BILL ANALYSIS Ó
SB 327
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Date of Hearing: July 15, 2015
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Adam Gray, Chair
SB
327 (Hall) - As Amended April 22, 2015
SENATE VOTE: 35-0
SUBJECT: Alcoholic beverages: licensees: tied-house
restrictions.
SUMMARY: Consolidates two similar tied-house exceptions (one
pertaining to "on-sale" retailers and the other to "off-sale"
retailers) within the Alcoholic Beverage Control Act (Act),
which authorize the dissemination of information pertaining to
the retail availability of products by alcoholic beverage
producers, distributors or importers in response to direct
inquiries from consumers. Specifically, this bill:
1)Deletes an existing tied-house exception pertaining to the
listing of "off-sale" licensed retailers as a thing of value or
prohibited inducement and instead includes "off-sale" retailers
within the exception previously applicable only to "on-sale"
licensed retailers.
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2)Makes other minor conforming changes.
EXISTING LAW:
1)Establishes the Department of Alcoholic Beverage Control (ABC)
and grants it exclusive authority to administer the provisions
of the Act in accordance with laws enacted by the Legislature.
This involves licensing individuals and businesses associated
with the manufacture, importation, and sale of alcoholic
beverages in this state and the collection of license fees for
this purpose.
2)Separates the alcoholic beverage industry into three component
parts, or tiers, of manufacturer (including breweries, wineries
and distilleries), wholesaler, and retailer (both on-sale and
off-sale). (Referred to as the "tied-house" law or "three-tier"
system.) The original policy rationale for this body of law was
to: (a) promote the state's interest in an orderly market; (b)
prohibit the vertical integration and dominance by a single
producer in the market place; (c) prohibit commercial bribery
and to protect the public from predatory marketing practices;
and, (d) discourage and/or prevent the intemperate use of
alcoholic beverages. Generally, other than exceptions granted
by the Legislature, the holder of one type of license is not
permitted to do business as another type of licensee within the
"three-tier" system.
3)Prohibits, in general, an alcohol manufacturer, wholesaler, or
any officer, director, or agent of any such person from owning,
SB 327
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directly, or indirectly, any interest in any on-sale license, or
from providing anything of value to retailers, be it free goods,
services, or advertising.
4)Provides that the listing of the names, addresses, telephone
numbers, email addresses, or Internet Web site addresses, of two
or more unaffiliated off-sale retailers selling beer, wine, or
distilled spirits and operating and licensed as bona fide public
eating places selling the beer, wine, or distilled spirits
produced, distributed, or imported by a nonretail industry
member in response to a direct inquiry from a consumer, as
specified, does not constitute a thing of value or prohibited
inducement to the listed off-sale retailer, if specified
conditions are met.
5)Includes similar provisions applicable to "on-sale" licensed
premises, except that those provisions also extend the exception
described in item #4 above to others forms of "electronic"
media.
6)Defines an "on-sale" license as authorizing the sale of all
types of alcoholic beverages: namely, beer, wine, and distilled
spirits, for consumption on the premises (such as at a
restaurant or bar). An "off-sale" license authorizes the sale
of all types of alcoholic beverages for consumption off the
premises in original, sealed containers.
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FISCAL EFFECT: Unknown
COMMENTS:
Purpose of the bill . The author's office states that under
existing law a response to a direct inquiry from a consumer
received by telephone, by mail, by electronic Internet inquiry,
or in person does not constitute a thing of value or prohibited
inducement to the listed on-sale or off-sale retailer. This
bill is simply intended to recast existing ABC statutes by
consolidating into a single statute the "on-sale" and "off-sale"
tied-house exceptions pertaining to direct inquiries.
Prior legislation . AB 2349 (Nestande), Chapter 374, Statutes of
2012. Provided that the listing of names, addresses, telephone
numbers, or email addresses in other forms of electronic media
do not constitute a thing of value. Also, revised the direct
inquiry provisions to remove the requirement that the
unaffiliated on-sale retailer operate and be licensed as a bona
fide public eating-place.
SB 1096 (Wiggins), Chapter 285, Statutes of 2010. Among other
things, revised the direct inquiry provisions in the ABC Act
pertaining to the authority of producers, wholesalers and
importers to respond to consumer inquiries as to where their
products may be found to include any "electronic" inquiries from
consumers.
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SB 1423 (Chesbro), Chapter 205, Statutes of 2000. Authorized
wineries and brandy manufacturers to advertise the name and
location of restaurants that sell their products.
SB 1233 (Chesbro), Chapter 666, Statutes of 1999. Allowed for
the limited dissemination of information regarding the off-sale
availability of alcoholic beverages.
REGISTERED SUPPORT / OPPOSITION:
Support
California Beer & Beverage Distributors
Opposition
None on file
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Analysis Prepared by:Eric Johnson / G.O. / (916)
319-2531