Joseph's of California v. Alcoholic Beverage Control Appeals Board

Opinion

KINGSLEY, J. We have consolidated these two petitions because they raise certain common issues of law concerning the imposition of administrative penalties for violation of. the minimum price provisions of the Business and Professions Code relating to sales of wine. (Bus. & Prof. Code, § 24862). For the reasons set forth below, we annul the disciplinary order in case No. 38284, but sustain it in case No. 38510.

The facts are not here in question. In Civ. No. 38284, involving Joseph’s of California, a student clerk, as the result of an error in computation, sold a case of wine to an undercover agent of the Department of Alcoholic Beverage Control for 50 cents less than the established minimum price. Admittedly the price was fixed by error, the conduct was neither known to nor condoned by the licensee, and the licensee has conducted its business for over 15 years without any prior accusation of misconduct. The hearing officer recommended dismissal of the accusation, but the department rejected the recommendation and imposed a 10-day suspension, of which five days were stayed under certain conditions.

In Civ. No. 38510, involving Nick Williams, an employee of the licensee sold six bottles of wine to an undercover agent at a discount of 16.7 cents per bottle. The discount was deliberate and intentional and was made with knowledge that it violated the minimum price law. After a hearing, the license was suspended for 10 days.1

[788]I

Since it is admitted that the undercover agents who made the purchases involved did not intend to drink the wine purchased, or to give it to others to drink, it is argued that the sales were not of the type prohibited by the applicable section. Section 24862, by its terms, applies only to sales “to a retailer or consumer,” and it is argued that an undercover agent who buys only to determine the existence of price-cutting is not a “consumer,” within the meaning of the statute. In support of that argument, petitioners point, inter aha, to the statutory definition of “consumer,” as “a person who buys wine for consumption off the premises where sold.” (Italics added.) While the semantics are ingenious, we reject the conclusion for which petitioners contend. A reading of the statutes as a whole makes it clear that the term “consumer” was used as the designation of the person last in the chain of sales, beginning with the vintner, passing through the various stages of distribution to the retailer, and from him to the ultimate buyer. Whether that buyer purchases in order to have something for himself and his guests to drink, or to make a “show” in a wine cellar, or just to possess, we think that he is a “consumer.” As the Attorney General points out, without the use of undercover agents who buy under the circumstances herein involved, it would be impossible to police the minimum price statute or to enforce it against anyone who did not blatantly advertise in public media his willingness to violate the law. We do not ascribe to the Legislature such a self-negating intent.