Bill Text: IN SB0244 | 2010 | Regular Session | Amended
Bill Title: Alcoholic beverage wholesalers.
Spectrum: Partisan Bill (Republican 4-0)
Status: (Introduced - Dead) 2010-02-01 - Amendment 2 (Merritt), prevailed; Roll Call 84: Yeas 32, Nays 14 [SB0244 Detail]
Download: Indiana-2010-SB0244-Amended.html
Citations Affected: IC 7.1-3.
Synopsis: Alcoholic beverage wholesalers. Allows a beer and wine
wholesaler to wholesale liquor, if: (1) the liquor primary source of
supply has been the wholesaler's primary source of supply for wine for
at least two years; and (2) the brand of liquor that the beer wholesaler
intends to wholesale has not been distributed in the state for more than
two years immediately preceding the first sale of the liquor to the
holder of the beer wholesaler's permit. Provides that if a primary source
of supply terminates or reduces a liquor or wine wholesaler's
distribution rights of a brand, the wholesaler that receives the
distribution rights (successor wholesaler) must compensate the
terminated wholesaler for the fair market value of the lost distribution
rights, less any amount paid to the original wholesaler by the primary
source of supply for the distribution rights to the discontinued brand.
Provides that unless otherwise agreed to by the parties, if the successor
wholesaler does not compensate the terminated wholesaler within a
specified period of time, either party may submit the matter to
arbitration.
Effective: Upon passage.
January 11, 2010, read first time and referred to Committee on Commerce, Public Policy
& Interstate Cooperation.
January 28, 2010, amended, reported favorably _ Do Pass.
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A BILL FOR AN ACT to amend the Indiana Code concerning
alcohol and tobacco.
(b) A beer wholesaler permittee may possess, transport, sell, and deliver beer to:
(1) another beer wholesaler authorized by the brewer to sell the brand purchased;
(2) an employee; or
(3) a holder of a beer retailer's permit, beer dealer's permit, temporary beer permit, dining car permit, boat permit, airplane permit, or supplemental caterer's permit;
located within this state. The sale, transportation, and delivery of beer
shall be made only from inventory that has been located on the
wholesaler's premises before the time of invoicing and delivery.
(c) The beer wholesaler's bona fide regular employees may purchase
beer from the wholesaler in:
(1) bottles, cans, or any other type of permissible containers in an
amount not to exceed forty-eight (48) pints; or
(2) one (1) keg;
at any one (1) time.
(d) The importation, transportation, possession, sale, and delivery
of beer shall be subject to the rules of the commission and subject to
the same restrictions provided in this title for a person holding a
brewer's permit.
(e) The holder of a beer wholesaler's permit may purchase, import,
possess, transport, sell, and deliver any commodity listed in
IC 7.1-3-10-5, unless prohibited by this title. However, a beer
wholesaler may deliver flavored malt beverages only to the holder of
one (1) of the following permits:
(1) A beer wholesaler or wine wholesaler permit, if the wholesaler
is authorized by the primary source of supply to sell the brand of
flavored malt beverage purchased.
(2) A wine retailer's permit, wine dealer's permit, temporary wine
permit, dining car wine permit, boat permit, airplane permit, or
supplemental caterer's permit.
(f) A beer wholesaler may:
(1) store beer for an out-of-state brewer described in IC 7.1-3-2-9
and deliver the stored beer to another beer wholesaler that the
out-of-state brewer authorizes to sell the beer;
(2) perform all necessary accounting and auditing functions
associated with the services described in subdivision (1); and
(3) receive a fee from an out-of-state brewer for the services
described in subdivisions (1) through (2).
(g) As used in this subsection, "brand" means any word, name,
group of letters, symbols, or combination, including the name of a
primary source of supply, if the name of the primary source of
supply is also a significant part of the product name, adopted and
used by a primary source of supply to identify a specific liquor
product and to distinguish that liquor product from other liquor
products. All package, size, flavor, and other variations bearing the
unique brand name are part of the brand. Notwithstanding any
other provision of this title to the contrary, the holder of a beer
wholesaler's permit may purchase and import liquor from a
primary source of supply and possess liquor and sell liquor at
wholesale, if:
(1) the primary source of supply or any subsidiary or affiliate
of the primary source of supply for liquor has been a primary
source of supply for wine to the holder of the beer
wholesaler's permit for at least two (2) years before selling
liquor to the holder of the beer wholesaler's permit; and
(2) the brand or brands of liquor that the holder of the beer
wholesaler's permit intends to wholesale have not been
distributed in the state for more than two (2) years
immediately preceding the first sale of the liquor to the holder
of the beer wholesaler's permit.
Chapter 25.5. Compensation for Transfer of Liquor and Wine Wholesaler Distribution Rights
Sec. 1. This chapter applies to an action taken by a primary source of supply under section 12 of this chapter on or after April 1, 2010, even if notice of the action occurs before April 1, 2010.
Sec. 2. As used in this chapter, "brand" means any word, name, group of letters, symbols, or combination, including the name of a primary source of supply, if the name of the primary source of supply is also a significant part of the product name, adopted and used by a primary source of supply to identify:
(1) a specific liquor product and to distinguish that liquor product from other liquor products; or
(2) a specific wine product and to distinguish that wine product from other wine products.
All package, size, flavor, and other variations bearing the unique brand name are part of the brand.
Sec. 3. As used in this chapter, "discontinued brand" means, with respect to a terminated wholesaler, any brand for which a primary source of supply has taken any of the actions described in section 12 of this chapter.
Sec. 4. As used in this chapter, "distribution rights" means the rights of a wholesaler to:
(1) purchase products bearing a brand from a primary source of supply; and
(2) sell the products at wholesale in Indiana under an agreement with a primary source of supply that is written, oral, or by course of dealing.
Sec. 5. As used in this chapter, "liquor wholesaler" means the
holder of a liquor wholesaler's permit.
Sec. 6. As used in this chapter, "primary source of supply"
includes any successor primary source of supply.
Sec. 7. As used in this chapter, "successor primary source of
supply" means a primary source of supply that obtains, in any
manner from any person, including a person who is not a primary
source of supply, the rights to a brand that a wholesaler has
distributed in Indiana under an agreement that is written, oral, or
by course of dealing with another primary source of supply who
previously had the rights to serve as the primary source of supply
for the brand.
Sec. 8. As used in this chapter, "successor wholesaler" means
any wholesaler that:
(1) enters into an agreement that is written, oral, or by course
of dealing to obtain a supply of a brand from a primary
source of supply after the primary source of supply has taken
any of the actions described in section 12 of this chapter; or
(2) has assumed or acquired in any manner all or part of the
distribution rights for a discontinued brand lost by a
terminated wholesaler.
Sec. 9. As used in this chapter, "terminated wholesaler" means
a wholesaler whose distribution rights are reduced or terminated
as set forth in section 12 of this chapter.
Sec. 10. As used in this chapter, "wholesaler" means a liquor
wholesaler or a wine wholesaler.
Sec. 11. As used in this chapter, "wine wholesaler" means the
holder of a wine wholesaler's permit.
Sec. 12. A primary source of supply that:
(1) terminates, cancels, or fails to renew a wholesaler's
distribution rights for a brand in whole or in part;
(2) reduces the territory of a wholesaler's distribution rights
for a brand;
(3) grants to another wholesaler all or part of the distribution
rights for a brand in all or part of the wholesaler's territory;
or
(4) otherwise fails to reappoint a wholesaler as a wholesaler
for a brand with all of the distribution rights of that
wholesaler for the brand;
is subject to this chapter.
Sec. 13. (a) Subject to sections 15 and 18 of this chapter, a
successor wholesaler shall compensate a terminated wholesaler for
the fair market value of the terminated wholesaler's distribution
rights to any discontinued brand, as determined under section 14
of this chapter, assumed by the successor wholesaler for the same
territory, less any amount paid to the terminated wholesaler by the
primary source of supply for the distribution rights to the
discontinued brand assumed by the successor wholesaler.
(b) If the terminated wholesaler's distribution rights to any
discontinued brand are divided among two (2) or more successor
wholesalers, each successor wholesaler shall compensate the
terminated wholesaler for the fair market value of the distribution
rights to any discontinued brand assumed by that successor
wholesaler, as determined under section 14 of this chapter, for the
applicable part of the same territory, less any amount paid to the
terminated wholesaler by the primary source of supply for
distribution rights to the discontinued brand assumed by the
successor wholesaler.
Sec. 14. The fair market value of the terminated wholesaler's
lost distribution rights to any discontinued brand is equal to the
fair market value of the terminated wholesaler's lost distribution
rights that would have been ascribed to the terminated
wholesaler's lost distribution rights for the brand in an arm's
length transaction entered into without duress or threat of
termination of the terminated wholesaler's distribution rights.
Sec. 15. A terminated wholesaler and a successor wholesaler
shall negotiate in good faith. If a terminated wholesaler and a
successor wholesaler agree to a fair market value of the terminated
wholesaler's distribution rights to any discontinued brand of liquor
or wine assumed by the successor wholesaler for the same
territory, the successor wholesaler shall pay the agreed upon sum
to the terminated wholesaler not later than thirty (30) days after
the date on which the parties reach an agreement.
Sec. 16. (a) This section applies if the parties cannot agree on the
compensation due the terminated wholesaler not later than thirty
(30) days after the terminated wholesaler receives notice of the loss
of the distribution rights for the discontinued brand.
(b) Unless otherwise agreed to by the terminated wholesaler and
successor wholesaler, upon written demand of either party, the
parties shall submit their dispute for binding arbitration under the
Commercial Arbitration Rules then in effect of the American
Arbitration Association or its successor in interest, to the extent
that the rules are not inconsistent with the provisions of this
chapter.
(c) Unless otherwise agreed to by the terminated wholesaler and
the successor wholesaler, the demand for arbitration for either
party shall be sent to the other party not later than sixty (60) days
after the terminated wholesaler receives notice of the loss of the
distribution rights for a discontinued brand.
Sec. 17. (a) The arbitration shall be conducted in a city in
Indiana that:
(1) has a population of more than fifty thousand (50,000); and
(2) is the closest to the location of the principal office or the
primary warehouse of the terminated wholesaler in Indiana.
(b) Unless otherwise agreed to by the terminated wholesaler and
successor wholesaler, the arbitration shall be conducted before one
(1) impartial arbitrator selected by the American Arbitration
Association.
(c) The arbitration shall be conducted on an expedited basis to
the extent an expedited proceeding is available.
Sec. 18. If the arbitrator awards compensation to the terminated
wholesaler, the successor wholesaler shall pay the awarded
compensation to the terminated wholesaler not later than thirty
(30) days after the date of the arbitrator's decision.
Sec. 19. Except as provided in section 21 of this chapter, the
terminated wholesaler and successor wholesaler shall each pay:
(1) its own fees and expenses incurred in connection with the
arbitration; and
(2) an equal share of the direct costs of the arbitration.
Sec. 20. The terminated wholesaler and the successor wholesaler
are considered to have consented to the determination of the
arbitrator. The decision of the arbitrator is final and binding on
the parties, and judgment may be entered in accordance with
applicable law in any court having jurisdiction.
Sec. 21. If the terminated wholesaler does not receive full
payment of the compensation under section 13 or 18 of this chapter
not later than thirty (30) days after the date of the settlement
agreement or arbitration award, the terminated wholesaler is
entitled to recover from the successor wholesaler all fees, costs, and
expenses, including reasonable attorney's fees paid or incurred in
connection with:
(1) the arbitration proceeding, including fees and costs of the
arbitrator; and
(2) any legal action brought to receive the payment of the
compensation under section 13 or 18 of this chapter.
Sec. 22. This chapter shall not be construed to limit or prohibit
good faith settlements voluntarily entered into by a terminated
wholesaler and a successor wholesaler.
