BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 252|
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THIRD READING
Bill No: AB 252
Author: Charles Calderon (D)
Amended: As introduced
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE : 12-0, 6/28/11
AYES: Wright, Anderson, Berryhill, Calderon, Cannella,
Corbett, De Le�n, Evans, Hernandez, Strickland, Wyland,
Yee
NO VOTE RECORDED: Padilla
SENATE APPROPRIATIONS COMMITTEE : 6-0, 8/15/11
AYES: Kehoe, Walters, Alquist, Emmerson, Price, Steinberg
NO VOTE RECORDED: Lieu, Pavley, Runner
ASSEMBLY FLOOR : 69-2, 5/5/11 - See last page for vote
SUBJECT : Alcoholic beverage control: licensees
SOURCE : Author
DIGEST : This bill modifies an existing provision of the
Alcoholic Beverage Control Act that allows, until January
1, 2014, a manufacturer, winegrower, rectifier, or
distiller to provide their product offerings directly to
consumers (free of charge) during invitation-only events,
as specified, to additionally grant the same privilege to a
"distilled spirits manufacturer's agent."
ANALYSIS : Existing law establishes the Department of
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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
or occupation taxes for this purpose.
Existing law, known as the "tied-house" law, separates the
alcoholic beverage industry into three component parts of
manufacturer, wholesaler, and retailer. The original
policy rationale for this body of law was to prohibit the
vertical integration of the alcohol industry and to protect
the public from predatory marketing practices. Generally,
other than exemptions 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.
Existing law, until January 1, 2014, permits a
manufacturer, winegrower, rectifier, or distiller, or any
authorized agent of that person to provide, free of charge,
entertainment, food, and distilled spirits, wine, or
nonalcoholic beverages to consumers over 21 years of age at
an invitation-only event in connection with the sale or
distribution of wine or distilled spirits, as specified.
Existing law also authorizes the Department of ABC to
impose a fee to cover the costs of administering such
events.
Existing law authorize the Department of ABC to issue to
the holder of an "off-sale" retail license an
"instructional tasting license" for the purpose of
furnishing tastings of alcoholic beverages to consumers,
subject to certain limitations.
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 a quarter
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
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history, nature, 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 eight 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.
Existing law authorizes distilled spirits manufacturers to
conduct tastings and provide distilled spirits without
charge for events sponsored by nonprofit organizations.
Only persons affiliated with the nonprofit organization,
including up to three guests, may attend. No distilled
spirits may be sold or solicited for sale at the tasting,
and the organization must obtain a permit from ABC prior to
the event.
This bill modifies an existing provision of the ABC Act
that allows, until January 1, 2014, a manufacturer,
winegrower, rectifier, or distiller to provide their
product offerings directly to consumers (free of charge)
during invitation-only events, as specified, to
additionally grant the same privilege to a "distilled
spirits manufacturer's agent."
Comments
SB 1323 (Walters), Session of 2009-10, was similar to this
bill but would have extended the privileges contained in AB
2293(De Leon), Chapter 638, Statutes of 2008, to include a
distilled spirits manufacturer's agent, a holder of a
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distilled spirits importer's general license, a holder of a
distilled spirits rectifier's general license and a holder
of an out-of-state distilled spirits shipper's certificate.
SB 1323 was held in the Senate Appropriation Committee
suspense file. This bill only adds distilled spirits
manufacturer's agents to the list of licensees who are able
to take advantage of the promotional events referenced
above. There are currently 16 licensees who would be able
to take advantage of this expansion.
Prior Legislation
SB 1323 (Walters), 2009-10 Session, would have modified an
existing provision of the ABC Act that allows, until
January 1, 2014, a manufacturer, winegrower, rectifier, or
distiller to provide their product offerings directly to
consumers (free of charge) during invitation-only events,
as specified, to additionally grant the same privilege to:
(1) a distilled spirits manufacturer's agent; (2) a holder
of a distilled spirits importer's general license; (3) a
holder of a distilled spirits rectifier's general license;
and (4) a holder of an out-of-state distilled spirits
shipper's certificate. (Held in Senate Appropriations
Suspense File)
SB 1022 (Strickland), Chapter 281, Statutes of 2010,
expands an existing tied-house exception to enable licensed
distilled spirits "rectifiers" to donate or sell their
products to specified nonprofit entities for the purpose of
assisting in fund-raising efforts.
AB 2293 (De Leon), Chapter 638, Statutes of 2008, allows
distilled spirits manufacturers and winegrowers to provide
their product offerings including food directly to
consumers (free of charge) during invitation-only events on
premises for which a caterer's permit authorization has
been issued.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
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Major Provisions 2011-12 2012-13 2013-14 Fund
Enforcement/oversight ----unknown, less than $50
partially Special*
offset by fee revenue------
*Alcoholic Beverage Control Fund
SUPPORT : (Verified 8/16/11)
Distilled Spirits Council of the United States
OPPOSITION : (Verified 8/16/11)
California Council on Alcohol Problems
ARGUMENTS IN SUPPORT : According to the author's office,
this bill is intended to correct a minor oversight
discovered since enactment of AB 2293 (De Leon). AB 2293
allows distilled spirits manufacturers and winegrowers to
provide their product offerings free of charge to
consumers, at an invitation-only event, where a caterer's
permit has been authorized by ABC. AB 2293 contains
restrictive criteria in order to provide appropriate
controls relating to these promotional events.
According to the sponsor of this bill, the Distilled
Spirits Council of the United States (DISCUS), the list of
licensees authorized by AB 2293 to provide supplier hosted
promotion and entertainment events did not include all its
member companies. For example, the holder of a distilled
spirits manufacturer's agent license has not been able to
secure a license from ABC to participate in these
promotional events. DISCUS states, this bill is simply
intended to correct this oversight and provide the same
privilege to a "distilled spirits manufacturer's agent."
According to the Department of ABC, since enactment of AB
2293, only five such event authorizations have been
granted. ABC has not identified any enforcement problems
and no disciplinary action has been taken relating to these
events. The sponsor of this bill contends that the low
number of invitation-only events is directly related to the
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very narrow criteria placed in AB 2293 that clearly define
how these private events must be operated by the licensee.
ARGUMENTS IN OPPOSITION : The California Council on
Alcohol Problems states "AB 252, dealing with expanding the
pool of event sponsors to include a manufacturer's agent.
While your sponsors have indicated this bill will only
increase the pool by five or more event sponsors, we are
unclear of that fact."
ASSEMBLY FLOOR : 69-2, 5/5/11
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Chesbro, Conway, Cook, Davis, Dickinson, Eng,
Fletcher, Fong, Fuentes, Galgiani, Gatto, Gordon, Grove,
Hagman, Halderman, Hall, Harkey, Hayashi, Roger
Hern�ndez, Hill, Huber, Hueso, Huffman, Jeffries, Knight,
Lara, Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza,
Miller, Mitchell, Monning, Morrell, Nestande, Norby,
Olsen, Pan, Perea, V. Manuel P�rez, Portantino, Silva,
Skinner, Smyth, Solorio, Swanson, Torres, Valadao,
Wagner, Wieckowski, Williams, John A. P�rez
NOES: Beall, Feuer
NO VOTE RECORDED: Cedillo, Donnelly, Furutani, Garrick,
Gorell, Jones, Nielsen, Yamada, Vacancy
PQ:kc 8/16/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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