BILL ANALYSIS
Bill No: SB
1101
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
SB 1101 Author: Wiggins
As Amended: March 23, 2010
Hearing Date: April 13, 2010
Consultant: Art Terzakis
SUBJECT
Alcoholic Beverages
DESCRIPTION
SB 1101 clarifies that winemakers who participate in
instructional events or "meet the winemaker dinners", held
at a retailer's licensed premises for consumers, may offer
minimal samples of wine from "bottles." Specifically, this
measure:
1. Modifies an existing provision of the Alcoholic
Beverage Control (ABC) Act which allows winemakers
participating in instructional events for consumers at a
retailer's premises to offer samples of wine from barrels
or tanks to also allow for wine samples (no more than
three one-ounce tastings per consumer) at the event from
"bottles" of wine provided by the winemaker.
2. Provides that minimal amounts of the samples or tastes
provided at the instructional event do not constitute a
thing of value.
3. Stipulates that any unused wine provided by the
winemaker for the instructional event must be removed
from the retailer's premises by the winemaker.
EXISTING LAW
Existing law establishes the Department of Alcoholic
SB 1101 (Wiggins) continued
Page 2
Beverage Control (ABC) and grants it exclusive authority to
administer the provisions of the ABC Act in accordance with
laws enacted by the Legislature.
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.
Tied-house law generally prohibits any alcoholic beverage
manufacturer, winegrower, agent, importer or wholesaler
from holding any interest in the business of a retailer of
alcoholic beverages or to give any thing of value to a
licensed retailer of alcoholic beverages. Licensees are
also prohibited from giving away any gift, premium or free
goods in connection with the sale or distribution of
alcoholic beverages.
The ABC Act permits an on-sale retail licensee of wine or
distilled spirits to conduct "instructional" consumer
tastings on the 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,
SB 1101 (Wiggins) continued
Page 3
values and characteristics of the product being offered,
and the methods of presenting and serving the product.
Existing law authorizes beer manufacturers and wholesalers
to offer beer samples (not to exceed 8 ounces per person,
per day) to individuals of legal drinking age at on-sale
retail licensed premises under specified conditions.
Existing law permits a licensed winegrower, manufacturer,
importer, or wholesaler to provide samples of the alcoholic
beverages which are authorized to be sold by the licensee
in accordance with rules prescribed by the ABC. A retail
licensee, however, is not authorized to provide any free
samples of alcoholic beverages. Moreover, ABC regulations
provide that samples of alcoholic beverages may only be
given away to licensees or employees of licensees who are
in a position to purchase the product or who are in need of
additional information about the product, as specified.
BACKGROUND
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 and 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.
Purpose of SB 1101: As noted above, current law allows
winemakers to conduct and participate in, and serve wine
at, instructional events and "meet the winemaker dinners"
held at a retailer's premises featuring wines produced by
or for the winegrower or, imported by the wine importer,
provided the wine samples are taken from "barrels" or from
"tanks." This measure would simply clarify that winemakers
participating in such events may also offer samples of wine
(three one-ounce tastes) from bottles.
Arguments in Support: Proponents note that this measure
"responds to the practical aspects of how meet the
winemaker dinners are conducted." Proponents also
emphasize that "the tastes, which are instructional, will
conform to existing law on the number and size of tastes
SB 1101 (Wiggins) continued
Page 4
allowed during a dinner."
Staff Comments/Historical Perspective: As noted above,
alcoholic beverage licensees are generally prohibited from
giving away any gift, premium or free goods in connection
with the sale or distribution of alcoholic beverages. AB
2868 (Floyd), Chapter 471, of 1992 (Business and
Professions Code Section 25503.4) was introduced to clarify
existing law and allow winemakers, alcoholic beverage
retailers and importers, to advertise and promote winemaker
dinners and tastings featuring specific wines of a winery.
The events addressed by AB 2868 (Floyd) of 1992 were
commonly known and advertised as "winemaker dinners" or
"meet the winemaker events." Such events were intended to
offer consumers an educational opportunity to learn more
about food and wine pairing and a bit of the wine's unique
history. At that particular time, the activities
encompassed by AB 2868 (Floyd) were commonplace however the
Department of ABC had expressed concern that such
activities might violate the prohibition against licensees
giving away things of value. AB 2868 (Floyd) of 1992 was
introduced on behalf of the Wine Institute and the Family
Winemakers of California so that the ability of vintners
and restaurateurs to advertise and participate in such
events would not be constrained.
PRIOR LEGISLATION
AB 611 (Cortese) Chapter 394, Statutes of 1993. Provided
that an adult resident of California may apply for a permit
to receive, under specified conditions, a shipment of wine
(not more than nine liters in any calendar month) from
another state that allows adult residents of that state to
receive shipments of wine from California. Also, deleted
the requirement that wine taken from barrels or tanks, and
sampled at winemaker dinners, be the same wine used to
blend the bottled wine featured at the dinners.
AB 2868 (Floyd) Chapter 471, Statutes of 1992. Authorized
a winegrower, California winegrower's agent, importer, or
their specified representatives, to participate as
described, in an instructional event for consumers held at
a retailer's premises featuring wines produced by or for
the winegrower or imported by the importer, under specified
SB 1101 (Wiggins) continued
Page 5
conditions.
SUPPORT: As of April 9, 2010:
Family Winemakers of California
Wine Institute
OPPOSE: None on file as of April 9, 2010.
FISCAL COMMITTEE: Senate Appropriations Committee