Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Alcohol Regulation topic
No spam. Unsubscribe anytime.
Committee advances bill to protect wholesalers when breweries are sold
Summary
The Assembly Governmental Organization Committee voted to send AB 344 (Valencia) to the Appropriations Committee. The bill would expand the definition of “successor beer manufacturer” to ensure wholesalers are compensated when a brewery changes hands, a fix prompted by a recent court ruling.
Assemblymember Valencia’s AB 344, which would update the statutory definition of “successor beer manufacturer” to ensure beer wholesalers can receive fair market compensation when a brewery is sold, was advanced by the Assembly Governmental Organization Committee to the Appropriations Committee.
Supporters told the committee the bill closes a gap created by a recent court ruling. "California's beer wholesalers play a vital role in ensuring consumers have access to a wide variety of products while maintaining a fair and competitive marketplace," Kevin Lucky, executive director of the Family Beer Distributors, said in testimony supporting AB 344. Lucky said the Legislature enacted the state's brand-transfer law in 2007 to protect wholesalers and that a recent decision — Harbor Distributing v. Main Street Capital — "created a potential loophole" by limiting the statute’s reach.
A neutral witness representing craft brewers said the subject is important to both distributors and manufacturers and that negotiations with the bill’s sponsor were ongoing. "This is a very, very critical section of law for the California craft brewers," Chris Walker of California Craft Growers said, explaining why his organization was taking a neutral position pending continued discussions.
The committee record shows members agreed to pass AB 344 to the Appropriations Committee. The motion was made on the committee floor and recorded as passing; the clerk announced that the bill had 14 votes in favor and the roll would be left open for absent members. Assemblymember Gibson moved the motion and a second was recorded from Assemblymember Wynne.
The bill’s sponsor and supporters said AB 344 would "reaffirm the original intent of California's alcohol laws," preserving wholesalers' longstanding protections and investments in local markets. No formal opposition was recorded in the hearing.
AB 344 now goes to the Assembly Appropriations Committee. The Governmental Organization Committee left the roll open for absent members to record additional votes.
