2016 LEGISLATIVE UPDATES: Part I

By Rebecca Stamey-White and Erin Kelleher

In 2016, we’ll see a lot of changes to California’s laws regulating alcoholic beverages. As the state’s legal experts on alcohol, we’ve been answering a lot of questions from clients about how they can comply with these new laws and take advantage of the new exceptions, so we decided to compile our analysis of the legislative changes into a series of blog posts to ensure your compliance is off to a great start in the new year.

 In order to help our readers digest the information and understand the changes, we’ve grouped our legislative discussion into four courses:

• First Course: Promotional Activities

Pairing Suggestion: an H&C big bottle of wine; best served with your sweepstakes dinner prize.

• Second Course: Advertising, Events and Things of Value

Pairing Suggestion: Renwood 2014 Old Vine Zin, to be enjoyed while you check-in at our restaurant on social media.

• Third Course: Licensing, Qualification and Tied House Ownership

Pairing Suggestion: White Russian with craft coffee liqueur and locally-sourced vodka, because you can soon enjoy a cocktail when you visit your favorite craft distillery.

• Fourth Course: The Medical Marijuana Regulation and Safety Act from an alcohol industry perspective.

Pairing Suggestion: Cannabis-infused wine… as soon as we can legally get our hands on some! Rebecca will also be speaking on some of these issues at the Women Grow Bay Area chapter meeting this Thursday in Oakland if you can’t wait for this course.

If you get heartburn from any of these courses, please reach out to us for a legal remedy.  

FIRST COURSE: PROMOTIONAL ACTIVITIES

Alcohol may now be part of a prize for contests & sweepstakes (SB 796: 25600.1 & 25600.2)

In big news for a state that only rejoined the rest of the country in 2013 by even permitting alcohol supplier-sponsored sweepstakes and contests, alcohol may now also be given away as a prize in connection with a contest or sweepstakes, provided that it is an “incidental part of a prize package.”

This is a marked departure from California’s previous position of being strictly against the potentially "overly aggressive marketing" of alcoholic beverages in the form of sweepstakes and contests. The state now blazes a trail by permitting the beverages themselves to be a prize (but not without a gray area to interpret!).

What “incidental” means exactly is not clear. While it is still the case that alcohol cannot be the sole prize that is given away in a contest or sweepstakes, it is less clear how marginal the alcohol prize must be and whether it can be specifically advertised or highlighted in the official rules. In our view, while “incidental” likely includes alcohol poured in connection with trips to supplier premises or at hosted dinners that may involve pairing with the supplier’s products, it likely would not include things like prized bottles of wine or a free bottle of wine every month for a year in addition to such trips.

Bottle signing events are here to stay (SB 796: 25502.2)

The sunset provision of this statute was deleted, allowing celebrity bottle signings to occur indefinitely (click here for a link to the previous Booze Rules post on this topic, outlining the requirements).

Still hungry? Good, because there are three more courses to go…

Rebecca Stamey-White presents Emerging Issues in Wine Law

On Wednesday, February 18th, Hinman & Carmichael LLP partner Rebecca Stamey-White gave a continuing legal education presentation to the Business Law Section and Intellectual Property Committee of the Palo Alto Area Bar Association (PAABA) on Emerging Issues in Wine Law.  During her presentation, Rebecca gave an overview of the complicated legal history of alcohol beverage regulation in the United States; a primer on tied house law, the three-tier system and investment/investor qualification considerations; and discussed other issues that may affect business and intellectual property counsel working with wineries and other licensee clients. Rebecca covered some of the emerging trends in the industry, including recent legal shifts in the regulation of private and control labels, the growth of unlicensed third party providers (such as online marketers, special event companies and local delivery platforms), the legal complications facing wineries advertising on social media and the growth of the legal cannabis industry and how it may affect California wineries if cannabis is legalized in the state.  The presentation was well-received with a lively discussion from the participants and of course was complemented with winetasting, which always pairs best with wine legal education!