Bill Summary for S 130 (2011-2012)

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Summary date: 

Feb 24 2011

Bill Information:

View NCGA Bill Details2011-2012 Session
Senate Bill 130 (Public) Filed Thursday, February 24, 2011
TO PRESERVE THE THREE-TIER DISTRIBUTION SYSTEM FOR WINE IN NORTH CAROLINA, TO PROHIBIT A WINE WHOLESALER FROM DISTRIBUTING WINE BEYOND ITS DESIGNATED SALES TERRITORY, AND TO CONFIRM THAT GOOD CAUSE FOR THE TERMINATION OF A WINE FRANCHISE DOES NOT INCLUDE A SUPPLIER’S DESIRE TO CONSOLIDATE ITS FRANCHISE OR DISTRIBUTION PATTERN.
Intro. by Brown, Allran, Blue.

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Bill summary

Amends GS 18B-1200(b) to include that an underlying purpose and policy of Article 12 (Wine Distribution Agreements) of GS Chapter 20 is to promote and maintain a three-tier system of distribution of wine to the public.
Amends GS 18B-1203 to prohibit a wine wholesaler from distributing any brand of wine to a retailer whose premises are located outside of the territory designated in the wholesaler’s agreement for the brand. However, permits an exception with the approval of the North Carolina Alcoholic Beverage Control Commission (Commission) if there are periods of temporary interruption of service and the winery and the wholesaler request that the wholesaler be allowed to distribute wine outside of the wholesaler’s designated territory. Provides that unless there is a written agreement between the winery and wholesaler stating otherwise, the area designated as the wholesaler’s area of primary sales responsibility as of the effective date (when the act becomes law) of this section, as amended, is declared the wholesaler’s designated sales territory. Requires that the redesignation of sales territories happening after the effective date (was, after March 21, 1983) of this proposed section are to be reported to the Commission within 30 days. Maintains that no provisions of Article 12 prohibits continuing multi-wholesaler agreements entered into prior to March 21, 1983, but when those agreements end, requires that any subsequent agreement for the affected territory be designated for a single wholesaler. Makes conforming changes.
Amends GS 18B-1204 to clarify that good cause for amending, canceling, terminating, or refusing to renew an agreement does not include the desire of a winery to consolidate its franchises or its distribution patterns without a showing that the wholesaler has failed to effectively market or distribute the winery’s product.
The act includes a severability clause.
Effective when the act becomes law and applies to all existing franchise agreements. Provides that following the effective date of the act, a winery’s shipment of wine to a wholesaler in North Carolina constitutes acceptance of the terms of this act and such acceptance will be considered as incorporated into the agreement between the winery and the wholesaler.