California Tries to Legalize Wine (and Beer) Volunteers Based on R Street Recommendation


Small wineries and breweries throughout the country often use volunteers to help produce and package their products. Doing so both supplies these small producers with extra labor and allows the volunteers (who are often craft beverage enthusiasts) to learn more about the production process. In California, however, the use of volunteers is technically a violation of the state’s labor code, and the state’s Department of Industrial Relations has previously slapped hefty fines on California wineries for using volunteers. R Street’s Western Region Director Steven Greenhut wrote about this issue back in 2014, and now, directly inspired by Steve’s column, state lawmakers are trying to fix the problem. Their new bill would exempt small wineries and microbreweries from this provision of the state labor code, and Steve submitted a letter of support on behalf of R Street for the reform:

I write you in support of S.B. 448, legislation that “would exempt a small winery or small microbrewery … that utilizes volunteers who perform part-time labor in exchange for hands-on training, from having these volunteers classified as employees or apprentices.”

These small wineries and breweries clearly deserve an exemption from this section of the labor code given that many people like the opportunity to volunteer at these businesses to learn about the trade. Such volunteers typically are older people who enjoy the wine and brewery culture. They aren’t interested in the money, but in learning about the fascinating process of making wine and beer. In fact, I’ve volunteered at a winery before with my church group where we picked grapes and made our own wine as part of an indescribably enjoyable afternoon…

Read the letter of support here, and Steve’s 2014 column that inspired the law here.

Effort to Lower BAC Level Spreads to More States


Last year, Utah became the first state to lower the blood-alcohol limit for drunk driving from .08 to .05. Utah’s change was followed by a report from the National Academy of Sciences, calling for more states to follow suit. Now, several states are considering .05-level legislation, including Michigan, California, and New York. The OC Register’s editorial board weighed in one why a lower limit could be counterproductive:

Many people drink less while out at pubs or restaurants to avoid getting stopped for DUI. Such arrests can lead to jail stays, costly legal bills and the loss of one’s driver’s license. People who actually are impaired deserve those harsh punishments, but we fear that reducing the legal limit will mainly ensnare people who might not be impaired. The goal should be removing drunks from the road, not arresting non-drunks.

National Highway Traffic Safety Administration data show that 92 percent of alcohol-related fatalities involve a driver with a BAC of 0.10, according to Jackson Shedelbower of the American Beverage Institute. This confirms other information we’ve seen: the main drunken-driving dangers come from a relatively small group of heavy drinkers, not from people who have had a glass of wine or two with dinner…

We fear that lowering the BAC will simply make it easier for police agencies to set up checkpoints and then issue press releases about the growing number of drunken drivers that they have removed from the road. Yet it’s better to divert scarce resources to programs and policing efforts that capture the real scofflaws…

Read the rest here.

Florida Wine Importer Sues California Over Wine Laws


California requires all out-of-state wine importers/wholesalers to first sell their wine to an in-state importer/wholesaler before the wine can be sold to California retail outlets. According to Wine & Spirits Daily, a Florida importer is challenging the law in court on the grounds that it discriminates against out-of-state importers:

In California, importers and wholesalers based outside the state must first sell their products to an importer or wholesaler based in California, while in-state importers/wholesalers can sell directly to retailers.

Florida-based Orion Wine Imports argues that requirement adds distribution costs to out-of-state wholesalers that in-state ones don't face, which violates the Commerce Clause and the Privileges and Immunities Clause…

Read more here.

This case could be impacted by the current lawsuit in front of the Supreme Court, Tennessee Wine v. Byrd.

Wineries in California Can Finally Post Pictures of Events on Social Media


Under California’s antiquated tied-house laws, it was illegal for wineries to post photos on social media to advertise events like tastings at bars or restaurants. According to Wine Business, that is finally about to change:

California wine producers who want to promote an upcoming tasting at a hotel, bar, restaurant, wine shop or other licensed retailer in the state may soon be able to post a photo on social media of that venue before the event on social media. 

Assembly Bill 2452 which Gov. Jerry Brown signed into law on Sept. 22, gives wineries and alcohol producers the opportunity to post the photos ahead of the special event. The new law takes effect Jan. 1.

The bill was introduced to update tied-house rules that prohibited alcohol producers from posting photos of a venue hosting a special wine tasting event. Posting a photo of such a venue was prohibited advertising – an illegal gift of “something of value” to the retailer under “tied-house” rules. 

Assemblywoman Cecilia Aguiar-Curry, D-Winters, sponsored the bill, saying the tied-house law is outdated.

"In today’s world of technology, social media, and fast-paced communication, prohibiting a winery or brewery from utilizing the full scope of social media is a competitive disadvantage. By allowing the limited use of photographs and sharing of website information, A.B. 2452 brings the law into the 21st century,” Aguiar-Curry said in an email…

Read more here.

Will California Start Requiring Wineries to Install Ethanol Emission Controls?


The production of wine can cause small amounts of ethanol emissions, which recently sparked a court case and settlement in California between the Wine Institute and local regulators. Wine Business has the full story:

Smaller and medium-size wineries may be required to install new ethanol emission controls on indoor, closed-top tanks 30,000 gallons or less, according to a settlement reached this summer between air district officials in Santa Barbara County and Wine Institute.

The settlement signed in June stems from an appeal Wine Institute filed in October 2017 over a Santa Barbara County Air Pollution Control District’s decision to issue a permit to Santa Maria custom-crush facility that wanted to crush and ferment more grapes, according to district filings…

The determination affecting closed, indoor tanks of up to 30,000 gallons is now posted on the California Air Resource Board’s clearinghouse. This means other air districts may use it as a basis to require other wineries of a similar type to install ethanol emission controls, explained Wine Institute general counsel Tracy Genesen…

Read the rest here.

New California Bill Would Make Life Easier on Craft Distillers


Under California law, craft distillers face restrictions on being able to sell their products directly to on-site customers. According to SF Weekly, a new bill seeks to fix this problem:

A whole lot of legislation pours out of Sacramento in the final days of August, and one bill takes a shot at the very curious regulations that cover California’s small-batch, craft spirit distilleries. Alcohol and spirit distillers like Alameda’s St. George Spirits and Menlo Park’s Rocket Vodka are treated much differently than wineries, beer breweries, and large-scale liquor producers.

In a bizarre legal stipulation, distilleries can only sell you their craft liquors if they have a tasting room, and after you’ve already participated in a tasting. If the craft distillery does not have a tasting room, they cannot sell you booze at all, and must rely on their distributor for sales.

State senator Nancy Skinner (D-Berkeley) is on the verge of changing that, with a bill that just passed both houses of the California legislature on its next-to-last day of eligibility for the year. Skinner’s SB 1164, nicknamed the“Craft Distiller Op-pour-tunity” Act, would allow all 82 of California’s craft distillers to sell directly to consumers even if they do not have a tasting room...

Read the rest here.


Out-of-state wine importers criticize California's distribution laws


As we have previously discussed, the United States has been taking action that is likely to increase drink prices. This is relevant not only at the national, but also at the state level. The debate has reached California, where Orion Wine Imports is unhappy with California's interstate shipping rules:

In California, importers and wholesalers based outside the state must first sell to an importer or wholesaler in California, even though in-state importers don't have to. Orion argues that adds distribution costs to out-of-state importers that in-state ones don't face, which violates the Commerce Clause and the Privileges and Immunities Clause, per the complaint.

Orion claims the laws could prevent it from selling and delivering some of its wine in California altogether "if the demand is so small or the wine is so new and unknown that no wholesaler will agree to carry it." Moreover, they have no plans to open a facility in California and "cannot afford to do so..."

Read the entire article here

Is California Cracking Down on Booze in Shared Office Spaces?


Shared offices--which offers those without physical offices the ability to rent office space--have become increasingly popular in modern times. Many shared office companies offer attractive perks in their offices, such as snacks, coffee, and even booze. But as the San Francisco Chronicle reports, alcohol in shared offices spaces has attracted the attention of the California government:

Inside WeWork, a co-working company that caters to young professionals with its amenity-heavy spaces, some members in California have been asking: Where did the beer go?

Easy-to-rent desks with plenty of Silicon Valley-style perks, including beer, have long been part of the sales pitch to WeWork’s tenants and investors, and helped propel the company to a $20 billion valuation.

But when the taps recently got shut off in California, some startups housed at WeWork wondered what happened...

Companies don’t need a liquor license to provide alcohol in their offices, as long as the employees aren’t paying for it. But WeWork, which is based in New York and has a number of Bay Area locations, is in an unusual situation. It’s a landlord, not an employer, to the people working in its buildings. And that puts it in a gray area under the law — highlighting how innovative businesses create new legal questions faster than regulators can keep up...

WeWork doesn’t have a liquor license in California — and under state law, it’s not clear whether it can go without one if it wants to serve alcohol to building occupants. When asked about the beer removal, a spokesman said the company is talking to state officials, but declined to elaborate..."

Read the rest here.

L.A. to Restrict How Alcohol is Sold at Gas Stations


The Los Angeles City Council has voted to place additional strictures on how alcohol can be sold at local gas stations. The new regulations prohibit things like selling alcohol within 5 feet of the cash register and advertisements that are visible from gas pumps. The purported rationale is reduce drunk driving and alcohol sales to minors, according to NBC 4 Los Angeles:

A Los Angeles City Council committee voted Tuesday in favor of adopting stricter enforcement of the sale of alcoholic beverages at gas stations in an effort to reduce drunk driving and the availability of alcohol to minors...

In California, the manufacture, distribution, storage and sale of alcohol is regulated by the Department of Alcoholic Beverage Control, but the city is responsible for permits to operate gas stations and other businesses...

Violations of the sale of alcohol at a gas station include:

  • No beer or wine shall be displayed within five feet of the cash register or the front door unless it is in a permanently affixed cooler as of Jan. 1, 1988.
  • No advertisement of alcoholic beverages shall be displayed at motor fuel islands, buildings, or windows.
  • No sale of alcoholic beverages shall be made from a drive-in window.
  • No display or sale of beer or wine shall be made from an ice tub.
  • Employees on duty between the hours of 10 p.m. and 2 a.m. who sell beer or wine shall be at least 21 years of age.

The rest of the story can be found here.

California liquor licenses are too expensive, and the L.A. dining scene suffers as a result

Conor Friedersdorf has an excellent op-ed in the Los Angeles Times discussing why obtaining a liquor license is so difficult and expensive for LA restaurants:

When I dine out in Los Angeles, I sometimes think of the editor Robert Messenger, who observed that a good cocktail 'whets the appetite, pleases the eye, and stimulates the mind. It is one of our conspicuous contributions to cultured living.' Or the writer Adam Gopnik, who said that 'meeting someplace with old and new friends, ordering wine, eating food, surrounded by strangers, I think is the core of what it means to live a civilised life.'

This is my way of saying that I like to order drinks at restaurants. But the price tag often stops me. Though California is home to many distillers and some of the world's most productive vineyards, a cocktail and a glass of wine while dining out can easily top $30. Why?

Supply and demand explains why wealthy Californians have access to, say, better real estate than poor Californians. There are only so many houses perched above the shores of Malibu, only so many courtside seats at Staples Center, and they go to the highest bidders. But the high cost of ordering a Negroni or a glass or Chianti is largely our creation, the result of a manufactured scarcity in licenses to sell liquor. A restaurateur must incur thousands of dollars in direct costs just to be in the drink business. And the process is so complicated that consultants and lawyers are hired to help navigate it..."

The whole piece is worth reading: