And that’s a wrap on 2023! As we close out the first month of the new year, here is a look at the California Alcoholic Beverage Control’s (“ABC”) significant legislative changes affecting the industry in 2024:

• Bars to Offer Drug Testing Kits: Starting July 1, 2024, AB 1013 requires Type 48 (On-Sale General Public Premises) licensees to offer drug testing devices to patrons. The devices (test strips, stickers, straws, etc.) are designed to detect the presence of certain controlled substances commonly used to spike drinks and may be available for sale or free of charge. Licensees must also post signage in a prominent location on the premises: “Don’t get roofied! Drink spiking drug test kits available here. Ask a staff member for details.” Unless renewed, the law sunsets January 1, 2027.

• Sale of Shochu: Effective January 1, 2024, AB 416 permits on-sale licensees with wine privileges (Type 41, 42) to sell shochu, an imported Japanese distilled spirit up to 24% alcohol by volume. A similar exception already exists for soju, a Korean distilled spirits product.

• Craft Distiller Direct Shipping Extended: AB 1088 allows licensed craft distillers to continue direct to consumer shipping of distilled spirits manufactured or produced by the licensee through 2024. A maximum of 2.25 liters may be shipped per day per consumer, and the licensee must maintain records of all shipments. The packaging label must include the words: “CONTAINS ALCOHOL: SIGNATURE OF PERSON AGE 21 YEARS OR OLDER REQUIRED FOR DELIVERY.” The privilege is extended only to craft distillers (Type 74) – it does not include larger distilled spirits manufacturers (Type 04). The law was previously set to sunset at the beginning of this year – it is now extended to January 1, 2025.

• Increased Fine Amounts for License Violations: Effective January 1, 2024, SB 489 authorizes ABC to increase the maximum fine amount a licensee may pay in lieu of a license suspension for a sale to minor or intoxicated person by up to 200%, depending on the severity of the incident.

• Updates to Tied-House Restrictions: AB 546 amends section 25503 of the California Business & Professions code (CA B&P) to clarify the tied-house restriction prohibiting manufacturers and wholesalers from providing anything of value to retailers applies to all alcoholic beverage suppliers (not just distilled spirits suppliers) and also extends to out-of-state beer manufacturer certificate holders. The bill prohibits providing credit or rebates (not just money) for sign or advertisement placement on a retailer’s premises, but expressly allows a wholesaler to provide customized signs to retailers for current market price. Lastly, AB 546 repeals the prohibition against brandy manufacturers offering tastings at their premises in the form of a cocktail or mixed drink.

• Expanded Tied-House Advertising Exceptions: Effective January 1, 2024, manufacturers are permitted to purchase advertising space and event sponsorships from retail licensees in connection with events held at eight additional colleges and universities, specifically seven Cal State University campuses and Saint Mary’s College in Contra Costa County (AB 840); a wave basin complex in Kings County aka Kelly Slater’s Surf Ranch in Lemoore, CA (AB 1294); and an 18,000 seat arena in the City of Inglewood aka Intuit Dome, future home of the LA Clippers when it opens in 2024 (SB 392).

• New Priority On-Sale Licenses: AB 1668 and SB 787 authorize ABC to issue up to 10 new original Type 47 licenses (on-sale general licenses for bona fide public eating places) in Placer and Nevada Counties, respectively. ABC may not issue more than four of the new licenses in each county per year. The licenses may not be transferred from one county to another nor sold by the licensees for more than the original cost to the seller.

• Other noteworthy legislation includes: SB 76, allowing the City and County of San Francisco to create “entertainment zones” where open alcoholic beverages can be purchased and consumed during special events and expanding eligibility for music venue licensees to obtain duplicate licenses; AB 1217, extending COVID-19 temporary catering authorizations to July 1, 2026; SB 247, clarifying the alcohol license exemption for beauty salons and barbershops in CA B&P Section 23399.5 applies to all such businesses licensed by the State Board of Barbering and Cosmetology; and SB 788, removing production volume requirements for beer manufacturers, enabling small beer manufacturers (Type 23) to produce cider or perry. Finally, two urgency bills effective September and October of 2023, respectively: SB 844, allowing retailers to return beer to a wholesaler or manufacturer under certain conditions and revising the definition of “seasonal brand of beer”; and AB 1704, requiring ABC to conduct priority drawings via live video feed and expanding eligibility for the brewpub-restaurant license exchange program.

For more information on new ABC legislation, contact an attorney at Strike Kerr & Johns.

© 2010-2024 Strike Kerr & Johns, Beverage Law Group LLP, Alcoholic Beverage Attorneys