BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 636 (Hall) - Alcoholic Beverages
Amended: As Introduced Policy Vote: GO 11-0
Urgency: No Mandate: No
Hearing Date: June 24, 2013
Consultant: Maureen Ortiz
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: AB 636 provides an exemption to the tied-house
rules in the Alcoholic Beverage Control Act by allowing a person
to give autographs at an instructional event under certain
circumstances.
Fiscal Impact:
The Department of ABC indicates the need for one PY
annually in the Trade Enforcement Unit at a cost of $98,000
(Special)
Background: 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).
Existing law also provides that no licensee shall, directly or
indirectly, give any premium, gift, free goods, or other thing
of value in connection with the sale, distribution, or sale and
distribution of alcoholic beverages, and no retailer shall,
directly or indirectly, receive any premium, gift, free goods or
other thing of value from a supplier of alcoholic beverages,
except as authorized by the Department of Alcoholic Beverage
Control.
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
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premises in original, sealed containers.
Existing law, AB 2184 (Hall) allows a person to give autographs
at a promotional event held at the premises of an off-sale
retail licensee under certain conditions. AB 636 will provide
the same opportunity for consumers to obtain an autograph on a
bottle of wine at instructional wine tastings.
Proposed Law: AB 636 authorizes a person employed or engaged by
a licensee to appear at an instructional event for the purposes
of providing autographs to consumers providing the following
conditions are adhered to: 1) a fee is not charged, 2) the
event is less than 4 hours long, 3) autographs must be given on
items provided by the consumer, 4) advertising for the event is
limited, 5) the wholesaler does not contribute to the costs of
the event, and 6) the licensee notifies the ABC 30 days in
advance. This authorization will sunset January 1, 2015.
Staff Comments: It has become more and more common for
individuals in the entertainment industry in particular to
acquire an ownership interest in a brand of distilled spirits or
to create a new spirits line and then arrange to have those
brands distributed in the normal and lawful distribution system
established by ABC laws. Additionally, those individuals will
often promote the product at the retail point of sale through
personal appearances which may include bottle signing events in
licensed premises which carry the product. Examples of
"celebrities" who have garnered an ownership interest in
distilled spirits include: Dan Ackroyd, Crystal Head Vodka;
Sean "P. Ditty" Combs, Ciroc Vodka (primary owner Diageo); Sammy
Hagar, Cabo Wabo Tequila (primary owner Gruppo Campari); Donald
Trump, Trump Vodka; Willie Nelson, Old Whiskey River, Heaven
Hill Distilleries; Danny DeVito, Danny DeVito's Limoncello; and,
Jay-Z, Armadale Vodka.
The Department of ABC has taken the position that the appearance
of any public personality, with an ownership interest in an
alcoholic beverage product, at a licensed retail premises to
autograph bottles of his or her product, constitutes a "thing of
value" in violation of current tied-house provisions of the ABC
Act - the department considers the autographed bottle a
"premium."
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