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Public Act 91-0247
HB1234 Enrolled LRB9103064LDmb
AN ACT to amend the Beer Industry Fair Dealing Act by
changing Sections 1.1, 2, 5, and 9.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Beer Industry Fair Dealing Act is amended
by changing Sections 1.1, 2, 5, and 9 as follows:
(815 ILCS 720/1.1) (from Ch. 43, par. 301.1)
Sec. 1.1. As used in this Act:
(1) "Beer" means a beverage obtained by the alcoholic
fermentation of an infusion or concoction of barley, or other
grain, malt, and hops in water, and includes, among other
things, beer, ale, stout, lager beer, porter and the like.
For purposes of this Act only, the term "beer" shall also
include malt beverage products containing less than one-half
of 1% of alcohol by volume and marketed for adult consumption
as an alternative beverage to beer.
(2) "Agreement" means any contract, agreement, or
arrangement, operating standards, or amendments to a
contract, agreement, arrangement, or operating standards, the
effect of which is to substantially change or modify the
existing contract, agreement, arrangement, or operating
standards, whether expressed or implied, whether oral or
written, for a definite or indefinite period between a brewer
and a wholesaler pursuant to which a wholesaler has been
granted the right to purchase, resell, and distribute as
wholesaler or master distributor any brand or brands of beer
offered by a brewer. The agreement between a brewer and
wholesaler shall not be considered a franchise relationship.
(3) "Wholesaler" or "beer wholesaler" means any person,
other than a manufacturer licensed under The Liquor Control
Act of 1934, who is engaged in this State in purchasing,
storing, possessing or warehousing any alcoholic liquors for
resale or reselling at wholesale, whether within or without
this State.
(4) "Brewer" means a person who is engaged in the
manufacture of beer, a master distributor as defined in this
Section, a successor brewer as defined in this Section, a
non-resident dealer under the provisions of the Liquor
Control Act of 1934, a foreign importer under the provisions
of the Liquor Control Act of 1934, or a person who owns or
controls the trademark, brand, or name of beer.
(5) "Master Distributor" means a person who, in addition
to being a wholesaler, acts in the same or similar capacity
as a brewer or outside seller of one or more brands of beer
to other wholesalers on a regular basis in the normal course
of business.
(6) "Successor Brewer" means any person who in any way
obtains the distribution rights that a brewer or master
distributor once had to manufacture or distribute a brand or
brands of beer whether by merger, purchase of corporate
shares, purchase of assets, or any other arrangement.
(7) "Person" means a natural person, partnership,
corporation, trust, agency, or other form of business
enterprise. Person also includes heirs, assigns, personal
representatives and guardians.
(8) "Territory" or "sales territory" means the
geographic area of primary sales responsibility designated by
an agreement between a wholesaler and brewer for any brand or
brands of the brewer.
(9) "Good cause" exists if the wholesaler or affected
party has failed to comply with essential and reasonable
requirements imposed upon the wholesaler or affected party by
the agreement. The requirements may not be discriminating
either by their terms or in the methods of their enforcement
as compared with requirements imposed on other similarly
situated wholesalers by the brewer. The requirements may not
be inconsistent with this Act or in violation of any law or
regulation.
(10) "Good faith" means honesty in fact and the
observance of reasonable commercial standards of fair dealing
in the trade as defined and interpreted under Section 2-103
of the Uniform Commercial Code.
(11) "Reasonable standards and qualifications" means
those criteria applied by the brewer to similarly situated
wholesalers during a period of 24 months before the proposed
change in manager or successor manager of the wholesaler's
business.
(12) "Affected party" means a wholesaler, brewer, master
distributor, successor brewer, or any person that is a party
to an agreement.
(13) "Signs" means signs described in Section 6-6 of the
Liquor Control Act of 1934.
(14) "Advertising materials" means advertising materials
described in Section 6-6 of the Liquor Control Act of 1934.
(Source: P.A. 89-83, eff. 6-30-95; 90-373, eff. 8-14-97.)
(815 ILCS 720/2) (from Ch. 43, par. 302)
Sec. 2. Purposes. The purposes and scope of this Act
are:
(A) This Act is promulgated pursuant to authority of the
State under the provisions of the Twenty-First Amendment to
the United States Constitution to promote the public's
interest in fair, efficient and competitive distribution of
malt beverage products by regulation and encouragement of
brewer and wholesaler vendors to conduct their business
relations toward these ends by:
(i) assuring the beer wholesaler is free to manage its
business enterprise, including the wholesaler's right to
independently establish its selling prices; and
(ii) assuring the brewer and the public of service from
wholesalers who will devote reasonable efforts and resources
to sales and distribution of all the brewer's products, which
wholesaler has been granted the right to sell and distribute
and maintain satisfactory sales levels.
(B) This Act shall be incorporated into and shall be
deemed a part of every agreement between brewers and
wholesalers and shall govern all relations between brewers
and their wholesalers to the full extent consistent with the
constitutions and laws of this State and the United States.
(Source: P.A. 82-946.)
(815 ILCS 720/5) (from Ch. 43, par. 305)
Sec. 5. Prohibited conduct. No brewer shall:
(1) Induce or coerce, or attempt to induce or
coerce, any wholesaler to engage in any illegal act or
course of conduct either by threatening to amend, modify,
cancel, terminate, or refuse to renew any agreement
existing between the brewer and the wholesaler, or by any
other means.
(2) Require a wholesaler to assent to any
unreasonable requirement, condition, understanding or
term or an agreement prohibiting a wholesaler from
selling the product of any other brewer or brewers.
(3) Directly or indirectly fix or maintain the
price at which a wholesaler may resell beer.
(4) Fail to provide to each wholesaler of its
brands a written contract which embodies the brewer's
agreement with its wholesalers and conforms to the
provisions of this Act.
(5) Require any wholesaler to accept delivery of
any beer, signs, advertising materials, or any other item
or commodity which has not been ordered by the
wholesaler, or require any wholesaler to accept a common
carrier for delivery of beer into this State unless the
wholesaler consents to the common carrier. In the event
a brewer adopts a uniform practice of delivering beer
into this State to the premises of all licensed
wholesalers, the brewer may select the common carrier in
this State.
(6) Require a wholesaler without the wholesaler's
approval to participate in an arrangement for the payment
or crediting by an electronic fund transfer transaction
for any item or commodity other than beer or to access a
wholesaler's account for any item or commodity other than
beer.
(7) Require a wholesaler to assent to any
requirement prohibiting the wholesaler from disposing,
after notice to the brewer, of a product which has been
deemed salvageable by a local or State health authority.
Nothing herein shall prohibit the brewer from having the
first right to purchase the salvageable product from the
wholesaler at a price not to exceed the original cost of
the product or to subsequently repurchase the product
from the insurance company or salvage company.
(8) Refuse to approve or require a wholesaler to
terminate a manager or successor manager without good
cause. A brewer has good cause only if the person
designated as manager or successor manager by the
wholesaler fails to meet reasonable standards and
qualifications.
(9) Present an agreement to a wholesaler that
attempts to waive compliance with any provision of this
Act or that requires the wholesaler to waive compliance
with any provision of this Act. No brewer shall induce or
coerce, or attempt to induce or coerce, any wholesaler to
assent to any agreement, amendment, renewal, or
replacement agreement that does not comply with this Act
and the laws of this State.
(10) Terminate or attempt to terminate an agreement
on the basis that the wholesaler refuses to purchase
signs or advertising materials or any quantity or types
thereof.
(11) Discriminate against a wholesaler who has
entered into a contract relative to signs or advertising
materials by not making signs or advertising materials or
any quantity or types thereof available to the wholesaler
when the brewer makes available such signs or advertising
materials to other similarly situated wholesalers in this
State.
(12) Present an agreement requiring the wholesaler
to arbitrate all disputes without offering the wholesaler
in writing the opportunity to reject arbitration and
elect to resolve all disputes by maintaining a civil suit
in accordance with this Act.
No brewer who, pursuant to an agreement with a wholesaler
which does not violate antitrust laws, has designated a sales
territory for which the wholesaler is primarily responsible
or in which the wholesaler is required to concentrate its
efforts, shall enter into an agreement with any other
wholesaler for the purpose of establishing an additional
wholesaler for the brewer's brand or brands in all or part of
the same territory.
No wholesaler who, pursuant to an agreement is granted a
sales territory for which it shall be primarily responsible
or in which it is required to concentrate its efforts, shall
make any sale or delivery of beer to any retail licensee
whose place of business is not within the territory granted
to the wholesaler.
(Source: P.A. 89-83, eff. 6-30-95; 90-373, eff. 8-14-97.)
(815 ILCS 720/9) (from Ch. 43, par. 309)
Sec. 9. Judicial and other remedies.
(1) If the brewer or wholesaler who is a party to an
agreement pursuant to this Act fails to comply with this Act
or otherwise engages in conduct prohibited under this Act,
the affected party may maintain a civil suit in court if the
cause of action directly relates to or stems from the
relationship of the individual parties under the agreement,
provided that any such suit shall be filed in a State or
federal court of competent jurisdiction located in Illinois.
In any legal action challenging any cancellation,
termination, or failure to renew, the brewer has the burden
of proving the existence of good cause if the wholesaler
first makes a prima facie showing that good cause does not
exist.
(2) A brewer or wholesaler may bring an action for
declaratory judgment for determination of any controversy
arising under this Act or out of the brewer and wholesaler
relationship.
(3) Upon proper application to the court, a brewer or
wholesaler may obtain injunctive relief against any violation
of this Act.
(4) In any action under subsection (1) the court may
grant such relief as the court determines is necessary or
appropriate considering the purposes of this Act.
(5) The prevailing party in any action under subsection
(1) shall be entitled to (i) actual damages, (ii) all court
or arbitration costs, and (iii) attorneys' fees at the
court's discretion.
(6) With respect to any dispute arising under this Act
or out of the relationship between brewer and wholesaler, the
wholesaler and the brewer each has the absolute right before
it has agreed to arbitrate a particular dispute to refuse to
arbitrate that particular dispute. Arbitration shall be
conducted in accordance with the Commercial Arbitration Rules
of the American Arbitration Association and the laws of this
State, and judgment upon the award rendered by the arbitrator
may be entered in any court having jurisdiction. A brewer
may not, as a condition of entering into or renewing an
agreement, require the wholesaler to agree to arbitration
instead of judicial remedies.
(7) If there is a finding by an arbitrator or a court in
a proceeding under this Section or under subsection (1.5) or
(2) of Section 7 that a party has not acted in good faith, an
appropriate penalty shall be assessed by the arbitrator or
the court against that party and, in addition, that party
shall also be ordered to pay all court or arbitration costs
and reasonable legal fees incurred by the other party in the
proceeding.
(Source: P.A. 89-716, eff. 2-21-97; 90-91, eff. 7-11-97;
90-655, eff. 7-30-98.)
Section 99. Effective date. This Act takes effect upon
becoming law.
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