BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Isadore Hall, III
Chair
2015 - 2016 Regular
Bill No: AB 774 Hearing Date: 6/9/2015
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|Author: |Levine |
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|Version: |5/28/2015 Amended |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Arthur Terzakis |
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SUBJECT: Alcoholic beverages: beer manufacturers: farmers'
market: tasting: nonprofit corporation: donated beer.
DIGEST: This bill allows a licensed beer manufacturer that
holds a certified farmers' market beer sales permit to provide
limited instructional tastings for consumers at the certified
farmers' market, under specified conditions.
ANALYSIS:
Existing law:
1)Establishes the Department of Alcoholic Beverage Control (ABC)
and grants it exclusive authority to regulate the licensing,
enforcement, and administration of the alcoholic beverage
control laws.
2)Provides for certified farmers' markets which are operated in
accordance with regulations established in the California
Administrative Code pertaining to direct marketing and are
governed by law under the California 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.
3)Authorizes the Department of ABC to issue special temporary
licenses and permits to various entities for limited purposes
AB 774 (Levine) Page 2 of ?
including a certified farmers' market sales permit that
authorizes a licensed winegrower to sell "wine" produced and
bottled by the winegrower at certified farmers' market
locations. The farmers' market wine 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. The law also allows a winegrower to hold more than
one certified farmers' market wine sales permit and requires
the Department of ABC to notify local agencies and enforcement
entities of the permits. Additionally, the law grants the
licensed winegrower the privilege of conducting limited "wine"
tastings for consumers at farmers' markets under certain
circumstances. Furthermore, the law 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.
4)Authorizes a licensed beer manufacturer to apply to the
Department of ABC for a 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. 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 or community event location. The
law also 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. Additionally, the farmers' market sales permit
is subject to the respective discretion and managerial control
of a certified farmers' market or community event operator and
existing regulations governed by law under the California
Department of Food and Agriculture.
5)Authorizes specified nonprofit corporations that have not been
issued a license authorizing the sale of wine to receive and
possess wine donated to that nonprofit corporation, if the
nonprofit corporation has submitted a license application to
sell wine with the Department of ABC.
6)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
AB 774 (Levine) Page 3 of ?
history, nature, values, and characteristics of those
beverages, as provided.
7)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) 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.
8)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.
9)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 Department of ABC. A retail licensee,
however, is not authorized to provide any free samples of
alcoholic beverages.
10)Prohibits any licensee from giving any premium, gift, or
free goods in connection with the sale or distribution of any
alcoholic beverage, except as specifically authorized. The
ABC Act provides that a violation of any of its provisions
for which another penalty or punishment is not specifically
provided is a misdemeanor.
11)Defines "community event" to mean an event that is civic,
political, public, or educational nature, including state and
county fairs, city festivals, circuses, and other public
gathering events approved by the local enforcement agency.
(Section 113755 of the Health & Safety Code)
This bill:
1)Provides that a certified farmers' market beer sales permit
shall also authorize an instructional tasting event on the
subject of beer at a certified farmers' market, including any
permitted community event area adjacent to, and operated in
AB 774 (Levine) Page 4 of ?
conjunction with, a certified farmers' market, located within
the county or an adjacent county of the physical location of
the licensed beer manufacturer. In addition, imposes the
following conditions on such tasting events:
a) The tasting event is subject to the authorization and
managerial control of the operator of the farmers' market
or community event.
b) The tasting event may be conducted by the licensee, a
member of the licensee's family who is 21 years of age or
older, or an employee of the licensee.
c) At all times during a tasting event, the tasting event
area must be separated from the remainder of the farmers'
market or community event area by a wall, rope, cable,
cord, chain, fence, or other permanent or temporary
barrier.
d) Only one licensed beer manufacturer may conduct a
tasting event during the operational hours of any one
farmers' market or community event.
e) The licensee shall not pour more than eight ounces of
beer per person per day and the licensee shall not permit
any consumer to leave the tasting area with an open
container of beer.
2)Modifies an existing provision of law relative to the
authorization for issuance of a special temporary on-sale or
off-sale wine license by the Department of ABC to certain
nonprofits that receive wine donations for fundraising
purposes by extending the authorization to include beer
donations.
3)Modifies an existing provision of law that allows a nonprofit
that has not been issued a license authorizing the sale of
wine to receive and possess donated wine provided the
nonprofit has submitted a license application to sell wine
with the Department of ABC by extending such authorization to
include beer.
Background
Purpose of AB 774. Currently, a licensed winegrower and a
AB 774 (Levine) Page 5 of ?
licensed beer manufacturer may apply for a permit, from the
Department of ABC, to sell wine or beer at a certified farmers'
market under specified conditions. In addition, the law grants
a licensed winegrower, but not a licensed beer manufacturer, the
privilege of also conducting instructional wine tastings for
consumers at a farmers' market, as specified. This bill is
intended to expand the privileges of a licensed beer
manufacturer that holds a certified farmers' market beer sales
permit by allowing the licensee to conduct instructional beer
tastings at the certified farmers' market in a specified manner
and with certain limitations.
According to the author's office, very few craft brewers sell
beer at farmers' markets in part because consumers are
accustomed to sampling craft beer before purchasing. The
author's office believes that this bill will help foster
relationships between local brewers and consumers - enabling the
brewers to build their brands by affiliating with farmers'
markets. The author's office also points out that this bill
amends existing law to allow nonprofits to receive beer
donations from breweries to assist them in their fundraising
activities. Currently, nonprofits may receive wine donations
for these purposes.
The craft beer industry. According to industry sources,
California currently has more craft breweries 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 United States comes from California. According
to the California Craft Brewers Association, which represents
approximately 350 independently owned craft breweries producing
98% of the craft beer volume in California, in 2013, the craft
brewing industry contributed over $5.5 billion to California's
economy and supported 44,000 in-state jobs.
Prior/Related Legislation
AB 2488 (Levine, Chapter 98, Statutes of 2014) expanded an
existing privilege in the ABC Act relating to the sale of wine
by a licensed winegrower at certified farmers' markets to also
allow a licensed winegrower the privilege of conducting limited
wine tastings for consumers at farmers' markets under certain
circumstances.
AB 774 (Levine) Page 6 of ?
AB 2004 (Chesbro, Chapter 806, Statutes of 2014), among other
things, authorized a licensed beer manufacturer to apply to the
Department of ABC for a "certified farmers' market beer sales
permit" for the purpose of allowing the licensee to sell
packaged beer at a farmers' market, including any area outside
the footprint of the farmers' market, under specified
conditions.
AB 520 (Chesbro, Chapter 777, Statutes of 2014) expanded the
types of licensees that may provide instructional tastings
events regarding wine or distilled spirits at on-sale retail
licensed premises and placed additional restrictions on the
instructional tastings events, including restrictions on the
types of advertising that may be conducted prior to the
instructional tasting event.
AB 949 (Quirk, 2013) would have authorized licensed distilled
spirits manufacturers to charge consumers for tastings and would
have imposed additional conditions on the provision of tastings
by the licensee, including limiting the size and number of
tastes. Also, would have provided that a distilled spirits
manufacturer's license authorizes the licensee to serve and sell
food, general merchandise, and nonalcoholic beverages for
consumption on or off the premises. (Held in Assembly Rules
Committee)
AB 933 (Skinner, Chapter 366, Statutes of 2013) granted licensed
distilled spirits manufacturers and licensed brandy
manufacturers the privilege to conduct consumer tastings on
their licensed premises and to charge for those tastings.
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.
AB 2004 (Evans, Chapter 127, Statutes of 2008) authorized a
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licensed winegrower to sell wine for consumption to consumers on
the winery's premises.
SB 995 (Maldonado, 2007) would have permitted specified
alcoholic beverage licensees to instruct consumers on the
premises of an off-sale licensee regarding wine and distilled
spirits, respectively, as provided. Also, would have allowed
the instruction to include the furnishing of tastings under
specified conditions and would have limited the amount of
instructions that include tastings per year and require the
licensees to notify the Department of ABC when instructions with
tastings would occur, as provided. (Held in this Committee at
author's request)
AB 2613 (Plescia, 2008) would have authorized specified
alcoholic beverage licensees to offer tastings of wine or
distilled spirits at off-sale retail licensed premises (grocery
stores and liquor stores) in a segregated area. Also, would
have required verification of age at entrance to the segregated
area and placed limits on tastings (one-quarter ounce of spirits
and one ounce of wine) and limited tastings to three per person
each day. (Held in Assembly Appropriations Committee)
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.
AB 2520 (Thomson, Chapter 384, Statutes of 2000) authorized
licensed winegrowers to obtain certified farmers' market sales
permits authorizing the sale of wine at farmers' markets, as
specified.
AB 2285 (V. Brown, Chapter 248, Statutes of 1998) allowed
on-sale retail licensees to offer limited tastings of wine or
distilled spirits at the licensed establishment.
SB 993 (Burton, Chapter 544, Statutes of 1997), among other
things, authorized a licensed distilled spirits manufacturer to
conduct tastings of distilled spirits on the licensed premises
under specified conditions.
AB 774 (Levine) Page 8 of ?
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT:
California Craft Brewers Association
OPPOSITION:
Alcohol Justice
California Council on Alcohol Problems
ARGUMENTS IN SUPPORT: Proponents state that AB 774 promotes
buy local programs by providing conditional authorization to
craft breweries to conduct instructional tastings of craft beer
at farmers' market events. Proponents point out that any
tasting event is subject to authorization and managerial control
of the operator of the certified farmers' market and adjacent
community event areas; and at all times the tasting event area
shall be separated from the remainder of the market by a wall,
fence, or temporary barrier. Proponents emphasize this bill
places certain conditions on the licensed beer manufacturer to
ensure responsible conduct that are similar to those imposed
upon licensed winegrowers that offer wine tastings at farmers'
markets.
ARGUMENTS IN OPPOSITION: Opponents believe that daytime
tastings, with little or no monitoring, in a family-friendly
setting, are inappropriate and potentially dangerous. Opponents
state that, as currently drafted, there is no mechanism to
effectively monitor the tasting limit of eight ounces of beer
per person per day. Opponents contend that AB 774 "will
negatively impact public health by allowing alcohol producers to
give away free beer where families shop for nutritious
vegetables, fruit and meat." Additionally, opponents claim that
the most recent amendments to this bill could conceivably allow
for consumption of beer at fairs, craft and home shows, downtown
civic and celebratory parades, etc.