BILL ANALYSIS                                                                                                                                                                                                    



                                                                    AB 1767


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          Date of Hearing:  May 11, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          AB  
          1767 (Bigelow) - As Amended March 17, 2016


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          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


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          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


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            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