Bill Text: NC S130 | 2011-2012 | Regular Session | Introduced
Bill Title: Wine Distribution Territories
Spectrum: Slight Partisan Bill (Republican 15-5)
Status: (Passed) 2011-05-12 - Ch. SL 2011-73 [S130 Detail]
Download: North_Carolina-2011-S130-Introduced.html
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2011
S D
SENATE DRS95018-MA-98 (02/02)
|
Short Title: Wine Distribution Territories. |
(Public) |
|
|
Sponsors: |
Senators Brown, Allran, and Blue (Primary Sponsors). |
|
|
Referred to: |
|
|
A BILL TO BE ENTITLED
AN ACT to preserve the three‑tier distribution system for wine in north carolina, to prohibit a wine wholesaler from distributing wine beyond its designated sales territory, and to confirm that good cause for the termination of a wine franchise does not include a supplier's desire to consolidate its franchise or distribution pattern.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 18B‑1200(b) reads as rewritten:
"(b) The underlying purposes and policies of the Article are:
(1) To promote the compelling interest of the public in
fair business relations between wine wholesalers and wineries, and in the
continuation of wine wholesalerships on a fair basis;basis.
(2) To protect wine wholesalers against unfair
treatment by wineries;wineries.
(3) To provide wine wholesalers with rights and
remedies in addition to those existing by contract or common law; andlaw.
(4) To govern all wine wholesalerships, including any renewals or amendments, to the full extent consistent with the Constitution of this State and the United States.
(5) To promote and maintain a sound, stable, and viable three‑tier system of distribution of wine to the public."
SECTION 2. G.S. 18B‑1201(2) reads as rewritten:
"(2) "Territory" or "sales territory"
means the area of primary sales responsibility expressly or implicitly
designated by any agreement between any wine wholesaler and winery for a brand
offered by any winery. The term "area of primary sales responsibility"
may not be construed as restricting sales or sales efforts by any wine
wholesaler attempting to sell wines within any designated sales territory."
SECTION 3. G.S. 18B‑1203 reads as rewritten:
"§ 18B‑1203.
Primary area of responsibility.responsibility; no discrimination.
(a) Each agreement shall designate a the sales
territory of the wholesaler. No winery may enter into more than one agreement
for each brand of wine or beverage it offers in any territory unless the
Commission, using the standards of G.S. 18B‑1204(4), orders
otherwise. Territories served by a wine wholesaler on March 21, 1983, are
designated sales territories within the meaning of this section. Within 30 days
of the effective date of this Article, each winery shall notify the Commission
in writing of all designations of sales territories as of March 21, 1983.territory.
A wholesaler shall not distribute any brand of wine to a retailer whose
premises are located outside the territory designated in the wholesaler's
agreement for that brand. With the approval of the Commission, a wholesaler may
distribute wine outside the wholesaler's designated territory during periods of
temporary service interruption, when requested to do so by the winery and the
wholesaler whose service is interrupted. Unless the winery and wine wholesaler
agree otherwise in writing, the territory designated as the wholesaler's "area
of primary sales responsibility" as of the effective date of this section
shall be the wholesaler's designated sales territory. Redesignations of
sales territories occurring after March 21, 1983,the effective
date of this section shall be reported to the Commission within 30 days. No
provisions of this Article, however, may prohibit the continuation of a multi‑wholesaler
agreement entered into before March 21, 1983, as between the winery and the
original wine wholesalers thereto.thereto, provided, that upon
termination of any such agreement the affected territory shall be designated
for a single wholesaler.
(b) This section may not be construed as
restricting sales or sales efforts by any wine wholesaler attempting to sell
wines within any designated sales territory. A wholesaler shall service
all retail permit holders within its designated territory without
discrimination and shall make a good faith effort to make available to each
retail permit holder in the territory each brand of wine that the wholesaler
has been authorized to distribute in that area."
SECTION 4. G.S. 18B‑1204 reads as rewritten:
"§ 18B‑1204. Cancellation.
Notwithstanding the terms, provisions, or conditions of any
agreement, no winery may amend, cancel, terminate, or refuse to continue to
renew any agreement, or cause a wholesaler to resign from an agreement, unless
good cause exists for amendment, termination, cancellation, nonrenewal,
noncontinuation, or resignation. "Good cause" does not include a
change in ownership of a winery.winery, or the desire of a winery to
consolidate its franchises or its distribution patterns without demonstrating a
failure of the wholesaler to effectively market or distribute its product. "Good
cause" does include:
(1) Revocation of the wholesaler's permit or license to do business in this State;
(2) Bankruptcy or receivership of the wholesaler;
(3) Assignment for the benefit of creditors or similar disposition of the assets of the wholesaler; or
(4) Failure of the wholesaler to comply substantially, without reasonable excuse or justification, with any reasonable and material requirement imposed upon him by the winery, including a substantial failure by a wine wholesaler to:
a. Maintain a sales volume of the brands offered by the winery, or
b. Render services comparable in quality, quantity, or volume to the sales volumes maintained and services rendered by other wholesalers of the same brands within the State.
In any determination as to whether a wholesaler has failed to comply substantially, without reasonable excuse or justification, with any reasonable and material requirement imposed upon him by the winery, consideration shall be given to the relative size, population, geographical location, number of retail outlets, demand for the products applicable to the territory of the wholesaler in question and to comparable territories, and any reasonable sales quota set by the agreement. The burden of proving good cause for amendment, termination, cancellation, nonrenewal, noncontinuation, or resignation is on the winery."
SECTION 5. If any provision of this act or its application is held invalid, the invalidity does not affect other provisions or applications of this act that can be given effect without the invalid provisions or application, and to this end the provisions of this act are severable.
SECTION 6. This act is effective when it becomes law, and its provisions shall apply to all existing franchise agreements. A winery's shipment of wine to a wholesaler in North Carolina following the effective date of this act shall constitute acceptance by the winery of the terms of this act, which shall be considered incorporated into the agreement between the winery and wholesaler.
