An Act To Assist Small Beer Manufacturers
Sec. 1. 28-A MRSA §2, sub-§2-B is enacted to read:
Sec. 2. 28-A MRSA §2, sub-§29, as amended by PL 1993, c. 730, §12, is further amended to read:
Sec. 3. 28-A MRSA §2, sub-§29-C is enacted to read:
Sec. 4. 28-A MRSA §1355-A, sub-§3, ¶¶A and B, as enacted by PL 2011, c. 629, §22, are amended to read:
(1) Upon application by a holder of a small brewery license whose brewery that has produced malt liquor in an amount that exceeds 50,000 gallons 30,000 barrels in one year, the bureau may renew that holder's small brewery license for only one additional year.
(2) A holder of a small brewery license may sell or deliver its products to licensed retailers or wholesalers. The licensee may sell, on the premises for consumption off the premises, malt liquor produced at the licensed premises by the bottle, by the case or in bulk to licensed retailers, including, but not limited to, off-premises retail licensees, restaurants and clubs. Notwithstanding section 1361, the holder of a small brewery license may sell its products directly to a retail licensee under this paragraph without selling to a wholesale licensee.
Sec. 5. 28-A MRSA §1455, sub-§1, as enacted by PL 1987, c. 45, Pt. A, §4, is amended to read:
Sec. 6. 28-A MRSA §1457, as enacted by PL 1987, c. 45, Pt. A, §4, is amended to read:
§ 1457. Compensation
(1) The small beer manufacturer amends, cancels, terminates, refuses to continue, refuses to renew or causes the wholesale licensee to resign from an agreement, unless for good cause shown, as described in section 1454, or the small beer manufacturer unreasonably withholds its consent to any assignment, transfer or sale of a wholesale licensee's business; and
(2) During the 12-month period immediately preceding the date on which the small beer manufacturer provides the wholesale licensee with written notice of the small beer manufacturer's intent to amend, cancel, terminate, refuse to continue, refuse to renew or cause the wholesale licensee to resign from an agreement, if required under section 1455, or the small beer manufacturer unreasonably withholds its consent to any assignment, transfer or sale of the wholesale licensee's business, the wholesale licensee's total number of case purchases as computed in 24 12-ounce-equivalent units of the terminated brand or brands of the small beer manufacturer that are distributed by the wholesale licensee represents no more than 3% of the wholesale licensee's total number of case purchases as computed in 24 12-ounce-equivalent units of all of the brands of certificate of approval holders, including, without limitation, the terminated brand or brands of the small beer manufacturer, that are distributed by the wholesale licensee.
The fair market value of the wholesale licensee's business related to the terminated brand or brands of the small beer manufacturer includes inventory and other tangible assets and its goodwill.
(1) The wholesale licensee's total gross profits with respect to the terminated brand or brands of the small beer manufacturer during the 12-month period described in paragraph A if the wholesale licensee's total gross profits with respect to the terminated brand or brands of the small beer manufacturer during the 12-month period described in paragraph A are equal to or less than that wholesale licensee's total gross profits with respect to the terminated brand or brands of the small beer manufacturer during the 12-month period immediately preceding the 12-month period described in paragraph A; or
(2) Twice the wholesale licensee's total gross profits with respect to the terminated brand or brands of the small beer manufacturer during the 12-month period described in paragraph A if the wholesale licensee's total gross profits with respect to the terminated brand or brands of the small beer manufacturer during the 12-month period described in paragraph A are greater than that wholesale licensee's total gross profits with respect to the terminated brand or brands of the small beer manufacturer during the 12-month period immediately preceding the 12-month period described in paragraph A.
(1) If the small beer manufacturer is a small brewery, sell the terminated brand or brands of the small beer manufacturer directly to retail licensees in the terminated wholesale licensee's territory under section 1355-A without selling the brand or brands to a wholesale licensee;
(2) Appoint one or more new wholesale licensees to sell the terminated brand or brands of the small beer manufacturer in all or any portion of the terminated wholesale licensee's territory; or
(3) Take any combination of actions described in subparagraphs (1) and (2), if applicable.
summary
This bill changes the definition of "small brewery" by increasing the amount of malt liquor a small brewery may brew from 50,000 gallons to 30,000 barrels per year. It defines a "small beer manufacturer" as a small brewery or out-of-state brewer that is brewing, lagering and kegging, bottling or packaging its own malt liquor, not to exceed 30,000 barrels per year. If a small beer manufacturer terminates its distribution relationship with a wholesale licensee, unless for good cause, causes a wholesale licensee to resign from an agreement, unless for good cause, or unreasonably withholds its consent to any assignment, transfer or sale of a wholesale licensee's business and that small beer manufacturer's brands make up no more than 3% of the wholesale licensee's business, the bill sets the maximum amount of the termination fee that the wholesale licensee is entitled to receive from that small beer manufacturer in connection with the termination. The bill amends the laws governing certain notice requirements that the small beer manufacturer must satisfy in connection with the termination, provides expedited arbitration proceedings for a small beer manufacturer and a wholesale licensee in connection with a dispute regarding the amount of the termination fee and provides that, regardless of whether the terminated wholesale licensee has received payment of the termination fee from the small beer manufacturer, upon written notice of the termination to the wholesale licensee, the small beer manufacturer may appoint a new wholesale licensee to distribute the relevant products in the terminated wholesale licensee's territory or, if the small beer manufacturer is a small brewery, sell the terminated brand or brands of the small beer manufacturer directly to retail licensees in the terminated wholesale licensee's territory without selling the brand or brands to a wholesale licensee. Lastly, this bill allows a wholesale licensee and a small beer manufacturer to agree upon or limit the amount of a termination fee pursuant to a distribution agreement as long as that termination fee does not exceed the maximum amount of the termination fee, as set forth in the bill.