Virginia Considers Altering Franchise Provisions

House Bill 910 would exempt the purchase of a brewery that manufactures less than 5,000 barrels of beer per year from the requirement that the purchaser become obligated to all of the terms and conditions of the selling brewery’s agreements with distributors in effect on the date of purchase. The bill reduces from 90 to 45 the number of days in which a brewery must provide a wholesaler prior written notice of any intent to amend, terminate, cancel, or not renew any agreement. The bill reduces from 60 to 30 the number of days in which a wholesaler may attempt to rectify the condition or conditions that led the brewery to provide notice of its intent to amend, terminate, cancel, or not renew the agreement. The bill reduces from 90 to 45 the number of days in which a panel of three arbitrators have to render a decision as to the amount of reasonable compensation a brewery must pay to a wholesaler for the value of an agreement that has been amended, terminated, canceled, or not renewed. The bill provides that in the event that the brewery involved in the arbitration manufactures less than 5,000 barrels of beer per year, the percentage of the total arbitration costs to be paid by the brewery shall equal the ratio of the brewery’s annual sales to the wholesaler to the wholesaler’s annual beer purchases. Current law requires that the costs of the arbitration in all situations be paid one-half by the wholesaler and one-half by the brewery.

Links

  1. House Bill 910

Pete Johnson serves as the State & Regulatory Affairs Manager for the Brewers Association. He joined the BA at its inception in 2005, having previously worked as Programs Director for the Brewers Association of America. Before coming to the small brewing industry in 2001, Pete worked for 14 years with both state and federal elected officials in Pennsylvania and Washington, D.C.

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