BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 973|
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CONSENT
Bill No: AB 973
Author: Gray (D)
Introduced:2/26/15
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE: 12-0, 6/29/15
AYES: Hall, Berryhill, Block, Gaines, Glazer, Hernandez, Hill,
Hueso, Lara, McGuire, Runner, Vidak
NO VOTE RECORDED: Galgiani
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 77-0, 4/30/15 (Consent) - See last page for
vote
SUBJECT: Alcoholic beverages: tied-house restrictions:
on-sale and off-sale retailers advertising
SOURCE: Author
DIGEST: This bill consolidates two similar tied-house
exceptions (one pertaining to "on-sale" retailers and the other
to "off-sale" retailers) within the Alcoholic Beverage Control
(ABC) Act 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.
ANALYSIS:
Existing law:
1)Establishes the Department of ABC and grants it exclusive
authority to administer the provisions of the ABC Act in
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accordance with laws enacted by the Legislature.
2)Separates the alcoholic beverage industry into three component
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
types of alcoholic beverages: namely, beer, wine and distilled
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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.
This bill:
1)Deletes an existing tied-house exception pertaining to the
listing of off-sale licensed retailers as a thing of value or
prohibited inducement and instead includes off-sale retailers
within the exception previously applicable only to on-sale
licensed retailers.
2)Makes other minor conforming changes.
Background
Tied-house. Tied-house refers to a practice in this country
prior to Prohibition and still occurring in England today where
a bar or public house, from whence comes the "house" of tied
house, is tied to the products of a particular manufacturer,
either because the manufacturer owns the house, or the house is
contractually obligated to carry only a particular
manufacturer's products. Existing tied-house laws generally
prohibit a manufacturer, importer or wholesaler from furnishing,
giving, or lending any money or other thing of value to any
person engaged in operating, owning, or maintaining any off-sale
or on-sale licensed retail premise. Existing law also provides
two separate tied-house exceptions (one pertaining to on-sale
retailers and the other to off-sale retailers) relative to the
listing of a licensed retailer as a thing of value or prohibited
inducement.
Purpose of AB 973. According to the author's office, alcoholic
beverage suppliers often list on a Facebook fan page or Web
site, the various restaurants where a consumer may purchase
their products. Given the development of new social media,
alcoholic beverage distributors are utilizing various social
media mediums as a marketing tool to inform consumers about
additional retail locations where a particular product may be
purchased. The author's office states that AB 973 is simply
intended to clean-up existing ABC statutes by consolidating into
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a single statute the "on-sale" and "off-sale" provisions of law
which authorize manufacturers and distributors, in response to a
direct inquiry from a consumer, to provide information relative
to where their product is available for purchase.
Prior/Related Legislation
SB 327 (Hall, 2015) consolidates two similar tied-house
exceptions within the ABC Act 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. (Pending on
Assembly Floor)
AB 780 (Williams, 2015) makes clarifying and conforming changes
to existing provisions of the ABC 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. (Pending on Senate Floor)
AB 2349 (Nestande, Chapter 374, Statutes of 2012) provided that
the listing of names, addresses, telephone 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.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT: (Verified 8/7/15)
California Beer & Beverage Distributors
OPPOSITION: (Verified 8/7/15)
None received
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ASSEMBLY FLOOR: 77-0, 4/30/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Chang, Chau,
Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd,
Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia,
Eduardo Garcia, Gatto, Gipson, Gonzalez, Gordon, Gray, Grove,
Hadley, Harper, Roger Hernández, Holden, Irwin, Jones,
Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,
Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,
Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Campos, Chávez, Gomez
Prepared by:Arthur Terzakis / G.O. / (916) 651-1530
8/18/15 16:45:12
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