Tag archives for “Supplier And Wholesaler Relations”

New California ABC Advisory on Merchandising Services by Suppliers

In December 2014, the California ABC posted a new Industry Advisory about merchandising services. Free services provided by suppliers to retail licensees, such as stocking shelves, pricing inventory, rotating stock, etc., are prohibited things-of-value under California Business & Professions Code sections 25500 and 25502. However, a number of permitted exceptions are separately provided for in Section 25503.2. The Advisory was posted in response to inquiries and complaints about the scope of permissible activity. When ABC receives multiple complaints about impermissible conduct, investigations and license accusations may well follow, so it would be prudent for suppliers to review the scope of permissible merchandising activities. Permitted activity varies depending on the type of retailer and the products involved so we created a simple chart below to help keep it straight.

Note that in all cases, any merchandising activities can only be done with the retailer’s permission. In no case can a supplier move the inventory of another supplier, except for “incidental touching” to access the space allocated to the licensee providing the merchandising service. Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2015 · All Rights Reserved ·

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New North Carolina Beer Franchise Act Now Effective

Revisions to the North Carolina malt beverages franchise act became effective yesterday when the Governor signed Senate Bill 745. Last year’s similar bill was stalled after brewers took issues with some of the terms. Senate Bill 745 is a compromise bill that passed the legislature with wide margins. Among the changes, the new law explicitly states that the meaning of “good cause” for termination purposes cannot be modified from the definition set forth in North Carolina law; however, there is a provision in the law that allows brewers that obtain self-distribution approval from the North Carolina Alcoholic Beverage Control Commission to terminate a wholesaler franchise relationship without good cause if “fair market value for the distribution rights for the affected brand” is paid to the wholesaler. Fair market value is determined not as an average price, but must be “highest dollar amount at which a seller would be willing to sell and a buyer willing to buy.” See Senate Bill 745, § 18B-1305(a1). The bill also revises what constitutes good cause, what factors a supplier may consider when approving an assignment, transfer or merger of a wholesaler, treatment of brand extensions, and prohibited acts by suppliers. The new law also introduces a mandatory mediation requirement. If a dispute arises among a supplier and a wholesaler that is likely to lead to litigation, then the North Carolina Alcoholic Beverage Control Commission can require the parties to submit to mediation in an effort to resolve the dispute. This requirement may arise solely by the initiative of the Commission, or either party to the dispute may request that the Commission mandate the mediation. See Senate Bill 745, § 18B-1309. This new provision makes North Carolina one of the few states with laws on mediation for resolution of conflicts between beer suppliers and wholesalers. California and Maryland are the only other two states that discuss mediation in their beer franchise acts. See Cal. Bus & Prof. Code § 25000.2; Md. Code Ann. § 21-103. It remains imperative for suppliers to review a state’s laws and regulations when entering into a distribution agreement and also to give oneself enough time for review and negotiation of the agreement, especially in light of the fact that states like North Carolina are further restricting the ability of suppliers and wholesalers to contract around franchise act laws. For more information about distribution agreements and franchise acts, please see our prior post available here or feel free to contact an attorney at Strike & Techel. Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2012 · All Rights Reserved ·

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