‘Twas the week before New Year’s and the ABC is out in Force – Alerts for the Last Week of 2017, including the Limits on Free Rides

2018 is almost upon us! This coming week will be full of folks celebrating the new year and saying good-bye to 2017.   That this year’s NYE weekend party calendar is four nights long has not been lost on the police, or the ABC. 

Law enforcement officers, with and without decoys, are out in force.

The ABC’s most recent bulletin warned all licensees that connect with consumers, including producers with tasting rooms, and all on-premises and off-premises retailers, to be on their best behavior during the upcoming holiday. As the bulletin put it:

The California Department of Alcoholic Beverage Control (ABC) announced today that agents will be utilizing education, prevention programs and enforcement operations in collaboration with local law enforcement, licensed establishments, and community stakeholders to help make the winter holiday season as safe as possible.Central to the enforcement effort will be “Minor Decoy” and “Decoy Shoulder Tap” operations to prevent underage drinking.  The “Minor Decoy” program uses minors under the supervision of undercover police officers to attempt to purchase alcohol from retail businesses.  The “Decoy Shoulder Tap” program uses similar techniques to arrest adults who buy alcohol for minors.

Translation: that youthful appearing customer is as likely to be a police decoy as a millennial tech engineer. All service employees and managers should be on high alert.  This is the time of year when your consumer service operation is most at risk.

Free Alcohol?  Not Unless it’s a private, invitation only, event.

The general prohibition against any distillery, wine producer or retailer offering free alcohol to consumers is in full force and effect.  The one exception is that free food and drink may be provided to consumers at “Invitation-only Events” where either a caterer’s authorization has been issued or at a hotel or lodging facility with an on-premises sales license. 

The private invitation-only event exception (the conditions are listed in CA Business & Professions Code 25600.5) authorizes the host conducting the event to also provide attendees with free ground transportation to the attendee’s home or lodging facility.   

We recommend including ground transportation home in any comprehensive NYE party package. There are no “free goods” involved when there is a per person charge to consumers for the entire package, including a set number of drinks, entertainment, food and transportation.

Free Rides? Only for Craft brewers.

The California legislature passed AB 771 in September 2017. The bill allows beer manufacturers to provide free or discounted rides directly to consumers through “taxicabs, transportation network companies or any other ride services” for “furthering public safety”.  The free or discounted rides may be provided by vouchers, codes, or any other method.  The noticeable restriction is that the free rides may NOT be conditioned on the purchase of an alcoholic beverage. 

To distilleries, wine producers and on-premise licensees: this new “free rides” provision does not apply to you – you continue to fall under the limited “Invitation-Only Event” free ride rules. This regulatory disparity should be addressed by the industry trade associations in 2018. The anti-alcohol forces are opposed to free rides because, they say, free rides encourage excessive alcohol consumption.

In our view, the regulatory risk of providing transportation home from holiday events is far outweighed by the public safety benefits of preventing intoxicated driving.  The work around is to charge a package fee that includes transportation; keeping your customers safe is the right thing to do. 

Wishing all a healthy and safe holiday season, and a terrific 2018!

The Hinman & Carmichael LLP Team

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