Insights
Publications

Alert: New California Law Allows Distilled Spirits and Wine Events

10/1/2008 Articles

Suppliers May Give Free Wine, Distilled Spirits, Food and Entertainment At Private Events

On September 30, 2008, Governor Schwarzenegger signed into law a bill authorizing distilled spirits and wine suppliers to hold private events and provide free wine, distilled spirits, food and entertainment to guests.  This new law blows a hole through current prohibitions on providing free goods or other things of value to consumers in connection with the sale or distribution of alcoholic beverages.

Prior to passage of Assembly Bill 2293, suppliers relied on the "private party exception" to hold certain events under Business & Professions Code section 23399.1.  During recent years, suppliers held events at unlicensed premises following the strict requirements of the private party exception to hold events for consumers without running afoul of the prohibitions on favoring a particular retailer and on giving away free goods.  The California Department of Alcoholic Beverage Control ("ABC") found some of these events to be problematic and District Offices attempted to shut down events.  ABC rescinded its policy guidance on what constitutes private events and tried to impose constraints on the commercial use of the private party exception.

The new law provides a safe harbor for private events.  It allows suppliers of distilled spirits and wine to host a dozen private parties each year for up to 400 guests, and even more parties for a more discrete guest list.  Beginning January 1, 2009, distilled spirits suppliers and wineries can provide free wine, distilled spirits, food and entertainment under the following conditions:

1) Invitation Only: Guests must be invited. Invitations must be made by email, telephone, mail or in person. Invitations cannot be made by other means. Guests must be 21 years of age or older. Each guest may bring one guest.

2) Responsible Host: The supplier hosting the event must be present. The host supplier must pay for the free alcoholic beverages, food and entertainment. In other words, a supplier cannot require a wholesaler to pay for all or part of the party.

3) Party Size: The total number of attendees cannot exceed 400.

4) Party Rules: The event cannot exceed four hours. The event must end by 2:00 a.m.

5) Party Frequency: Each supplier only may host 12 events per calendar year of more than 100 guests. Each supplier only may host 24 events per calendar year of 100 people or less.

6) Venue: A catering license must be issued for the event venue. In California, in order to obtain a catering license, the applicant must operate a restaurant. Then the caterer seeks permission from ABC to hold an event at a specific location. Under this new law, events at wineries or other unlicensed locations may only be held if a caterer has obtained permission to serve alcohol at the venue. If the event is held at a winery, no distilled spirits may be served. Only eight events per year may be held at any one venue.

7) Retail Licensed Premise: An event may not be held at a retail licensed premise such as a hotel, bar or restaurant.

8) Additional Freebies: The host may provide a free ride home to guests as long as it is ground transportation only to the guests' home or hotel. Aside from food, alcoholic beverages, other beverages, entertainment and a free ride home, no other free things may be given away.

9) Fees: ABC may charge fees for issuing the catering permits; and fees for administering the new law not to exceed $200 per event.

The law goes into effect January 1, 2009 and will be found at Business and Profession Code § 25600.5.

Firm Highlights

Publication

Estate Planning During Uncertain Times

Farella's Wine Industry Education Series features Lauren Galbraith discussing "Estate Planning During Uncertain Times." Estate planning for vineyard and winery owners has come to the forefront during this unpredictable pandemic and in light of...

Read More
Publication

SEC Expands Definition of “Accredited Investor” – Here Are 5 Key Takeaways

The SEC recently adopted amendments to Rule 501(a) of Regulation D of the Securities Act of 1933 that expand the definition of “accredited investor” by adding new categories of eligibility based on professional knowledge...

Read More
Publication

Maximizing Business Insurance Coverage Benefits After a Fire

Unfortunately, we again write while wildfire is devouring homes and businesses in Napa and Sonoma, and threatening many more. We’ve previously posted tips about first steps that you should take in the event your...

Read More
Publication

M&A Deals and PPP Loans: Unexpected Parties in Your Deal

The Payroll Protection Program has been a lifesaver to many businesses this year, but its quick roll out, and many generous features (including potential forgiveness) could tempt a borrower to treat the PPP as...

Read More
Event

North Bay Business Journal Wine Industry Conference - Part 2

Farella Braun + Martel is a proud underwriter of the North Bay Business Journal's 2021 Wine Industry Conference series. This event features keynote speaker Jon Moramarco, Managing Partner for bw166 LLC and Editor & Partner...

Read More
News

Alexis Sinclair Joins Farella Braun + Martel’s Financial Services Industry Group

SAN FRANCISCO, October 14, 2020: Northern California legal powerhouse Farella Braun + Martel is pleased to announce that business transactions lawyer Alexis Sinclair has joined the firm as special counsel in its Financial Services...

Read More
News

Farella Braun + Martel Elevates Five to Partner

Read More
News

Lawyers Advising California’s Wineries Navigate a Pandemic and Wildfires

Partners Tyler Gerking and Matt Lewis were interviewed in the Daily Journal article "Lawyers advising California’s wineries navigate a pandemic and wildfires."

Read More
News

How California Wine Business Property Transfer Rules Will Change in 2021

Lauren Galbraith commented in the North Bay Business Journal article "How California Wine Business Property Transfer Rules Will Change in 2021."  “I see families in the wine business demonstrate keen awareness that they must...

Read More
Publication

Top 10 Practical Business Implications Arising From the Passage of the CPRA

California’s Proposition 24 passed as expected, and the new California Privacy Rights Act will change the privacy landscape created by the California Consumer Protection Act (CCPA), which went into effect only months ago. While...

Read More