Will Massachusetts Lawmakers Level The Playing Field Between Small Brewers And Distributors?

By AIVI NGUYEN
Back in January, 2015, a petition along with a draft bill, Bill 245, came before the Massachusetts legislature for consideration. The proposed bill which is an amendment to an already existing bill, if approved, will change the way relationships between small brewers and distributors operate. The bill creates a standard by which small brewers are allowed to terminate their relationships with distributors, outside of the terms written in a distribution contract and different from the requirements placed upon larger breweries.
As of today, a brewer may only refuse to sell beer to a distributor if the distributor breaches whatever contract they have written between them. However, oftentimes, these contracts are drafted by huge distributors and the terms are not favorable to brewers, especially small brewers who are just trying to get their foot in the door and who were probably willing to sign anything.
Or even worse still, sometimes there is no contract between the brewer and the distributor and the relationship is governed by a decades-old franchise law.
Bill 245 is an attempt to level the power dynamic in those distribution relationships.
The bill proposes a carve out for small brewing relationships, which are defined as relationships where the sale of products to a distributer does not exceed 20% of the distributorís total sales in the prior year.
The language of the proposed bill remains unchanged with respect to large breweries, who may refuse to sell to a distributor only for good cause shown if that brewer had made regular sales to the distributor within the last 6 months. This means that a large brewer cannot simply refuse to sell to a distributor that it routinely sold to, for no good reason.
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