BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 933|
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THIRD READING
Bill No: AB 933
Author: Skinner (D) and Hall (D)
Amended: 6/19/13 in Senate
Vote: 21
SENATE GOVERNMENTAL ORGANIZATION COMMITTEE : 10-0, 6/25/13
AYES: Wright, Nielsen, Berryhill, Calderon, Cannella, De León,
Galgiani, Hernandez, Lieu, Padilla
NO VOTE RECORDED: Correa
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 76-0, 5/30/13 - See last page for vote
SUBJECT : Distilled spirits manufacturers: licenses:
tastings
SOURCE : California Artisanal Distillers Guild
DIGEST : This bill grants licensed distilled spirits
manufacturers and licensed brandy manufacturers the privilege to
conduct consumer tastings on their licensed premises and to
charge for those tastings.
ANALYSIS :
Existing law:
1.Establishes the Department of Alcoholic Beverage Control (ABC)
and grants it exclusive authority to administer the provisions
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of the Alcoholic Beverage Control Act (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.Permits a licensed distilled spirits manufacturer to conduct
tastings of distilled spirits produced or bottled by, or
produced or bottled for, the licensee, on or off the
licensee's premises. Tastings conducted by the licensee off
the licensee's premises must be for an event sponsored by a
nonprofit organization, as defined, and only if persons
attending the event are affiliated with the sponsor. Makes it
explicit that no distilled spirits shall be sold or solicited
for sale in that portion of the premises where the distilled
tasting is being conducted.
4.Permits an on-sale retail licensee of wine or distilled
spirits to conduct "instructional" consumer tastings on the
licensed retail premise provided the following conditions are
met: (a) no more than ounce of distilled spirits is offered
in one tasting; (b) no more than one ounce of wine is offered
in one tasting; and (c) no more than three tastings are
offered to an individual in one day. An instruction may
include the history, nature, values and characteristics of the
product being offered, and the methods of presenting and
serving the product.
5.Authorizes beer manufacturers and wholesalers to offer beer
samples (not to exceed eight ounces per person, per day) to
individuals of legal drinking age at on-sale retail licensed
premises under specified conditions.
6.Permits a licensed winegrower, manufacturer, importer, or
wholesaler to provide samples of the alcoholic beverages which
are authorized to be sold by the licensee in accordance with
rules prescribed by the ABC. A retail licensee, however, is
not authorized to provide any free samples of alcoholic
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beverages. Moreover, ABC regulations provide that samples of
alcoholic beverages may only be given away to licensees or
employees of licensees who are in a position to purchase the
product or who are in need of additional information about the
product, as specified.
7.Permits a licensed winegrower or brandy manufacturer to be
issued an off-sale general license. Permits wineries to sell
their products to consumers on their licensed premises and
directly to licensed, on-sale and off-sale retailers (e.g.,
restaurants and liquor stores). Provides for a
brewpub-restaurant license, issued to a bona fide public
eating place, which authorizes the sale of beer, wine, and
distilled spirits for consumption on the premises and the sale
of beer produced by the brewpub-restaurant licensee for
consumption on the premises. The license also authorizes the
sale of beer produced by the licensed brewpub-restaurant
licensee to a licensed beer and wine wholesaler. The
brewpub-restaurant licensee must purchase all beer, wine, or
distilled spirits for sale on the licensed premises from a
licensed wholesaler or winegrower, except for the beer
produced by the brewpub-restaurant licensee on the licensed
premises. Requires the brewpub-restaurant licensee to offer
for sale on the licensed premises other commercially available
beers available from licensed wholesalers.
8.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 grants licensed distilled spirits manufacturers and
licensed brandy manufacturers the privilege to conduct consumer
tastings on their licensed premises and to charge for those
tastings. Specifically, this bill:
1.Makes legislative findings and declarations that a tasting of
distilled spirits or brandy is a presentation of samples of
alcoholic beverages representing one or more manufacturers to
a group of consumers for the purpose of acquainting the
tasters with the characteristics of the distilled spirits or
brandy tasted.
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2.Stipulates that tastings of "distilled spirits" on the
licensee's premises shall be subject to the following
conditions:
A. Tastings must not exceed of an ounce and must be
limited to no more than four tastes per individual per day.
B. Tastings must include the products that are authorized
to be produced or bottled by or for the licensee.
C. Prohibits individuals under 21 years of age from serving
tastings.
D. Prohibits single tastings in the form of a cocktail or
mixed drink.
E. Permits the distilled spirits licensee to charge for
such tastings.
1.Adds a new Section of law to the ABC Act authorizing a
licensed "brandy" manufacturer to conduct tastings of brandy
produced or bottled by, or produced or bottled for, the
licensee, on or off the licensee's premises for events
sponsored by a nonprofit organization, as defined, and only if
persons attending the event are affiliated with the sponsor.
(This provision mirrors existing ABC law relative to
authorization granted to distilled spirits manufacturers.)
2.Also, makes it explicit that no brandy shall be sold or
solicited for sale at the event and mandates that the
sponsoring organization obtain a permit for such an event from
the ABC. Additionally, grants brandy manufacturers the
privilege of conducting tastings on their licensed premises
and charging for those tastings subject to the same conditions
afforded distilled spirits manufacturers as referenced in #2
above.
3.Includes "boiler plate" findings and declarations relative to
the necessity of requiring a separation between the
three-tiers of the alcoholic beverage industry in order to
prevent suppliers from dominating local markets through
vertical integration and to prevent excessive sales of
alcoholic beverages produced by overly aggressive marketing
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techniques.
4.Makes minor technical and code maintenance changes to existing
provisions of the ABC Act.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/8/13)
California Artisanal Distillers Guild (source)
California Farm Bureau Federation
OPPOSITION : (Verified 8/8/13)
California Council on Alcohol Problems
ARGUMENTS IN SUPPORT : The author's office points out that
existing law permits distilleries to provide their customers
with complementary tastings of the products they manufacture
however the law precludes them from charging for those tastings.
According to the author's office, this bill is intended to give
adult consumers who enjoy distilled spirits the opportunity to
sample new products, in modest quantities, and in a responsible
environment (at the distillery). The author's office maintains
that the ability to charge for tastings is also aligned with
existing privileges afforded the wine and beer industry.
Additionally, the author's office emphasizes that this bill is
carefully crafted to give distilled spirits and brandy
manufacturers a marketing tool to educate current and future
consumers while taking into consideration California's
three-tier system.
The bill's sponsor, the California Artisanal Distillers Guild,
writes: "California's artisanal distillers compete at a great
disadvantage to distillers from almost all the other states.
Twenty-seven states allow distillers to sell their product
directly to consumers. More importantly for the purposes of this
bill, California is one of only four states that do not allow
distillers to charge for tastings. AB 933 would help California
distillers to be more competitive by allowing them to charge for
tastings."
According to the sponsor, California currently has approximately
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32 small business distilleries producing common brands such as
Hangar One Vodka and St. James Spirits. These distilleries
manufacture a variety of products including but not limited to
gin, vodka, rum and bourbon. California distillers make
award-winning products using raw ingredients which are primarily
purchased, sourced or grown by California farmers or suppliers.
ARGUMENTS IN OPPOSITION : The California Council on Alcohol
Problems has expressed concern about the expansion of the
tastings exemption in tied-house law and the unprecedented
authorization for the sale and consumption of distilled spirits
and brandy outside of a properly licensed, on-sale establishment
even if this bill limits such consumption to a manufacturer's
licensed business location.
ASSEMBLY FLOOR : 76-0, 5/30/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Chávez, Conway, Cooley,
Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Frazier, Beth
Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, Gray,
Grove, Hagman, Hall, Harkey, Roger Hernández, Jones,
Jones-Sawyer, Levine, Linder, Logue, 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, Ting, Wagner, Waldron, Weber, Wieckowski, Wilk,
Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Chesbro, Fox, Holden, Vacancy
MW:nl 8/9/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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