BILL ANALYSIS Ó
AB 816
Page 1
Date of Hearing: April 10, 2013
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Hall III, Isadore, Chair
AB 816 (Hall) - As Introduced: February 21, 2013
SUBJECT : Alcoholic beverages: tied-house restrictions: on-sale
& off-sale retailers advertising.
SUMMARY : Merges code sections within the Alcoholic Beverage
Control Act (Act) pertaining to direct requests from consumers
to non-retail alcoholic beverage purveyors seeking information
as to where specific brands are available on the retail market.
The bill consolidates the individual authorizations for
providing information regarding on-sale and off-sale retail
licensees carrying the product requested. Specifically, this
bill:
1) Consolidates provisions within the Act pertaining to the
listing of the names, addresses, telephone numbers, email
addresses, or Internet Web site addresses, or other electronic
media, of two or more unaffiliated on-sale or off-sale
retailers selling beer, wine, or distilled spirits produced,
distributed, or imported by a nonretail industry member in
response to a direct inquiry from a consumer received by
telephone, by mail, by electronic inquiry, or in person does not
constitute a thing of value or prohibited inducement to the
listed on-sale or off-sale retailer, under specified
conditions.
2) Deletes the definition of "nonretail industry member" which
is defined as a manufacturer, including, but not limited to, a
beer manufacturer, winegrower, or distiller of alcoholic
beverages, or an agent of those entities, or a wholesaler,
regardless of any other licenses held directly or indirectly by
that person.
3) Make technical and clarifying changes.
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
AB 816
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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) 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).
3) Provides the listing of the names, addresses, telephone
numbers, or email addresses, or Internet Web site addresses, of
2 or more unaffiliated off-sale retailers selling beer, wine, or
distilled spirits and operating and licensed as bona fide public
eating places selling the beer, wine, or distilled spirits
produced, distributed, or imported by a nonretail industry
member in response to a direct inquiry from a consumer, as
specified, does not constitute a thing of value or prohibited
inducement to the listed off-sale retailer, if specified
conditions are met.
4) Includes similar provisions applicable to on-sale licensed
premises, except that those provisions also extend the
above-described exception to other forms of electronic media.
FISCAL EFFECT : Unknown.
COMMENTS :
Purpose of the bill : In 2012, AB 2349 (Nestande), Chapter 374,
Statutes of 2012, amended Business and Professions Code Section
25500.1 to permit alcohol manufacturers and distributors to list
two or more unaffiliated on-sale licensees of any type that
carries their product. Prior to AB 2349, restaurants were only
allowed to be listed and bars were excluded. The bill corrected
this inequity by permitting any on-sale license to be listed
under specified conditions. The bill also added "other
electronic media" to the list of sources that beer manufacturers
or distributors could use to list two or more unaffiliated
on-sale licensees that carry their product.
The author points out, that suppliers often list on a Facebook
fan page or Web site, the different restaurants where a consumer
may purchase their product. Thus, given the development of new
social media, distributors are utilizing the various social
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media mediums as a marketing tool to educate consumers
about additional retail locations where a product can be
purchased.
This measure is intended to clean-up existing statutes within
the Act on this subject by consolidating into a single statute
the on-sale and off-sale sections of law regarding authorizing
manufacturers and distributors in response to a direct inquiry
from a consumer to provide information relating to where their
product is available for purchase.
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).
Tied house refers to a practice in this country prior to
Prohibition and still occurring in England today where a 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.
Prior legislation : AB 2349 (Nestande), Chapter 374, Statutes of
2012. Revised the direct inquiry provisions in Act to remove
the requirement that manufacturers and distributors can only
provide consumer information where they can find a specific
product at an on-sale establishment if that on-sale retailer
operates and is licensed as a restaurant. By removing that
requirement, manufacturers and distributors can add bars to the
list they provide consumers of on-sale establishments that serve
their specific products.
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SB 1096 (Wiggins), Chapter 285, Statutes of 2010. Made various
technical and code maintenance changes to several provisions of
the Act to keep up with modern technology.
SB 1423 (Chesbro), Chapter 205, Statutes of 2000. Authorized
wineries and brandy manufacturers to advertise the name and
location of restaurants that sell their products.
SB 1233 (Chesbro), Chapter 666, Statutes of 1999. Allowed for
the limited dissemination of information regarding the off-sale
availability of alcoholic beverages.
AB 2777 (Granlund), Chapter 980, Statutes of 2000. Broadened an
existing tied-house exception relating to the purchase of
alcohol advertisements at specified venues to include distilled
spirits manufacturers, and authorizes a non-retail alcohol
industry member to list specified information relating to the
availability of alcoholic beverages at no more than two
restaurants in response to a direct inquiry from a consumer
received by telephone, mail, or the Internet.
REGISTERED SUPPORT / OPPOSITION :
Support
California Beer and Beverage Distributors
Opposition
None on file
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531