Capitol debate brewing over beer

A stout beckons at a craft brewer's tasting. Photo: Maxy M., Shutterstock.

A debate is brewing in Sacramento over regulating California beer.

“There has been a concern that there has been inadequate enforcement staff available,” said Assemblyman Wesley Chesbro, D-Arcata, whose district includes at least 15 breweries.

The issue is whether the state’s Department of Alcoholic Beverage Control has enough people to effectively regulate brewers, especially the increasingly popular craft brewing industry.

California has about 430 craft brewers and they say more effective regulation will help ensure market fairness, catch bad actors, curb illegal activities and better serve the public.

“It’s generally we feel that better regulation would be good for everybody,” said Tom McCormick, executive director of the California Craft Brewers Association.

The ABC, which regulates wine, beer and distilled spirits, said it has 133 field agents covering 86,500 licensed businesses across California and handles some 35,000 special events, such as fairs and wine walks, each year.

Chesbro, backed by the California Craft Brewers Association, wants the ABC to tell the Legislature details of exactly what the field agents are doing, including the places they are raiding, arrests, the numbers and types of operations, the assistance of local law enforcement personnel and a geographic breakdown.

The ABC already reports its activities to lawmakers, but not in this level of detail. Chesbro’s bill, AB 2004, would require the ABC to provide the information in its annual report, which typically includes department-by-department spending and the revocation, denial, suspension and renewal of licenses.

“It’s not about creating more regulations, it’s about enforcing the current regulations that we have that we are all supposed to abide by,” said Natalie Ciluzo, of the Russian River Brewing Co., which produces 14,000 barrels of beer annually at two Santa Rosa locations.  “Most of them (regulations) help small brewers, in particular, from being gobbled up by larger brewers.”

“For example,” she added, “there was only one person in the ABC office who does label approval. If you are a new brewery and you come up with a new beer, you submit it to ABC before you can package it and distribute it. There is one person who does that for me and for every other brewer in California. To me, they are under staffed.”

The ABC has not taken a position on Chesbro’s bill.

The department has a $57.7 million annual budget and a total staff of 428 people. Of its personnel, the 133 field agents are directly managed by about 70 supervisors, bringing to about 200 the total number of personnel in the field, said ABC spokesman John Carr. The ABC is in line for a slight budget increase, about $240,000, in the 2014-15 fiscal year beginning July 1. Almost all of the ABC’s budget comes in the form of fees paid by the businesses it regulates.

Chesbro says including more detail in the ABC’s annual report will give the Legislature a better handle on budgeting it, and that could mean more resources for enforcement, a shift in the way funds and personnel are allocated, or both.

“This is working towards a budget action,” Chesbro said.

Chesbro has another beer-related bill that focuses not on the brew but on the kegs.

Full-size metal beer kegs cost brewers about $80 to $120 – a reduced price that reflects purchases in bulk. But the kegs are enticing to thieves, who take the kegs and sell them for scrap for about $40 to $60. In larger breweries, keg loss can amount to 2 percent of the total, and some breweries lease kegs rather than buy them outright.

Chesbro’s AB 2203 would outlaw the removal of the manufacturer’s name and other identifying marks from the keg, making it harder to sell the kegs to scrap dealers who by law can only buy kegs that are clearly marked with ownership.

“It is widespread and it is a big problem,” McCormick said. “It’s a tough number to write off.”

Ed’s Note: A version of this story appeared in the Press Democrat of Santa Rosa, a content partner of Capitol Weekly.

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