floor vote on 4/20/09 (37-0). AB 3071 (Assembly G.O. Committee) Chapter 508, Statutes of 2008. Among other things, authorized beer that is recalled for health or safety issues to be accepted for return at any time from a retailer and be picked up by the seller of beer. Also, permitted the seller of beer to exchange the returned beer for identical product, issue a deferred exchange memorandum showing the beer was picked-up and is to be replaced when inventory is available, or issue a credit to the retailer for the returned beer. AB 3065 (Assembly G.O. Committee) Chapter 910, Statutes of 2006. Among other things, extended the time frame (from six weeks to three months) in which a beer manufacturer or beer wholesaler is authorized to provide assistance to SB 1393 (Negrete McLeod) continued Page 3 retailers whose equipment, fixtures, or supplies were lost or damaged as a result of a natural disaster and whose premises are located in an area proclaimed to be in a state of disaster by the Governor. SB 1035 (Perata) Chapter 657, Statutes of 2001. Allowed a person in possession of a stock of lawfully acquired alcoholic beverages following the revocation or voluntary surrender of, or failure to renew, an alcoholic beverage license to sell that stock to licensees, as authorized by the Department of ABC. SB 452 (Maddy) Chapter 273, Statutes of 1998. Among other things, authorized a wholesaler or manufacturer of beer to accept the return of discontinued or seasonal brands of beer from a retail licensee, provided that the returned beer is exchanged for a quantity of beer of a brand produced or sold by the same manufacturer with a value not greater than the original sales price to the retail licensee of the returned beer. SUPPORT: California Beer & Beverage Distributors (sponsor) OPPOSE: None on file as of April 6, 2012 FISCAL COMMITTEE: No **********