Background
The Office of Environmental Health Hazard Assessment (OEHHA) is the lead agency that implements the California Safe Drinking Water and Toxic Enforcement Act of 1986, better known as "Proposition 65" (the Act). OEHHA promulgates and can amend regulations to further the purposes of the Act.
Among other things, the Act requires businesses to provide a "clear and reasonable warning" before exposing persons in California to any of over 900 chemicals which are linked to cancer or reproductive toxicity. OEHHA amended the Act's Clear and Reasonable Warnings regulations in August 2018 to include tailored warnings for several specific types of exposure situations (Section 25607.1, et seq.). The Act lists alcoholic beverages as increasing the risk for cancer, and, during pregnancy, birth defects. Historically, some alcoholic beverage containers have also contained listed chemicals.
The proposed amendments will clarify the warning requirements for alcoholic beverages sold on the internet, in catalogs, and via third-party providers. These amendments track the provisions of a recently proposed settlement between the Attorney General's Office and a number of alcoholic beverage retailers, thus allowing any alcoholic beverage manufacturer or retailer to use warning methods proposed in that settlement.
The most prominent item in the settlement's methods and in OEHHA's proposed amendments is that alcoholic beverages sold online or through catalogs must have a warning on the internet site or in the catalog as well as a warning provided to the purchaser or delivery recipient prior to or at the same time as delivery (e.g., a warning label on a bottle or can). The proposed amendments are explained further below.
Section 25607.3. Alcoholic Beverage Exposure Warnings - Methods of Transmission Amendments
Location-Specific Warnings
The phrase, "for alcoholic beverages sold at a physical location:" is proposed to be added to clarify that warnings are location specific. Warnings provided on the premises do not satisfy the requirement for providing a warning for products delivered to customers at locations other than the point of sale or for products purchased over the internet or through catalogs.
Package Delivery Service Sales
The Act currently regulates warning methods for alcohol delivered through package delivery services. Industry stakeholders have indicated that the phrase "package delivery services" is vague as to which entities this provision would apply in modern commerce. The phrase is proposed to be deleted and replaced with "delivered to consumers in California at a location other than the point of sale" to clarify that the focus is the purchase of alcoholic beverages where the place of purchase is remote or varies from the delivery location, including internet, mobile application, or catalog purchases that are delivered to the customer.
Online or Catalog Sales
OEHHA proposes to clarify that alcoholic beverages sold online or through catalogs must have a warning on the internet site or in the catalog as well as a warning provided to the purchaser or delivery recipient prior to or at the same time as delivery using the warning content specific for alcoholic beverages found in Section 25607.4. Previously, only one warning was required, as long as it was clear and reasonable.
Third-Party Providers
Some industry stakeholders question how third-party providers (TPPs) may provide Proposition 65 warnings. Some TPPs may facilitate the transaction but will not take physical possession of a product and therefore are unable to provide a warning on or with a package. New regulations are proposed to retain the option to provide the warning on or in the shipping container or delivery package, and to add the option of providing the warning by email, text, as part of the written or electronically delivered receipt or confirmation for the applicable transaction. This is in addition to the internet or catalog warning required (explained above).
As an example, if a business provides a website warning, the business will still need to provide the warning in accordance with the new subsections (i.e., in the delivery package or by email, by text, or as part of the receipt or transaction confirmation).
Language Requirement
The Act currently states that an alcoholic beverage warning must be provided in English and in any other language used for labeling or advertising the product on the premises. The proposed amendment will clarify that the language requirement also applies to warnings provided on the internet, including mobile device applications, or in catalogs.
Impacts of the Proposed Regulation
Affected businesses will likely benefit from the proposed regulatory action because the amendments provide clarifying guidance concerning the provision of Proposition 65 warnings for alcoholic beverages purchased via the internet (including mobile applications) or through catalogs. However, with the increased use of third-party providers to facilitate sales, businesses may need to change their current standards to ensure that warnings are provided to the purchaser or delivery recipient prior to or at the same time as delivery.
For more information
The above regulations are intended to clarify warning obligations, but in the process, they arguably increase costs for regulated parties, some of whom question the need for duplicative warnings. Public comments concerning this proposed action must be received by OEHHA by March 31, 2020.
If you have questions or would like additional information on the material covered in this alert, please contact one of the authors or the Reed Smith lawyer with whom you regularly work.
Client Alert 2020-161
