BILL ANALYSIS Ó
AB 933
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Date of Hearing: May 24, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 933 (Skinner) - As Amended: May 15, 2013
Policy Committee: Governmental
Organization Vote: 17 - 0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill allows a licensed distilled spirits or brandy
manufacturer to charge consumers for tastings on its licensed
premises. Specifically, this bill:
1)Authorizes a licensed distilled spirits or brandy manufacturer
to charge consumers for tastings on its licensed premises, and
would impose additional conditions on the provision of
tastings by the licensee on the licensed premises.
2)Limits tastings of distilled spirits to one-quarter ounce per
taste and to a total of four tastings per person, per day.
3)Provides that distilled spirits tastings may be conducted by
the licensee off the licensee's premises only for an event
sponsored by a nonprofit organization.
4)Requires the sponsoring nonprofit organization obtain a permit
from Department of Alcoholic Beverage Control (ABC).
5)Permits a distilled spirits manufacturer, for tastings
conducted at a licensee's premises, to display or provide to
individuals a listing of the names, addresses, telephone
numbers, e-mail addresses, or Internet Web site addresses, of
two or more unaffiliated off-sale retailers selling their
products.
FISCAL EFFECT
Negligible non-reimbursable costs for prosecution and/or
incarceration, offset by fine revenue, for misdemeanor
AB 933
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violations of these provisions of the ABC Act.
COMMENTS
1)Purpose . This bill provides a tied house exemption for
distilled spirits and brandy manufacturers by allowing them to
charge consumers for tastings at their licensed facility. The
author notes that currently, distilleries may provide their
customers complementary tastings of their products, but may
not charge for tastings. In order to educate consumers about
their products, distilleries must hire staff. The ability to
charge for tastings will allow distilleries to provide better
customer service to market their product while remaining
financially sustainable. The author points out that the
ability to charge for tastings is also aligned with what the
wine and beer industry are allowed to do under the ABC Act.
2)Tied house laws , developed after prohibition, sought to break
up and separate the liquor industry by categorizing and
regulating each aspect of the business. It is essentially
divided into manufacturing, wholesaling, and retailing. Each
category is independent of the other with specific laws
ensuring that the relationship between manufacturers,
distributors and retailers remains distinct. The original
policy rationale for this body of law was to prohibit the
vertical integration of the alcohol industry and to protect
the public from predatory marketing practices. Generally,
other than exemptions 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.
The current tied house laws are specific about who can sell
alcoholic beverage products to whom. Generally, manufacturers
must sell their products through wholesalers so that there is
no direct contact between the manufacturer and the retailer or
the consumer.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081