AB 774
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 774 (Levine)
As Amended May 28, 2015
Majority vote
ASSEMBLY:
79-0
(May 11, 2015)
SENATE:
37-0
(June 25, 2015)
Original Committee Reference: G.O.
SUMMARY: Provides that a certified farmers' market beer sales permit shall also authorize an
instructional tasting event on the subject of beer at a certified farmers' market (CFM), including
any permitted community event area adjacent to, and operated in conjunction with, a certified
farmers' market, located within the county or an adjacent county of the physical location of the
licensed beer manufacturer, under specified conditions.
The Senate amendments:
1) Clarify that the community event area shall be adjacent to, and operated in conjunction with,
the CFM and the procedures for conducting the instructional beer tastings.
2) Make a conforming change.
EXISTING LAW:
1) Establishes the Department of Alcoholic Beverage Control (ABC) and grants it exclusive
authority to regulate the licensing, enforcement, and administration of the alcoholic
beverage control laws.
2) Provides for certified farmers' markets which are operated in accordance with regulations
established in the California Administrative Code pertaining to direct marketing and are
governed by law under the California Department of Food and Agriculture (CDFA). These
rules are enforced by County Agriculture Commissioners in the counties in which the
market operates. The markets also fall under the jurisdiction of the health departments in
each county in which a market operates.
3) Authorizes the Department of ABC to issue special temporary licenses and permits to various
entities for limited purposes including a certified farmers’ market sales permit that
authorizes a licensed winegrower to sell "wine" produced and bottled by the winegrower at
certified farmers' market locations. The farmers' market wine sales permit may be issued for
up to 12 months but shall not be valid for more than one day a week at any single specified
farmers' market location. The law also allows a winegrower to hold more than one certified
farmers' market wine sales permit and requires the Department of ABC to notify local
agencies and enforcement entities of the permits. Additionally, the law grants the licensed
winegrower the privilege of conducting limited "wine" tastings for consumers at farmers'
markets under certain circumstances. Furthermore, the law prohibits the licensed
winegrower from selling more than 5,000 gallons of wine annually pursuant to all certified
farmers' markets sales permits held by any single winegrower.
4) Authorizes a licensed beer manufacturer to apply to the Department of ABC for a certified
farmers' market "beer" sales permit that grants the beer manufacturer the privilege of selling
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beer, that has been produced by the beer manufacturer, at a certified farmers' market,
including any permitted community event area adjacent to, and operated in conjunction
with, a certified farmers' market, as specified. The farmers' market sales permit may be
issued for up to 12 months but shall not be valid for more than one day a week at any single
specified farmers' market or community event location. The law also prohibits the licensed
beer manufacturer from selling more than 5,000 gallons of beer annually pursuant to all
certified farmers' markets permits held by any single beer manufacturer. Additionally, the
farmers' market sales permit is subject to the respective discretion and managerial control of
a certified farmers' market or community event operator and existing regulations governed
by law under the CDFA.
5) Authorizes specified nonprofit corporations that have not been issued a license authorizing
the sale of wine to receive and possess wine donated to that nonprofit corporation, if the
nonprofit corporation has submitted a license application to sell wine with the Department
of ABC.
6) Permits a winegrower, beer manufacturer, or a beer and wine wholesaler to instruct licensees
and their employees on the subject of wine or beer, including, but not limited to, the history,
nature, values, and characteristics of those beverages, as provided.
7) Permits an on-sale retail licensee of wine or distilled spirits to conduct "instructional"
consumer tastings on the licensed retail premise provided the following conditions are met:
a) no more than 1/4 ounce of distilled spirits is offered in one tasting; b) no more than one
ounce of wine is offered in one tasting; and, c) no more than three tastings are offered to an
individual in one day. An instruction may include the history, nature, values and
characteristics of the product being offered, and the methods of presenting and serving the
product.
8) Authorizes beer manufacturers and wholesalers to offer beer samples (not to exceed eight
ounces per person, per day) to individuals of legal drinking age at on-sale retail licensed
premises under specified conditions.
9) Permits a licensed winegrower, manufacturer, importer, or wholesaler to provide samples of
the alcoholic beverages, which are authorized to be sold by the licensee in accordance with
rules prescribed by the Department of ABC. A retail licensee, however, is not authorized to
provide any free samples of alcoholic beverages.
10) Prohibits any licensee from giving any premium, gift, or free goods in connection with the
sale or distribution of any alcoholic beverage, except as specifically authorized. The ABC
Act provides that a violation of any of its provisions for which another penalty or
punishment is not specifically provided is a misdemeanor.
11) Defines "community event" to mean an event that is civic, political, public, or educational
nature, including state and county fairs, city festivals, circuses, and other public gathering
events approved by the local enforcement agency. (Health and Safety Code Section
113755)
AS PASSED BY THE ASSEMBLY, this bill allowed a licensed beer manufacturer that holds a
certified farmers' market beer sales permit to conduct instructional beer tastings for consumers at
the certified farmers' market, and specifies the manner in which the tasting may be conducted.
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FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate
Rule 28.8, negligible state costs.
COMMENTS: This bill as amended in the Senate is consistent with Assembly actions.
Purpose of the bill. Currently, a licensed winegrower and a licensed beer manufacturer may
apply for a permit, from the Department of ABC, to sell wine or beer at a certified farmers'
market under specified conditions. In addition, the law grants a licensed winegrower, but not a
licensed beer manufacturer, the privilege of also conducting instructional wine tastings for
consumers at a farmers' market, as specified. This bill is intended to expand the privileges of a
licensed beer manufacturer that holds a certified farmers' market beer sales permit by allowing
the licensee to conduct instructional beer tastings at the certified farmers' market in a specified
manner and with certain limitations.
According to the author's office, very few craft brewers sell beer at farmers' markets in part
because consumers are accustomed to sampling craft beer before purchasing. The author's office
believes that this bill will help foster relationships between local brewers and consumers –
enabling the brewers to build their brands by affiliating with farmers' markets. The author's
office also points out that this bill amends existing law to allow nonprofits to receive beer
donations from breweries to assist them in their fundraising activities. Currently, nonprofits may
receive wine donations for these purposes.
The craft beer industry. According to industry sources, California currently has more craft
breweries than any other state in the country. In fact, California has more than twice as many
craft breweries as Colorado - the state with the next highest number. An average of one in every
five craft beers produced in the United States comes from California. According to the
California Craft Brewers Association, which represents approximately 350 independently owned
craft breweries producing 98% of the craft beer volume in California, in 2013, the craft brewing
industry contributed over $5.5 billion to California's economy and supported 44,000 in-state
jobs.
In support: Proponents state that this bill promotes buy local programs by providing conditional
authorization to craft breweries to conduct instructional tastings of craft beer at farmers' market
events. Proponents point out that any tasting event is subject to authorization and managerial
control of the operator of the certified farmers' market and adjacent community event areas; and
at all times the "tasting event area" shall be separated from the remainder of the market by a wall,
fence, or temporary barrier. Proponents emphasize this bill places certain conditions on the
licensed beer manufacturer to ensure responsible conduct that are similar to those imposed upon
licensed winegrowers that offer wine tastings at farmers' markets.
In opposition: Opponents believe that daytime tastings, with little or no monitoring, in a familyfriendly setting, are inappropriate and potentially dangerous. Opponents state that, as currently
drafted, there is no mechanism to effectively monitor the tasting limit of eight ounces of beer per
person per day. Opponents contend that this bill "will negatively impact public health by
allowing alcohol producers to give away free beer where families shop for nutritious vegetables,
fruit and meat." Additionally, opponents claim that the most recent amendments to this bill
could conceivably allow for consumption of beer at fairs, craft and home shows, downtown civic
and celebratory parades, etc.
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Prior Legislation: AB 2488 (Levine), Chapter 98, Statutes of 2014, expanded an existing
privilege in the ABC Act relating to the sale of wine by a licensed winegrower at certified
farmers' markets to also allow a licensed winegrower the privilege of conducting limited wine
tastings for consumers at farmers' markets under certain circumstances.
AB 2004 (Chesbro), Chapter 806, Statutes of 2014, among other things, authorized a licensed
beer manufacturer to apply to the Department of ABC for a "certified farmers' market beer sales
permit" for the purpose of allowing the licensee to sell packaged beer at a farmers' market,
including any area outside the footprint of the farmers' market, under specified conditions.
AB 520 (Chesbro), Chapter 777, Statutes of 2014, expanded the types of licensees that may
provide instructional tastings events regarding wine or distilled spirits at on-sale retail licensed
premises and placed additional restrictions on the instructional tastings events, including
restrictions on the types of advertising that may be conducted prior to the instructional tasting
event.
Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531
FN: 0001090