BILL NUMBER: AB 527 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 29, 2015
INTRODUCED BY Assembly Member Dodd
FEBRUARY 23, 2015
An act to add Section 25503.40 to the Business and Professions
Code, relating to alcoholic beverages.
LEGISLATIVE COUNSEL'S DIGEST
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, as
described, 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. This The 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. This The 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 1. Section 25503.40 is added to the Business and
Professions Code, to read:
25503.40. (a) Notwithstanding any other law, 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 may sponsor events promoted by, and may
purchase advertising space and time from, or on behalf of, a live
entertainment marketing company subject to all of the following
conditions:
(1) (A) The live entertainment marketing
company is a wholly owned subsidiary of a live entertainment company
that has its principal place of business in the County of Napa, that
may also own interests, directly or indirectly, in retail licenses.
(B) The venue of the event is located within the County of Napa,
expected attendance of the event is at least 5,000 people per day,
and no more than three of these events are held in the County of Napa
each year.
(2) The sponsorship and the advertising space or time is purchased
only in connection with the promotion of live artistic, musical,
sports, food, beverage, culinary, lifestyle, or other cultural
entertainment events at entertainment facilities, parks, fairgrounds,
auditoriums, arenas, or other areas or venues that are designed for,
or set up to be, lawfully used for live artistic, musical, sports,
food, beverage, culinary, lifestyle, or other cultural entertainment
events.
(3) (A) Any on-sale licensee operating at a venue where live
artistic, musical, sports, food, beverage, culinary, lifestyle, or
other cultural entertainment events are performed pursuant to a
sponsorship described in this section or where advertising is
purchased as described in this section shall serve other brands of
beer, distilled spirits, and wine in addition to any brand
manufactured or distributed by the sponsoring or advertising 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. If,
however, there is brand diversity by virtue of the existence of
multiple sponsors within the same sponsorship category, this
subparagraph shall not apply.
(B) Any on-sale retail licensee owned by the live entertainment
company described in paragraph (1) shall serve other brands of beer,
distilled spirits, and wine in addition to any brand manufactured or
distributed by the sponsoring or advertising 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. If, however, there is brand
diversity by virtue of the existence of multiple sponsors within the
same sponsorship category, this subparagraph shall not apply.
(4) (A) Advertising space or time purchased pursuant to this
section shall not be placed in any on-sale licensed premises where
the on-sale retail licensee is owned directly or
indirectly by the live entertainment company, or any of its
subsidiaries, described in paragraph (1).
(B) Sponsorship provided pursuant to this section shall not be
allowed if the event or activity is held at or in any on-sale
licensed premises where the on-sale retail licensee is owned by the
live entertainment company, or any of its subsidiaries, described in
paragraph (1).
(5) An agreement for the sponsorship of, or for the purchase of
advertising space and time during, a live artistic, musical, sports,
food, beverage, culinary, lifestyle, or other cultural entertainment
event shall not be conditioned directly or indirectly, in any way, on
the purchase, sale, or distribution of any alcoholic beverage
manufactured or distributed by the advertising or sponsoring 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 by the live
entertainment company described in paragraph (1) or by any on-sale
retail licensee that is owned by the live entertainment company.
(b) Any sponsorship of events or purchase of advertising space or
time conducted pursuant to subdivision (a) shall be conducted
pursuant to a written contract entered into by the 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 and the live entertainment marketing
company.
(c) Any 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, directly
or indirectly, a holder of a wholesaler's license to fulfill those
contractual obligations entered into pursuant to subdivision (a)
shall be guilty of a misdemeanor and shall be punished by
imprisonment in the county jail not exceeding six months, or by a
fine in an amount equal to the entire value of the advertising space
or time involved in the contract, whichever is greater, plus ten
thousand dollars ($10,000), or by both imprisonment and fine. The
person shall also be subject to license revocation pursuant to
Section 24200.
(d) Any on-sale retail licensee who, directly or indirectly,
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 subdivision (a) shall be guilty
of a misdemeanor and shall be punished by imprisonment in the county
jail not exceeding six months, or by a fine in an amount equal to
the entire value of the advertising space or time involved in the
contract, whichever is greater, plus ten thousand dollars ($10,000),
or by both imprisonment and fine. The person shall also be subject to
license revocation pursuant to Section 24200.
(e) For purposes of this section, "beer manufacturer" includes a
holder of a beer manufacturer's license, a holder of an out-of-state
beer manufacturer's certificate, a holder of a beer and wine
wholesaler's license, or a holder of a beer and wine
importer's general license.
(f) Nothing in this section shall authorize the purchasing of
advertising space or time directly from, or on behalf of, any on-sale
retail licensee.
(g) Nothing in this section shall authorize 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 furnish, give, or lend anything of
value to an on-sale retail licensee described in subdivision (a)
except as expressly authorized by this section or any other provision
of this division.
(h) The Legislature finds and declares both of the following:
(1) It is necessary and proper to require a separation between
manufacturing interests, wholesale interests, and retail interests in
the production and distribution of alcoholic beverages 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) Any exception established by the Legislature to the general
prohibition against tied interests shall be limited to the express
terms of the exception so as not to undermine the general
prohibition.
SEC. 2. The Legislature finds and declares that a special law is
necessary and that a general law cannot be made applicable within the
meaning of Section 16 of Article IV of the California Constitution
because of the unique conditions located in the County of Napa.
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.