Life on Tap.

Home Beer California passes bill to curtail upselling of beers

California passes bill to curtail upselling of beers

AB-776 seeks to prevent retail liquor store owners from buying beer as consumers from a brewery and then reselling it at their shop for a profit.
SHARE
, / 5

shutterstock_195826061Craft beer has a secondary market, no doubt about it. While breweries can try to prevent individuals from reselling rare beers at above retail price, it’s more damaging—and usually illegal—for retail liquor store owners to buy beer as consumers from a brewery and then resell it at their shop for a profit. Imagine a liquor store owner walking in to, say, Russian River’s brewpub, buying up some Pliny the Elder, then selling those same bottles at their shop for double the price. (It happens.)

A new California law aims to strengthen protections against that. Gov. Jerry Brown recently signed AB-776, which includes a number of provisions relating to craft beer, including whether breweries can tweet about events or releases at retail stores. But section 3 is where the the meat of the reselling beer language is. It prevents a retail license holder from selling any beer that is purchased from a beer manufacturer at the beer manufacturer’s premises under any of the following circumstances:

  • There’s no price schedule filed for the beer. In California, breweries and distributors must file a price schedule or price posting with the ABC (Department of Alcoholic Beverage Control) that names the price breweries charge distributors and retailers for their beer. It’s designed to keep distributors from constantly fluctuating prices in an attempt to undercut each other.
    Rule: If there’s no price schedule filed for a beer filed in a certain county, liquor stores in that county can’t sell it.
  • “The beer container contains the statement or is marked ‘Not Packaged for Resale’.” This is a biggie. If, for example,  Russian River wants to prevent its Pliny bottles from being resold at liquor stores, it can slap a sticker on each bottle they sell from their brewpub that says ‘Not Packaged for Resale.’ The bottles that are earmarked for distribution would not receive this sticker.
    Rule: If bottles released only at the brewery are marked ‘Not Packaged for Resale,’ it’s illegal for a liquor store to sell them.

This bill obviously doesn’t address all the wily ways that the secondary beer market operates—and it’s only one state’s attempt at solving the problem—but it’s a start. Alas, it obviously doesn’t outlaw some dude’s Craiglist or Facebook post selling The Bruery’s Black Tuesday bottles for $150 … but you can still call him a jerk.

Oh, and a special tip of the cap to astute reader (and California attorney) Eugene Pak for bringing this bill to my attention.

 

Author
Kate Bernot is DRAFT’s beer editor. Reach her at kate.bernot[at]draftmag.com.

Related Articles

5 Comments

  • Dr. X says:

    glad the state of California is in Excellent financial shape
    No water worries
    No Crime.
    Just reselling of Beer is their only worry….

    somebody not get their Rare Beer??

    • Chris says:

      It’s possible to deal with more than one problem at a time. And crime, already illegal by definition, isn’t something legislators can work on: except by making more things illegal, which you don’t seem to like.

  • Ron B says:

    Isn’t that just the definition of a business? If you subbed in the word “tomato” for beer and “farmer” for brewery….this same story would be “legislators are making it illegal for grocers to buy tomatoes from farmers and then sell them at a higher price” which we would say is ridiculous.

  • Rudy says:

    Whatever happened to the free market? Get the government out of the beer business. Absolutely no reason this law should exist. Get back to fixing out state’s many and very real problems, like crime, immigration, water resources, and jobs.

  • Lamont C says:

    The article states “it’s more damaging” for a retail store to buy beer as a patron and then re-sell it (than, say, a consumer re-selling it)???
    Who, precisely, is being damaged?
    Is it the brewery, whose product was purchased?
    Is it the retailer, who’s attempting to satisfy their customers?
    Is it the final purchaser of the product, who decided to buy something at a price they’re agreeing to pay?

    State law already prohibits a retailer from purchasing at retail and re-selling, doesn’t it? Sections 23402 and 24045.1…

    But given so many issues in the state of California such a education, infrastructure, gun laws, etc., perhaps legislators ought to be dealing with more pressing problems than a very minor beer sales issue…

    (And why would they pass a bill covering only beer? What about wine? What about distilled spirits?? Hello Cult Cabernets and Pappy Van Winkle!)

Leave A Reply

Your email address will not be published.