BILL ANALYSIS �
Bill No: SB
32
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
SB 32 Author: Leno
As Introduced: December 6, 2010
Hearing Date: March 22, 2011
Consultant: Art Terzakis
SUBJECT
Alcoholic Beverages: definitions: rectifiers
DESCRIPTION
SB 32 adds clarity to the definition of "rectifier" within
the Alcoholic Beverage Control (ABC) Act by expressly
excluding from the definition any on-sale licensee that
colors, flavors, or blends distilled spirits or wine
products on the licensed premises for consumption on those
premises.
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.
Existing law (Business & Professions Section 23016) defines
"rectifier" to mean every person who colors, flavors, or
otherwise processes distilled spirits by distillation,
blending, percolating, or other processes.
Existing law (Business & Professions Section 23005) defines
"distilled spirits" to mean an alcoholic beverage obtained
by the distillation of fermented agricultural products, and
includes alcohol for beverage use, spirits of wine,
whiskey, rum, brandy, and gin, including all dilutions and
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mixtures thereof.
Existing law (Business & Professions Section 23368.1)
relating to a "distilled spirits rectifier's general
license" authorizes the licensee to cut, blend, rectify,
mix, flavor, and color distilled spirits, and whether so
cut, blended, mixed, flavored, or colored by him or any
other person to package, label, export, and sell the
distilled spirits to distilled spirits manufacturers,
distilled spirits manufacturer's agents, distilled spirits
wholesalers, distilled spirits general importers,
rectifiers, and distilled spirits general rectifiers.
Existing law defines an "on-sale" license as authorizing
the sale of all types of alcoholic beverages: namely, beer,
wine and distilled spirits, for consumption on the premises
(such as at a restaurant or bar). An "off-sale" license
authorizes the sale of all types of alcoholic beverages for
consumption off the premises in original, sealed
containers.
BACKGROUND
The Problem: In late February 2010, the Department of ABC
announced that it would be cracking down on bars and
restaurants that were breaking the law (e.g., altering
alcohol) by making their own "infused" drinks. The
department initially had issued an industry advisory, or
warning, in May 2008 relating to rectification of distilled
spirits in on-sale premises (bars and restaurants) that was
designed to prevent bartenders from modifying drinks to
increase the alcohol content of distilled spirits in
violation of existing license privileges. "Rectification"
is defined as any process or procedure whereby distilled
spirits (vodka, gin, tequila) are cut, blended, mixed or
infused with any ingredient (spices, herbs, fruit,
vegetables, etc.) which reacts with the constituents of the
distilled spirits and changes the character and nature or
standards of identity of the distilled spirits. One
example of rectification is, but not necessarily limited
to, creating products such as 'lemoncello" or "limoncello"
in which sugar and citrus products are combined with vodka
and stored, initiating a maturation process which
consequently changes the character and nature of the vodka,
and possibly its alcohol content. The simple mixing of
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alcoholic beverages with other ingredients for immediate
consumption (e.g., mint leaves in mojitos) is not
considered rectification.
The author's office notes that the original intent of ABC
law referenced above was to protect the public from watered
down or adulterated - and potentially dangerous - alcoholic
beverages. The author's office contends that such concerns
no longer apply to the current practice of treating spirits
as an element of culinary creativity. The author's office
estimates that approximately 50% of San Francisco area bars
created and served infusions prior to the department taking
action to issue warnings to licensees. Many of these
establishments stopped serving infusions with a resulting
drop in business.
The Solution: This measure would modify the definition of
rectifier within the ABC Act so as not to require that an
on-sale licensee obtain a separate rectifier license for
this business activity (infusion) . Specifically, this
measure is intended to permit on-sale licensees to engage
in the artisanal practice of making small amounts of
spirits flavored with fruit, vegetables and spices on the
licensed premises for consumption solely on the licensee's
premises. The author's office emphasizes that SB 32 would
simply update existing law to recognize this innovation and
validate the existing practice.
Arguments in Support: Proponents argue that the act or art
of mixing drinks from distilled spirits or wine for
consumption on licensed premises should not be considered a
production process requiring a separate license.
Proponents believe that SB 32 is a straightforward solution
that relieves a potential enforcement situation for tens of
thousands of license holders throughout the state.
PRIOR/RELATED LEGISLATION
SB 39 (Padilla) 2011-12 Session. Would prohibit the
import, production, manufacture, distribution, or sale of
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"caffeinated" beer beverages, as defined, at retail
locations within the state. (Pending in this Committee)
SB 1022 (Strickland) Chapter 281, Statutes of 2010.
Expanded an existing tied-house exception within the ABC
Act 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.
SUPPORT: As of March 18, 2011:
California Music and Culture Association
California Restaurant Association
Family Winemakers of California
Golden Gate Restaurant Association
OPPOSE: None on file as of March 18, 2011.
FISCAL COMMITTEE: Senate Committee on Appropriations
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