Do you allow people under the age of 21 to tour your winery? Do you let them into your tasting room? How about the picnic area, are kids allowed in there? If so, then you may soon have a problem. California's Legislature is considering legislation – Assembly Bill 2004 – that would permit (but would not require) wineries to serve wine to their customers anywhere on their licensed premises. If passed, the Bill will greatly enhance the experience that wineries can provide to their visitors, and will permit wineries to diversify their income streams. But it will also make every winery's licensed premises off limits to minors.
Assembly Bill 2004 is intended to solve the "picnic area problem." In California, wineries operate under a Type 02 "Winegrower" liquor license issued by the Department of Alcoholic Beverage Control (the "ABC"). A Winegrower can conduct winetastings at the winery and, if it holds a duplicate license, at one branch office. The ABC interprets "winetaste" to mean a one-ounce pour. A Winegrower can serve multiple winetastings, but may not allow their customers to drink full glasses or bottles of wine.
Some wineries, however, permit their customers to drink full glasses or bottles of wine in unsupervised "picnic areas" that are on winery property, but that fall outside of the wineries' licensed premises. These picnic areas have long been a gray area in California's liquor license law, because some customers drink bottles of wine in the picnic area that they purchased in the winery's tasting room. Why should a winery be allowed to sell wine that they know that customers will drink in the picnic areas, some ask, when they can't sell that same wine for customers to drink in the tasting room?
Assembly Bill 2004 would change the law to permit a winery to sell customers full glasses or bottles of wine that the customers may drink anywhere on the winery's licensed premises. As originally proposed, it would have allowed Winegrowers to obtain a picnic area-specific duplicate license. This approach would have had two advantages. First, it would have given wineries express legal authorization to continue to permit customers to drink wine in picnic areas. Second, it would have separated the picnic area from the rest of the winery for the purposes of liquor license supervision and discipline (i.e., the ABC would not have been able to suspend the winery's license because of an infraction that occurred in the picnic area).
But the duplicate license approach would have had disadvantages as well. It would not have helped wineries without picnic areas. And wineries that have picnic areas likely would have found the law difficult to administer. The liquor license rules that apply in the tasting room are entirely different from those that would have applied in the picnic area. Wineries would have been responsible for learning and applying the rules for each place, and for supervising their picnic areas to ensure that no wine-drinking picnickers ventured outside of the area covered by the duplicate license.
Two weeks after it was introduced, Assembly Bill 2004 was amended to propose a liquor law change that would be both easier to apply and more dramatic. Instead of creating duplicate licenses for picnic areas, the new version of Assembly Bill 2004 would give Winegrowers broad authority to sell full glasses or bottles of wine for customers to drink anywhere on a winery's licensed premises. Unlike establishments that operate under most other types of liquor licenses, Winegrowers would be permitted to allow customers to take partially consumed containers of wine with them when they left the licensed premises.
If passed in its current form, however, Assembly Bill 2004 will also require Winegrowers to comply with stricter legal requirements. The new wine-service privilege will convert wineries into "public premises" (i.e., "premises operated and maintained to sell alcoholic beverages to the public for consumption on the premises"). Public premises cannot admit or employ persons who are not old enough to buy alcohol. As currently written, therefore, Assembly Bill 2004 would make Winegrowers' entire licensed premises – including the winery, the cellar, the tasting room, and any picnic area – off limits to anyone who is under the age of 21. Because Assembly Bill 2004 would grant the new wine-service privilege to all Winegrowers, these stricter legal restrictions would apply to all wineries, not just those with picnic areas.
If Assembly Bill 2004 is enacted, Winegrowers will need to be very careful to enforce its ban on minors, because a liquor license infraction occurring anywhere on a winery's licensed premises could put its entire business at risk. The Bill no longer separates the picnic area from the rest of the winery for the purposes of supervision and discipline by the ABC, so a serious liquor law infraction that occurs in a winery's picnic area could lead to the suspension, or even revocation, of the Winegrower's license itself.
Assembly Bill 2004 is not yet the law, and it is possible that it will be amended again before it is voted upon by the Legislature. If the current version of the Bill is approved, however, wineries will need to carefully evaluate its legal implications, so that they can take full advantage of the Bill's benefits, and avoid its pitfalls.
For more information, please contact Marco D. Costales at (213) 612-7800 / mcostales@nossaman.com.