BILL ANALYSIS Ó
Bill No: AB
636
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2013-2014 Regular Session
Staff Analysis
AB 636 Author: Hall
As Introduced: February 20, 2013
Hearing Date: June 11, 2013
Consultant: Art Terzakis
SUBJECT
Alcoholic Beverages
DESCRIPTION
AB 636 permits, under specified conditions and until
January 1, 2016, 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
featuring wines produced by or for the winegrower or,
imported by the wine importer.
EXISTING LAW
Existing law establishes the Department of ABC and grants
it exclusive authority to administer the provisions of the
ABC Act in accordance with laws enacted by the Legislature.
This involves licensing individuals and businesses
associated with the manufacture, importation and sale of
alcoholic beverages in this state and the collection of
license fees.
Existing law, known as the "tied-house" law, separates the
alcoholic beverage industry into three component parts, or
tiers, of manufacturer (including breweries, wineries and
distilleries), wholesaler, and retailer (both on-sale and
off-sale).
Tied-house refers to a practice in this country prior to
Prohibition and still occurring in England today where a
AB 636 (Hall) continued
Page 2
bar or public house, from whence comes the "house" of tied
house, is tied to the products of a particular
manufacturer, either because the manufacturer owns the
house, or the house is contractually obligated to carry
only a particular manufacturer's products.
The original policy rationale for this body of law was to:
(a) promote the state's interest in an orderly market; (b)
prohibit the vertical integration and dominance by a single
producer in the marketplace; (c) prohibit commercial
bribery and protect the public from predatory marketing
practices; and, (d) discourage and/or prevent the
intemperate use of alcoholic beverages. Generally, other
than exceptions 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.
Existing law permits, until January 1, 2016, the appearance
of a person employed or engaged by an authorized licensee
at a promotional event held at the premises of an off-sale
retail licensee for the purposes of providing autographs to
consumers at the event, subject to the following
conditions: (a) a fee is not charged to attend the event
and a purchase from the off-sale retail licensee is not
required; (b) the event does not exceed 4 hours in duration
and there are no more than two such events per calendar
year involving the same authorized licensee at a single
premise of an off-sale licensee; (c) autographing may only
be provided on consumer advertising specialties given by
the authorized licensee to a consumer or on any item
provided by the consumer; (d) an authorized licensee may
advertise in advance of the event only in publications of
the authorized licensee, subject to specified conditions;
(e) a wholesaler does not directly or indirectly
underwrite, share in, or contribute to any costs related to
the event; and, (f) the authorized licensee notifies ABC in
writing of the event at least 30 days in advance and
maintains records necessary to establish compliance with
this law.
Existing law generally prohibits a winegrower, a California
winegrower's agent, importer, or other specified parties
from providing a licensee alcoholic beverages as a free
good as a part of any sale or transaction involving
alcoholic beverages or furnishing anything of value to a
licensee for specified purposes. Existing law excepts from
this prohibition a winegrower, California winegrower's
AB 636 (Hall) continued
Page 3
agent, importer, or other specified parties when conducting
or participating in an instructional event for consumers
held at a retailer's premises featuring wines produced by
or for the winegrower or imported by the importer, subject
to specified conditions.
Existing law defines an "on-sale" license as authorizing
the sale of all types of alcoholic beverages: namely, beer,
wine and distilled spirits, for consumption on the premises
(such as at a restaurant or bar). An "off-sale" license
authorizes the sale of all types of alcoholic beverages for
consumption off the premises in original, sealed
containers.
The ABC Act provides that a violation of any of its
provisions for which another penalty or punishment is not
specifically provided is a misdemeanor.
BACKGROUND
Purpose of AB 636: Current law (Business & Professions
Code Section 25502.2) permits wineries and other suppliers
of wine, beer, and spirits to autograph bottles for
consumers at a promotional event held at an off-sale
retailer (e.g., specialty wine shop, BevMo or Costco).
However, a supplier or their representative may not sign
autographs of items at any other venue. This measure would
amend current law to include autographs at an on-sale
restaurant where a winery is conducting a "winemaker
dinner."
The author's office notes that this measure is a modest
extension of AB 2184 (Hall) which was enacted last year.
AB 636 simply provides an opportunity for a consumer to
obtain an autograph on a bottle at an additional type of
event, namely an instructional "winemaker dinner" -
conducted at bona fide eating venue which holds an on-sale
license. The author's office emphasizes that existing law
contains built-in safeguards, as referenced above. Wine
producers are expected to use this new marketing tool to
build brand awareness and loyalty.
PRIOR/RELATED LEGISLATION
AB 2184 (Hall), Chapter 480, Statutes of 2012. Created a
new tied-house exception in the ABC Act that authorizes,
AB 636 (Hall) continued
Page 4
until January 1, 2016, wine, beer and spirits producers to
participate in promotional events held at an off-sale
retail licensed location for the purpose of providing
autographs on bottles or other items to consumers.
SB 1101 (Wolk), Chapter 177, Statutes of 2010. Clarified
that winemakers who participate in instructional events or
"meet the winemaker dinners," held at a retailer's licensed
premises for consumers, may offer minimal samples (no more
than three one-ounce tastes) of wine from "bottles."
AB 605 (Portantino), Chapter 230, Statutes of 2010. Added
new provisions to the ABC Act authorizing the department to
issue to the holder of an "off-sale" retail license an
"instructional tasting license" for the purpose of
furnishing tastings of alcoholic beverages to consumers,
subject to certain limitations.
AB 2134 (Chesbro), Chapter 149, Statutes of 2010. Created
a new tied-house exception in the ABC Act that allows
licensed brewers to conduct and participate in events
called "Beer Maker Dinners" for consumers held at an
on-sale retail licensed premise.
AB 2293 (De Leon), Chapter 638, Statutes of 2008. Added a
new provision to the ABC Act allowing distilled spirits
manufacturers and winegrowers to provide their product
offerings directly to consumers (free of charge) during
invitation-only events on premises for which a caterer's
permit authorization has been issued.
SB 1548 (Murray), Chapter 670, Statutes of 2006.
Authorized beer manufacturers and wholesalers to offer beer
samples (not to exceed 8 ounces per person, per day) to
individuals of legal drinking age at on-sale retail
licensed premises under specified conditions.
AB 2868 (Floyd), Chapter 471, Statutes of 1992. Authorized
a winegrower, California winegrower's agent, importer, or
their specified representatives, to participate in an
instructional event for consumers held at a retailer's
premises featuring wines produced by or for the winegrower
or imported by the importer, under specified conditions.
SUPPORT: As of June 7, 2013:
AB 636 (Hall) continued
Page 5
Wine Institute
Family Winemakers of California
OPPOSE: None on file as of June 7, 2013.
FISCAL COMMITTEE: Senate Appropriations Committee
**********