BILL ANALYSIS �
AB 2184
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Date of Hearing: May 2, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2184 (Hall) - As Introduced: February 23, 2012
Policy Committee: Governmental
Organization Vote: 16 - 0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill provides a tied-house exemption for bottles of
distilled spirits that are autographed at promotional events
conducted at off-sale licensed retail premises by a person who
holds an ownership interest in that distilled spirit.
Specifically, the bill states that the autograph does not
constitute a thing of value and therefore is not a violation of
tied-house laws.
FISCAL EFFECT
There are no significant costs associated with this legislation.
COMMENTS
1)Rationale . According to the author, this bill is intended to
allow public figures who have an ownership interest in a brand
of distilled spirits to conduct marketing and promotional
events that include autograph bottle signing at a location
that holds an off-sale general license issued by the
department of Alcoholic Beverage Control (ABC).
In recent years, it has become more common for individuals in
the entertainment industry in particular to acquire an
ownership interest in a brand of distilled spirits or create a
new spirits line. These individuals will often promote the
product at the retail point of sale through personal
appearances which may include bottle signing events in grocery
stores and bottle shops which stock the product.
AB 2184
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ABC has taken the position that the appearance of any public
personality appearing at a licensed retail premises
constitutes a thing of value which is in violation of current
ABC Tied-house laws because the presence of that individual at
the licensed location would draw an extraordinary level of
business to that retailer. In addition, if a bottle were to
be autographed by the public figure it would be considered a
premium which would be in violation of the ABC Act.
2)Tied-House Laws . California's tied-house laws separate the
alcoholic beverage industry into three component parts or
tiers of manufacturers (including breweries, wineries, and
distilleries), wholesalers, and retailers (both on-sale and
off-sale). These laws restrict certain ownership structures
and business relationships within the alcoholic beverage
industry, and create a public policy model for the following
purposes:
To promote the State's interest in an orderly market.
To prohibit vertical integration and dominance by a
single producer.
To prohibit commercial bribery and protect the public
from predatory marketing practices.
To discourage or prevent the intemperate use of
alcoholic beverages.
The Legislature has generally prohibited forms of
cross-ownership between manufacturers and retailers, and
discouraged manufacturers from providing anything of value -
free goods, services, or advertising - to distributors or
retailers. Numerous exceptions to these restrictions have been
enacted over the years in instances where the Legislature
determined that the public's interests are protected.
1)Related legislation . AB 605 (Portantino), Chapter 230,
Statutes of 2010, creates a new type of license that allows
the tasting of beer, wine, and distilled spirits at off-sale
licensed premises.
AB 2293 (De Leon), Chapter 638, Statutes of 2008, added a new
provision to the ABC Act that permits a manufacturer of
distilled spirits, winegrower, rectifier, or distiller, or its
authorized agent to provide their product, as well as
entertainment and food to consumers over 21 years of age
during invitation-only events (free of charge). The events
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must occur on premises for which a caterer's permit
authorization has been issued. The bill sunsets on January 1,
2014.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081