BILL ANALYSIS Ó
Bill No: AB
1424
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2013-2014 Regular Session
Staff Analysis
AB 1424 Author: Committee on Governmental Organization
As Introduced: March 21, 2013
Hearing Date: June 11, 2013
Consultant: Art Terzakis
SUBJECT
Alcoholic Beverages
DESCRIPTION
AB 1424 permits winegrowers and beer manufacturers to
describe the "composition" of their products, in addition
to other characteristics already permitted, when engaging
in tastings or instructional events for their licensees or
employees.
EXISTING LAW
Existing law establishes the Department of 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 for this purpose.
Existing law permits a winegrower, beer manufacturer, or a
beer and wine wholesaler to instruct licensees and their
employees on the subject of wine or beer, including, but
not limited to, the history, nature, values, and
characteristics of those beverages, as provided.
Existing law also 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: (1) no more than ounce
of distilled spirits is offered in one tasting; (2) no more
than one ounce of wine is offered in one tasting; and, (3)
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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.
Additionally, existing law authorizes beer manufacturers
and wholesalers to offer beer samples (not to exceed 8
ounces per person, per day) to individuals of legal
drinking age at on-sale retail licensed premises under
specified conditions.
Furthermore, existing law 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 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.
Existing law, known as the "tied-house" law, separates the
alcoholic beverage industry into three component parts of
manufacturer, wholesaler, and retailer. 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.
BACKGROUND
Purpose of AB 1424: According to the author's office,
craft brewers are producing award-winning beers that are
recognized and purchased in national and international
markets. These brewers have also installed tasting rooms
to accommodate consumers and to facilitate tourism and
economic growth in their respective local communities. In
addition, craft breweries have taken advantage of expanded
opportunities for on-site beer tastings at restaurants and
bars. During such tasting events, consumers usually
inquire as to the actual "composition" of the beers - they
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are also curious about specific ingredients due to various
gastronomic interests or food allergies. The author's
office claims that existing law does not explicitly permit
a response to questions relating to "composition" of the
beer. This measure is simply intended to affirmatively
provide that authority.
PRIOR/RELATED LEGISLATION
AB 605 (Portantino), Chapter 230, Statutes of 2010. Among
other things, authorized 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.
AB 2293 (De Leon), Chapter 638, Statutes of 2008. Added a
new provision to the ABC Act authorizing distilled spirits
manufacturers and winegrowers to provide their product
offerings directly to consumers (free of charge) during
invitation-only events on premises for which a caterer's
permit authorization has been issued.
SB 1548 (Murray), Chapter 670, Statutes of 2006.
Authorized beer manufacturers and wholesalers to offer beer
samples (not to exceed 8 ounces per person, per day) to
individuals of legal drinking age at on-sale retail
licensed premises under specified conditions.
SUPPORT: None on file as of June 7, 2013.
OPPOSE: None on file as of June 7, 2013.
FISCAL COMMITTEE: No.
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