AB 364

This bill modifies the applicable penalty under certain circumstances when an

an alcohol beverage retailer purchases alcohol beverages from a source other than

a wholesaler in violation of current law. The bill also eliminates restrictions on the

maximum period of credit that a wholesaler may extend to a retailer in connection

with the purchase of alcohol beverages.

Retailer purchases of alcohol beverages from non-wholesaler

Under current law, alcohol beverages are generally distributed to consumers

under a three-tier distribution system: the producer sells to a wholesaler; the

wholesaler sells to a retailer; and the retailer sells to a consumer. With specific

exceptions, no person may sell outside the three-tier system and no person may sell

alcohol beverages to a consumer unless the seller possesses a license or permit

authorizing the sale. A Class “B" license authorizes the retail sale of fermented malt

beverages (beer) for consumption on or off the premises. A “Class B" license

authorizes the retail sale of intoxicating liquor, which includes wine and distilled

spirits, for consumption on the licensed premises and, subject to restrictions, off the

licensed premises. Class “B” and “Class B” licenses are generally issued together for

establishments such as restaurants, bars, and taverns. Class “A” and “Class A”

licenses authorize the retail sale of, respectively, beer and intoxicating liquor in

original packages for consumption off the licensed premises. Class “A” and “Class

A” licenses are often issued together for establishments such as grocery stores, liquor

stores, and convenience stores. With exceptions for certain sales of beer by brewers

and brewpubs, a retail licensee may not purchase alcohol beverages from, or possess

alcohol beverages purchased from, any person other than a wholesaler. If a retail

licensee purchases or possesses beer in violation of this prohibition, the penalty that

may be imposed is a fine of not more than $10,000 or imprisonment for not more than

nine months or both. If a retail licensee purchases or possesses intoxicating liquor

in violation of this prohibition, the penalty that may be imposed (or must be imposed

if item 3., below, applies) is one of the following:

1. If a “Class B" licensee purchases intoxicating liquor from a “Class A" licensee

for resale or possesses intoxicating liquor purchased from a “Class A" licensee for

resale, a fine of not more than $100.

2. If 1. does not apply and the total volume of intoxicating liquor purchased or

possessed in one month is 12 liters or less, a forfeiture of not more than $100.

3. If neither 1. nor 2. apply, a fine of not less than $1,000 nor more than $10,000.

This bill makes changes to some of these penalties. With respect to the penalty

under item 2., above, the bill increases the threshold amount from 12 liters of

intoxicating liquor to 48 liters of intoxicating liquor. With respect to the penalty

under item 1., above, the bill changes the penalty from a fine to a forfeiture, making

the violation a civil offense rather than a crime.

The bill also creates a tiered penalty structure for violations with respect to beer