First the good news: on October 8, 2021, California Governor Newsom signed SB 389, which permits restaurants and some types of suppliers to sell for pickup mixed drinks, wine in single serving containers, and manufacturer-sealed containers of distilled spirits. SB 389 codifies California’s Covid-19 “cocktails-to-go” regulatory relief that has been in place since March 2020. Now the bad news: SB 389 does not allow all of the privileges permitted under the current regulatory relief, and most notably, it does not enable delivery of spirits, mixed drinks, or single servings of wine, and it is instead limited to pickup. The bill adds Section 23401.5 to the California Business & Professions Code, and will go into effect on January 1, 2022. The new law is set to expire at the end of 2026.

SB 389 applies to the following types of California ABC licensees, which must notify the California ABC prior to taking advantage of the new privileges: on-sale licensees with bona fide public eating places that have off-sale privileges (this includes primarily Type 41, 47, and 75 licensees that don’t have license conditions that prohibit off-premises sales); licensed beer manufacturers (Type 1 and 23 licensees); licensed wine manufacturers (Type 2 licensees); and, licensed craft distillers that operate bona fide public eating places at their premises of production (Type 74 licensees).

The above types of licensees will have the following privileges under new Section 23401.5: 1) licensees with distilled spirits off-sale privileges (applies primarily to Type 47, 74 (with bona fide eating place), and 75 licensees) can sell distilled spirits in manufacturer-prepackaged containers for pickup; 2) licensees can sell alcoholic beverages, except beer, not in manufacturer-packages containers (i.e., cocktails-to-go) provided several conditions are met, including the following:

• The drink must be packaged in a container with a secure lid designed to prevent consumption without removing the lid, and the package must be clearly and conspicuously labeled to identify that it includes an alcoholic beverage;
• Drinks must be sold in conjunction with a “bona fide meal” (ABC guidance as to what qualifies is available here), and only two drinks may be sold per meal ordered;
• Wine not packaged in manufacturer-sealed containers must be sold in “single-serve containers” in one of the following sizes: 187ml, 200ml, 250ml, or 355ml;
• Mixed drinks can include no more than 4.5 ounces of distilled spirits per drink;
• The following warning language must be posted on the premises, online, or “in whatever manner is necessary to ensure that the consumer purchasing the beverages to which this section applies is given notice of this warning” - “Alcoholic beverages that are packaged by this establishment are open containers and shall not be transported in a motor vehicle except in the vehicle’s trunk or, if there is no trunk, the containers shall be kept in some other area of the vehicle that is not normally occupied by the driver or passengers. This does not include a utility compartment or glove compartment (See Vehicle Code Section 23225). Additionally, these beverages shall not be consumed in public or in any other area where open containers are prohibited by law.”

Orders for alcoholic beverages under SB 389 can be placed online, by phone, or in person, but must be picked-up by the consumer, and delivery is prohibited. Lastly, the new law gives the ABC discretion to impose conditions on licenses to limit or prohibit the sale of alcoholic beverages under the new law, and it includes a mechanism for licensees to challenge any such conditions.SB 389 adds California to the list of more than 20 states that have codified cocktails-to-go privileges that were first implemented in 2020 as part of various types of emergency Covid-19 relief for restaurants and other industry members. California’s Notices of Regulatory Relief (see here and here) that address cocktails-to-go expire on December 31, so the new law will allow cocktails-to-go to continue with no lapse. However, SB 389 does not extend all cocktails-to-go privileges, and most notably, delivery privileges will expire on December 31. Similarly, all other Covid-19 regulatory relief related to delivery will expire at the end of the year. For restaurants, that means delivery privileges will be limited to beer and wine in manufacturer-packaged containers, and any license conditions limiting off-sale and delivery privileges will go back into effect.

If you’d like more information about this law, contact the attorneys at Strike Kerr & Johns.

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