BILL ANALYSIS �
AB 2010
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Date of Hearing: April 9, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2010 (Gray) - As Introduced: February 20, 2014
Policy Committee: Governmental
Organization Vote: 19-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill allows a retail licensee to return beer to the
wholesaler or manufacturer if it is recalled or considered by a
manufacturer, importer, or governmental entity to present issues
of "product quality." It allows beer returned for product
quality issues to be exchanged for "quality-controlled product
inventory," if available from the wholesaler or manufacturer.
FISCAL EFFECT
Insignificant and absorbable costs to the Department of
Alcoholic Beverage Control (ABC) for monitoring and enforcement.
COMMENTS
1) Purpose. According to the author, there have been at least
two recent instances in which beer manufacturers have
identified "product quality issues" in beer that had been
delivered to retailers. Although the beer at issue did not
present health and safety concerns when consumed, the yeast in
the beer had soured its flavor, and as a result, the beer did
not achieve the quality the brewers desired and consumers
expected to enjoy. The manufacturers asked their distributors
to remove this beer from retail accounts but the current
statute did not permit that action. In response, ABC granted
a one-time waiver to each brewer to accept the return of the
beer from retailers.
2) Existing law. Current law allows a retail licensee to return
beer only under limited circumstances, including:
AB 2010
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a) within 15 days of the date the beer was delivered to the
retail licensee;
b) at any time for certain seasonal and/or discontinued
products, beer purchased for special events, or beer that
is produced by temporary manufacturing licensees;
c) at any time from retail licensees that have had their
license suspended or revoked; or
d) at any time for beer that presents issues of health or
safety.
AB 2010 permits a retail licensee to return beer that presents
issues of "product quality" in the same manner as beer that
presents issues of health and safety.
3) Staff comment. The author and supporters may wish to consider
whether the concept of "product quality" is sufficiently
narrow and unambiguous to achieve the bill's desired
objectives without becoming a means to circumvent the general
prohibition on beer returns. The author may wish to consider
defining "product quality" and "quality-controlled product"
for this purpose.
Analysis Prepared by : Joel Tashjian / APPR. / (916) 319-2081