Comments on Delivery Minor Decoy Requirements
Comments received during the week of May 27 to June 1, 2020.
From Tyler Blackney, Wine Institute
Dear OAL Reference Attorney and Mr. de Ruyter,
Please find attached a letter from associations representing California alcohol beverage producer licensees regarding the ABC Delivery Minor Decoy Requirements emergency regulations.
If you have any questions, please do not hesitate reaching out. Thank you in advance for your consideration.
The commenters assert that the proposed emergency regulation goes “far beyond the stated emergency” for the reasons addressed specifically below. The Department respectfully disagrees with the commenters’ assertions.
- Alcoholic beverage manufacturer licensees should not be treated the same as retail licensees when it comes to delivering alcoholic beverages to customers.
- Manufacturers should not be subject to the proposed emergency regulation because they deliver alcoholic beverages to consumers using common carriers.
- The proposed emergency regulation would impose liability on common carriers.
Response: There is no distinction between retail licensee and producer licensees when it comes to retail delivery privileges.
Although the notice of emergency specifically references retail licensees, the Notice of Regulatory Relief applies to both retail licensees and producer licensees who have retail privileges under their manufactures license. For example, Type-23 craft brewers, and Type-02 winegrowers all have the privilege under their respective licenses to exercise retail privileges, including delivery of alcoholic beverages under normal circumstances. In response to the COVID-19 crisis, the Department issued a Notice of Regulatory Relief that extends the ability for manufacturer licensees to deliver alcoholic beverages to consumers. First, it extended to Type-74 craft distillers the ability to deliver sealed containers of distilled spirits to consumers away from the licensed premises of production. Second, as to breweries, wineries, and craft distilleries, if they operate a restaurant at the licensed premises of production, they can temporarily deliver alcoholic beverages other than what they produce themselves (thus expanding the type and amount of alcohol that they may deliver) and to deliver open containers of alcohol with a bona fide meal. As such, some producer licensees currently exercise delivery service privileges in the same manner as retail licensees, which the Department has shown through recent investigations to present a rampant problem with delivering alcohol to minors. There is no rational basis for excluding producer licensees from the proposed regulations as requested by commenters because producer licenses have access to, and engage in, the exact retail privileges that are the basis for ABC’s stated emergency.
Response: Direct-to-Consumer shipping is a retail delivery privilege held by producer licensees.
The Commenters’ claim that the “decades old” Direct-to-Consumer (DTC) wine shipping system has not been shown to be a problem. However, all third-party shipping companies, including common carriers used in DTC have been modifying their delivery rules to enforce social distancing in response to the current state of emergency. In those changes, requirements for signature or identification of the recipient have been set aside. While this is commendable for public health reasons, delivery persons must still comply with the law while social distancing themselves from recipients. All licensees, including manufacturers, are prohibited from selling or furnishing alcoholic beverages to minors. This prohibition applies whether the sale or furnishing occurs on the licensed premises or during the delivery of alcoholic beverages to a consumer at their home or elsewhere. The DTC deliveries are subject to the same rules and liability under law and there is no rational basis for excluding them from the proposed emergency regulation.
Response: No new liability is created for anyone under the proposed emergency regulation.
The commenters assert that the proposed emergency regulation will disincentivize common carriers from delivering alcoholic beverages on behalf of wineries by creating new liability. However, the statutes cited within the commenters’ letter establish liability, not the emergency regulations. The proposed regulation authorizes the Department to use minor decoys in conducting investigations into potential violations of the law involving the furnishing of alcoholic beverages by delivery to the consumer away from the licensed premises, and establishes safeguards to ensure that licensees are afforded the opportunity to avoid such illegal deliveries. As complaints to and recent investigations by the Department have illustrated, the tremendous growth of alcohol delivery and the use of third-party delivery services during the COVID-19 crisis has led to an unacceptable degree of alcohol being delivered into the hands of minors. The regulation does not impose any liability on the delivery service or on the licensee. Rather, it provides an investigative tool that may be used by the Department and other law enforcement agencies to test compliance with the law. Moreover, it affords licensees a defense against administrative disciplinary actions that may be taken against their license for a violation, if the minor decoy operation is not conducted in accordance with the provisions of the regulation.
ABC respectfully believes that no changes to the proposed emergency regulation are required due to comments made by the commenters. The commenters have presented no rational basis to exclude wineries from being tested for compliance with the law using minor decoys. There is no justification for ABC to make the changes requested by commenters to exempt producer licensees since they are granted the same privileges as retail licensees under their licenses that have led to the emergency outlined by ABC in its Notice of Emergency Regulatory Action.
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