BILL ANALYSIS �
Bill No: AB
2609
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Lou Correa, Chair
2013-2014 Regular Session
Staff Analysis
AB 2609 Author: Nestande
As Amended: June 2, 2014
Hearing Date: June 10, 2014
Consultant: Art Terzakis
SUBJECT
Alcoholic Beverages: home brewers and home winemakers
DESCRIPTION
AB 2609 adds a new provision to the Alcoholic Beverage
Control (ABC) Act that allows nonprofit organizations
established for the purpose of promoting home brewing to
serve beer at fundraising events subject to specified
conditions. Specifically, this measure:
1.Stipulates that a nonprofit organization established for
the purpose of promoting home production of beer shall be
eligible to serve beer at a fundraising event conducted
solely for the benefit of the nonprofit organization
subject to the following conditions:
a. The beer that is served is donated by home brewers.
b. The nonprofit shall be issued no more than 2
permits per calendar year by the Department of ABC for
the serving of beer.
c. The nonprofit must display a printed notice at the
event that home brewed beer is not a regulated product
subject to health and safety standards.
d. The event must have an educational component, as
specified.
e. Only bona fide members of the nonprofit may attend
the event and the nonprofit shall not solicit or sign
up individuals to be members on the day of the event
at the event premises.
AB 2609 (Nestande) continued
Page 2
f. If more than 50 members are expected to be in
attendance at the event, the nonprofit must provide
ABC with the number of members that have registered
for the event and the estimated number that will be in
attendance, 48 hours prior to the event.
2.In addition, this measure modifies an existing provision
of law that permits the removal of home brewed beer or
wine from the site of production for use, including
tasting by judges, in a bona fide competition or
exhibition to instead, allow for such removal for use ,
including in a bona fide competition or judging or a bona
fide exhibition or tasting.
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 authorizes a person over 21 years of age to
manufacture beer or wine (200 gallons per calendar year if
there are two or more adults in the household or 100
gallons if there is only one adult in the household) for
personal or family use, and not for sale, without the need
for a license or permit.
Existing law authorizes the removal of beer or wine,
manufactured for personal or family use, from the premises
where manufactured only under the following circumstances:
(1) for use, including tasting by judges, in a bona fide
competition or exhibition; (2) for personal or family use;
and, (3) when donated to a nonprofit organization for sale
at fundraising events conducted solely by and for the
benefit of the nonprofit and pursuant to a license issued
by ABC to the nonprofit entity. Current law explicitly
prohibits nonprofit organizations that promote home brewing
or home winemaking or are primarily composed of home
brewers or home winemakers from selling beer pursuant to
this body of law.
Existing law, known as the "tied-house" law, separates the
AB 2609 (Nestande) continued
Page 3
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 2609 : The author's office references the
fact that AB 1425 (Assembly G.O. Committee) of last year,
(Chapter 463 of 2013), was intended to revise the law
pertaining to a person who manufactures beer or wine for
personal or family use without the need for a license or
permit. The author's office states that AB 1425 authorized
home brewed beer to be removed from the premises where made
only when used in a bona fide competition or exhibition,
for personal or family use, or when donated to a nonprofit
organization for sale at a fundraising event, excluding
nonprofit organizations that either promote home brewing or
home winemaking or that are primarily composed of home
brewers or home winemakers, as specified.
According to the author's office, AB 2609 is intended to
revise the description regarding the authorized removal of
home brewed beer from the home for use at a competition,
judging, exhibition, or tasting. It also seeks to provide
express authorization for nonprofit home brew associations
to host annual or semi-annual events for their members to
gather and participate in exhibitions, judgings, tastings
or competitions. Additionally, AB 2609 limits the number
of permits that can be issued for such events to two per
each nonprofit, per calendar year. Additionally, AB 2609
requires an educational component per event, and provides
that the entity sponsoring the event must display a printed
notice at the event stipulating that the home brewed beer
is not subject to certain health and safety standards
pertaining to manufactured beverages.
The author's office points out that prior to the passage of
AB 1425 of 2013, the California Homebrewers Association
(CHA) held an annual event for their members to gather and
share their craft. These events featured judging,
AB 2609 (Nestande) continued
Page 4
tastings, educational components, and provided members the
opportunity to expand their knowledge about home brewed
beer. CHA had been issued permits by ABC to host such
events. Unfortunately, in light of the enactment of AB
1425, the Southern California Home Brew Festival had to be
cancelled this year. The author's office also notes that
existing law might prevent the 2015 National Homebrewers
Conference, scheduled in San Diego, from being held.
Arguments in Support: Writing in support, the California
Homebrewers Association (CHA) states that "the passage of
AB 1425 of last year dealt a devastating blow to our
organization when the unintended consequences of that law
led to the cancellation of the 24th year of the Southern
California Homebrewers Festival. The CHA believes that
passage of AB 2609 will clarify the law to allow sharing
between homebrew clubs as had been possible since the
1980's." Also writing in support, the American Homebrewers
Association (AHA) states that "if AB 2609 is not passed,
the AHA may be forced to cancel the 37th Annual National
Homebrewers Conference planned to be held in San Diego in
2015. The Conference is annually the largest gathering of
homebrewers in the world and is expected to draw 4000-5000
attendees in 2015, generating approximately $8 million for
the local economy."
Arguments in Opposition: Writing in opposition, Alcohol
Justice argues that "AB 2609 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."
Staff Comments: This measure is intended to correct an
unintended consequence of enactment of AB 1425 of last year
(Chapter 463/2013). Among other things, AB 1425 addressed
a problem which had arisen regarding home winemakers and
the use of their home-made wine at community (nonprofit)
fundraisers. Specifically, ABC had asserted that charging
an admission fee to nonprofit sponsored events, exhibitions
or competitions was equivalent to selling the tastings
taking place. ABC's conclusion resulted in the
cancellation of the decades old Napa Classic home
winemakers' festival which was the major support for the
Dry Creek Volunteer Fire Department.
AB 2609 (Nestande) continued
Page 5
AB 1425 allowed beer or wine made for personal or family
use to be donated to a non-profit organization for sale at
a fundraising event conducted solely by and for the benefit
of the nonprofit organization and only for consumption on
the premises of the fundraising event under a license
issued by ABC to the nonprofit. AB 1425 also imposed
various labeling requirements on the donated beer or wine
and stipulated that the label identify its producer and
state that the beer or wine is homemade and not available
for sale or for consumption off the licensed premises.
Furthermore, AB 1425 excluded from this authorization
nonprofit organizations that either promote home brewing or
home winemaking or that are primarily composed of home
brewers or home winemakers.
As currently drafted, AB 2609 may not necessarily fix the
problem but could instead turn home brew events into
businesses and allow for an unregulated product (home
brewed beer) to be sold. Additionally, several provisions
of AB 2609 may be difficult if not impossible for ABC to
verify and enforce. For example, AB 2609 provides that only
bona fide members of the nonprofit may attend the event and
the nonprofit shall not solicit or sign up individuals to
be members on the day of the event at the event premises.
Furthermore, AB 2609 states that if more than 50 members
are expected to be in attendance at such an event, the
nonprofit must provide ABC with the number of members that
have registered for the event and the estimated number that
will be in attendance, 48 hours prior to the event.
Committee staff suggests that the author or members of the
Committee consider a simpler solution to the problem
referenced above pertaining to AB 1425 of last year.
Suggested amendments are as follows:
Strike changes made to existing law found on page 2
lines 13-14 and line 17.
On page 3, strike lines 13-16.
On page 3, strike lines17-40 and on page 4, strike
lines 1-3.
PRIOR/RELATED LEGISLATION
AB 2182 (B. Gaines), 2013-14 Session. Would modify an
existing provision of law which 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
AB 2609 (Nestande) continued
Page 6
maximum of five consecutive days to instead, make the
permit valid for the entire duration of the event.
(Pending in this Committee)
AB 1425 (Governmental Organization Committee), Chapter 463,
Statutes of 2013. Among other things, allowed beer or wine
made for personal or family use to be donated to a
non-profit organization and used at a fundraising event
conducted solely by and solely for the benefit of the
nonprofit organization and only for consumption on the
premises of the fundraising event, provided that a license
is issued by the ABC.
SB 607 (Wiggins), Chapter 28, Statutes of 2008. Authorized
a person to manufacture wine for personal or family use in
an amount not to exceed 100 or 200 gallons per household
per calendar year without the need for a license or permit,
as provided. Also, authorized the removal of wine,
manufactured for personal or family use, from the premises
where manufactured for use, including use at organized
affairs, exhibitions or competitions, such as homemakers'
contests, tastings, or judgings.
SUPPORT: As of June 6, 2014:
American Homebrewers Association
California Homebrewers Association
And, numerous letters from homebrewers throughout the State
OPPOSE: As of June 6, 2014:
Alcohol Justice (formerly Marin Institute)
FISCAL COMMITTEE: Senate Appropriations Committee