Fiscal Note - SB 0385 - Provides Procedures and Obligations in Agreements Between Beer Brewers and Wholesalers
L.R. NO. 1452-01
BILL NO. SB 385
SUBJECT: Alcohol
TYPE: Original
DATE: February 21, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
None
Total Estimated
Net Effect on All
State Funds $0 $0 $0
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
None
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Local Government
FISCAL ANALYSIS
ASSUMPTION
The Department of Public Safety, Division of Liquor Control assumes this
proposal would not fiscally impact their agency.
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
(10 Mo.)
0 0 0
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
(10 Mo.)
0 0 0
FISCAL IMPACT - Small Business
This proposal would protect beer wholesalers from brewers cancelling
contracts without cause; therefore, it would have a positive economic impact
on wholesalers.
DESCRIPTION
This proposal would prohibit brewers from terminating or refusing to renew
any agreement with a wholesaler for the purchase and distribution of beer
unless the brewer provides written notice pursuant to certain procedures and
acts in good faith and with good cause. The proposal provides several
exemptions to the written notice provision. It would also prohibit brewers
from requiring certain contractual provisions and require brewers to assign
brand extensions to the same wholesaler that has the exclusive sales
territory for the underlying brand.
The legislation limits brewers' ability to control stock or ownership of
wholesalers, contains penalties for wrongful termination of an agreement with
wholesalers, provides for a process to resolve disputes, prohibits brewers
from controlling the price at which wholesalers sell alcoholic beverages, and
prohibits brewers from requiring changes in the personnel of any wholesaler.
It obligates the purchaser of a brewery to honor the terms of the predecessor
brewer's pending agreements and states that brewers or wholesalers cannot
inhibit the right of free association.
This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space.
SOURCES OF INFORMATION
Department of Public Safety
Division of Liquor Control
This Fiscal Note is not an official copy and should not be quoted or cited.