BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 2134|
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CONSENT
Bill No: AB 2134
Author: Chesbro (D)
Amended: 4/19/10 in Assembly
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE : 6-0, 6/9/10
AYES: Wright, Negrete McLeod, Padilla, Price, Wyland, Yee
NO VOTE RECORDED: Harman, Calderon, Denham, Florez, Oropeza
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 74-0, 5/6/10 - See last page for vote
SUBJECT : Alcoholic beverage control: tied-house
restrictions:
instructional events: beer
SOURCE : California Small Brewers Association
DIGEST : This bill creates a new tied-house exception in
the Alcoholic Beverage Control Act that allows licensed
brewers to conduct and participates in events called "Beer
Maker Dinners" for consumers held at an on-sale retail
licensed premise.
ANALYSIS : 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
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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
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
25503.4) permits a winegrower, beer manufacturer, beer or
wine wholesaler, distilled spirits manufacturer, distilled
spirits general rectifier, or distilled spirits general
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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
one-fourth 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.
This bill:
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
provided the advertisement does not contain the retail
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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.
Comments
According to the sponsor, the California Small Brewers
Association, this bill 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 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
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conduct "Wine Maker Dinners." The one exception is that
under this bill no alcoholic beverages may be given away at
the "Beer Maker Dinners."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 6/22/10)
California Small Brewers Association (source)
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Blumenfield,
Bradford, Brownley, Buchanan, Caballero, Charles
Calderon, Carter, Chesbro, Conway, Cook, Coto, Davis, De
Leon, DeVore, Emmerson, Eng, Evans, Feuer, Fletcher,
Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani,
Garrick, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,
Huber, Huffman, Jeffries, Jones, Knight, Lieu, Logue,
Bonnie Lowenthal, Ma, Miller, Monning, Nava, Nestande,
Niello, Nielsen, Norby, V. Manuel Perez, Portantino,
Ruskin, Salas, Saldana, Silva, Skinner, Smyth, Solorio,
Audra Strickland, Swanson, Torlakson, Torres, Torrico,
Tran, Villines, Yamada, John A. Perez
NO VOTE RECORDED: Bass, Block, De La Torre, Gilmore,
Mendoza, Vacancy
TSM:do 6/29/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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