BILL ANALYSIS Ó
AB 782
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Date of Hearing: April 24, 2013
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Hall III, Isadore, Chair
AB 782 (Bocanegra) - As Introduced: February 21, 2013
SUBJECT : Alcoholic beverage control: licensees: returns.
SUMMARY : Would allow a wholesaler or manufacturer of beer to
accept the return of beer unsold and unopened beer from an
organization that obtained a caterer's permit or an event
permit, as specified. Specifically, this bill :
1) Under the Alcoholic Beverage Control Act, a wholesaler or
manufacturer may accept the return of beer from from a seasonal
or temporary licensee or an annual licensee operating on a
temporary basis, permitting the return of unsold and unopened
beer from an organization that obtained a specified temporary
license, and permitting the return of beer that is recalled or
presents a health and safety issue as provided.
This bill would add to the above exceptions, to permit a
wholesaler or manufacturer to accept the return of unsold and
unopened beer from an organization that obtained a caterer's
permit or an event permit, as specified.
EXISTING LAW :
1) Establishes the Department of Alcoholic Beverage Control
(ABC) and grants it exclusive authority to administer the
provisions of the 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 or occupation taxes for this purpose.
2) 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).
3) Permits the return of beer for errors in delivery, health
and safety recalls and the identical exchange of out-of-code
products.
AB 782
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4) 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.
5) Authorizes an alcoholic beverage licensee to accept the
return of unsold and unopened beer from an organization that has
obtained a temporary daily license. Permits the licensee to
credit the account of the organization in an amount not to
exceed the original sales price of the returned beer, provided
that the beer has been paid for in full.
FISCAL EFFECT : Unknown.
COMMENTS :
Purpose of the bill : According to the author's office, only
specified holders of permanent retail licenses are able to
acquire a caterer's permit. Because they're holders of
permanent retail licenses, they are ineligible to return unsold
and unopened beer to an alcoholic beverage licensee and have
their account credited.
Often times it is difficult to estimate the amount of beer that
will be consumed at an event, which can cause a situation where
a caterer has overestimated the amount of beer needed for any
particular event and is left with an excess stock. If the
caterer cannot sell the beer at future events or at its
permanently licensed premise and the beer expires or goes
"out-of-code", the distributor or manufacturer much exchange the
out-of-code beer for fresh beer. This requirement is burdensome
to the distributor or manufacturer as they must bear the cost of
the fresh inventory as well as the cost of having the expired
beer destroyed.
The author further states, that allowing holders of permanent
retail licenses, and not just temporary or seasonal licenses, to
return unsold beer to the beer distributor or manufacturer for
credit would cut costs and eliminate an unnecessary regulation
that burdens business.
Prior legislation : SB 1393 (Negrete McLeod), Chapter 163,
Statutes of 2012. Allowed a manufacturer or wholesaler of beer
AB 782
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to accept the return of recalled beer for health or safety
issues and exchange the beer or credit the retailer. In
addition, permits the return of unsold and unopened beer from an
organization that obtained a temporary license, as specified.
AB 3071 (Assembly Governmental Organization 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 Governmental Organization 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 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.
REGISTERED SUPPORT / OPPOSITION :
Support
California Beer & Beverage Distributors
Opposition
None on file
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531