BILL ANALYSIS Ó
AB 780
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
780 (Williams)
As Amended June 15, 2015
Majority vote
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|ASSEMBLY: |77-0 |(May 7, 2015) |SENATE: |38-0 |(August 20, |
| | | | | |2015) |
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Original Committee Reference: G.O.
SUMMARY: Makes clarifying and conforming changes to existing
provisions of the Alcoholic Beverage Control Act (Act) relating
to the listing of on-sale and off-sale retailers as a thing of
value in order to enable licensees to connect with each other
for normal commercial purposes. Specifically, this bill:
1)Consolidates two similar tied-house exceptions (one pertaining
to on-sale retailers and the other to off-sale retailers)
which authorize the dissemination of information pertaining to
the retail availability of products by alcoholic beverage
producers, distributors or importers in response to direct
inquiries from consumers.
2)Eliminates the requirement that the dissemination of
information be in response to a direct inquiry from a
consumer, thus broadening the exception.
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3)Includes brandy manufacturers and rectifiers within the
definition of non-retail industry member.
4)Contains boilerplate language (legislative findings and
declarations) relative to the necessity of requiring a
separation between manufacturing interests, wholesale
interests, and retail interests in the production and
distribution of alcoholic beverages.
5)Makes other minor conforming changes.
The Senate amendments:
1)Add boilerplate language (legislative findings and
declarations) relative to the necessity of requiring a
separation between manufacturing interests, wholesale
interests, and retail interests in the production and
distribution of alcoholic beverages.
2)Include brandy manufacturers and rectifiers within the
definition of non-retail industry member.
3)Add coauthors.
4)Make other minor conforming changes.
EXISTING LAW:
1)Establishes the Department of Alcoholic Beverage Control (ABC)
and grants it exclusive authority to administer the provisions
of the Act in accordance with laws enacted by the Legislature.
2)Separates the alcoholic beverage industry into three component
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parts, or tiers, (referred to as the "tied-house" law or
"three-tier" system), of manufacturer (including breweries,
wineries and distilleries), wholesaler, and retailer (both
on-sale and off-sale). The original policy rationale for this
body of law was to: a) promote the state's interest in an
orderly market; b) prohibit the vertical integration and
dominance by a single producer in the market place; c)
prohibit commercial bribery and to protect the public from
predatory marketing practices; and, d) discourage and/or
prevent the intemperate use of alcoholic beverages.
Generally, other than exceptions 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.
3)Prohibits, in general, an alcohol manufacturer, wholesaler, or
any officer, director, or agent of any such person from
owning, directly, or indirectly, any interest in any on-sale
license, or from providing anything of value to retailers, be
it free goods, services, or advertising.
4)Provides that the listing of the names, addresses, telephone
numbers, email addresses, or Internet Web site addresses, of
two or more unaffiliated off-sale retailers selling beer,
wine, or distilled spirits and operating and licensed as bona
fide public eating places selling the beer, wine, or distilled
spirits produced, distributed, or imported by a nonretail
industry member in response to a direct inquiry from a
consumer, as specified, does not constitute a thing of value
or prohibited inducement to the listed off-sale retailer, if
specified conditions are met.
5)Includes similar provisions applicable to on-sale licensed
premises, except that those provisions also extend the
exception described in item 4) above, to others forms of
"electronic" media.
6)Defines an on-sale license as authorizing the sale of all
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types of alcoholic beverages: namely, beer, wine and
distilled spirits, for consumption on the premises (such as at
a restaurant or bar). An off-sale license authorizes the sale
of all types of alcoholic beverages for consumption off the
premises in original, sealed containers.
AS PASSED BY THE ASSEMBLY, this bill amended a provision in the
Act that authorizes the dissemination of information regarding
retail availability of alcoholic products to remove the
requirement that the dissemination be in response to a direct
inquiry from a consumer, and broadens the provision to include
both on-sale and off-sale retailers.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS: This bill, as amended in the Senate is consistent
with Assembly actions.
Purpose of this bill. According to the author's office, this
bill is intended to provide small distillers, brewers, and
wineries with an additional tool to promote their businesses.
The author's office contends that social media is a free form of
advertisement to the public; therefore, it should not be subject
to the traditional notion of advertising as a "gift" under
current tied-house laws.
The author's office emphasizes this bill will provide greater
flexibility and protect the ability of specified alcohol
interests to engage in social media communications with
consumers, while preserving the original intent of the
tied-house law of prohibiting gifts of advertisement from
alcoholic beverage producers, distributors or importers.
Prior Legislation: AB 2349 (Nestande), Chapter 374, Statutes of
2012 provided that the listing of names, addresses, telephone
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numbers, or email addresses in other forms of electronic media
do not constitute a thing of value.
SB 1096 (Wiggins), Chapter 285, Statutes of 2010 revised the
direct inquiry provisions in the ABC Act pertaining to the
authority of producers, wholesalers and importers to respond to
consumer inquiries as to where their products may be found to
include any "electronic" inquiries from consumers.
SB 1423 (Chesbro), Chapter 205, Statutes of 2000 authorized
wineries and brandy manufacturers to advertise the name and
location of restaurants that sell their products.
SB 1233 (Chesbro), Chapter 666, Statutes of 1999 allowed for the
limited dissemination of information regarding the off-sale
availability of alcoholic beverages.
Analysis Prepared by:
Eric Johnson / G.O. / (916) 319-2531 FN:
0001445