Full Text of HB0773 96th General Assembly
HB0773enr 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 Beer Industry Fair Dealing Act is amended by | 5 |
| changing Sections 1.1, 2, and 5 as follows:
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| (815 ILCS 720/1.1) (from Ch. 43, par. 301.1)
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| Sec. 1.1. As used in this Act:
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| (1) "Beer" means a beverage obtained by the alcoholic | 9 |
| fermentation of an
infusion or concoction of barley, or other | 10 |
| grain, malt, and hops in water,
and includes, among other | 11 |
| things, beer, ale, stout, lager beer, porter and
the like.
For | 12 |
| purposes of this Act only, the term "beer" shall also include | 13 |
| malt
beverage products containing less
than one-half of 1% of | 14 |
| alcohol by volume and marketed for adult consumption as
an | 15 |
| alternative beverage to beer.
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| (2) "Agreement" means any contract, agreement, | 17 |
| arrangement,
operating
standards, or amendments to a contract, | 18 |
| agreement, arrangement, or operating
standards, the effect of | 19 |
| which is to substantially change or modify
the existing | 20 |
| contract, agreement, arrangement, or operating standards,
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| whether
expressed or implied, whether oral or written, for a | 22 |
| definite or indefinite
period between a brewer and a wholesaler | 23 |
| pursuant to which a wholesaler
has been granted the right to |
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| purchase, resell, and distribute as
wholesaler or master | 2 |
| distributor
any brand
or brands of beer offered by a brewer. | 3 |
| The agreement between a brewer
and wholesaler shall not be | 4 |
| considered a franchise relationship.
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| (3) "Wholesaler" or "beer wholesaler" means any person, | 6 |
| other than a
manufacturer licensed under the Liquor Control Act | 7 |
| of 1934, who is
engaged in this State in purchasing, storing, | 8 |
| possessing or warehousing any
alcoholic liquors for resale or | 9 |
| reselling at wholesale, whether within or
without this State.
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| (4) "Brewer" means a person who is engaged in the | 11 |
| manufacture of beer,
a master distributor as defined in this
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| Section, a
successor brewer as defined in this Section, a | 13 |
| non-resident dealer under the
provisions of the Liquor Control | 14 |
| Act of 1934, a foreign importer under the
provisions of the | 15 |
| Liquor Control Act of 1934, or a person who owns or controls
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| the trademark, brand, or name of beer.
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| (4.5) "Brand" means any word, name, group of letters, | 18 |
| symbols, or any combination thereof that is adopted and used by | 19 |
| a brewer to identify a specific beer product and to distinguish | 20 |
| that beer product from another beer product. | 21 |
| (4.7) "Brand extension" means any brand that incorporates | 22 |
| all or a substantial part of the features of a pre-existing | 23 |
| brand of the same brewer and that relies to a significant | 24 |
| extent on the good will associated with the pre-existing brand.
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| (5) "Master Distributor" means a person who, in addition to | 26 |
| being a
wholesaler, acts in the same or
similar capacity as a |
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| brewer or outside seller of one or more brands of
beer to other | 2 |
| wholesalers on a regular basis in the normal course of
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| business.
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| (6) "Successor Brewer" means any person who in any way
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| obtains the distribution rights that a
brewer, non-resident | 6 |
| dealer, foreign importer, or master distributor once had
to | 7 |
| manufacture or distribute a brand or brands
of beer whether by | 8 |
| merger, purchase of corporate shares, purchase of
assets, or | 9 |
| any other arrangement, including but not limited to any | 10 |
| arrangements transferring the ownership or control of the | 11 |
| trademark, brand or name of the brand.
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| (7) "Person" means a natural person, partnership, | 13 |
| corporation, trust,
agency, or other form of business | 14 |
| enterprise. Person also includes heirs,
assigns, personal | 15 |
| representatives and guardians.
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| (8) "Territory" or "sales territory" means the exclusive | 17 |
| geographic area of primary
sales responsibility designated by | 18 |
| the an agreement between a wholesaler and
brewer for any brand , | 19 |
| or brands , or brand extensions of the brewer. The "territory" | 20 |
| or "sales territory" designated by the agreement may not be | 21 |
| designated by address or specific location unless such specific | 22 |
| address or location is part of a general and broad territory or | 23 |
| sales territory description. The designation of a territory or | 24 |
| sales territory in violation of this subsection is prohibited | 25 |
| by this Act and deemed discriminatory.
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| (9) "Good cause" exists if the wholesaler or affected party |
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| has failed
to comply with essential and reasonable requirements | 2 |
| imposed upon the
wholesaler or affected party by the agreement. | 3 |
| The requirements may not be
discriminating either by their | 4 |
| terms or in the methods of their enforcement
as compared with | 5 |
| requirements imposed on other similarly situated
wholesalers | 6 |
| by the brewer. The requirements may not be inconsistent with
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| this Act or in violation of any law or regulation.
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| (10) "Good faith" means honesty in fact and the observance | 9 |
| of reasonable
commercial standards of fair dealing in the trade | 10 |
| as defined and
interpreted under Section 2-103 of the Uniform | 11 |
| Commercial Code.
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| (11) "Reasonable standards and qualifications" means those | 13 |
| criteria
applied by the brewer to similarly situated | 14 |
| wholesalers during a period of
24 months before the proposed | 15 |
| change in manager or successor manager of the
wholesaler's | 16 |
| business.
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| (12) "Affected party" means a wholesaler, brewer, master | 18 |
| distributor,
successor brewer, or any person that is a party to | 19 |
| an agreement.
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| (13) "Signs" means signs described in Section 6-6 of the | 21 |
| Liquor Control
Act of 1934.
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| (14) "Advertising materials" means advertising materials | 23 |
| described in
Section 6-6 of the Liquor Control Act of 1934.
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| (Source: P.A. 95-240, eff. 8-17-07; 95-789, eff. 8-7-08.)
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| (815 ILCS 720/2) (from Ch. 43, par. 302)
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| Sec. 2. Purposes. The purposes and scope of this Act are:
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| (A) This Act
is promulgated pursuant to
authority of the | 3 |
| State under the
provisions of the Twenty-First Amendment to the | 4 |
| United States Constitution
to promote the public's interest in | 5 |
| fair, efficient and competitive
distribution
of malt beverage | 6 |
| products by regulation and encouragement of brewer and
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| wholesaler vendors to conduct their business relations toward | 8 |
| these ends by:
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| (i) assuring the beer wholesaler is free to manage its | 10 |
| business
enterprise,
including the wholesaler's right to | 11 |
| independently establish its selling prices;
and
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| (ii) assuring the brewer and the public of service from | 13 |
| wholesalers who
will devote reasonable efforts and | 14 |
| resources to sales and distribution of
all the brewer's | 15 |
| products, which wholesaler has been granted the right to
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| sell and distribute and maintain satisfactory sales | 17 |
| levels.
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| (B) This Act shall be incorporated into and shall be deemed | 19 |
| a part of
every
agreement between brewers and wholesalers and
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| shall govern all relations between brewers and their | 21 |
| wholesalers
to the full extent consistent with the | 22 |
| constitutions and laws of this State
and the United States and | 23 |
| any provision of this Act shall supersede any conflicting | 24 |
| provision of the agreement .
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| (Source: P.A. 91-247, eff. 7-22-99.)
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| (815 ILCS 720/5) (from Ch. 43, par. 305)
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| Sec. 5. Prohibited conduct. No brewer shall:
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| (1) Induce or coerce, or attempt to induce or coerce, | 4 |
| any wholesaler to
engage in any illegal act or
course of | 5 |
| conduct either by threatening to
amend, modify, cancel, | 6 |
| terminate, or refuse to renew any agreement existing
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| between the brewer and the wholesaler, or by any other | 8 |
| means.
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| (2) Require a wholesaler to assent to any unreasonable | 10 |
| requirement,
condition, understanding or term or an | 11 |
| agreement prohibiting a wholesaler
from selling the | 12 |
| product of any other brewer or brewers.
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| (3) Directly or indirectly fix or maintain
the price at | 14 |
| which a wholesaler may resell beer.
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| (4) Fail to provide to each wholesaler of its brands a | 16 |
| written contract
which embodies the brewer's agreement | 17 |
| with its wholesalers and conforms
to the provisions of this | 18 |
| Act.
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| (5) Require any wholesaler to accept delivery of any | 20 |
| beer, signs,
advertising materials, or any other
item or | 21 |
| commodity which has not been ordered by the wholesaler, or | 22 |
| require
any wholesaler to accept a common carrier for | 23 |
| delivery of beer into this State
unless the wholesaler | 24 |
| consents to the common carrier. In the event
a brewer | 25 |
| adopts a uniform practice of delivering beer into this | 26 |
| State to the
premises of all licensed wholesalers, the |
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| brewer may select the common carrier
in this State.
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| (6) Require a wholesaler without the wholesaler's | 3 |
| approval to
participate in an arrangement for the payment | 4 |
| or crediting by an electronic
fund transfer transaction for | 5 |
| any item or commodity other than beer or to
access a | 6 |
| wholesaler's account for any item or commodity other than | 7 |
| beer.
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| (7) Require a wholesaler to assent to any requirement
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| prohibiting the wholesaler from disposing, after notice to | 10 |
| the brewer,
of a product which has been deemed salvageable | 11 |
| by a local or State health
authority. Nothing herein shall | 12 |
| prohibit the brewer from having the first
right to purchase | 13 |
| the salvageable product from the wholesaler at a price
not | 14 |
| to exceed the original cost of the product or to | 15 |
| subsequently
repurchase the product from the insurance | 16 |
| company or salvage company.
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| (8) Refuse to approve or require a wholesaler to | 18 |
| terminate a manager
or successor manager without good | 19 |
| cause. A brewer has good cause only if
the person | 20 |
| designated as manager or successor manager by the | 21 |
| wholesaler
fails to meet reasonable standards and | 22 |
| qualifications.
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| (9) Present an agreement to a wholesaler that attempts | 24 |
| to waive
compliance with any provision of this Act or that | 25 |
| requires the wholesaler to
waive compliance with any | 26 |
| provision of this Act.
A wholesaler entering into an |
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| agreement containing provisions in conflict with this Act | 2 |
| shall not be deemed to waive compliance with any provision | 3 |
| of this Act. No brewer shall induce or coerce, or attempt | 4 |
| to induce or coerce, any
wholesaler to assent to any | 5 |
| agreement, amendment, renewal, or replacement
agreement | 6 |
| that does not comply with this Act and
the laws of this | 7 |
| State.
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| (10) Terminate or attempt to terminate an agreement on | 9 |
| the basis that
the wholesaler refuses to purchase signs or | 10 |
| advertising materials or any
quantity or types thereof.
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| (11) Discriminate against a wholesaler who has entered | 12 |
| into a contract
relative to signs or advertising materials | 13 |
| by not making signs or advertising
materials or any | 14 |
| quantity or types thereof available to the wholesaler when | 15 |
| the
brewer makes available such signs or advertising | 16 |
| materials to other similarly
situated wholesalers in this | 17 |
| State.
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| (12) Present an agreement requiring the wholesaler to | 19 |
| arbitrate all
disputes without offering the wholesaler in | 20 |
| writing the opportunity to reject
arbitration and elect to | 21 |
| resolve all disputes by maintaining a civil suit in
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| accordance with this Act.
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| (13) Fail to assign brand extensions to a wholesaler | 24 |
| who has been granted the territory to the brand from which | 25 |
| the brand extension resulted and agrees to accept the brand | 26 |
| extension; however, this requirement does not apply if the |
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| wholesaler is not in compliance with the agreement at the | 2 |
| time the brewer offers the brand extension to the | 3 |
| wholesaler.
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| (14) Terminate, cancel, or non-renew or attempt to | 5 |
| terminate, cancel, or non-renew an agreement on the basis | 6 |
| that the wholesaler fails to agree or consent to an | 7 |
| amendment at the time such amendment is presented to the | 8 |
| wholesaler. A brewer may amend an agreement including | 9 |
| operating standards at any time without the wholesaler's | 10 |
| consent if such amendment does not materially, | 11 |
| substantially, and adversely affect the wholesaler and | 12 |
| such amendment is effective as to all wholesalers of the | 13 |
| brewer in the State. | 14 |
| (15) Coerce or attempt to coerce a transferring | 15 |
| wholesaler to sign a renewal agreement, replacement | 16 |
| agreement, or an amendment to an agreement by threatening | 17 |
| to refuse to approve or delay issuing an approval for the | 18 |
| sale or transfer of a wholesaler's business. | 19 |
| The agreement must provide in substance that the agreement | 20 |
| shall be governed by all applicable provisions of State law, | 21 |
| and that such State law is incorporated into the agreement, | 22 |
| shall be deemed to be a part thereof, and shall supercede any | 23 |
| provision of the agreement in conflict with such State law. If | 24 |
| an agreement presented to the wholesaler does not provide this | 25 |
| provision in substance the brewer must furnish an executed | 26 |
| Illinois addendum to the wholesaler stating that the agreement |
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| shall be governed by all applicable provisions of State law, | 2 |
| and that such State law is incorporated into the agreement, | 3 |
| shall be deemed to be a part hereof, shall supercede any | 4 |
| provision of the agreement in conflict with such State law, and | 5 |
| shall govern and control. | 6 |
| No brewer who, pursuant to an agreement with a wholesaler | 7 |
| which does not
violate antitrust laws, has designated a sales | 8 |
| territory for which the
wholesaler is exclusively responsible | 9 |
| or in which the wholesaler is required
to concentrate its | 10 |
| efforts, shall enter into an agreement with any other
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| wholesaler for the purpose of establishing an additional | 12 |
| wholesaler for the
brewer's brand, brands, or brand extension | 13 |
| in the territory.
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| No wholesaler who, pursuant to an agreement is granted a | 15 |
| sales territory
for which it shall be exclusively responsible | 16 |
| or in which it is required to
concentrate its efforts, shall | 17 |
| make any sale or delivery of beer to any
retail licensee whose | 18 |
| place of business is not within the territory granted
to the | 19 |
| wholesaler.
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| (Source: P.A. 95-240, eff. 8-17-07.)
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| Section 99. Effective date. This Act takes effect upon | 22 |
| becoming law.
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