BILL ANALYSIS Ó
AB 1971
Page 1
Date of Hearing: May 4, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1971 (Cooper) - As Introduced February 16, 2016
-----------------------------------------------------------------
|Policy |Governmental Organization |Vote:|21 - 0 |
|Committee: | | | |
| | | | |
| | | | |
|-------------+-------------------------------+-----+-------------|
| | | | |
| | | | |
| | | | |
|-------------+-------------------------------+-----+-------------|
| | | | |
| | | | |
| | | | |
-----------------------------------------------------------------
Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill modifies the Alcohol Beverage Control Act's
prohibition against advertising arrangements among retail,
wholesale, and manufacturing licensees to allow an exception for
stadiums and arenas subject to the following conditions:
AB 1971
Page 2
1)The stadium or arena has a fixed seating capacity of more than
1,500 people;
2)The stadium or arena is not owned by a community college
district;
3)The advertising space is purchased only in connection to the
events to be held at the stadium or arena; and
4)Other competing brands of the type of alcoholic beverage being
advertised are also sold.
FISCAL EFFECT:
Minor and absorbable costs to the California Department of
Alcoholic Beverage Control (ABC).
COMMENTS:
1)Purpose. This bill aims to standardize "tied-house" policy
regarding advertisements in larger stadiums and arenas. The
author and ABC contend that standardizing this exception is
preferable to creating individual exceptions by statute.
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
AB 1971
Page 3
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
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