BILL ANALYSIS �
Bill No: AB
2182
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Lou Correa, Chair
2013-2014 Regular Session
Staff Analysis
AB 2182 Author: Beth Gaines
As Amended: March 28, 2014
Hearing Date: June 10, 2014
Consultant: Art Terzakis
SUBJECT
Alcoholic Beverages: wine sales events permits
DESCRIPTION
AB 2182 modifies a provision of the Alcoholic Beverage
Control (ABC) Act which currently allows a licensed
winegrower to apply for a wine sales event permit that
allows wine to be sold at fairs and cultural events for a
maximum of five consecutive days to instead, make the
permit valid for the entire duration of the event.
EXISTING LAW
Existing law establishes the Department of 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 for this purpose.
Existing law (Business & Professions Code Section 23399.6)
authorizes the ABC to issue a wine sales event permit (Type
81 license) to allow a licensed winegrower to sell bottled
wine (produced by the winegrower) at festivals, county
fairs, civic/cultural celebrations or similar events held
by organizations operated for nonprofit purposes, as
defined. The law provides that each permit shall be valid
for a maximum of five consecutive days at that particular
event and limits sponsorship of such events to certain
AB 2182 (Beth Gaines) continued
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nonprofit organizations defined in the Revenue and Taxation
Code. Additionally, the law 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.
Furthermore, a wine sales event permit may not be used more
than two times a month at a particular location and 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.
Existing law, known as the "tied-house" law, separates the
alcoholic beverage industry into three component parts of
manufacturer, wholesaler, and retailer. 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.
BACKGROUND
Purpose of AB 2182: The author's office points out wine
growers have encountered struggles attending certain events
(e.g., the State Fair, renaissance fairs, county fairs,
etc.) that exceed the limited scope of the existing Type 81
ABC license. This measure is intended to recognize that
qualifying fairs and cultural events often span a greater
duration than the five-day wine sales event permit
currently allows and that the proposed modification to
existing law simply matches the length of the permit to the
length of the event. Proponents indicate such events are a
viable channel for wine sales and they strongly believe
that AB 2182 is crucial for small wine producers to reach
the full potential of their business capacity.
Writing in opposition, Alcohol Justice argues that "AB 2182
will expand the availability of alcoholic products while
eroding the three-tier system which provides public health
and safety protections. Evidence shows that increased
availability of alcoholic beverages is correlated with an
increase in alcohol related harm."
PRIOR/RELATED LEGISLATION
AB 2182 (Beth Gaines) continued
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AB 2609 (Nestande), 2013-14 Session. Would add a new
provision to the ABC Act that allows nonprofit
organizations established for the purpose of promoting home
brewing to serve beer at fundraising events subject to
specified conditions. (Pending in this Committee)
AB 2488 (Levine), 2013-14 Session. Would expand an
existing provision of the ABC Act which currently allows a
licensed winegrower, under specified conditions, to sell
estate grown wine at certified farmers' markets to also
grant the licensed winegrower the privilege of conducting
limited wine tastings for consumers at farmers' markets
under certain circumstances. (Pending in this Committee)
SB 157 (Wiggins), Chapter 337, Statutes of 2008. Modified
an existing provision of the ABC Act that allows
winegrowers to sell bottled wine at events sponsored by
certain tax-exempt organizations as specified by the
Revenue and Taxation Code to include three additional types
of non-profit organizations (e.g., civic leagues, social
organizations and voluntary employees' beneficiary
associations). Also, expanded the list of nonprofit
organizations that are authorized to receive or purchase
wine at prices other than those contained in schedules
filed with the Department of ABC.
SB 88 (Chesbro), Chapter 588, Statutes of 2003.
Established a new ABC wine event sales permit to allow
licensed winegrowers to sell bottles of wine at non-profit
events where attendance is not expected to exceed 1,000
attendees. Also, limited sales to 5,000 gallons annually.
AB 2520 (Thomson), Chapter 384, Statutes of 2000.
Authorized licensed winegrowers to obtain certified
farmers' market sales permits authorizing the sale of wine
at farmers' markets, as specified.
SUPPORT: As of June 6, 2014:
Family Winemakers of California
Placer County Vintners Association
Strad Meadery
OPPOSE: As of June 6, 2014:
Alcohol Justice (formerly Marin Institute)
AB 2182 (Beth Gaines) continued
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FISCAL COMMITTEE: Senate Appropriations Committee
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