Assembly BillChaptered/SignedBusiness and Professions
AB 1246: Alcoholic beverages: distilled spirits.
What AB 1246 does, verified December 13, 2025
This bill would amend the alcoholic beverage control act to allow winegrowers to possess and transport brandy for aging on their premises. It would also permit craft distillers to transport brandy to and from a licensed winegrower's premises for the same purpose. The bill would increase the amount of prepackaged spirits that licensed craft distillers can sell to consumers per day, from 2.25 liters to 4.5 liters. Additionally, it would allow licensed craft distillers and out-of-state distillers to directly ship distilled spirits to consumers, subject to certain requirements and permit fees. The bill would also extend the operation of direct shipping provisions until January 1, 2027.
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Last action: Chaptered by Secretary of State - Chapter 295, Statutes of 2025. (2025-09-13)Alert me
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| Oct. 03, 2025 | Chaptered by Secretary of State - Chapter 295, Statutes of 2025. |
| Oct. 03, 2025 | Approved by the Governor. |
| Sep. 24, 2025 | Enrolled and presented to the Governor at 3 p.m. |
| Sep. 13, 2025 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 73. Noes 1. Page 3499.). |
| Sep. 13, 2025 | Joint Rules 61(a)(14) and 51(a)(4) suspended. (Ayes 59. Noes 20. Page 3413.) |
Latest bill textChaptered version, October 3, 2025 · 2,724 words
Assembly Bill No. 1246
CHAPTER 295
An act to amend Sections 23358, 23502, 23504, and 23504.5 of the Business and Professions Code, relating to alcoholic beverages.
[ Approved by Governor October 03, 2025. Filed with Secretary of State October 03, 2025. ]
LEGISLATIVE COUNSEL'S DIGEST
AB 1246, Hoover. Alcoholic beverages: distilled spirits.
(1) Existing law, the Alcoholic Beverage Control Act, requires the Department of Alcoholic Beverage Control to administer the act and perform various duties relating to the issuance of alcoholic beverage licenses. Existing law provides for the licensure and regulation of winegrowers and craft distillers and establishes the privileges that a winegrower or craft distiller may exercise. Existing law authorizes a winegrower, among other things, to sell wine and brandy to any person holding a license authorizing the sale of wine or brandy. Existing law provides that a violation of the act for which another penalty or punishment is not specifically provided for in the act, is a crime, as specified.
This bill would additionally authorize a winegrower to possess and transport brandy for the purpose of storing the brandy to age on the winegrower’s premises. The bill would authorize a craft distiller to transport brandy to and from the premises of a licensed winegrower for the purpose of storing the brandy to age on the winegrower’s premises.
(2) Existing law authorizes a licensed craft distiller to manufacture and produce distilled spirits, subject to specified conditions, including that the licensee manufacture no more than 150,000 gallons of distilled spirits per fiscal year and sell no more than 2.25 liters of prepackaged containers of the licensee’s spirits per day per consumer at its premises.
This bill would authorize a licensed craft distiller to sell up to 4.5 liters of prepackaged containers of the licensee’s spirits per day per consumer at its premises.
(3) Existing law, until January 1, 2026, authorizes a licensed craft distiller to directly ship distilled spirits manufactured or produced by the licensee at its premises to a consumer if they comply with certain requirements, including not shipping more than 2.25 liters in any combination of prepackaged containers per day per consumer.
This bill would authorize a qualifying out-of-state distiller, as defined, whose license is not suspended to directly ship distilled spirits manufactured or produced by the qualifying out-of-state distiller at its premises to a consumer if they comply with the above-described requirements. The bill would, in addition to the requirements described above, require a licensed craft distiller, or qualifying out-of-state distiller, to hold a current distilled spirits direct shipper permit issued by the department. The bill would require, in order to obtain and maintain a distilled spirits direct shipper permit, a licensed craft distiller, or qualifying out-of-state distiller, to, among other things, file an application for the permit with the department and pay specified fees. The bill would authorize the department to enforce the above-described provisions related to direct shipping through administrative proceedings, as provided. The bill would make the sale and shipment of distilled spirits directly to consumers without a permit a crime, as specified. By expanding the scope of a crime, the bill would impose a state-mandated local program. The bill would extend the operation of the above-described direct shipping provisions until January 1, 2027.
(4) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
The people of the State of California do enact as follows:
SECTION 1.
Section 23358 of the Business and Professions Code is amended to read:23358.
(a) Licensed winegrowers, notwithstanding any other provisions of this division, may also exercise the following privileges:(1) Sell wine and brandy to any person holding a license authorizing the sale of wine or brandy.
(2) Sell wine and brandy to consumers for consumption off the premises where sold.
(3) Sell wine to consumers for consumption on the premises.
(4) Sell all beers, wines, and brandies, regardless of source, to consumers for consumption on the premises in a bona fide eating place as defined in Section 23038, which is located on the licensed premises or on premises owned by the licensee that are contiguous to the licensed premises and which is operated by and for the licensee. At such a bona fide public eating place, beer, wine, and brandy may be used in the preparation of food and beverages to be consumed on the premises.
(5) (A) Permit consumers to leave the premises with open containers of alcoholic beverages for consumption off the premises within an entertainment zone if all of the following conditions are satisfied:
(i) The premises is located within the entertainment zone.
(ii) Consumption of that type of alcoholic beverage is authorized by the ordinance creating the entertainment zone.
(iii) Open alcohol containers only leave the premises during the hours allowed by the ordinance establishing the entertainment zone.
(iv) Patrons with open containers exit the premises directly into an entertainment zone.
(v) All alcoholic beverages in the entertainment zone are purchased only at a licensed premises located within the entertainment zone.
(vi) The premises expressly prohibits open containers or closed containers of alcoholic beverages acquired outside their premises.
(vii) Delivery of alcoholic beverages to consumers within the entertainment zone by the licensee or by any third-party delivery service is expressly prohibited unless the delivery is to a residential building or private business that is not a licensee.
(viii) No alcoholic beverages purchased at the licensed premises may leave the premises in an open glass or metal container for consumption in an entertainment zone.
(ix) The licensee annually submits their notice of intent to participate in an open container entertainment zone to the department.
(B) This paragraph does not require a licensee to sell any alcoholic beverage for consumption off the premises within an entertainment zone.
(C) Licensees whose privileges are restricted due to operating conditions or other statutory restrictions may be prohibited from exercising entertainment zone privileges that are contrary to their operating conditions. For purposes of this paragraph, any restrictions on the exercise of off-sale privileges shall not apply to the removal of open alcoholic beverages from the licensed premises for consumption in the entertainment zone.
(6) Produce spirits of wine and blend those spirits of wine into wine produced by the winegrower or sell those spirits of wine to an industrial alcohol dealer or any person holding a license authorizing the manufacture or rectification of distilled spirits.
(7) Possess and transport brandy for the purpose of storing the brandy to age on the winegrower’s premises.
(b) A winegrower may also have upon the premises all beers, wines, and brandies, regardless of source, for sale or service only to guests during private events or private functions not open to the general public. Alcoholic beverage products sold at the premises that are not produced and bottled by, or produced and packaged for, the winegrower shall be purchased by the winegrower only from a licensed wholesaler.
(c) A winegrower shall actually produce on the winegrower’s licensed premises by conversion of grapes, berries, or other fruit, into wine, not less than 50 percent of all wines sold to consumers on the winegrower’s licensed premises and any licensed branch premises.
(d) The department may, if it shall determine for good cause that the granting of any such privilege would be contrary to public welfare or morals, deny the right to exercise any on-sale privilege authorized by this section in either a bona fide eating place the main entrance to which is within 200 feet of a school or church, or on the licensed winery premises, or both.
(e) Nothing in this section or in Section 23390 is intended to alter, diminish, replace, or eliminate the authority of a county, city, or city and county from exercising land use regulatory authority by law to the extent the authority may restrict, but not eliminate, privileges afforded by these sections.
SEC. 2.
Section 23502 of the Business and Professions Code is amended to read:23502.
(a) The department may issue a craft distiller’s license to a person that has facilities and equipment for the purposes of, and is engaged in, the commercial manufacture of distilled spirits. The craft distiller’s license authorizes the licensee to do all of the following:(1) Manufacture distilled spirits. For purposes of this article, “manufacture” means the actual distillation of distilled spirits from naturally fermented materials or the redistillation of distilled spirits obtained from another manufacturer of distilled spirits.
(2) Produce distilled spirits. For purposes of this article, “produce” means to mix, color, flavor, or blend distilled spirits, whether manufactured by the licensee or by another manufacturer of distilled spirits, including spirits of wine produced by a winegrower pursuant to paragraph (6) of subdivision (a) of Section 23358.
(3) Only sell distilled spirits that are manufactured or produced by the licensee solely to a wholesaler, manufacturer, winegrower, manufacturer’s agent, or rectifier that holds a license authorizing the sale of distilled spirits or to persons that take delivery of those distilled spirits within this state for delivery or use without the state.
(4) Deal in warehouse receipts.
(5) Manufacture or produce up to 150,000 gallons of distilled spirits per fiscal year (July 1 through June 30), excluding brandy the craft distiller manufactures or has manufactured for it pursuant to a brandy manufacturer license, as reported to the department in the manner prescribed by the department for the fiscal year prior to the date of submitting an application for the license. At least 65 percent of the total volume of distilled spirits manufactured or produced shall be actually manufactured by the licensee. The volume of distilled spirits authorized by this paragraph shall be calculated by adding the volume of distilled spirits, less waste, drawn off the still with the volume of distilled spirits obtained by the licensee from any other source that is not redistilled by the licensee. For purposes of this paragraph, “volume” means the liquid volume and shall not be based on proof gallons or packaged goods.
(6) Transport brandy to or from the premises of any licensed winegrower for the purpose of storing the brandy to age on the winegrower’s premises.
(b) A craft distiller’s license shall not be issued to any person, any officer, director, employee, or agent of such person, or any person who is affiliated with, directly or indirectly, a person that manufactures or has manufactured for them more than 150,000 gallons of distilled spirits per year within or without the state, excluding brandy it manufactures or has manufactured for them pursuant to a brandy manufacturer license, or to any person that is affiliated with, directly or indirectly, a wholesaler.
(c) A licensed craft distiller shall report to the department, at the time of renewal in the manner prescribed by the department, the amount of distilled spirits manufactured or produced by the licensee specifying, as applicable, the respective amounts of distilled spirits the licensed craft distiller has manufactured itself, obtained from another manufacturer of distilled spirits, and imported, excluding brandy manufactured by or for the licensee pursuant to a brandy manufacturer license, during the previous fiscal year. If the report to the department establishes that the licensee no longer qualifies to hold a craft distiller’s license because the licensee has either exceeded the 150,000 gallon manufacture or production limitation as specified in paragraph (5) of subdivision (a) or actually manufactured less than 65 percent of the total volume of distilled spirits as specified in paragraph (5) of subdivision (a), the department shall renew the license as a distilled spirits manufacturer’s license.
SEC. 3.
Section 23504 of the Business and Professions Code is amended to read:23504.
Notwithstanding any other provision, a licensed craft distiller may sell up to the equivalent of 4.5 liters in any combination of prepackaged containers per day per consumer of distilled spirits manufactured or produced by the licensee at its premises to a consumer.SEC. 4.
Section 23504.5 of the Business and Professions Code is amended to read:23504.5.
(a) Notwithstanding any other provision of this division to the contrary, a licensed craft distiller, or a qualifying out-of-state distiller whose license is not suspended, may directly ship distilled spirits manufactured or produced by the licensee at its premises to a consumer only if they comply with all of the following requirements:(1) The amount shipped shall not exceed the equivalent of 2.25 liters in any combination of prepackaged containers per day per consumer and shall be solely for the consumer’s personal use and not for resale.
(2) The licensed craft distiller, or qualifying out-of-state distiller, shall maintain adequate records of the shipments and provide those records to the department upon request.
(3) The licensed craft distiller, or qualifying out-of-state distiller, shall require the common carrier to obtain the signature of any individual 21 years of age or older before delivering any distilled spirits shipped to an individual in this state.
(4) The containers in which the distilled spirits are shipped shall be conspicuously labeled with the words: “CONTAINS ALCOHOL: SIGNATURE OF PERSON AGE 21 YEARS OR OLDER REQUIRED FOR DELIVERY.”
(5) The licensed craft distiller, or qualifying out-of-state distiller, shall hold a current distilled spirits direct shipper permit issued by the department.
(b) To obtain and maintain a distilled spirits direct shipper permit from the department, the craft distiller, or qualifying out-of-state distiller, shall do all of the following:
(1) File an application for a distilled spirits direct shipper permit with the department.
(2) Pay the same fees that apply to a direct shipper permit (Type 82).
(3) Provide the department with the craft distiller’s California alcoholic beverage license number or a true copy of their current alcoholic beverage distiller license issued by another state, as applicable.
(4) If the permitholder is located outside of this state, report to the department no later than January 1, 2027, the total amount of distilled spirits shipped into the state during the preceding calendar year under the distilled spirits direct shipper permit.
(5) If the permitholder is located within this state, provide to the department any necessary additional information not currently provided to ensure compliance with this section.
(6) Permit the department to perform an audit of the distilled spirits direct shipper permitholder’s records upon request.
(7) Be deemed to have consented to the jurisdiction of the department or any other state agency and California courts concerning enforcement of this section and any related laws, rules, or regulations.
(c) The department may enforce the requirements of this section by administrative proceedings to suspend or revoke the distilled spirits direct shipper permit, and the department may accept payment of an offer in compromise in lieu of suspension as provided by this division. Any hearing held pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code against a permitholder outside of California shall be held in the City of Sacramento.
(d) A person shall not sell and ship distilled spirits directly to consumers in California without possessing a current distilled spirits direct shipper permit issued by the department. A person who knowingly makes, participates in, transports, imports, or receives a shipment from a person who does not possess a current distilled spirits direct shipper permit issued by the department pursuant to this section is guilty of a misdemeanor pursuant to Section 25617.
(e) For purposes of this section, “qualifying out-of-state distiller” means a distiller licensed in any other state that satisfies the conditions necessary for a craft distiller license under the laws of this state.
(f) This section shall remain in effect only until January 1, 2027, and as of that date is repealed.
SEC. 5.
No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.Text of AB 1246 as chaptered, from the official record. Connect Plus keeps every version and highlights what changed.Compare versions