Bill Text: IL HB5400 | 2013-2014 | 98th General Assembly | Introduced

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Bill Title: Amends provisions of the Beer Industry Fair Dealing Act setting forth conditions under which a brewer shall pay reasonable compensation to a wholesaler if a brewer cancels, terminates, or fails to renew an agreement or unlawfully denies approval of, or unreasonably withholds consent to, an assignment, transfer, or sale of a wholesaler's business assets or voting stock or other equity securities, the brewer elects expedited binding arbitration, the wholesaler rejects the offer to arbitrate, and other conditions exist. Provides that a brewer shall, in good faith, make a payment of reasonable compensation to the wholesaler if the wholesaler retains a brand for 6 months (rather than 2 years) after the wholesaler rejects the offer to arbitrate and other conditions are met. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2014-12-03 - Session Sine Die [HB5400 Detail]

Download: Illinois-2013-HB5400-Introduced.html

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98TH GENERAL ASSEMBLY State of Illinois 2013 and 2014 HB5400 Introduced , by Rep. Ann Williams SYNOPSIS AS INTRODUCED:
815 ILCS 720/7 from Ch. 43, par. 307
Amends provisions of the Beer Industry Fair Dealing Act setting forth conditions under which a brewer shall pay reasonable compensation to a wholesaler if a brewer cancels, terminates, or fails to renew an agreement or unlawfully denies approval of, or unreasonably withholds consent to, an assignment, transfer, or sale of a wholesaler's business assets or voting stock or other equity securities, the brewer elects expedited binding arbitration, the wholesaler rejects the offer to arbitrate, and other conditions exist. Provides that a brewer shall, in good faith, make a payment of reasonable compensation to the wholesaler if the wholesaler retains a brand for 6 months (rather than 2 years) after the wholesaler rejects the offer to arbitrate and other conditions are met. Effective immediately.
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A BILL FOR
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AN ACT concerning business.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Beer Industry Fair Dealing Act is amended by
changing Section 7 as follows:
(815 ILCS 720/7) (from Ch. 43, par. 307)
Sec. 7. Reasonable compensation.
(1) Subject to the right of any party to an agreement to
pursue any remedy provided in Section 9, any brewer that
cancels, terminates or fails to renew any agreement, or
unlawfully denies approval of, or unreasonably withholds
consent, to any assignment, transfer or sale of a wholesaler's
business assets or voting stock or other equity securities,
except as provided in this Act, shall pay the wholesaler with
which it has an agreement pursuant to this Act reasonable
compensation for the fair market value of the wholesaler's
business with relation to the affected brand or brands. The
fair market value of the wholesaler's business shall include,
but not be limited to, its goodwill, if any.
(1.5) The provisions of this subsection (1.5) shall only
apply if the brewer agrees to pay reasonable compensation as
defined in subsection (1) and the total annual volume of all
beer products supplied by a brewer to a wholesaler pursuant to

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agreements between such brewer and wholesaler represents 10% or
less of the total annual volume of the wholesaler's business
for all beer products supplied by all brewers. For purposes of
this subsection (1.5) only, "annual volume" means the volume of
beer products sold by the wholesaler in the 12-month period
immediately preceding receipt of the brewer's written offer
pursuant to this subsection (1.5).
If a brewer is required to pay reasonable compensation as
described in subsection (1) and the question of reasonable
compensation is the only issue between the parties, the brewer
shall, in good faith, make a written offer to pay reasonable
compensation. The wholesaler shall have 30 days from receipt of
the written offer to accept or reject the brewer's offer.
Failure to respond, in writing, to the written offer shall
constitute rejection of the offer to pay reasonable
compensation. If the wholesaler, in writing, accepts the
written offer, the wholesaler shall surrender the affected
brand or brands to the brewer at the time payment is received
from the brewer. If the wholesaler does not, in writing, accept
the brewer's written offer, either party may elect to submit
the determination of reasonable compensation to expedited
binding arbitration. If one party notifies the other party in
writing that it elects expedited binding arbitration, the other
party has 10 days from receipt of the notification to elect
expedited binding arbitration or to reject the arbitration in
writing. Failure to elect arbitration shall constitute

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rejection of the offer to arbitrate.
(A) If the parties agree to expedited binding
arbitration, the arbitration shall be subject to the
expedited process under the commercial rules of the
American Arbitration Association. The arbitration shall be
concluded within 90 days after the parties agree to
expedited binding arbitration under this Section, unless
extended by the arbitrator or one of the parties. The
wholesaler shall retain the affected brand or brands during
the period of arbitration, at the conclusion of which the
wholesaler shall surrender the affected brand or brands to
the brewer upon payment of the amount determined to be
reasonable compensation, provided the wholesaler shall
transfer the affected brand or brands to the brewer after
90 days if the arbitration proceedings are extended beyond
the 90 day limit at the request of the wholesaler.
Arbitration costs shall be paid one-half by the wholesaler
and one-half by the brewer. The award of the arbitrator
shall be final and binding on the parties.
(B) If the brewer elects expedited binding arbitration
but the wholesaler rejects the offer to arbitrate:
(i) The wholesaler may accept, in writing, any
written offer previously made by the brewer. If the
wholesaler selects this option, the wholesaler must
surrender the affected brand or brands to the brewer at
the time payment is received. If the wholesaler

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believes that the amount paid by the brewer is less
than reasonable compensation under subsection (1), the
wholesaler may bring a proceeding under subsection (2)
for the difference, but may not proceed under
subsection (3) of Section 9; or
(ii) The wholesaler may proceed against the brewer
under Section 9, provided the wholesaler must
surrender the affected brand or brands to the brewer if
a proceeding under Section 9 has not been initiated
within 90 days after the wholesaler rejects the offer
to arbitrate. Upon determination of reasonable
compensation pursuant to Section 9, the brewer shall
pay the wholesaler the amount so determined. Until
receiving payment from the brewer of the amount so
determined, the wholesaler shall retain the affected
brand or brands. If (a) the wholesaler retains the
affected brand or brands for a period of 6 months 2
years after the wholesaler rejects the offer to
arbitrate, (b) the amount of reasonable compensation
has not been determined, and (c) an injunction has not
been issued, the brewer shall, in good faith, make a
payment of reasonable compensation to the wholesaler.
If, however, the brewer fails to ship or make available
brands ordered by the wholesaler prior to the brewer
making any payment (including a good faith payment as
provided in this subsection) to the wholesaler, the

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wholesaler shall be entitled to injunctive relief and
attorneys' fees and shall subject the brewer to
punitive damages. Upon receipt of this payment, the
wholesaler must surrender the affected brand or brands
to the brewer, provided that such surrender shall not
affect the brewer's obligation to pay all amounts
ultimately determined due to the wholesaler under this
Act.
(C) If the wholesaler elects expedited binding
arbitration but the brewer rejects, the brewer may proceed
under Section 9 for the purpose of determining reasonable
compensation. Upon determination of reasonable
compensation pursuant to Section 9, the brewer shall pay
the wholesaler the amount so determined. Until receiving
payment from the brewer of the amount so determined, the
wholesaler shall retain the affected brand or brands. If
(a) the brewer initiates a proceeding under Section 9
within 90 days after the wholesaler rejects the offer to
arbitrate, (b) the wholesaler retains the affected brand or
brands for a period of 6 months 2 years from the date the
wholesaler rejects the offer to arbitrate, (c) the amount
of reasonable compensation has not been determined, and (d)
an injunction has not been issued, the brewer shall, in
good faith, make a payment of reasonable compensation to
the wholesaler. If, however, the brewer fails to ship or
make available brands ordered by the wholesaler prior to

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the brewer making any payment (including a good faith
payment as provided in this subsection) to the wholesaler,
the wholesaler shall be entitled to injunctive relief and
attorneys' fees and shall subject the brewer to punitive
damages. Upon receipt of this payment, the wholesaler must
surrender the affected brand or brands to the brewer,
provided that such surrender shall not affect the brewer's
obligation to pay all amounts ultimately determined due to
the wholesaler under this Act.
(2) Except as otherwise provided in subsection (1.5), in
the event that the brewer and the beer wholesaler are unable to
mutually agree on the reasonable compensation to be paid for
the value of the wholesaler's business, as defined in this Act,
either party may maintain a civil suit as provided in Section 9
or the matter may, by mutual agreement of the parties, be
submitted to a neutral arbitrator to be selected by the parties
and the claim settled in accordance with the rules provided by
the American Arbitration Association. Arbitration costs shall
be paid one-half by the wholesaler and one-half by the brewer.
The award of the arbitrator shall be final and binding on the
parties.
(Source: P.A. 96-482, eff. 8-14-09; 97-1119, eff. 8-27-12.)
Section 99. Effective date. This Act takes effect upon
becoming law.