HOUSE DOCKET, NO. 1319        FILED ON: 1/18/2017

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 183

 

The Commonwealth of Massachusetts

_________________

PRESENTED BY:

Alice Hanlon Peisch

_________________

To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act relative to craft brewers.

_______________

PETITION OF:

 

Name:

District/Address:

Date Added:

Alice Hanlon Peisch

14th Norfolk

1/18/2017

Denise Provost

27th Middlesex

 

Marc T. Lombardo

22nd Middlesex

 

James R. Miceli

19th Middlesex

 

Donald H. Wong

9th Essex

 

Colleen M. Garry

36th Middlesex

 

Brian Murray

10th Worcester

 

Jason M. Lewis

Fifth Middlesex

 

Jay R. Kaufman

15th Middlesex

 

Danielle W. Gregoire

4th Middlesex

 

Ann-Margaret Ferrante

5th Essex

 

Timothy R. Whelan

1st Barnstable

 

Paul J. Donato

35th Middlesex

 

Jennifer L. Flanagan

Worcester and Middlesex

 

Chris Walsh

6th Middlesex

 

William C. Galvin

6th Norfolk

 

Aaron Michlewitz

3rd Suffolk

 

David M. Nangle

17th Middlesex

 

David Paul Linsky

5th Middlesex

 

Sarah K. Peake

4th Barnstable

 

Daniel J. Ryan

2nd Suffolk

 

Kay Khan

11th Middlesex

 

Sal N. DiDomenico

Middlesex and Suffolk

 

Richard J. Ross

Norfolk, Bristol and Middlesex

 

Cory Atkins

14th Middlesex

 

John J. Lawn, Jr.

10th Middlesex

 

Frank I. Smizik

15th Norfolk

 

Bradley H. Jones, Jr.

20th Middlesex

 

Jack Lewis

7th Middlesex

 

Kenneth I. Gordon

21st Middlesex

 

Kate Hogan

3rd Middlesex

 

Mike Connolly

26th Middlesex

 

Marjorie C. Decker

25th Middlesex

 

Angelo L. D'Emilia

8th Plymouth

 

Thomas M. Stanley

9th Middlesex

 

David M. Rogers

24th Middlesex

 

Natalie Higgins

4th Worcester

 

Ruth B. Balser

12th Middlesex

 

Brian M. Ashe

2nd Hampden

 

Bradford R. Hill

4th Essex

 

Cynthia Stone Creem

First Middlesex and Norfolk

2/3/2017

Stephen Kulik

1st Franklin

 

James J. Dwyer

30th Middlesex

 

Steven Ultrino

33rd Middlesex

 

John W. Scibak

2nd Hampshire

 

Jay D. Livingstone

8th Suffolk

 

Paul W. Mark

2nd Berkshire

 

Linda Dorcena Forry

First Suffolk

 

Susan Williams Gifford

2nd Plymouth

 

Sean Garballey

23rd Middlesex

 

Joseph A. Boncore

First Suffolk and Middlesex

 

Byron Rushing

9th Suffolk

 

Todd M. Smola

1st Hampden

 

Lori A. Ehrlich

8th Essex

 

Elizabeth A. Malia

11th Suffolk

 

Jonathan Hecht

29th Middlesex

 

Michael J. Finn

6th Hampden

 

Bruce J. Ayers

1st Norfolk

 

Jeffrey Sánchez

15th Suffolk

 

Daniel Cullinane

12th Suffolk

 

Kimberly N. Ferguson

1st Worcester

 

William L. Crocker, Jr.

2nd Barnstable

 

Nick Collins

4th Suffolk

 


HOUSE DOCKET, NO. 1319        FILED ON: 1/18/2017

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 183

By Ms. Peisch of Wellesley, a petition (accompanied by bill, House, No. 183) of Alice Hanlon Peisch and others relative to small brewers of alcoholic beverages.  Consumer Protection and Professional Licensure.

 

[SIMILAR MATTER FILED IN PREVIOUS SESSION
SEE HOUSE, NO. 245 OF 2015-2016.]

 

The Commonwealth of Massachusetts

 

_______________

In the One Hundred and Ninetieth General Court
(2017-2018)

_______________

 

An Act relative to craft brewers.

 

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1. Chapter 138 of the General Laws is hereby amended by striking out section 25E and inserting in place thereof the following section:

Section 25E. It shall be an unfair trade practice for any manufacturer, winegrower, farmer-brewer, importer or wholesaler of any alcoholic beverages, to refuse to sell, except for good cause shown, any item having a brand name to any licensed wholesaler to whom such manufacturer, winegrower, farmerbrewer, importer or wholesaler has made regular sales of such brand item during a period of six months preceding any refusal to sell.

Any manufacturer, importer or wholesaler shall forward a notice in writing to the wholesaler, to whom it has sold any brand item, prior to discontinuing sales to such wholesaler of such brand item and shall forward a copy of said notice to the commission. The notice of discontinuance of sale shall be furnished by the manufacturer, importer or wholesaler to the wholesaler being discontinued at least 120 days before the effective date of such discontinuance. The notice shall state the specific grounds for such discontinuance. Either party may appeal to the commission for a hearing on the notice of discontinuance and the commission shall make a determination after hearing on the issue of good cause for discontinuance. Upon application by the wholesaler to the commission, the commission shall order the manufacturer, importer or wholesaler giving notice of refusal to sell to continue to make sales in the regular course to such wholesaler pending determination by the commission on the merits of said appeal. The commission shall after notice to all parties and hearing, make a determination on the issue of good cause and grant such relief as may be appropriate under the circumstances. Good cause as used herein shall be limited to the following conduct:

(a) disparagement of the product so as to impair the reputation of the brand owner or the brand name of any product,

(b) unfair preferment in sales effort for brand items of a competitor,

(c) failure to exercise best efforts in promoting the sale of any brand item,

(d) engaging in improper or proscribed trade practices, or

(e) failure to comply with the terms of sale agreed upon between the supplier and wholesaler.

The preceding two paragraphs of this section shall not apply to a small brewer relationship, which may be discontinued as established by contract or through the process described below. For purposes of this paragraph, a small brewer relationship shall mean any relationship between a manufacturer of malt beverages licensed under this chapter, a farmer-brewer licensed under this chapter, or a manufacturer of malt beverages located outside of the Commonwealth that holds a certificate of compliance permitting it to sell malt beverages to wholesalers in this state collectively such manufacturer or farmer-brewer referenced as a supplier below and a wholesaler if  the sales of products to the wholesaler by the supplier do not exceed 20% of the wholesalers total sales in the prior calendar year preceding any refusal to sell. In calculating a suppliers annual global sales and sales to wholesalers, the sales of a controlled group, as such term is defined in 26 U.S.C. 5051(a)(2)(B) or a successor provision, shall count as the sales of a single entity. Any dispute concerning whether a supplier-wholesaler relationship is or is not a small brewer relationship within the meaning of this Section 25E shall be determined by final binding arbitration, which either the supplier or the wholesaler in the relationship may request within thirty (30) days of either party claiming rights under a small brewer relationship. The arbitration shall be conducted in accordance with arbitration process established below. Nothing in this section shall be construed to expand or diminish the rights or obligations established by contract in a small brewer relationship provided, however, that a supplier in a small brewer relationship also may elect at any time to refuse to sell to any wholesaler in accordance with the following paragraph.

To initiate a suppliers non-contractual right to refuse to sell as established under the immediately preceding paragraph, the supplier in a small brewer relationship shall provide the wholesaler with not less than thirty (30) days written notice of the refusal to sell, which written notice shall identify the successor wholesaler who will begin servicing the affected territory (the successor wholesaler). Upon any refusal to sell under this paragraph, the successor wholesaler shall compensate the affected wholesaler in an amount equal to the fair market value of the suppliers distribution rights granted to the wholesaler in the terminated wholesalers territory. Suppliers refusal to sell may take effect following the notice period in suppliers notice, which shall not be less than 30 days, regardless of whether the successor wholesaler has compensated the affected wholesaler. If the successor wholesalers and the affected wholesaler cannot agree to the fair market value compensation due to the affected wholesaler within the thirty (30) days following the suppliers notice of its refusal to sell, either the affected wholesaler or any successor wholesaler may request that the amount of compensation be determined by final binding arbitration conducted in accordance with the arbitration process established below.

Arbitrations under this section shall be conducted before a single impartial arbitrator selected by the parties or, if they cannot agree to an arbitrator within 30 days, selected by the nearest office of the American Arbitration Association or its successor organization. The commercial arbitration rules of the American Arbitration Association or its successor organization shall govern the arbitration. The arbitration proceeding shall conclude not later than 90 days after the date of the notice of intent to arbitrate is transmitted to the other party, unless the parties agree to extend the time by mutual agreement or the arbitrator extends the time for good cause shown. An arbitrators award in any arbitration held pursuant to the immediately preceding paragraph with regard to fair market value shall be monetary only and shall not enjoin or compel conduct. Any arbitration held pursuant to this section shall be in lieu of all other remedies and procedures. The costs of the arbitrator and any other costs of the arbitration shall be equally divided by the parties engaged in the arbitration. Each party shall bear all other expenses related to the arbitration, provided that the arbitrator may award the prevailing party in the dispute as to whether a small brewer relationship exists its costs and reasonable attorneys fees for good cause shown. The arbitrator shall render a written decision not later than 30 days after the conclusion of the arbitration proceeding, unless the parties agree to extend the time by mutual agreement or the arbitrator extends the time for good cause shown. The arbitrators decision shall be final and binding and may be enforced by commencing a civil action in any court of competent jurisdiction. Any party duly notified of an arbitration involving its rights that fails to participate in an arbitration proceeding held pursuant to this paragraph waives all rights it would have had in the arbitration and is considered to have consented to the determination of the arbitrator."

SECTION 2. This Act shall apply to all small brewer relationships existing as of the effective date of this act and all agreements and relationships entered into after the effective date.