Cal. BPC § 25503.42 — California Code / Code bpc / Division 9 / Chapter 15 / Section 25503.42
Section 25503.42
Status: in_force

(a) Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrower’s license, a California winegrower’s agent, a holder of a distilled spirits rectifier’s general license, a distilled spirits manufacturer, or a distilled spirits manufacturer’s agent may purchase indoor advertising space or time at a fully enclosed venue with box office sales and attendance by the public on a ticketed basis only, with a patronage capacity in excess of 2,000, but not more than 3,000, located in Los Angeles County within the area subject to the Los Angeles Sports and Entertainment District Specific Plan adopted by the City of Los Angeles pursuant to ordinance number 174225, as approved on September 6, 2001, where the owner of the venue is not the on-sale retail licensee. The purchase of the indoor advertising space or time shall be subject to all of the following conditions:

(1) The indoor advertising space or time is purchased only at the venue specified in this subdivision.

(2) The purchase of indoor advertising space or time shall be conducted pursuant to a written agreement entered into by the beer manufacturer, holder of a winegrower’s license, California winegrower’s agent, holder of a distilled spirits rectifier’s general license, distilled spirits manufacturer, or a distilled spirits manufacturer’s agent and the owner of the venue described in this subdivision. A holder of a wholesale license shall not be a party to the written agreement or otherwise have any direct or indirect obligations under the agreement, including an obligation to share in the costs or contribute to the costs of the indoor advertising space or time purchased pursuant to this section.

(3) An agreement for the purchase of indoor advertising space or time pursuant to this section shall not be conditioned directly or indirectly, in any way, on the purchase, sale, or distribution of any alcoholic beverage manufactured or distributed by the advertising beer manufacturer, holder of a winegrower’s license, California winegrower’s agent, holder of a distilled spirits rectifier’s general license, distilled spirits manufacturer, or a distilled spirits manufacturer’s agent by any on-sale retail licensee.

(4) An on-sale licensee operating at a venue described in this subdivision where indoor advertising space or time is purchased shall serve other brands of beer distributed by a competing beer wholesaler in addition to the brands manufactured or marketed by the advertising beer manufacturer, other brands of wine distributed by a competing wine wholesaler in addition to the brands produced or marketed by the advertising winegrower or California winegrower’s agent, and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brands manufactured or marketed by the advertising distilled spirits manufacturer, the distilled spirits manufacturer’s agent, or a holder of a distilled spirits rectifier’s general license.

(5) No more than 15 percent of the retail licensee’s monetary expenditures for distilled spirits and wine for sale on its licensed premises in any calendar year shall be for products manufactured, produced, or distributed by the holder of a winegrower’s license, California winegrower’s agent, distilled spirits manufacturer, holder of a distilled spirits rectifier’s general license, or a distilled spirits manufacturer’s agent that has purchased indoor advertising space.

(b) A beer manufacturer, holder of a winegrower’s license, California winegrower’s agent, holder of a distilled spirits rectifier’s general license, distilled spirits manufacturer, or a distilled spirits manufacturer’s agent who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesaler’s license to fulfill those contractual obligations entered into pursuant to subdivision (a) shall be guilty of a misdemeanor and shall be punished by imprisonment in a county jail for not more than six months, or by a fine equal to the greater of an amount equal to the entire value of the advertising space or time involved in the contract or ten thousand dollars ($10,000), or by both that imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.

(c) An on-sale retail licensee who, directly or indirectly, solicits or coerces a holder of a wholesaler’s license to solicit a beer manufacturer, holder of a winegrower’s license, California winegrower’s agent, holder of a distilled spirits rectifier’s general license, distilled spirits manufacturer, or a distilled spirits manufacturer’s agent to purchase indoor advertising time or space pursuant to subdivision (a) shall be guilty of a misdemeanor and shall be punished by imprisonment in a county jail for not more than six months, or by a fine equal to the greater of an amount equal to the entire value of the advertising space or time involved in the contract or ten thousand dollars ($10,000), or by both that imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.

(d) For purposes of this section, “beer manufacturer” includes a holder of a beer manufacturer’s license, a holder of an out-of-state beer manufacturer’s certificate, or a holder of a beer and wine importer’s general license.

(e) Nothing in this section shall authorize the purchasing of indoor advertising space or time pursuant to subdivision (a) by any beer manufacturer, holder of a winegrower’s license, a California winegrower’s agent, a distilled spirits manufacturer, holder of a distilled spirits rectifier’s general license, or a distilled spirits manufacturer’s agent directly or indirectly from any on-sale licensee.

(f) A venue owner that meets the description provided in subdivision (a) and that enters into a written agreement pursuant to this section shall obtain an annual certificate from the department. The director shall prepare, as part of the annual report required by Section 23055 for submission to the Legislature, a listing of the number of certifications made pursuant to this section or the absence of any certifications. Where there have been no certifications made pursuant to this section for two consecutive years, this information shall be included in the report.

(g) The Legislature finds that it is necessary and proper to require a separation among manufacturing interests, wholesale interests, and retail interests in the production and distribution of alcoholic beverages in order to prevent suppliers from dominating local markets through vertical integration and to prevent excessive sales of alcoholic beverages produced by overly aggressive marketing techniques. The Legislature further finds that the exception established by this section to the general prohibition against tied interests shall be limited to its express terms so as not to undermine the general prohibition, and intends that this section be construed accordingly.