Full Text of SB1282 96th General Assembly
SB1282enr 96TH GENERAL ASSEMBLY
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| AN ACT concerning business.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Liquor Control Act of 1934 is amended by | 5 |
| changing Section 6-9 as follows:
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| (235 ILCS 5/6-9) (from Ch. 43, par. 126)
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| Sec. 6-9.
Registration of trade marks; sale within | 8 |
| geographical area;
delivery to authorized persons. The | 9 |
| Legislature hereby finds and declares
that for purposes of
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| ensuring the preservation and enhancement of interbrand | 11 |
| competition in
the alcoholic liquor industry within the State, | 12 |
| ensuring that importation
and distribution of alcoholic liquor | 13 |
| in the State will be subject to
thorough and inexpensive | 14 |
| monitoring by the State, reducing the
importation of illicit or | 15 |
| untaxed alcoholic liquor into the State,
excluding misbranded | 16 |
| alcoholic liquor products from the State,
providing incentives | 17 |
| to distributors to service and sell to larger
numbers of retail | 18 |
| licensees in the geographic area where such
distributors are | 19 |
| engaged in business, and reducing the amount of
spoiled and | 20 |
| overaged alcoholic liquor products sold to consumers,
it is | 21 |
| necessary to restrict the purchase of alcoholic liquors at
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| wholesale in the State to those persons selected by the | 23 |
| manufacturer,
distributor, importing distributor or foreign |
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| importer who owns or
controls the trade mark, brand or name of | 2 |
| the alcoholic liquor
products sold to such persons, and to | 3 |
| restrict the geographic area
or areas within which such persons | 4 |
| sell such alcoholic liquor at
wholesale, as provided in this | 5 |
| Section.
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| Each manufacturer, non-resident dealer, distributor, | 7 |
| importing distributor,
or
foreign importer who owns or controls | 8 |
| the trade mark, brand or name of
any alcoholic liquor shall | 9 |
| register with the State Commission, in the Chicago
office, on | 10 |
| or before the effective date, the name
of each person to whom | 11 |
| such manufacturer, non-resident dealer, distributor,
importing
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| distributor, or foreign importer grants the right to sell at | 13 |
| wholesale
in this State any such alcoholic liquor, specifying | 14 |
| the particular trade
mark, brand or name of alcoholic liquor as | 15 |
| to which such right is
granted, the geographical area or areas | 16 |
| for which such right is granted
and the period of time for | 17 |
| which such rights are granted to such person.
Each | 18 |
| manufacturer,
non-resident dealer, distributor or importing | 19 |
| distributor, or foreign
importer who is required to register | 20 |
| under this Section must furnish a copy
of the registration | 21 |
| statement at the time of appointment to the person who has
been | 22 |
| granted the right to sell alcoholic liquor at wholesale. | 23 |
| However, if a
person who has been appointed the right to sell | 24 |
| alcoholic liquor at wholesale
does not receive a copy of the | 25 |
| registration statement as required under this
Section, such | 26 |
| person may file a registration statement with the State
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| Commission, provided that the person furnishes a copy of that | 2 |
| registration
statement to the manufacturer, non-resident | 3 |
| dealer, distributor, importing
distributor, or foreign | 4 |
| importer within 30 days of filing the registration
statement. | 5 |
| The registration statement shall state:
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| (1) the name of the person appointed;
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| (2) the name of the manufacturer, non-resident dealer, | 8 |
| distributor,
importing distributor, or foreign importer from | 9 |
| whom the person received the
right to sell alcoholic liquor;
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| (3) the particular trade mark, brand, or name of alcoholic | 11 |
| liquor
as
to
which the right to sell at wholesale is granted; | 12 |
| and
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| (4) the geographical areas for which the right to sell at
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| wholesale
is
granted.
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| Such manufacturer, non-resident dealer, distributor, | 16 |
| importing distributor,
or
foreign
importer may grant the right | 17 |
| to sell at wholesale any trade mark, brand
or name of any | 18 |
| alcoholic liquor in any geographical area to more than
one | 19 |
| person. If the registration is received after the effective | 20 |
| date, the
Commission shall treat the date the registration was | 21 |
| received in the Chicago
office as the effective
date. Such | 22 |
| registration shall be made on a form prescribed by the
State | 23 |
| Commission and the State Commission may require such | 24 |
| registration
to be on a form provided by it.
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| A non-resident dealer or foreign importer who is not a | 26 |
| manufacturer shall file the registration statement jointly |
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| with the manufacturer identifying the person authorized by the | 2 |
| manufacturer to sign the registration statement on behalf of | 3 |
| the manufacturer. | 4 |
| No such registration shall be made
in any other manner than | 5 |
| as is provided in this
Section and only those persons | 6 |
| registered by the manufacturer, non-resident
dealer, | 7 |
| distributor, importing distributor or foreign importer, shall | 8 |
| have
the right to sell at wholesale in this State, the brand of | 9 |
| alcoholic liquor
specified on the registration form.
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| However, a licensed Illinois distributor who has not been | 11 |
| registered to
sell a brand of alcoholic liquor, but for a | 12 |
| period of 2 years prior
to
November 8, 1979 has been engaged in | 13 |
| the purchase of a brand for resale
from a licensed Illinois | 14 |
| distributor who has the right to sell that brand
at wholesale, | 15 |
| may continue to purchase and resell the brand at wholesale,
and | 16 |
| may purchase from the same distributor and resell at wholesale | 17 |
| any
new brands of the same manufacturer, provided that:
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| (1) Within 60 days after November 8, 1979 he identifies | 19 |
| the brand which
he so purchased to the State Commission and | 20 |
| the Commission within 30 days
thereafter verifies that the | 21 |
| purchases have occurred;
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| (2) Thereafter, he notifies the State Commission in | 23 |
| writing of any brands
of the same manufacturer which he | 24 |
| wishes to purchase from the same distributor
that were not | 25 |
| available for distribution on or before November 8, 1979,
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| and that the Commission within 30 days of such notification |
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| verifies
that the brand is a new brand of the same | 2 |
| manufacturer, and that the same
licensed Illinois | 3 |
| distributor has the right to sell the new brand at | 4 |
| wholesale;
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| (3) His licensed business address is within the | 6 |
| geographical area for
which the licensed Illinois | 7 |
| distributor from whom the purchases are made
has the right | 8 |
| to sell said brand or brands of alcoholic liquor; and
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| (4) His sales are made within the geographical area for | 10 |
| which the licensed
Illinois distributor from whom the | 11 |
| purchases are made has the right to sell
the brand or | 12 |
| brands of alcoholic liquor and only to retail licensees | 13 |
| whose
licensed premises are located within the | 14 |
| aforementioned geographical area.
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| No person to whom such right is granted shall sell at | 16 |
| wholesale in
this State any alcoholic liquor bearing such trade | 17 |
| mark, brand or name
outside of the geographical area for which | 18 |
| such person holds such
selling right, as registered with the | 19 |
| State Commission, nor shall he
sell such alcoholic liquor | 20 |
| within such geographical area to a retail
licensee if the | 21 |
| premises specified in such retailer's license are
located | 22 |
| outside such geographical area.
Any licensed Illinois | 23 |
| distributor who has not been granted the right to sell
any | 24 |
| alcoholic liquor at wholesale and is purchasing alcoholic | 25 |
| liquor from a
person who has been granted the right to sell at | 26 |
| wholesale may sell and deliver
only to retail licensees whose |
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| licensed premises are within the same
geographical area as the | 2 |
| person who has been granted the right to sell at
wholesale.
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| No manufacturer, importing distributor, distributor, | 4 |
| non-resident dealer,
or foreign
importer shall sell or deliver | 5 |
| any package containing alcoholic liquor
manufactured or | 6 |
| distributed by him for resale, unless the person to whom
such | 7 |
| package is sold or delivered is authorized to receive such | 8 |
| package
in accordance with the provisions of this Act.
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| (Source: P.A. 92-105, eff. 1-1-02.)
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| Section 10. The Beer Industry Fair Dealing Act is amended | 11 |
| by changing Section 7 as follows:
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| (815 ILCS 720/7) (from Ch. 43, par. 307)
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| Sec. 7. Reasonable compensation.
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| (1) Subject to the right of any party to an agreement to | 15 |
| pursue any remedy provided in Section 9, any Any brewer that | 16 |
| cancels, terminates or fails to renew any agreement,
or | 17 |
| unlawfully denies approval of, or unreasonably withholds | 18 |
| consent, to any
assignment, transfer or sale of a wholesaler's | 19 |
| business assets or voting
stock or other equity securities, | 20 |
| except as provided in this Act, shall pay
the wholesaler with | 21 |
| which it has an agreement pursuant to this Act
reasonable | 22 |
| compensation for the fair market value of the wholesaler's
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| business with relation to the affected brand or brands. The | 24 |
| fair market
value of the wholesaler's business shall include, |
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| but not be limited to,
its goodwill, if any.
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| (1.5) The provisions of this subsection (1.5) shall only | 3 |
| apply if the brewer agrees to pay reasonable compensation as | 4 |
| defined in subsection (1) and when
the total annual volume of | 5 |
| all beer products supplied by a brewer to a
wholesaler pursuant | 6 |
| to agreements between such brewer and wholesaler represents 15%
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| 20% or less of the total annual volume of the wholesaler's | 8 |
| business for all
beer products supplied by all brewers. For | 9 |
| purposes of this subsection (1.5)
only, "annual volume"
means | 10 |
| the volume of beer products sold by the wholesaler in the | 11 |
| 12-month period
immediately preceding receipt of the brewer's | 12 |
| written offer pursuant to this
subsection (1.5).
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| If a brewer is required to pay reasonable compensation as | 14 |
| described
in subsection (1) and the question of reasonable | 15 |
| compensation is the only issue
between the parties,
the brewer | 16 |
| shall, in good faith, make a written offer to
pay reasonable | 17 |
| compensation. The wholesaler shall have 30 days from receipt of
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| the written offer to accept or reject the
brewer's offer. | 19 |
| Failure to respond, in writing, to the written offer shall
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| constitute rejection of the offer to pay reasonable | 21 |
| compensation. If the
wholesaler, in writing, accepts the | 22 |
| written offer, the wholesaler shall
surrender the affected | 23 |
| brand or brands to the brewer at the time payment is
received | 24 |
| from
the brewer. If the wholesaler does not, in writing, accept | 25 |
| the brewer's
written offer, either party
may elect to submit | 26 |
| the determination of reasonable compensation to expedited
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| binding arbitration. If one party notifies the other party in | 2 |
| writing that it
elects expedited binding arbitration, the other | 3 |
| party has 10 days from receipt
of the notification to elect | 4 |
| expedited binding arbitration or to
reject the arbitration in | 5 |
| writing.
Failure to elect arbitration shall constitute
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| rejection of the offer to arbitrate.
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| (A) If the parties agree to expedited binding | 8 |
| arbitration, the arbitration
shall
be subject to the | 9 |
| expedited process under the commercial rules of the | 10 |
| American
Arbitration Association.
The arbitration shall be | 11 |
| concluded within 90 days after the parties agree to
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| expedited binding arbitration under this Section, unless | 13 |
| extended by the
arbitrator or one of the parties. The | 14 |
| wholesaler shall retain the affected
brand or brands during | 15 |
| the period of arbitration,
at the conclusion of which
the | 16 |
| wholesaler shall surrender the affected brand or brands to | 17 |
| the
brewer upon payment of the amount determined to be | 18 |
| reasonable compensation,
provided the wholesaler shall | 19 |
| transfer the affected brand or brands to the
brewer
after | 20 |
| 90 days if the arbitration proceedings are extended beyond | 21 |
| the 90 day
limit at the request of the wholesaler. | 22 |
| Arbitration costs shall be paid
one-half by the wholesaler | 23 |
| and
one-half by the brewer. The award of the arbitrator | 24 |
| shall be final and binding
on the parties.
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| (B) If the brewer elects expedited binding arbitration | 26 |
| but the wholesaler
rejects the offer to arbitrate:
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| (i) The wholesaler may accept, in writing, any | 2 |
| written offer previously
made by the
brewer. If the | 3 |
| wholesaler selects this option, the wholesaler must | 4 |
| surrender
the affected brand or brands to the brewer at | 5 |
| the time payment is received. If
the
wholesaler | 6 |
| believes that the amount paid by the brewer is less | 7 |
| than reasonable
compensation under subsection (1), the | 8 |
| wholesaler may bring a proceeding under
subsection (2) | 9 |
| for the difference, but may not proceed under | 10 |
| subsection (3) of
Section 9; or
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| (ii) The
wholesaler may proceed against the brewer | 12 |
| under Section 9, provided
the wholesaler must
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| surrender the affected brand or brands to the brewer if | 14 |
| a proceeding under
Section 9 has not been initiated | 15 |
| within 90 days after the wholesaler rejects
the offer | 16 |
| to arbitrate.
Upon determination of reasonable | 17 |
| compensation pursuant to Section 9, the brewer
shall
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| pay the wholesaler the amount so determined.
Until | 19 |
| receiving payment from the
brewer of the amount so | 20 |
| determined, the wholesaler shall retain the
affected | 21 |
| brand or brands.
If (a) the wholesaler retains the | 22 |
| affected brand or brands for a period of 2
years after | 23 |
| the wholesaler rejects the offer to arbitrate,
(b) the | 24 |
| amount of reasonable compensation has not been
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| determined, and (c) an injunction has not been issued, | 26 |
| the brewer shall, in
good
faith, make a payment of |
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| reasonable compensation to the wholesaler. If, | 2 |
| however, the brewer fails to ship or make available | 3 |
| brands ordered by the wholesaler prior to the brewer | 4 |
| making any payment (including a good faith payment as | 5 |
| provided in this subsection) to the wholesaler, the | 6 |
| wholesaler shall be entitled to injunctive relief and | 7 |
| attorneys' fees and shall subject the brewer to | 8 |
| punitive damages. Upon
receipt of this
payment, the | 9 |
| wholesaler must surrender the affected brand or brands | 10 |
| to the
brewer, provided that such surrender shall not | 11 |
| affect the brewer's obligation
to pay all amounts | 12 |
| ultimately determined due to the wholesaler under this | 13 |
| Act.
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| (C) If the wholesaler elects expedited binding | 15 |
| arbitration but the brewer
rejects, the brewer may proceed | 16 |
| under Section 9 for
the
purpose of
determining reasonable | 17 |
| compensation.
Upon determination of reasonable | 18 |
| compensation pursuant to Section 9, the brewer
shall
pay | 19 |
| the wholesaler the amount so determined.
Until receiving | 20 |
| payment from the
brewer of the amount so determined, the | 21 |
| wholesaler shall retain the
affected brand or brands.
If | 22 |
| (a) the brewer initiates a proceeding under Section 9 | 23 |
| within 90 days after
the wholesaler rejects the offer to | 24 |
| arbitrate, (b) the wholesaler retains the
affected brand or | 25 |
| brands for a period of 2 years from the date the wholesaler
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| rejects the offer to arbitrate, (c) the amount
of |
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| reasonable compensation has not been
determined, and (d) an | 2 |
| injunction has not been issued, the brewer shall, in
good
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| faith, make a payment of reasonable compensation to the | 4 |
| wholesaler. If, however, the brewer fails to ship or make | 5 |
| available brands ordered by the wholesaler prior to the | 6 |
| brewer making any payment (including a good faith payment | 7 |
| as provided in this subsection) to the wholesaler, the | 8 |
| wholesaler shall be entitled to injunctive relief and | 9 |
| attorneys' fees and shall subject the brewer to punitive | 10 |
| damages. Upon
receipt of this
payment, the wholesaler must | 11 |
| surrender the affected brand or brands to the
brewer, | 12 |
| provided that such surrender shall not affect the brewer's | 13 |
| obligation
to pay all amounts ultimately determined due to | 14 |
| the wholesaler under this Act.
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| (2) Except as otherwise provided in subsection (1.5), in | 16 |
| the event that
the brewer and the beer wholesaler are unable to
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| mutually agree on the reasonable compensation to be paid for | 18 |
| the value of
the wholesaler's business, as defined in this Act, | 19 |
| either
party may maintain a civil suit as provided in Section 9 | 20 |
| or the matter
may, by mutual agreement of the parties, be | 21 |
| submitted to a neutral
arbitrator to be selected by the parties | 22 |
| and the claim settled in
accordance with the rules provided by | 23 |
| the American Arbitration Association.
Arbitration costs shall | 24 |
| be paid one-half by the wholesaler and one-half by
the brewer. | 25 |
| The award of the arbitrator shall be final and binding on the
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| parties.
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| (Source: P.A. 89-716, eff. 2-21-97.)
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| Section 99. Effective date. This Act takes effect upon | 3 |
| becoming law.
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