California state liquor law generally prohibits a retail licensee from donating alcoholic beverages.
But there are a few exceptions.
The exceptions involve donating to certain organizations holding a temporary license. Those organizations a retailer may donate alcoholic beverages to are:
1. A member-supported television station, which is also a non-profit charitable corporation, holding a temporary off-sale beer and wine license OR a non-profit charitable corporation that receives and administers donations for public television holding a temporary package off-sale beer and wine license.
In either case, the temporary license only entitles the temporary licensee to sell the donated beer and wine at auction. (Section 24045.2 Business & Professions Code)
2. A women’s educational and charitable organization, which holds a temporary off-sale beer and wine license, “that is a part of a national organization having at least 10 chapters in California at least one of which has been incorporated since 1928, whose purpose is to foster interest among its members in the social, economic and civic conditions of their community and to give effective volunteer service.”
In addition, the temporary license only entitles the women’s organization to sell the donated beer and wine at auction for charitable purposes. The law further states, “None of the funds realized from this auction shall be used for administrative expenses of the auction and all funds shall be placed in trust for a charitable purpose.” (Section 24045.3 Business & Professions Code)
3. Certain non-profit corporations who have a special temporary on-sale or off-sale wine license. The temporary licensee may only sell the donated wine to a consumer and to any person holding a license authorizing the sale of wine.
This license is good for up to 15 days. If the license is issued for a period more than two days, then it can only be used “solely for retail sales in conjunction with an identifiable fundraising event sponsored or conducted by the licensee and all bottles of wine sold under this license shall bear a label prominently identifying the event.”
The ABC may only issue three of these special licenses to any corporation in a calendar year. (Section 24045.6 Business & Professions Code)
4. A member-supported television or broadcasting station who has a temporary on-sale beer and wine license. The retail licensee may also serve that beer or wine he/she donated at any event so licensed.
The ABC may only issue one such temporary license (valid for 30 days) to the television or broadcasting station per calendar year. (Section 24045.9 Business & Professions Code)
In summary, there aren’t many situations where a retail licensee can donate alcohol. And although the laws cited above permit a retail licensee to donate alcohol to the above organizations, the laws specifically say the donation cannot be made in connection with a sale of an alcoholic beverage.
Halloween is almost here and many bars, nightclubs and other licensed establishments are getting creative with their events and marketing of alcoholic beverages.
If you’re having a costume contest at your establishment, be careful what you give away as prizes. I just read about a winery whose Halloween bash includes a “frightfully exciting” costume contest, with the winner receiving a bottle of wine.
Things could get more frightening than they planned if the ABC finds out. While retailers are allowed to sponsor contests at their premises and give prizes to contestants, there are some restrictions:
First, the prizes can’t be alcoholic beverages.
Second, the contest can’t be conditioned on the purchase, sale or consumption of alcoholic beverages.
Third, the contest does not involve the consumption of alcoholic beverages (e.g., beer pong).
Any one of these three issues would be a violation of Rule 106(l)(1) of the Business and Professions Code and could result in the ABC taking disciplinary action against the licensee.
As to drink specials, an establishment cannot offer complimentary or free alcoholic beverages, but may offer packages that include alcoholic beverages, provided the total charge to the customer covers their cost of acquisition (to prevent a free goods violation).
Nor can they offer alcoholic beverages at “two for the price of one, “buy one, get one free,” “all you can drink,” or in any other manner where a patron is required to buy more than one drink at a time in order to received a reduced price.
Stay safe and legal at Halloween and always.
A 40-year old man died after being stabbed at the El Diamante nightclub, 12002 S. Figueroa Street, Los Angeles, shortly after midnight today. KTLA news reported people in the nightclub two men began arguing. The Los Angeles Police Department (LAPD) believes the stabbing is gang-related.
After reading an article like this, I’m usually compelled to do some digging. So, I went to the CA Department of Alcoholic Beverage Control’s (ABC) website. I wanted to see if El Diamante’s had any past problems with their liquor license.
I clicked on License Query System entered the name, El Diamante. (You can do this, too. It’s public information.)
And I discovered the current owners of El Diamante have had a beer and wine license since 2006 with no previous liquor license problems.
The club did have two violations under previous owners: one in 1998, and another in 2000. Both were violations of the “drink solicitation” law.
In my experience, patrons drinking too much, combined with drink solicitation, is a recipe for major violence and liquor license problems.
What is drink solicitation, you ask?
Most commonly, it’s an illegal practice whereby a female asks a male patron to buy her a drink, and the female is employed or permitted to loiter for that purpose. The politically incorrect term for the female is “B-girl” (short for bar-girl). It’s a crime and can result in liquor license suspension or revocation.
When I was Enforcement Supervisor at the ABC’s Inglewood District Office, B-girls were drinking little 7-oz. beers called chicas. That may still be the case. (Often, the establishment tracks the number of drinks solicited, and takes a percentage of the profits–an even bigger whammy from the ABC.)
By the way… even the most upscale restaurants may unknowingly be violating the same law. Although the owner might not have B-girls, does he pay his employees a percentage or commission on the sale of alcohol–to encourage the purchase or sale of alcohol?
Here’s how the law reads:
“25657. It is unlawful:
(a) For any person to employ, upon any licensed on-sale premises, any person for the purpose of procuring or encouraging the purchase or sale of alcoholic beverages, or to pay any such person a percentage or commission on the sale of alcoholic beverages for procuring or encouraging the purchase or sale of alcoholic beverages on such premises.
(b) In any place of business where alcoholic beverages are sold to be consumed upon the premises, to employ or knowingly permit anyone to loiter in or about said premises for the purpose of begging or soliciting any patron or customer of, or visitor in, such premises to purchase any alcoholic beverages for the one begging or soliciting. Every person who violates the provisions of this section is guilty of a misdemeanor.
I don’t know what caused the fight at El Diamante. But I do know what happens next. LAPD will complete their investigation and submit their written report to the local ABC office. The ABC will review the evidence and decide whether grounds exist to suspend or revoke El Diamante’s liquor license. We’ll see.
Stay safe and legal.
Disclaimer: This is not intended as legal advice. Please check with a competent attorney before doing anything that could jeopardize your liquor license.