BILL ANALYSIS
AB 1282
Page 1
Date of Hearing: April 22, 2009
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Curren Price, Chairman
AB 1282 (Hall) - As Introduced: February 27, 2009
SUBJECT : Alcoholic beverages.
SUMMARY : Includes a holder of a beer manufacturer's license,
a holder of an out-of-state beer manufacturer's certificate, an
out-of-state vendor that holds a certificate of compliance, or a
holder of a beer and wine importer's general license to the list
of those authorized to give adult consumers promotional
advertising items valued up to $3, as specified. Specifically,
this bill :
1)Defines "beer manufacturer" as a holder of a beer
manufacturer's license, a holder of an out-of-state beer
manufacturer's certificate, an out-of-state vendor that holds
a certificate of compliance, or a holder of a beer and wine
importer's general license. A licensee authorized to give
consumer advertising specialties, as defined, shall not be
precluded from doing so on the basis of holding any other type
of alcoholic beverage license.
EXISTING LAW :
1)Establishes the ABC and grants it exclusive authority to
administer the provisions of the ABC 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 or occupation taxes for this
purpose.
2)Provides no licensee shall, directly or indirectly, give any
premium, gift, or free goods in connection with the sale or
distribution of any alcoholic beverage, except as provided by
rules that shall be adopted by ABC, as defined.
3)Specifies that no rule of ABC may permit a licensee to give
any premium, gift, or free goods of greater than
inconsequential value in connection with the sale or
distribution of beer. With respect to beer, premiums, gifts,
or free goods, including advertising specialties that have no
AB 1282
Page 2
significant utilitarian value other than advertising, shall be
deemed to have greater than inconsequential value if they cost
more than twenty-five cents ($0.25) per unit, or cost more
than fifteen dollars ($15) in the aggregate for all those
items given by a single supplier to a single retail premises
per calendar year.
4)Provides that no rule of ABC may impose a dollar limit for
consumer advertising specialties furnished by a beer
manufacturer to the general public other than three dollars
($3) per unit original cost to the beer manufacturer who
purchased it. The consumer advertising specialties furnished
by a beer manufacturer are intended only for adults of legal
drinking age. Coin banks, toys, balloons, magic tricks,
miniature bottles or cans, confections, dolls, or other items
that appeal to minors or underage drinkers may not be used in
connection with the merchandising of beer.
5)States that the "Tied-House" Law, separates the alcoholic
beverage industry into three component parts of manufacturer,
wholesaler, and retailer. The original policy rationale for
this body of law was to prohibit the vertical integration of
the alcohol industry and to protect the public from predatory
marketing practices. Generally, other than exemptions 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.
FISCAL EFFECT : Unknown
COMMENTS : According to the author, the intent of this bill is
to fix a drafting error in AB 1245 (Torrico), Chapter 629,
Statutes of 2008, which should have allowed out-of-state
domestic and overseas brewers as well as beer importers the same
privileges as California brewers have with respect to the dollar
value of advertising specialty items that may be given away to
adult consumers. AB 1282 will correct inequities inadvertently
created by AB 1245 (Torrico) and insure that the new gift limit
law applies to all brewers and importers that sell and market
beer within the state, not just for companies holding a
California beer manufacturer's license.
In support of this measure, Diageo North America states it is
important to note that as AB 1245 (Torrico) was making its way
through the legislative process last year, it was always
AB 1282
Page 3
intended (and assumed) that out-of-state beer interests, as
defined, were included in the bill. As the bill was awaiting
signature by the Governor last fall, it became apparent that ABC
felt clarification regarding out-of-state beer manufactures was
necessary.
Prior legislation . AB 1245 (Torrico), Chapter 629, Statutes of
2008, modified an existing provision of the Alcoholic Beverage
Control Act (ABC Act) to allow beer manufacturers to give adult
consumers promotional advertising items valued up to $3.
SB 993 (Burton) Chapter 544, Statutes of 1997, among other
things: 1) provides that no rule of ABC may impose a dollar
limit for consumer advertising specialties furnished by a
distilled spirits supplier to a retailer or to the general
public of less than $5 per unit original cost to the supplier
who purchased it; and, 2) authorizes a licensed distilled
spirits manufacturer to conduct tastings of distilled spirits on
the licensed premises under specified conditions.
REGISTERED SUPPORT / OPPOSITION :
Support
Anheuser-Busch Companies, Inc.
Crown Imports LLC
Diageo North America
Heineken USA
MillerCoors
Opposition
California Council on Alcohol Policy
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531