SB 0813 Wholesalers & Brewers of Beer
LR Number:L2679.01I Fiscal Note:2679-01
Committee:Corrections and General Laws
Last Action:02/13/96 - Hearing Conducted S Corrections & General Laws Committee
Effective Date:August 28, 1996
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Current Bill Summary

SB 813 - This act contains provisions which regulate the business practices of brewers of beer with respect to wholesalers. A brewer is barred from amending, terminating, or refusing to renew agreements made with wholesalers unless the brewer gives a one hundred twenty day notice as provided, acts in good faith, and has good cause. In cases of bankruptcy, the voluntary assignment of assets, the revocation of the wholesaler's license, or of a felony conviction, or plea of guilty to a felony relating to the wholesaler's business, the notice to terminate must not be less than fifteen days.

Brewers are prohibited from coercing wholesalers to engage in illegal acts, requiring wholesalers to assent to unreasonable requirements, failing to provide written contracts, and requiring wholesalers to accept delivery of beer or any other commodity that was not ordered by the wholesaler. Brewers who assign a brand extension to a wholesaler must assign the brand extension to the wholesaler to whom the brewer granted exclusive sales territory for the brand from which such brand extension resulted, unless that extension was granted prior to the effective date of the legislation.

This act establishes provisions which prevent brewers from withholding or delaying approval of the sale or transfer of stock of a wholesaler, provisions that prohibit brewers from denying surviving partners, of a partnership where death of one of the partners has occurred, the right to become a successor-in- interest, or denying approval of a transfer of ownership to a surviving spouse or adult child.

Any brewer who violates these provisions must pay the wholesaler involved the fair market value of the wholesaler's business with relation to the affected brand or brands. If the brewer and wholesaler cannot mutually agree on whether good cause exists for cancellation or on the reasonable compensation to be paid for fair market value, the wholesaler may submit the dispute to a neutral arbitrator. Brewers who violate the provisions of this act are also subject to civil action, including attorney's fees and court costs.

Brewers are further prohibited from fixing the price at which wholesalers may sell any alcoholic beverage or from preventing wholesalers the right of free association.