BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 933
                                                                  Page  1

          CONCURRENCE IN SENATE AMENDMENTS
          AB 933 (Skinner and Hall)
          As Amended  September 3, 2013
          Majority vote
           
           ----------------------------------------------------------------- 
          |ASSEMBLY:  |76-0 |(May 30, 2013)  |SENATE: |39-0 |(September 9,  |
          |           |     |                |        |     |2013)          |
           ----------------------------------------------------------------- 
            
           Original Committee Reference:    G.O.  

           SUMMARY  :  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, as defined.

           The Senate amendments  :

          1)Include "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  
            techniques.

          2)Make it explicit that single tastings of distilled spirits or  
            brandy shall not be given in the form of a cocktail or a mixed  
            drink.

          3)Allow distilled spirits manufacturers and brandy manufacturers  
            to charge individuals for up to six tastings instead of four  
            tastings.

          4)Provide the licensee shall not be relieved of any civil or  
            criminal liability arising out of a violation of Business and  
            Professions Code Section 25602.

          5)Delete reference to "single" tastings and instead uses the  
            term "tastings."

           EXISTING LAW  :

          1)Establishes the Department of Alcohol and Beverage Control  








                                                                  AB 933
                                                                  Page  2

            (ABC) and grants it exclusive authority to administer the  
            provisions 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)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.  Existing  
            law also 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.   

          3)Authorizes ABC to issue to the holder of an "off-sale" retail  
            license an "instructional tasting license" for the purpose of  
            furnishing tastings of alcoholic beverages to consumers,  
            subject to certain limitations.

          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 a quarter 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)Authorizes licensed winegrowers to conduct wine tastings  
            featuring their products either on or off the winegrower's  
            premises, as provided for in rules and regulations adopted by  
            ABC.









                                                                  AB 933
                                                                  Page  3

          7)Permits, until January 1, 2014, a manufacturer, winegrower,  
            rectifier, or distiller, distilled spirits manufacturer's  
            agent or any authorized agent of that person to provide, free  
            of charge, entertainment, food, and distilled spirits, wine,  
            or nonalcoholic beverages to consumers over 21 years of age at  
            an invitation-only event in connection with the sale or  
            distribution of wine or distilled spirits, as specified. 

           AS PASSED BY THE ASSEMBLY  , this bill allowed a licensed  
          distilled spirits or brandy manufacturer to charge consumers for  
          tastings on its licensed premises.

           FISACL EFFECT  :  According to the Senate Appropriations  
          Committee, pursuant to Senate Rule 28.8, negligible state costs.

           COMMENTS  :  This bill, as amended in the Senate is consistent  
          with Assembly actions.

          According to the author, tastings are a traditional means of  
          allowing responsible adult consumers to sample and learn about  
          the wide variety of alcoholic beverage products available in the  
          marketplace.  There are roughly 32 small business distilleries  
          in the state; some common brands produced are 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.

          The author points out, 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 also 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.

          According to the author's office, this measure 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).  This measure is  
          carefully crafted to give distilled spirits and brandy  
          manufacturers a marketing tool to educate current and future  








                                                                  AB 933
                                                                  Page  4

          consumers while taking into consideration California's  
          three-tier system.

          In support:  According to the bill's sponsor, California  
          Artisanal Distillers Guild, granting artisanal distillers the  
          ability to charge for tastings will induce growth and long-term  
          sustainability for the overall industry.  

          In opposition:  The California Council on Alcohol Problems  
          (CCAP), "Beyond the fiscal context of our general opposition to  
          AB 933 -- and bills like it, CCAP members are concerned about  
          expanding the tastings exemption to Tied-House and licensure  
          limitations, and most especially allowing such tastings to be  
          sold like an on-sale premise.  This unprecedented authorization  
          for the sell and consumption of distilled spirits outside of a  
          properly licensed, on-sale establishment is deeply troubling,  
          even if this measure limits such consumption to a manufacturer's  
          business location."


           Analysis Prepared by  :    Eric Johnson / G. O. / (916) 319-2531


                                                               FN: 0002332