BILL ANALYSIS �
AB 2010
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2010 (Gray)
As Amended August 11, 2014
2/3 vote. Urgency
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|ASSEMBLY: | |(April 24, |SENATE: |35-0 |(August 14, 2014) |
| | |2014) | | | |
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(vote not relevant)
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|COMMITTEE VOTE: |18-0 |(August 28, 2014) |RECOMMENDATION: |concur |
|(G.O.) | | | | |
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Original Committee Reference: G.O.
SUMMARY : Adds beer that a brewer considers to have "product
quality" issues to the list of conditions under which beer may be
returned to a wholesaler or manufacturer, subject to Department of
Alcoholic Beverage Control (ABC) approval. In addition, this bill
repeals an existing Section of the Alcoholic Beverage Control Act
(ABC Act) relating to duplicate licenses and the sale and delivery
of beer from branch offices and recasts those provisions, as
specified.
The Senate amendments :
1)Delete an existing section of law within the ABC Act that
requires the ABC to issue a duplicate license to a beer
manufacturer if the beer manufacturer applies for a duplicate
license that permits the beer manufacturer to sell and deliver
beer at or from branch offices and instead, authorizes the
department to issue to a beer manufacturer a duplicate of its
original license where specified privileges are to be exercised
at the branch office.
2)Prohibit the sale or tasting of alcoholic beverages to consumers
at more than six branch office locations and allows two of the
branch office locations to be bona fide eating places owned and
operated by and for the beer manufacturer, as specified. Also,
provides that beer manufacturers who are conducting these
activities under an existing duplicate license issued prior to
AB 2010
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the effective date of this act will not be affected by the
limitations imposed by this measure.
3)Prohibit a branch office location where consumer tastings or
sales for on or off premises consumption are authorized from
selling or serving alcoholic beverages other than beer that is
produced and bottled by, or produced and packaged for, the beer
manufacturer.
4)Specify that a branch office location where the sale of beer and
wine to consumers for consumption on the premises of a bona fide
public eating place is authorized shall not sell or serve
alcoholic beverages other than: a) beer and wine that is
produced and bottled by, or produced and packaged for, the beer
manufacturer and b) beer and wine that is purchased by the beer
manufacturer from a licensed wholesaler that is not owned, either
alone or under common ownership, by the beer manufacturer.
5)Require in order to obtain a duplicate license, with or without
certain privileges as specified, a beer manufacturer to submit
any application forms as ABC may require and, upon request and
payment of a $100 fee by the beer manufacturer, be issued a beer
manufacturer temporary permit for use at a branch office location
during the period the application for a duplicate license is
pending.
6)Provide that any duplicate license issued shall be contingent on
the beer manufacturer consenting to make no changes in the
character or mode of operation of the branch office premises that
would directly or indirectly expand the privileges under the
duplicate license and any such changes shall require
reapplication and reissuance of the duplicate license.
7)Permit a beer manufacturer may continue to exercise privileges at
all of its licensed branch offices that were in existence and
authorized by ABC prior to the effective date of this bill,
including any privileges resulting from any renewal or transfer
of the duplicate licenses for the branch locations, that it was
authorized to exercise prior to that date.
8)Eliminate the existing 30-day prohibition on retail sales of beer
for a branch office with a duplicate license.
9)Add an urgency clause.
EXISTING LAW :
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1)Establishes 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.
2)Permits a licensed beer manufacturer to sell and deliver beer to
consumers from branch offices located away from the licensee's
place of manufacture and exercise all privileges, other than
manufacture, at or from the branch offices. Requires ABC to
issue a duplicate license to a beer manufacturer if the beer
manufacturer applies for a duplicate license. Under existing
law, for 30 days from the date of the issuance of a duplicate
license, retail sales of beer are prohibited at a branch office
for which the duplicate license was issued.
AS PASSED BY THE ASSEMBLY , this bill allowed 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 : According to the Senate Appropriations Committee,
pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS :
Purpose of the bill: According to the author's office, this bill
limits the existing expedited duplicate licensing process to the
licensure of a beer manufacturer's storage facility and its
operations that are conducted for this purpose alone. Also, this
bill requires a beer manufacturer's duplicate license for a taproom
or bona fide public eating place to undergo the same local review
and approval process that every bar, tavern and restaurant owner
must comply with in order to be licensed. In addition, this bill
limits the number of duplicate licenses to a maximum of six
taprooms, and of these, up to two may be for bona fide eating
places. The author's office states that a beer manufacturer who is
now conducting these on-premises activities under any existing
duplicate license issued prior to January 1, 2015, will not be
affected by this bill. Furthermore, the author's office emphasizes
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that this measure is simply intended to update the beer
manufacturer's duplicate license by leveling the playing field
between duplicate licenses and all other retail licensees.
The author's office points out that the second component of this
bill is intended to address 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 producers asked their distributors to remove this
beer from retail accounts but existing law 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. The author's
office contends that this bill would remedy this situation and
permit beer removal for product quality concerns, subject to ABC
approval.
Analysis Prepared by : Eric Johnson / G.O. / (916) 319-2531
FN: 0005557