Governor Signs Bill to Allow Craft Breweries to Expand

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 authorizes the Department of Alcoholic Beverage Control to 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. Existing law authorizes a licensed beer manufacturer to exercise the privileges under its manufacturer’s license at branch offices, subject to certain exceptions and qualifications. In this regard, existing law prohibits a beer manufacturer from selling alcoholic beverages to consumers for consumption on or off the licensed premises, or providing authorized tastings to consumers, at more than 6 branch office locations, regardless of how many beer manufacturer licenses the beer manufacturer holds, either alone or under common ownership with any other licensed beer manufacturer. Existing law further prohibits more than 2 of these 6 branch locations from being bona fide public eating places owned and operated by and for the beer manufacturer.

This bill would increase the number of authorized branch office locations for purposes of the provisions described above from 6 to 8 and would prohibit more than 4 of these locations from being bona fide public eating places owned and operated by and for the beer manufacturer. The bill would prohibit a beer manufacturer from being eligible to receive a 7th or an 8th duplicate license until it has held a 6th duplicate license for a minimum of one year.

Existing law, applicable to a beer manufacturer with an authorized branch office location selling beer and wine to consumers for consumption on the premises of a bona fide public eating place, restricts the types of alcoholic beverages that may be sold. Existing law authorizes the sale, in this context, of beer and wine that is purchased by the beer manufacturer from a licensed wholesaler that is not owned, either alone or under common ownership, by the beer manufacturer.

This bill, with regard to the beer and wine sold that is purchased from a wholesaler, as described above, would delete the requirement that the wholesaler not be owned, either alone or under common ownership, by the beer manufacturer.

Existing law, known as tied-house restrictions, generally prohibits specified licensees, or the officers, directors, or agents of those licensees, from giving or lending money or a thing of value to a person operating, owning, or maintaining any on-sale premises where alcoholic beverages are sold. Existing law prohibits beer manufacturers, as specified, regardless of how many beer manufacturer licenses they hold, from exercising retail privileges that would result in the exercise of those privileges at more than 6 locations, as specified.

This bill would increase the number of locations to 8 at which beer manufacturers may exercise retail privileges, provided that no more than 6 of the locations may be on-sale licenses.

This bill would incorporate additional changes to Section 25503.28 of the Business and Professions Code proposed by AB 2301 to be operative only if this bill and AB 2301 are enacted and this bill is enacted last.