BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Isadore Hall, III
Chair
2015 - 2016 Regular
Bill No: AB 893 Hearing Date: 6/29/2015
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|Author: |Mark Stone |
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|Version: |6/23/2015 Amended |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Arthur Terzakis |
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SUBJECT: Beer: labels.
DIGEST: This bill repeals existing provisions of the
Alcoholic Beverage Control (ABC) Act relating to the process for
filing of beer label applications with the Department of ABC by
manufacturers of beer and instead creates a simplified and
streamlined product registration process, as specified, to be
used by beer manufacturers.
ANALYSIS:
Existing law:
1)Establishes the Department of ABC and grants it exclusive
authority to administer the provisions of the ABC Act in
accordance with laws enacted by the Legislature. This
involves licensing individuals and businesses associated with
the manufacture, importation and sale of alcoholic beverages
in this state and the collection of license fees for this
purpose.
2)Specifies that all beer sold in the state must have a label
affixed to its package or container with the true and correct
name and address of the manufacturer of the beer and the true
and correct name of the bottler of the beer if other than the
manufacturer. (B&P Code Section 25200)
3)Requires a beer manufacturer that refills any container
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supplied by a consumer to affix a label, as specified, on the
container prior to its resale to the consumer. Also, any
information concerning any beer previously packaged in the
container, including, but not limited to, information
regarding the manufacturer and bottler of the beer, or any
associated brands or trademarks must be removed or completely
obscured in a manner not readily removable by the consumer
prior to resale. Additionally, prohibits a beer manufacturer
from refilling a container supplied by a consumer with a
capacity of five liquid gallons or more. (B&P Code Section
25200)
4)Requires every manufacturer or bottler of beer in this state
or elsewhere whose beer is sold within the state to file with
ABC the brand name or names under which they sell or label
their beer. (B&P Code Section 25203)
5)Provides for specified labeling requirements for containers of
alcoholic beverages sold within this state, as specified. For
beer, existing law requires compliance with federal
regulations requiring a statement of alcohol content as a
percentage of alcohol by volume, as specified. (B&P Code
Section 25204)
6)Requires the container of any beer or alcoholic beverage,
other than sake, that derives 0.5% or more of its alcoholic
content by volume from flavors or other ingredients containing
distilled alcohol and that is sold by a manufacturer or
importer to a wholesaler or retailer within this state to bear
a label or a firmly affixed sticker that includes specified
information regarding its alcohol content and its status as an
alcoholic beverage. (B&P Code Section 25205)
7)Defines "beer manufacturer" to mean any person that has
facilities and equipment for the purposes of, and is engaged
in, the commercial manufacture of beer. (B&P Code Section
23012)
8)Defines "beer" to mean any alcoholic beverage obtained by the
fermentation of any infusion or decoction of barley, malt,
hops, or any other similar product, or any combination thereof
in water, and includes ale, porter, brown, stout, lager beer,
small beer, and strong beer, but does not include sake, known
as Japanese rice wine. Beer aged in an empty wooden barrel
previously used to contain wine or distilled spirits shall be
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defined exclusively as "beer" and shall not be considered a
dilution or mixture of any other alcoholic beverage. (B&P
Code Section 23006)
This bill:
1)Stipulates that a package or sealed container of beer shall
not be sold in this state without having a label affixed to
such package or container that meets specified federal
requirements. In addition to the label requirements, if not
already included, the following requirements must appear on
the label:
a) The brand, and class or type, of beer and the true and
correct name and address of the manufacturer of the beer.
b) The true and correct name of the bottler of the beer, if
other than the manufacturer and a statement of alcoholic
content if the beer contains more than 5.7% alcohol by
volume.
2)Provides that prior to the first sale of beer in this state,
the manufacturer of that beer must register the product with
the Department of ABC and include the following information:
a) The true name and address of the actual manufacturer of
the beer.
b) Any fictitious business name of the manufacturer under
which the beer is manufactured.
c) The class or type of beer and all brand names under
which the beer is to be sold in this state.
d) If manufactured under contract for another beer
manufacturer or other person, the true name of such other
beer manufacturer or person.
e) If manufactured pursuant to a joint venture or other
collaborative arrangement, the name and address of all
manufacturers involved in the joint venture or other
collaborative arrangement.
3)Makes it explicit that the manufacturer of the beer shall be
responsible for compliance with the requirements of this bill.
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Also, provides that in the case of beer manufactured pursuant
to a joint venture or other collaborative arrangement, only
the actual manufacturer of the beer need comply.
4)Authorizes the Department of ABC to take action it deems
reasonable and necessary including, but not limited to,
ordering that the beer not be sold, or allowing it to be sold
for a reasonable time, until the requirements of this bill are
met.
Background
Federal Law. The Treasury Department's Alcohol and Tobacco Tax
and Trade Bureau (TTB) is responsible for implementing and
enforcing a broad range of statutory and compliance provisions
and ensuring that alcohol products are created, labeled, and
marketed in accordance with the Federal Alcohol Administration
(FAA) Act.
California Law. As noted above, the ABC Act imposes various
requirements relating to the labels and containers of alcoholic
beverages sold within the state, including a requirement that
every manufacturer or bottler of beer whose beer is sold within
the state file with the Department of ABC the brand name or
names under which the beer is sold or labeled, as specified.
Purpose of AB 893. The author's office points out that existing
law requires a beer producer to fill out a form and attach a
label to it for every beer label it seeks approval from the
Department of ABC. Due to the incredible growth of craft
breweries, this existing requirement has resulted in an
incredible back log of label approvals. This bill seeks to
eliminate the existing label filing process and establish a
simplified label registration process that is intended to place
compliance burden squarely on the beer manufacturer so that the
manufacturer can get product to the market quicker.
Additionally, the author's office notes that this bill grants
the Department of ABC full authorization to deal with beer
manufacturers who are not in compliance. The author's office
emphasizes that AB 893 will enable the Department of ABC to
obtain all the necessary labeling information from a
manufacturer and allow the manufacturer to sell product without
waiting for approval.
Furthermore, the author's office notes that a trend has
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developed in the craft brewing world whereby two small
manufacturers enter into joint ventures or other collaborative
arrangement to blend their product and make special seasonal
beers. Current law allows for only one brewer to be listed on a
beer label. This bill addresses that issue by allowing the
names of all brewers involved in the special brew to appear on
the label.
Prior/Related Legislation
AB 647 (Chesbro, Chapter 686, Statutes of 2013) added clarity to
existing provisions of the ABC Act relative to labeling
requirements for the refilling of off-sale consumer sized beer
containers, known as "growlers," by beer manufacturers.
AB 346 (Beall, Chapter 624, Statutes of 2008) provided that any
container of beer or alcoholic beverage, other than sake, that
is approved for labeling as a malt beverage under the Federal
Alcohol Administration Act, that derives 0.5% or more of its
alcoholic content by volume from flavors or other ingredients
containing distilled alcohol and that is sold within this state
on or after July 1, 2009, shall bear a distinctive, conspicuous,
and prominently displayed label, or firmly affixed sticker, as
defined.
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: Yes
SUPPORT:
California Craft Brewers Association
OPPOSITION:
None received
ARGUMENTS IN SUPPORT: Writing in support, proponents
reference the fact that California's craft brew industry
continues to grow and now stands at more than 540 businesses
throughout the state supporting more than 50,000 jobs with an
annual impact of $6.5 billion on the state economy.
Proponents note that "existing law provides that beer labels are
required for all beer sold in this state. ABC conducts label
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approval for each new beer product and whenever there is any
change to existing beer content or size of container for those
beers. On average, a single craft brewery will seek label
approval from the ABC more than 200 times per year.
Understandably, the sheer volume of beer label approvals can be
difficult to handle on a timely basis by ABC. For affected
breweries, these delays result in reduced product availability
and diminished sales."
Proponents contend that "AB 893 clarifies California's label
registration laws so that beer manufacturers will no longer be
required to await approval from ABC before placing labeled
products into commerce. Under this bill, beer manufacturers
themselves bear the responsibility to comply with state and
federal alcohol labeling laws; and ABC is no longer burdened
with having to individually review each of these labels for
legal compliance. This bill streamlines the beer labeling
process and reduces significant costs to the state."