|Self-service or "assisted" checkout at Fresh & Easy Neighborhood Market.|
Assembly Bill 183 (AB 183), which passed in the California State Assembly earlier this year by a large majority, is making its way though the committee process in the California State Senate and could be voted on by the full body as early as late this summer or early fall.
AB 183, which we've nicknamed the "Son of Tesco Fresh & Easy Law" law for reasons you'll soon learn, will if passed by the California State Senate and signed into law by Governor Jerry Brown (Democrat), ban the sale of all alcoholic beverages at self-service checkouts in grocery and other format retail stores where adult beverages are sold.
The reason we gave AB 183 the "Son of Tesco Fresh & Easy Law" moniker is two-fold: (1) It's a successor bill to two previous pieces of legislation, first in 2008 and again in 2010, designed to prohibit the sale of alcohol at self service checkouts; and (2) Tesco's Fresh & Easy Neighborhood Market would be the only major retailer in California the bill would have a major operational affect on because its stores offer self-service checkout only, which it calls "assisted checkout" because store employees will assist customers with checkout if asked.
If AB 183 becomes law in California, where Tesco has 127 of its 176 Fresh & Easy grocery markets - there are 28 stores in metropolitan Phoenix, Arizona and 21 units in metro Las Vegas, Nevada - the grocer will at a minimum most likely have to add at least one full-service checkout in each of its stores in the Golden State, which is something it does not want to do because it believes - in our analysis incorrectly - the cost savings from having self-service checkout only outweighs the benefits of offering shoppers the choice between self and full service checkout, which is something all of its competitors that offer self-service do.
The two previous bills, both authored by Assemblyman Hector De La Torre (Democrat-Southgate, Southern California), failed to become law. In 2008 De La Torre's AB 523 failed to pass by a majority in both houses in Sacramento. His second bill in 2010, AB 1060, passed in both the California State Assembly and California State Senate but was vetoed by then Governor Arnold Schwarzenegger, who is a Republican, albeit a moderate one.
AB 183, which is authored by Assemblywoman Fiona Ma, a Democrat from San Francisco's Richmond District, the neighborhood where Tesco recently opened its first Fresh & Easy store in the city at 32nd Avenue and Clement Street on June 22, is virtually identical to the previous two bills in that it amends California's alcohol beverage license law to include as a provision of holding an off-sale wine and beer permit and/or a liquor license that the holder will not sell alcohol at self-service checkout stand in its stores. A violation of the law by a retailer would be a misdemeanor, according to the bill's current legislative language.
None of California's major retailers, including stores operated by national giants Safeway Stores, Inc., Kroger Co, Supervalu, Inc., Walmart Stores, Inc., 7-Eleven, Target or Costco, nor any regional chains and independents we're aware of, offer self-service checkout only like Tesco's Fresh & Easy does. Instead, the retailers that do offer self-service checkout in the Golden State do so along with offering full-service checkout in their respective stores.
Therefore, although the state's trade group for grocers, the California Grocers Association (CGA), which United Kingdom-based Tesco's Fresh & Easy and most of the other grocers with stores in California are members of, is working to defeat AB 183, the fact is none of its other members will be materially affected if the legislation becomes law because unlike Fresh & Easy Neighborhood Market those retailers offer both full and self-service checkout lanes or full-service only in their stores.
AB 183 moving through senate committee process
AB 183, which was passed in the California State Assembly by a 48 (in favor) to 26 (against) vote on May 26, is now headed to the Senate Appropriations Committee, following recent passage in the Senate Governmental Organization Committee, and is set for an August 15 hearing in appropriations.
Because the California State Senate is controlled by Democrats, who have a 25 to 15 member margin over Republicans, the Appropriations Committee like all others has a Democrat majority. Therefore we expect AB 183 to pass out of the committee with a majority vote in favor, just as AB 1060 did in 2010.
It's also our analysis, as we've been saying in our coverage of the legislation all year, that AB 183 will pass in the California State Senate like it did in the state assembly in May, and as AB 1060 did last year in both legislative bodies.
Democrats have a 10-member advantage in the California State Senate. Therefore even if a number of Democrats were to vote against AB 183 (we think no more than three or four will at the most) the bill would still pass in the senate. Additionally, it's possible a few Senate Republicans will vote for AB 183 because it's supported by numerous law enforcement organizations, clergy groups and Mothers Against Drunk Driving (MADD), all of which are important interest groups for some Republicans in California. (Here's a list of the major supporters and opponents of AB 183.)
Jerry Brown: Man on the white horse for AB 183 opponents?
If our analysis is correct, and we believe it is, Fresh& Easy Neighborhood Market, CGA and the other groups working to defeat AB 183, such as the California Chamber of Commerce and the California Hispanic Chamber of Commerce, will have just one way to stop the "Son of Tesco Fresh & Easy Law" from becoming just that - law. That one opportunity to kill the bill will be to appeal to Governor Jerry Brown directly as well as through a public relations campaign to veto the legislation. [Suggested reading: Jerry Brown, The Man on the White Horse. J. D. Lorenze, 1978.]
Prior to this month our analysis was that Brown would in very high probability sign AB 183 if it passes both legislative bodies. To attach a metric to our previous analysis, our confidence rating was about 80% in the positive the Governor would sign the bill if it passes.
However, a couple recent developments, including the passage of the state budget and Brown's veto of the so called California "Card Check" legislation this month, which passed in both the California State Assembly and Senate and would have allowed farm workers to join a union by simply filling out a card rather than voting in a secret ballot election, have lead us to reduce that confidence rating somewhat.
Jerry Brown, who marched with Cesar Chavez in the 1960's and 70's and pushed and signed groundbreaking pro-farm worker legislation during his previous incarnation as Governor in the 1980's, is a longtime supporter of the United Farm Workers Union, founded by Chavez, which was behind getting the "Card Check" bill passed.
It remains our analysis at present that AB 183, if passed later this year by the California State Senate, will be signed by Governor Brown, although our current confidence rating he will sign the bill into law is about 70% for to 30% that he would veto it.
However, that's our current assessment. And things can change between now and the next few months in California politics. For example, opponents' of AB 183 have ratcheted up there lobbying and PR campaign to defeat the legislation, getting a umber of major California newspapers to come out with editorials against the bill, for example, although how influential this will be is questionable in today's climate where newspaper editorial boards have far less influence over politicians and voters than they once had.
Supporters of AB 183 recently told us they're planning soon to invigorate their campaign in favor of the legislation in response to the added efforts by opponent groups.
But despite the lobbying and PR campaign, it's difficult to see, based on our reporting, how AB 183 can be defeated once it's voted on by members of the California State Senate.
Therefore the endgame for the bill's opponents, chief among them Tesco's Fresh & Easy Neighborhood Market which is doing most of its work through the CGA and a couple Sacramento-based lobbying and public relations firms, remains with the Governor, in our analysis. Stay tuned.
Related Stories: Follow the Legislative History in Fresh & Easy Buzz
June 4, 2011: 'Son of Tesco Fresh Easy Law': Self-Checkout Booze Ban Bill AB 183 Sails Through California State Assembly; State Senate Next Stop
May 11, 2011: ‘Son of Tesco Fresh & Easy Law' - California Assembly Appropriations Committee Passes Self-Checkout Ban Bill AB 183 By 12-4 Margin
May 6, 2011: 'Son of Tesco Fresh & Easy Law': California State Assembly Appropriations Committee Hearing For AB 183 Cancelled
May 4, 2011: 'Son of Tesco Fresh & Easy Law': Strong Chance California Legislation to Prohibit Alcohol Sales at Self-Service Checkouts Could Pass This Year
September 30, 2010: Self-Service-Only Checkout Safe at California Fresh & Easy Neighborhood Market Stores Thanks to Governor's Veto Pen
September 30, 2010: Fresh & Easy Neighborhood Market Hopes Governor Schwarzenegger Can Find His Veto Pen Before Midnight Tonight
September 28, 2010: Fresh & Easy Neighborhood Market Hoping Governor Schwarzenegger Prefers His Veto Pen When it Comes to AB 1060
September 25, 2010: Future of Fresh & Easy Neighborhood Market's Self-Service-Only Checkout in California Up to Governor Schwarzenegger
August 24, 2010: California State Senate Sends Bill to Governor That Could End Self-Service-Only Checkout at Fresh & Easy Neighborhood Market
August 15, 2010: Bill to Ban Alcoholic Beverage Sales at Self-Service Checkouts Would End 'Self-Service Only' at California Fresh & Easy Neighborhood Market Stores