BILL ANALYSIS
Bill No: AB
2134
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
AB 2134 Author: Chesbro
As Amended: April 19, 2010
Hearing Date: June 9, 2010
Consultant: Art Terzakis
SUBJECT
Alcoholic Beverages: instructional events: beer
DESCRIPTION
AB 2134 creates a new tied-house exception in the Alcoholic
Beverage Control (ABC) Act that allows licensed brewers to
conduct and participate in events called "Beer Maker
Dinners" for consumers held at an on-sale retail licensed
premise. Specifically, this measure:
1. Allows a licensed beer manufacturer or a holder of a
beer and wine importer's general license, or any
director, partner, officer, agent, or representative of
that person, to conduct an instructional event for
consumers held at an on-sale retail licensee's premises
featuring beer.
2. Provides that the instruction by brewers may include
serving beer sold by the on-sale retail licensee to the
consumer and providing information on the history,
nature, values, and characteristics of the beer and
methods of presenting and serving the beer.
3. Provides that orders for the sale of beer may be
accepted by the beer manufacturer conducting the
instructional event if the sales transaction is completed
at the beer manufacturer's licensed premises.
4. Allows the brewer to advertise an instructional event
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provided the advertisement does not contain the retail
price of the beers and the listing of the retailer's name
and address is the only reference to the retailer in the
advertisement and is relatively inconspicuous in relation
to the advertisement as a whole.
5. Makes it explicit that no alcoholic beverage may be
given away in connection with the instructional event and
that all the beer being tasted at the event must be
purchased from the on-sale retail licensee.
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, known as the "tied-house" law, 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).
Tied house refers to a practice in this country prior to
Prohibition and still occurring in England today where a
bar or public house, from whence comes the "house" of tied
house, is tied to the products of a particular
manufacturer, either because the manufacturer owns the
house, or the house is contractually obligated to carry
only a particular manufacturer's products.
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 marketplace; (c) prohibit commercial
bribery and 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
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another type of licensee within the "three-tier" system.
As a limited exception to the general tied-house rule,
existing law (Business and Professions Code Section
25503.4) permits winegrowers and their agents, including
wine importers, to conduct and participate in instructional
events known as "meet the winemaker" dinners held at a
retailer's premises featuring the winemaker's wine,
provided certain conditions are met. Although no wine can
be given away at the events, minimal amounts of wine, taken
from barrels or tanks, may be sample tasted.
As a limited exception to the general tied-house rule,
existing law (Business and Professions Code Section
25503.5) permits a winegrower, beer manufacturer, beer or
wine wholesaler, distilled spirits manufacturer, distilled
spirits general rectifier, or distilled spirits general
importer to conduct "instructional" tastings for licensees
and their employees on the subject of wine, beer, or
distilled spirits. This section of law also permits a
winegrower or distilled spirits manufacturer to instruct
"consumers" at an on-sale licensed retail premise provided
the following conditions are met: (1) no more than ounce
of distilled spirits is offered in one tasting; (2) no more
than one ounce of wine is offered in one tasting; and, (3)
no more than three tastings are offered to an individual in
one day. An instruction may include the history, nature,
values and characteristics of the product being offered,
and the methods of presenting and serving the product.
As a limited exception to the general tied-house rule,
existing law (Business and Professions Code Section
25503.55) authorizes beer manufacturers, beer wholesalers,
and beer importers to conduct instructional beer tastings
(not to exceed 8 ounces per person, per day) to consumers
of legal drinking age at on-sale retail licensed premises
under specified conditions.
BACKGROUND
Purpose of AB 2134: According to the sponsor, the
California Small Brewers Association, this measure is
intended to grant beer manufacturers and importers the
privilege of participating in "Beer Maker Dinners" at
licensed on-sale retail premises (i.e. restaurants) while
upholding the three-tier system and ensuring appropriate
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protections for the industry and public.
The sponsor contends that these events will provide a
unique opportunity for brewers and their representatives to
personally meet with consumers and provide instruction on
existing and emerging craft beer products while being
paired with food. The sponsor notes that several
restrictions currently make it difficult for craft brewers
to engage in these types of instructional events for
consumers. For example, current law requires that the
brewer and/or their representatives be paid an "honorarium"
by the retail account to attend; and that the brewer cannot
advertise the location of the "Beer Maker Dinner" to
interested parties.
The sponsor points out that under current law, winegrowers
are able to conduct "Wine Maker Dinners" at licensed retail
accounts. The law allows a winegrower representative to
conduct the educational event without compensation from the
retail establishment; and allows the winegrower to
advertise the event under specified conditions.
The sponsor emphasizes that this measure will establish
parity in the ABC Act by allowing California craft brewers
to conduct "Beer Maker Dinners" with the same privileges
and protections currently enjoyed by winegrowers when they
conduct "Wine Maker Dinners." The one exception is that
under this measure no alcoholic beverages may be given away
at the "Beer Maker Dinners."
SUPPORT: As of June 4, 2010:
California Small Brewers Association
OPPOSE: None on file as of June 4, 2010.
FISCAL COMMITTEE: Senate Appropriations Committee
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