BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



           ----------------------------------------------------------------- 
          |SENATE RULES COMMITTEE            |                        AB 816|
          |Office of Senate Floor Analyses   |                              |
          |1020 N Street, Suite 524          |                              |
          |(916) 651-1520         Fax: (916) |                              |
          |327-4478                          |                              |
           ----------------------------------------------------------------- 
           
                                           
                                       CONSENT


          Bill No:  AB 816
          Author:   Hall (D)
          Amended:  As introduced
          Vote:     21

           
           SENATE GOVERNMENTAL ORGANIZATION COMMITTEE  :  11-0, 6/11/13
          AYES:  Wright, Nielsen, Berryhill, Calderon, Cannella, Correa,  
            De León, Galgiani, Hernandez, Lieu, Padilla

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8

           ASSEMBLY FLOOR  :  75-0, 5/9/13 (Consent) - See last page for vote


           SUBJECT  :    Alcoholic beverages:  tied-house restrictions:   
          on-sale and off-sale
                      retailers advertising

           SOURCE  :     Author


           DIGEST  :    This bill merges two similar tied-house exceptions  
          (one pertaining to on-sale retailers the other to off-sale  
          retailers) within the Alcoholic Beverage Control Act (ABC Act)  
          which authorizes the dissemination of information regarding the  
          retail availability of products by alcoholic beverage producers,  
          distributors or importers in response to direct requests from  
          consumers.  

           ANALYSIS  :    

          Existing law:
                                                                CONTINUED





                                                                     AB 816
                                                                     Page  
          2


          1.Establishes the Department of Alcoholic Beverage Control (ABC)  
            and grants it exclusive authority to administer the provisions  
            of the ABC 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).  This is known as the "tied-house" law.

          3.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 ABC.  

          4.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.  

          This bill merges two similar tied-house exceptions (one  
          pertaining to "on-sale" retailers the other to "off-sale"  
          retailers) within the ABC Act which authorizes the dissemination  
          of information regarding the retail availability of products by  
          alcoholic beverage producers, distributors or importers in  
          response to direct requests from consumers.  

           Background
           
          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  

                                                                CONTINUED





                                                                     AB 816
                                                                     Page  
          3

          manufacturer's products.   

          The original policy rationale for this body of law was to (1)  
          promote the state's interest in an orderly market; (2) prohibit  
          the vertical integration and dominance by a single producer in  
          the marketplace; (3) prohibit commercial bribery and protect the  
          public from predatory marketing practices; and (4) 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.  

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

           SUPPORT  :   (Verified  6/25/13)

          California Beer and Beverage Distributors

           ARGUMENTS IN SUPPORT  :    According to the author's office,  
          suppliers often list on a Facebook fan page or Web site, the  
          different restaurants where a consumer may purchase their  
          products.  Thus, given the development of new social media,  
          distributors are utilizing the various social media mediums as a  
          marketing tool to inform consumers about additional retail  
          locations where a product can be purchased.  This bill is simply  
          intended to clean-up existing ABC statutes by consolidating into  
          a single statute the "on-sale" and "off-sale" provisions of law  
          which authorize manufacturers and distributors, in response to a  
          direct inquiry from a consumer, to provide information relative  
          to where their product is available for purchase.


           ASSEMBLY FLOOR  :  75-0, 5/9/13
          AYES:  Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,  
            Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,  
            Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway,  
            Cooley, Dahle, Daly, Dickinson, Eggman, Fong, Fox, Frazier,  
            Beth Gaines, Garcia, Gatto, Gomez, Gordon, Gorell, Gray,  
            Grove, Hagman, Hall, Harkey, Roger Hernández, Jones,  
            Jones-Sawyer, Levine, Linder, Lowenthal, Maienschein, Mansoor,  
            Medina, Melendez, Mitchell, Morrell, Mullin, Muratsuchi,  
            Nazarian, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel  
            Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone,  

                                                                CONTINUED





                                                                     AB 816
                                                                     Page  
          4

            Ting, Torres, Wagner, Weber, Wieckowski, Wilk, Williams,  
            Yamada, John A. Pérez
          NO VOTE RECORDED:  Donnelly, Holden, Logue, Waldron, Vacancy


          MW:nl  6/25/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

                                   ****  END  ****



































                                                                CONTINUED