BILL ANALYSIS Ó
Bill No: AB
782
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2013-2014 Regular Session
Staff Analysis
AB 782 Author: Bocanegra
As Amended: June 19, 2013
Hearing Date: June 25, 2013
Consultant: Art Terzakis
SUBJECT
Alcoholic Beverages: returns
DESCRIPTION
AB 782 adds a new provision to the Alcoholic Beverage
Control (ABC) Act that authorizes a licensed caterer who
has obtained a caterer's event permit to return unsold beer
to the beer distributor or manufacturer for credit, thereby
eliminating the need for a beer distributor or manufacturer
to continuously exchange out-of-code beer involving catered
events. Specifically, this measure:
1)Permits an on-sale retail licensee, that purchases beer
for sale at an event for which a caterer's event permit
has been issued by the Department of ABC, to return the
unused and unopened beer to the original selling licensee
at the conclusion of the catered event or upon expiration
of the catering authorization provided the beer was
purchased for use or sale only at the event and the
on-sale retail licensee does not also provide any beer
for use or sale at the event from its permanent licensed
premises.
2)Requires the on-sale retail licensee holding the catering
authorization to record and maintain a record of the
inventory of all unused and unopened beer to be returned
at the conclusion of the catering event.
3)Requires the original selling licensee to prepare an
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invoice of the returned beer that references the original
sales invoice and also provide the on-sale retail
licensee holding the catering authorization a copy of the
invoice.
4)Makes it explicit that any beer returned must be
delivered to the original selling licensee at the
conclusion of the catered event or upon expiration of the
catering authorization.
5)Also, permits the original selling licensee to credit the
account of the on-sale retail licensee in an amount not
exceed the original sales price of the returned beer,
provided the beer has been paid for in full.
EXISTING LAW
Existing law permits the return of beer for errors in
delivery, health and safety recalls and the identical
exchange of out-of-code products.
Existing law also 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.
Existing law allows an alcoholic beverage licensee to
accept the return of unsold and unopened beer from an
organization that obtains a temporary license.
Additionally, the licensee may 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.
Existing law authorizes the ABC to issue special licenses
for the sale of beer or wine on a temporary basis (usually
one to three days) for premises temporarily occupied by the
licensee for a picnic, social gathering, or similar
occasion at a fee equal to the actual cost of issuing the
license, but not to exceed $25 per day. Also, under
existing law, ABC may, in its discretion, issue on a
temporary basis a daily on-sale general license and the fee
for such license shall be $25 per day.
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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 782 : According to the author's office, only
specified holders of permanent retail licenses are able to
acquire a caterer's permit. Due to the fact that 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. This measure is
intended to allow a caterer to return unsold and unopened
beer to a beer distributor or manufacturer for credit.
The author's office points out that often times it is
difficult to estimate the amount of beer that will be
consumed at an event which can lead to a situation whereby
a caterer has overestimated the amount of beer needed for
any particular event and is left with an excess of 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 must
exchange the out-of-code beer for fresh beer and bear the
cost of fresh inventory and also pay to have the
out-of-code beer destroyed.
PRIOR/RELATED LEGISLATION
SB 1393 (Negrete McLeod), Chapter 163, Statutes of 2012.
Allowed an alcoholic beverage licensee to accept the return
of unsold and unopened beer from organizations that obtain
a particular license, as specified, and allowed the return
of beer that is recalled or that is considered to present a
health and safety issue by the manufacturer, importer, or
governmental entity if distributed, offered for sale, or
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sold in the state. Also, allowed for the exchange of beer
or a credit memorandum.
AB 517 (Hall), Chapter 12, Statutes of 2012. As
introduced, would have allowed a wholesaler or manufacturer
to accept the return of unsold and unopened beer from an
organization that obtained a specified temporary license,
as provided. This measure was eventually gutted and
amended in the Senate to contain a tribal gaming compact
for the Federated Indians of Graton Rancheria.
SB 487 (Negrete McLeod), 2011-12 Session. Would have added
a new provision to the ABC Act authorizing the return of
unsold and unopened beer from an organization that obtained
a temporary license. (Held in Assembly G.O. Committee at
author's request)
AB 3071 (Governmental Organization), 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.
SB 1035 (Perata), Chapter 657, Statutes of 2001. Allowed a
person in possession of a stock of lawfully acquired
alcoholic beverages following the revocation or voluntary
surrender of, or failure to renew, an alcoholic beverage
license to sell that stock to licensees, as authorized by
the Department of ABC.
SB 452 (Maddy), Chapter 273, Statutes of 1998. Among other
things, authorized a wholesaler or manufacturer of beer to
accept the return 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.
SUPPORT: As of June 21, 2013:
California Beer and Beverage Distributors
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OPPOSE: None on file as of June 21, 2013.
FISCAL COMMITTEE: Senate Appropriations Committee
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