By: Barbara Snider, Senior Counsel, and John Hinman, Senior Partner
Welcome to the insanely complicated world of alcohol regulation!
New legislative changes have now clarified that it’s a crime for almost all licensees to provide free transportation home from events and evenings out.
Unbeknown to most, California ABC law has consistently prohibited almost all alcoholic beverage licensees from providing free rides to customers because “free rides” are considered by the ABC an impermissible “thing of value,” and are considered by the anti-alcohol forces an inducement to consumption. While this prohibition has seldom (if ever) been enforced, it places responsible licensees who want to make sure that their customers are getting home safely in a very difficult spot – do they violate the law by providing a free ride home, or do they potentially endanger the community by allowing an inebriated customer to drive (or get) home on their own?
Here’s how the legislature has weighed in. This is a brilliant example of the old legislative axiom that ‘making laws is like making sausage – you never want to watch it happen.”
Last September the California Legislature amended two key provisions of the byzantine event regulations. AB 711 amended Business & Professions Code (“B&P”) section 25600 (“Premiums, Gifts or Free Goods”) and AB 605 amended 25600.5 (“Invitation-Only Events In Connection With the Sale of Wine or Spirits”).
AB 711 – Expanded privileges for beer manufacturers
AB 711 amended 25600 (“Premiums, Gifts or Free Goods” – which applies to all licensees) to add a whole new sub-section creating a new, much broader “free ride” exception - - but only for beer manufacturers and their agents and with no expiration date. And, these licensees are not limited to providing these rides at “Invitation Only” events. Under this new provision, beer manufacturers may provide free rides directly to consumers using taxicabs, transportation network companies, “or any other service for the purpose of furthering public safety”. The beer manufacturer can provide free or discounted rides using vouchers, codes or any other method. The only restriction is that the free ride may not be conditioned on the purchase of an alcoholic beverage.
The 2008 limited exception for Distilled Spirits and Wine, and AB 605
A limited earlier exception to the general “free ride” prohibition was adopted in 2008 when B&P section 25600.5 (“Invitation-Only Events In Connection With the Sale of Wine or Spirits”) was added. Part of that bill provides that distilled spirits manufacturers, wineries, and their agents (presumptively brand ambassadors) may provide free rides to consumers at “invitation only” events. Beer manufacturers and their agents, and retail licensees, were not included in this exception.
Last September, AB 605 extended the expiration date of the current “Invitation Only Event” rule for spirits and wine manufacturers to January 1, 2023.
These changes were supposed to be a fix. Here, the limitations of the “fix” are the issue because of how narrowly parsed the “free ride” privilege appears to be.
Have we lost you yet?
The situation in 2018 – Complicated for Manufacturers, Impossible for Retailers
Spirits and wine manufacturers are now strictly limited to providing free rides only in conjunction with “Invitation Only” events as provided in B&P section 25600.5 and only in compliance with a long list of conditions including: only those invited may attend, the duration of the event may be only four hours, the hotel or caterer must be licensed, and limitations on the number of attendees and the number of events. (These conditions are in B&P section 25600.5.)
What basically happened in 2017 (effective in 2018) was that the “free ride” rules were bifurcated between spirits-wineries and the beer manufacturers, and all other types of licensees were left out. By making these amendments the legislature left intact the prohibition on all other licensees offering free rides home.
By expressly permitting only two classes of licenses to offer free rides, it is now the case that the broader general class of licensees (on-premise licensees of all sorts, restaurants, bars, nightclubs, etc.) are prohibited from offering free rides under the threat of violating Section 25600, which is a statutory misdemeanor.
This concerns us. If a customer of any establishment is not safe to drive (or care for themselves) providing a ride home (free or not) is the proper response of the establishment (and under social host liability laws may be required – how is that for a catch-22?). This is especially true in today’s cannabis/alcohol environment where customers may be imbibing multiple substances.
Encouraging (and legalizing) responsible host and on-premises behavior is the right thing to do. If the customer can pay for the ride, fine, but if not, there should be no restriction on the establishment protecting the customer, and the rest of us, from potentially tragic consequences.
Every bartender and server training program in the marketplace (including the ABC’s LEAD training and the TIPS program) stresses not letting patrons who may have become inebriated drive. The law encourages safe conduct – we think that should include free rides where justified by the circumstances.
Well-meaning retailers should know of their liability and manufacturer tier licensees should know of the limitations and conditions on their right to provide “free rides.”
The dilemma is real and we believe it should be addressed by the legislature building in a public safety exception to the “free ride” prohibition. Whenever any licensee has a reasonable belief that public safety would be protected by providing a customer with a free ride home, they should be able to provide that ride without fear of license consequences.