BILL ANALYSIS Ó AB 1767 Page 1 Date of Hearing: May 11, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 1767 (Bigelow) - As Amended March 17, 2016 ----------------------------------------------------------------- |Policy |Governmental Organization |Vote:|21 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill permits designated alcohol licensees to purchase advertising space or time, on the premises of an exposition, park, stadium, or arena leased by the on-sale licensee. AB 1767 Page 2 FISCAL EFFECT: Negligible fiscal costs. COMMENTS: 1)Purpose. According to the author's office, this bill would expand existing tied-house exceptions to circumstances in which the on-sale licensee is not actually the owner of a stadium or arena in which the paid-for advertising is allowed. Due to the evolving ownership structures of larger sports and entertainment venues, it is rare that the on-sale licensee is the owner of the venue. However, this measure would ensure that existing tied-house exceptions are able to continue in effect even if the ownership of the venue changes. 2)Background. Current "tied-house" law, also called "three-tier" law, prohibits paid advertising by winegrowers, beer manufacturers and distilled spirits producers in cases where a retail licensee also owns a sports or entertainment venue. California's three-tier law is designed to prevent vertical integration between alcohol producers, wholesalers, and retailers. Limiting the ability for an alcoholic beverage producer or winegrower to pay a retail licensee, including a stadium or arena, for advertising its product is one way to protect consumers from predatory marketing. However, over the years numerous exceptions to this prohibition have been added to the ABC Act (such as Sleep Train Arena in Sacramento, Oakland Coliseum in Oakland, Levi's AB 1767 Page 3 Stadium in Santa Clara). In these cases, an owner in one tier (Bud Light, for example) can pay a retail licensee (Santa Clara Stadium Authority, for example) for displaying advertising. Analysis Prepared by:Luke Reidenbach / APPR. / (916) 319-2081