Today's Law As Amended


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AB-2307 Alcoholic beverages: beer manufacturers: branch offices.(2021-2022)



As Amends the Law Today


SECTION 1.

 Section 23389 of the Business and Professions Code is amended to read:

23389.
 (a) The department may issue to a beer manufacturer a duplicate of its original license for a location or locations other than its licensed premises of production or manufacture. A duplicate license issued by the department authorizes the maintenance and operation of each branch office by the beer manufacturer and shall only have the license privileges set forth in this section. The fee for each duplicate license, regardless of type, shall be as specified in Section 23320.
(b) Subject to the limitations set forth in this section, a licensed beer manufacturer may exercise all of the privileges under its manufacturer’s license at branch offices licensed by the department, except for production or manufacture; sales to consumers for consumption on or off the branch office premises, except as provided for in subdivision (c); and the sale of beer and wine to consumers for consumption on the branch office premises where a bona fide public eating place is owned and operated by and for the beer manufacturer, except as provided for in subdivision (c).
(c) (1) A beer manufacturer shall not sell any alcoholic beverages to consumers for consumption on or off the licensed premises, or provide authorized tastings to consumers, at more than eight branch office locations, regardless of how many beer manufacturer licenses are held by the beer manufacturer either alone or under common ownership with any other licensed beer manufacturer, and no more than four of the eight branch locations may be bona fide public eating places owned and operated by and for the beer manufacturer. A branch office location authorized to sell an alcoholic beverage or provide a tasting to consumers for consumption on or off the licensed premises or that is a bona fide public eating place owned and operated by and for the beer manufacturer before the effective date of the act adding this section, shall be counted against the limit imposed by this subdivision. A beer manufacturer licensee shall not be eligible to receive a seventh or an eighth duplicate license authorized under this paragraph until it has held a sixth duplicate license for a minimum of one year.
(2) A branch office location where consumer tastings or sales for on- or off-premises consumption are authorized shall not sell or serve any alcoholic beverages other than beer that is produced and bottled by, or produced and packaged for, the beer manufacturer.
(3) A branch office location where the sale of beer and wine to consumers for consumption on the premises of a bona fide public eating place is authorized shall not sell or serve alcoholic beverages other than the following:
(A) Beer and wine that is produced and bottled by, or produced and packaged for, the beer manufacturer.
(B) Beer and wine that is purchased by the beer manufacturer from a licensed wholesaler.
(d) In order to obtain a duplicate license for a branch location or locations with the privileges described in subdivision (c), a beer manufacturer shall submit any application forms as the department may require. Upon request, and upon payment by the beer manufacturer of a fee of one hundred dollars ($100), the department shall issue to a beer manufacturer a beer manufacturer temporary permit for use at a branch office location during the period the application for a duplicate license with privileges pursuant to subdivision (c) is pending. The beer manufacturer temporary permit shall authorize the beer manufacturer to exercise all of the privileges under the duplicate license except for those privileges described in subdivision (c).
(e) A beer manufacturer temporary permit shall be effective for a period of 120 days and may be extended at the discretion of the department for additional 120-day periods as necessary and upon payment of an additional fee of one hundred dollars ($100).
(f) In order to obtain a duplicate license for a branch office location or locations without the privileges described in subdivision (c), a beer manufacturer shall submit all application forms as the department may require, and the department shall issue that duplicate license forthwith; provided, however, that any duplicate license issued forthwith by the department shall be contingent on the beer manufacturer consenting to the imposition of a condition that the beer manufacturer shall make no changes in the character or mode of operation of the branch office premises that would directly or indirectly expand the privileges under the duplicate license, such as to include those privileges described in subdivision (c), without notice to and approval by the department. If the department receives any protest concerning the issuance of the duplicate license forthwith under this subdivision, the protest shall be considered as an accusation against the licensee and a hearing had thereon as if an accusation had been filed. Any proposed changes in the character or mode of operation of the branch office premises that would directly or indirectly expand the privileges under the duplicate license, such as to include those privileges described in subdivision (c), shall require reapplication and reissuance of the duplicate license pursuant to subdivision (d).
(g) Notwithstanding the provisions of any other section of this division, a beer manufacturer may continue to exercise privileges at all of its licensed branch offices that were in existence and authorized by the department prior to the effective date of the act adding this section, including any privileges resulting from any renewal or transfer of the duplicate licenses for the branch locations, that it was authorized to exercise prior to that date.

SEC. 2.

 Section 25503.28 of the Business and Professions Code is amended to read:

25503.28.
 (a) Notwithstanding any other provision of this division, the holder of no more than six on-sale licenses, or any officer, director, employee, or agent of that licensee, may own a licensed beer manufacturer holding a license pursuant to Section 23357, and may serve on the board of directors and as an officer or employee of a licensed beer manufacturer. A beer manufacturer, regardless of how many beer manufacturer licenses are held by the beer manufacturer alone, under common ownership with any other licensed beer manufacturer, or under common ownership with any officer, director, employee, or agent of that beer manufacturer licensee who is operating as an on-sale retailer pursuant to this section, shall be prohibited from exercising alone or in common any combination of retail privileges authorized under this section and subdivision (c) of Section 23389 that would result in that beer manufacturer exercising retail privileges at more than eight locations, provided that, subject to the limitations of this section, no more than six of which may be on-sale licenses. This section shall not limit the number of licensed beer manufacturer locations or the exercise of retail privileges at those licensed beer manufacturer locations as authorized pursuant to Section 23357.
(b) An on-sale licensee specified in subdivision (a) shall purchase no alcoholic beverages for sale in this state other than from a wholesale or winegrower licensee, except for any alcoholic beverages manufactured by the licensed beer manufacturer whose premises of production are located no more than five miles from the licensed on-sale premises. at a single location contiguous or adjacent to the premises of the on-sale licensee. 
(c) 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. 3.

 Section 25503.28 of the Business and Professions Code is amended to read:

25503.28.
 (a) Notwithstanding any other provision of this division, the holder of no more than six on-sale licenses, or any officer, director, employee, or agent of that licensee, may own a licensed beer manufacturer holding a license pursuant to Section 23357, and may serve on the board of directors and as an officer or employee of a licensed beer manufacturer. A beer manufacturer, regardless of how many beer manufacturer licenses are held by the beer manufacturer alone, under common ownership with any other licensed beer manufacturer, or under common ownership with any officer, director, employee, or agent of that beer manufacturer licensee who is operating as an on-sale retailer pursuant to this section, shall be prohibited from exercising alone or in common any combination of retail privileges authorized under this section and subdivision (c) of Section 23389 that would result in that beer manufacturer exercising retail privileges at more than eight locations, provided that, subject to the limitations of this section, no more than six of which may be on-sale licenses. This section shall not limit the number of licensed beer manufacturer locations or the exercise of retail privileges at those licensed beer manufacturer locations as authorized pursuant to Section 23357.
(b) An on-sale licensee specified in subdivision (a) shall purchase no alcoholic beverages for sale in this state other than from a wholesale or winegrower licensee, except for any alcoholic beverages manufactured by the licensed beer manufacturer whose premises of production are located no more than five miles from the licensed on-sale premises.
(c) 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. 4.
 Section 3 of this bill incorporates amendments to Section 25503.28 of the Business and Professions Code proposed by both this bill and Assembly Bill 2301. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2023, (2) each bill amends Section 25503.28 of the Business and Professions Code, and (3) this bill is enacted after Assembly Bill 2301, in which case Section 2 of this bill shall not become operative.