• Justin Hein

ABC Issues Emergency Regulatory Relief

In the wake of shelter-in-place, ABC has removed a variety of restrictions and limitations on various license types.

Over a dozen restrictions and limitations on ABC license types have been whisked away by the State of California, Department of Alcoholic Beverage Control in the wake of shelter-in-place being implemented to combat COVID-19 coronavirus. Many of these restrictions and limitations had been historical impediments to licensees innovating in the 21st century--whether through marketing, business operations, or customer service.

As of April 22, ABC has issued three notices of regulatory relief reducing or eliminating 13 previous license restrictions. Each notice can be found below:

ABC also announced a 30-day grace period to all license renewal fees and late renewal penalty payments.

According to the ABC, the relief identified is designed to support the alcoholic beverage industry during these unprecedented times. This is to ensure that it can continue to operate while assisting California in slowing the spread of the COVID-19 virus. The changes are designed to confront the economic challenges the industry is facing as a result of this effort and almost all consumers sheltering-in-place. According to the ABC, "The Department has carefully considered the public’s health, safety, and welfare in providing this relief, and the Department has concluded that the decision to defer enforcement of these measures, exercised on a temporary basis, will not jeopardize the public’s health, safety, or welfare."

All of the relief provided by these notices is temporary and may be withdrawn by ABC at any time.  ABC indicates that it intends to provide a 10-day notice of the termination of any such relief, although such relief may be withdrawn immediately should the needs of public safety dictate.

ABC has compiled the changes for each license type and posted it on their website here. Please note that the changes are being implemented so quickly that this compilation may not be entirely accurate at present (i.e. it was first published on March 27).

Major Changes Implemented

Some of the major changes implemented by the regulatory relief are as follows:

Returns of alcohol - manufacturers and wholesalers may accept returns of alcoholic beverages from retailers.

Retail-to-Retail transactions - Off-sale retailers may purchase alcoholic beverages from on-sale retailers to the same extent they can purchase such beverages from suppliers authorized to sell to them (e.g., wholesalers, beer manufacturers, and winegrowers).

On-sale may make Off-sale transactions - Licensees with on-sale privileges may sell those alcoholic beverages for off-sale consumption in manufacturer pre-packaged containers as to which their license permits on-sale consumption.

Sale in to-go containers - Bona fide eating places (i.e., restaurants) selling beer, wine, and pre-mixed drinks or cocktails for consumption off the licensed premises may do so when sold in conjunction with meals prepared for pick-up or delivery. Any such alcoholic beverages must be packaged in a container with a secure lid or cap and in a manner designed to prevent consumption without removal of the lid or cap (e.g., no lids with sipping holes or openings for straws).

Pass-Through and Drive-Thru Windows - suspends any prohibition on licensees from making sales and deliveries of alcoholic beverages to persons in a motor vehicle or to persons outside the licensed premises through a pass-out window or a slide-out tray to the exterior of the premises.

Restrictions on hours of operation - suspends enforcement of any specific license condition restricting the hours of sales and service for licensees exercising off-sale privileges. The universal bar of sales and services between 2 AM and 6 AM remains in place.

Delivery restrictions - suspends enforcement on restrictions of delivery. This includes the specific requirements that the transaction be completed on the premises before delivery may occur. Also clarifies that existing law regarding delivery permits delivery to the consumers immediately outside the licensed premises (often known as “curbside delivery”).

Free delivery - suspends enforcement of prohibitions against licensees delivering alcoholic beverages—whether by the licensee, by third-party services, or by mail services—without charge to the consumer. Note that licensees are not required to provide free delivery; merely that they may choose to offer it to consumers.

Delivery extends to midnight - suspends enforcement of prohibitions of delivery of alcohol between 8 PM and 3 AM by permitting licensees to deliver up to 12 AM on Monday through Saturday. Prohibition of delivery of alcohol on Sunday remains in effect.

Charitable promotions and sales - suspends enforcement of the prohibitions against provisions of things of value to retailers and the prohibition against the provision of premiums, gifts, or free goods in connection with the sale or marketing of alcoholic beverages, so long as the donation and promotion involve a bona fide charitable organization providing relief related to the COVID-19 pandemic and other requirements.

Virtual Wine Tastings - suspends enforcement of certain rules and otherwise provides guidance to Type-02 winegrower licensees for conducting “virtual wine tastings.” Includes permitting a winegrower licensee to deliver tasting samples of wines to consumers away from their licensed premises. (Please note - ABC only regulates sales and deliveries to consumers only within California. Winegrowers who wish to provide a “virtual wine tasting” to customers outside the state will need to comply with all laws of the state where the tastes are being shipped.)

Does Not Impact Local Restrictions

One final note - the ABC's notices of regulatory relief does not exempt licensees from local ordinances, zoning restrictions, conditional use permits. These restrictions are implemented at the municipal level - city and county levels of government. ABC has no jurisdiction or control over suspension of those conditions. That said, ABC indicated that it "will not consider any violation of ... local controls to constitute a violation of the license issued by the Department."

So, bottoms up until further notice.

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