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| Public Act 097-1119 | ||||
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AN ACT concerning beer wholesalers.
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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 | ||||
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 | ||||
pursue any remedy provided in Section 9, any brewer that | ||||
cancels, terminates or fails to renew any agreement,
or | ||||
unlawfully denies approval of, or unreasonably withholds | ||||
consent, to any
assignment, transfer or sale of a wholesaler's | ||||
business assets or voting
stock or other equity securities, | ||||
except as provided in this Act, shall pay
the wholesaler with | ||||
which it has an agreement pursuant to this Act
reasonable | ||||
compensation for the fair market value of the wholesaler's
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business with relation to the affected brand or brands. The | ||||
fair market
value of the wholesaler's business shall include, | ||||
but not be limited to,
its goodwill, if any.
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(1.5) The provisions of this subsection (1.5) shall only | ||||
apply if the brewer agrees to pay reasonable compensation as | ||||
defined in subsection (1) and
the total annual volume of all | ||||
beer products supplied by a brewer to a
wholesaler pursuant to | ||||
agreements between such brewer and wholesaler represents 10% | ||
15%
or less of the total annual volume of the wholesaler's | ||
business for all
beer products supplied by all brewers. For | ||
purposes of this subsection (1.5)
only, "annual volume"
means | ||
the volume of beer products sold by the wholesaler in the | ||
12-month period
immediately preceding receipt of the brewer's | ||
written offer pursuant to this
subsection (1.5).
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If a brewer is required to pay reasonable compensation as | ||
described
in subsection (1) and the question of reasonable | ||
compensation is the only issue
between the parties,
the brewer | ||
shall, in good faith, make a written offer to
pay reasonable | ||
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. | ||
Failure to respond, in writing, to the written offer shall
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constitute rejection of the offer to pay reasonable | ||
compensation. If the
wholesaler, in writing, accepts the | ||
written offer, the wholesaler shall
surrender the affected | ||
brand or brands to the brewer at the time payment is
received | ||
from
the brewer. If the wholesaler does not, in writing, accept | ||
the brewer's
written offer, either party
may elect to submit | ||
the determination of reasonable compensation to expedited
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binding arbitration. If one party notifies the other party in | ||
writing that it
elects expedited binding arbitration, the other | ||
party has 10 days from receipt
of the notification to elect | ||
expedited binding arbitration or to
reject the arbitration in | ||
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 | ||
arbitration, the arbitration
shall
be subject to the | ||
expedited process under the commercial rules of the | ||
American
Arbitration Association.
The arbitration shall be | ||
concluded within 90 days after the parties agree to
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expedited binding arbitration under this Section, unless | ||
extended by the
arbitrator or one of the parties. The | ||
wholesaler shall retain the affected
brand or brands during | ||
the period of arbitration,
at the conclusion of which
the | ||
wholesaler shall surrender the affected brand or brands to | ||
the
brewer upon payment of the amount determined to be | ||
reasonable compensation,
provided the wholesaler shall | ||
transfer the affected brand or brands to the
brewer
after | ||
90 days if the arbitration proceedings are extended beyond | ||
the 90 day
limit at the request of the wholesaler. | ||
Arbitration costs shall be paid
one-half by the wholesaler | ||
and
one-half by the brewer. The award of the arbitrator | ||
shall be final and binding
on the parties.
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(B) If the brewer elects expedited binding arbitration | ||
but the wholesaler
rejects the offer to arbitrate:
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(i) The wholesaler may accept, in writing, any | ||
written offer previously
made by the
brewer. If the | ||
wholesaler selects this option, the wholesaler must | ||
surrender
the affected brand or brands to the brewer at | ||
the time payment is received. If
the
wholesaler | ||
believes that the amount paid by the brewer is less | ||
than reasonable
compensation under subsection (1), the | ||
wholesaler may bring a proceeding under
subsection (2) | ||
for the difference, but may not proceed under | ||
subsection (3) of
Section 9; or
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(ii) The
wholesaler may proceed against the brewer | ||
under Section 9, provided
the wholesaler must
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surrender the affected brand or brands to the brewer if | ||
a proceeding under
Section 9 has not been initiated | ||
within 90 days after the wholesaler rejects
the offer | ||
to arbitrate.
Upon determination of reasonable | ||
compensation pursuant to Section 9, the brewer
shall
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pay the wholesaler the amount so determined.
Until | ||
receiving payment from the
brewer of the amount so | ||
determined, the wholesaler shall retain the
affected | ||
brand or brands.
If (a) the wholesaler retains the | ||
affected brand or brands for a period of 2
years after | ||
the wholesaler rejects the offer to arbitrate,
(b) the | ||
amount of reasonable compensation has not been
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determined, and (c) an injunction has not been issued, | ||
the brewer shall, in
good
faith, make a payment of | ||
reasonable compensation to the wholesaler. If, | ||
however, the brewer fails to ship or make available | ||
brands ordered by the wholesaler prior to the brewer | ||
making any payment (including a good faith payment as | ||
provided in this subsection) to the wholesaler, the | ||
wholesaler shall be entitled to injunctive relief and | ||
attorneys' fees and shall subject the brewer to | ||
punitive damages. Upon
receipt of this
payment, the | ||
wholesaler must surrender the affected brand or brands | ||
to the
brewer, provided that such surrender shall not | ||
affect the brewer's obligation
to pay all amounts | ||
ultimately determined due to the wholesaler under this | ||
Act.
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(C) If the wholesaler elects expedited binding | ||
arbitration but the brewer
rejects, the brewer may proceed | ||
under Section 9 for
the
purpose of
determining reasonable | ||
compensation.
Upon determination of reasonable | ||
compensation pursuant to Section 9, the brewer
shall
pay | ||
the wholesaler the amount so determined.
Until receiving | ||
payment from the
brewer of the amount so determined, the | ||
wholesaler shall retain the
affected brand or brands.
If | ||
(a) the brewer initiates a proceeding under Section 9 | ||
within 90 days after
the wholesaler rejects the offer to | ||
arbitrate, (b) the wholesaler retains the
affected brand or | ||
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 | ||
reasonable compensation has not been
determined, and (d) an | ||
injunction has not been issued, the brewer shall, in
good
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faith, make a payment of reasonable compensation to the | ||
wholesaler. If, however, the brewer fails to ship or make | ||
available brands ordered by the wholesaler prior to the | ||
brewer making any payment (including a good faith payment | ||
as provided in this subsection) to the wholesaler, the | ||
wholesaler shall be entitled to injunctive relief and | ||
attorneys' fees and shall subject the brewer to punitive | ||
damages. Upon
receipt of this
payment, the wholesaler must | ||
surrender the affected brand or brands to the
brewer, | ||
provided that such surrender shall not affect the brewer's | ||
obligation
to pay all amounts ultimately determined due to | ||
the wholesaler under this Act.
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(2) Except as otherwise provided in subsection (1.5), in | ||
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 | ||
the value of
the wholesaler's business, as defined in this Act, | ||
either
party may maintain a civil suit as provided in Section 9 | ||
or the matter
may, by mutual agreement of the parties, be | ||
submitted to a neutral
arbitrator to be selected by the parties | ||
and the claim settled in
accordance with the rules provided by | ||
the American Arbitration Association.
Arbitration costs shall | ||
be paid one-half by the wholesaler and one-half by
the brewer. | ||
The award of the arbitrator shall be final and binding on the
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parties.
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(Source: P.A. 96-482, eff. 8-14-09.)
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Section 99. Effective date. This Act takes effect upon | ||
becoming law.
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