BILL ANALYSIS Ó
AB 893
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
893 (Mark Stone)
As Amended July 7, 2015
Majority vote
--------------------------------------------------------------------
|ASSEMBLY: |78-0 |(April 23, |SENATE: |38-0 |(August 20, |
| | |2015) | | |2015) |
| | | | | | |
| | | | | | |
--------------------------------------------------------------------
Original Committee Reference: G.O.
SUMMARY: Repeals existing provisions of the Alcoholic Beverage
Control Act (ABC Act) relating to the process for filing of beer
label applications with the Department of Alcoholic Beverage
Control (ABC) by manufacturers of beer and instead creates a
simplified and streamlined product registration process, as
specified, to be used by beer manufacturers. Specifically, 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
AB 893
Page 2
correct name and address of the manufacturer of the beer.
If multiple beer manufacturers are involved in the
production of the beer, each of those manufacturers may be
identified on the label.
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)Stipulates that the true and correct name of a manufacturer,
bottler, or packager shall be deemed to include a fictitious
business name for which the manufacturer, bottler, or packager
has duly filed a fictitious business name pursuant to existing
business regulations.
3)Provides that prior to the first sale of a brand of beer in
this state, the manufacturer of that beer must register the
brand with ABC and the brand may be sold in this state without
further action by ABC.
4)Specifies that the registration must 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
AB 893
Page 3
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.
5)Makes it explicit that the manufacturer of the beer shall be
responsible for compliance with the requirements of this bill.
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.
6)Authorizes 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.
The Senate amendments:
1)Repeal existing provisions of the ABC Act relating to the
process for filing of beer label applications with ABC.
2)Require a beer manufacturer, before the first sale of beer in
this state, to register the product with ABC, as specified,
and would make the manufacturer responsible for compliance
with labeling and registration requirements, as defined.
3)State that if the beer is sold or offered for sale in this
state without first complying with specified provisions or
other provisions of the ABC Act, ABC would be authorized 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 these
AB 893
Page 4
requirements are met.
4)Stipulate that the true and correct name of a manufacturer,
bottler, or packager shall be deemed to include a fictitious
business name for which the manufacturer, bottler, or packager
has duly filed a fictitious business name pursuant to existing
business regulations.
5)Make technical and conforming changes.
6)Add coauthors.
EXISTING LAW:
1)Establishes 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 or occupation taxes for this
purpose.
2)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 ABC the
brand name or names under which the beer is sold or labeled,
as provided. California labeling requirements are detailed in
the ABC Act Sections 2500-25206 and Rule 130 of the California
Code of Regulations.
3)Under 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
AB 893
Page 5
created, labeled, and marketed in accordance with the Federal
Alcohol Administration (FAA) Act.
AS PASSED BY THE ASSEMBLY, this bill prohibits beer from being
imported into or sold within the state unless the label for that
beer is first filed with ABC. The bill permits ABC to accept
the filing of labels by any means it determines are appropriate,
including electronically, and specifies that a violation of this
requirement does not subject the licensee to the civil or
criminal provisions of the ABC Act.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS: 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 ABC. Due to
the incredible growth of craft breweries, this existing
requirement has resulted in an incredible backlog 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 ABC full authorization to deal with beer
manufacturers who are not in compliance. The author's office
emphasizes that this bill will enable 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
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.
AB 893
Page 6
Background: The mission of ABC is to administer the provisions
of the ABC Act in a manner that fosters and protects the health,
safety, welfare, and economic well-being of the people of the
State. California Constitution Article XX, Section 22, vests
ABC with the exclusive right and power to license and regulate
the manufacture, importation, and sale of alcoholic beverages
within the State.
Any beer container sold within this state shall bear a label
that conforms with the alcohol content labeling requirements
prescribed in Section 7.71 of Part 7 of Title 27 of the Code of
Federal Regulations, as adopted pursuant to the Federal Alcohol
Administration Act (27 United States Code Section 201 et seq.).
Existing law provides every manufacturer or bottler of beer in
this state or elsewhere whose beer is sold within the state
shall file with ABC (Form ABC-412, Label Approval Application)
the brand name or names under which they sell or label their
beer. An original label of each brand and size listed on Form
412 must be included with the form. Photocopies are not
acceptable.
Any labels or notices affixed to beer must, if such beer is
produced in this state, be affixed prior to the first sale, and
in the case of beer produced outside the state and imported into
California, must be affixed prior to delivery in this state.
Who regulates alcohol labeling at the Federal level? TTB is
responsible for regulating the labeling of alcohol beverages
under the provisions of the Federal Alcohol Administration (FAA)
Act, 27 United States Code Section 205(e). TTB's statutory
mandate is to prevent consumer deception and ensure the label
provides the consumer with adequate information as to the
identity and quality of the product.
The FAA Act requires that the alcoholic beverage industry seek
approval of their labels. The administration and enforcement is
AB 893
Page 7
done through the issuance of permits and through procedures that
require the prior approval of all labels. In addition, TTB is
charged with the administration and enforcement of Chapter 51 of
the Internal Revenue Code, relating to Distilled Spirits, Wines
and Beer. This chapter in conjunction with the FAA Act
establishes a system of control of alcoholic beverages,
including formulas showing each ingredient to be used in the
product.
TTB issues regulations governing the labeling and advertising of
wine, distilled spirits, and malt beer. Pursuant to the FAA
Act, Section 5, TTB is vested with the authority to promulgate
regulations to make sure that they provide the consumer with
adequate information concerning the identity and quality of such
products. The TTB also enforces the Alcohol Beverage Labeling
Act of 1988 requiring the appearance of a health warning
statement on all alcohol beverages for sale and distribution in
the United States (U.S.) containing 0.5% or more alcohol by
volume.
Prior 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 FAA 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.
Analysis Prepared by:
Eric Johnson / G.O. / (916) 319-2531 FN:
0001440
AB 893
Page 8