February 17, 2016
Effective January 1, 2016, the California ABC Act contains a new section that loosens the restrictions suppliers face when mentioning a retailer in a social media post. Newly added Business and Professions Code § 23355.3 is aimed at clarifying how suppliers and retailers can co-sponsor nonprofit events. It was drafted, in part, as a response to the backlash that occurred after the ABC filed accusations against several wineries for advertising sponsorship of the “Save Mart Grape Escape” charity fundraising event in 2014. In that instance, several wineries posted or tweeted their support and sponsorship of the event on social media. The ABC reasoned that the suppliers were impermissibly advertising for Save Mart, a retailer, even though the event was held under a nonprofit permit issued to a bona fide nonprofit organization. The ABC alleged that by posting or tweeting about the event, the suppliers were giving a thing of value to the retailer, a practice that has long been considered a violation of California’s tied house restrictions.
California law has long permitted supplier licensees to sponsor nonprofit events if the nonprofit gets an event license, and the new law does not fundamentally change that. However, the new section clarifies that a supplier may advertise sponsorship or participation in such events even if a retailer is also a named sponsor of the event. Payments or other consideration to the retailer are still considered a thing of value, and are not allowed, but social media postings no longer fall under that broad category. There are restrictions on what the supplier is permitted to post about the retailer; posts cannot contain the retail price of alcoholic beverages and cannot promote or advertise for the retail licensee beyond mentioning sponsorship or participation in the event. The supplier can share a retailer’s advertisement for the event on social media, but the supplier is not permitted to pay or reimburse the retailer for any advertisement and cannot demand exclusivity of its products at the event. In short, the new section will allow exactly the type of supplier social media support that occurred in the Save Mart Grape Escape situation.
October 08, 2015
Craft beer continues to be all the rage in California and across the country. With the increase in demand for local craft beers, we’ve been getting a lot of questions about how to get licensed as a brewery in California. The California Department of Alcoholic Beverage Control (“ABC”) issues three primary license types that permit beer production, including Beer Manufacturer licenses (Type 1), Small Beer Manufacturer licenses (Type 23) and the increasingly popular On-Sale General Brewpub license (Type 75). The license privileges of each type of brewery license vary, and the brewpub license is a good choice for brewers that primarily want to operate a brewpub or microbrewery restaurant rather than sell their beers for consumers to drink off the brewery’s premises.
A Type 75 brewpub license authorizes the sale of beer, wine and distilled spirits for consumption at a bona fide eating place, which essentially requires that the facility be a restaurant with its own kitchen that serves meals. The ability to sell distilled spirits as a brewpub is a privilege that many find attractive in deciding between brewery licenses. Type 1 and Type 23 breweries may, but are not required to, operate bona fide eating places, but they are limited to beer and wine, and cannot sell distilled spirits. Additionally, beer, wine, and distilled spirits restaurant licenses (i.e., Type 47 On-Sale General for Bona Fide Public Eating Place) are often extremely expensive as the number of licenses issued is limited per county based on population. There is no cap on the number of Type 75 licenses that can be issued, so the Type 75 license can be an attractive option for businesses that want to sell distilled spirits, although all Type 75 licensees must meet certain brewing requirements.
Brewpubs must produce at least 100 barrels of beer per year and can produce no more than 5,000 barrels of beer per year. That production cap is substantially lower than the production allowances for Small Beer Manufacturers (less than 60,000 barrels per year) and Beer Manufacturers (60,000 barrels per year or more). Additionally, a Type 75 brewpub premises must have brewing equipment that has at least seven-barrel brewing capacity. The ABC has recently been looking into the brewing equipment of Type 75 licensees and enforcing against brewpubs that aren’t actually brewing beer or don’t have the requisite brewing capacity.
Other key features of Type 75 brewpub licenses include the following:
• Cannot make sales from the brewpub premises for off-premises consumption. This means that a brewpub cannot sell bottles, cans, growlers or other containers for consumption away from the brewpub.
• Can sell beer produced by the brewpub to California licensed wholesalers.
• Must buy all wine, distilled spirits, and beer not produced by the brewpub from a licensed wholesaler or winegrower. Note that brewpubs cannot buy or sell beer or other alcoholic beverages from other brewpubs or retailers.
The initial fee for a brewpub license is currently $12,000, which is more expensive than most California license types. The annual fee is determined by the population where the brewpub is located, and varies between approximately $500 and $1,000 per year. Additionally, local rules where the brewpub is located may require additional permitting or other approvals before the brewpub can operate. Lastly, all breweries, including brewpubs, must obtain a brewery basic permit from the Alcohol and Tobacco Tax and Trade bureau, the federal agency that regulates alcoholic beverages. There is no fee for the federal permit, but a bond is required.
Contact one of the attorneys at Strike & Techel if you have any questions about starting a brewery!
March 27, 2015
Strike & Techel LLP, a law firm specializing in alcoholic beverage law, is seeking an associate attorney with 2-5 years of law firm experience and enthusiasm for the alcoholic beverage field. The firm represents a broad range of clients, including producers (wineries, breweries and distilleries), importers, retailers, advertising/promotional agencies, and other related beverage industry businesses. S&T provides comprehensive counsel on a variety of topics relevant to our clients. We handle alcohol-specific matters such as regulatory compliance, dealings with state and federal alcohol agencies, and alcohol licensing, as well as general legal matters such as trademark registrations, contract drafting and review, purchase and sale transactions, etc. For more information about the firm, visit www.strikeandtechel.com.
Alcohol beverage law experience is highly desirable but not mandatory. The selected attorney will be responsible primarily for corporate matters and alcohol licensing projects. Strong corporate/transactional skills are essential, and familiarity with entity structuring and operating agreements/bylaws, commercial leases, and conditional use permits is preferred. The ideal applicant will have strong analytical, writing and communication skills, an engaging personality and a sense of humor.
If you think that you’d be a great fit with us, please send us your resume, a short sample blog post (modeled on the ones on our website) about a current alcoholic beverage issue that has caught your attention, a cover letter, references and salary requirements. In the cover letter, please tell us why you chose the issue in your sample blog post and why you are interested in alcoholic beverage law. We
February 12, 2014
We are pleased to announce that Kate Hardy has joined the firm as a partner. Kate joins Strike & Techel from Nixon Peabody LLP’s Beverage Alcohol Group. Previously, Kate spent four years as manager of the Economy and Law Commission for the International Organization of Wine and Vine (OIV) in Paris, preceded by years of law practice in Australia. We are thrilled to add Kate to the Strike & Techel team!
Kate’s many years of beverage industry experience will be invaluable to wineries, breweries, distillers, suppliers, importers, distributors, retailers, ecommerce providers and other industry members that make up the diverse Strike & Techel client base. To learn more about Kate and the firm, visit strikeandtechel.com.
Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2014 · All Rights Reserved ·
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