SB 1164: Craft distillers.

(1)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 specified types of alcoholic beverage licenses and prescribes the rights and duties of the respective licensees. Existing law prohibits a person without the appropriate license from exercising a privilege or performing any act for which the license is required, and a violation of this prohibition is a misdemeanor or a felony, as specified. Existing law authorizes the department to issue a craft distillers license that authorizes the manufacture of distilled spirits, subject to specified conditions, including that the licensee manufacture no more than 100,000 gallons of distilled spirits per fiscal year, excluding brandy the craft distiller manufactures or has manufactured for it. Existing law prohibits the department from issuing a craft distillers license to any person that manufactures or has manufactured for them more than 100,000 gallons of distilled spirits per year, or to any officer, director, employee, or agent of that person, or to any person who is affiliated with that person. A craft distiller is also authorized to sell up to 2.25 liters of prepackaged containers of the licensees spirits per day per consumer to a person attending these tastings.

This bill would increase the maximum amount of distilled spirits that a craft distiller is permitted to manufacture to 150,000 gallons. The bill would prohibit the department from issuing a craft distillers license to any person that manufactures or has manufactured for it more than 150,000 gallons of distilled spirits per year, as described above. The bill would also eliminate the requirement that the prepackaged containers of the licensees spirits described above, be sold only to a person attending these tastings. The bill would make a conforming change in connection with tastings.

(2)Existing law makes it a crime for various alcoholic beverage licensees to deliver undenatured ethyl alcohol or other distilled spirits in packages of more than one gallon for use in the trades, professions, or industries, unless the package is plainly labeled, as specified.

This bill would apply these provisions to craft distillers.

(3)Existing law authorizes various alcoholic beverage licensees, including distilled spirits manufacturers, to serve and provide food, beverages, and entertainment at conventions and trade shows of bona fide trade associations and to advertise in regular publications of specified trade associations, among other things. Existing law authorizes various alcoholic beverage licensees, including distilled spirits manufacturers, to provide instruction and to conduct courses on their respective beverages for licensees and to provide beverages in this context. Existing law provides a similar authorization to provide instructional tasting events to consumers and prescribes a variety of limits and conditions in this regard, including restrictions on the number and size of tastings, who may serve them, and how often they may be conducted.

This bill would extend the authorizations described above to craft distillers.

(4)Existing law provides that the Alcoholic Beverage Control Act does not prohibit various alcoholic beverage licensees, including distilled spirits manufacturers, from giving or selling beverages, as specified, to certain charities and prescribes conditions in this regard.

This bill would apply these provisions to craft distillers.

This bill would also make technical and conforming changes.

(5)This bill would incorporate additional changes to Section 25503.56 of the Business and Professions Code proposed by AB 2452 to be operative only if this bill and AB 2452 are enacted and this bill is enacted last.

This bill would incorporate additional changes to Section 25503.9 of the Business and Professions Code proposed by AB 1986 to be operative only if this bill and AB 1986 are enacted and this bill is enacted last.

(6)By expanding the definition of a crime, this bill would impose a state-mandated local program.

(7)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.