Comments on the Proposed Amendments to Beer Price Posting Regulation

Comment #2

Dear Law and Policy Unit,

Attached please find comments from the industry stakeholder signatories to the enclosed correspondence regarding the Department’s proposed Beer Price Posting Amendments, the notice for which was published on November 13, 2022. Thank you.

ABC Response

Comments will be addressed at the end of the comment period.

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Comment #3

Hello Department of ABC,

My name is Maxwell Johnson and I am a Prevention Specialist for the Binge and Underage Drinking Initiative at the Institute for Public Strategies in San Diego, CA.

After reviewing the language being used for the new regulations surrounding beer price posting and price promotion programs for beer manufacturers and wholesalers in the state of California, I wanted to bring forth a couple comments I had.

1. One of the questions I had was if there is current language in California law, or within the regulations that prevents quid pro quo between the beer manufacturers offering the pricing promotion programs to wholesalers. While the proposed regulations state that all price promotion programs must be offered to all wholesalers, I did not see language that prevented beer manufacturers from establishing conditions that would require wholesalers to do something in return for them. Such as refusing business with other beer manufacturers, entering long term advertising agreements, or preventing wholesalers from purchasing competing products from other manufacturers). Without these regulations preventing quid pro quo, beer manufacturers may have the power to threaten the three tier system, and discourage market competition from other smaller manufacturers and wholesalers.
2. I was also wondering if there is a proportional limitation on the price drop or number of products that a beer manufacturer can offer to wholesalers, as to ensure that larger wholesalers do not control a disproportionate amount of the inventory a manufacturer has available. This would obviously make it more difficult for smaller wholesalers to compete with their larger counterparts when it comes to both the purchase and sale of the same product at their locations.

Please let me know if I can be of any service in this regulation writing process, or if there are any points of clarification I need to provide on my questions above. Thank you for the work that you do, and I hope to hear from you.

ABC Response

Comments will be addressed at the end of the comment period.