BILL ANALYSIS �
AB 2182
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Date of Hearing: April 30, 2014
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Isadore Hall, Chair
AB 2182 (Beth Gaines) - As Amended: March 28, 2014
SUBJECT : Alcoholic beverage control: caterer's permit.
SUMMARY : Permits the issuance of a wine sales event permit to
any licensee under a winegrower's license, which authorizes the
sale of bottled wine produced by the winegrowers at specified
events, to be valid for the "entire duration of the event."
Current law provides that the permit shall be valid for "a
maximum of five consecutive days during the event period," as
specified.
EXISTING LAW :
1) Establishes the Department of Alcoholic Beverage Control
(ABC) and grants it the exclusive authority to administer the
provisions of the Alcoholic Beverage Control Act (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 or occupation taxes for
this purpose.
2) Provides that any licensee under a winegrower's license may
apply to ABC for a wine sales event permit. The wine sales event
permit shall authorize the sale of bottled wine produced by the
winegrower at festivals, state, county, district, or citrus
fruit fairs, civic or cultural celebrations, or similar events
approved by ABC.
3) Provides that the sale of the wine shall not be the primary
purpose of the event, and the sale shall be for consumption off
the premises where sold.
4) Specifies that the permit shall be valid for a maximum of
five consecutive days during the event period, as specified. A
wine sales event permit may not be used more than two times a
month at a particular location.
5) Specifies that consent for sales at each event shall be
first obtained by an annual authorization issued by ABC. The
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applicant for the wine sales permit is required to notify the
city, county, or city and county where the event is being held
at least five days prior to the event. At all events, a copy of
the wine sales permit shall be maintained, as defined.
6) States that a licensee may not sell more than 5,000 gallons
of wine annually pursuant to wine sales event permits issued
under this section to that licensee. A licensee holding a wine
sales event permit may not sell more than 1,250 gallons of wine
per event.
FISCAL EFFECT : Unknown.
COMMENTS :
Purpose of the bill : According to the author, the ABC Act allows
for licensed wine growers to apply for, through the ABC, an
additional license that would allow growers to sell their
product at specific tax-exempt and/or designated events approved
by ABC. These events include festivals, county fairs and
civic/cultural celebrations. The license is classified as a
Type 81 license and is specified in the Business and Professions
Code Section �23399.6. This license allows vendors to attend
events for no more than 5 consecutive days, twice a month at a
particular location. The author notes that there are events in
California that currently exceed the 5-day time period.
The author states that wine growers are experiencing scheduling
issues while trying to participate at specific events due to the
limited scope of the existing license. At times, the structure
of the current license prevents wineries from being able to
participate at specific events because the event sponsors want
the vendor to be on the grounds for the entire event. Some
events, such as the California State Fair or local "renaissance
fairs." often operate for longer than 10 days. Current law is
preventing designated events from being able to showcase local
wineries and hampering the ability of wineries to engage in
large-scale outreach.
AB 2182 would amend current law to allow wine growers with a
Type 81 license to attend events for the entire duration of the
event, thereby giving growers the opportunity to showcase and
sell their product. The bill, however, still maintains a cap of
sales that can occur off the property of the winery on an annual
basis.
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Background :
Tied-house laws : The tied-house laws, developed after
Prohibition, sought to break up and separate the liquor industry
by categorizing and regulating each aspect of the business.
Tied-house laws are essentially divided into manufacturing,
wholesaling, and retailing. Each category is independent of the
other with specific laws ensuring that the relationship between
manufacturers, distributors and retailers remains distinct. The
original policy rationale for this body of law was to prohibit
the vertical integration of the alcohol industry and to protect
the public from predatory marketing practices. Generally, other
than exemptions granted by the Legislature, the holder of one
type of license is not permitted to do business as another type
of licensee within the "three-tier" system.
Current tied-house laws are specific about who can sell
alcoholic beverage products to whom. Generally, manufacturers
must sell their products through wholesalers so that there is no
direct contact between the manufacturer and the retailer or the
consumer.
California wineries : In 2012, there were more than 3,700 bonded
winery premises in California. California's commercial wineries
(brick and mortar) are predominantly family owned and operated
businesses. Roughly, half of the commercial wineries in
California sell less than 5,000 cases of wine. California makes
90% of all U.S. wine and is the world's 4th leading wine
producer after France, Italy and Spain. Three of every five
bottles sold in the U.S. are a California wine. California
exports 47.2 million cases to 125 countries. Winegrapes are
grown in 45 of California's 58 counties, covering 565,000 acres
in 2000. Each year, 21 million tourists visit wine regions
throughout the state to explore and enjoy the wines, the cuisine
and cultural offerings associated with California's signature
industry.
Related legislation : AB 2488 (Levine) of 2014. Authorizes the
operator of the certified farmers' market to allow a licensed
winegrower to conduct an instructional tastings on the subject
of wine, subject to specified conditions. Only "one licensed
winegrower" may conduct an instructional tasting during the
operational hours of the certified farmers' market event.
(Assembly Appropriations Committee)
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Prior legislation : SB157 (Wiggins), Chapter 337, Statutes of
2008. Expanded the list of nonprofit organizations authorized
to receive or purchase wine, beer, and distilled spirits at
prices other than those contained in schedules filed with the
ABC.
SB 108 (Wiggins) Chapter 246, Statutes of 2007. Modified an
existing provision of law that allows wine orders to be taken at
wine tasting events held by specified non-profit organizations
to include three additional types of non-profit organizations -
civic leagues, social organizations and voluntary employees'
beneficiary associations.
SB 88 (Chesbro), Chapter 588, Statutes of 2003. Created a new
ABC wine sales event permit to allow a winegrowers to sell
bottled wine at charity events.
AB 1505 (Wiggins), Chapter 270, Statutes of 2003. Provided that
wine may not be sold or orders solicited, when a wine tasting is
held off the winegrower's premises at an event sponsored by a
private nonprofit organization, as defined, except that the
winegrower would be permitted to accept orders for the sale of
wine when the sales transaction is completed at the winegrower's
premises.
AB 2520 (Thomson), Chapter 384, Statutes of 2000. Authorized the
ABC to issue a certified farmers market permit to allow
winegrowers to sell wine produced and bottled by the winegrower
entirely from grapes grown by the winegrower at such venues.
REGISTERED SUPPORT / OPPOSITION :
Support
Family Winemakers of California
Opposition
None on file
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531
AB 2182
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