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