Craft 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.