In September, California Governor Gavin Newsom signed SB19, AB239 and AB1267 into law This new legislation relaxes some restrictions on wineries and expands tasting room privileges. They are set to go into effect on January 1, 2022, and create the following changes:
- Increase number of permitted off-site tasting rooms
- Allow the sale and delivery of wine to consumer-provided containers
- Allow charitable donations in connection with the sale of alcohol
The changes come as a means to help California wineries with post-pandemic recovery. Here is what the new laws entail:
Currently, Type 02 wineries in California are permitted to operate only one tasting room away from their licensed Type 02 premises where the wine is crushed and fermented. Under SB19, Section 23390.5, the California Alcoholic Beverage Control Act (ABC Act) is amended to allow a winery to operate a second Duplicate Type 02 premises.
The second off-site tasting room allows wineries to expand their reach to consumers without the additional costs of maintaining a production facility at that location.
Sale and Delivery of Consumer-Provided Containers at Duplicate Type 02 Tasting Rooms (Assembly Bill 239)
Section 23390 of the ABC Act prohibits a Duplicate Type 02 premises from selling or delivering wine to consumers in containers that have been supplied, furnished or sold by the consumer. Under AB239, that exception will be removed, and consumers may provide their own bottles or containers to be filled at an off-site tasting room.
With this change, wineries save on expenses for materials, and those savings are passed along to the consumer. It is also an important change for environmental responsibility, as more wine containers will be able to be reused rather than disposed of after just one use.
Advertisements of Charitable Donations in Connection with the Sale of Alcohol (Assembly Bill 1267)
Under the ABC Act, an alcoholic beverage licensee may not give a gift or donation to a charitable organization if the gift is advertised as being tied to the sale of alcoholic beverages. For example, a winery cannot advertise to consumers that a portion of proceeds from their alcohol purchase will be donated to a charity. Until now, this has been seen as an attempt to incentivize the purchase of alcohol and in violation of California law.
During COVID-19, a temporary exception was put in place to allow proceeds from the sale of alcoholic beverages to be given to COVID-19 relief charities only. Under AB1267, an amendment will be made to Section 25600 of the ABC Act to continue to allow winegrowers, beer manufacturers, distilled spirits manufacturers, craft distillers, brandy manufactures and wine rectifiers to donate a portion of the proceeds of alcoholic beverage sales to any nonprofit charitable organization. This update is not limited to COVID-19 relief charities.
- Donations can only come from proceeds of the sale or distribution of alcoholic beverages in manufacturer-sealed containers. Sales of alcohol to consumer-provided containers will not be eligible.
- Promotion for the charitable donation must not directly encourage or reference the consumption of alcoholic beverages
- The donation cannot benefit a retail licensee or charity benefiting the employees of a retail licensee. Advertisements for the donation may not promote or reference a retail licensee.
This statutory exception will be valid through January 1, 2025. It will require additional legislation to be extended or remain permanently in place.
Allen Wine Group is ready to assist with any tax and accounting questions or challenges you may have in regards to taking advantage of this new legislation to open additional tasting rooms. Contact us today to schedule your free and confidential consultation.