Recently enacted legislation (Assembly Bill 605, Statutes 2010, effective January 1, 2011) created two new sections of the California Business & Professions Code; the first, Section 23396.6, provides for a new “instructional tasting license” to be issued to off-sale retail licensed businesses. The license has been designated as “Type 86” by the Department. The off-sale licensed premises generally need to be larger than 5,000 square feet to qualify, and gas stations are not eligible. Areas used for instructional tasting events will need to be separated from the main retail premises and posted while the tastings are taking place.

As of Monday, January 3, 2011, eligible off-sale licensees are able to apply for the new license; the original application fee is $300 (thereafter a $261 annual renewal fee applies). Because only existing off-sale license holders can apply for a type 86 license, and the instructional tasting premises are treated as the same as the retail premises, forms 257, 208, 243, 256/256-LLC, and 140 are not required for the application; otherwise, all forms applicable to a regular retail license should be submitted.

The second new section, 25503.56, authorizes qualified supplier license holders or their agents to conduct “instructional tasting events” at off-sale retail locations holding the new Type 86 license.

While it is the retail licensee that will hold the instructional tasting license, its central privileges require the participation of a qualified supplier. Thus it is important that suppliers and retailers be fully aware of existing tied-house laws that otherwise restrict business relationships between the two. A supplier cannot directly or indirectly pay, reimburse, or assist a retail licensee with any efforts associated with obtaining a type 86 license, or use the new license to circumvent the tied-house restrictions. Any payment made by a supplier to a retailer in connection with an instructional tasting event (except payment for products to be used during the tasting event) violates tied house laws.

The full text of the chaptered bill and detailed legislative analysis is available at www.leginfo.ca.gov. Just click on the Bill Information button, select the 2009-2010 legislative session, and search by Bill Number 605.


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