BILL ANALYSIS Ó AB 1303 Page 1 Date of Hearing: April 15, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 1303 (Gray) - As Introduced February 27, 2015 ----------------------------------------------------------------- |Policy |Governmental Organization |Vote:|21 - 0 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: YesReimbursable: > SUMMARY: This bill amends the Alcoholic Beverage Control Act to clarify that retailers may not be obligated to purchase or sell products from distilled spirits wholesalers as a condition of a marketing data agreement with those wholesalers. FISCAL EFFECT: Minor and absorbable enforcement costs to the Department of Alcoholic Beverage Control.] AB 1303 Page 2 COMMENTS: 1)Purpose. Existing law permits certain manufacturers, winegrowers, rectifiers, distillers, and distilled spirit wholesalers to conduct market research and purchase marketing data from off-sale licensed retailers, provided that the retailer is not obligated to purchase or sell alcoholic beverages from the manufacturer, winegrower, rectifier, or distiller. This bill adds distilled spirits wholesalers to the list of licensees which may not condition the purchase of market data on the sale of alcoholic beverages. 2)Tied-House Technicalities. In general, tied-house laws prohibit holders of alcoholic beverage manufacturers, wholesalers, and retailers from having specified relationships with one another, including relationships that involve the provision of something of value from a manufacturer or wholesaler to a retailer, and vice versa. Numerous exceptions to this general rule have been created, including allowing manufacturers and wholesalers to partner with retailers to conduct market research and purchase market data. The law prohibits bundling a market research relationship with an obligation to purchase or sell the manufacturers or wholesalers alcoholic beverages, and this bill closes a gap in that prohibition. Analysis Prepared by:Joel Tashjian / APPR. / (916) 319-2081 AB 1303 Page 3