In January, I wrote about a writ petition that I filed asking the California Court of Appeal to review the Department of Alcoholic Beverage Control’s position that cider is wine, not beer, under California law. I am pleased to report that the Court has now granted that petition and ordered full briefing on the merits. This is an important development, and I wanted to share a bit more about the case and what it could mean for the California alcohol industry.
The Background
My clients are a California couple who own two craft beer taprooms in Morgan Hill and Fresno, Out of the Barrel and The Running Shop & Hops, both operating with Type 40 beer-only licenses. Like many taprooms, they sold cider alongside their beer offerings for years. They purchased cider from dozens of wholesalers and manufacturers, none of which ever suggested there was any issue with selling cider under a beer license. Then the ABC initiated an enforcement action, taking the position that cider is classified as wine under California law and therefore cannot be sold with a beer-only license.
The Legal Questions
This case raises three distinct legal questions, each of which could independently support reversal of the ABC’s decision.
1. Statutory interpretation.
The Business and Professions Code defines “beer” and “wine” in sections 23006 and 23007, but neither definition mentions cider. Both definitions encompass products made from fruit; and the definition of beer expressly permits fruit, fruit juice, and fruit concentrate as ingredients. The only California statute that uses the word “cider” at all—section 23357—authorizes beer manufacturers to produce it. The question is whether the statutory definitions compel the conclusion that cider is exclusively wine and therefore outside the scope of a beer license.
2. Constitutional vagueness.
The Due Process Clause requires that laws give people fair notice of what is prohibited. In this case, the administrative law judge found “widespread” confusion in the industry about whether beer-only licensees can sell cider. That finding is significant because it goes to the heart of whether the statutory definitions provide the kind of notice the Constitution requires. Our clients, their vendors, and numerous other businesses all understood cider to be within the scope of a beer license—a shared understanding that persisted for years without correction by the ABC.
3. Administrative Procedures Act.
California’s APA requires state agencies to follow formal rulemaking procedures—including public notice and an opportunity for comment—before enforcing regulatory interpretations. When the ABC takes the position that cider is exclusively wine, that classification functions as a regulation. Because the ABC never went through APA procedures to adopt this interpretation, it may constitute what the law calls an “underground regulation,” which cannot be enforced against the businesses it was meant to govern.
Why It Matters Beyond This Case
This case has potential significance well beyond my clients’ taprooms. Cider currently occupies an ambiguous space in California’s alcohol regulatory framework. This case has the potential to affect how retailers, wholesalers, and producers across the state buy and sell cider. If the Court finds that the ABC’s classification requires formal rulemaking, it could prompt a broader public process in which industry participants have a voice in shaping how cider—and potentially other non-beer and wine alcoholic beverage categories—are regulated going forward. That process could provide the clarity that the current statutory scheme lacks, which would benefit businesses and regulators alike.
What Comes Next
The Court has directed the Alcoholic Beverage Control Appeals Board to certify the full administrative record by April 6, 2026. After that, both sides will submit detailed briefs, and the Court will decide the case. The stay that has been in place since January remains in effect, meaning no penalties will be imposed while the case is pending.
I am gratified that the Court has invited full briefing on these issues and I look forward to presenting my clients’ position. I will continue to provide updates as the case progresses.
