Chapter 15 - Tied-House Restrictions

California Business and Professions Code — §§ 25500-25512

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Sections (66)

Amended by Stats. 2015, Ch. 519, Sec. 4. (AB 776) Effective January 1, 2016.

(a)No manufacturer, winegrower, manufacturer’s agent, rectifier, California winegrower’s agent, distiller, bottler, importer, or wholesaler, or any officer, director, or agent of any such person shall:

(1)Hold the ownership, directly or indirectly, of any interest in any on-sale license.

(2)Furnish, give, or lend any money or other thing of value, directly or indirectly, to, or guarantee the repayment of any loan or the fulfillment of any financial obligation of, any person engaged in operating, owning, or maintaining any on-sale premises where alcoholic beverages are sold for

consumption on the premises.

(3)Own any interest, directly or indirectly, in the business, furniture, fixtures, refrigeration equipment, signs, except signs for interior use mentioned in subdivision (g) of Section 25503, or lease in or of any premises operated or maintained under any on-sale license for the sale of alcoholic beverages for consumption on the premises where sold; or own any interest, directly or indirectly, in realty acquired after June 13, 1935, upon which on-sale premises are maintained unless the holding of the interest is permitted in accordance with rules of the department.

(b)This section does not apply to the holding by one person of a wholesaler’s license and an on-sale license in counties not to exceed 15,000 population.

(c)This section does not apply to the financial or representative relationship between a manufacturer, winegrower, manufacturer’s agent, rectifier, California winegrower’s agent, distiller, bottler, importer, or wholesaler, or any officer, director, or agent of such person, and a person holding only one of the following types of licenses:

(1)On-sale general license for a bona fide club.

(2)Club license issued under Article 4 (commencing with Section 23425) of Chapter 3.

(3)Veterans’ club license issued under Article 5 (commencing with Section 23450) of Chapter 3.

(4)On-sale license for boats,

trains, sleeping cars, or airplanes where the alcoholic beverages produced or sold by the manufacturer, winegrower, manufacturer’s agent, rectifier, California winegrower’s agent, bottler, importer, or wholesaler or any officer, director, or agent of the person are not sold, furnished, or given, directly or indirectly to the on-sale licensee.

(d)This section does not apply to an employee of a licensee referred to in subdivision (a) who is a nonadministrative and nonsupervisorial employee.

(e)Notwithstanding any other provision of this division or regulation of the department, this section does not apply to an employee of a licensee referred to in subdivision (a) who is the spouse of an on-sale licensee, so long as the on-sale licensee does not purchase, offer for sale, or

promote, regardless of source, any of the brands of alcoholic beverages that are produced, bottled, processed, imported, rectified, distributed, represented, or sold by any licensee referred to in subdivision (a) that employs the spouse of the on-sale licensee.

(f)(1) Nothing in this division prohibits the holder of any retail on-sale or off-sale license from purchasing advertising in any publication published by

a nonretail licensee.

(2)For purposes of this subdivision:

(A)“Nonretail licensee” means any manufacturer, winegrower, manufacturer’s agent, rectifier, California winegrower’s agent, distiller, bottler, importer, or wholesaler, or any person who does not directly or indirectly hold the ownership of any interest in a retail license.

(B)“Publication published by a nonretail licensee” includes Internet Web sites and social media feeds operated and maintained by or for a nonretail licensee under an account or Internet Web site address owned by the nonretail licensee.

§ 25500.1

Amended by Stats. 2015, Ch. 408, Sec. 1. (AB 780) Effective January 1, 2016.

(a)The listing of the names, addresses, telephone numbers, email addresses, or Internet Web site addresses, or other electronic media, of two or more unaffiliated on-sale or off-sale retailers selling beer, wine, or distilled spirits produced, distributed, or imported by a nonretail industry member does not constitute a thing of value or prohibited inducement to the listed on-sale or off-sale retailer, provided all of the following conditions are met:

(1)The listing does not also contain the retail price of the product.

(2)The listing is the only reference to the on-sale or off-sale retailers in the direct communication.

(3)The listing does not refer only to one on-sale or off-sale retailer or only to on-sale or off-sale retail establishments controlled directly or indirectly by the same retailer.

(4)The listing is made, or produced, or paid for, exclusively by the nonretail industry member.

(b)For the purposes of this section, “nonretail industry member” is defined as a manufacturer, including, but not limited to, a beer manufacturer, winegrower, brandy manufacturer, rectifier, or distiller of alcoholic beverages or an agent of that entity, or a wholesaler, regardless of any other licenses held directly or indirectly by that person.

(c)The Legislature finds that it is necessary and proper to require a separation among manufacturing interests, wholesale interests, and retail interests in the production and distribution of alcoholic beverages in order to prevent suppliers from dominating local markets through vertical integration and to prevent excessive sales of alcoholic beverages produced by overly aggressive marketing techniques. The Legislature further finds that the exceptions established by this section to the general prohibition against tied interests shall be limited to their express terms so as not to undermine the general prohibition, and intends that this section be construed accordingly.

§ 25501

Amended by Stats. 1997, Ch. 774, Sec. 2.3. Effective January 1, 1998.

No manufacturer, bottler, importer, or wholesaler of products of the brewing industry shall:

(a)Furnish, give, rent, lend, or sell, directly or indirectly, any equipment, fixtures, or supplies, other than alcoholic beverages, to any person engaged in operating, owning, or maintaining any on-sale premises where alcoholic beverages are sold for consumption on the premises. This subdivision shall not prohibit the furnishing of draft beer pumps and iceboxes to those persons who operate on a temporary basis. Notwithstanding any other provision of this division, a manufacturer, bottler, importer, or wholesaler of products of the brewing industry may furnish, give, rent, lend, or sell, directly or indirectly, paper beverage coasters less than 25 square inches in size and having a value of less than five cents ($0.05) per coaster or brand-identified acrylic table tent holders to any person engaged in operating, owning, or maintaining any on-sale premises where alcoholic beverages are sold for consumption on the premises.

(b)Directly or indirectly, hold the ownership or any interest, by stock ownership or otherwise, in any firm, corporation, partnership, or business, furnishing, supplying, or dealing in any office, store, or restaurant furnishings or equipment, other than signs for interior use or supplies authorized to be given under this division to any person engaged in operating, owning, or maintaining any on-sale premises.

(c)Notwithstanding any provision of this section, the holder of a beer and wine wholesaler’s license may manufacture, distribute, and sell any lawful product to any person engaged in operating, owning, or maintaining any on-sale premises where alcoholic beverages are sold for consumption on the premises, provided that these products are sold by the holder of the beer and wine wholesaler’s license to the on-sale licensee at a price not less than the current market price for the product.

§ 25502

Amended by Stats. 1987, Ch. 1121, Sec. 3.

(a)No manufacturer, winegrower, manufacturer’s agent, California winegrower’s agent, rectifier, distiller, bottler, importer, or wholesaler, or any officer, director, or agent of any such person, shall, except as authorized by this division:

(1)Hold the ownership, directly or indirectly, of any interest in an off-sale license.

(3)Own or control any interest, directly or indirectly, by stock ownership, interlocking directors, or trusteeship, in the business, furniture, fixtures, refrigeration equipment, signs, except signs for interior use mentioned in subdivision (g) of Section 25503, or lease in premises licensed with an off-sale license.

(4)Own or control any interest, directly or indirectly, by stock ownership, interlocking directors, trusteeship, or mortgage of the realty upon which an off-sale licensed premises is maintained.

(b)Any wholesaler in counties not to exceed 15,000 population who holds both a beer and wine wholesaler’s license and an off-sale general license and who held such licenses prior to September 19, 1947, may continue to hold such licenses but may not transfer the beer and wine wholesaler’s license to another individual, individuals, partnership, corporation or other legal entity. Where the off-sale general license is transferred to an individual, individuals, partnership, corporation or other legal entity, the transfer shall be a person-to-person transfer only.

(c)Nothing in this section prohibits any holder of a distilled spirits manufacturer’s, manufacturer’s agent’s, California winegrower’s agent, rectifier’s, or wholesaler’s license, or any officer, employee, or representative of any such licensee, from acting as a trustee for any off-sale general licensee in any bankruptcy or other proceedings for the benefit of the creditors of the off-sale general licensee.

(d)Nothing in this section shall alter, change, or otherwise affect, retroactively or prospectively, any of the rights or privileges granted to a winegrower or brandy manufacturer by Section 23362, or by any other provision of this division.

(e)This section does not apply to an employee of a licensee referred to in subdivision (a) who is a nonadministrative and nonsupervisorial employee.

§ 25502.2

Amended by Stats. 2015, Ch. 311, Sec. 2. (SB 796) Effective January 1, 2016.

(a)A person employed or engaged by an authorized licensee may appear at a promotional event at the premises of an off-sale retail licensee for the purposes of providing autographs to consumers at the promotional event only under the following conditions:

(1)A purchase from the off-sale retail licensee is not required.

(2)A fee is not charged to attend the promotional event.

(3)Autographing may only be provided on consumer advertising specialities given by the authorized licensee to a consumer or on any item provided by the consumer.

(4)The promotional event does not exceed four hours in duration.

(5)There are no more than two promotional events per calendar year involving the same authorized licensee at a single premises of an off-sale retail licensee.

(6)The off-sale retail licensee may advertise the promotional event to be held at its licensed premises.

(7)An authorized licensee may advertise in advance of the promotional event only in publications of the authorized licensee, subject to the following conditions:

(A)The advertising only lists the name and address of the off-sale retail licensee, the name of the alcoholic beverage product being featured at the promotional event, and the time, date, and location of the off-sale retail licensee location where the

promotional event is being held.

(B)The listing of the off-sale retail licensee’s name and address is the only reference to the off-sale retail licensee in the advertisement and is relatively inconspicuous in relation to the advertisement as a whole, and the advertisement does not contain any pictures or illustrations of the off-sale retail licensee’s premises or laudatory references to the off-sale retail licensee.

(8)A wholesaler does not directly or indirectly underwrite, share in, or contribute to any costs related to the promotional event, except that a beer and wine wholesaler that holds at least six distilled spirits wholesaler licenses may directly or indirectly underwrite, share in, or contribute to any costs related to a promotional event for which the wholesaler employs or engages the person providing autographs to consumers at the promotional event.

(9)The authorized licensee notifies the department in writing of the promotional event at least 30 days in advance of the promotional event.

(10)The authorized licensee maintains records necessary to establish its compliance with this section.

(b)For purposes of this section, “authorized licensee” means a manufacturer, winegrower, manufacturer’s agent, California winegrower’s agent, rectifier, importer, brandy manufacturer, brandy importer, or wholesaler.

§ 25503

Amended by Stats. 2023, Ch. 532, Sec. 2. (AB 546) Effective January 1, 2024.

No manufacturer, winegrower, manufacturer’s agent, California winegrower’s agent, rectifier, distiller, bottler, importer, out-of-state beer manufacturer certificate holder, or wholesaler, or any officer, director, or agent of any such person, shall do any of the following:

(a)Directly or indirectly, deliver the possession of any alcoholic beverages to any on- or off-sale licensee under an agreement of consignment whereby title to the alcoholic beverages is retained by the seller or whereby the licensee receiving the alcoholic beverages has the right at any time prior to sale to relinquish possession to or return them to the original seller.

(b)Directly or indirectly, give any licensee or any person any alcoholic beverages as free goods as a part of any sale or transaction involving alcoholic beverages.

(c)Give secret rebates or make any secret concessions to any licensee or the employees or agents of any licensee, and no licensee shall request or knowingly accept from another licensee secret rebates or secret concessions.

(d)Give or furnish, directly or indirectly, to any employee of any holder of a retail on-sale or off-sale license only anything of value for the purpose or with the intent to solicit, acquire, or obtain the help or assistance of the employee to encourage or promote either the purchase or the sale of the alcoholic beverage sold or manufactured

by the licensee giving or furnishing anything of value, and any employee who accepts or acquires anything of value contrary to the provisions of this subdivision is guilty of a misdemeanor.

(e)Willfully or knowingly discriminate, in the same trading area, either directly or indirectly, in the price of any brand of distilled spirits sold to different retail licensees purchasing under like terms and conditions.

(f)Pay, credit, or compensate a retailer or retailers for advertising, display, or distribution service in connection with the advertising and sale of alcoholic beverages.

(g)Furnish, give, lend, or rent, directly or indirectly, to any person any decorations, paintings,

or signs, other than signs advertising their own products as permitted by Section 25611.1.

(h)Pay money, provide credit, rebate, or give or furnish anything of value for the privilege of placing or painting a sign or advertisement, floor or window display, on or in any premises selling alcoholic beverages at retail.

§ 25503.1

Amended by Stats. 1983, Ch. 215, Sec. 1. Effective July 13, 1983.

(a)Anything in this division to the contrary notwithstanding, any manufacturer, winegrower, manufacturer’s agent, rectifier, distiller, bottler, importer, or wholesaler, or any officer, director, or agent of any such person is authorized:

(1)Only in connection with alcoholic beverages manufactured, produced or sold by such licensee, to install, service and set up window displays, promotional materials, and temporary floor displays holding merchandise in the premises of an off-sale retail licensee.

(2)Only in connection with alcoholic beverages manufactured, produced or sold by such licensee, to furnish, give, lend, rent or sell decorations and decorative materials, including holiday decorations, paintings and pictures, to an off-sale retail licensee for use in the windows and elsewhere in the interior of the retail premises in connection with advertising and promotional material or displays in the premises of such retailer; provided, that the advertising and promotional material shall have no intrinsic value other than as advertising and that the total original cost of all such decorations and decorative materials, including holiday decorations, paintings and pictures furnished by any licensee and in use at any one time in any one off-sale retail premise shall not exceed the amount established by rules of the department; and provided, that the licensee or any officer, director or agent of such licensee shall not directly or indirectly pay or credit the retailer for the display of such decorations or decorative materials or for any expense incidental to their operation.

(3)To furnish, give, lend, rent or sell to an off-sale retailer who sells the alcoholic beverages of such licensee, newspaper cuts, mats, or engraved blocks for use in the retailer’s advertisements relating to such alcoholic beverages.

(b)Anything in this chapter to the contrary notwithstanding, any holder of a wholesaler’s license may manufacture, and distribute, sell, or rent any lawful product to any person engaged in operating, owning, or maintaining any retail premises where alcoholic beverages are sold; provided, however, that such products are sold or rented by the holder of the wholesaler’s license to the licensee at a price not less than the current market price for such product; and provided, further, that the manufacturer and importer of alcoholic beverages shall be controlled by the other applicable provisions of this division.

§ 25503.10

Amended by Stats. 1974, Ch. 699.

(a)Notwithstanding any other provision of this division, the department may approve a lease or sublease, or amendments to such lease or sublease, where a manufacturer, manufacturer’s agent, winegrower, California winegrower’s agent, rectifier, importer, or wholesaler is the lessor and a retailer is the lessee when each of the following conditions are incorporated in the lease:

(1)The lease is confined to real property and improvements thereon which have become part of the real property.

(2)No trade fixtures or other personal property are included in the lease.

(3)The rent to be paid by the lessee is not less than the current value for such a lease, which the lessor shall establish by submission of competent proof to the department.

(4)The rent is due and payable monthly beginning with the first month of occupancy.

(5)Any money received by the lessor from the lessee when the rent is due shall be first applied by the lessor to the payment of the rent.

(6)The lessee shall purchase from the lessor no more than 10 percent of his yearly supply of the type of alcoholic beverages sold on his licensed premises. The percentage shall be computed on a calendar-year basis.

(b)The original lease and any amendments to the original lease or to an amended lease shall be submitted to the department for its approval.

(c)The department may suspend or revoke the license of the lessor or the lessee for violations of any of the above conditions or for any misrepresentation in the terms of the lease.

(d)The ownership of shares of stock in a corporation licensed as a retailer under the provisions of this division, when such shares of stock are sold to the general public on any national or local stock exchange, shall not be deemed to be the ownership, either in whole or in part, of the land upon which a retail license issued to such corporation is located. The person who holds such shares of stock shall not be held to be a lessor under the provisions of this section.

§ 25503.11

Amended by Stats. 1998, Ch. 639, Sec. 12. Effective January 1, 1999.

Notwithstanding any other provision of this division, a manufacturer, manufacturer’s agent, winegrower, rectifier, importer, or wholesaler may hold a diminutive amount of stock in a corporate retail licensee or serve on the board of directors of a corporate off-sale retail licensee, provided the stock ownership or service on the board of directors, as determined by the department, does not result in the exercise of control over the retail licensee’s business and does not result in the exclusion of any competitor’s brand of alcoholic beverages, and provided further that the stock is listed on the New York Stock Exchange, the American Stock Exchange, or NASDAQ, and the department is notified of the stock ownership or service on the board of directors.

§ 25503.12

Amended by Stats. 1998, Ch. 639, Sec. 13. Effective January 1, 1999.

Notwithstanding any other provision of this division, a retail licensee may hold a diminutive amount of stock in a corporate licensed manufacturer, manufacturer’s agent, winegrower, rectifier, importer, or wholesaler, provided that the purpose of the stock ownership by the retail licensee, as determined by the department, is not to violate any of the provisions of this chapter, and provided further that the stock is listed on the New York Stock Exchange, the American Stock Exchange, or on NASDAQ, and the department is notified of the stock ownership.

§ 25503.13

Added by Stats. 1977, Ch. 1044.

(a)In order to alleviate the adverse economic and social consequences of high unemployment in identifiable urban and rural areas of California, the Legislature finds it in the public interest to encourage the private sector to create new employment and job-training opportunities for low-income persons and establish business enterprises owned and managed by such persons. To provide such opportunities it is necessary for companies with sufficient financial resources, management experience and marketing strength to establish as a principal operating objective the creation of definitive programs for obtaining these goals.

(b)Notwithstanding any other provision of this division, a manufacturer, rectifier, distiller, winegrower or bottler of wine who produces and sells only wine in an area outside of the United States, its territories or possessions and outside of foreign countries having common boundaries with any state of the United States, and who is not licensed in the United States, its territories or possessions, or any officer, director or agent of any such person or a person holding the ownership, directly or indirectly, of any interest in any such manufacturer, rectifier, distiller, winegrower or bottler of wine may have an interest in a person holding an on-sale license, provided, that the wine produced or sold by such manufacturer, rectifier, distiller, winegrower or bottler of wine is not sold, furnished or given, directly or indirectly to such on-sale licensee, provided further, that food shall also be sold at the on-sale premises, and, provided further, that any on-sale license that may be granted under this section shall be conditioned so as to promote, where feasible, the following objectives in accordance with the public policy set forth in subdivision (a) above:

(1)The location of a significant number of on-sale premises in or accessible to areas of high unemployment,

(2)The employment and management training of low-income individuals, particularly those who, because of race, sex, age or national origin, suffer a rate of unemployment significantly higher than the statewide average and

(3)The minority ownership of licensed businesses operating on-sale premises pursuant to a franchise agreement.

The department, after consultation with the Secretary of Business and Transportation, the Department of Business and Economic Development, the Chief of the Division of Fair Employment Practices, and the Director of the Employment Development Department, shall adopt such rules as it determines to be necessary for the administration of this section.

§ 25503.14

Added by Stats. 1978, Ch. 407.

Notwithstanding any provision of this division, any retail off-sale general licensee who holds at least 30 such licenses in this state and who also operates at least 50 wholesale grocery warehouses not licensed under this division may hold a beer and wine wholesale license in a state with a population not exceeding 700,000, provided that such licensed wholesale operation does not sell or transfer any alcoholic beverages to licensees of this state.

§ 25503.15

Amended by Stats. 2010, Ch. 296, Sec. 8. (SB 1480) Effective January 1, 2011.

(a)Notwithstanding any other provision of this division, a winegrower who manufactures, produces, bottles, processes, imports, or sells wine only, or any officer, director, or agent of that person, may hold the ownership of any interest in any on-sale license, if both of the following conditions exist:

(1)Neither that person, nor any officer, director, or agent of that person, sells or furnishes to the holder of the license any wine, or permits the sale pursuant to that license of any wine, manufactured, produced, wholesaled, bottled, processed, imported, or sold by that person or that person’s principal for as long as that ownership continues.

(2)Neither that person, nor any officer, director, or agent of that person, enters into any collusive scheme, whereby he or she unfairly sells or promotes, in his or her on-sale businesses, the wine of another winegrower who manufactures, produces, bottles, processes, imports, or sells wine only, in return for his or her wine being unfairly sold or promoted in the on-sale businesses of that winegrower.

(b)Notwithstanding any other provision of this division, any licensed winegrower or any winegrower who has a wholesale license, or any officer, director, or agent of that person, may hold, directly or indirectly, the ownership of any interest in an on-sale license, provided that each of the following conditions is met:

(1)The on-sale licensed premises are licensed as a bona fide public eating place as defined in

Section 23038, or as a bona fide bed and breakfast inn as defined in Section 24045.11.

(2)The on-sale licensed premises purchases all alcoholic beverages sold and served at the on-sale licensed premises only from California wholesale licensees, other than the licensed winegrower who has a wholesale license and an interest in an on-sale license, unless one of the following conditions is met:

(A)The wine purchased is produced or bottled by, or produced and packaged for, the same licensed winegrower that holds an interest in the on-sale license.

(B)The wine is produced or bottled by, and is purchased from, a licensed winegrower who sells no more than 125,000 gallons of wine per year for distribution in this state under all brands or trade names owned by that winegrower.

(C)The wine is purchased by an on-sale licensee in whose on-sale license a licensed winegrower holds an interest, provided that the winegrower sells no more than 125,000 gallons of wine per year for distribution in this state under all brands or trade names owned by that winegrower.

(3)The licensed winegrower and any officer, director, or agent of that person, whether individually or in the aggregate, do not sell and serve the wine products produced or bottled under any brand or trade name owned by that winegrower through more than two on-sale licensed premises in which any of them holds an ownership interest.

(4)The number of wine items by brand offered for sale by the on-sale licensed premises that are produced, bottled, processed, imported, or sold by the licensed winegrower or by any person holding any interest in

the winegrower does not exceed 15 percent of the total wine items by brand listed and offered for sale in the licensed bona fide public eating place selling and serving that wine. This paragraph does not apply to a bona fide bed and breakfast inn.

(c)The Legislature finds that it is necessary and proper to require a separation between manufacturing interests, wholesale interests, and retail interests in the production and distribution of alcoholic beverages in order to prevent suppliers from dominating local markets through vertical integration and to prevent excessive sales of alcoholic beverages produced by overly aggressive marketing techniques. The Legislature further finds that the exceptions established by this section to the general prohibition against tied interests must be limited to their express terms so as not to undermine the general prohibition, and intends that this section be construed

accordingly.

§ 25503.16

Amended by Stats. 2017, Ch. 517, Sec. 1. (SB 461) Effective January 1, 2018.

(a)Nothing in this division shall prohibit the issuance or transfer of any retail on-sale or off-sale license to any person with respect to premises which are an integral part of the operations of a hotel, motel, or marine park owned by, or operated by or on behalf of, the licensee notwithstanding that a manufacturer, winegrower, manufacturer’s agent, California winegrower’s agent, rectifier, distiller, bottler, importer, wholesaler, or out-of-state distilled spirits shipper has any interest, directly or indirectly, in the premises, in the retail license, or in the retail licensee, and notwithstanding that the issuance or transfer would otherwise result in a violation of subdivision (a) of Section 25500,

subdivision (a) or (b) of Section 25501, or Section 25502, if each of the following conditions is met:

(1)In the case of a hotel or motel, the hotel or motel consists of not less than 25 guestroom accommodations.

(2)No more than one-quarter of the total gross annual revenues of the hotel, motel, or marine park is derived from the sale by the hotel, motel, or marine park of alcoholic beverages.

(3)(A) The retail licensee shall purchase no beer or distilled spirits for sale in this state other than from a wholesale licensee, and

the retail licensee, except as otherwise provided in subparagraph (B), shall purchase no alcoholic beverages for sale in this state from any wholesale licensee that has any interest, directly or indirectly, in the premises, in the retail license, or in the retail licensee.

(B)Notwithstanding subparagraph (A), a marine park may purchase beer or malt beverages for sale in this state from a wholesale licensee regardless of whether the wholesale licensee has any interest, directly or indirectly, in the premises, in the retail license, or in the retail licensee.

(4)The retail licensee serves other brands of beer, wine, and distilled spirits in addition to the brands manufactured by the beer or distilled spirits manufacturer or produced by the winegrower holding an interest in the

retail license.

(5)No marine park shall sell or offer for sale any distilled spirits, except during private events or private functions held at the marine park.

(b)For purposes of this section, “hotel” and “motel” shall mean an establishment containing guestroom accommodations with respect to which the predominant relationship existing between the occupants thereof and the owner or operator of the establishment is that of innkeeper and guest; for purposes of this subdivision, the existence of other legal relationships as between some occupants and the owner or operator thereof shall be immaterial.

(c)For purposes of this section, “marine park” means an establishment with not less than 125 contiguous acres, located

in San Diego County, the predominant purpose of which is the education or entertainment of the public through the display of marine animals and related aquatic, food service, and amusement activities, which holds permits issued by state and federal regulatory agencies authorizing the keeping of marine animals or endangered species or both, and which has an annual paid attendance of at least 2,000,000 people.

(d)The Legislature finds that it is necessary and proper to require a separation between manufacturing interests, wholesale interests, and retail interests in the production and distribution of alcoholic beverages in order to prevent suppliers from dominating local markets through vertical integration and to prevent excessive sales of alcoholic beverages produced by overly aggressive marketing techniques. The Legislature further

finds that the exception established by this section to the general prohibition against tied interests shall be limited to its express terms so as not to undermine the general prohibition, and intends that this section be construed accordingly.

§ 25503.17

Added by Stats. 1983, Ch. 314, Sec. 1.

Nothing in this division shall prohibit the issuance or transfer of any retail onsale general license to any person with respect to premises which are an integral part of the operations of a school for professional chefs owned by, or operated by or on behalf of, the licensee, notwithstanding that a manufacturer, winegrower, manufacturer’s agent, California winegrower’s agent, rectifier, distiller, bottler, importer, or wholesaler holds the ownership of any interest, directly or indirectly, in the premises or in the retail licensee, provided that each of the following conditions is met:

(a)The school is operated in conjunction with a bona fide eating place open to the public.

(b)The school has been in operation in a city with a population of less than one million for at least five years prior to the effective date of this section.

(c)The retail licensee shall purchase no beer or distilled spirits for sale in this state other than from a wholesale licensee, and the retail licensee shall purchase no alcoholic beverages for sale in this state from any wholesale licensee holding the ownership of any interest, directly or indirectly, in the premises or in the retail licensee.

The Legislature finds that it is necessary and proper to require a separation between manufacturing interests, wholesale interests, and retail interests in the production and distribution of alcoholic beverages in order to prevent suppliers from dominating local markets through vertical integration and to prevent excessive sales of alcoholic beverages produced by overly aggressive marketing techniques. The Legislature further finds that the exception established by this section to the general prohibition against tied interests must be limited to its express terms so as not to undermine the general prohibition, and intends that this section be construed accordingly.

§ 25503.18

Added by Stats. 1983, Ch. 313, Sec. 1.

Nothing in this division shall prohibit the issuance or transfer of any retail offsale beer and wine license to any person with respect to premises which are an integral part of the operations of a school for professional chefs owned by, or operated by or on behalf of, the licensee notwithstanding that a manufacturer, winegrower, manufacturer’s agent, California winegrower’s agent, rectifier, distiller, bottler, importer, or wholesaler holds the ownership of any interest, directly or indirectly, in the premises or in the retail licensee, provided that each of the following conditions is met:

(a)The school is operated in conjunction with a bona fide eating place open to the public.

(b)The school has been in operation in a city with a population of less than one million for at least five years prior to the effective date of this section.

§ 25503.19

Added by Stats. 1986, Ch. 804, Sec. 1.

(a)Nothing in this division shall prohibit the issuance or transfer of any retail on-sale general license to any person with respect to passenger cruise ships or lines owned by, or operated by or on behalf of, the licensee, notwithstanding that a manufacturer, winegrower, manfacturer’s agent, California winegrower’s agent, rectifier, distiller, bottler, importer, or wholesaler holds the ownership of any interest, directly or indirectly, in the cruise ships or lines or in the retail licensee, subject to the following conditions:

(1)Not more than 10 percent of the total gross annual revenues of the cruise ships or lines is derived from the sale of alcoholic beverages.

(2)The manufacturer, winegrower, manufacturer’s agent, California winegrower’s agent, rectifier, distiller, bottler, importer, or wholesaler shall not influence or attempt to influence decisions concerning the purchase and sale of alcoholic beverages by the retail licensee and those decisions are made solely by the retail licensee.

(3)The retail licensee is not required, by agreement or otherwise, to exclude from sale on board its vessels competitive alcoholic beverage products.

(4)The retail licensee shall purchase no beer, wine, or distilled spirits for sale in this state other than from a wholesale licensee, and the retail licensee shall purchase no alcoholic beverages for sale in this state from any wholesale licensee holding the ownership of any interest, directly or indirectly, in the cruise ships or lines or in the retail licensee.

(b)The Legislature finds that it is necessary and proper to require a separation between manufacturing interests, wholesale interests, and retail interests in the production and distribution of alcoholic beverages in order to prevent suppliers from dominating local markets through verticle integration and to prevent excessive sales of alcoholic beverages produced by overly aggressive marketing techniques. The Legislature further finds that the exception established by this section to the general prohibition against tied interests must be limited to its express terms so as not to undermine the general prohibition, and intends that this section be construed accordingly.

§ 25503.2

Amended by Stats. 2021, Ch. 271, Sec. 1. (AB 1149) Effective September 23, 2021.

(a)Notwithstanding any other provision in this division, any winegrower, wine blender, beer manufacturer, brandy manufacturer, distilled spirits manufacturer, distilled spirits manufacturer’s agent, rectifier, distilled spirits wholesaler, and beer and wine wholesaler, or the authorized agent or agents or representative or representatives of that licensee, may perform any of the following services for off-sale retail licensees at or on the licensed premises of the off-sale retail licensee where the licensee sells alcoholic beverages with the retail licensee’s permission:

(1)Stack or arrange cases of the brand or brands of alcoholic beverages owned or

sold by the licensee performing the service in the storeroom or warehouse where the off-sale retail licensee stores the brand or brands.

(2)Rotate the brand or brands owned or sold by the licensee performing the service on shelves and in refrigerated boxes, and rearrange bottles or packages of the brand or brands by moving the bottles or packages horizontally or vertically from shelf to shelf in the space and shelves allocated to the brand or brands. This paragraph does not permit the removal of any brand or brands of alcoholic beverages, except beer, and brands of distilled spirits in single-serve

containers, and wine in single-serve containers, which are owned or sold by the licensee performing the service, from the storeroom or other place belonging to an off-sale retailer for the purpose of replacing alcoholic beverages on or restocking shelves or refrigerated boxes.

(3)Take an inventory of an off-sale retailer’s stock of a brand or brands of alcoholic beverages which are owned or sold by the licensee performing the service and which are in the stockroom or other place belonging to the off-sale retailer.

(4)Service the brand or brands of alcoholic beverages owned or sold by the licensee performing the service which are on shelves, fixtures, or other display pieces at the off-sale retail premises, including, but not limited to, dusting

bottles and shelves and refrigerated boxes allocated to the brand or brands at the retail premises. The licensees authorized to render services by this section and their agents and representatives shall not price-mark individual containers of the brand of alcoholic beverages, except beer, owned or sold by the licensee performing the service, except for individual bottles and packages used on floor displays.

(5)Rotate or rearrange the brand or brands of wine or distilled spirits owned or sold by the licensee on, in, or among permanent shelves, permanent fixtures, refrigerated boxes, or floor or other displays or display pieces; stock the brand or brands onto or into floor or other displays or display pieces; and stock the brand or brands onto or into permanent shelves, permanent fixtures, or refrigerated boxes for the sole purposes of the

introduction of new products, the resetting or rearrangement of existing products, or the setting or arranging of new stores. Incidental touching or rearrangement of the brand or brands of another licensee by a licensee performing any of the services authorized by this paragraph for the sole purpose of accessing permanent shelves, permanent fixtures, and other spaces allocated to the licensee performing the service shall not be deemed to be a violation of any provision of this division provided the other licensee’s brands are not removed from spaces allocated to that licensee. Nothing in this paragraph permits stocking permanent shelves, permanent fixtures, or refrigerated boxes for regular inventory replenishment, except beer,

and brands of distilled spirits in single-serve containers, and wine in single-serve containers.

(b)Notwithstanding any other provision in this division, any beer manufacturer or beer and wine wholesaler, or the authorized agent or agents or representative or representatives of that licensee, may perform any of the services specified in paragraphs (1) to (4), inclusive, of subdivision (a), with respect to beer, for on-sale retail licensees at or on the premises of the on-sale retail licensee with the retail licensee’s permission.

(c)For purposes of this section, “single-serve

containers” means containers that have a standard of fill between 50 milliliters and 355 milliliters that is authorized for distilled spirits under Section 5.47a of Title 27 of the Code of Federal Regulations or a standard of fill between 187 milliliters and 355 milliliters that is authorized for wine under Section 4.72 of Title 27 of the Code of Federal Regulations, either individually or in multiple container packaging, and are intended to be consumed without mixing with any other substance.

§ 25503.20

Added by Stats. 1995, Ch. 245, Sec. 2. Effective January 1, 1996.

Notwithstanding any other provision of this division, a manufacturer, winegrower, manufacturer’s agent, California winegrower’s agent, rectifier, distiller, bottler, importer, or wholesaler may hold the ownership of any interest, directly or indirectly in the premises or in the retail licensee, may serve as an officer, director, employee, or agent of that licensee, and may sponsor or fund educational programs, special fundraising and promotional events, improvements in capital projects, and the development of exhibits or facilities of and for the licensee, provided that each of the following conditions is met:

(a)The retail license is for a nonprofit school for professional chefs located in Napa County which is operated in conjunction with a bona fide eating place open to the public.

(b)The school’s educational program has been accredited by the Board of Regents of the University of California, the State Department of Education, or the Council for Private Postsecondary and Vocational Education or other state-authorized accrediting commission.

(c)The number of items of beer, wine, or distilled spirits by brand offered for sale by the retail licensee, which are produced, bottled, rectified, distilled, processed, imported, or sold by the licensees holding an interest in, serving as an officer or director of, or sponsoring or funding the programs and projects of the retail licensee, does not exceed 15 percent of the total items of beer, wine, or distilled spirits by brand listed and offered for sale in the bona fide public eating place.

§ 25503.21

Added by Stats. 1988, Ch. 116, Sec. 4. Effective May 25, 1988.

Notwithstanding any other provision of this division, a licensed manufacturer, winegrower, manufacturer’s agent, California winegrower’s agent, rectifier, distiller, bottler, importer, or wholesaler, or any officer, director, or agent of any such person, who prior to July 1, 1987, has entered into an active lease of premises to any holder of an off-sale license, may continue to lease premises or renew or otherwise modify such lease with any holder of an off-sale license so long as the lessor holds no financial interest other than such lease in the business of the lessee.

§ 25503.22