Full Text of HB3442 101st General Assembly
HB3442ham001 101ST GENERAL ASSEMBLY | Rep. Will Guzzardi Filed: 3/12/2019
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| 1 | | AMENDMENT TO HOUSE BILL 3442
| 2 | | AMENDMENT NO. ______. Amend House Bill 3442 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Beer Industry Fair Dealing Act is amended | 5 | | by changing Sections 1.1, 2, 3, 4, 6, 7, 8, and 9 and by adding | 6 | | Section 8.5 as follows:
| 7 | | (815 ILCS 720/1.1) (from Ch. 43, par. 301.1)
| 8 | | Sec. 1.1. As used in this Act:
| 9 | | (1) "Beer" means a beverage obtained by the alcoholic | 10 | | fermentation of an
infusion or concoction of barley, or other | 11 | | grain, malt, and hops in water,
and includes, among other | 12 | | things, beer, ale, stout, lager beer, porter, all beverages | 13 | | brewed or fermented wholly or in part from malt products, and
| 14 | | the like; and for purposes of this Act only, the term "beer" | 15 | | shall also include malt
beverage products containing less
than | 16 | | one-half of 1% of alcohol by volume and marketed for adult |
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| 1 | | consumption as
an alternative beverage to beer.
| 2 | | (2) "Agreement" means any contract, agreement, | 3 | | arrangement,
operating
standards, or amendments to a contract, | 4 | | agreement, arrangement, or operating
standards, the effect of | 5 | | which is to substantially change or modify
the existing | 6 | | contract, agreement, arrangement, or operating standards,
| 7 | | whether
expressed or implied, whether oral or written, for a | 8 | | definite or indefinite
period between a brewer and a wholesaler | 9 | | pursuant to which a wholesaler
has been granted the right to | 10 | | purchase, resell, and distribute as
wholesaler or master | 11 | | distributor
any brand
or brands of beer offered by a brewer. | 12 | | The agreement between a brewer or craft brewer
and wholesaler | 13 | | shall not be considered a franchise relationship.
| 14 | | (3) "Wholesaler" or "beer wholesaler" means any person, | 15 | | other than a
manufacturer licensed under the Liquor Control Act | 16 | | of 1934, who is
engaged in this State in purchasing, storing, | 17 | | possessing or warehousing beer any
alcoholic liquors for resale | 18 | | or reselling at wholesale, whether within or
without this | 19 | | State.
| 20 | | (4) "Brewer" means a person who is engaged in the | 21 | | manufacture of 3,720,000 or more gallons of beer,
a master | 22 | | distributor as defined in this
Section, a
successor brewer as | 23 | | defined in this Section, a non-resident dealer under the
| 24 | | provisions of the Liquor Control Act of 1934, a foreign | 25 | | importer under the
provisions of the Liquor Control Act of | 26 | | 1934, or a person who owns or controls
the trademark, brand, or |
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| 1 | | name of beer. | 2 | | (4.4) "Craft brewer" means a person licensed to manufacture | 3 | | beer or who owns or controls the trademark, brand, or name of | 4 | | beer or enters into a written agreement for the manufacture of | 5 | | less than 3,720,000 gallons of beer under a license, contract, | 6 | | or other written agreement.
| 7 | | (4.5) "Brand" means any word, name, group of letters, | 8 | | symbols, or any combination thereof that is adopted and used by | 9 | | a brewer or craft brewer to identify a specific beer product | 10 | | and to distinguish that beer product from another beer product. | 11 | | (4.7) "Brand extension" means any brand that incorporates | 12 | | all or a substantial part of the features of a pre-existing | 13 | | brand of the same brewer or craft brewer and that relies to a | 14 | | significant extent on the good will associated with the | 15 | | pre-existing brand.
| 16 | | (5) "Master Distributor" means a person who, in addition to | 17 | | being a
wholesaler, acts in the same or
similar capacity as a | 18 | | brewer or outside seller of one or more brands of
beer to other | 19 | | wholesalers on a regular basis in the normal course of
| 20 | | business.
| 21 | | (6) "Successor wholesaler Brewer " means any person who in | 22 | | any way
obtains the distribution rights that a wholesaler
| 23 | | brewer , non-resident dealer, foreign importer, or master | 24 | | distributor once had
to manufacture or distribute a brand or | 25 | | brands
of beer whether by merger, purchase of corporate shares, | 26 | | purchase of
assets, purchase of brand rights, or any other |
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| 1 | | arrangement, including but not limited to any arrangements | 2 | | transferring the ownership or control of the trademark, brand | 3 | | or name of the brand.
| 4 | | (7) "Person" means a natural person, partnership, | 5 | | corporation, trust,
agency, or other form of business | 6 | | enterprise. Person also includes heirs,
assigns, personal | 7 | | representatives and guardians.
| 8 | | (8) "Territory" or "sales territory" means the exclusive | 9 | | geographic area of primary
sales responsibility designated by | 10 | | the agreement between a wholesaler and
brewer or craft brewer | 11 | | for any brand, brands, or brand extensions of the brewer. The | 12 | | "territory" or "sales territory" designated by the agreement | 13 | | may not be designated by address or specific location unless | 14 | | such specific address or location is part of a general and | 15 | | broad territory or sales territory description. The | 16 | | designation of a territory or sales territory in violation of | 17 | | this subsection is prohibited by this Act and deemed | 18 | | discriminatory.
| 19 | | (9) "Good cause" exists if the wholesaler or affected party | 20 | | has failed
to comply with essential and reasonable requirements | 21 | | imposed upon the
wholesaler or affected party by the agreement. | 22 | | The requirements may not be
discriminating either by their | 23 | | terms or in the methods of their enforcement
as compared with | 24 | | requirements imposed on other similarly situated
wholesalers | 25 | | by the brewer or craft brewer . The requirements may not be | 26 | | inconsistent with
this Act or in violation of any law or |
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| 1 | | regulation.
| 2 | | (10) "Good faith" means honesty in fact and the observance | 3 | | of reasonable
commercial standards of fair dealing in the trade | 4 | | as defined and
interpreted under Section 2-103 of the Uniform | 5 | | Commercial Code.
| 6 | | (11) "Reasonable standards and qualifications" means those | 7 | | criteria
applied by the brewer or craft brewer to similarly | 8 | | situated wholesalers during a period of
24 months before the | 9 | | proposed change in manager or successor manager of the
| 10 | | wholesaler's business.
| 11 | | (12) "Affected party" means a wholesaler, brewer, craft | 12 | | brewer, master distributor,
successor brewer, or any person | 13 | | that is a party to an agreement.
| 14 | | (13) "Signs" means signs described in Section 6-6 of the | 15 | | Liquor Control
Act of 1934.
| 16 | | (14) "Advertising materials" means advertising materials | 17 | | described in
Section 6-6 of the Liquor Control Act of 1934.
| 18 | | (Source: P.A. 98-843, eff. 1-1-15 .)
| 19 | | (815 ILCS 720/2) (from Ch. 43, par. 302)
| 20 | | Sec. 2. Purposes. The purposes and scope of this Act are:
| 21 | | (A) This Act
is promulgated pursuant to
authority of the | 22 | | State under the
provisions of the Twenty-First Amendment to the | 23 | | United States Constitution
to promote the public's interest in | 24 | | fair, efficient and competitive
distribution
of malt beverage | 25 | | products by regulation and encouragement of brewer, craft |
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| 1 | | brewer , and
wholesaler vendors to conduct their business | 2 | | relations toward these ends by:
| 3 | | (i) assuring the beer wholesaler , brewer, and craft
| 4 | | brewer is free to manage its business
enterprise,
including | 5 | | the brewer's or craft brewer's right to negotiate and | 6 | | independently establish its selling prices and the | 7 | | wholesaler's right to independently establish its selling | 8 | | prices;
and
| 9 | | (ii) assuring the brewer , craft brewer, and the public | 10 | | of service from wholesalers who
will devote reasonable | 11 | | efforts and resources to sales and distribution of
all the | 12 | | brewer's or craft brewer's products, which wholesaler has | 13 | | been granted the right to
sell and distribute and maintain | 14 | | satisfactory sales levels to the satisfaction of the brewer | 15 | | or craft brewer .
| 16 | | (B) This Act shall be incorporated into and shall be deemed | 17 | | a part of
every
agreement between brewers or craft brewers and | 18 | | wholesalers and
shall govern all relations between brewers and | 19 | | their wholesalers
to the full extent consistent with the | 20 | | constitutions and laws of this State
and the United States and | 21 | | any provision of this Act shall supersede any conflicting | 22 | | provision of the agreement. Notwithstanding the foregoing, | 23 | | wholesalers, brewers, and craft brewers may, upon mutual | 24 | | written agreement, agree to waive the provisions of this Act as | 25 | | it may apply to the agreement.
| 26 | | (Source: P.A. 96-662, eff. 8-25-09.)
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| 1 | | (815 ILCS 720/3) (from Ch. 43, par. 303)
| 2 | | Sec. 3. Termination and notice of cancellation.
| 3 | | (1) Except as provided in subsection (3) of this Section | 4 | | and in Section 8.5 , no brewer or
beer wholesaler may cancel, | 5 | | fail to renew, or otherwise terminate an
agreement unless the | 6 | | brewer or wholesaler furnishes prior notification to
the | 7 | | affected party in accordance with subsection (2).
| 8 | | (2) The notification required under subsection (1) shall be | 9 | | in writing
and sent to the affected party by certified mail not | 10 | | less than 30 90 days before
the date on which the agreement | 11 | | will be cancelled, not renewed, or otherwise
terminated. The | 12 | | notification shall contain (a) a statement of intention
to | 13 | | cancel, failure to renew, or otherwise terminate an agreement, | 14 | | (b) a
complete statement of reasons therefore, including all | 15 | | data and
documentation necessary to fully apprise the | 16 | | wholesaler of the reasons for
the action, and (c) the date on | 17 | | which the action shall take effect.
| 18 | | (3) A brewer or craft brewer may cancel, fail to renew, or | 19 | | otherwise terminate an agreement
without furnishing any prior | 20 | | notification for any of the following reasons:
| 21 | | (A) Wholesaler's failure to pay any account when due | 22 | | and upon demand by
the brewer for such payment, in | 23 | | accordance with agreed payment terms.
| 24 | | (B) Wholesaler's assignment for the benefit of | 25 | | creditors, or similar
disposition, of substantially all of |
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| 1 | | the assets of such party's business.
| 2 | | (C) Insolvency of wholesaler, or the institution of | 3 | | proceedings in
bankruptcy by or against the wholesaler.
| 4 | | (D) Dissolution or liquidation of the wholesaler.
| 5 | | (E) Wholesaler's conviction of, or plea of guilty or no | 6 | | contest, to a
charge of violating a law or regulation, in | 7 | | this State which materially
and adversely affects the | 8 | | ability of either party to continue to sell beer
in this | 9 | | State, or the revocation or suspension of a license or | 10 | | permit to
sell beer in this State.
| 11 | | (F) Any attempted transfer of business assets of the | 12 | | wholesaler, voting
stock of the wholesaler, voting stock of | 13 | | any parent corporation of the
wholesaler, or any change in | 14 | | the beneficial ownership or control of any
entity without | 15 | | obtaining the prior consent or approval as provided for | 16 | | under
Section 6 unless the brewer or craft brewer neither | 17 | | approves, consents to, nor objects to the
transfer within | 18 | | 60 days after receiving all requested information from the
| 19 | | wholesaler regarding the proposed purchase, in which event | 20 | | the brewer shall be
deemed to have consented to the | 21 | | proposed transaction.
| 22 | | (G) Fraudulent conduct by the wholesaler in its | 23 | | dealings with the brewer. | 24 | | (H) Malfeasance, misfeasance, or a material | 25 | | misrepresentation made by the wholesaler to the brewer. | 26 | | (I) Conduct or acts by the wholesaler that cause damage |
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| 1 | | within the marketplace to the brewer's trademark, name, | 2 | | brand, reputation, or the products sold by the wholesaler. | 3 | | (J) An intentional breach by the wholesaler of the | 4 | | provisions of this Act or the provisions of the | 5 | | wholesaler's Agreement with a brewer.
| 6 | | (Source: P.A. 88-410; revised 10-9-18.)
| 7 | | (815 ILCS 720/4) (from Ch. 43, par. 304)
| 8 | | Sec. 4. Cancellation. No brewer , craft brewer, or beer | 9 | | wholesaler may cancel, fail
to renew or otherwise terminate an | 10 | | agreement unless the party intending
that action has good cause | 11 | | for the cancellation, failure to renew or
termination, except | 12 | | as provided for in Section 8.5, has made good faith efforts to | 13 | | resolve disagreements, and, in
any case in which prior | 14 | | notification is required under Section 3 or as provided for in | 15 | | Section 8.5 , the party
intending to act has furnished the prior | 16 | | notification and the affected
party has not eliminated the | 17 | | reasons specified in the notification for
cancellation, | 18 | | failure to renew, or termination, within 30 90 days after the
| 19 | | sending of the notification. Wholesalers, brewers, and craft | 20 | | brewers may agree, in writing, to extend the period for | 21 | | resolution of the causes for termination beyond 30 days.
| 22 | | (Source: P.A. 82-946; 86-1485.)
| 23 | | (815 ILCS 720/6) (from Ch. 43, par. 306)
| 24 | | Sec. 6. Transfer of business assets or stock. |
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| 1 | | (1) No brewer , craft brewer, or wholesaler shall | 2 | | unreasonably
withhold or delay its approval of any assignment, | 3 | | sale , or transfer of the
stock of a wholesaler , brewer, or | 4 | | craft brewer or all or any portion of a wholesaler's , brewer's, | 5 | | or craft brewer's assets, wholesaler's , brewer's, or craft | 6 | | brewer's
voting stock, the voting stock of any parent | 7 | | corporation, or the beneficial
ownership or control of any | 8 | | other entity owning or controlling wholesaler, brewer, or craft | 9 | | brewer,
including the wholesaler's rights and obligations | 10 | | under the terms of an
agreement whenever the person or persons | 11 | | to be substituted meet reasonable
standards. Upon the death of | 12 | | one of the partners of a partnership operating
the business of | 13 | | a wholesaler, brewer, or craft brewer, no brewer , craft brewer, | 14 | | or wholesaler shall deny the surviving partner
or partners of | 15 | | such partnership the right to become a successor-in-interest
to | 16 | | the agreement between the brewer , craft brewer, or wholesaler | 17 | | and such partnership, provided that
the survivor has been | 18 | | active in the management of the partnership and is
otherwise | 19 | | capable of carrying on the business of the partnership.
| 20 | | (2) Notwithstanding the provisions of subsection (1) , upon | 21 | | the death of
a wholesaler , no brewer or craft brewer shall deny | 22 | | approval for any transfer of ownership
to a surviving spouse or | 23 | | adult child of an owner of a wholesaler; provided,
however, | 24 | | that such subsequent transfers of such ownership by such | 25 | | surviving
spouse or adult child shall thereafter be subject to | 26 | | the provisions of subsection (1).
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| 1 | | (Source: P.A. 82-946.)
| 2 | | (815 ILCS 720/7) (from Ch. 43, par. 307)
| 3 | | Sec. 7. Reasonable compensation.
| 4 | | (1) Subject to the right of any party to an agreement to | 5 | | pursue any remedy provided in Section 9 or subject to the | 6 | | provisions of Section 8.5 , any brewer or craft brewer that | 7 | | cancels, terminates or fails to renew any agreement,
or | 8 | | unlawfully denies approval of, or unreasonably withholds | 9 | | consent, to any
assignment, transfer or sale of a wholesaler's | 10 | | business assets or voting
stock or other equity securities, | 11 | | except as provided in this Act, shall pay
the wholesaler with | 12 | | which it has an agreement pursuant to this Act
reasonable | 13 | | compensation for the fair market value of the wholesaler's , | 14 | | brewer's, or craft brewer's
business with relation to the | 15 | | affected brand or brands. The fair market
value of the | 16 | | wholesaler's business shall include, but not be limited to,
its | 17 | | goodwill, if any.
| 18 | | (1.5) The provisions of this subsection (1.5) shall only | 19 | | apply if the brewer or craft brewer agrees to pay reasonable | 20 | | compensation , as defined in subsection (1) , and
the total | 21 | | annual volume of all beer products supplied by the a brewer or | 22 | | craft brewer to a
wholesaler pursuant to agreements between | 23 | | such brewer and wholesaler represents 10%
or less of the total | 24 | | annual volume of the wholesaler's business for all
beer | 25 | | products supplied by all brewers and craft brewers . For |
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| 1 | | purposes of this subsection (1.5)
only, "annual volume"
means | 2 | | the volume of beer products sold by the wholesaler in the | 3 | | 12-month period
immediately preceding receipt of the brewer's | 4 | | written offer pursuant to this
subsection (1.5).
| 5 | | If a brewer or craft brewer is required to pay reasonable | 6 | | compensation as described
in subsection (1) and the question of | 7 | | reasonable compensation is the only issue
between the parties,
| 8 | | the brewer or craft brewer shall, in good faith, make a written | 9 | | offer to
pay reasonable compensation. The wholesaler shall have | 10 | | 30 days from receipt of
the written offer to accept or reject | 11 | | the
brewer's or craft brewer's offer. Failure to respond, in | 12 | | writing, to the written offer shall
constitute rejection of the | 13 | | offer to pay reasonable compensation. If the
wholesaler, in | 14 | | writing, accepts the written offer, the wholesaler shall
| 15 | | surrender the affected brand or brands to the brewer or craft | 16 | | brewer at the time payment is
received from
the brewer or craft | 17 | | brewer . If the wholesaler does not, in writing, accept the | 18 | | brewer's or craft brewer's
written offer, the rejecting party | 19 | | must submit a counter offer to the brewer or craft brewer | 20 | | within 30 days after receipt of the original written offer. | 21 | | Failure to submit a counter offer constitutes an acceptance of | 22 | | the original offer and constitutes a binding waiver of the | 23 | | arbitration proceedings as specified in this Section. | 24 | | If the parties to an agreement subject to this Act fail to | 25 | | agree on the amount of reasonable compensation, either party
| 26 | | may elect to submit the determination of reasonable |
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| 1 | | compensation to expedited
binding arbitration. If one party | 2 | | notifies the other party in writing that it
elects expedited | 3 | | binding arbitration, the other party has 10 days from receipt
| 4 | | of the notification to elect expedited binding arbitration or | 5 | | to
reject the arbitration in writing.
Failure to elect | 6 | | arbitration shall constitute
rejection of the offer to | 7 | | arbitrate.
| 8 | | (A) If the parties agree to expedited binding | 9 | | arbitration, the arbitration
shall
be subject to the | 10 | | expedited process under the commercial rules of the | 11 | | American
Arbitration Association.
The arbitration shall be | 12 | | concluded within 90 days after the parties agree to
| 13 | | expedited binding arbitration under this Section, unless | 14 | | extended by the
arbitrator or one of the parties. The | 15 | | wholesaler shall retain the affected
brand or brands during | 16 | | the period of arbitration,
at the conclusion of which
the | 17 | | wholesaler shall surrender the affected brand or brands to | 18 | | the
brewer upon payment of the amount determined to be | 19 | | reasonable compensation,
provided the wholesaler shall | 20 | | transfer the affected brand or brands to the
brewer
after | 21 | | 90 days if the arbitration proceedings are extended beyond | 22 | | the 90 day
limit at the request of the wholesaler. | 23 | | Arbitration costs shall be paid
one-half by the wholesaler | 24 | | and
one-half by the brewer. The award of the arbitrator | 25 | | shall be final and binding
on the parties.
| 26 | | (B) If the brewer , craft brewer, or wholesaler elects |
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| 1 | | expedited binding arbitration , but the wholesaler , brewer, | 2 | | or craft brewer
rejects the offer to arbitrate:
| 3 | | (i) The wholesaler may accept, in writing, any | 4 | | written offer previously
made by the
brewer. If the | 5 | | wholesaler selects this option, the wholesaler must | 6 | | surrender
the affected brand or brands to the brewer at | 7 | | the time payment is received. If
the
wholesaler | 8 | | believes that the amount paid by the brewer or craft | 9 | | brewer is less than reasonable
compensation under | 10 | | subsection (1), the wholesaler may bring a proceeding | 11 | | under
subsection (2) for the difference, but may not | 12 | | proceed under subsection (3) of
Section 9; or
| 13 | | (ii) The
wholesaler , brewer, or craft brewer may | 14 | | proceed against the brewer , craft brewer, or | 15 | | wholesaler under Section 9, provided
the wholesaler | 16 | | must
surrender the affected brand or brands to the | 17 | | brewer if a proceeding under
Section 9 has not been | 18 | | initiated within 90 days after the wholesaler rejects
| 19 | | the offer to arbitrate.
Upon determination of | 20 | | reasonable compensation pursuant to Section 9, the | 21 | | brewer
shall
pay the wholesaler the amount so | 22 | | determined.
Until receiving payment from the
brewer of | 23 | | the amount so determined, the wholesaler shall retain | 24 | | the
affected brand or brands.
If (a) the wholesaler | 25 | | retains the affected brand or brands for a period of | 26 | | one year 2
years after the wholesaler rejects the offer |
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| 1 | | to arbitrate,
(b) the amount of reasonable | 2 | | compensation has not been
determined, and (c) an | 3 | | injunction has not been issued, the brewer shall, in
| 4 | | good
faith, make a payment of reasonable compensation | 5 | | to the wholesaler. If, however, the brewer fails to | 6 | | ship or make available brands ordered by the wholesaler | 7 | | prior to the brewer making any payment (including a | 8 | | good faith payment as provided in this subsection) to | 9 | | the wholesaler, the wholesaler shall be entitled to | 10 | | injunctive relief and attorneys' fees and shall | 11 | | subject the brewer to punitive damages. Upon
receipt of | 12 | | this
payment, the wholesaler must surrender the | 13 | | affected brand or brands to the
brewer, provided that | 14 | | such surrender shall not affect the brewer's | 15 | | obligation
to pay all amounts ultimately determined | 16 | | due to the wholesaler under this Act.
| 17 | | (C) If the wholesaler elects expedited binding | 18 | | arbitration , but the brewer or craft brewer
rejects, the | 19 | | brewer or craft brewer may proceed under Section 9 for
the
| 20 | | purpose of
determining reasonable compensation.
Upon | 21 | | determination of reasonable compensation pursuant to | 22 | | Section 9, the brewer
shall
pay the wholesaler the amount | 23 | | so determined.
Until receiving payment from the
brewer of | 24 | | the amount so determined, the wholesaler shall retain the
| 25 | | affected brand or brands.
If (a) the brewer initiates a | 26 | | proceeding under Section 9 within 90 days after
the |
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| 1 | | wholesaler rejects the offer to arbitrate, (b) the | 2 | | wholesaler retains the
affected brand or brands for a | 3 | | period of 2 years from the date the wholesaler
rejects the | 4 | | offer to arbitrate, (c) the amount
of reasonable | 5 | | compensation has not been
determined, and (d) an injunction | 6 | | has not been issued, the brewer shall, in
good
faith, make | 7 | | a payment of reasonable compensation to the wholesaler. If, | 8 | | however, the brewer fails to ship or make available brands | 9 | | ordered by the wholesaler prior to the brewer making any | 10 | | payment (including a good faith payment as provided in this | 11 | | subsection) to the wholesaler, the wholesaler shall be | 12 | | entitled to injunctive relief and attorneys' fees and shall | 13 | | subject the brewer to punitive damages. Upon
receipt of | 14 | | this
payment, the wholesaler must surrender the affected | 15 | | brand or brands to the
brewer, provided that such surrender | 16 | | shall not affect the brewer's obligation
to pay all amounts | 17 | | ultimately determined due to the wholesaler under this Act.
| 18 | | (2) Except as otherwise provided in subsection (1.5), in | 19 | | the event that
the brewer and the beer wholesaler are unable to
| 20 | | mutually agree on the reasonable compensation to be paid for | 21 | | the value of
the wholesaler's business, as defined in this Act, | 22 | | either
party may maintain a civil suit as provided in Section 9 | 23 | | or the matter
may, by mutual agreement of the parties, be | 24 | | submitted to a neutral
arbitrator to be selected by the parties | 25 | | and the claim settled in
accordance with the rules provided by | 26 | | the American Arbitration Association.
Arbitration costs shall |
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| 1 | | be paid one-half by the wholesaler and one-half by
the brewer. | 2 | | The award of the arbitrator shall be final and binding on the
| 3 | | parties.
| 4 | | (Source: P.A. 96-482, eff. 8-14-09; 97-1119, eff. 8-27-12.)
| 5 | | (815 ILCS 720/8) (from Ch. 43, par. 308)
| 6 | | Sec. 8. Right of free association. No brewer , craft brewer, | 7 | | or wholesaler shall restrict
or inhibit, directly or | 8 | | indirectly, the right of free association among
brewers , craft | 9 | | brewers, or wholesalers for any lawful purpose.
| 10 | | (Source: P.A. 82-946.)
| 11 | | (815 ILCS 720/8.5 new) | 12 | | Sec. 8.5. Craft brewer agreements. | 13 | | (1) Upon written notice to a wholesaler, a craft brewer | 14 | | may cancel, terminate, or not renew any agreement with a | 15 | | wholesaler. | 16 | | (2) The notification required under subsection (1) | 17 | | shall be in writing and sent to the affected party by | 18 | | certified mail not less than 30 days before the date on | 19 | | which the agreement will be terminated, cancelled, or not | 20 | | renewed. The notice shall contain: (i) a statement of | 21 | | intention to cancel, to not renew, or otherwise terminate | 22 | | an agreement; (ii) the date on which the action will take | 23 | | effect; and (iii) a complete statement of the reasons for | 24 | | the termination, cancellation, or nonrenewal, including |
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| 1 | | whether the termination, cancellation, or nonrenewal is | 2 | | based on good cause, or a violation of Section 5, or both. | 3 | | (3) Upon receipt of a notice of termination, | 4 | | cancellation, or nonrenewal, a wholesaler may be entitled | 5 | | to reasonable compensation, but is not automatically | 6 | | entitled to receive compensation. | 7 | | (4) A wholesaler and craft brewer may in their written | 8 | | agreement provide for predetermined compensation and the | 9 | | circumstances under which the wholesaler would be entitled | 10 | | to compensation. | 11 | | (5) Any compensation negotiated and agreed to be paid | 12 | | to a wholesaler as a result of a termination, cancellation, | 13 | | or nonrenewal by a craft brewer, except for compensation | 14 | | provided for in the agreement, shall be determined by the | 15 | | following factors: (i) the length of time the wholesaler | 16 | | has distributed the craft brewer's product; (ii) the total | 17 | | annual volume of all products supplied by a craft brewer to | 18 | | a wholesaler and the percentage of the wholesaler's total | 19 | | sales the craft brewer's volume represents; and (iii) the | 20 | | actual case equivalent sales of the craft brewer's products | 21 | | made by the wholesaler on sales of the craft brewer's | 22 | | product. | 23 | | (6) A wholesaler is not entitled to any compensation | 24 | | under the following: | 25 | | (A) The wholesaler shall not receive compensation | 26 | | if the craft brewer cancels, terminates, or does not |
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| 1 | | renew an agreement for any of the reasons stated in | 2 | | subsection (3) of Section 3. | 3 | | (B) The wholesaler shall not receive any | 4 | | compensation if the craft brewer cancels, terminates, | 5 | | or does not renew an agreement for committing any | 6 | | violation of Section 5. | 7 | | (C) The wholesaler shall not receive any | 8 | | compensation if the craft brewer cancels, terminates, | 9 | | or does not renew an agreement if the wholesaler has | 10 | | not purchased or sold the craft brewer's products for | 11 | | more than 6 months prior to the date of the notice of | 12 | | termination, cancellation, or nonrenewal. | 13 | | (D) The wholesaler shall not receive compensation | 14 | | if the sales of the craft brewer's products represent | 15 | | less than 2% of the wholesaler's annual gross sales of | 16 | | all of its beers. A wholesaler shall, on an annual | 17 | | basis, provide the craft brewer with a sales report | 18 | | that indicates the percentage of the wholesaler's | 19 | | annual gross sales for the previous 12 months the craft | 20 | | brewer represents.
| 21 | | (815 ILCS 720/9) (from Ch. 43, par. 309)
| 22 | | Sec. 9. Judicial and other remedies.
| 23 | | (1) If the brewer , craft brewer, or wholesaler who is a | 24 | | party to an agreement pursuant
to this Act fails to comply with | 25 | | this Act or otherwise engages in conduct
prohibited under this |
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| 1 | | Act, the affected party may maintain a civil suit in
court if | 2 | | the cause of action directly relates
to or stems from the | 3 | | relationship of the individual parties under the
agreement, | 4 | | provided that any such suit shall be filed in a State or | 5 | | federal
court of competent jurisdiction located in Illinois.
| 6 | | In any legal action challenging any cancellation, | 7 | | termination, or failure
to renew, the brewer , craft brewer, or | 8 | | wholesaler that initiates the civil suit has the burden of | 9 | | proving the existence of good cause if
the wholesaler first | 10 | | makes a prima facie showing that good cause does not
exist .
| 11 | | (2) A brewer , craft brewer, or wholesaler may bring an | 12 | | action for declaratory
judgment for determination of any | 13 | | controversy arising under this Act or out
of the brewer or | 14 | | craft brewer and wholesaler relationship.
| 15 | | (3) Upon proper application to the court, a brewer , craft | 16 | | brewer, or wholesaler may
obtain injunctive relief against any | 17 | | violation of this Act.
| 18 | | (4) In any action under subsection (1) the court may grant | 19 | | such relief
as the court determines is necessary or appropriate | 20 | | considering the purposes
of this Act.
| 21 | | (5) The prevailing party in any action under subsection (1)
| 22 | | shall be entitled to (i) actual damages, (ii) all court or | 23 | | arbitration
costs, and (iii) attorneys' fees at the court's | 24 | | discretion.
| 25 | | (6) With respect to any dispute arising under this Act or | 26 | | out of the
relationship between brewer or craft brewer and |
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| 1 | | wholesaler, the wholesaler and the brewer or craft brewer,
each | 2 | | has the absolute right before it has agreed to arbitrate a | 3 | | particular
dispute to refuse to arbitrate that particular | 4 | | dispute. A party refusing to accept arbitration shall do so in | 5 | | writing within 30 days after receipt of a written request for | 6 | | arbitration. Arbitration
shall be conducted in accordance with | 7 | | the Commercial Arbitration Rules of
the American Arbitration | 8 | | Association and the laws of this State, and
judgment upon the | 9 | | award rendered by the arbitrator may be entered in any
court | 10 | | having jurisdiction. A brewer , craft brewer, or wholesaler may | 11 | | not, as a condition of
entering into or renewing an agreement, | 12 | | require the wholesaler , brewer, or craft brewer to agree to
| 13 | | arbitration instead of judicial remedies.
| 14 | | (7) If there is a finding by an arbitrator or a court in a | 15 | | proceeding
under this Section or under subsection (1.5) or (2) | 16 | | of Section 7 that a party
has not acted in good faith, an | 17 | | appropriate penalty shall be assessed by the
arbitrator or the | 18 | | court against
that party and, in addition, that party shall | 19 | | also be ordered to pay all court
or arbitration costs and | 20 | | reasonable legal fees incurred by the other party in
the | 21 | | proceeding.
| 22 | | (Source: P.A. 90-91, eff. 7-11-97; 90-655, eff. 7-30-98; | 23 | | 91-247, eff.
7-22-99.)".
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