BILL ANALYSIS Ó AB 636 Page 1 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 Page 2 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 Page 3 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