SENATE DOCKET, NO. 1687        FILED ON: 1/20/2017

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 136

The Commonwealth of Massachusetts

_________________

PRESENTED BY:

Barbara A. L'Italien

_________________

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 restoring contract rights to craft brewers.

_______________

PETITION OF:

SENATE DOCKET, NO. 1687        FILED ON: 1/20/2017

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 136

The Commonwealth of Massachusetts

_______________

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

_______________

An Act restoring contract rights 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, as appearing in the 2014 Official Editionis hereby amended by striking out section 25E, and inserting in place thereof the following section:

Section 25E. (a) Refusal to sell brand name alcoholic beverages to wholesalers as unfair trade practice; exception for good cause; discontinuance notice and procedure.  It shall be an unfair trade practice and therefore unlawful 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 one hundred and twenty 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:

(1) disparagement of the product so as to impair the reputation of the brand owner or the

brand name of any product,

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

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

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

(5) failure to comply with the terms of sale agreed upon between the supplier and

wholesaler.

(b)Subsection (a) shall not apply to 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 “malt beverage supplier” below) and a wholesaler licensed under this Chapter.  Regardless of whether or not the parties have entered into a written agreement, relationships between a malt beverage supplier and a wholesaler shall be governed by the parties’ agreement, the law of contracts, and/or other generally-applicable provisions and principles of commercial law.  Any dispute concerning whether a malt beverage supplier-wholesaler relationship is governed by this subsection shall not be determined by the commission, provided that if a competent judicial or arbitral forum concludes that a relationship is not governed by this subsection then the dispute shall proceed before the commission in accordance with subsection (a). 

SECTION 2.  This Act shall apply to all relationships existing as of its effective date, and all agreements and relationships entered into after its effective date.

SECTION 3.  This Act shall take effect immediately upon its passage.