California Beer & Wine Wholesalers Ass'n v. Department of Alcoholic Beverage Control

In this original proceeding we hold that subdivision (e)(1) of rule 106 of the Department of Alcoholic Beverage Control (the Department) is invalid for the reason that it authorizes the gift of “supplies” by a wholesaler to a retailer of beer in violation of Business and Professions Code section 25501, subdivision (a). We will conclude that the offending provisions cannot be severed from the subdivision and will accordingly issue a peremptory writ of mandate directing the Department not to enforce it.

Discussion

Petitioners are beer wholesalers and their association, the California Beer and Wine Wholesalers Association, Inc. The respondents are the Department and its director.

This proceeding stems from the 1986 amendment to the Department’s rule 106. (Cal. Admin. Code, tit. 4. § 106; Reg. 86, No. 4.) Petitioners challenge the validity of subdivision (e)(1) of the rule, which provides in pertinent part that a wholesale “supplier may furnish, give, rent, loan or sell advertising specialties to a retailer provided such items bear conspicuous advertising required of a sign and the total value of all retailer advertising specialties furnished by a supplier directly or…