Legislation ends long-time dispute over distribution agreements
BOSTON (7/24/2020) – The Massachusetts Senate unanimously passed legislation that resolves a decade-long distribution dispute between brewers and wholesalers in the Commonwealth.
“The craft brewing industry has become a welcome addition to our state’s economy over the last several years,” said Senator Cindy F. Friedman (D-Arlington). “Solving this dispute is a big win for breweries in our local communities and will allow them to continue to thrive and contribute to the economic stability of our cities and towns.”
The legislation ,An Act Relative to Craft Brewers, represents the agreement reached by The Massachusetts Brewers Guild, representing craft breweries, and the Beer Distributors of Massachusetts after good-faith negotiations encouraged by Senate President Karen Spilka (D-Ashland) and her Senate colleagues.
In Massachusetts, current law makes it difficult for a brewer to end a relationship with their distributor, jeopardizing potential growth. The compromise legislation would allow a brewery that produces less than 250,000 barrels (or just over 3.4 million cases) a year to end their relationship with a distributor with a 30-day notice and other certain protections. If a distribution contract is terminated, the brewery would be responsible for fairly compensating the wholesaler the fair market value of the distribution rights in addition to other costs for inventory and marketing investments. The legislation calls for both parties to engage in an expedited arbitration process to resolve such issues.
The bill now moves to the Massachusetts House of Representatives for consideration. To track the progress of the bill, visit https://malegislature.gov/Bills/191/S2829.