North Carolina Revamps Beer Franchising Laws
By Sarah Miller
On Thursday, May 24, 2012, the North Carolina Senate ratified S 745, a controversial beer distributorship bill that has been debated for over a year in the North Carolina Legislature. The bill, which would alter the decades-old beer distribution regulatory scheme in North Carolina, prohibits suppliers from engaging in price discrimination between wholesalers, except in very limited circumstances. Suppliers may discriminate in servicing retailers, however.
The bill also restricts suppliers' freedom to contract with distributors. A beer supplier cannot alter or terminate a franchise agreement without good cause, and, under the bill, the meaning of "good cause" may not be modified by contract. Plus, if a supplier wrongfully terminates a franchise agreement, he may be liable for monetary damages in addition to injunctive relief. The ratified version of S 745 is more supplier-friendly than previous drafts of the bill, which elicited energetic opposition from numerous major brewers. WRAL.com notes that, after the bill passed the house in a near-unanimous (113-1) vote on Wednesday, legislators attended "The Growler" - an annual event hosted by The North Carolina Beer and Wine Wholesalers. Now that the Senate has ratified S 745, all that remains is for Governor Perdue to sign it into law.
The bill also restricts suppliers' freedom to contract with distributors. A beer supplier cannot alter or terminate a franchise agreement without good cause, and, under the bill, the meaning of "good cause" may not be modified by contract. Plus, if a supplier wrongfully terminates a franchise agreement, he may be liable for monetary damages in addition to injunctive relief. The ratified version of S 745 is more supplier-friendly than previous drafts of the bill, which elicited energetic opposition from numerous major brewers. WRAL.com notes that, after the bill passed the house in a near-unanimous (113-1) vote on Wednesday, legislators attended "The Growler" - an annual event hosted by The North Carolina Beer and Wine Wholesalers. Now that the Senate has ratified S 745, all that remains is for Governor Perdue to sign it into law.
