Amended in Senate August 18, 2015

Amended in Assembly May 13, 2015

Amended in Assembly April 28, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 1320


Introduced by Assembly Member Maienschein

February 27, 2015


An act to add Section 25503.36 to the Business and Professions Code, relating to alcoholicbegin delete beverages.end deletebegin insert beverages, and declaring the urgency thereof, to take effect immediately.end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1320, as amended, Maienschein. Alcoholic beverages: tied-house restrictions: advertising.

Existing law generally restricts certain alcoholic beverage licensees, including manufacturers and winegrowers, from paying, crediting, or compensating a retailer for advertising in connection with the advertising and sale of alcoholic beverages. Existing law expressly authorizes a beer manufacturer, holder of a winegrower’s license, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, holder of a distilled spirits rectifier’s general license, or a distilled spirits manufacturer’s agent to sponsor events promoted by or purchase advertising space and time from, or on behalf of, a live entertainment marketing company that is a wholly owned subsidiary of a live entertainment company that has its principal place of business in the County of Los Angeles, as provided.

This bill would expressly authorize abegin insert holder of aend insert beer manufacturerbegin insert licenseend insert, holderbegin insert of an outend insertbegin insert-ofend insertbegin insert-state beer manufacturer’s certificate, holderend insert of a winegrower’s license, winegrower’s agent, holder ofbegin delete an importer’s general license, as described,end deletebegin insert a rectifier license,end insert distilled spirits manufacturer, holder of a distilled spirits rectifier’s general license,begin delete or aend delete distilled spirits manufacturer’sbegin delete agentend deletebegin insert agent, or holder of a beer and wine importer’s general license or distilled spirits importer’s general license, as described,end insert to sponsor events promoted by or purchase advertising space and time from, or on behalf of, a live entertainment marketing company that conducts entertainment events solely at the San Diego County Fairgrounds, under specified conditions. The bill would also make a beer manufacturer, holder of a winegrower’s license, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, holder of a distilled spirits rectifier’s general license, or a distilled spirits manufacturer’s agent who, through coercion or other illegal means, induces the holder of a wholesaler’s license to fulfill those contractual obligations entered into pursuant to these provisions guilty of a misdemeanor. The bill would additionally make an on-sale retail licensee, as described, who solicits or coerces a holder of a wholesaler’s license to solicit a beer manufacturer, holder of a winegrower’s license, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, holder of a distilled spirits rectifier’s general license, or a distilled spirits manufacturer’s agent to purchase advertising time or space pursuant to these provisions guilty of a misdemeanor. The bill would make a related statement of findings.

By creating new crimes this bill would impose a state-mandated local program.

This bill would make legislative findings and declarations as to the necessity of a special statute for the County of San Diego.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

begin insert

This bill would declare that it is to take effect immediately as an urgency statute.

end insert

Vote: begin deletemajority end deletebegin insert23end insert. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P3    1

SECTION 1.  

Section 25503.36 is added to the Business and
2Professions Code
, to read:

3

25503.36.  

(a) Notwithstanding any other provision of this
4division, abegin insert holder of aend insert beer manufacturerbegin insert licenseend insert, holderbegin insert of an
5outend insert
begin insert-ofend insertbegin insert-state beer manufacturer’s certificate, holderend insert of a
6winegrower’s license, winegrower’s agent, holder ofbegin delete an importer’s
7general license that does not also hold a wholesale or retail license
8as an additional license,end delete
begin insert a rectifier license,end insert distilled spirits
9manufacturer, holder of a distilled spirits rectifier’s general license,
10begin delete or aend delete distilled spirits manufacturer’sbegin delete agentend deletebegin insert agent, or holder of a
11beer and wine importer’s general license or distilled spirits
12importer’s general license that, unless it holds one of the other
13authorized licenses specified in this section, does not also hold a
14wholesale or retail license as an additional license,end insert
may sponsor
15events promoted by, and may purchase advertising space and time
16from, or on behalf of, a live entertainment marketing company
17subject to all of the following conditions:

18(1) The live entertainment marketing company operates and
19promotes live artistic, musical, sports, or cultural entertainment
20events only.

21(2) All of the live artistic, musical, sports, or cultural
22entertainment events are conducted at the San Diego County
23Fairgrounds, located in the City of Del Mar in the County of San
24Diego, and the events will typically occur over a period of no more
25than four consecutive days during which approximately 100 acts
26will perform before approximately 20,000 or more patrons. The
27live entertainment marketing company shall not conduct more than
28three of these types of events within a calendar year.

29(3) The live entertainment marketing company is a Delaware
30limited liability company that is under common ownership,
31management, or control by a private equity firm that may also have
32common ownership, management, or control of a licensed
33California winery, provided the winery represents not more than
3425 percent of the assets under common ownership, management,
35or control by the private equity firm or its subsidiaries, and the
36live entertainment marketing company exercises no control over
37the operations of the winery.

P4    1(4) Any on-sale licensee operating at a venue where live artistic,
2musical, sports, or cultural entertainment events are performed
3pursuant to a sponsorship described in this section or where
4advertising is purchased as described in this section shall serve
5other brands of beer, distilled spirits, and wine distributed by a
6competing wholesaler in addition to any brand manufactured or
7distributed by the owning, sponsoring, or advertising beer
8manufacturer, holder of a winegrower’s license, winegrower’s
9agent, holder of an importer’s general license, distilled spirits
10manufacturer, holder of a distilled spirits rectifier’s general license,
11or a distilled spirits manufacturer’s agent.

12(5) An agreement for the sponsorship of, or for the purchase of
13advertising space and time during, a live artistic, musical, sports,
14or cultural entertainment event shall not be conditioned directly
15or indirectly, in any way, on the purchase, sale, or distribution of
16any alcoholic beverage manufactured or distributed by the owning,
17advertising, or sponsoring beer manufacturer, holder of a
18winegrower’s license, winegrower’s agent, holder of an importer’s
19general license, distilled spirits manufacturer, holder of a distilled
20spirits rectifier’s general license, or a distilled spirits
21manufacturer’s agent by the live entertainment company described
22in this section.

23(b) Any sponsorship of events or purchase of advertising space
24or time conducted pursuant to subdivision (a) shall be conducted
25pursuant to a written contract entered into by the beer manufacturer,
26holder of a winegrower’s license, winegrower’s agent, holder of
27an importer’s general license, distilled spirits manufacturer, holder
28of a distilled spirits rectifier’s general license, or a distilled spirits
29manufacturer’s agent and the live entertainment marketing
30company.

31(c) Any beer manufacturer, holder of a winegrower’s license,
32winegrower’s agent, holder of an importer’s general license,
33distilled spirits manufacturer, holder of a distilled spirits rectifier’s
34general license, or a distilled spirits manufacturer’s agent who,
35through coercion or other illegal means, induces, directly or
36indirectly, a holder of a wholesaler’s license to fulfill those
37contractual obligations entered into pursuant to subdivision (a)
38shall be guilty of a misdemeanor and shall be punished by
39imprisonment in the county jail not exceeding six months, or by
40a fine in an amount equal to the entire value of the advertising
P5    1space or time involved in the contract, whichever is greater, plus
2ten thousand dollars ($10,000), or by both imprisonment and fine.
3The person shall also be subject to license suspension or revocation
4pursuant to Section 24200.

5(d) Any on-sale retail licensee who, directly or indirectly, solicits
6or coerces a holder of a wholesaler’s license to solicit a beer
7manufacturer, holder of a winegrower’s license, winegrower’s
8agent, holder of an importer’s general license, distilled spirits
9manufacturer, holder of a distilled spirits rectifier’s general license,
10or a distilled spirits manufacturer’s agent to purchase advertising
11time or space pursuant to subdivision (a) shall be guilty of a
12misdemeanor and shall be punished by imprisonment in the county
13jail not exceeding six months, or by a fine in an amount equal to
14the entire value of the advertising space or time involved in the
15contract, whichever is greater, plus ten thousand dollars ($10,000),
16or by both imprisonment and fine. The person shall also be subject
17to license suspension or revocation pursuant to Section 24200.

begin delete

18(e) For purposes of this section, “beer manufacturer” includes
19a holder of a beer manufacturer’s license, a holder of an out-of-state
20beer manufacturer’s certificate, or a holder of a beer and wine
21importer’s general license.

end delete
begin delete

7 22(f)

end delete

23begin insert(e)end insert Nothing in this section shall authorize the purchasing of
24advertising space or time directly from, or on behalf of, any on-sale
25licensee except as expressly authorized by this section or any other
26provision of this division.

begin delete

11 27(g)

end delete

28begin insert(f)end insert Nothing in this section shall authorize a beer manufacturer,
29holder of a winegrower’s license, winegrower’s agent, holder of
30an importer’s general license, distilled spirits manufacturer, holder
31of a distilled spirits rectifier’s general license, or a distilled spirits
32manufacturer’s agent to furnish, give, or lend anything of value to
33an on-sale retail licensee described in subdivision (a) except as
34expressly authorized by this section or any other provision of this
35division.

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19 36(h)

end delete

37begin insert(g)end insert The Legislature finds that it is necessary and proper to
38require a separation between manufacturing interests, wholesale
39interests, and retail interests in the production and distribution of
40alcoholic beverages in order to prevent suppliers from dominating
P6    1local markets through vertical integration and to prevent excessive
2sales of alcoholic beverages produced by overly aggressive
3marketing techniques. The Legislature further finds that the
4exception established by this section to the general prohibition
5against tied interests must be limited to its expressed terms so as
6not to undermine the general prohibition, and intends that this
7section be construed accordingly.

8

SEC. 2.  

The Legislature finds and declares that a special law
9is necessary and that a general law cannot be made applicable
10within the meaning of Section 16 of Article IV of the California
11Constitution because of the unique conditions located in the County
12of San Diego.

13

SEC. 3.  

No reimbursement is required by this act pursuant to
14Section 6 of Article XIII B of the California Constitution because
15the only costs that may be incurred by a local agency or school
16district will be incurred because this act creates a new crime or
17infraction, eliminates a crime or infraction, or changes the penalty
18for a crime or infraction, within the meaning of Section 17556 of
19the Government Code, or changes the definition of a crime within
20the meaning of Section 6 of Article XIII B of the California
21Constitution.

22begin insert

begin insertSEC. 4.end insert  

end insert
begin insert

This act is an urgency statute necessary for the
23immediate preservation of the public peace, health, or safety within
24the meaning of Article IV of the Constitution and shall go into
25immediate effect. The facts constituting the necessity are:

end insert
begin insert

26In order to allow for the sponsoring of events within the County
27of San Diego as soon as possible, it is necessary that this act take
28effect immediately.

end insert


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