CA ABC Loosens Regulations for Alcohol Beverage Retailers and Delivery
The California Department of Alcoholic Beverage Control issued a notice on March 19, 2020 temporarily loosening certain regulations during the current state of affairs. While primarily focused on retailers, there are some potentially helpful provisions that impact alcohol beverage producers, too.
A few things to keep in mind. First, local regulations and restrictions may also govern and restrict the ability of licensees to engage in these activities. Second, this move by the ABC is temporary. ABC plans to notify the industry 10 days before these guidelines terminate.
Below is a summary of ABC’s March 19 notice.
3/21/2020 Update: CA ABC has issued a FAQ for it’s 3/19/2020 Notice of Regulatory Relief
ON-PREMISE RETAILERS SELLING ALCOHOL “TO GO”
ALCOHOL IN MANUFACTURER PRE-PACKAGED CONTAINERS: If you hold an on-premise retail license that allows you to sell beer and wine or beer wine and spirits, you can sell that beer and wine to go for off-premise consumption in the original container/bottle (barring any condition on your license). That was true prior to the ABC notice, and still holds. However, if you hold an on-premise retail license that allows you to sell beer, wine and spirits, you can now sell all those beverages (beer, wine and spirits) in the original container/bottle.
ALCOHOL IN RETAILER PACKAGED CONTAINER: Under ABC’s new notice, if you operate a restaurant / “bona fide eating place”, you can now package whatever alcohol your license allows you to sell (beer and wine only for a Type 41; beer, wine, and premixed cocktails/drinks if you are a Type 47) in a container with a “secure lid or cap” so long as that cap does not have a sipping hole or opening for a straw, or could otherwise be consumed without removing the lid/cap. However, that container must be sold in conjunction with a meal prepared for pick-up or delivery.
Retailers that want engage in this type of activity must have a prominent posting (either on the premise, online, or in any way possible to alert consumers or the person transporting the beverage) that states, “Alcoholic beverages that are packaged by this establishment are open containers and may not be transported in a motor vehicle except in the vehicle’s trunk; or, if there is no trunk, the container may be kept in some other area of the vehicle that is not normally occupied by the driver or passengers (which does not include a utility compartment or glove compartment (Vehicle Code section 23225)). Further, such beverages may not be consumed in public or in any other area where open containers are prohibited by law.” UPDATE 3/24/2020: ABC has created a PDF of that notice so that retailers can easily print and post.
TAKE OUT WINDOWS: Some licensees have conditions on their license that prohibit the sale / delivery of alcohol to persons in cars or to consumers outside of the licensed premises through a take-out window or slide-out tray. Those prohibitions are temporarily lifted.
DELIVERY TO CONSUMERS: Even before the emergency notice, most business that hold a license that permits them to sell alcohol to consumers for off-premise consumption can also deliver those beverages to the consumer, so long as the sales transaction (other than the delivery) takes place at the licensed premise. In other words, the order must be received at the licensed premise, and payment is processed there. You can’t just show up at someone’s door and swipe a credit card there.
The temporary notice now allows for the following:
- If you are allowed to sell to consumers for off-premise consumption, you can accept payment, including cash, at the point of delivery.
- Although the CA ABC Act is silent as to whether Craft Distillers have the right to make deliveries away from the premises, the notice now allows Type 74 craft distillers can also deliver to consumers, but must limit sales to 2.25 liters per consumer per day.
- These delivery privileges are not limited to delivery to a consumer’s residence, but also allow for curbside delivery to consumers immediately outside the licensed premises.
HOURS OF OPERATION: State law prohibits the retail sale of alcohol between 2:00am and 6:00am. Some licensees have even more restrictive hours through conditions placed on their license. However, those license conditions are now lifted for off-premise sales, though the 2am-6am state law is still in place.
RETURNS: Generally, there are restrictions on the ability of producers and wholesalers from accepting returns from retailers. Those restrictions are temporarily lifted. It doesn’t mean that wholesalers and producers are required to accept all returns from retailers, just that they can if they choose to. However, producers/wholesalers cannot condition the acceptance of a return on a requirement to purchase in the future. This is consistent with TTB latest guidance on returns as well.
RETAILER-TO-RETAILER SALES: Under California law, retailers cannot purchase alcohol from other retailers. Under the temporary guidance, an off-premise retailer (grocery store, bottle shop, etc.) can now buy inventory from on-premise retailers (such as bars and restaurants).
EXTENSION OF CREDIT: Normally, California law imposes a maximum 30 day credit on the purchase of alcohol by a retailer from a wholesaler or producer. That 30 day limit is temporarily lifted. Note, however, once the temporary guidance is revoked, the extended credit term will also terminate (i.e., the retailer will have to pay the amount due at that time).
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