Public Hearing Transcript

Present

• Matthew Botting, General Counsel

Comments

Transcribed by: Shelley Kelber, Foothill Transcription Company

Transcribed Recorded Public Meeting

December 29, 2022

MR. BOTTING: Good morning, everyone. Welcome to the public hearing on proposed rulemaking. We’ll just give it a second to allow everyone to connect. I think we have that now. There’s still one connecting to audio, so let’s just give it a second here. All right. That’s long enough. I’m sure they’ll tune in when they can if they haven’t already.

Anyway, my name is Matthew Botting. I’m General Counsel with the Department of Alcoholic Beverage Control, so I will be presiding over this public hearing, which is scheduled for this date, December 13, 2022. We are a little bit behind schedule. It is currently 10:04. This hearing is scheduled to go until 2:00 p.m. today, and the record will remain open during that period of time.

Just a few preliminary matters. This, again, is proposed rulemaking with respect to beer price posting. All of the information concerning the proposed rulemaking is on the Department’s website, and periodically through the course of today, there will be links posted in the chat for you to access the materials if you desire to do so. The purpose of today’s hearing is to take public comment concerning the proposed rulemaking.

The proceedings today are being recorded and a transcript will be prepared of all comments that will become part of the public record. This is not an interactive forum, so we will not be and are not able to answer questions as we go along. This is simply an opportunity for any interested party to make comment for the record.

All comments will be addressed, and responses prepared by the Department, and there may also be, you know, the comments may also lead to amendments to the proposed regulation and so that will be determined following the public hearing.

The public comment record in this matter is open until 5:00 p.m. today, December 13th, 2022, for submission of any written comments in addition to any oral comments made today on the record. If you have or intend to submit written comments, there is no need to repeat those comments on the record today, and the written comments will suffice. But if you choose to do so, that is entirely up to you, or if you wish to supplement them in any respect, that is fine also.

To ensure that everyone has an equal opportunity for participation, the way we will proceed in terms of the comments today is, if you wish to make a comment, please send via the chat, you know, indicate your intent to do so and request an opportunity to Sarah Easter in the chat box and she will then let me know so that I can recognize you for comments.

When you are on the record making comments in this proceeding, I will give you five minutes to do so. If your comments exceed five minutes, that’s fine but you will have to renotice Sarah that you would like an additional five minutes. So, if we have multiple people signing up for comments, that will allow everyone an equal opportunity to make their comment. I will cut you off at five minutes and then you can again let Sarah know that you wish to make additional comments and you’ll be called upon again to continue or conclude your comments, so you won’t miss out on the opportunity.

Once again, if you do wish to submit written comments in addition to or instead of oral comments today, they must be received by the Department by 5:00 p.m. today to be considered and addressed in the process. And all of the information concerning that is in the notice that is on the public website, and I see Sarah has just also put in the chat box the email address to which you may send comments.

So with that, we do have one person in person in the Department’s conference room, so I will hand this over to that individual for any public comments. So Jacob Appelsmith, if you can hear me and you wish to go on the record to make comments, please get in front of the computer and you may do so.

MR. APPELSMITH: Can you hear me now?

MR. BOTTING: Yes. Thank you.

MR. APPELSMITH: Okay. Thank you, Matthew. Thank you, Yong (phonetic). We submitted a letter yesterday by email. A coalition of various industry members, and, Matthew, I handed you a copy of that today.

But just briefly, we want to thank you for having a public hearing and also thanks to the Department for putting the price posting system online, which was a monumental undertaking as we all know. Very complicated, something the Department committed to doing as part of its fee increases several years ago, and the Department really delivered on that. So, I just want to tell you the industry appreciates that.

For many decades the industry has been posting price promotions through the Department’s paper submission, which on the one hand is a transparent process because it’s public record. Anybody can walk in and see what the price promotions are, what the prices are, but it’s also a very cumbersome process because you literally had to walk in and look at pieces of paper to actually figure out what people are doing. Whereas now, any member of the public can go online and see what prices are posted for beer.

Right now, the system does not permit price promotions to be entered. That is something we raised with the Department, and we appreciate the fact that the Department, as part of its price posting regulations, which really key towards the online system and clean up some other issues that have been the subject of possible rulemaking for many years, have included that.

The rule, as it’s articulated, is not clear that the price promotions will be part of the online posting and so some of the comments we have made addresses that issue and the importance to the industry and to the public of actually posting the price promotions themselves.

We appreciate the complexity of the rule. The Department really has done a very good job of taking something that is really sort of an industry art, for lack of a better way to put it, and translating it into something that can actually be defined by rules.

We’ve made a number of comments and proposed revisions. All of these are consistent with the Department’s power and authority under the operative statutes related to its regulatory powers and price posting. And they’re also — the changes we suggested are also consistent with what the industry has done for many, many decades without any substantial compliance issues anywhere within the industry of which we’re aware of.

Finally, I just want to emphasize that price posting is about fairness to everyone in the industry. Transparency is important to that, and the online system is the best vehicle and needs to be modified accordingly.

And then finally, price promotions in the end are about lowering prices to consumers. So, thank you for your time. Thank you for consideration of our comments, which again really come from a broad coalition of large beer manufacturers, small beer manufacturers, large wholesalers and small wholesalers. So, thank you very much.

MR. BOTTING: Thank you for your comment.

Appreciate you taking the time to come on down here and I do acknowledge receipt of the envelope you handed me this morning, although I haven’t looked in it, so I assume it has what you say is actually in it but thank you very much.

We do have, I believe, someone online to make a comment. Sarah, if you could let me know who that is.

MS. EASTER: Yep. Kirk Komoshu (phonetic), I just unmuted him for you.

MR. BOTTING: Okay. Thank you very much. Mr. Komoshu, the floor is yours for comments.

MR. KOMOSHU: Well, thank you very much, Matthew, and thank you to you and Sarah, and your team, for putting this together. I very much appreciate the opportunity to speak very briefly this morning to your point in the opening.

We are part of the larger coalition that Mr. Appelsmith referenced in terms of our formal comments back to the Department on the proposed rule. So very much appreciate your willingness to let us comment through this process and address and outline a few potential modifications that we hope the Department will consider.

We’ve outlined those in the letter that you’re in receipt of and it sounds like in addition to the letter that Mr. Appelsmith handed you personally this morning, so we’ll look forward to your review of those components.

But I think Jacob highlighted a number of the main points, as does that comment letter, so I will not reiterate those, but I will align myself with those comments. And then just probably further expand on Jacob’s point about the industry coming together.

I think we’ve spoken with a very collective voice on this, about the practices that the industry’s been undertaking, as he referenced, to our knowledge without issue for many, many years and want to continue in order to allow for as transparent of a process as is possible, as was indicated to us as stakeholders, that was the purpose of moving the electronic — to the electronic system, that is, for price posting.

And we think that’s really to allow for as much transparency as possible in the promotions that are run, the prices that are being posted for, and that’s really for consumers, retailers, wholesalers, and other manufacturers alike.

As Jacob mentioned, I think the broad coalition of smaller manufacturers, larger manufacturers, wholesalers that are partners of ours at Anheuser-Busch, and wholesalers that operate in California that are not partners of ours, in addition to some other manufacturers here both inside and outside of California coming together to speak with you guys on these thoughts about how we move forward with this proposed rulemaking.

And so, really appreciate the time, look forward to your feedback, and we’ll look forward to any revisions that may take place in our belated comment on those. Thank you.

MR. BOTTING: Thank you, Kirk. Appreciate your comments and your participation in this proceeding. We will certainly, you know, consider the comments received and respond accordingly. Sarah, do we have anyone else lined up either in person or online currently?

MS. EASTER: We do not.

MR. BOTTING: All right. As you can all imagine, this can be a somewhat clunky process with the public hearing since we are required to keep the record open for a significant period of time regardless of whether or not anyone is actually waiting to speak.

So, you know, you certainly do not have to stick around unless you want to. As I’ve indicated previously, there will be a transcript prepared of today’s proceeding that will become part of the public record so it will be available to anyone who wishes to review that.

And since we do not currently have anyone waiting, I am going to just turn the recording off and stop my video, so you don’t have to look at me all day.

And if anyone does come in and wish to speak, make a comment, again, please notify Sarah Easter through the chat function, and we will open the record back up again and recommence with recording. So until then, stand by.

Thank you.

(General Counsel on mute awaiting public comments.)

MR. BOTTING: Just wanted to jump back on and note that we still have a number of people on the line reviewing this, so just a reminder that if you do wish to make a comment today, please message Sarah Easter to let her know you wish to do so.

Alternatively, you can submit written comments until 5:00 p.m. today. And, again, for record, this is concerning the proposed beer price posting regulation. And if you do wish to review the rulemaking materials, those are available on the Department’s website.

Shelby, if you could just post the links again so that — there we go, so if you do wish to access those, please feel free to do so. Unless anyone wishes to make comment at this point, I will again pause the recording and mute my audio and video.

And we will check back in every 15 or 20 minutes or so just to remind everyone what’s going on. All right, thanks very much.

(General Counsel on mute awaiting public comments.)

MR. BOTTING: I believe we’ve had a few additional people join us online, so I just wanted to pop back in and state once again for the record that this is the public hearing for the proposed rulemaking for the price posting regulation that is pending with the Department currently.

In addition to the oral hearing today, comments may also be submitted in writing to the Department by 5:00 p.m. today, at which point the comment period will close. All comments, whether received today during this hearing or in writing, will be considered by the Department and responded to in the course of the rulemaking process and will be part of the official record.

In addition, comments may lead to proposed amendments to the regulation that will then be available for additional public comment at that time if that occurs. If you do wish to weigh in today during this hearing, be advised that it is being recorded and a transcript will be prepared, which will also be part of the public record.

But if you wish to make a comment, please in the chat function let Sarah Easter know you wish to go on the record, and we will open the record to you. Comments will be limited to five minutes just to give everyone an opportunity, a fair opportunity, but if you wish to make additional comments, you may sign up again for a second or subsequent five-minute comment period.

So, if anyone wishes to go on the record at this point, please let Ms. Easter know and we will open the record; otherwise I will pause the recording once again and we will sit and wait to see what happens next.

As I mentioned previously to those who were on this Zoom and for new folks, this public hearing will remain open until 2:00 p.m. this afternoon. We’re required to offer that lengthy period of time even though no one seems to be wanting to make a public comment at this point.

But the record will remain open until 2:00 p.m. this afternoon so you can make your comments at any time up until then. And, again, if you do submit written comments, you do not need to repeat them verbally during this hearing. They will be considered. But if you do wish to supplement them or emphasize any points, please feel free to do so.

All right. Not seeing anyone wishing to raise their hand and comment, I’m going to pause the recording and mute my audio and video once again.

(General Counsel on mute awaiting public comments.)

Just checking back in to see if anyone wishes to submit public comments during this hearing today. Just for the record, once again, for anyone new who may have joined, this is the public hearing on the pending proposed regulation for beer price posting. And this is your opportunity to submit any comments to the Department for consideration in connection with that rulemaking.

In addition to submitting oral comments here today, you can submit written comments to the Department and submit those via email until 5:00 p.m. today, at which point the public comment period will close. All comments received by then will be considered by the Department in the rulemaking and will be addressed in public responses that will become part of the record.

This hearing today is being recorded, so any comments made will be — a transcript will be prepared and will become part of the public record. If you do wish to make oral comments today, please send Sarah Easter a note in the chat function to let her know you wish to go on the record and you will be recognized.

This hearing will remain open until 2:00 p.m. this afternoon, so you have plenty of time to decide if you want to go on the record. Seeing no one wishing to do so at this point, I will once again pause the recording and mute myself and we’ll check back in in another 15 or 20 minutes.

Thank you.

(General Counsel on mute awaiting public comments.)

MR. BOTTING:

It is 11:32 a.m. on December 13th, 2022. We’re back on the record in the beer price posting rulemaking hearing. Once again, for those of you who are tuned in, I am going to be checking back every 15, 20 minutes or so to reopen the record in the event that there are any public comments to be made.

Again, this is the public hearing on been price posting proposed regulation that is currently pending before the Department. The rulemaking record will remain open until 5:00 p.m. this evening for the submission of written arguments.

This hearing will remain open until 2:00 p.m. today to take any oral submissions. There is no requirement to make oral submissions if you are also submitting written comments. But if you wish to do so, please feel free to weigh in. We do welcome and encourage public participation. But if you do wish to be heard in this matter, please send a chat to Sarah Easter and she will let me know so that I can then recognize you.

This hearing is being recorded and a transcript will be prepared and that will be made part of the public record. All comments received today will be addressed in the course of the rulemaking, as will all written comments received by 5:00 p.m. today.

So if you, again, if you do wish to make a public comment for consideration by the Department as this matter proceeds, please let Sarah Easter know in the chat function and you will be recognized. So just keep this going for just a moment longer to give you an opportunity to do so.

And the information regarding where to obtain the rulemaking file is available in the chat function as a link to the Department’s website where all of the information is maintained, so feel free to review that.

Seeing no one wishing to make a comment at this point, I am going to pause the recording once again and will check back in 15 or 20 minutes or so. So see you then.

(General Counsel on mute awaiting public comments.)

MR. BOTTING: All right. It is 12:01. It’s back on the record in the beer price posting public hearing. I don’t believe anyone new has checked into the hearing, so rather than repeating myself in my entirety, we’ll just open it up. If anyone wishes to make a public comment on the record, please let Sarah Easter know. We’ll just keep things open for a moment to allow you the opportunity to do so.

I’m impressed with everyone’s staying power, that you have managed to stick with this and see if you can last for another two hours. I’m not seeing anyone wishing to make a public comment. I am once again going to pause the recording and going dark for another – well, let’s just go until 12:30 and I’ll tune back in to see if anyone else has come on the record. All right.

Thanks very much.

(General Counsel on mute awaiting public comments.)

MR. BOTTING: It is 12:30. Back on the record in the beer price posting rulemaking public hearing. We do not have any new people who have joined the hearing, you know, according to the two of you who have managed to last this long, other than Department representatives, the hearing — we are required to keep it open until 2:00 p.m. in case anyone does tune in to make a public comment.

However, given that there is no one new, I’m not going to go through my usual comments. Just that if anyone does want to make a comment, please let Sarah Easter know; otherwise I’m going to pause the recording once again and mute myself and will reconvene at 1 o’clock.

Thank you.

(General Counsel on mute awaiting public comments.)

MR. BOTTING: All right. It is 1:00. Back on the record with the beer price posting public hearing. I see no one new has entered the hearing so, again, congratulations to those of you who have lasted this long. The hearing will be open for another hour to receive public comments on the pending beer price posting rulemaking.

Again, I won’t repeat myself since you’ve already heard it several times, but if you do wish to make a comment, please let Sarah Easter know via the chat. And I am going to, once again, pause the recording in this matter. We’ll come back on at 1:30 to see where we’re at. In the meantime if you do wish to make a comment, let Sarah know and we can reopen the record as quickly as possible.

All right. Thanks very much. Check back with you soon.

(General Counsel on mute awaiting public comments.)

MR. BOTTING: It’s 1:12. Just going back on the record, as we do appear to have someone new who has checked into the hearing. This is the public hearing for the pending beer price posting regulation. If you wish to make a public comment, please let Sarah Easter know in the chat box.

This is an opportunity to make a public comment on the pending regulation, which is available on the Department’s website. The record of this hearing will remain open until 2:00 p.m. today. Alternatively, you can submit written comments until 5:00 p.m. today and submit those to the Department. And a transcript of this hearing will be prepared and made part of the public record.

So, once again, if you do wish to make a comment on the record today, please let Sarah Easter know and we can recognize you.

All right. Seeing no one jump up, I am going to go off the record again and pause the recording, and we will reopen it in another half hour at 2:45 and, I’m sorry, at 1:45, and at that point we’ll keep the record open until it formally closes at 2:00 p.m. So I’m going to mute myself once again and pause the recording.

(General Counsel on mute awaiting public comments.)

MR. BOTTING: It is currently 1:47 p.m. on December 13th, 2022. Just reopening the record in the public hearing for the pending beer price posting rulemaking.

This public hearing is scheduled to go until 2:00 p.m., so at this juncture, I’m just going to stay online and leave the record open. If anyone wishes to make a comment, please notify Sarah Easter in the chat and we can recognize you.

I think we are just down to one non-ABC person on the hearing at this time, so it’s up to you if you want to make a public comment. I will keep the recording going, but I’m just going to mute myself at this point. But if you do wish to make a public comment, please notify us.

Thank you.

(General Counsel on mute awaiting public comments.)

MR. BOTTING: All right. It’s 1:55, so with five minutes to go in this rulemaking hearing, we’ll just keep the lines open, so to speak, in case anyone indicates their desire to make a public comment.

(General Counsel on mute awaiting public comments.)

MR. BOTTING: It is now 2:00 p.m. The record is officially closed on this public rulemaking.

I did receive an offline request to tell a joke. Unfortunately, the record is closed so it’s too late, so no jokes today. So, thank you for those of you who participated who are still around.

It’s an important part of the process, and we do appreciate all of the comments received. So, the record is now officially closed in the beer price posting public comment period. Thank you very much.

(Recording Ends)