Bill Text: CA SB420 | 2019-2020 | Regular Session | Amended
Bill Title: Alcoholic beverage licensees: beer and wine importers, beer and wine importers general, and beer and wine wholesalers.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2019-06-06 - Referred to Com. on G.O. [SB420 Detail]
Download: California-2019-SB420-Amended.html
|
Amended
IN
Senate
March 25, 2019 |
CALIFORNIA LEGISLATURE—
2019–2020 REGULAR SESSION
| Senate Bill | No. 420 |
| Introduced by Senator Archuleta |
February 21, 2019 |
An act to amend Section 23008 of the Business and Professions Code, Sections 23320, 23366.5, 23373.1, 23374.6, 23375.6, 23378.05, 23378.1, 23379, 23396.3, 23399.3, 23661.7, 23776, 23817.8, 23820, 23958.1, 24045.18, 25000, 25000.2, 25000.6, 25000.7, 25000.9, 25501, 25502, 25502.2, 25503.2, 25503.5, 25503.55, 25503.56, 25503.57, 25503.6, 25503.7, 25503.8, 25503.85, 25503.9, 25503.14, 25503.24, 25503.26, 25503.31, 25503.33, 25503.34, 25503.36, 25503.38, 25503.39, 25503.41, 25503.42, 25503.45, 25503.56, 25509, 25600, 25600.1, and 25600.2 of the Business and Professions Code, and to amend Section 32176 of the Revenue and Taxation Code, relating to alcoholic beverages.
LEGISLATIVE COUNSEL'S DIGEST
SB 420, as amended, Archuleta.
Alcoholic beverage control: definitions: person. licensees: beer and wine importers, beer and wine importers general, and beer and wine wholesalers.
Existing law, the Alcoholic Beverage Control Act, which is administered by the Department of Alcoholic Beverage Control, regulates the application, issuance, and suspension of alcoholic beverage licenses. Existing law establishes a beer and wine importer’s license, a beer and wine importer’s general license, and a beer and wine wholesaler license with specified privileges and restrictions attached to each license, as provided. A violation of the Alcoholic Beverage Control Act is a misdemeanor, unless another penalty or punishment is specified.
This bill would remove the beer and wine importer, the beer and wine importer’s general, and the beer and wine wholesaler licenses and replace them with a separate beer or wine license, as specified,
and would make relating changes within the Alcoholic Beverage Control Act with regard to the privileges and restrictions on these licenses. Because the violation of a provision of a license is punishable as a misdemeanor and the bill would create a new category of license, the bill would expand the definition of a crime, thereby imposing a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
The Alcoholic Beverage Control Act contains various provisions regulating the application for, the issuance of, the suspension of, and the conditions imposed upon, alcoholic beverage licenses by the Department of Alcoholic Beverage Control, and defines various terms for specified purposes. The act includes a definition of “person” and defines that term as any individual, firm, copartnership, joint adventure, association, corporation, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, and the plural as well as the singular number.
This bill would specify the definition of “person” includes limited liability companies and limited liability partnerships.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee:Bill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 23320 of the Business and Professions Code is amended to read:23320.
(a) The following are the types of licenses and the annual fees to be charged therefor:Name & License Type Number: | Fee Effective 01/01/10 | |
(1) Beer manufacturer: (a) Beer manufacturers that produce 60,000 barrels or less a year (Type 23)
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(b) All other beer manufacturers (Type 1)
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(c) Branch Office —Small Beer Manufacturers (Type 23D)
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—Beer Manufacturers (Type 1D)
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| $161.00 $1334.00 $85.00 $85.00 | |
(2) Winegrower or wine blender (to be computed only on the gallonage produced or blended) (Type 2 & Type 22): —5,000 gallons or less
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—Over 5,000 gallons to 20,000 gallons per year
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—Over 20,000 to 100,000 gallons per year
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—Over 100,000 to 200,000 gallons per year
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—Over 200,000 gallons to 1,000,000 gallons per year
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—For each 1,000,000 gallons or fraction thereof over 1,000,000 gallons an additional
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Winegrower (Branch Office) - (Type 2D)
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| $62.00 $115.00 $208.00 $274.00 $406.00 $265.00 $85.00 | |
(3) Brandy manufacturer (Type 3)
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Brandy manufacturer (Branch Office) (Type 3D)
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| $271.00 $248.00 | |
(4) Distilled spirits manufacturer (Type 4)
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| $444.00 | |
(5) Distilled spirits manufacturer’s agent (Type 5)
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| $444.00 | |
(5a) California winegrower’s agent (Type 27)
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| $444.00 | |
(6) Still (Type 6)
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| $67.00 | |
(7) Rectifier (Type 7)
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| $444.00 | |
(7a) Distilled spirits rectifier’s general license (Type 24)
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| $444.00 | |
(8) Wine rectifier (Type 8)
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| $444.00 | |
(9)Beer & wine importer (Type 9) (9) Beer importer (Type __)
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Wine importer (Type __)
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| $67.00 $67.00 $67.00 | |
(10)Beer & wine importer’s general license (Type 10) (10) Beer importer’s general license (Type __)
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Wine importer’s general license (Type __)
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| $296.00 $296.00 $296.00 | |
(11) Brandy importer (Type 11)
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| $67.00 | |
(12) Distilled spirits importer (Type 12)
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| $67.00 | |
(13) Distilled spirits importer’s general license (Type 13)
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| $444.00 | |
(14) Public warehouse (Type 14)
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| $67.00 | |
(15) Customs broker (Type 15)
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| $67.00 | |
(16) Wine broker (Type 16)
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| $90.00wholesaler (Type 18)
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| $444.00 |
(18a) California brandy wholesaler (Type 25)
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| $444.00 | |
(19) Industrial alcohol dealer (Type 19)
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| $90.00 | |
(20) Retail package off-sale beer & wine (Type 20)
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| $242.00 | |
(21) Retail package off-sale general license (Type 21) and controlled access cabinet permit (Type 66)
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| $537.00 | |
(22) On-sale beer (Type 40 & Type 61); On-sale beer & wine (Type 42); Special on-sale beer & wine (Theater) (Type 69); and Special on-sale beer & wine (Symphony) cabinet permit (Type 66)
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| $248.00 | |
(23) On-sale beer & wine eating place (Type 41)
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| $335.00 | |
(24) On-sale beer & wine license for trains (per train) (Type 43)
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| $100.00 | |
(25) On-sale beer license for fishing party boats (per boat) (Type 44)
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| $100.00 | |
(26) On-sale beer & wine license for boats (per boat) (Type 45)
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| $100.00 | |
(27) On-sale beer & wine license for airplanes (per scheduled flight) (Type 46)
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| $100.00 | |
(28) On-sale general license (Types 47, 48, 57, 70, 75, 78, 78D (for 78D see Section 23396.2)) and club caterer’s permit (Type 58): —In cities of 40,000 population or over
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—In cities of less than 40,000 but more than 20,000 population
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—In all other localities
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Duplicate on-sale general license (Types 47D, 48D, 57D) and portable bar license (Type 68): —In cities of 40,000 population or over
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—In cities of less than 40,000 but more than 20,000 population
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—In all other localities
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| $846.00 $620.00 $551.00 $609.00 $360.00 $284.00 | |
(29) On-sale general license for seasonal business (Type 49): —In cities of 40,000 population or over (per quarter)
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—In cities of less than 40,000 but more than 20,000 population (per quarter)
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—In all other localities (per quarter)
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Duplicate on-sale general license for seasonal business (Type 49D): —In
cities of 40,000 population or over (per quarter)
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—In cities of less than 40,000 but more than 20,000 population (per quarter)
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—In all other localities (per quarter)
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| $215.00 $153.00 $134.00 $153.00 $90.00 $71.00 | |
(30) (a) On-sale general license for bona fide clubs, (b) Club license (issued under Article 4 of this chapter), or (c) Veterans’ club license (issued under
Article 5 (commencing with Section 23450) of this chapter) (Types 50, 51, 52, & 64): —In cities of 40,000 population or over
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—In cities of less than 40,000 but more than 20,000 population
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—In all other localities
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| $488.00 $366.00 $325.00 | |
(31) On-sale general license for trains and sleeping cars (Type 53)
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—Duplicate on-sale general license for trains and sleeping car companies (Type 53D)
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| $189.00 $67.00 | |
(32) On-sale general license for boats (Type 54)
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| $491.00 | |
(33) On-sale general license for airplanes (Type 55)
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—Duplicate on-sale general license for air common carriers (Type 55D)
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| $491.00 $67.00 | |
(34) On-sale general license for vessels of more than 1,000 tons burden (Type 56) and for Maritime Museum (Type 76)
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—Duplicate on-sale general license for vessels of more than 1,000 tons burden (Type 56D) and for Maritime Museum (Type
76D)
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| $189.00 $67.00 | |
(35) On-sale general bona fide public eating place intermittent dockside license for vessels of more than 7,000 tons displacement (Type 62)
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| $531.00 | |
(36) On-sale special beer & wine license for hospitals, convalescent homes, and rest homes (Type 63)
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| $83.00 | |
(37) On-sale beer & wine seasonal (Type 59) and on-sale beer seasonal (Type 60) —Operating period 3-9 months
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—Operating period 3-6 months
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| $208.00 $141.00 |
(b) Beginning January 1, 2013, and each January 1 thereafter, the department may adjust each of the fees specified in this section by increasing each fee by an amount not to exceed the percentage that the
Consumer Price Index (United States Bureau of Labor Statistics, West Region, All Urban Consumers, All Items, Base Period 1982-84 =100) for the preceding April 2011, and each April annually thereafter, has increased under the same index over the month of April 2010, which shall be the base period. No fee shall be decreased pursuant to this adjustment below the fee currently in effect on each December 31. In the event that this index is discontinued, the department shall consult with the Department of Finance to convert the increase calculations to an index then available. When approved by the Department of Finance, the new index shall replace the discontinued index.
(c) The department shall calculate the percentage increase as specified in subdivision (b) and shall apply this increase to each fee. The increase to each fee shall be rounded to the nearest whole dollar. The adjusted fee list shall be published by the department and transmitted to
the Legislature for approval as part of the department’s budget submission for the fiscal year in which the adjusted fees would be implemented. This adjustment of fees and publication of the adjusted fee list is not subject to the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.
(d) (1) On or before ____, the holder of a beer & wine importer license shall relinquish that license and transition to a beer importer license, a wine importer license, or both.
(2) On or before ____, the holder of a beer & wine importer’s general license shall relinquish that license and transition to a beer importer’s
general license, a wine importer’s general license, or both.
(3) On or before ____, the holder of a beer & wine wholesaler license shall relinquish that license and transition to a beer wholesaler license, a wine wholesaler license, or both.
SEC. 2.
Section 23366.5 of the Business and Professions Code is amended to read:23366.5.
A winegrower’s license, brandy manufacturer’s license, California winegrower’s agent’s license,SEC. 3.
Section 23373.1 of the Business and Professions Code is amended to read:23373.1.
Neither the holder of any wholesaler’s license nor the holder of any retail license may hold a California winegrower’s agent’s license, except that the holder of a wholesaler’s license who has been a primary distributor for a winegrower for more than 20 years immediately prior to the effective date of this section may continue to be issued and to hold aSEC. 4.
Section 23374.6 of the Business and Professions Code is amended to read:23374.6.
(a) A(b) A beer importer’s general license authorizes the person to whom issued to become an importer of beer and to sell state tax paid beer to beer manufacturer’s, beer wholesaler’s, and beer importer’s general licensees.
SEC. 5.
Section 23375.6 of the Business and Professions Code is amended to read:23375.6.
(b) A beer importer’s general license shall not be issued to any person who holds an interest, directly or indirectly, in any retail license. A retail license shall not be issued to any beer importer’s general licensee.
SEC. 6.
Section 23378.05 of the Business and Professions Code is amended to read:23378.05.
(a) For any sale or offer of sale of beer by a beer wholesaler within the state, the beer wholesaler shall comply with all of the following:(1) Pursuant to Section 25000.5, the beer wholesaler shall file and maintain with the department a written territorial agreement with each beer manufacturer prior to the wholesaler’s sale or offer of sale of each beer manufacturer’s beer.
(2) Pursuant to Section 25000, the beer wholesaler shall file prices with the department for each beer manufacturer’s beer prior to the wholesaler’s sale or offer of sale of each manufacturer’s beer.
(3) (A) The beer wholesaler shall own
or lease a warehouse sufficient to store at one time a stock of beer equal to 10 percent or more of the wholesaler’s annual volume of beer case and keg sales to retailers within this state.
(B) The beer wholesaler shall maintain at all times in a warehouse either owned or leased by the wholesaler a stock of beer equal to not less than 5 percent of the wholesaler’s annual volume of beer case and keg sales to retailers within this state.
(C) If a beer wholesaler has more than one leased or owned licensed warehouse premises, the wholesaler shall be required to comply with the conditions of subparagraphs (A) and (B) only in connection with one licensed warehouse premises.
(4) The beer wholesaler shall receive all beer for sale at the wholesaler’s licensed warehouse premises, unload and maintain the beer on the premises,
and record the beer into the wholesaler’s inventory and for the California Beverage Container Recycling and Litter Reduction Act, prior to any sale or reloading for delivery.
(5) The beer wholesaler shall sell only beer that the wholesaler owns and has in physical possession and that is not acquired, held, or offered for sale under consignment.
(6) The beer wholesaler shall sell beer only from the wholesaler’s licensed warehouse premises or pursuant to Section 23388.
(7) The beer wholesaler shall deliver all beer sold to retailers for delivery from the wholesaler’s licensed warehouse premises only with equipment owned, leased, or rented by the wholesaler.
(8) The beer wholesaler shall sell beer for resale generally and not to a single retailer or
retailers that have a direct or indirect interest in the wholesaler or in each other and that are owned in whole or in part or managed or controlled directly or indirectly by the retailer or retailers.
(b) For purposes of this section, “beer manufacturer” means any holder of a beer manufacturer’s license, any holder of an out-of-state beer manufacturer’s certificate, or any holder of a beer and wine importer’s general license.
SEC. 7.
Section 23378.1 of the Business and Professions Code is amended to read:23378.1.
(a) A California brandy wholesaler’s license may be issued only to the holder of a(1) The licensee shall:
(A) Maintain warehouse space either owned or leased by him or her the licensee or dedicated to his or her their use in a public warehouse which space is sufficient to store at one time a stock of California brandy whose cost of acquisition is one hundred thousand dollars ($100,000) or more.
(B) Maintain at all times in his or her
their warehouse either owned or leased by him or her the licensee or in space dedicated to his or her their use in a public warehouse a stock of California brandy whose cost of acquisition is one hundred thousand dollars ($100,000) or more. If a licensee has more than one licensed premise, he or she the licensee shall be required to maintain warehouse space for and a stock of California brandy whose
cost of acquisition is one hundred thousand dollars ($100,000) or more only in connection with one licensed premise. For each of the remaining licensed premises, the licensee shall be required to maintain warehouse space for and a stock of California brandy whose cost of acquisition is thirty thousand dollars ($30,000) or more. The stock of California brandy required by this paragraph shall be owned by the licensee, not held on consignment, and not acquired pursuant to a prior agreement to sell it to a specific licensee or licensees.
(2) The licensee shall sell California brandy to retailers generally, rather than a few selected retailers. A licensee who sells to 25 percent of the retailers in the county where his or her their California brandy wholesale
licensed premises are located, or a licensee whose total volume of sales of California brandy to retailers during any 12-month period consists of 50 percent or more of individual sales in quantities of 10 cases or less, shall be conclusively presumed to be selling to retailers generally.
(3) The licensee may sell only one California brandy of one winegrower, which brandy is produced or bottled by the winegrower, or which is produced for, or is produced and packaged for, the winegrower, and is sold under a brand name owned or controlled by the winegrower.
(4) The licensee, under the authority of his or her beer and their wine wholesaler’s license, shall stock and offer to sell to retailers a
complete product line of California wines of the winegrower whose brandy the licensee handles. A “complete product line” for the purposes of this paragraph means all of the types of wines sold under a particular label.
(b) The number of California brandy wholesaler’s licenses which may be issued shall not be limited by any rule of the department relating to the number which may be issued in any county, nor shall those licenses be included in any formula used by the department in determining the number of distilled spirits wholesaler’s licenses which may be issued in a county.
(c) The fee for a California brandy wholesaler’s license shall be two hundred seventy-six dollars ($276) per year, which shall be deposited in the Alcohol Beverage Control Fund.
SEC. 8.
Section 23379 of the Business and Professions Code is amended to read:23379.
ASEC. 9.
Section 23396.3 of the Business and Professions Code is amended to read:23396.3.
(a) (1) A brewpub-restaurant license is a retail license which may be issued to a bona fide public eating place, as defined in Section 23038. The licensed premises shall have a minimum seven-barrel commercial brewing system located permanently onsite that is capable of producing at least seven barrels of beer per brewing cycle, and the licensee shall produce not less than 200 barrels nor more than 5,000 barrels of beer annually on the licensed premises. The license authorizes the sale of beer, wine, and distilled spirits for consumption on the premises, and the sale of beer produced by the brewpub-restaurant licensee for consumption on the premises. The license also authorizes the sale of beer produced by the licensed brewpub-restaurant licensee to a licensed beer(A) The sale, furnishing, or exchange of any alcoholic beverages with any other brewpub-restaurant licensee, any licensed beer manufacturer regardless of any other licenses held by the licensed beer manufacturer, or any retail licensee in California.
(B) The sale, furnishing, or exchange of any beer produced on the licensed premises bearing the same trademark as any beer produced by a licensed beer manufacturer.
(C) A brewpub-restaurant licensee to engage a licensed beer manufacturer to produce beer for sale by the brewpub-restaurant licensee.
(2) Beer produced on the premises
shall be offered for sale to consumers for consumption on the premises or off-premises in a bona fide manner. In determining whether the licensee is offering beer produced on the premises for sale in a bona fide manner, the department may consider, without limitation, whether, and the extent to which, the licensee actually sells beer manufactured on the licensed premises to consumers.
(b) A brewpub-restaurant licensee shall purchase all beer, wine, or distilled spirits for sale on the licensed premises from a licensed wholesaler or winegrower, except for the beer produced by the brewpub-restaurant licensee on the licensed premises.
(c) Notwithstanding any other law, a brewpub-restaurant licensee may label, bottle, package, or refill any container with beer produced on the licensed premises and may, at the licensed premises, sell beer produced and packaged by the licensee to
consumers for consumption off the premises.
(d) A brewpub-restaurant licensee may donate or sell beer produced by the licensee to a nonprofit charitable corporation or association or a nonprofit incorporated trade association pursuant to subdivisions (a) and (b) of Section 25503.9, provided that beer donated pursuant to this section shall not count in the calculation of minimum amounts of beer required to be manufactured and sold pursuant to subdivision (a).
(e) A brewpub-restaurant licensee shall offer for sale on the licensed premises canned, bottled, or draft beer commercially available from licensed wholesalers.
(f) (1) The fee for an original brewpub-restaurant license shall be the same as that specified in Section 23954.5 for an original on-sale general license.
(2) The annual license fee for a brewpub-restaurant license shall be the same as that for an on-sale general license.
(g) An existing brewpub-restaurant license or a brewpub license issued pursuant to an application filed with the department prior to December 31, 2019, shall not be sold or transferred for a price greater than the original license fee paid by the seller or transferor.
(h) (1) The limitations provided in Section 23816 on the number of licensed premises shall not apply to a brewpub-restaurant license application submitted to the department prior to December 31, 2019.
(2) The limitations provided in Section 23816 on the number of licensed premises shall apply to a brewpub-restaurant license application submitted to the
department on or after December 31, 2019.
(i) The licensee shall maintain records on a monthly or quarterly basis that are adequate to establish compliance with this section and to enable the department to identify which beer sold by a licensee was produced on the premises in order to establish the licensee’s compliance with subdivisions (a) and (b). These records shall be maintained for a period of at least three years and shall be provided to the department within 30 days of receipt of the department’s written request.
SEC. 10.
Section 23399.3 of the Business and Professions Code is amended to read:23399.3.
(a) An on-sale special beer and wine license for hospitals, convalescent homes, and rest homes, authorizes the sale or service of beer and wine purchased from a licensed(b) As used in this section, “rest home” includes an apartment building, whether licensed or unlicensed, which rents exclusively to persons age 62 and older, and provides one to three meals daily for tenants.
SEC. 11.
Section 23661.7 of the Business and Professions Code is amended to read:23661.7.
(a) A person who has purchased wine from a licensed winegrower, the holder of a(b) The provisions of Section 32175 of the Revenue and Taxation Code
shall apply to any wine so returned.
SEC. 12.
Section 23776 of the Business and Professions Code is amended to read:23776.
A wholesaler’s license shall not be issued or renewed to any on-sale or off-sale licensee, except that:(1) A wholesaler’s license restricted to sales to on-sale licensees may be issued or renewed to an on-sale licensee in counties not to exceed 15,000 population, or
(2) If restricted to the wholesaler’s sale of wine, a beer and wine wholesaler’s license may be renewed as a wine wholesaler’s license on and after ____, for the holder of an off-sale beer and wine licensee
license who on December 31, 1987, held an off-sale beer and wine license and a beer and wine wholesaler’s license, provided that the beer and wine wholesaler’s license restricted to the wholesaler’s sale of wine can only be transferred to the holder of a beer and wine wholesaler’s license license, or on or after ____, to a holder of a wine wholesaler’s license restricted to the wholesaler’s sale of wine on the date of transfer.
SEC. 13.
Section 23817.8 of the Business and Professions Code is amended to read:23817.8.
(a) Notwithstanding Section 23817.5, the department may approve an application for an off-sale beer and wine license by a licensed beer(1) The off-sale beer and wine license shall be held at the same location as the beer and
wholesaler license or wine wholesaler license.
(2) The off-sale beer and wine license shall be restricted to sales solicited and accepted by direct mail, telephone, or on-line computer. The off-sale beer and wine license shall not be used for operations conducted from a retail store open to the public.
(b) The department may impose reasonable conditions on a licensee as may be needed in the interest of the public health, safety, and welfare regarding signing, training for responsible beverage sales, hours, and mode of sale.
SEC. 14.
Section 23820 of the Business and Professions Code is amended to read:23820.
The department may make all rules consistent with the provisions of Section 22 of Article XX of the Constitution, or the provisions of this division, necessary to carry into effect the provisions of this article, and to restrict the issuance of alcoholic beverage licenses, including seasonal licenses, but not including beer, beerSEC. 15.
Section 23958.1 of the Business and Professions Code is amended to read:23958.1.
Notwithstanding the provisions of Section 23958, the department is not required to investigate the personal qualifications of a licensed beerSEC. 16.
Section 24045.18 of the Business and Professions Code is amended to read:24045.18.
Notwithstanding any other provision of this division, aSEC. 17.
Section 25000 of the Business and Professions Code is amended to read:25000.
(a) Each manufacturer, importer, and wholesaler of beer shall file and thereafter maintain on file with the department, in such form as the department may provide, a written schedule of selling prices charged by the licensee for beer sold and distributed by the licensee to customers in California, except that the transfer, including the sale, of beer between wholesalers who sell the same brand in package is permitted without filing the schedule of selling prices, and the transfer, including the sale, of beer made under contract from a contract beer manufacturer making the beer to a beer manufacturer receiving the beer is permitted without filing the schedule of selling prices. All prices filed shall be for immediate delivery. Each manufacturer, importer, and wholesaler of beer shall file a price schedule for each county in which(b) For purposes of this section, a “contract beer manufacturer” is a beer manufacturer that does all of the following:
(1) Makes beer pursuant to a written contract with another beer manufacturer, and neither entity has a controlling
interest in the other entity.
(2) Makes beer in accordance with a recipe that is a trade secret of the beer manufacturer having its beer made under contract.
(3) Has no right to sell the beer to any other beer manufacturer, importer, or wholesaler other than the beer manufacturer who contracted for the beer.
(c) For purposes of this section, “beer manufacturer” includes any holder of a beer manufacturer’s license, any holder of an out-of-state beer manufacturer’s certificate, or any holder of a beer and wine importer’s general license.
SEC. 18.
Section 25000.2 of the Business and Professions Code is amended to read:25000.2.
(a) For purposes of this section:(1) “Acquire” means to purchase, receive, assume, obtain, or otherwise come into possession or control of.
(2) “Affected distribution rights” means the distribution rights to the product held by the existing beer wholesaler prior to the acquisition of the right to manufacture, import, or distribute the product by the successor beer manufacturer.
(3) “Beer manufacturer” includes any holder of a beer manufacturer’s license, any holder of an out-of-state beer manufacturer’s certificate, or any holder of a beer and wine
importer’s general license.
(4) “Cancel” means to terminate, reduce, not renew, not appoint or reappoint, or cause any of the same.
(5) “Existing beer wholesaler” means a beer wholesaler that distributes a product at the time a successor beer manufacturer acquires the rights to manufacture, import, or distribute that product.
(6) “Fair market value” includes all elements of value, including, but not limited to, goodwill.
(7) “Product” means a brand or brands of beer, as defined by Section 23006.
(8) “Successor beer manufacturer” means a beer manufacturer that acquires the rights to manufacture, import, or distribute a product.
(9) “Successor beer manufacturer’s designee” means one or more distributors designated by the successor beer manufacturer to replace the existing beer wholesaler, for all or part of the existing beer wholesaler’s territory, in the distribution of the product.
(b) (1) Any successor beer manufacturer that acquires the rights to manufacture, import, or distribute a product, and who cancels any of the existing beer wholesaler’s rights to distribute the product, shall comply with this section.
(2) A successor beer manufacturer’s designee shall comply with this section.
(c) (1) The successor beer manufacturer shall notify the existing beer wholesaler of the successor beer manufacturer’s intent to cancel any of the
existing beer wholesaler’s rights to distribute the product.
(2) The successor beer manufacturer shall mail the notice by certified mail, return receipt requested, to the existing beer wholesaler. The successor beer manufacturer shall include in the notice the name, address, and telephone number of the successor beer manufacturer’s designee or designees.
(d) The successor beer manufacturer’s designee shall negotiate with the existing beer wholesaler to determine the fair market value of the affected distribution rights and, if the existing beer wholesaler and the successor beer manufacturer’s designee agree to the fair market value of the affected distribution rights, shall compensate the existing beer wholesaler in the agreed amount. The successor beer manufacturer’s designee and the existing beer wholesaler shall negotiate in good faith.
(e) The existing beer wholesaler shall continue to distribute the product to at least the same extent that it distributed the product immediately before the successor beer manufacturer acquired rights to the product until receipt of the payment of the compensation agreed to under subdivision (d) is made or is awarded under subdivision (f). The successor beer manufacturer and the existing beer wholesaler shall act in good faith regarding the ongoing supply and distribution of the product.
(f) If the successor beer manufacturer’s designee and the existing beer wholesaler are unable to mutually agree on the fair market value of the affected distribution rights within 30 days of the existing beer wholesaler’s receipt of the successor beer manufacturer’s notice pursuant to subdivision (c), the successor beer manufacturer’s designee or the existing beer wholesaler shall initiate
arbitration against each other to determine the issue of compensation for the fair market value of the affected distribution rights no later than 40 days after the existing beer wholesaler’s receipt of the successor beer manufacturer’s notice pursuant to subdivision (c). Upon submission to arbitration, the arbitration shall be the means of determining compensation to the existing beer wholesaler for the fair market value of the affected distribution rights, and the fair market value of the affected distribution rights shall be the purpose of the arbitration unless the parties agree otherwise.
(1) An arbitration held under this subdivision shall be held in California through a private arbitration services provider with at least three offices in California and a statewide roster of at least 70 neutral arbitrators, of which at least 30 have prior experience as a sole arbitrator in franchise, distribution, or related business litigation.
(2) The direct costs of the arbitration, including any fees charged by the arbitrator, shall be borne equally by the parties engaged in the arbitration. All other costs shall be paid by the party incurring them.
(3) The parties shall mutually agree on an arbitrator. If the parties cannot agree on the arbitrator, the arbitration provider shall select an impartial arbitrator.
(4) (A) No later than 20 days after receipt of a notification to arbitrate, the parties shall complete an initial exchange of all nonprivileged documents and other information relevant to the fair market value of the affected distribution rights in their possession and control, including, without limitation, copies of all documents and the names of individuals who may be called to testify at the arbitration hearing. No later
than 45 days after receipt of notification to arbitrate, the parties shall complete an exchange of the names of any experts who may be called to testify at the arbitration hearing, together with each expert’s report that may be introduced at the arbitration hearing.
(B) The arbitrator may modify the requirements of subparagraph (A) on a showing of good cause. The arbitrator shall permit third-party discovery and additional discovery between beer wholesalers, including depositions, which the arbitrator finds appropriate for a period of time not to exceed 90 days after receipt of a notification to arbitrate. No discovery shall be permitted against a beer manufacturer.
(5) The decision of the arbitrator shall be final and binding on the parties unless notice of appeal is filed, within 10 business days after service of the arbitration award, with the superior court of the county in
which the hearing was held. Upon filing of the appeal, the court shall review the arbitration award for errors of fact or law by determining whether the award is supported by the sufficiency of the evidence presented at the arbitration. This subdivision shall further permit any other appeal or review that is authorized by the California Arbitration Act (Title 9 (commencing with Section 1280) of Part 3 of the Code of Civil Procedure).
(6) The arbitrator’s award shall be monetary only and shall not enjoin or compel conduct.
(7) The arbitration hearing shall conclude not more than 180 days after receipt of a notification to arbitrate, unless the time period is extended by mutual agreement of the parties or by the arbitrator.
(8) The arbitrator shall render a decision not later than 15 days after the conclusion of the
arbitration unless this time period is extended by mutual agreement of the parties or by the arbitrator.
(9) A party who fails to participate in the arbitration hearings waives all rights the party would have had in the arbitration and is considered to have consented to the determination of the arbitrator.
(10) The Legislature finds and declares that several unique factors in combination warrant the Legislature authorizing limited mandatory arbitration between an existing beer wholesaler and a successor beer manufacturer’s designee solely to determine the issue of compensation for the fair market value of the affected distribution rights:
(A) On the issue of the fair market value of the affected distribution rights, the parties are sophisticated and in an equal position in their knowledge of this legal issue and
understand the law and their legal rights, including their jury trial rights.
(B) The parties desire a mandatory arbitration provision to resolve the question of compensation for the fair market value of the affected distribution rights if the parties are not able to reach a mutual settlement so that product distribution can be continued in an orderly manner and the determination of compensation can be made in a timely manner.
(C) The state’s regulatory interest in maintaining orderly markets for the safe and efficient transportation, distribution, and sale of beer within the state warrants the statutory authorization for mandatory arbitration as provided in this section.
(g) If the existing beer wholesaler does not receive payment of the compensation under subdivision (d) or (f) not later than 10 business days after
the date of the settlement or service of the arbitration award, and if there is no appeal or review filed under paragraph (5) of subdivision (f), the existing beer wholesaler shall remain the distributor of the product in the existing beer wholesaler’s territory to at least the same extent that the existing beer wholesaler distributed the product immediately before the successor beer manufacturer acquired rights to the product, and the existing beer wholesaler is not entitled to the settlement or arbitration award.
(h) Nothing in this section shall be construed to limit or prohibit good faith settlements voluntarily entered into by the parties subsequent to the successor beer manufacturer’s notice pursuant to subdivision (c).
SEC. 19.
Section 25000.6 of the Business and Professions Code is amended to read:25000.6.
(a) A provision in an agreement between a beer manufacturer and a beer wholesaler for the sale and distribution of beer in this state, which restricts venue to a forum outside this state, is void with respect to any claim arising under or relating to the agreement involving a beer wholesaler operating within this state.(b) This section shall apply to any transaction or conduct pursuant to an agreement described in subdivision (a) on or after the effective date of this section.
(c) For purposes of the section, “beer manufacturer” includes any holder of a beer manufacturer’s license, any holder of an out-of-state beer manufacturer’s certificate, or any
holder of a beer and wine
importer’s general license.
SEC. 20.
Section 25000.7 of the Business and Professions Code is amended to read:25000.7.
(a) Notwithstanding the provisions of any agreement for the sale or distribution of beer between a beer manufacturer and beer wholesaler, no sale or distribution agreement shall be terminated solely for a beer wholesaler’s failure to meet a sales goal or quota that is not commercially reasonable under the prevailing market conditions.(b) For purposes of this section, “beer manufacturer” includes any holder of a beer manufacturer’s license, any holder of an out-of-state beer manufacturer’s certificate, or any holder of a beer and wine importer’s general license.
SEC. 21.
Section 25000.9 of the Business and Professions Code is amended to read:25000.9.
(a) Any beer manufacturer who unreasonably withholds consent or unreasonably denies approval of a sale, transfer, or assignment of any ownership interest in a beer wholesaler’s business with respect to that manufacturer’s brand or brands, shall be liable in damages to the beer wholesaler. Recoverable damages under this section shall not exceed the compensatory damages sustained by the wholesaler and the wholesaler’s costs of suit. The fair market value of the beer wholesaler’s business shall include, but is not limited to, its goodwill, if any.(b) If a beer wholesaler has been paid a consideration by a successor wholesaler for the sale, transfer, or assignment of the beer wholesaler’s interest in the sale or
distribution of the affected brand or brands, the beer manufacturer shall be liable only for compensatory damages in an amount reflecting the difference in the amount already paid to the beer wholesaler, and the fair market value of the beer wholesaler’s business with respect to the affected brand or brands.
(c) For purposes of this section, “beer manufacturer” includes any holder of a beer manufacturer’s license, any holder of an out-of-state beer manufacturer’s certificate, or any holder of a beer and wine importer’s general license.
SEC. 22.
Section 25501 of the Business and Professions Code is amended to read:25501.
No manufacturer, bottler, importer, or wholesaler of products of the brewing industry shall:(a) Furnish, give, rent, lend, or sell, directly or indirectly, any equipment, fixtures, or supplies, other than alcoholic beverages, to any person engaged in operating, owning, or maintaining any on-sale premises where alcoholic beverages are sold for consumption on the premises. This subdivision shall not prohibit the furnishing of draft beer pumps and iceboxes to those persons who operate on a temporary basis. Notwithstanding any other provision of this division, a manufacturer, bottler, importer, or wholesaler of products of the brewing industry may furnish, give, rent, lend, or sell, directly or indirectly, paper beverage coasters less than 25
square inches in size and having a value of less than five cents ($0.05) per coaster or brand-identified acrylic table tent holders to any person engaged in operating, owning, or maintaining any on-sale premises where alcoholic beverages are sold for consumption on the premises.
(b) Directly or indirectly, hold the ownership or any interest, by stock ownership or otherwise, in any firm, corporation, partnership, or business, furnishing, supplying, or dealing in any office, store, or restaurant furnishings or equipment, other than signs for interior use or supplies authorized to be given under this division to any person engaged in operating, owning, or maintaining any on-sale premises.
(c) Notwithstanding any provision of this section, the holder of a beer and wine wholesaler’s license may
manufacture, distribute, and sell any lawful product to any person engaged in operating, owning, or maintaining any on-sale premises where alcoholic beverages are sold for consumption on the premises, provided that these products are sold by the holder of the beer and wine wholesaler’s license to the on-sale licensee at a price not less than the current market price for the product.
SEC. 23.
Section 25502 of the Business and Professions Code is amended to read:25502.
(a) No manufacturer, winegrower, manufacturer’s agent, California winegrower’s agent, rectifier, distiller, bottler, importer, or wholesaler, or any officer, director, or agent of any such person, shall, except as authorized by this division:(1) Hold the ownership, directly or indirectly, of any interest in an off-sale license.
(2) Furnish, give, or lend any money or other thing of value, directly or indirectly, to, or guarantee the repayment of any loan or the fulfillment of any financial obligation of, any person engaged in operating, owning, or maintaining any off-sale licensed premises.
(3) Own or control any interest, directly or indirectly, by stock ownership, interlocking directors, or trusteeship, in the business, furniture, fixtures, refrigeration equipment, signs, except signs for interior use mentioned in subdivision (g) of Section 25503, or lease in premises licensed with an off-sale license.
(4) Own or control any interest, directly or indirectly, by stock ownership, interlocking directors, trusteeship, or mortgage of the realty upon which an off-sale licensed premises is maintained.
(b) Any wholesaler in counties not to exceed 15,000 population who holds both a beer and wine wholesaler’s license and an off-sale general license and who held such licenses prior to September 19, 1947, and who, on or after ____, holds either a beer wholesaler’s license or a wine
wholesaler’s license, or both, and an off-sale general license, may continue to hold such licenses but may not transfer the beer and wine wholesaler’s license
wholesaler license or licenses to another individual, individuals, partnership, corporation or other legal entity. Where the off-sale general license is transferred to an individual, individuals, partnership, corporation or other legal entity, the transfer shall be a person-to-person transfer only.
(c) Nothing in this section prohibits any holder of a distilled spirits manufacturer’s, manufacturer’s agent’s, California winegrower’s agent, rectifier’s, or wholesaler’s license, or any officer, employee, or representative of any such licensee, from acting as a trustee for any off-sale general licensee in any bankruptcy or other proceedings for the benefit of the creditors of the off-sale general licensee.
(d) Nothing in this section shall alter, change, or otherwise affect, retroactively or prospectively, any of the rights or privileges
granted to a winegrower or brandy manufacturer by Section 23362, or by any other provision of this division.
(e) This section does not apply to an employee of a licensee referred to in subdivision (a) who is a nonadministrative and nonsupervisorial employee.
SEC. 24.
Section 25502.2 of the Business and Professions Code is amended to read:25502.2.
(a) A person employed or engaged by an authorized licensee may appear at a promotional event at the premises of an off-sale retail licensee for the purposes of providing autographs to consumers at the promotional event only under the following conditions:(1) A purchase from the off-sale retail licensee is not required.
(2) A fee is not charged to attend the promotional event.
(3) Autographing may only be provided on consumer advertising specialities given by the authorized licensee to a consumer or on any item provided by the consumer.
(4) The promotional event does
not exceed four hours in duration.
(5) There are no more than two promotional events per calendar year involving the same authorized licensee at a single premises of an off-sale retail licensee.
(6) The off-sale retail licensee may advertise the promotional event to be held at its licensed premises.
(7) An authorized licensee may advertise in advance of the promotional event only in publications of the authorized licensee, subject to the following conditions:
(A) The advertising only lists the name and address of the off-sale retail licensee, the name of the alcoholic beverage product being featured at the promotional event, and the time, date, and location of the off-sale retail licensee location where the promotional event is being held.
(B) The listing of the off-sale retail licensee’s name and address is the only reference to the off-sale retail licensee in the advertisement and is relatively inconspicuous in relation to the advertisement as a whole, and the advertisement does not contain any pictures or illustrations of the off-sale retail licensee’s premises or laudatory references to the off-sale retail licensee.
(8) A wholesaler does not directly or indirectly underwrite, share in, or contribute to any costs related to the promotional event, except that a beer and wine wholesaler that holds at least six distilled spirits wholesaler licenses licenses, regardless of
any other licenses held, may directly or indirectly underwrite, share in, or contribute to any costs related to a promotional event for which the wholesaler employs or engages the person providing autographs to consumers at the promotional event.
(9) The authorized licensee notifies the department in writing of the promotional event at least 30 days in advance of the promotional event.
(10) The authorized licensee maintains records necessary to establish its compliance with this section.
(b) For purposes of this section, “authorized licensee” means a manufacturer, winegrower, manufacturer’s agent, California winegrower’s agent, rectifier, importer, brandy manufacturer, brandy importer, or wholesaler.
SEC. 25.
Section 25503.2 of the Business and Professions Code is amended to read:25503.2.
(a) Notwithstanding any other provision in this division, any winegrower, wine blender, beer manufacturer, brandy manufacturer, distilled spirits manufacturer, distilled spirits manufacturer’s agent, rectifier, distilled spirits wholesaler,(1) Stack or arrange cases of the brand or brands of alcoholic beverages owned or sold by the licensee performing the service in the storeroom or warehouse where the off-sale retail licensee stores the brand or brands.
(2) Rotate the brand or brands owned or sold by the licensee performing the service on shelves and in refrigerated boxes, and rearrange bottles or packages of the brand or brands by moving the bottles or packages horizontally or vertically from shelf to shelf in the space and shelves allocated to the brand or brands. This paragraph does not permit the removal of any brand or brands of alcoholic beverages, except beer, which are owned or sold by the licensee performing the service, from the storeroom or other place belonging to an off-sale retailer for the purpose of replacing alcoholic beverages on or restocking shelves or refrigerated boxes.
(3) Take
an inventory of an off-sale retailer’s stock of a brand or brands of alcoholic beverages which are owned or sold by the licensee performing the service and which are in the stockroom or other place belonging to the off-sale retailer.
(4) Service the brand or brands of alcoholic beverages owned or sold by the licensee performing the service which are on shelves, fixtures, or other display pieces at the off-sale retail premises, including, but not limited to dusting bottles and shelves and refrigerated boxes allocated to the brand or brands at the retail premises. The licensees authorized to render services by this section and their agents and representatives may not price-mark individual containers of the brand of alcoholic beverages, except beer, owned or sold by the licensee performing the service, except for individual bottles used on floor displays.
(5) Rotate or rearrange the
brand or brands of wine or distilled spirits owned or sold by the licensee on, in, or among permanent shelves, permanent fixtures, refrigerated boxes, or floor or other displays or display pieces; stock the brand or brands onto or into floor or other displays or display pieces; and stock the brand or brands onto or into permanent shelves, permanent fixtures, or refrigerated boxes for the sole purposes of the introduction of new products, the resetting or rearrangement of existing products, or the setting or arranging of new stores. Incidental touching or rearrangement of the brand or brands of another licensee by a licensee performing any of the services authorized by this paragraph for the sole purpose of accessing permanent shelves, permanent fixtures, and other spaces allocated to the licensee performing the service shall not be deemed to be a violation of any provision of this division provided the other licensee’s brands are not removed from spaces allocated to that licensee. Nothing in this paragraph
permits stocking permanent shelves, permanent fixtures, or refrigerated boxes for regular inventory replenishment.
(b) Notwithstanding any other provision in this division, any beer manufacturer or beer and wine wholesaler, or the authorized agent or agents or representative or representatives of that licensee, may perform any of the services specified in paragraphs (1) to (4), inclusive, of subdivision (a), with respect to beer, for on-sale retail licensees at or on the premises of the on-sale retail licensee with the retail licensee’s permission.
SEC. 26.
Section 25503.5 of the Business and Professions Code is amended to read:25503.5.
(a) (1) A(2) A beer manufacturer or beer wholesaler may, without charge, instruct licensees and their employees, or conduct courses of instruction for licensees and their employees, on the subject of beer, including, but not limited to, the history, nature, values, composition, and characteristics of beer, and the methods of presenting and serving beer. The beer manufacturer or beer wholesaler may furnish beer and the equipment, materials, and utensils that may be required for use in connection with the instruction or courses of instruction.
(b) A craft distiller, distilled spirits manufacturer, distilled spirits manufacturer’s agent, distilled spirits general rectifier, or distilled spirits
general importer may, without charge, instruct licensees and their employees, or conduct courses of instruction for licensees and their employees, on the subject of distilled spirits, including, but not limited to, the history, nature, values, and characteristics of distilled spirits, and the methods of presenting and serving distilled spirits. The craft distiller, distilled spirits manufacturer, or distilled spirits manufacturer’s agent may furnish distilled spirits and the equipment, materials, and utensils that may be required for use in connection with the instruction or courses of instruction.
(c) The instruction or courses of instruction, authorized in subdivision (a) or (b), may be given at the premises of the winegrower, beer manufacturer, beer and wine wholesaler, wine
wholesaler, craft distiller, distilled spirits manufacturer, distilled spirits manufacturer’s agent, distilled spirits general rectifier, distilled spirits general importer, or of a licensee, including an on-sale retail licensee, or elsewhere.
SEC. 27.
Section 25503.55 of the Business and Professions Code is amended to read:25503.55.
(a) A beer manufacturer, a licensed beer(b) The instruction of consumers regarding beer may include the furnishing of tastes of beer to an individual of legal drinking age. Beer tastes at any individual course of instruction shall not exceed eight ounces of beer per person, per day. The tasting portion of a course of instruction shall not exceed one hour at any individual licensed retail premises. Tastes of beer may not be served to a consumer in their original container but must be served in an individual glass or cup.
(c) All tastes of beer served to a consumer as authorized in subdivision (b) shall be served only as part of the course of instruction and shall be served to the consumer by an employee of the on-sale retail licensee.
(d) A beer manufacturer, a licensed
beer and wine
importer general, or a licensed beer and wine
wholesaler may not hold more than six courses of instruction per calendar year at any individual on-sale retail licensed premises if the courses of instruction includes consumer tastes of beer.
(e) (1) A representative of a beer manufacturer, a licensed beer and wine importer general, or a licensed beer and wine wholesaler, except as provided in paragraph (2), must be present and authorize any tastes of beer conducted at an on-sale retail licensed premises pursuant to this section. The representative shall be responsible for paying the retailer for the tastes of beer served at any course of instruction. Such payment shall not exceed the retail price of the beer.
(2) For
purposes of this subdivision, a licensed beer and wine
wholesaler shall not be a representative of a beer manufacturer or a licensed beer and wine importer general.
(f) No on-sale retail licensee shall require one or more courses of instruction pursuant to this section as a requirement to carry a brand or brands of any beer manufacturer, licensed beer and wine importer general, or licensed beer and wine wholesaler.
(g) No premium, gift, free goods, or other thing of value may be given away in connection with an authorized course of instruction that includes beer tastes, except as authorized by this division. Failure to comply with the provisions of this section shall be
presumed to be a violation of Section 25500.
(h) A retail licensee may advertise the instructional tasting event using interior signs visible only within the establishment.
(i) (1) A beer manufacturer, a licensed beer and wine importer general, and a licensed beer and wine wholesaler shall maintain an individual record of each course of instruction involving tastes of beer for three years.
(2) Records shall include the date of the tasting, the name and address of the retail licensee, and the brand, quantity, and payment made for the beer furnished by the beer manufacturer, the licensed beer and wine
importer general, or the licensed beer and wine
wholesaler.
SEC. 28.
Section 25503.56 of the Business and Professions Code is amended to read:25503.56.
(a) An authorized licensee, or a designated representative of an authorized licensee acting as an agent of the authorized licensee, may conduct, on the area specified by paragraph (1) of subdivision (c) of Section 23396.6, an instructional tasting event for consumers on the subject of wine, beer, or distilled spirits, including, but not limited to, the history, nature, values, and characteristics of wine, beer, or distilled spirits, and the methods of presenting and serving wine, beer, or distilled spirits.(1) (A) Except as provided in subparagraph (B), the instructional tasting event may include the serving of alcoholic beverages to an attendee of legal drinking age. An instructional tasting event on the subject of wine or distilled
spirits shall be limited to not more than three tastings per person per day. A single tasting of distilled spirits shall not exceed one-fourth of one ounce and a single tasting of wine shall not exceed one ounce. An instructional tasting event on the subject of beer shall be limited to not more than the tasting of eight ounces of beer per person per day. The wine, beer, or distilled spirits tasted shall be limited to the products that are authorized to be sold by the authorized licensee and the licenseholder under its off-sale license.
(B) A beer and wine wholesaler may conduct an instructional tasting event but shall not serve tastes of beer unless the beer and wine wholesaler also holds a beer manufacturer’s license, an out-of-state beer manufacturer’s certificate, or more than
six distilled spirits wholesaler’s licenses.
(C) No charge of any sort shall be made for the tastings. Except for the purposes of Section 23985, the serving of tastings shall not be deemed a sale of products pursuant to this division.
(D) A person under 21 years of age shall not serve wine, beer, or distilled spirits at the instructional tasting event.
(E) All tastes shall be served by an employee of the authorized licensee, the designated representative of the authorized licensee, or by an employee of the designated representative of the authorized licensee.
(F) An authorized licensee, or a designated representative of an authorized licensee, shall either supply the wine or distilled spirits to be tasted during the instructional tasting event or
purchase the wine or distilled spirits from the licenseholder at the original invoiced cost. An authorized licensee, or a designated representative of an authorized licensee, shall purchase beer to be tasted during the instructional tasting event from the licenseholder at the original invoiced cost.
(G) Any unused wine, beer, or distilled spirits remaining from the tasting shall be removed from the off-sale licensed premises by the authorized licensee or its designated representative.
(2) If the instructional tasting event is conducted by a designated representative of an authorized licensee, the designated representative shall not be owned, controlled, or employed directly or indirectly by the licenseholder on whose premises the instructional tasting event is held.
(3) An instructional tasting event shall be limited
to a single type of alcoholic beverage. For purposes of this paragraph, “type of alcoholic beverage” means distilled spirits, wine, or beer.
(b) For purposes of this section:
(1) “Authorized licensee” means a winegrower, California winegrower’s agent, beer and
importer general, wine importer general, beer and wholesaler, wine wholesaler, wine rectifier, craft distiller, distilled spirits manufacturer, distilled spirits manufacturer’s agent, distilled spirits importer general, distilled spirits rectifier, distilled spirits general rectifier, rectifier, out-of-state distilled spirits shipper’s certificate holder, distilled spirits wholesaler, brandy manufacturer, brandy importer, California brandy wholesaler, beer manufacturer, or an out-of-state beer manufacturer certificate holder. “Authorized licensee” shall not include an entity that solely holds a combination of a beer and wine wholesale license and an off-sale beer and wine retail license or holds
those licenses solely in combination with any license not listed in this paragraph, or holds a limited off-sale retail wine license.
(2) “Licenseholder” means an off-sale retail licensee issued an instructional tasting license pursuant to Section 23396.6.
(3) “Location” means the total contiguous area encompassed by the off-sale and on-sale licenses.
(c) Notwithstanding subparagraph (E) of paragraph (1) of subdivision (a), a licenseholder may conduct an instructional tasting event that includes the serving of tastings only when an authorized licensee or its designated representative are unable to conduct an instructional tasting event previously advertised pursuant to this section and scheduled by the authorized licensee or its designated representative, provided that the licenseholder supplies the wine, beer, or
distilled spirits used in the instructional tasting event and provides or pays for a person to serve the wine, beer, or distilled spirits. Instructional tasting events conducted by a licenseholder pursuant to this subdivision are subject to the provisions of this section and Section 23396.6.
(d) No more than one authorized licensee, or its designated representative, may conduct an instructional tasting event that includes the serving of tastes of wine, beer, or distilled spirits at any one individual licensed premises of a licenseholder per day.
(e) A licenseholder that also holds an on-sale beer and wine license, an on-sale beer and wine eating place license, or an on-sale general license shall not allow an authorized licensee, or its designated representative, to conduct an instructional tasting event on the same day and at the same location as any instructional tasting event
held pursuant to subdivision (b) of Section 23386, Section 25503.4, subdivision (c) of Section 25503.5, or Section 25503.55.
(f) A licenseholder shall not condition the allowance of an instructional tasting event upon the use of a particular designated representative of an authorized licensee.
(g) In addition to any point-of-sale advertising or other advertising items allowed under this division or under rules of the department, an authorized licensee or its designated representative, in his or her their absolute discretion and with permission of the licenseholder upon whose premises the instructional tasting event will be held, may list in any advertisement to the general public for the
instructional tasting event the name, address, telephone number, email address, Internet Web site
internet website address, and any other electronic media of the licenseholder, the names of the alcoholic beverages being featured at the instructional tasting event, pictures, illustrations, and depictions of the retailer’s premises, personnel, and customers, and the time, date, and location of, and other information about, the instructional tasting event, provided that both of the following apply:
(1) The advertisement does not contain the retail price of the alcoholic beverages.
(2) The listing of the licenseholder’s name, address, telephone number, email address, Internet Web site internet website address, and any other electronic media in the
advertisement is relatively inconspicuous in relation to the advertisement as a whole. Laudatory references to the licenseholder in these advertisements are not authorized. Pictures, illustrations, or depictions shall be still pictures, illustrations, or depictions only and shall not include any video. The reposting of social media posts, including posts by the retailer, is permitted provided that the reposting complies with all the requirements of this section. Nothing in this section shall authorize an authorized licensee or its designated representative to share in the costs, if any, of the licenseholder.
(h) A licenseholder may advertise an instructional tasting event to the general public. The costs of this advertising shall be borne solely by the licenseholder. Advertising permitted by this subdivision includes flyers, newspaper ads, Internet
internet communications, and interior signage.
(i) Except as otherwise provided in this division or rules of the department, no premium, gift, free goods, or other thing of value shall be given away by an authorized licensee or its designated representative in connection with an instructional tasting event that includes tastings of an alcoholic beverage.
(j) The licenseholder or the authorized licensee or its designated representative is authorized to perform setup and breakdown of the instructional tasting event area. The authorized licensee or its designated representative may provide, free of charge to the licenseholder, the equipment, materials, and utensils as may be required for use in connection with the instructional tasting event.
(k) (1) A
licenseholder shall not require, or enter into a collusive scheme with, an authorized licensee or its designated representative to conduct one or more instructional tasting events as a condition of the licenseholder’s carrying or continuing to carry a brand or brands of the authorized licensee or as a condition for display or other merchandising plan which is based on an agreement to provide shelf space. An authorized licensee or its designated representative shall not require any preferential treatment or benefit from, or enter into a collusive scheme with, a licenseholder as a condition of conducting one or more instructional tasting events, require a licenseholder to carry or continue to carry a brand or brands of the authorized licensee as a condition of conducting one or more instructional tasting events, or condition display or other merchandising plans that are based on agreements for the provision of shelf space on the conducting of one or more instructional tasting events. Any agreement, whether
written or oral, entered into by and between a licenseholder and an authorized licensee or its designated representative that precludes the conducting of instructional tasting events on the premises of the licenseholder by any other authorized licensee is prohibited. A licenseholder or authorized licensee, or its designated representative, shall not use an instructional tasting event to circumvent any other requirements of this division.
(2) In addition to any other remedies available under this division, upon a finding by the department of a failure to comply with this subdivision, the department shall suspend the instructional tasting license of the licenseholder and the privilege of the authorized licensee to conduct instructional events for not less than six months but for no more than one year.
(l) The Legislature finds that it is necessary and proper to require a separation
between manufacturing interests, wholesale interests, and retail interests in the production and distribution of alcoholic beverages in order to prevent suppliers from dominating local markets through vertical integration and to prevent excessive sales of alcoholic beverages produced by overly aggressive marketing techniques. The Legislature further finds that the exception established by this section to the general prohibition against tied interests must be limited to its express terms so as not to undermine the general prohibition, and intends that this section be construed accordingly.
SEC. 29.
Section 25503.57 of the Business and Professions Code is amended to read:25503.57.
(a) (1) An authorized licensee, or its designated representative, may instruct consumers at an on-sale retail licensed premises authorized to sell its product with the permission of the retail on-sale licensee. The instruction may include, without limitation, the history, nature, values, and characteristics of the wine or distilled spirits and the methods of presenting and serving the wine or distilled spirits.(2) The instruction of consumers may include the furnishing of not more than three tastings to any individual in one day. A single tasting of distilled spirits may not exceed one-fourth of one ounce and a single tasting of wine may not exceed one ounce.
(3) The
authorized licensee, or its designated representative, shall either supply the wine or distilled spirits to be tasted during the instructional tasting event or purchase the wine or distilled spirits from the retail on-sale licensee at the original invoiced cost.
(4) The authorized licensee, or its designated representative, shall remove any unfinished alcoholic beverages that were supplied by the authorized licensee, or its designated representative, following the instruction.
(5) Nothing in this subdivision shall limit the giving away of samples pursuant to subdivision (a) of Section 23386.
(b) For purposes of this section, “authorized licensee” means a winegrower, California winegrower’s agent, beer and wine importer general, beer and
wine wholesaler, wine rectifier, craft distiller, distilled spirits manufacturer, distilled spirits manufacturer’s agent, distilled spirits importer general, distilled spirits rectifier, distilled spirits general rectifier, rectifier, out-of-state distilled spirits shipper’s certificate holder, distilled spirits wholesaler, brandy manufacturer, brandy importer, or California brandy wholesaler. “Authorized licensee” shall not include any person that solely holds a combination of a beer and wine wholesaler license and an off-sale beer and wine retail license or holds those licenses solely in combination with any license not listed in this paragraph, or in combination with a beer and wine importer general license, or holds a limited off-sale retail wine license.
(c) Except as otherwise provided in this division or by the rules of the department, no premium, gift, free goods, or other thing of value shall be given away by an authorized licensee or its designated representative in connection with an instructional tasting event conducted pursuant to this section that includes tastings of wine or distilled spirits.
(d) In addition to any point-of-sale advertising or other advertising items allowed under this division or under rules of the department, an authorized licensee or its designated representative, in his or her their absolute discretion and with permission of the retail on-sale licensee upon whose premises the instructional tasting event will be held, may list in any advertisement to the general
public for the instructional tasting the name, address, telephone number, email address, Internet Web site
internet website address, and any other electronic media of the on-sale retail licensee, the names of the wines or distilled spirits being featured at the instructional tasting event, pictures, illustrations, and depictions of the retailer’s premises, personnel, and customers, and the time, date, and location of, and other information about, the instructional tasting event, provided that both of the following apply:
(1) The advertisement does not contain the retail price of the alcoholic beverages.
(2) The listing of the licenseholder’s name, address, telephone number, email address, Internet Web site internet website address, and any other
electronic media in the advertisement is relatively inconspicuous in relation to the advertisement as a whole. Laudatory references to the licenseholder in these advertisements are not authorized. Pictures, illustrations, or depictions shall be still pictures, illustrations, or depictions only and shall not include any video. The reposting of social media posts, including posts by the retailer, is permitted provided that the reposting complies with all the requirements of this section. Nothing in this section shall authorize an authorized licensee or its designated representative to share in the costs, if any, of the licenseholder.
(e) An on-sale retail licensee may advertise an instructional tasting event to the general public. The costs of this advertising shall be borne solely by the on-sale retail licensee. Advertising permitted by this subdivision includes flyers, newspaper ads, Internet
internet communications, and interior signage.
(f) No more than one authorized licensee or its designated representative shall conduct an instructional tasting pursuant to this section at the on-sale retail licensed premises of an on-sale retail licensee at any time, and a person shall not act as the designated representative for more than one authorized licensee at that instructional tasting.
SEC. 30.
Section 25503.6 of the Business and Professions Code is amended to read:25503.6.
(a) Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrower’s license, a rectifier, a distilled spirits manufacturer, or distilled spirits manufacturer’s agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee subject to all of the following conditions:(1) The on-sale licensee is the owner, manager, agent of the owner, assignee of the owner’s advertising rights, or the major tenant of the owner of any of the following:
(A) An outdoor stadium or a fully enclosed arena with a fixed seating capacity in excess of 10,000 seats located in Sacramento County or Alameda County.
(B) (i) A fully enclosed arena with a fixed seating capacity in excess of 18,000 seats located in Orange County or Los Angeles County.
(ii) An outdoor stadium of at least 70,000 seats located in Los Angeles County operated by a joint powers authority.
(C) An outdoor stadium or fully enclosed arena with a fixed seating capacity in excess of 8,500 seats located in Kern County.
(D) An exposition park of not less than 50 acres that includes an outdoor stadium with a fixed seating capacity in excess of 8,000 seats and a fully enclosed arena with an attendance capacity in excess of 4,500 people, located in San Bernardino County.
(E) An outdoor stadium with a fixed seating
capacity in excess of 10,000 seats located in Yolo County.
(F) An outdoor stadium and a fully enclosed arena with fixed seating capacities in excess of 10,000 seats located in Fresno County.
(G) An athletic and entertainment complex of not less than 50 acres that includes within its boundaries an outdoor stadium with a fixed seating capacity of at least 8,000 seats and a second outdoor stadium with a fixed seating capacity of at least 3,500 seats located in Riverside County.
(H) An outdoor stadium with a fixed seating capacity in excess of 1,500 seats located in Tulare County.
(I) A motorsports entertainment complex of not less than 50 acres that includes within its boundaries an outdoor speedway with a fixed seating capacity of at least 50,000 seats,
located in San Bernardino County.
(J) An exposition park, owned or operated by a bona fide nonprofit organization, of not less than 400 acres with facilities including a grandstand with a seating capacity of at least 8,000 people, at least one exhibition hall greater than 100,000 square feet, and at least four exhibition halls, each greater than 30,000 square feet, located in the City of Pomona or the City of La Verne in Los Angeles County.
(K) An outdoor soccer stadium with a fixed seating capacity of at least 25,000 seats, an outdoor tennis stadium with a fixed seating capacity of at least 7,000 seats, an outdoor track and field facility with a fixed seating capacity of at least 7,000 seats, and an indoor velodrome with a fixed seating capacity of at least 2,000 seats, all located within a sports and athletic complex built before January 1, 2005, in the City of Carson in Los
Angeles County.
(L) An outdoor professional sports facility with a fixed seating capacity of at least 4,200 seats located in San Joaquin County.
(M) A fully enclosed arena with a fixed seating capacity in excess of 13,000 seats located in the City of Inglewood.
(N) (i) An outdoor stadium with a fixed seating capacity of at least 68,000 seats located in the City of Santa Clara.
(ii) A beer manufacturer, the holder of a winegrower’s license, a rectifier, a distilled spirits manufacturer, or distilled spirits manufacturer’s agent may purchase advertising space and time from, or on behalf of, a major tenant of an outdoor stadium described in clause (i), provided the major tenant does not hold a retail license, and the advertising may
include the placement of advertising in an on-sale licensed premises operated at the outdoor stadium.
(O) A complex of not more than 50 acres located on the campus of, and owned by, Sonoma State University dedicated to presenting live artistic, musical, sports, food, beverage, culinary, lifestyle, or other cultural and entertainment events and performances with venues that include a concert hall with a seating capacity of approximately 1,500 seats, a second concert hall with a seating capacity of up to 300 seats, an outdoor area with a seating capacity of up to 5,000 seats, and a further outdoor area with a seating capacity of up to 10,000 seats. With respect to this complex, advertising space and time may also be purchased from or on behalf of the owner of the complex, a long-term tenant or licensee of the venue, whether or not the owner, long-term tenant, or licensee holds an on-sale license.
(P) A fairgrounds with a horse racetrack and equestrian and sports facilities located in San Diego County.
(Q) A stadium with a fixed seating capacity of at least 70,000 seats located in the City of Inglewood and a performance venue with a seating capacity of at least 5,000 seats adjacent to the stadium.
(R) An outdoor stadium with a fixed seating capacity of at least 40,000 seats located in the City and County of San Francisco.
(S) An indoor arena with a fixed seating capacity of at least 13,000 seats located in the City and County of San Francisco.
(T) An outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the City of Los Angeles.
(U) An outdoor stadium with a fixed seating capacity of at least 43,000 seats located in the City of San Diego.
(V) An outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the City of San Jose.
(W) An outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose.
(X) A fully enclosed arena with a fixed seating capacity in excess of 15,000 seats located in the City of San Jose.
(2) The outdoor stadium or fully enclosed arena described in paragraph (1) is not owned by a community college district.
(3) The advertising space
or time is purchased only in connection with the events to be held on the premises of the exposition park, stadium, or arena owned by the on-sale licensee. With respect to an exposition park as described in subparagraph (J) of paragraph (1) that includes at least one hotel, the advertising space or time shall not be displayed on or in any hotel located in the exposition park, or purchased in connection with the operation of any hotel located in the exposition park. With respect to the complex described in subparagraph (O) of paragraph (1), the advertising space or time shall be purchased only in connection with live artistic, musical, sports, food, beverage, culinary, lifestyle, or other cultural and entertainment events and performances to be held on the premises of the complex. With respect to a fully enclosed arena described in subparagraph (X) of paragraph (1), advertising space or time shall be purchased only for interior advertising in connection with events conducted within the arena.
(4) The on-sale licensee serves other brands of beer distributed by a competing beer wholesaler in addition to the brand manufactured or marketed by the beer manufacturer, other brands of wine distributed by a competing wine wholesaler in addition to the brand produced by the winegrower, and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brand manufactured or marketed by the rectifier, the distilled spirits manufacturer, or the distilled spirits manufacturer’s agent that purchased the advertising space or time.
(b) Any purchase of advertising space or time pursuant to subdivision (a) shall be conducted pursuant to a written contract entered into by the beer manufacturer, the holder of the winegrower’s license, the rectifier, the distilled spirits manufacturer, or the distilled spirits manufacturer’s agent and any of the
following:
(1) The on-sale licensee.
(2) With respect to clause (ii) of subparagraph (N) of paragraph (1) of subdivision (a), the major tenant of the outdoor stadium.
(3) With respect to subparagraphs (O), (R), and (T) of paragraph (1) of subdivision (a), the owner, a long-term tenant of the complex, or licensee of the complex, whether or not the owner, long-term tenant, or licensee holds an on-sale license.
(c) Any beer manufacturer or holder of a winegrower’s license, any rectifier, any distilled spirits manufacturer, or any distilled spirits manufacturer’s agent who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesaler’s license to fulfill all or part of those contractual obligations entered into pursuant
to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space, time, or costs involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(d) Any on-sale retail licensee, as described in subdivision (a), who, directly or indirectly, solicits or coerces a holder of a wholesaler’s license to solicit a beer manufacturer, a holder of a winegrower’s license, a rectifier, a distilled spirits manufacturer, or a distilled spirits manufacturer’s agent to purchase advertising space or time pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an
amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(e) For the purposes of this section, “beer manufacturer” includes any holder of a beer manufacturer’s license, any holder of an out-of-state beer manufacturer’s certificate, or any holder of a beer and wine importer’s general license.
(f) The Legislature finds that it is necessary and proper to require a separation among manufacturing interests, wholesale interests, and retail interests in the production and distribution of alcoholic beverages in order to prevent suppliers from dominating local markets through vertical integration and
to prevent excessive sales of alcoholic beverages produced by overly aggressive marketing techniques. The Legislature further finds that the exceptions established by this section to the general prohibition against tied interests shall be limited to their express terms so as not to undermine the general prohibition and intends that this section be construed accordingly.
SEC. 31.
Section 25503.7 of the Business and Professions Code is amended to read:25503.7.
A winegrower, beer manufacturer,SEC. 32.
Section 25503.8 of the Business and Professions Code is amended to read:25503.8.
(a) Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrower’s license, a California winegrower’s agent, a rectifier, a distilled spirits manufacturer, or a distilled spirits manufacturer’s agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee if all of the following conditions are met:(1) The on-sale licensee is the owner of any of the following:
(A) A fully enclosed auditorium or theater with a fixed seating capacity in excess of 6,000 seats, at least 60 percent of the use of which is for plays or musical concerts, not including sporting events.
(B) A motion picture studio facility at which public tours are conducted for at least four million people per year.
(C) A retail, entertainment development adjacent to, and under common ownership with, a theme park, amphitheater, and motion picture production studio.
(D) A theme or amusement park and the adjacent retail, dining, and entertainment area located in the City of Los Angeles, Los Angeles County, or Orange County.
(E) A fully enclosed theater, with box office sales and attendance by the public on a ticketed basis only, with a fixed seating capacity in excess of 6,000 seats, located in Los Angeles County within the area subject to the Los Angeles Sports and Entertainment District Specific Plan adopted by the City of Los Angeles pursuant to ordinance number 174225, as approved on September 6,
2001.
(2) The advertising space or time is purchased only in connection with one of the following:
(A) In the case of a fully enclosed auditorium or theater, in connection with sponsorship of plays or musical concerts to be held on the premises of the auditorium or theater owned by the on-sale licensee.
(B) In the case of a motion picture studio facility, in connection with sponsorship of the public tours or special events conducted at the studio facility.
(C) In the case of a retail, entertainment development, in connection with sponsorship of public tours or special events conducted at the development.
(D) In the case of a theme or amusement park and the adjacent retail, dining, and
entertainment area, located in the City of Los Angeles, Los Angeles County, or Orange County, in connection with daily activities and events at the theme or amusement park and the adjacent retail, dining, and entertainment area.
(E) In the case of the fully enclosed theater described in subparagraph (E) of paragraph (1) of subdivision (a), in connection with events conducted at the theater.
(3) The on-sale licensee serves other brands of beer distributed by a competing beer wholesaler in addition to the brand manufactured or marketed by the beer manufacturer, other brands of wine distributed by a competing wine wholesaler in addition to the brand produced or marketed by the winegrower or California winegrower’s agent, and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brand manufactured or marketed by the distilled
spirits manufacturer or distilled spirits manufacturer’s agent purchasing the advertising space or time.
(b) Any purchase of advertising space or time conducted pursuant to subdivision (a) shall be conducted pursuant to a written contract entered into by the beer manufacturer, the holder of the winegrower’s license, the California winegrower’s agent, the rectifier, the distilled spirits manufacturer, or the distilled spirits manufacturer’s agent, and the on-sale licensee, which contract shall not in any way involve the holder of a wholesaler’s license.
(c) Any beer manufacturer, rectifier, distilled spirits manufacturer, distilled spirits manufacturer’s agent, holder of a winegrower’s license, or California winegrower’s agent, who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesaler’s license to fulfill those contractual obligations
entered into pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(d) Any on-sale retail licensee, as described in subdivision (a), who solicits or coerces, directly or indirectly, a holder of a wholesaler’s license to solicit a beer manufacturer, rectifier, distilled spirits manufacturer, or distilled spirits manufacturer’s agent, holder of a winegrower’s license, or California winegrower’s agent to purchase advertising space or time pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not
exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(e) For the purposes of this section, “beer manufacturer” includes any holder of a beer manufacturer’s license, any holder of an out-of-state beer manufacturer’s certificate, or any holder of a beer and wine
importer’s general license.
SEC. 33.
Section 25503.85 of the Business and Professions Code is amended to read:25503.85.
(a) Notwithstanding any other provision of this chapter, a beer manufacturer, distilled spirits manufacturer, distilled spirits manufacturer’s agent, holder of a winegrower’s license, or California winegrower’s agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee, that shall be limited to small notices, plaques, or signs that portray partial or full sponsorship or funding of educational programs, special fundraising and promotional events, improvements in capital projects, and the development of exhibits or facilities, if all of the following conditions are met:(1) The on-sale licensee is a zoo or aquarium operated by a nonprofit organization that is accredited by the
American Association of Zoological Parks and Aquariums.
(2) The advertising space or time is purchased only in connection with the sponsorship of activities that are held on the premises or grounds owned, leased, or controlled by the on-sale licensee.
(3) The on-sale licensee serves other brands of beer distributed by a competing beer wholesaler in addition to the brand manufactured or marketed by the beer manufacturer, other brands of wine distributed by a competing wine wholesaler in addition to the brand produced or marketed by the winegrower or California winegrower’s agent, and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brand manufactured or marketed by the distilled spirits manufacturer or distilled spirits manufacturer’s agent purchasing the advertising space or time.
(b) Nothing in this section shall be construed to permit the purchase of billboards or bench advertisements as “advertising space.”
(c) Any purchase of advertising space or time pursuant to subdivision (a) shall be accomplished by a written contract entered into by the beer manufacturer, the distilled spirits manufacturer, the distilled spirits manufacturer’s agent, a holder of the winegrower’s license, or the California winegrower’s agent, and the on-sale licensee. That contract shall not in any way involve the holder of a wholesaler’s license.
(d) Any beer manufacturer, distilled spirits manufacturer, distilled spirits manufacturer’s agent, holder of a winegrower’s license, or California winegrower’s agent who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesaler’s license
to fulfill those contractual obligations entered into pursuant to subdivision (a) or (c) is guilty of a misdemeanor and shall be punished by imprisonment in the county jail for a period not to exceed six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(e) Any on-sale licensee who, directly or indirectly, solicits or coerces a holder of a wholesaler’s license to solicit a beer manufacturer, distilled spirits manufacturer, distilled spirits manufacturer’s agent, holder of a winegrower’s license, or a California winegrower’s agent to purchase advertising space or time shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an
amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(f) For the purposes of this section, “beer manufacturer” includes any holder of a beer manufacturer’s license, any holder of an out-of-state beer manufacturer’s certificate, or any holder of a beer and wine importer’s general license.
SEC. 34.
Section 25503.9 of the Business and Professions Code is amended to read:25503.9.
(a) Nothing in this division prohibits a winegrower, a(1) A nonprofit charitable corporation or association
exempt from payment of income taxes under the provisions of the Internal Revenue Code of the United States and Chapter 4 (commencing with Section 23701) of Part 11 of Division 2 of the Revenue and Taxation Code.
(2) A nonprofit incorporated trade association that is exempt from payment of income taxes under the provisions of the Internal Revenue Code of the United States and Chapter 4 (commencing with Section 23701) of Part 11 of Division 2 of the Revenue and Taxation Code, and the members of which trade association are licensed under this division. However, the wine, beer, and distilled spirits shall be used solely for a convention or meeting of the nonprofit incorporated trade association.
(3) A nonprofit corporation or association that is exempt from payment of income taxes under the provisions of the Internal Revenue Code of the United States and is defined as a tax exempt
organization under Section 23701a, 23701b, 23701d, 23701e, 23701f, 23701g, 23701i, 23701k, 23701l, 23701r, or 23701w of the Revenue and Taxation Code. Wine, beer, and distilled spirits given or sold by a winegrower, beer manufacturer, craft distiller, distilled spirits manufacturer, distilled spirits manufacturer’s agent, or importer general licensee pursuant to this subdivision may be furnished only in connection with public service or fundraising activities including picnics, parades, fairs, amateur sporting events, agricultural exhibitions, or similar events.
(b) Nothing in this division prohibits a winegrower, a beer and wine wholesaler that also holds an off-sale beer and wine retail license and only sells wine, or the holder of a limited off-sale retail wine license from giving or selling wine, a beer manufacturer from giving or selling beer, a craft distiller, distilled spirits manufacturer, rectifier, or a distilled spirits manufacturer’s agent from giving or selling distilled spirits, or a beer and wine
beer wholesaler that also holds an importer’s license from giving or selling beer, wine, or distilled spirits beer at prices other than those contained in schedules filed with the department, to any of the following:
(1) A nonprofit charitable corporation or association exempt from payment of income taxes under the provisions of the Internal Revenue Code of the United States and Chapter 4 (commencing with Section 23701) of Part 11 of Division 2 of the Revenue and Taxation Code.
(2) A nonprofit incorporated trade association that is exempt from payment of income taxes under the provisions of the Internal Revenue Code of the United States and Chapter 4
(commencing with Section 23701) of Part 11 of Division 2 of the Revenue and Taxation Code, and the members of which trade association are licensed under this division. However, the wine, beer, and distilled spirits shall be used solely for a convention or meeting of the nonprofit incorporated trade association.
(3) A nonprofit corporation or association that is exempt from payment of income taxes under the provisions of the Internal Revenue Code of the United States and is defined as a tax exempt organization under Section 23701a, 23701d, 23701e, 23701f, or 23701r of the Revenue and Taxation Code. Wine, beer, and distilled spirits given or sold by a winegrower, beer manufacturer, craft distiller, distilled spirits manufacturer, distilled spirits manufacturer’s agent, or licensed importer pursuant to this subdivision may be furnished only in connection with public service or fundraising activities including picnics, parades, fairs, amateur
sporting events, agricultural exhibitions, or similar events.
(c) A nonprofit corporation, organization, or association that is authorized to purchase or accept donations of alcoholic beverages pursuant to this section, and that also holds a permanent retail license issued pursuant to this division, shall not use any alcoholic beverage so purchased or donated in the exercise of any privileges or business under its permanent retail license.
(d) A licensee authorized to donate or sell alcoholic beverages to a nonprofit corporation, organization, or association pursuant to this section, except for a beer and wine wholesaler that also holds an importer’s license, may also provide services to and otherwise assist the corporation, organization, or association in connection with an event conducted under a
temporary license issued by the department.
SEC. 35.
Section 25503.14 of the Business and Professions Code is amended to read:25503.14.
Notwithstanding any provision of this division, any retail off-sale general licensee who holds at least 30 such licenses in this state and who also operates at least 50 wholesale grocery warehouses not licensed under this division may hold a beerSEC. 36.
Section 25503.24 of the Business and Professions Code is amended to read:25503.24.
(a) Notwithstanding any other provision of this chapter, any manufacturer, winegrower, rectifier, distiller, distilled spirits wholesaler, or any officer, director, agent, or representative of any of those entities, may conduct market research and, in connection with that research, the entity conducting the market research may purchase from licensed off-sale retailers data regarding purchases and sales of alcoholic beverage products at the customary rates that those retailers sell similar data for nonalcoholic beverage products subject to the following limitations:(1) No licensed retailer shall be obligated to purchase or sell the alcoholic beverage products of that manufacturer, winegrower, rectifier, or
distiller.
(2) No retail premises shall participate in more than one research project conducted by any single manufacturer, winegrower, rectifier, distiller, or distilled spirits wholesaler during a calendar year. A research project may involve multiple onsite surveys.
(3) Nothing in this section shall allow a licensed retailer to require a manufacturer, winegrower, rectifier, distiller, or distilled spirits wholesaler to conduct any market research as a condition for selling alcoholic beverage products to that licensed retailer.
(b) Any holder of a beer manufacturer’s license or winegrower’s license who, through coercion or other illegal means, induces, directly or indirectly, a holder of a beer or wine wholesaler’s license to fulfill obligations entered into pursuant to subdivision (a) shall be guilty of a
misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the market research or time involved in the project, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(c) Any retail licensee who, directly or indirectly, solicits or coerces a holder of a beer or wine wholesaler’s license to solicit a beer manufacturer, or holder of a winegrower’s license to fulfill obligations entered into pursuant to subdivision (a) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the market research or time involved in the project, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person
shall also be subject to license revocation pursuant to Section 24200.
(d) For the purposes of this section, “beer manufacturer” includes any holder of a beer manufacturer’s license, any holder of an out-of-state beer manufacturer’s certificate, or any holder of a beer and wine importer’s general license.
SEC. 37.
Section 25503.26 of the Business and Professions Code is amended to read:25503.26.
(a) Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrower’s license, a California winegrower’s agent, a manufacturer of distilled spirits, or distilled spirits manufacturer’s agent, may purchase advertising space and time from, or on behalf of, an on-sale retail licensee subject to all of the following conditions:(1) The on-sale licensee is the owner, or is the lessee, or is a wholly owned subsidiary of the lessee, of an arena with a fixed seating capacity in excess of 10,000 seats, at least 60 percent of the use of which is for horseracing events, and which is located within Los Angeles County, Alameda County, or San Mateo County.
(2) The advertising space or time is purchased only in connection with events to be held on the premises of the arena owned or leased by the on-sale licensee.
(3) The on-sale licensee serves other brands of beer distributed by a competing beer wholesaler in addition to the brand manufactured or marketed by the beer manufacturer, other brands of wine distributed by a competing wine wholesaler in addition to the brand produced or marketed by the winegrower or California winegrower’s agent and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brand manufactured or marketed by the distilled spirits manufacturer or distilled spirits manufacturer’s agent purchasing the advertising space or time.
(b) Any purchase of advertising space or time pursuant to subdivision (a)
shall be conducted pursuant to a written contract entered into by the beer manufacturer, the holder of the winegrower’s license, the California winegrower’s agent, the manufacturer of distilled spirits, or distilled spirits manufacturer’s agent, and the on-sale licensee.
(c) Any beer manufacturer, holder of a winegrower’s license, California winegrower’s agent, manufacturer of distilled spirits, or the distilled spirits manufacturer’s agent, who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesaler’s license to fulfill the contractual obligations entered into pursuant to subdivision (a) or (b) is guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and
fine. The person shall also be subject to license revocation pursuant to Section 24200.
(d) Any on-sale licensee who, directly or indirectly, solicits or coerces a holder of a wholesaler’s license to solicit a beer manufacturer, a holder of a winegrower’s license, a California winegrower’s agent, a distilled spirits manufacturer, or a distilled spirits manufacturer’s agent, to purchase advertising space or time shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(e) For the purposes of this section, “beer manufacturer” includes any
holder of a beer manufacturer’s license, any holder of an out-of-state beer manufacturer’s certificate, or any holder of a beer and wine importer’s general license.
SEC. 38.
Section 25503.31 of the Business and Professions Code is amended to read:25503.31.
(a) Notwithstanding any other provision of this division, a beer manufacturer, holder of a winegrower’s license, a California winegrower’s agent, a distilled spirits manufacturer, holder of a distilled spirits rectifiers general license, a distilled spirits manufacturer’s agent, and a licensed retailer may make monetary contributions or alcoholic beverage contributions of the type that licensee is authorized to sell to a symphony association, if all the following conditions are met:(1) The symphony association is a nonprofit charitable corporation or association exempt from payment of income taxes under the provisions of the Internal Revenue Code of the United States and Chapter 4 (commencing with Section 23701) of Part 11 of Division 2 of the Revenue and
Taxation Code.
(2) The symphony association has been incorporated in the City and County of San Francisco by and through its predecessor organizations for not less than 99 years and produces not less than 175 musical events open to the general public per symphony season.
(3) The symphony association holds a retail on-sale license in a portion of its premises, provided that no contribution shall be used in or for the benefit of the symphony association’s retail on-sale license.
(4) The contribution shall not be conditioned directly or indirectly, in any way, on the purchase, sale, or distribution of any alcoholic beverage manufactured or distributed by the beer manufacturer, holder of a winegrower’s license, California winegrower’s agent, distilled spirits manufacturer, holder of a distilled spirits rectifiers general
license, a distilled spirits manufacturer’s agent, or a licensed retailer by the symphony association.
(b) The symphony association shall serve other brands of beer distributed by a competing beer wholesaler in addition to the brand manufactured or marketed by the contributing beer manufacturer, other brands of wine distributed by a competing wine wholesaler in addition to the brand produced or marketed by the contributing winegrower or California winegrower’s agent, and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brand manufactured or marketed by the contribution distilled spirits manufacturer or distilled spirits manufacturer’s agent.
(c) For purposes of this section, “beer manufacturer” includes a holder of a beer manufacturer’s license, a holder of an out-of-state beer manufacturer’s certificate, or a holder of a
beer and wine importer’s general license.
(d) The Legislature finds that it is necessary and proper to require a separation between manufacturing interests, wholesale interests, and retail interests in the production and distribution of alcoholic beverages in order to prevent suppliers from dominating local markets through vertical integration and to prevent excessive sales of alcoholic beverages produced by overly aggressive marketing techniques. The Legislature further finds that the exceptions established by this section to the general prohibition against tied interests must be limited to their express terms so as not to undermine the general prohibition, and intends that this section be construed accordingly.
SEC. 39.
Section 25503.33 of the Business and Professions Code is amended to read:25503.33.
(a) Notwithstanding any other provision of this division, a beer manufacturer or winegrower may provide sponsorship funds for or on behalf of a retail on-sale licensee provided each of the following conditions are met:(1) The on-sale licensee is the owner and manager of outdoor fairs in northern and southern California which have a history-based theme and operate for 6 to 12 weekends in either or both venues and, excluding rain-outs, have an average daily attendance exceeding 10,000 persons.
(2) The sponsorship funds will be provided and used only in connection with specific programs or activities at the outdoor fairs described in paragraph (1).
(3) The sponsorship funds are to sponsor the following programs or activities only:
(i) Signing program for the deaf.
(ii) Docent program for the disabled.
(iii) Public school history program.
(iv) Scholarships and honoraria for the students of the College of Performing Arts.
(v) Contests involving sports, cooking, brewing, costumes, and other skills related to arts and sciences.
(vi) Equestrian exhibits and tournaments.
(4) The on-sale licensee serves other brands of beer or wine in addition to the
brand manufactured by the beer manufacturer or produced by the winegrower providing sponsorship funds.
(b) Any provision of sponsorship funds pursuant to subdivision (a) shall be conducted pursuant to a written contract entered into by the beer manufacturer or winegrower and the on-sale licensee.
(c) Any beer manufacturer or winegrower who, through coercion or other illegal means, induces a beer wholesaler or wine wholesaler to fulfill those contractual obligations entered into pursuant to subdivision (a), is guilty of a misdemeanor and is punishable by imprisonment in a county jail not exceeding six months, or by a fine in an amount equal to the entire value of the sponsorship funds involved in the contract, plus ten thousand dollars ($10,000), or by both that imprisonment
and fine. This person shall also be subject to license revocation pursuant to Section 24200.
(d) The Legislature finds that it is necessary and proper to require a separation between manufacturing interests, wholesale interests, and retail interests in the production and distribution of alcoholic beverages in order to prevent suppliers from dominating local markets through vertical integration and to prevent excessive sales of alcoholic beverages produced by overly aggressive marketing techniques. The Legislature further finds that the exception established by this section to the general prohibition against tied interests must be limited to its express terms so as not to undermine the general prohibition, and intends that this section be construed accordingly.
SEC. 40.
Section 25503.34 of the Business and Professions Code is amended to read:25503.34.
(a) A holder of a winegrower’s license, a beer manufacturer as defined in subdivision (d), a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturer’s agent may donate wine, beer, or spirits, and make monetary contributions to a complex dedicated to the presentation of live artistic, musical, sports, food, beverage, culinary, lifestyle, or other cultural entertainment events or performances, if all of the following conditions are met:(1) The permanent retail on-sale licensee in the complex is a nonprofit charitable corporation or association exempt from payment of income taxes under the provisions of the Internal Revenue Code and Chapter 4 (commencing with Section 23701) of Part 11 of Division 2 of the Revenue and
Taxation Code.
(2) The complex is of not more than 50 acres located on the campus of, and owned by, Sonoma State University dedicated to presenting live artistic, musical, sports, food, beverage, culinary, lifestyle, or other cultural and entertainment events and performances with venues that include a concert hall with a seating capacity of approximately 1,500 seats, a second concert hall with a seating capacity of up to 300 seats, an outdoor area with a seating capacity of up to 5,000 seats, and a further outdoor area with a seating capacity of up to 10,000 seats.
(3) The complex has a permanent retail on-sale license that is a long-term tenant of the complex.
(4) The donation or monetary contribution shall not be conditioned directly or indirectly, in any way, on the purchase, sale, or distribution of any
alcoholic beverage manufactured or distributed by the holder of a winegrower’s license, the beer manufacturer, the distilled spirits rectifier, the distilled spirits manufacturer, or the distilled spirits manufacturer’s agent by the licensee of the complex.
(5) The permanent retail on-sale licensee in the complex shall:
(A) Serve other brands of beer distributed by a competing beer wholesaler in addition to the brand manufactured or marketed by a contributing beer manufacturer.
(B) Serve other brands of wine distributed by a competing wine wholesaler in addition to the brand produced or distributed by a contributing winegrower.
(C) Serve other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brand
manufactured or marketed by the contributing distilled spirits manufacturer or distilled spirits manufacturer’s agent.
(6) Except as provided in paragraph (7), donated wine, beer, or spirits shall not be used or sold by the permanent retail licensee and a monetary contribution shall not be used in, or for the benefit of, the permanent retail on-sale licensee.
(7) Donated wine, beer, or spirits may only be used or sold in connection with fundraising activities held on or off the permanent licensed premises. Fundraising activities held in any area included in the licensed premises during which donated wine, beer, or spirits is used or sold shall not take place at the complex while the permanent retail licensee is exercising its license privileges and shall only be conducted pursuant to a temporary license issued by the department, provided however, that the permanent licensee shall
surrender its license during the fundraising only for those areas of the complex where the fundraising activities are being presented and may continue to operate under its permanent license in other areas covered by the license where the fundraising is not taking place.
(b) The complex may acknowledge and thank a donating winegrower, beer manufacturer as defined in subdivision (d), distilled spirits rectifier, distilled spirits manufacturer, or distilled spirits manufacturer’s agent in the complex’s event programs, on the complex’s Internet Web site, internet website, and on stage at the permanent licensed premises during an event or performance.
(c) The Legislature finds that it is necessary
and proper to require a separation among manufacturing interests, wholesale interests, and retail interests in the production and distribution of alcoholic beverages in order to prevent suppliers from dominating local markets through vertical integration and to prevent excessive sales of alcoholic beverages produced by overly aggressive marketing techniques. The Legislature further finds that the exceptions established by this section to the general prohibition against tied interests shall be limited to their express terms so as not to undermine the general prohibition and intends that this section be construed accordingly.
(d) For the purposes of this section, “beer manufacturer” includes any holder of a beer manufacturer’s license, any holder of an out-of-state beer manufacturer’s certificate, or any holder of a beer and wine importer’s general
license.
SEC. 41.
Section 25503.36 of the Business and Professions Code is amended to read:25503.36.
(a) Notwithstanding any other provision of this division, an authorized licensee may sponsor events promoted by, and may purchase advertising space and time from, or on behalf of, a live entertainment marketing company in connection with events organized and conducted by the live entertainment marketing company on the premises of a permanent retail licensee located at the San Diego County Fairgrounds, located in the City of Del Mar in the County of San Diego, subject to all of the following conditions:(1) The live entertainment marketing company operates and promotes live artistic, musical, sports, or cultural entertainment events only.
(2) The events will take place over a period of no more
than four consecutive days during which approximately 100 acts will perform before approximately 20,000 or more patrons.
(3) The live entertainment marketing company is a Delaware limited liability company that is under common ownership, management, or control by a private equity firm that may also have common ownership, management, or control of a licensed California winery, provided the winery represents not more than 25 percent of the assets under common ownership, management, or control by the private equity firm or its subsidiaries, and the live entertainment marketing company exercises no control over the operations of the winery. Any authorized licensee sponsoring an event or purchasing advertising space or time, pursuant to this section, shall obtain written verification of compliance with this subdivision prior to such sponsorship or the purchase of advertising space or time.
(4) Any on-sale licensee operating at the San Diego County Fairgrounds shall serve other brands of beer, distilled spirits, and wine distributed by a competing wholesaler or manufacturer in addition to any brand manufactured, distributed, or owned by the authorized licensee sponsoring an event or purchasing advertising space or time pursuant to this section.
(5) An agreement pursuant to this section shall not be conditioned directly or indirectly on the purchase, sale, or distribution of any alcoholic beverage manufactured or distributed by any authorized licensee sponsoring or purchasing advertising space or time pursuant to this section.
(b) Any sponsorship of events or purchase of advertising space or time conducted pursuant to subdivision (a) shall be conducted pursuant to a written contract entered into by the authorized licensee and the live entertainment
marketing company.
(c) Any authorized licensee who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesaler’s license to fulfill those contractual obligations entered into pursuant to subdivision (a) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license suspension or revocation pursuant to Section 24200.
(d) Any on-sale retail licensee who, directly or indirectly, solicits or coerces a holder of a wholesaler’s license to solicit an authorized licensee to purchase advertising time or space pursuant to subdivision (a) shall be guilty of
a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license suspension or revocation pursuant to Section 24200.
(e) Nothing in this section shall authorize the purchasing of advertising space or time directly from, or on behalf of, any on-sale licensee except as expressly authorized by this section or any other provision of this division.
(f) Nothing in this section shall authorize an authorized licensee to furnish, give, or lend anything of value to an on-sale retail licensee described in subdivision (a) except as expressly authorized by this section or any other provision of this division.
(g) For purposes of this section, the following definitions shall apply:
(1) “Authorized licensee” means the following licensees: beer manufacturer, out-of-state beer manufacturer’s certificate, winegrower, winegrower’s agent, importer, rectifier, distilled spirits manufacturer, distilled spirits rectifier general, distilled spirits manufacturer’s agent.
(2) Except for a licensee that holds only a beer and importer general license, a wine importer general license or
license, or a distilled spirits importer general license, “importer” does not include the holder of any importer license that does not also hold at least one other license specified as an authorized licensee.
(h) The Legislature finds that it is necessary and proper to require a separation between manufacturing interests, wholesale interests, and retail interests in the production and distribution of alcoholic beverages in order to prevent suppliers from dominating local markets through vertical integration and to prevent excessive sales of alcoholic beverages produced by overly aggressive marketing techniques. The Legislature further finds that the exception established by this section to the general prohibition against tied interests must be limited to its expressed terms so as not to undermine the general prohibition, and intends that this section be construed
accordingly.
SEC. 42.
Section 25503.38 of the Business and Professions Code is amended to read:25503.38.
(a) Notwithstanding any other provision of this chapter, a beer manufacturer may sponsor or purchase advertising space and time from, or on behalf of, an off-sale retail licensee subject to all of the following conditions:(1) The off-sale retail licensee is an owner or coowner of a professional sports team.
(2) The professional sports team owned or coowned by the off-sale retail licensee is a tenant of, and plays its home games in, an arena with a fixed seating capacity in excess of 10,000 seats located in San Joaquin County.
(3) The advertising space or time is sponsored or purchased only
in connection with the professional sports team’s events held on the premises of the arena.
(4) The owner or coowner of the professional sports team does not hold or have an interest in more than two off-sale retail licenses.
(b) Any sponsorship or purchase of advertising space or time conducted pursuant to subdivision (a) shall be conducted pursuant to a written contract entered into by the beer manufacturer, the off-sale retail licensee, and all other coowners, where applicable.
(c) Any beer manufacturer who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesaler’s license to fulfill those contractual obligations entered into pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six
months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(d) Any off-sale retail licensee described in subdivision (a) who, directly or indirectly, solicits or coerces a holder of a wholesaler’s license to solicit a beer manufacturer to sponsor or purchase advertising time or space pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section
24200.
(e) Nothing in this section shall authorize the purchasing of advertising space or time from, or on behalf of, any on-sale licensee that is the owner, manager, agent of the owner, assignee of the owner’s advertising rights, or a tenant of the arena described in paragraph (2) of subdivision (a).
(f) Nothing in this section shall authorize a beer manufacturer to furnish, give, or lend anything of value to an off-sale retail licensee described in subdivision (a) except as expressly authorized by this section or any other provision of this division.
(g) For purposes of this section, “beer manufacturer” includes a holder of a beer manufacturer’s license, a holder of an out-of-state beer manufacturer’s certificate, or a holder of a beer and wine
importer’s general license, selling beer only. license.
SEC. 43.
Section 25503.39 of the Business and Professions Code is amended to read:25503.39.
(a) Notwithstanding any other provision of this chapter, a beer manufacturer, holder of a winegrower’s license, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, holder of a distilled spirits rectifiers general license, or a distilled spirits manufacturer’s agent may sponsor events promoted by, and may purchase advertising space and time from, or on behalf of, a live entertainment marketing company subject to all of the following conditions:(1) The live entertainment marketing company is a wholly owned subsidiary of a live entertainment company that has its principal place of business in the County of Los Angeles, whose shares of stock are sold to the general public on a
national stock exchange, and also owns subsidiaries that hold on-sale retail licenses.
(2) The sponsorship and the advertising space or time is purchased only in connection with the promotion of live artistic, musical, sports, or cultural entertainment events at entertainment facilities, auditoriums, or arenas that are designed and used for live artistic, musical, sports, or cultural entertainment events.
(3) (A) Any on-sale licensee operating at a venue where live artistic, musical, sports, or cultural entertainment events are performed pursuant to a sponsorship described in this section or where advertising is purchased as described in this section shall serve other brands of beer, distilled spirits, and wine in addition to any brand manufactured or distributed by the sponsoring or advertising beer manufacturer, holder of a winegrower’s license,
winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, holder of a distilled spirits rectifiers general license, or a distilled spirits manufacturer’s agent.
(B) Any on-sale retail licensee owned by the live entertainment company described in paragraph (1) shall serve other brands of beer, distilled spirits, and wine in addition to any brand manufactured or distributed by the sponsoring or advertising beer manufacturer, holder of a winegrower’s license, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, holder of a distilled spirits rectifiers general license, or a distilled spirits manufacturer’s agent.
(4) (A) Advertising space or time purchased pursuant to this section shall not be placed in any on-sale licensed premises where the on-sale retail licensee is owned by the live
entertainment company, or any of its subsidiaries, described in paragraph (1).
(B) Sponsorship provided pursuant to this section shall not be allowed if the event or activity is held at or in any on-sale licensed premises where the on-sale retail licensee is owned by the live entertainment company, or any of its subsidiaries, described in paragraph (1).
(5) An agreement for the sponsorship of, or for the purchase of advertising space and time during, a live artistic, musical, sports, or cultural entertainment event shall not be conditioned directly or indirectly, in any way, on the purchase, sale, or distribution of any alcoholic beverage manufactured or distributed by the advertising or sponsoring beer manufacturer, holder of a winegrower’s license, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, holder of a distilled spirits
rectifiers general license, or a distilled spirits manufacturer’s agent by the live entertainment company described in paragraph (1) or by any on-sale retail licensee that is owned by the live entertainment company.
(b) Any sponsorship of events or purchase of advertising space or time conducted pursuant to subdivision (a) shall be conducted pursuant to a written contract entered into by the beer manufacturer, holder of a winegrower’s license, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, holder of a distilled spirits rectifiers general license, or a distilled spirits manufacturer’s agent and the live entertainment marketing company.
(c) Any beer manufacturer, holder of a winegrower’s license, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, holder of a distilled spirits rectifiers general
license, or a distilled spirits manufacturer’s agent who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesaler’s license to fulfill those contractual obligations entered into pursuant to subdivision (a) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(d) Any on-sale retail licensee who, directly or indirectly, solicits or coerces a holder of a wholesaler’s license to solicit a beer manufacturer, holder of a winegrower’s license, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, holder of a distilled spirits
rectifiers general license, or a distilled spirits manufacturer’s agent to purchase advertising time or space pursuant to subdivision (a) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(e) For purposes of this section, “beer manufacturer” includes a holder of a beer manufacturer’s license, a holder of an out-of-state beer manufacturer’s certificate, or a holder of a beer and wine importer’s general license.
(f) Nothing in this section shall authorize
the purchasing of advertising space or time directly from, or on behalf of, any on-sale licensee.
(g) Nothing in this section shall authorize a beer manufacturer, holder of a winegrower’s license, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, holder of a distilled spirits rectifiers general license, or a distilled spirits manufacturer’s agent to furnish, give, or lend anything of value to an on-sale retail licensee described in subdivision (a) except as expressly authorized by this section or any other provision of this division.
SEC. 44.
Section 25503.41 of the Business and Professions Code is amended to read:25503.41.
(a) Notwithstanding any other provision of this division, any person that both operates a winery in another state and produces distilled spirits in another state may hold an interest in no more than 12 brewpub-restaurant licenses, provided that all of the following conditions are met:(1) The out-of-state distilling operations occur only on premises where the licensee also conducts brewpub-restaurant operations, and do not exceed 12,000 gallons of distilled spirits annually at any licensed location.
(2) The out-of-state winery operations occur only on premises where the licensee also conducts brewpub-restaurant operations.
(3) The distilled spirits and wine that are manufactured out of state by the licensee are not imported into or sold in this state. If the licensee imports beer into this state that is produced in its out-of-state brewpub, it shall do so only through a licensed beer and wine wholesaler.
(b) The Legislature finds that it is necessary and proper to require a separation between manufacturing interests, wholesale interests, and retail interests in the production and distribution of alcoholic beverages in order to prevent suppliers from dominating local markets through vertical integration and to prevent excessive sales of alcoholic beverages produced by overly aggressive marketing techniques. The Legislature further finds that the exception established by this section to the general prohibition against
tied interests must be limited to its expressed terms so as not to undermine the general prohibition, and intends that this section be construed accordingly.
SEC. 45.
Section 25503.42 of the Business and Professions Code is amended to read:25503.42.
(a) Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrower’s license, a California winegrower’s agent, a holder of a distilled spirits rectifier’s general license, a distilled spirits manufacturer, or a distilled spirits manufacturer’s agent may purchase indoor advertising space or time at a fully enclosed venue with box office sales and attendance by the public on a ticketed basis only, with a patronage capacity in excess of 2,000, but not more than 3,000, located in Los Angeles County within the area subject to the Los Angeles Sports and Entertainment District Specific Plan adopted by the City of Los Angeles pursuant to ordinance number 174225, as approved on September 6, 2001, where the owner of the venue is not the on-sale retail licensee. The purchase of the indoor advertising space or time shall be subject to all of the following conditions:(1) The indoor advertising space or time is purchased only at the venue specified in this subdivision.
(2) The purchase of indoor advertising space or time shall be conducted pursuant to a written agreement entered into by the beer manufacturer, holder of a winegrower’s license, California winegrower’s agent, holder of a distilled spirits rectifier’s general license, distilled spirits manufacturer, or a distilled spirits manufacturer’s agent and the owner of the venue described in this subdivision. A holder of a wholesale license shall not be a party to the written agreement or otherwise have any direct or indirect obligations under the agreement, including an obligation to share in the costs or contribute to the costs of the indoor advertising space or time purchased pursuant to this section.
(3) An agreement for the purchase of indoor advertising space or time pursuant to this section shall not be conditioned directly or indirectly, in any way, on the purchase, sale, or distribution of any alcoholic beverage manufactured or distributed by the advertising beer manufacturer, holder of a winegrower’s license, California winegrower’s agent, holder of a distilled spirits rectifier’s general license, distilled spirits manufacturer, or a distilled spirits manufacturer’s agent by any on-sale retail licensee.
(4) An on-sale licensee operating at a venue described in this subdivision where indoor advertising space or time is purchased shall serve other brands of beer distributed by a competing beer wholesaler in addition to the brands manufactured or marketed by the advertising beer manufacturer, other brands of wine distributed by a competing wine wholesaler in addition to the
brands produced or marketed by the advertising winegrower or California winegrower’s agent, and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brands manufactured or marketed by the advertising distilled spirits manufacturer, the distilled spirits manufacturer’s agent, or a holder of a distilled spirits rectifier’s general license.
(5) No more than 15 percent of the retail licensee’s monetary expenditures for distilled spirits and wine for sale on its licensed premises in any calendar year shall be for products manufactured, produced, or distributed by the holder of a winegrower’s license, California winegrower’s agent, distilled spirits manufacturer, holder of a distilled spirits rectifier’s general license, or a distilled spirits manufacturer’s agent that has purchased indoor advertising space.
(b) A beer
manufacturer, holder of a winegrower’s license, California winegrower’s agent, holder of a distilled spirits rectifier’s general license, distilled spirits manufacturer, or a distilled spirits manufacturer’s agent who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesaler’s license to fulfill those contractual obligations entered into pursuant to subdivision (a) shall be guilty of a misdemeanor and shall be punished by imprisonment in a county jail for not more than six months, or by a fine equal to the greater of an amount equal to the entire value of the advertising space or time involved in the contract or ten thousand dollars ($10,000), or by both that imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(c) An on-sale retail licensee who, directly or indirectly, solicits or coerces a holder of a wholesaler’s license to solicit a beer
manufacturer, holder of a winegrower’s license, California winegrower’s agent, holder of a distilled spirits rectifier’s general license, distilled spirits manufacturer, or a distilled spirits manufacturer’s agent to purchase indoor advertising time or space pursuant to subdivision (a) shall be guilty of a misdemeanor and shall be punished by imprisonment in a county jail for not more than six months, or by a fine equal to the greater of an amount equal to the entire value of the advertising space or time involved in the contract or ten thousand dollars ($10,000), or by both that imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(d) For purposes of this section, “beer manufacturer” includes a holder of a beer manufacturer’s license, a holder of an out-of-state beer manufacturer’s certificate, or a holder of a beer and wine
importer’s general license.
(e) Nothing in this section shall authorize the purchasing of indoor advertising space or time pursuant to subdivision (a) by any beer manufacturer, holder of a winegrower’s license, a California winegrower’s agent, a distilled spirits manufacturer, holder of a distilled spirits rectifier’s general license, or a distilled spirits manufacturer’s agent directly or indirectly from any on-sale licensee.
(f) A venue owner that meets the description provided in subdivision (a) and that enters into a written agreement pursuant to this section shall obtain an annual certificate from the department. The director shall prepare, as part of the annual report required by Section 23055 for submission to the Legislature, a listing of the number of certifications made pursuant to this section or the absence of any certifications. Where there have been
no certifications made pursuant to this section for two consecutive years, this information shall be included in the report.
(g) The Legislature finds that it is necessary and proper to require a separation among manufacturing interests, wholesale interests, and retail interests in the production and distribution of alcoholic beverages in order to prevent suppliers from dominating local markets through vertical integration and to prevent excessive sales of alcoholic beverages produced by overly aggressive marketing techniques. The Legislature further finds that the exception established by this section to the general prohibition against tied interests shall be limited to its express terms so as not to undermine the general prohibition, and intends that this section be construed accordingly.
SEC. 46.
Section 25503.45 of the Business and Professions Code is amended to read:25503.45.
(a) Notwithstanding any other provision of this division, a licensed beer manufacturer or a holder of beer(b) A person authorized by subdivision (a), in advance of an authorized instructional event, may list in an advertisement the name and address of the on-sale retail licensee, the names of the beers being featured at the instructional event, and the time, date, and location of, and other information about, the instructional event, subject to the following limitations:
(1) The advertisement does not also contain the retail price of the beers.
(2) The listing of the retailer’s name and address is the only reference to the retailer in the advertisement and is relatively inconspicuous in relation to the advertisement as a whole. Pictures or illustrations of the retailer’s premises and laudatory references to the retailer in these advertisements are not hereby authorized.
(c) An on-sale retail licensee’s advertisement of an authorized instructional event may include the name, address, and brand names of the person authorized by subdivision (a), however nothing in this section allows that person to share in the costs of the on-sale retail licensee’s advertisement.
(d) For purposes of this section, a licensed beer and wine wholesaler shall not be a representative of a beer manufacturer or a holder of a beer and wine importer’s general license.
(e) Notwithstanding any other provision of this division, no alcoholic beverage may be given away in connection with the instructional event authorized by this
section.
SEC. 47.
Section 25503.56 of the Business and Professions Code is amended to read:25503.56.
(a) An authorized licensee, or a designated representative of an authorized licensee acting as an agent of the authorized licensee, may conduct, on the area specified by paragraph (1) of subdivision (c) of Section 23396.6, an instructional tasting event for consumers on the subject of wine, beer, or distilled spirits, including, but not limited to, the history, nature, values, and characteristics of wine, beer, or distilled spirits, and the methods of presenting and serving wine, beer, or distilled spirits.(1) (A) Except as provided in subparagraph (B), the instructional tasting event may include the serving of alcoholic beverages to an attendee of legal drinking age. An instructional tasting event on the subject of wine or distilled
spirits shall be limited to not more than three tastings per person per day. A single tasting of distilled spirits shall not exceed one-fourth of one ounce and a single tasting of wine shall not exceed one ounce. An instructional tasting event on the subject of beer shall be limited to not more than the tasting of eight ounces of beer per person per day. The wine, beer, or distilled spirits tasted shall be limited to the products that are authorized to be sold by the authorized licensee and the licenseholder under its off-sale license.
(B) A beer and wine wholesaler may conduct an instructional tasting event but shall not serve tastes of beer unless the beer and wine wholesaler also holds a beer manufacturer’s license, an out-of-state beer manufacturer’s certificate, or more than
six distilled spirits wholesaler’s licenses.
(C) No charge of any sort shall be made for the tastings. Except for the purposes of Section 23985, the serving of tastings shall not be deemed a sale of products pursuant to this division.
(D) A person under 21 years of age shall not serve wine, beer, or distilled spirits at the instructional tasting event.
(E) All tastes shall be served by an employee of the authorized licensee, the designated representative of the authorized licensee, or by an employee of the designated representative of the authorized licensee.
(F) An authorized licensee, or a designated representative of an authorized licensee, shall either supply the wine or distilled spirits to be tasted during the instructional tasting event or
purchase the wine or distilled spirits from the licenseholder at the original invoiced cost. An authorized licensee, or a designated representative of an authorized licensee, shall purchase beer to be tasted during the instructional tasting event from the licenseholder at the original invoiced cost.
(G) Any unused wine, beer, or distilled spirits remaining from the tasting shall be removed from the off-sale licensed premises by the authorized licensee or its designated representative.
(2) If the instructional tasting event is conducted by a designated representative of an authorized licensee, the designated representative shall not be owned, controlled, or employed directly or indirectly by the licenseholder on whose premises the instructional tasting event is held.
(3) An instructional tasting event shall be limited
to a single type of alcoholic beverage. For purposes of this paragraph, “type of alcoholic beverage” means distilled spirits, wine, or beer.
(b) For purposes of this section:
(1) “Authorized licensee” means a winegrower, California winegrower’s agent, beer and
importer general, wine importer general, beer and wholesaler, wine wholesaler, wine rectifier, craft distiller, distilled spirits manufacturer, distilled spirits manufacturer’s agent, distilled spirits importer general, distilled spirits rectifier, distilled spirits general rectifier, rectifier, out-of-state distilled spirits shipper’s certificate holder, distilled spirits wholesaler, brandy manufacturer, brandy importer, California brandy wholesaler, beer manufacturer, or an out-of-state beer manufacturer certificate holder. “Authorized licensee” shall not include an entity that solely holds a combination of a beer and wine wholesale license and an off-sale beer and wine retail license or holds
those licenses solely in combination with any license not listed in this paragraph, or holds a limited off-sale retail wine license.
(2) “Licenseholder” means an off-sale retail licensee issued an instructional tasting license pursuant to Section 23396.6.
(3) “Location” means the total contiguous area encompassed by the off-sale and on-sale licenses.
(c) Notwithstanding subparagraph (E) of paragraph (1) of subdivision (a), a licenseholder may conduct an instructional tasting event that includes the serving of tastings only when an authorized licensee or its designated representative are unable to conduct an instructional tasting event previously advertised pursuant to this section and scheduled by the authorized licensee or its designated representative, provided that the licenseholder supplies the wine, beer, or
distilled spirits used in the instructional tasting event and provides or pays for a person to serve the wine, beer, or distilled spirits. Instructional tasting events conducted by a licenseholder pursuant to this subdivision are subject to the provisions of this section and Section 23396.6.
(d) No more than one authorized licensee, or its designated representative, may conduct an instructional tasting event that includes the serving of tastes of wine, beer, or distilled spirits at any one individual licensed premises of a licenseholder per day.
(e) A licenseholder that also holds an on-sale beer and wine license, an on-sale beer and wine eating place license, or an on-sale general license shall not allow an authorized licensee, or its designated representative, to conduct an instructional tasting event on the same day and at the same location as any instructional tasting event
held pursuant to subdivision (b) of Section 23386, Section 25503.4, subdivision (c) of Section 25503.5, or Section 25503.55.
(f) A licenseholder shall not condition the allowance of an instructional tasting event upon the use of a particular designated representative of an authorized licensee.
(g) In addition to any point-of-sale advertising or other advertising items allowed under this division or under rules of the department, an authorized licensee or its designated representative, in his or her their absolute discretion and with permission of the licenseholder upon whose premises the instructional tasting event will be held, may list in any advertisement to the general public for the
instructional tasting event the name, address, telephone number, email address, Internet Web site
internet website address, and any other electronic media of the licenseholder, the names of the alcoholic beverages being featured at the instructional tasting event, pictures, illustrations, and depictions of the retailer’s premises, personnel, and customers, and the time, date, and location of, and other information about, the instructional tasting event, provided that both of the following apply:
(1) The advertisement does not contain the retail price of the alcoholic beverages.
(2) The listing of the licenseholder’s name, address, telephone number, email address, Internet Web site internet website address, and any other electronic media in the
advertisement is relatively inconspicuous in relation to the advertisement as a whole. Laudatory references to the licenseholder in these advertisements are not authorized. Pictures, illustrations, or depictions shall be still pictures, illustrations, or depictions only and shall not include any video. The reposting of social media posts, including posts by the retailer, is permitted provided that the reposting complies with all the requirements of this section. Nothing in this section shall authorize an authorized licensee or its designated representative to share in the costs, if any, of the licenseholder.
(h) A licenseholder may advertise an instructional tasting event to the general public. The costs of this advertising shall be borne solely by the licenseholder. Advertising permitted by this subdivision includes flyers, newspaper ads, Internet
internet communications, and interior signage.
(i) Except as otherwise provided in this division or rules of the department, no premium, gift, free goods, or other thing of value shall be given away by an authorized licensee or its designated representative in connection with an instructional tasting event that includes tastings of an alcoholic beverage.
(j) The licenseholder or the authorized licensee or its designated representative is authorized to perform setup and breakdown of the instructional tasting event area. The authorized licensee or its designated representative may provide, free of charge to the licenseholder, the equipment, materials, and utensils as may be required for use in connection with the instructional tasting event.
(k) (1) A
licenseholder shall not require, or enter into a collusive scheme with, an authorized licensee or its designated representative to conduct one or more instructional tasting events as a condition of the licenseholder’s carrying or continuing to carry a brand or brands of the authorized licensee or as a condition for display or other merchandising plan which is based on an agreement to provide shelf space. An authorized licensee or its designated representative shall not require any preferential treatment or benefit from, or enter into a collusive scheme with, a licenseholder as a condition of conducting one or more instructional tasting events, require a licenseholder to carry or continue to carry a brand or brands of the authorized licensee as a condition of conducting one or more instructional tasting events, or condition display or other merchandising plans that are based on agreements for the provision of shelf space on the conducting of one or more instructional tasting events. Any agreement, whether
written or oral, entered into by and between a licenseholder and an authorized licensee or its designated representative that precludes the conducting of instructional tasting events on the premises of the licenseholder by any other authorized licensee is prohibited. A licenseholder or authorized licensee, or its designated representative, shall not use an instructional tasting event to circumvent any other requirements of this division.
(2) In addition to any other remedies available under this division, upon a finding by the department of a failure to comply with this subdivision, the department shall suspend the instructional tasting license of the licenseholder and the privilege of the authorized licensee to conduct instructional events for not less than six months but for no more than one year.
(l) The Legislature finds that it is necessary and proper to require a separation
between manufacturing interests, wholesale interests, and retail interests in the production and distribution of alcoholic beverages in order to prevent suppliers from dominating local markets through vertical integration and to prevent excessive sales of alcoholic beverages produced by overly aggressive marketing techniques. The Legislature further finds that the exception established by this section to the general prohibition against tied interests must be limited to its express terms so as not to undermine the general prohibition, and intends that this section be construed accordingly.
SEC. 48.
Section 25509 of the Business and Professions Code is amended to read:25509.
(a) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, a distilled spirits rectifier, a wine rectifier, a distilled spirits(b) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, distilled spirits rectifier, a wine rectifier, distilled spirits wholesaler or beer and wine wholesaler wholesaler, beer wholesaler, or wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment in full by the expiration of the 30th day from date of delivery or who has not received payment of the 1 percent charge at the expiration of the 30th day from the day the charge became due shall thereafter sell beer, wine, or distilled spirits to said retailer either for cash or by receiving payment in advance of delivery until such
time as all payments are received for the beer, wine, or distilled spirits sold and delivered to the said retailer more than 30 days previously.
(c) The 42-day period and the 30-day period provided for in this section shall commence with the day immediately following the date of invoice and shall include all successive days including Sundays and holidays to and including the 42nd or 30th day as the case may be. When the 42nd day from date of invoice or the expiration of each additional 30-day period falls on Saturday, Sunday, or legal holiday, the next business day shall be deemed to be the expiration day.
(d) All moneys received from a retailer in payment for any beer, wine, or distilled spirits sold and delivered to him or her
the retailer shall be first applied to the payment of the oldest balance on beer, wine, or distilled spirits. All checks received for such payments shall be deposited for collection not later than the second business day following receipt of said check. A promissory note, postdated check or check dishonored on presentation shall not be deemed payment.
(e) In enacting the act that amends this section by adding this subdivision, the Legislature finds that it is necessary and proper to remove the retailer from financial or business obligations to suppliers or wholesalers by the extension of credit beyond the terms contained in this section. The Legislature further finds that the exception established by this section to the general prohibition against tied interests shall be limited to its express terms so as not to undermine the general prohibition, and intends that this section shall be construed
accordingly.
SEC. 49.
Section 25600 of the Business and Professions Code is amended to read:25600.
(a) (1) No licensee shall, directly or indirectly, give any premium, gift, or free goods in connection with the sale or distribution of any alcoholic beverage, except as provided by rules that shall be adopted by the department to implement this section or as authorized by this division.(2) (A) Notwithstanding paragraph (1), for purposes of this section, a refund to, or exchange of products for, a dissatisfied consumer by a licensee authorized to sell to consumers shall not be deemed a premium, gift, or free goods given in connection with the sale or distribution of an alcoholic beverage.
(B) A winegrower may advertise or otherwise offer consumers a
guarantee of product satisfaction only in newsletters or other publications of the winegrower or at the winegrower’s premises. A winegrower may refund to a dissatisfied consumer the entire purchase price of wine produced by that winegrower and sold to that consumer, regardless of where the wine was purchased.
(b) (1) Except as provided in paragraph (2), no rule of the department may permit a licensee to give any premium, gift, or free goods of greater than inconsequential value in connection with the sale or distribution of beer. With respect to beer, premiums, gifts, or free goods, including advertising specialties that have no significant utilitarian value other than advertising, shall be deemed to have greater than inconsequential value if they cost more than twenty-five cents ($0.25) per unit, or cost more than fifteen dollars ($15) in the aggregate for all those items given by a single supplier to a single retail
premises per calendar year.
(2) (A) No rule of the department may impose a dollar limit for consumer advertising specialties furnished by a beer manufacturer to the general public other than three dollars ($3) per unit original cost to the beer manufacturer who purchased it.
(B) With respect to beer, a beer manufacturer may give consumer advertising specialties to the general public that do not exceed three dollars ($3) per unit original cost to the beer manufacturer who purchased it. For purposes of this paragraph, “beer manufacturer” includes a holder of a beer manufacturer’s license, a holder of an out-of-state beer manufacturer’s certificate, an out-of-state vendor that holds a certificate of compliance, or a holder of a beer and wine importer’s general license. A licensee
authorized to give consumer advertising specialties pursuant to this paragraph shall not be precluded from doing so on the basis of holding any other type of alcoholic beverage license.
(C) A beer manufacturer, as defined in subparagraph (B) of paragraph (2) shall not require a beer wholesaler to fund the purchase of consumer advertising specialties that beer manufacturers are permitted to give under paragraph (2).
(D) Consumer advertising specialties furnished by a beer manufacturer are intended only for adults of legal drinking age. Coin banks, toys, balloons, magic tricks, miniature bottles or cans, confections, dolls, or other items that appeal to minors or underage drinkers may not be used in connection with the merchandising of beer.
(c) With respect to distilled spirits and wines, a licensee may furnish, give,
rent, loan, or sell advertising specialties to a retailer, provided those items bear conspicuous advertising required of a sign and the total value of all retailer advertising specialties furnished by a supplier, directly or indirectly, to a retailer do not exceed fifty dollars ($50) per brand in any one calendar year per retail premises. The value of a retailer advertising specialty is the actual cost of that item to the supplier who initially purchased it, excluding transportation and installation costs. The furnishing or giving of any retailer advertising specialty shall not be conditioned upon the purchase of the supplier’s product. Retail advertising specialties given or furnished free of charge may not be sold by the retail licensee. No rule of the department may impose a dollar limit for consumer advertising specialties furnished by a distilled spirits supplier to a retailer or to the general public of less than five dollars ($5) per unit original cost to the supplier who purchased it. A rule or
decision of the department may not approve glassware as an authorized retailer advertising specialty for distilled spirits or wine under this section.
(d) (1) Notwithstanding any other provision of this division, a beer manufacturer or distilled spirits manufacturer may provide directly to consumers free or discounted rides through taxicabs, transportation network companies, or any other ride service for the purpose of furthering public safety. The free or discounted rides may be provided by vouchers, codes, or any other method to deliver the free or discounted ride. A free or discounted ride, or the provision of a voucher, code, or other method of delivery, shall not be conditioned upon the purchase of an alcoholic beverage. A beer and wine wholesaler or distilled spirits importer general that holds a wholesaler’s or retailer’s license
only as an additional license shall not directly or indirectly underwrite, share in, or contribute to, the costs of free or discounted rides or serve as an agent of a beer manufacturer or distilled spirits manufacturer to provide free or discounted rides to consumers. Nothing in this provision authorizes a beer manufacturer or distilled spirits manufacturer to provide a gift or anything of value directly or indirectly to a retail licensee.
(2) For purposes of this section:
(A) “Beer manufacturer” has the same meaning as defined in subparagraph (B) of paragraph (2) of subdivision (b).
(B) “Distilled spirits manufacturer” means a distilled spirits manufacturer, holder of a distilled spirits rectifier’s general license, distilled spirits manufacturer’s agent, brandy manufacturer, holder of an out-of-state distilled
spirits shipper’s certificate, holder of a distilled spirits importer general’s license, or craft distiller.
(C) “Glassware” means a single-service glass container or nonglass container capable of holding no more than 23 ounces of liquid volume or a decanter, chalice, infusion jar, or similar container of any size and made of any material.
SEC. 50.
Section 25600.1 of the Business and Professions Code is amended to read:25600.1.
(a) An authorized licensee may conduct consumer contests, subject to the following conditions:(1) (A) Entry or extra chances in a contest shall not be made available via the purchase of an alcoholic beverage.
(B) Entry into or participation in a contest shall be limited to persons 21 years of age or older.
(C) No contest shall involve consumption of alcoholic beverages by a participant.
(D) A contest may not be conducted for the benefit of any permanent retail licensee.
(2) (A) Closures, caps, cap liners, corks, labels, cartons, cases, packaging, or other similar material shall not be used as an entry to a contest or as a means of determining the amount or size of the prize or the winner in a contest, except as provided in subparagraphs (D) and (F).
(B) The authorized licensee shall provide an alternative means of entry that does not require a visit to a licensed premises.
(C) Except as provided in subparagraph (D), removable entry forms shall not be used on alcoholic beverage labels, containers, packaging, cases, or cartons.
(D) Removable entry forms that are neck hangers shall be used only on bottles of wine or distilled spirits, and shall not require purchase of the product. Removable neck hangers shall be used only if other entry forms are available at the point of sale
or if an alternative means of entry is also available.
(E) Entry forms may be provided through electronic or other media, including point of sale.
(F) Codes that may be scanned or electronically entered by a consumer where the authorized licensee has permanently affixed the codes as part of the original alcoholic beverage label, container, packaging, case, or carton, and where the codes are not removable and not required to be removed are permitted as a form of entry.
(G) All permitted means of entry, including the use of electronic or scanner codes, shall clearly indicate that no purchase is required to enter.
(3) A contest shall not provide for the instant or immediate awarding of a prize or prizes. Instant or immediate notification to the consumer
that he or she the consumer is a winner is permissible.
(4) Except for providing a means of entry, a contest authorized by this section shall not be conducted at the premises of a retail licensee or the premises of a winegrower or beer manufacturer operating under a duplicate license for a branch office.
(5) Alcoholic beverages or anything redeemable for alcoholic beverages shall not be awarded as a contest prize. This paragraph shall not prohibit a contest in which the prize is cash or cash equivalent, the awarding of cash or cash equivalent, or the inclusion of alcoholic beverages as an incidental part of a prize package.
(6) A retail licensee shall not serve as the agent of an authorized licensee by collecting or forwarding entries or awarding prizes to, or redeeming prizes for, a contest winner.
(7) A licensee that is not an authorized licensee shall not directly or indirectly underwrite, share in, or contribute to, the costs of a contest authorized by this section or serve as the agent of an authorized licensee to collect or forward entries or to furnish any prize to a contest winner.
(8) (A) Advertising of a contest shall comply with the signage and advertising restrictions contained in this chapter, Chapter 15 (commencing with Section 25500), and any regulations issued by the department.
(B) Advertising or promotion of a contest shall not identify or refer to any retail licensee.
(C) A retail licensee shall only advertise or promote a contest authorized by this section in the manner specified in subparagraph (A).
(D) Advertising or promotion of a contest shall only be conducted on the premises of a retail licensee when such advertisement or promotion involves a minimum of three unaffiliated retail licensees. For purposes of this subparagraph, “unaffiliated retail licensees” shall not include any retail licensee owned or controlled in whole or in part by an authorized licensee or any officer, director, or agent of that licensee.
(E) Placement of signs or other advertising of a contest in a licensed retail premises shall not be conditioned upon the following:
(i) The placement of any product within the licensed premises or the
restriction, in any way, of the purchase of a product by a licensee, the removal of a product from the sales area of a licensed premises, or the resetting or repositioning of a product within the licensed premises.
(ii) The purchase or sale of any product produced, imported, distributed, represented, or promoted by an authorized licensee or its agent.
(F) An agreement, whether written or oral, entered into, by, and between a retail licensee and an authorized licensee or its agent that precludes the advertisement or promotion of a contest on the premises of the retail licensee by another authorized licensee is prohibited.
(9) Contest prizes shall not be awarded to an authorized licensee, retail licensee, or wholesale licensee or agent, officer, employee, or family member of an authorized licensee, retail licensee, or
wholesale licensee. For the purposes of this paragraph, “family member” means a spouse, parent, sibling, child, son-in-law, daughter-in-law, and lineal descendants, including those by adoption. An authorized licensee shall maintain all records pertaining to a contest for three years following the completion of a contest. This section shall not apply to contests conducted by an authorized licensee as part of a sales incentive program for wholesale licensees or their employees or an authorized licensee’s employees.
(b) Nothing in this section shall preclude licensees from sponsoring contests as permitted by regulations of the department.
(c) For purposes of this section:
(1) (A) “Authorized licensee” means a winegrower, beer and
importer general, wine importer general, beer manufacturer, out-of-state beer manufacturer certificate holder, distilled spirits manufacturer, distilled spirits manufacturer’s agent, distilled spirits importer general, distilled spirits general rectifier, rectifier, out-of-state distilled spirits shipper’s certificate holder, brandy manufacturer, and brandy importer. An authorized licensee may conduct a consumer contest pursuant to this section regardless of whether the licensee holds any additional license not included in this paragraph.
(B) An “authorized licensee” shall not include a beer and wine wholesaler, beer wholesaler, a wine wholesaler, a beer and
importer general, a wine importer general, or a distilled spirits importer general that only holds a wholesaler’s or retailer’s license as an additional license.
(2) “Contest” means a game, contest, puzzle, or similar activity that holds out or offers to participants the opportunity to receive or compete for gifts, prizes, gratuities, or other things of value as determined by skill, knowledge, or ability rather than upon random selection. Skill, knowledge, or ability does not include the consumption or use of alcoholic beverages.
(d) Nothing in this section authorizes conducting any contest where consumers are entitled to an allotment or accumulation of points based on purchases made over a period of time that can be redeemed for
prizes, things of value, or additional contest entries.
(e) A prize awarded for a contest conducted pursuant to this section shall not be subject to the monetary limitation imposed by Section 25600 or a regulation of the department.
(f) An authorized licensee that violates this section, in addition to any other penalty imposed by this division, may be prohibited by the department from offering a contest to California residents for a period of 12 months.
SEC. 51.
Section 25600.2 of the Business and Professions Code is amended to read:25600.2.
(a) An authorized licensee may conduct or sponsor consumer sweepstakes, subject to the following conditions:(1) (A) No entry fee may be charged to participate in a sweepstakes authorized by this subdivision. Entry or extra chances in a sweepstakes shall not be made available via the purchase of an alcoholic beverage.
(B) Entry into or participation in a sweepstakes shall be limited to persons 21 years of age or older.
(C) No sweepstakes shall involve consumption of alcoholic beverages by a participant.
(D) Subject to subparagraph (B), any
sweepstakes offered in California shall be open to all residents of California.
(E) A sweepstakes may not be conducted for the benefit of any permanent retail license.
(2) (A) Closures, caps, cap liners, corks, labels, cartons, cases, packaging, or other similar material shall not be used as an entry to a sweepstakes or as a means of determining the amount or size of the prize or the winner in a sweepstakes, except as provided in subparagraphs (D) and (F).
(B) The authorized licensee shall provide an alternative means of entry that does not require a visit to a licensed premises.
(C) Except as provided in subparagraph (D), removable entry forms shall not be used on alcoholic beverage labels, containers, packaging, cases, or
cartons.
(D) Removable entry forms that are neck hangers shall be used only on bottles of wine or distilled spirits, and shall not require purchase of the product. Removable neck hangers shall be used only if other entry forms are available at the point of sale or if an alternative means of entry is also available.
(E) Entry forms may be provided through electronic or other media, including point of sale.
(F) Codes that may be scanned or electronically entered by a consumer where the authorized licensee has permanently affixed the codes as part of the original alcoholic beverage label, container, packaging, case, or carton and where the codes are not removable and not required to be removed are permitted as a form of entry.
(G) All permitted means of
entry, including the use of electronic or scanner codes, shall clearly indicate that no purchase is required to enter.
(H) All sweepstakes entries shall provide the entrant with an equal odds of winning.
(3) A sweepstakes shall not provide for the instant or immediate awarding of a prize or prizes. Instant or immediate notification to the consumer that he or she
the consumer is a winner is permissible.
(4) Except for providing a means of entry, a sweepstakes authorized by this section shall not be conducted at the premises of a retail licensee or the premises of a winegrower or beer manufacturer operating under a duplicate license for a branch office.
(5) Alcoholic beverages or anything redeemable for alcoholic beverages shall not be awarded as a sweepstakes prize. This paragraph shall not prohibit a sweepstakes in which the prize is cash or cash equivalent, the awarding of cash or cash equivalent, or the inclusion of alcoholic beverages as an incidental part of a prize package.
(6) A retail licensee shall not serve as the agent of an authorized licensee by collecting or forwarding entries or awarding prizes to, or redeeming prizes
for, a sweepstakes winner. The matching of entries with numbers or pictures on the point-of-sale materials at retail licensed premises is permitted only if entrants are also offered the opportunity to use an alternative means to determine prize-winning status. An authorized licensee may furnish and maintain a deposit box on a retail licensed premises for the collection and forwarding of sweepstakes entry forms.
(7) A licensee that is not an authorized licensee shall not directly or indirectly underwrite, share in, or contribute to, the costs of a sweepstakes authorized by this section or serve as the agent of an authorized licensee to collect or forward entries or to furnish any prize to a sweepstakes winner.
(8) (A) Advertising of a sweepstakes shall comply with the signage and advertising restrictions contained in this chapter, Chapter 15 (commencing with
Section 25500), and any regulations issued by the department.
(B) Advertising or promotion of a sweepstakes shall not identify or refer to a retail licensee.
(C) A retail licensee shall only advertise or promote a sweepstakes authorized by this section in the manner specified in subparagraph (A).
(D) Advertising or promotion of a sweepstakes shall only be conducted on the premises of a retail licensee when such advertisement or promotion involves a minimum of three unaffiliated retail licensees. For purposes of this subparagraph, “unaffiliated retail licensees” shall not include a retail licensee owned or controlled in whole or in part by an authorized licensee or any officer, director, or agent of that licensee.
(E) Placement of signs or other
advertising of a sweepstakes in a licensed retail premises shall not be conditioned upon the following:
(i) The placement of a product within the licensed premises or the restriction, in any way, of the purchase of a product by a licensee, the removal of a product from the sales area of a licensed premises, or the resetting or repositioning of a product within the licensed premises.
(ii) The purchase or sale of a product produced, imported, distributed, represented, or promoted by an authorized licensee or its agent.
(F) An agreement, whether written or oral, entered into, by, and between a retail licensee and an authorized licensee that precludes the advertisement or promotion of a sweepstakes on the premises of the retail licensee by another authorized licensee or its agent is prohibited.
(9) Sweepstakes prizes shall not be awarded to an authorized licensee, retail licensee, or wholesale licensee or agent, officer, employee, or family member of an authorized licensee, retail licensee, or wholesale licensee. For the purposes of this paragraph, “family member” means a spouse, parent, sibling, child, son-in-law, daughter-in-law, and lineal descendants, including those by adoption. An authorized licensee shall maintain all records pertaining to a sweepstakes for three years following the completion of a sweepstakes.
(b) For purposes of this section:
(1) (A) “Authorized licensee” means a winegrower, beer and importer
general, wine importer general, beer manufacturer, out-of-state beer manufacturer certificate holder, distilled spirits manufacturer, distilled spirits manufacturer’s agent, distilled spirits importer general, distilled spirits general rectifier, rectifier, out-of-state distilled spirits shipper’s certificate holder, brandy manufacturer, and brandy importer. An authorized licensee may conduct, sponsor, or participate in a sweepstakes pursuant to this section regardless of whether the licensee holds an additional license not included in this paragraph.
(B) An “authorized licensee” shall not include a beer and wine wholesaler, beer wholesaler, a wine wholesaler, a beer and
importer general, a wine importer general, or a distilled spirits importer general that only holds a wholesaler’s or retailer’s license as an additional license.
(2) “Sweepstakes” means a procedure, activity, or event for the distribution of anything of value by lot, chance, or random selection where the odds for winning a prize are equal for each entry.
(c) Nothing in this section authorizes conducting sweepstakes where consumers are entitled to an allotment or accumulation of points based on purchases made over a period of time that can be redeemed for prizes, things of value, or additional sweepstakes entries.
(d) A prize awarded for a sweepstakes conducted pursuant
to this section shall not be subject to the monetary limitation imposed by Section 25600 or a regulation of the department.
(e) An authorized licensee that violates this section, in addition to any other penalty imposed by this division, may be prohibited by the department from offering a sweepstakes to California residents for a period of 12 months.
SEC. 52.
Section 32176 of the Revenue and Taxation Code is amended to read:32176.
(a) If taxes have been paid on beer or wine subsequently exported from the state or sold for export and actually thereafter exported from this state, or on beer or wine subsequently destroyed under the supervision of a board representative, a taxpayer may claim and shall be allowed credit with respect to the taxes in any report filed or assessment made under this part.(b) A beer manufacturer located in this state may claim and shall be allowed a credit for excise taxes paid on tax paid beer returned by a licensed wholesaler and subsequently destroyed by the beer manufacturer under the supervision of a board representative. The credit shall be allowed only if the beer manufacturer has credited the licensed wholesaler the
amount of the tax. If the credit is allowed to the beer manufacturer, a credit shall not be allowed to the licensed wholesaler with respect to the destruction of the same product.
(c) A winegrower may claim credit with respect to excise taxes on wine purchased state tax paid from another winegrower and subsequently exported or sold for export and actually exported.
(d) A beer manufacturer or a beer and wine wholesaler may claim credit for excise taxes on beer purchased state tax paid and subsequently exported or sold for export and actually exported.
SEC. 53.
No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.“Person” includes any individual, firm, copartnership, joint adventure, association, limited liability company, limited liability partnership, corporation, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, and the plural as well as the singular number.
