BILL ANALYSIS Ó
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THIRD READING
Bill No: AB 2004
Author: Chesbro (D)
Amended: 8/13/14 in Senate
Vote: 21
SENATE GOVERNMENTAL ORGANIZATION COMMITTEE : 10-0, 6/24/14
AYES: Correa, Berryhill, Cannella, De León, Galgiani,
Hernandez, Lieu, Padilla, Torres, Vidak
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 75-0, 4/24/14 (Consent) - See last page for
vote
SUBJECT : Alcoholic beverage sales: beer manufacturers
SOURCE : California Craft Brewers Association
DIGEST : This bill authorizes a licensed beer manufacturer to
apply to the Department of Alcoholic Beverage Control (ABC) for
a certified farmers market beer sales permit which allows the
licensee to sell packaged beer at a farmers' market, including
any specified area, under certain conditions; and expands a
licensed beer manufacturer's privileges under the Alcoholic
Beverage Control Act (ABC Act) by authorizing a beer
manufacturer to sell or serve all beers and wines, regardless of
source, to guests during private events held on the licensed
beer manufacturer's premises.
Senate Floor Amendments of 8/13/14 remove "brandy" as one of the
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alcoholic beverages a licensed beer manufacturer may sell or
serve guests during private events held on the beer
manufacturers licensed premises.
Senate Floor Amendments of 8/6/14 clarify that the licensee's
family member must be 21 years of age if they're engaged in
selling beer at a certified farmers market.
ANALYSIS :
Existing law:
1.Establishes ABC and grants it exclusive authority to
administer the provisions of the ABC Act in accordance with
laws enacted by the Legislature.
2.Authorizes a licensed beer manufacturer, at the licensed
premises of production, to sell to consumers for consumption
off the premises beer that is produced and bottled by, or
produced and packaged for, that manufacturer.
3.Grants licensed beer manufacturers the following privileges:
(a) selling beer to any person holding a license authorizing
the sale of beer; (b) selling beer to consumers for
consumption on the manufacturer's licensed premises or on
premises owned by the manufacturer which are contiguous to the
licensed premises and which are operated by and for the
manufacturer; and (c) selling beer and wine, regardless of
source, to consumers for consumption at a bona fide public
eating place on the manufacturer's licensed premises or at a
bona fide public eating place on premises owned by the
manufacturer which are contiguous to the licensed premises and
which are operated by and for the manufacturer.
4.Provides that licensed beer manufacturers and holders of
out-of-state beer manufacturer's certificates may be issued
and may hold retail package off-sale beer and wine licenses.
Stipulates that alcoholic beverages produced or sold at or
from the off-sale premises which are not produced and bottled
by, or produced and packaged for, the beer manufacturer must
be purchased by the beer manufacturer only from a licensed
wholesaler.
5.Authorizes ABC to issue special temporary licenses and permits
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to various entities for limited purposes including a certified
farmers' market sales permit that authorizes a licensee under
a winegrower's license, a member of the licensee's family who
is 21 years of age or older, or an employee of the licensee to
sell wine produced and bottled by the winegrower at certified
farmers' market locations. The farmers' market sales permit
may be issued for up to 12 months but shall not be valid for
more than one day a week at any single specified farmers'
market location. Allows a winegrower to hold more than one
certified farmers' market sales permit and requires ABC to
notify local agencies and enforcement entities of the permits.
Prohibits the licensed winegrower from selling more than
5,000 gallons of wine annually pursuant to all certified
farmers' markets sales permits held by any single winegrower.
6.Provides for certified farmers' markets which are operated in
accordance with regulations established in the Administrative
Code pertaining to direct marketing and are governed by law
under the Department of Food and Agriculture (CDFA). These
rules are enforced by county agriculture commissioners in the
counties in which the market operates. The markets also fall
under the jurisdiction of the health departments in each
county in which a market operates.
This bill:
1.Authorizes a beer manufacturer to have upon the licensed
premises, or on premises owned by the manufacturer that are
contiguous to the licensed premises and are operated by and
for the manufacturer all beers and wines, regardless of
source, for sale or service only to guests during private
events not open to the general public. In addition, imposes
the following requirements on the beer manufacturer:
A. The alcoholic beverages sold at the premises that are
not produced and bottled by, or produced and packaged for,
the beer manufacturer must be purchased by the beer
manufacturer only from a licensed wholesaler.
B. All alcoholic beverages sold or served must be produced
by a licensee authorized to manufacture the product.
1.Authorizes a licensed beer manufacturer to apply to ABC for a
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certified farmers' market beer sales permit that grants the
beer manufacturer the privilege of selling beer, that has been
produced by the beer manufacturer, at a certified farmers'
market, including any permitted community event area adjacent
to, and operated in conjunction with, a certified farmers'
market, as specified. Also, imposes the following conditions
on the beer manufacturer:
A. Subjects the permit to the respective discretion and
managerial control of a certified farmers' market or
community event operator and existing regulations governed
by law under CDFA.
B. Issues the permit for up to 12 months but validates it
for no more than one day a week at any single specified
farmers' market or community event location. Allows a beer
manufacturer to hold more than one permit.
C. Prohibits the licensed beer manufacturer from selling
more than 5,000 gallons of beer annually pursuant to all
certified farmers' markets permits held by any single beer
manufacturer.
D. Requires the licensed beer manufacturer to maintain
records of annual beer sales made pursuant to all farmers'
market beer sales permits issued.
1.Requires ABC to notify the local entity and applicable law
enforcement agency where the certified farmers' market or
community event is to be held of the issuance of the permit.
2.Establishes a $50 permit which is subject to adjustment
pursuant to the ABC Act.
Background
According to industry sources, California currently has more
craft breweries (approximately 440) than any other state in the
country. In fact, California has more than twice as many craft
breweries as Colorado - the state with the next highest number.
An average of one in every five craft beers produced in the U.S.
comes from California. In 2012, the California craft brewery
industry had an annual impact of $4.7 billion on the state's
economy and supported well over 45,000 jobs. Additionally, the
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state's craft brewery industry generated over $850 million in
federal, state, and local revenues in 2012.
Comments
According to the author's office, this bill allows beer
manufacturers to sell beer and wine regardless of the source at
private events such as weddings as long as the beer and wine is
purchased through a distributor. This privilege of selling wine
and beer from other brewers at private events is the same
privilege that currently is enjoyed by wineries. As the
popularity and number of craft breweries grows, the demand for
private events, such as weddings, at these venues is becoming
much more prevalent. This bill provides craft brewers parity
with the privileges currently enjoyed by the wine industry.
Additionally, this bill allows the sale of packaged beer at
certified farmers markets including any community event adjacent
to and operated in conjunction with the farmers market. The
beer manufacturer must be located within the county or an
adjacent county to the farmers market. The beer must be for off
premises consumption and does not permit tasting or sampling the
product prior to purchase.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/14/14)
California Craft Brewers Association (source)
ARGUMENTS IN SUPPORT : The California Craft Brewers
Association states that certified farmers' markets require
products sold within their event boundaries to be 100% grown and
produced on the property owned by the farmer or manufacturer.
Products that cannot meet this criterion must be sold in an area
adjacent to the farmers' market called a 'community event' area.
While most craft brewers cannot meet the certified farmers'
market criteria there may be the rare instance where one does in
fact grow all the ingredients (i.e., grain and hops) on their
own property. As such, this bill reflects the necessary
authority under both circumstances."
ASSEMBLY FLOOR : 7 5-0, 4/24/14
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
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Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gorell, Grove, Hagman, Hall, Roger Hernández, Holden, Jones,
Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein,
Medina, Melendez, Mullin, Muratsuchi, Nestande, Olsen, Pan,
Patterson, Perea, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon,
Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Wagner,
Waldron, Weber, Wieckowski, Wilk, Williams, Yamada, John A.
Pérez
NO VOTE RECORDED: Gray, Harkey, Mansoor, Nazarian, Vacancy
MW:nl 8/14/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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