BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 636
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          Date of Hearing:   April 10, 2013

                   ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
                              Hall III, Isadore, Chair
                  AB 636 (Hall) - As Introduced:  February 20, 2013
           
          SUBJECT  :   Alcoholic beverages: tied-house restrictions.

           SUMMARY  :   Would permit, until January 1, 2015, under specified  
          conditions, the appearance of a person for the purpose of  
          providing autographs at an instructional event for consumers  
          that a winegrower, California winegrower's agent, importer, or  
          other specified parties conduct, or participate in, that is held  
          at a retailer's premises. 
           
          EXISTING LAW  :

          1)  Establishes the Department of Alcoholic Beverage Control  
          (ABC) and grants it the exclusive authority to administer the  
          provisions of the ABC Act in accordance with laws enacted by the  
          Legislature.

          2)  Existing law, known as 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.

          3)  Permits, until January 1, 2016, the appearance of a person  
          employed or engaged by an "authorized licensee," as defined, at  
          a promotional event held at the premises of an off-sale retail  
          licensee for the purpose of providing autographs under specified  
          conditions.

           FISCAL EFFECT  :   Unknown.

           COMMENTS  :   

           Purpose of bill  :  According to the author's office, under  
          current law wineries and other suppliers of wine, beer, and  
          spirits are permitted to autograph bottles for consumers at a  








                                                                  AB 636
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          promotional event held at an off-sale retailer such as BevMo or  
          Costco.  However, a supplier or their representative may not  
          sign autographs of items at any other venue.  AB 636 would amend  
          current law to include autographs at on-sale restaurants where a  
          winery is conducting a winemaker dinner.

          In essence, the bill is a modest extension of AB 2184 (Hall)  
          which was enacted last year.  This bill simply provides an  
          opportunity for a consumer to obtain an autograph on a bottle at  
          an additional type of event (an instructional winemaker dinner).

          The author emphasizes that this measure has been carefully  
          crafted to include a number of well-reasoned provisions and  
          built-in safeguards that do not require purchase of a product,  
          prevent charging a fee for an autograph, and provide a  
          limitation on the number and duration of events. In addition,  
          ABC will still need to be notified in advance of any such event.


           In Support  :   In support of this measure, the Family Winemakers  
          of California notes that the alcoholic beverage industry is  
          highly competitive with thousands of competing brands in the  
          wine and spirits categories.  This bill will provide brand  
          owners and wine producers the opportunity to market their  
          product on a personal basis and help build brand awareness and  
          loyalty.  Proponents also state that this bill does not change  
          the existing safeguards which were incorporated into last year's  
          autographing legislation.

           Prior legislation  : AB 2184 (Hall), Chapter 480, Statutes of  
          2012.  Permits, until January 1, 2016, the appearance of a  
          person employed or engaged by an "authorized licensee," as  
          defined, at a promotional event held at the premises of an  
          off-sale retail licensee for the purpose of providing autographs  
          under specified conditions.

          AB 605 (Portantino), Chapter 230, Statutes of 2010.  Created a  
          new type of license that allows the tasting of beer, wine, and  
          distilled spirits at off-sale licensed premises. 

          AB 2293 (De Leon), Chapter 638, Statutes of 2008.  Added a new  
          provision to the ABC Act that permits a manufacturer of  
          distilled spirits, winegrower, rectifier, or distiller, or its  
          authorized agent to provide their product, as well as  
          entertainment and food to consumers over 21 years of age during  








                                                                  AB 636
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          invitation-only events (free of charge).  The events must occur  
          on premises for which a caterer's permit authorization has been  
          issued.  The bill sunsets on January 1, 2014. 
           
          REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          Wine Institute
          Family Winemakers of California
           
          Opposition 
           
          None on file
           

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