*** Update: The Oklahoma County District Court has ruled that Senate Bill 608 violates the Oklahoma Constitution. The new law, which was set to go into effect on August 29, 2019, would have required the top 25 wine and spirits brands sold in Oklahoma to be made available for distribution by all Oklahoma distributors. As a result of the Court’s finding, manufacturers of Oklahoma’s top selling alcoholic beverages retain the right to choose their own distributors. However, an appeal of the District Court’s ruling could be filed. ***
Oklahoma Governor Kevin Stitt recently signed Senate Bill 608 into law, mandating that as of August 29, 2019, suppliers of the top 25 wine and spirits brands must make their products available to all licensed Oklahoma distributors. The top 25 brands will be determined by total sales over the preceding twelve-month period.
Since October 2018, wine and spirits manufacturers have been allowed to enter exclusivity agreements with Oklahoma distributors. Prior to that time, wine and spirits manufacturers were required to make products available to all distributors in Oklahoma. The change was brought about by State Question Number 792, approved by voters in 2016, which amended the Oklahoma Constitution to permit the sale of cold, strong beer in liquor stores and to allow distributors to obtain sole distribution rights. Although the law allowing wine and spirits brands to be distributed exclusively by one Oklahoma distributor has been in effect for less than a year, smaller Oklahoma distributors and some Oklahoma retailers argued that the new distribution system was detrimental to their businesses. Senate Bill 608 purports to even the playing field and remedy the alleged business disadvantage to smaller distributors by mandating that top-selling products be made available to all distributors within the state. Opponents of Senate Bill 608 contend that the legislation runs afoul of the voter-approved constitutional amendment, because it is manufacturers’ right to choose their own distributors.
It is possible that the provisions of Senate Bill 608 will be challenged in the courts. But for now, it appears that suppliers of top wine and spirits brands in Oklahoma must again navigate a revised distribution system, beginning at the end of August.
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