BILL ANALYSIS �
AB 2010
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Date of Hearing: April 2, 2014
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Hall III, Isadore, Chair
AB 2010 (Gray) - As Introduced: February 20, 2014
SUBJECT : Alcoholic beverages: beer returns: product quality.
SUMMARY : Allows a wholesaler or manufacturer to accept the
return of beer that a brewer considers to have "product quality
issues." Specifically, this bill :
1) Permits the return of beer by a retailer to a seller, and by
a seller to a manufacturer or importer, if the beer has "product
quality issues,"as specified.
2) Provides that a seller of beer may exchange with the
manufacturer or importer the returned beer that was recalled or
considered to present "product quality issues." The returned
beer may be exchanged for identical product, if safe inventory
or quality-controlled product inventory is available or the
seller of beer may elect to receive either a refund or be issued
a credit memorandum by the manufacturer or importer.
EXISTING LAW :
1) Establishes the Department of Alcoholic Beverage Control
(ABC) and grants it exclusive authority to administer the
provisions of the 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.
2) 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).
3) Permits the return of beer for errors in delivery, health
and safety recalls and the identical exchange of out-of-code
products.
4) Authorizes a wholesaler or manufacturer of beer to accept
the return of quantities of discontinued or seasonal brands of
AB 2010
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beer from a retail licensee, provided that the returned beer is
exchanged for a quantity of beer of a brand produced or sold by
the same manufacturer with a value not greater than the original
sales price to the retail licensee of the returned beer.
5) Authorizes an alcoholic beverage licensee to accept the
return of unsold and unopened beer from an organization that has
obtained a temporary daily license. Permits the licensee to
credit the account of the organization in an amount not to
exceed the original sales price of the returned beer, provided
that the beer has been paid for in full.
FISCAL EFFECT : Unknown.
COMMENTS :
Purpose of the bill : According to the author's office, AB 2010
adds beer that a brewer considers to have "product quality
issues" to the list of conditions under current law which beer
may be returned to a wholesaler or manufacturer. Recently,
there have been at least two instances in which beer
manufacturers have identified "product quality issues" in beer
that had been delivered to retailers. Although the beer did not
present health and safety issues when consumed, the yeast in the
beer had soured the flavor of the beer and was not the high
quality the brewers desired and consumers expect to enjoy. The
brewers asked their distributors to remove this beer from retail
accounts but due to current law, no statute exists to permit
this action. In response, ABC had to grant a one-time waiver to
each brewer to accept the return of beer from a retailer. AB
2010 will remedy this situation and permit beer removal for
product quality concerns.
Prior legislation : AB 782 (Bocanegra), Chapter 242, Statutes of
2013. Authorized a licensed caterer who has obtained a
caterer's event permit to return unsold beer to the beer
distributor or manufacturer for credit, thereby eliminating the
need for a beer distributor or manufacturer to continuously
exchange out-of-code beer involving catered events.
SB 1393 (Negrete McLeod), Chapter 163, Statutes of 2012.
Allowed a manufacturer or wholesaler of beer to accept the
return of recalled beer for health or safety issues and exchange
the beer or credit the retailer. In addition, permits the
return of unsold and unopened beer from an organization that
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obtained a temporary license, as specified.
AB 3071 (Assembly Governmental Organization Committee), Chapter
508, Statutes of 2008. Among other things, authorized beer that
is recalled for health or safety issues to be accepted for
return at any time from a retailer and be picked up by the
seller of beer. Also, permitted the seller of beer to exchange
the returned beer for identical product, issue a deferred
exchange memorandum showing the beer was picked-up and is to be
replaced when inventory is available, or issue a credit to the
retailer for the returned beer.
AB 3065 (Assembly Governmental Organization Committee), Chapter
910, Statutes of 2006. Among other things, extended the time
frame (from six weeks to three months) in which a beer
manufacturer or beer wholesaler is authorized to provide
assistance to retailers whose equipment, fixtures, or supplies
were lost or damaged as a result of a natural disaster and whose
premises are located in an area proclaimed to be in a state of
disaster by the Governor.
REGISTERED SUPPORT / OPPOSITION :
Support
California Beer and Beverage Distributors
Opposition
None on file
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531