Alcoholic beverages: licensees: craft distillers: tied-house restrictions.

(1) Existing law, the Craft Distillers Act of 2015, authorizes the Department of Alcoholic Beverage Control to issue a craft distiller's license to manufacture 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 them. Existing law allows these licensees to sell distilled spirits to specified consumers, to own interests in on-sale retail licenses, and to sell beer, wines, brandies, and distilled spirits to consumers for consumption on the premises of a bona fide eating place, as provided. This bill, among other things related to the craft distiller's license, would define "manufacture" for the purposes of the license, allow these licensees to produce, as defined, distilled spirits, and require a specified percentage of the 100,000 allowed gallons to be manufactured or produced by the licensee. (2) The Alcoholic Beverage Control Act regulates the application for, the issuance of, the suspension of, and the conditions imposed upon, various alcoholic beverage licenses pursuant to which the licensees may exercise specified privileges in the state. The act authorizes licensees to sponsor or otherwise participate in an event conducted by, and for the benefit of, a nonprofit organization in which retail and nonretail licensees are involved as sponsors or participants, subject to specified conditions. The act authorizes a nonretail licensee to advertise or communicate sponsorship or participation in the event and provides that advertising or communication may include, but is not limited to, initiating, sharing, reposting, or otherwise forwarding a social media post by a permanent retail licensee or a nonretail licensee, as specified. This bill would delete the word "initiating" from that provision. The act also prohibits a retail licensee from receiving any advertising, sale, or promotional benefit from any permanent retail licensee in connection with the sponsorship or participation. This bill would instead prohibit a nonretail licensee from receiving that advertising, sale, or promotional benefit. (3) Existing law authorizes specified licensees, including distilled spirits rectifiers, to purchase advertising space and time from, or on behalf of, an on-sale retail licensee, under certain conditions, if the on-sale retail licensee is the owner, manager, agent of the owner, assignee of the owner's advertising rights, or major tenant of specified facilities. Existing law makes it a crime for an on-sale licensee to coerce certain licensees to purchase advertising space or time, as specified. This bill would revise these authorizations to instead allow a rectifier to purchase the above-described advertising space and time and would include rectifiers as licensees subject to specified criminal provisions. By expanding the definition of a crime, this bill would impose 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.