In craft beer law, one of the most aggravating and seemingly unstoppable issues we see is Big Manufacturers’ constant efforts to undermine, diminish, and erode tied-house laws through the legislative process. Here we go again.
California Assembly Bill AB-1070 (Irwin), introduced on February 18, 2021, is shining example of the shenanigans that deep pockets empower Big Manufacturers to engage in. The Bill provides as follows [with my bracketed insertions]: “This bill would authorize specified licensees [manufacturers], without direct or indirect charge, to give up to 12 retail advertising umbrellas to an on-sale retail licensee [bars and restaurants], per licensed location [all locations the bar or restaurant has], each calendar year for use at the location [a new set of umbrellas every year!]. This bill would prohibit the retail advertising umbrellas from exceeding the value of $250 per unit [LOL] and would prescribe other requirements in this regard.”
Ask yourself who would want this. Do you think your local craft brewery could afford to give even one $250 umbrella to each of the retail locations that serve its beer? When you multiply $250 by 12, you get $3000. Really? A free $3000 worth of fancy umbrellas? This would be yet another major exception to the tied-house laws.
The primary purpose of tied-house laws is to prevent Big Manufacturers from having undue influence over retailers. See Cal. Bus. & Prof. Code § 25500 et seq. The primary restriction to achieve this goal is to prohibit manufacturers from giving “anything of value” to retailers so that retailers will not be subject to pressure to favor certain brands over others. In addition, California’s alcoholic beverage control scheme, like most states’ schemes, seeks to promote temperance in the consumption of alcoholic beverages. See id. at § 23000.
AB-1070 (Irwin) patently flies in the face of the legislative purposes behind tied-house laws and California’s alcoholic beverage control scheme. Does allowing manufacturers who can afford to give $3000 x [add up as many on-premise locations as you wish] further the goals of reducing undue pressure on retailers or promote temperance? Nope. Not at all.
Instead, this reflects a larger plan that Big Manufacturers have effectively employed over time to snuff out the pesky little guy. The more exceptions to the tied-house restrictions that Big Manufacturers can pass, the less veracity the whole system has—exactly what Big Manufacturers want. If there are no restrictions on Big Manufacturers giving away free stuff (even money in some cases), the pressure on retailers to push their products, and only their products, will be insurmountable. A small mom-and-pop, or even a large chain restaurant, would be hard pressed to deny such enticing freebies—especially when the Big Manufacturer can quickly supply its own shiny and new crafty beers from the formerly independent brewery down the street that it just bought (with no reference to ownership, of course).
Two cycles ago, it was free glassware; now it is free branded umbrellas. Anyone seeing a pattern? Educate your legislators. This is ridiculous.