EFFECTIVE JANUARY 1, 2024, CA WINERIES AND DISTILLERIES WILL HAVE REPORTING AND PAYMENT OBLIGATIONS TO CALRECYCLE UNDER THE BOTTLE BILL

With the passage of  Senate Bill No. 1013, beginning on January 1, 2024, wine and spirits will be included in California’s state container deposit system established by the California Beverage Container Recycling and Litter Reduction Act (known as the “Bottle Bill”).  As such, wineries and distilleries will now be required to comply with the Bottle Bill’s CA Redemption Value (CRV) payment and reporting obligations beginning January 1, 2024, and CRV labeling requirements for all wine and spirits sold after July 1, 2025.  Beer and certain other non-alcoholic beverages were already previously covered by the Bottle Bill.

Importantly, because all wines and spirits sold in California after July 1, 2025 must be labeled with some type of approved CRV statement, producers should start including this information on their bottles and/or labels as soon as possible.

Below we have included a brief summary of the rules applicable to wines and spirits under Bottle Bill, the new registration and payment obligations, and labeling changes required to comply with the new laws

TYPES OF BEVERAGES:

The Bottle Bill applies to beer, malt beverages, wine, spirits, wine and spirit coolers (regardless of ABV), and certain other non-alcoholic beverages intended for sale in California. Section 14504 and 14560

CA REDEMPTION VALUES (CRV): Section 14560

  1. For bottles smaller than 750 mL (less than 24 fluid ounces), the CRV is 5 cents/bottle.
  2. For bottles 750 mL or larger (24 fluid ounces or more), the CRV is 10 cents/bottle.
  3. For boxes, bladders, pouches, or similar containers, the CRV is 25 cents/container.

REGISTRATION & PAYMENT OBLIGATIONS BEGINNING JANUARY 1, 2024:

  1. Prior to January 1, 2024, all wineries and distilleries should register with CalRecycle (information regarding registration can be found here).
  • All wineries and distilleries should register as a Beverage Manufacturer.
  • Any wineries and distilleries that sell wine or spirits in California Direct to Consumer or Direct to a Retailer (for wine) should also register as a Distributor.

2. Pay the applicable CRV to CalRecycle.

  • The winery or distillery may pass on this cost to consumers (as the consumers can return the bottles to a recycling center for the redemption). Section 14560
  • Wineries and distilleries do NOT need to pay the CRV for sales made to California wholesalers or sales outside of California.

3. Pay the applicable Processing Fee.

  • The processing fee is paid on all containers a winery or distillery sells, whether to wholesalers, retailers, or consumers.  Section 14575(g)
  • The processing fee is variable, but is currently 0.426 cents/glass bottle or for new containers, 0.574 cents/container.  The Wine Institute has noted that the hope is for the processing fee to be reduced to zero.

LABELING OBLIGATIONS FOR ALL WINES AND SPIRITS SOLD AFTER JULY 1, 2025:

  1. All wines and distilled spirits sold in California after July 1, 2025 must be labeled with:  “CA Redemption Value,”  “CA Cash Refund,” “California Cash Refund,” or “CA CRV” . This statement can be added on the actual label or by sticker, stamp, embossment, or other similar method.
  2. Currently, there is no exemption for wines or spirits labeled before July 1, 2025.  While the Wine Institute is working on legislation to create an exemption for wines labeled before January 1, 2024, wineries and distilleries should start including the required labeling on all applicable containers as soon as possible.

EXCEPTION FOR TASTING ROOM SALES:

If any wines or spirits are sold exclusively in a tasting room, then those products are exempt from the Bottle Bill’s requirements. Section 14510.

For more information regarding Bottle Bill compliance, please contact Bahaneh Hobel at [email protected] or Theresa Barton Cray at [email protected].

Prop 65 Warnings Streamlined for Alcohol Beverages Sold Online

California’s Proposition 65 warning regulations were recently amended to modify the delivery of the required state warnings for alcoholic beverages. The modified regulations somewhat ease compliance, as they will now allow for the required warning to be provided to the customer electronically for alcoholic beverages ordered online or via catalog. However, they muddle the standard for other orders that are placed for delivery.

Proposition 65, adopted in 1986, generally requires in California for a statement to be provided before the purchase of products that contain certain chemicals that may cause cancer or reproductive toxicity. Stores are generally required to post signs along-side listed products. The warning methods and language are product-specific, but there is also a requirement that, for products that are sold on line, the warning be provided via electronic device to the customer, without requiring the purchaser to seek out the warning, prior to or during the purchase of the product. Under the existing regulations for internet purchases of products, including alcoholic beverages, the warning or a clearly marked hyperlink using the word “WARNING” must be provided on the product display page or by otherwise prominently displaying the applicable warning to the customer prior to completing the purchase on the website. This rule is not changing.

In addition to the warning on the website, a copy of the alcohol beverage exposure warning was also required to be included on or in all alcohol packages when delivered in California. This portion of the rule is changing, making it easier for online orders, but more convoluted in the case of orders placed other than via the internet or catalog.

Going forward, for an order that is to be delivered to customers in California at a location other than the point of sale that is not made online or from a catalog – for example, for wines ordered in a tasting room for delivery to the customer at another location within California – the product-specific warning must be provided prior to or during the purchase of the wines. The regulation does not specify how the warning must be provided however, but presumably notice should be provided by signage similar to in-store sales, a printed warning on a sales document, or – although not spelled out specifically in the regulation –verbally for phone orders. The regulation is specific though that the warning be provided prior to or at the time of the purchase – not at the time of delivery as was the case previously.

While such transactions are now less clear, with respect to internet or catalog orders of alcoholic beverages, the warning has gotten simpler to deliver. The prior method of a warning on or in the package is still allowed, but the rule has been streamlined to instead allow the required warning to be included in an email or text message with the purchase confirmation rather than having to be printed and included with the shipment. Providing the warning as part of the electronically delivered receipt or confirmation should simplify shipping and can potentially reduce liability for inadvertent warning omissions in shipments to California.

All businesses that employ more than 10 employees that produce or sell alcoholic beverages to consumers in California are subject to Proposition 65 and must be in compliance with the modified regulations by April 1, 2021. Because the definition of “employee” under the regulations is imprecise, we recommend that all applicable Proposition 65 warnings be complied with, even if a winery or retailer has fewer than 10 employees.

For more on this and related issues, please contact Josh Devore.