BILL ANALYSIS Ó
SB 1032
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Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 1032
(Galgiani) - As Amended May 19, 2016
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|Policy |Governmental Organization |Vote:|20 - 0 |
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill expands the prohibition on beer manufacturers and beer
wholesalers from offering consumer coupons, as defined, to
include those involved in the production of wine, such as
winemakers, winegrowers, and wine blenders. This bill also
prohibits licensed retailers from accepting or redeeming such
coupons from these nonretail licensees.
SB 1032
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FISCAL EFFECT:
Minor enforcement costs to the Department of Alcoholic Beverage
Control (ABC).
COMMENTS:
1)Background. Instant redeemable coupons (IRCs) offered by
alcohol manufacturers provide an instant reduction in the
price of a product when purchased at a retail licensee.
However, AB 1928 (Bocanegra), Chapter 145, Statutes of 2014,
prohibited beer manufacturers and beer wholesalers from IRCs.
Supporters of that bill contended that these coupons were
prone to problems such as fraud and that they gave an unfair
competitive advantage to large beer manufacturers because
smaller craft breweries could not afford to offer such
coupons.
2)Purpose. According to supporters of this bill, which include
The Wine Institute and Family Winemakers of California,
current coupon practices in the wine industries can create
competitive imbalances between large and small wineries as
well as between large grocery chains and smaller independent
retailers. Proponents state that these coupons raise social
responsibility issues as well by promoting excessive drinking.
3)Nonretail licensees and coupon exemption. This bill expands
the IRC prohibition to nonretail licensees, defined as those
involved in the production, manufacturing, rectification,
importation, or wholesaling of alcoholic beverages. However,
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SB 1032 also contains provisions that state that the
prohibition does not apply to distilled spirit producers and
manufactures or in instances when wineries offer discounts
directly to consumers through wine clubs or on internet
purchases.
4)Opposition. The California Grocers Association and the
California Retailers Association oppose this bill, arguing
that these discount programs are important to retailers and
consumers.
Analysis Prepared by:Luke Reidenbach / APPR. / (916)
319-2081