BILL ANALYSIS
Bill No: AB
1649
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
AB 1649 Author: Chesbro
As Amended: March 15, 2010
Hearing Date: June 9, 2010
Consultant: Art Terzakis
SUBJECT
Alcoholic Beverages
DESCRIPTION
AB 1649 allows licensed winegrowers to produce spirits of
wine (a byproduct of wine fermentation) under specified
conditions without having to additionally obtain a
distilled spirits manufacturer's license. Specifically,
this measure:
1. Adds clarity to the definition of "distilled spirits
manufacturer," within the Alcoholic Beverage Control
(ABC) Act, by stipulating that a distilled spirits
manufacturer shall not include a winegrower that produces
spirits of wine, provided the spirits of wine are blended
into wine produced by the winegrower, are sold to an
industrial alcohol dealer, or are destroyed by the
winegrower.
2. Expands the privileges afforded a licensed winegrower
to include the production of spirits of wine and blending
those spirits of wine into wine produced by the
winegrower or selling those spirits of wine to an
industrial alcohol dealer.
3. Also, makes clarifying changes with respect to a
licensed winegrower's authorization to sell only their
own wine or brandy by the glass or bottle that is
produced under their original or duplicate license.
AB 1649 (Chesbro) continued
Page 2
EXISTING LAW
Existing law establishes the Department of Alcoholic
Beverage Control (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.
Existing law defines "distilled spirits manufacturer" to
mean any person who produces distilled spirits from
naturally fermented materials or in any other manner.
Existing law authorizes a licensed winegrower to conduct
specified activities, including authorizing a licensed
winegrower to sell wine and brandy for consumption to
consumers for on-premises consumption, as specified.
Existing law 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.
BACKGROUND
Purpose of AB 1649: 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
spirits manufacturer's license to deal with this byproduct.
The sponsor points out that many wineries use reverse
osmosis, or the spinning cone technique, to reduce the
alcohol content in their wines. This measure would simply
clarify that a 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. This measure would
also make minor clarifying changes to the newly enacted
wine-by-the-glass law.
AB 1649 (Chesbro) continued
Page 3
PRIOR/RELATED LEGISLATION
AB 1470 (Evans) Chapter 535, Statutes of 2009. Authorized
winegrowers to sell wine for consumption at a "branch
office," warehouse, or an off-site cellar, and removed the
requirement that the Department of ABC issue a "duplicate"
license "forthwith." Also, authorized an on-sale beer and
wine public premises licensee 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.
AB 2004 (Evans) Chapter 127, Statutes of 2008. Authorized
a winery to sell wine for consumption on the winery's
grounds, such as at a picnic area within the boundaries of
the winery. Also, granted any winegrower the same
privilege that is currently available to any on-sale
licensee which maintains a restaurant, which permits the
licensee to allow a patron to remove from the premises upon
departure, a bottle of wine that has been opened (partially
consumed).
SUPPORT: As of June 4, 2010:
Wine Institute
Family Winemakers of California
OPPOSE: None on file as of June 4, 2010.
FISCAL COMMITTEE: Senate Appropriations Committee
**********