BILL ANALYSIS
AB 1649
Page 1
Date of Hearing: April 12, 2010
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Joe Coto, Chair
AB 1649 (Chesbro) - As Amended: March 15, 2010
SUBJECT : Alcoholic beverage licensees: winegrowers.
SUMMARY : Allows a winery to produce spirits of wine
(byproduct of wine fermentation) under specified conditions
without having to additionally obtain a distilled spirits
manufacturer's license. This measure also clarifies current
statutes related to privileges of wineries and branch offices.
Specifically, this bill :
1)Expands the authorized activities that a licensed winegrower
may conduct to include the production of spirits of wine,
provided those spirits of wine are either blended into wine
produced by the winegrower, sold to an industrial alcohol
dealer, or destroyed by the winegrower, as specified.
2)Makes conforming changes with regard to a licensed
winegrower's authorization to sell wine and brandy for
consumption to consumers on the licensed premises, as
specified.
3)Clarifies that current law is not intended to expand the
privilege for selling wine to consumers at a premises of
branch office to all of a licensee's branch offices but only
the office as approved by the Department of Alcoholic Beverage
Control (ABC).
EXISTING LAW :
1)Establishes ABC and grants it the exclusive authority to
administer the provisions of the Alcoholic Beverage Control
Act (Act) in accordance with laws enacted by the Legislature.
2)Establishes ABC and grants it exclusive authority to
administer the provisions of the ABC Act in accordance with
laws enacted by the Legislature. This involves the licensing
and regulation of businesses involved in the manufacture,
importation, and sale of alcoholic beverages in the state.
3)Authorizes a licensed winegrower to conduct specified
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activities, including authorizing a licensed winegrower to
sell wine and brandy for consumption to consumers for
on-premises consumption, as specified.
4)Authorizes an on-sale beer and wine public premises licensee
and a licensed winegrower who exercises his or her license
privileges at specified locations to allow a person who has
purchased and partially consumed a bottle of wine to
remove the partially consumed bottle from the premises upon
departure.
5)Allows a licensed winegrower or brandy manufacturer to sell
wine for consumption on the premises of a branch office. In
essence, extends the wine-by-the-glass privilege that a Type
02's master license has to its duplicate license.
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 (e.g.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.
FISCAL EFFECT : Unknown.
COMMENTS :
According to the bill's sponsor, the Wine Institute, while
existing law authorizes a winery to produce the spirits of wine
byproduct, it is unclear whether or not the winery needs to
obtain a Type 04 distilled manufacturer's license to deal with
this byproduct. AB 1649 states a winegrower (winery) does not
need to purchase a separate distilled spirits manufacturer's
license when producing spirits of wine (byproduct of wine
fermentation) provided the spirits of wine are blended into the
wine produced by the winegrower, are sold to an industrial
alcohol dealer, or are destroyed by the winegrower. Many
wineries use reverse osmosis or the spinning cone technique to
reduce the alcohol content in their wines.
This bill also clarifies current statue relating to the recent
enactments of AB 2004 (Evans), Chapter 127, Statutes of 2008 and
AB 1470 (Evans) Chapter 535, Statutes of 2009. A provision of
current law is amended to state that wineries are only
authorized to sell their own wine by the glass or bottle not
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wine which is produced for other businesses. In addition, a
provision within AB 1470 is clarified by stating that the
privilege for selling wine for consumption on the premises of a
branch office is only for the "specific branch office" as
approved by ABC. This measure does not change the customary
30-day public notice process that applies to the master license
under current law.
Background : According to ABC, there are approximately 2,730
licenses issued to winegrowers for production facilities
throughout the State. Currently, there are approximately 69
licenses issued to distilled manufacturers. Approximately 50
winegrowers have distilled manufacturer's licenses. Some
wineries use either a reverse osmosis apparatus or a spinning
cone system on the winery's premises for the purpose of reducing
the alcohol content in wine. This procedure produces spirits of
wine which is a non potable distilled spirit.
Prior legislation : AB 1470 (Evans) Chapter 535, Statutes of
2009. Removed the prohibition against licensed winegrowers or
brandy manufacturers from selling wine for consumption at a
branch office, essentially extending wine-by-the-glass
privileges to a duplicate license.
AB 2004 (Evans), Chapter 127, Statutes of 2008. Authorized a
licensed winegrower to sell wine to consumers for on-premises
consumption, as specified.
SB 113 (Thompson), Chapter 238, Statutes of 1993. Permits a
licensed winegrower (a winery) to sell wine and brandy to
consumers for consumption off the premises or for consumption at
a restaurant located at the winery or immediately contiguous to
it. A winegrower must produce on the licensed premises not less
than 50% of the wines sold to consumers.
REGISTERED SUPPORT / OPPOSITION :
Support
Wine Institute
Winemakers of California
AB 1649
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Opposition
California Council on Alcohol Problems
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531