California Craft Brewers Opposed to SB 1426

Senate Bill 1426 (Hall), sponsored by the global alcohol company, DIAGEO, was introduced to resolve a licensing issue for a major celebrity that would like to maintain investments in on-sale licensed restaurants while simultaneously working for DIAGEO as a paid spokesperson for their alcohol products. The full text of the bill can be read online here.

While the sponsor and author of SB 1426 introduced the bill to help resolve a narrow issue for one celebrity spokesperson, as it is written, the bill would legalize pay-to-play practices for the first time in California.

The longstanding ban on payments from alcohol beverage manufacturers to retail licensees is the central component of California’s tied-house laws and the key reason independent craft brewers enjoy a growing and successful industry. Tied-house laws are critical to ensuring equal access to market for all brands. Without the protection of tied-house laws, larger suppliers would be able to use resources to pay retailers to market and promote their products. The CCBA is concerned SB 1426 could open the door to more pay-to-play practices and an unfair advantage given to larger suppliers, disrupting the level playing field that supports an industry contributing over $5.5 billion to the state economy and creating nearly 50,000 jobs.

Alternative language has been provided that would solve this licensing issue without sacrificing our state’s tied-house laws that more than 700 craft breweries rely on to continue to brew and sell craft beer in California.