AB 527, as amended, Dodd. Alcoholic beverage control: tied-house restrictions: advertising.
Existing law generally restricts certain alcoholic beverage licensees, including manufacturers and winegrowers, from paying, crediting, or compensating a retailer for advertising in connection with the advertising and sale of alcoholic beverages. Existing law expressly authorizes a beer manufacturer, holder of a winegrower’s license, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, holder of a distilled spirits rectifiers general license, or a distilled spirits manufacturer’s agent to sponsor events promoted by or purchase advertising space and time from, or on behalf of, a live entertainment marketing company that is a wholly owned subsidiary of a live entertainment company that has its principal place of business in the County of Los Angeles, as provided.
This bill would expressly authorize a beer
manufacturer,begin insert as described,end insert holder of a winegrower’s license, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, holder of a distilled spirits rectifiers general license, or a distilled spirits manufacturer’s agent to sponsor events promoted by or purchase advertising space and time from, or on behalf of, a live entertainment marketing company that is a wholly owned subsidiary of a live entertainment company that has its principal place of business in the County of Napa, under specified conditions.begin delete Thisend deletebegin insert Theend insert bill would also make a beer manufacturer, holder of a winegrower’s license, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer,
holder of a distilled spirits rectifiers general license, or a distilled spirits manufacturer’s agent who, through coercion or other illegal means, induces the holder of a wholesaler’s license to fulfill those contractual obligations entered into pursuant to these provisions guilty of a misdemeanor.begin delete Thisend deletebegin insert Theend insert bill would additionally make an on-sale retail licensee, as described, who solicits or coerces a holder of a wholesaler’s license to solicit a beer manufacturer, holder of a winegrower’s license, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, holder of a distilled spirits rectifiers general license, or a distilled spirits manufacturer’s agent to purchase advertising time or space pursuant to these provisions guilty of a misdemeanor.
By creating a new crime, this bill would impose a state-mandated local program.
This bill would make legislative findings and declarations as to the necessity of a special statute for the County of Napa.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Section 25503.40 is added to the Business and
2Professions Code, to read:
(a) Notwithstanding any other law, a beer
4manufacturer, holder of a winegrower’s license, winegrower’s
5agent, holder of an importer’s general license, distilled spirits
6manufacturer, holder of a distilled spirits rectifiers general license,
7or a distilled spirits manufacturer’s agent may sponsor events
8promoted by, and may purchase advertising space and time from,
P3 1or on behalf of, a live entertainment marketing company subject
2to all of the following conditions:
3(1) begin insert(A)end insertbegin insert end insertThe live entertainment marketing company is a wholly
4owned subsidiary of a live
entertainment company that has its
5principal place of business in the County of Napa, that may also
6own interests, directly or indirectly, in retail licenses.
7(B) The venue of the event is located within the County of Napa,
8expected attendance of the event is at least 5,000 people per day,
9and no more than three of these events are held in the County of
10Napa each year.
11(2) The sponsorship and the advertising space or time is
12purchased only in connection with the promotion of live artistic,
13musical, sports, food, beverage, culinary, lifestyle, or other cultural
14entertainment events at entertainment facilities, parks, fairgrounds,
15auditoriums, arenas, or other areas or venues that are designed for,
16or set up to be,
lawfully used for live artistic, musical, sports, food,
17beverage, culinary, lifestyle, or other cultural entertainment events.
18(3) (A) Any on-sale licensee operating at a venue where live
19artistic, musical, sports, food, beverage, culinary, lifestyle, or other
20cultural entertainment events are performed pursuant to a
21sponsorship described in this section or where advertising is
22purchased as described in this section shall serve other brands of
23beer, distilled spirits, and wine in addition to any brand
24manufactured or distributed by the sponsoring or advertising beer
25manufacturer, holder of a winegrower’s license, winegrower’s
26agent, holder of an importer’s general license, distilled spirits
27manufacturer, holder of a distilled spirits rectifiers general license,
28or a distilled spirits manufacturer’s agent.begin delete If, however, there is
29brand diversity by virtue of the existence of multiple sponsors
30within the same sponsorship category, this subparagraph shall not
31apply.end delete
32(B) Any on-sale retail licensee owned by the live entertainment
33company described in paragraph (1) shall serve other brands of
34beer, distilled spirits, and wine in addition to any brand
35manufactured or distributed by the sponsoring or advertising beer
36manufacturer, holder of a winegrower’s license, winegrower’s
37agent, holder of an importer’s general license, distilled spirits
38manufacturer, holder of a distilled spirits rectifiers general license,
39or a distilled spirits manufacturer’s agent.begin delete If,
however, there is
40brand diversity by virtue of the existence of multiple sponsors
P4 1within the same sponsorship category, this subparagraph shall not
2apply.end delete
3(4) (A) Advertising space or time purchased pursuant to this
4section shall not be placed in any on-sale licensed premises where
5the on-sale retail licensee is ownedbegin insert directly or indirectlyend insert by the
6live entertainment company, or any of its subsidiaries, described
7in paragraph (1).
8(B) Sponsorship provided pursuant to this section shall not be
9allowed if the event or activity is held at or in any on-sale licensed
10premises where the
on-sale retail licensee is owned by the live
11entertainment company, or any of its subsidiaries, described in
12paragraph (1).
13(5) An agreement for the sponsorship of, or for the purchase of
14advertising space and time during, a live artistic, musical, sports,
15food, beverage, culinary, lifestyle, or other cultural entertainment
16event shall not be conditioned directly or indirectly, in any way,
17on the purchase, sale, or distribution of any alcoholic beverage
18manufactured or distributed by the advertising or sponsoring beer
19manufacturer, holder of a winegrower’s license, winegrower’s
20agent, holder of an importer’s general license, distilled spirits
21manufacturer, holder of a distilled spirits rectifiers general license,
22or a distilled spirits manufacturer’s agent by the live entertainment
23company
described in paragraph (1) or by any on-sale retail
24licensee that is owned by the live entertainment company.
25(b) Any sponsorship of events or purchase of advertising space
26or time conducted pursuant to subdivision (a) shall be conducted
27pursuant to a written contract entered into by the beer manufacturer,
28holder of a winegrower’s license, winegrower’s agent, holder of
29an importer’s general license, distilled spirits manufacturer, holder
30of a distilled spirits rectifiers general license, or a distilled spirits
31manufacturer’s agent and the live entertainment marketing
32company.
33(c) Any beer manufacturer, holder of a winegrower’s license,
34winegrower’s agent, holder of an importer’s general license,
35distilled spirits
manufacturer, holder of a distilled spirits rectifiers
36general license, or a distilled spirits manufacturer’s agent who,
37through coercion or other illegal means, induces, directly or
38indirectly, a holder of a wholesaler’s license to fulfill those
39contractual obligations entered into pursuant to subdivision (a)
40shall be guilty of a misdemeanor and shall be punished by
P5 1imprisonment in the county jail not exceeding six months, or by
2a fine in an amount equal to the entire value of the advertising
3space or time involved in the contract, whichever is greater, plus
4ten thousand dollars ($10,000), or by both imprisonment and fine.
5The person shall also be subject to license revocation pursuant to
6Section 24200.
7(d) Any on-sale retail licensee who, directly or indirectly, solicits
8or
coerces a holder of a wholesaler’s license to solicit a beer
9manufacturer, holder of a winegrower’s license, winegrower’s
10agent, holder of an importer’s general license, distilled spirits
11manufacturer, holder of a distilled spirits rectifiers general license,
12or a distilled spirits manufacturer’s agent to purchase advertising
13time or space pursuant to subdivision (a) shall be guilty of a
14misdemeanor and shall be punished by imprisonment in the county
15jail not exceeding six months, or by a fine in an amount equal to
16the entire value of the advertising space or time involved in the
17contract, whichever is greater, plus ten thousand dollars ($10,000),
18or by both imprisonment and fine. The person shall also be subject
19to license revocation pursuant to Section 24200.
20(e) For purposes of this
section, “beer manufacturer” includes
21a holder of a beer manufacturer’s license, a holder of an out-of-state
22beer manufacturer’s certificate,begin delete a holder of a beer and wine or a holder of a beer and wine importer’s
23wholesaler’s license,end delete
24general license.
25(f) Nothing in this section shall authorize the purchasing of
26advertising space or time directly from, or on behalf of, any on-sale
27begin insert retailend insert licensee.
28(g) Nothing in this section shall authorize a beer manufacturer,
29holder of a winegrower’s license, winegrower’s agent, holder of
30an importer’s
general license, distilled spirits manufacturer, holder
31of a distilled spirits rectifiers general license, or a distilled spirits
32manufacturer’s agent to furnish, give, or lend anything of value to
33an on-sale retail licensee described in subdivision (a) except as
34expressly authorized by this section or any other provision of this
35division.
36(h) The Legislature finds and declares both of the following:
end insertbegin insert
37(1) It is necessary and proper to require a separation between
38manufacturing interests, wholesale interests, and retail interests
39in the production and distribution of alcoholic beverages in
order
40to prevent suppliers from dominating local markets through vertical
P6 1integration and to prevent excessive sales of alcoholic beverages
2produced by overly aggressive marketing techniques.
3(2) Any exception established by the Legislature to the general
4prohibition against tied interests shall be limited to the express
5terms of the exception so as not to undermine the general
6prohibition.
The Legislature finds and declares that a special law
8is necessary and that a general law cannot be made applicable
9within the meaning of Section 16 of Article IV of the California
10Constitution because of the unique conditions located in the County
11of Napa.
No reimbursement is required by this act pursuant to
13Section 6 of Article XIII B of the California Constitution because
14the only costs that may be incurred by a local agency or school
15district will be incurred because this act creates a new crime or
16infraction, eliminates a crime or infraction, or changes the penalty
17for a crime or infraction, within the meaning of Section 17556 of
18the Government Code, or changes the definition of a crime within
19the meaning of Section 6 of Article XIII B of the California
20Constitution.
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