Full Text of SB3399 97th General Assembly
SB3399 97TH GENERAL ASSEMBLY |
| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012 SB3399 Introduced 2/7/2012, by Sen. Antonio Muñoz SYNOPSIS AS INTRODUCED: |
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815 ILCS 720/7 | from Ch. 43, par. 307 |
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Amends the Beer Industry Fair Dealing Act. Provides that certain compensation requirements applicable to the termination of an agreement between a brewer and a wholesaler apply if the total annual volume of beer products supplied by the brewer to the wholesaler represents 10% or less, rather than 15% or less, of the wholesaler's business for all beer products supplied by all brewers. Effective immediately.
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| | A BILL FOR |
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| 1 | | AN ACT concerning beer wholesalers.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Beer Industry Fair Dealing Act is amended by | 5 | | changing Section 7 as follows:
| 6 | | (815 ILCS 720/7) (from Ch. 43, par. 307)
| 7 | | Sec. 7. Reasonable compensation.
| 8 | | (1) Subject to the right of any party to an agreement to | 9 | | pursue any remedy provided in Section 9, any brewer that | 10 | | cancels, terminates or fails to renew any agreement,
or | 11 | | unlawfully denies approval of, or unreasonably withholds | 12 | | consent, to any
assignment, transfer or sale of a wholesaler's | 13 | | business assets or voting
stock or other equity securities, | 14 | | except as provided in this Act, shall pay
the wholesaler with | 15 | | which it has an agreement pursuant to this Act
reasonable | 16 | | compensation for the fair market value of the wholesaler's
| 17 | | business with relation to the affected brand or brands. The | 18 | | fair market
value of the wholesaler's business shall include, | 19 | | but not be limited to,
its goodwill, if any.
| 20 | | (1.5) The provisions of this subsection (1.5) shall only | 21 | | apply if the brewer agrees to pay reasonable compensation as | 22 | | defined in subsection (1) and
the total annual volume of all | 23 | | beer products supplied by a brewer to a
wholesaler pursuant to |
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| 1 | | agreements between such brewer and wholesaler represents 10% | 2 | | 15%
or less of the total annual volume of the wholesaler's | 3 | | business for all
beer products supplied by all brewers. For | 4 | | purposes of this subsection (1.5)
only, "annual volume"
means | 5 | | the volume of beer products sold by the wholesaler in the | 6 | | 12-month period
immediately preceding receipt of the brewer's | 7 | | written offer pursuant to this
subsection (1.5).
| 8 | | If a brewer is required to pay reasonable compensation as | 9 | | described
in subsection (1) and the question of reasonable | 10 | | compensation is the only issue
between the parties,
the brewer | 11 | | shall, in good faith, make a written offer to
pay reasonable | 12 | | compensation. The wholesaler shall have 30 days from receipt of
| 13 | | the written offer to accept or reject the
brewer's offer. | 14 | | Failure to respond, in writing, to the written offer shall
| 15 | | constitute rejection of the offer to pay reasonable | 16 | | compensation. If the
wholesaler, in writing, accepts the | 17 | | written offer, the wholesaler shall
surrender the affected | 18 | | brand or brands to the brewer at the time payment is
received | 19 | | from
the brewer. If the wholesaler does not, in writing, accept | 20 | | the brewer's
written offer, either party
may elect to submit | 21 | | the determination of reasonable compensation to expedited
| 22 | | binding arbitration. If one party notifies the other party in | 23 | | writing that it
elects expedited binding arbitration, the other | 24 | | party has 10 days from receipt
of the notification to elect | 25 | | expedited binding arbitration or to
reject the arbitration in | 26 | | writing.
Failure to elect arbitration shall constitute
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| 1 | | rejection of the offer to arbitrate.
| 2 | | (A) If the parties agree to expedited binding | 3 | | arbitration, the arbitration
shall
be subject to the | 4 | | expedited process under the commercial rules of the | 5 | | American
Arbitration Association.
The arbitration shall be | 6 | | concluded within 90 days after the parties agree to
| 7 | | expedited binding arbitration under this Section, unless | 8 | | extended by the
arbitrator or one of the parties. The | 9 | | wholesaler shall retain the affected
brand or brands during | 10 | | the period of arbitration,
at the conclusion of which
the | 11 | | wholesaler shall surrender the affected brand or brands to | 12 | | the
brewer upon payment of the amount determined to be | 13 | | reasonable compensation,
provided the wholesaler shall | 14 | | transfer the affected brand or brands to the
brewer
after | 15 | | 90 days if the arbitration proceedings are extended beyond | 16 | | the 90 day
limit at the request of the wholesaler. | 17 | | Arbitration costs shall be paid
one-half by the wholesaler | 18 | | and
one-half by the brewer. The award of the arbitrator | 19 | | shall be final and binding
on the parties.
| 20 | | (B) If the brewer elects expedited binding arbitration | 21 | | but the wholesaler
rejects the offer to arbitrate:
| 22 | | (i) The wholesaler may accept, in writing, any | 23 | | written offer previously
made by the
brewer. If the | 24 | | wholesaler selects this option, the wholesaler must | 25 | | surrender
the affected brand or brands to the brewer at | 26 | | the time payment is received. If
the
wholesaler |
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| 1 | | believes that the amount paid by the brewer is less | 2 | | than reasonable
compensation under subsection (1), the | 3 | | wholesaler may bring a proceeding under
subsection (2) | 4 | | for the difference, but may not proceed under | 5 | | subsection (3) of
Section 9; or
| 6 | | (ii) The
wholesaler may proceed against the brewer | 7 | | under Section 9, provided
the wholesaler must
| 8 | | surrender the affected brand or brands to the brewer if | 9 | | a proceeding under
Section 9 has not been initiated | 10 | | within 90 days after the wholesaler rejects
the offer | 11 | | to arbitrate.
Upon determination of reasonable | 12 | | compensation pursuant to Section 9, the brewer
shall
| 13 | | pay the wholesaler the amount so determined.
Until | 14 | | receiving payment from the
brewer of the amount so | 15 | | determined, the wholesaler shall retain the
affected | 16 | | brand or brands.
If (a) the wholesaler retains the | 17 | | affected brand or brands for a period of 2
years after | 18 | | the wholesaler rejects the offer to arbitrate,
(b) the | 19 | | amount of reasonable compensation has not been
| 20 | | determined, and (c) an injunction has not been issued, | 21 | | the brewer shall, in
good
faith, make a payment of | 22 | | reasonable compensation to the wholesaler. If, | 23 | | however, the brewer fails to ship or make available | 24 | | brands ordered by the wholesaler prior to the brewer | 25 | | making any payment (including a good faith payment as | 26 | | provided in this subsection) to the wholesaler, the |
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| 1 | | wholesaler shall be entitled to injunctive relief and | 2 | | attorneys' fees and shall subject the brewer to | 3 | | punitive damages. Upon
receipt of this
payment, the | 4 | | wholesaler must surrender the affected brand or brands | 5 | | to the
brewer, provided that such surrender shall not | 6 | | affect the brewer's obligation
to pay all amounts | 7 | | ultimately determined due to the wholesaler under this | 8 | | Act.
| 9 | | (C) If the wholesaler elects expedited binding | 10 | | arbitration but the brewer
rejects, the brewer may proceed | 11 | | under Section 9 for
the
purpose of
determining reasonable | 12 | | compensation.
Upon determination of reasonable | 13 | | compensation pursuant to Section 9, the brewer
shall
pay | 14 | | the wholesaler the amount so determined.
Until receiving | 15 | | payment from the
brewer of the amount so determined, the | 16 | | wholesaler shall retain the
affected brand or brands.
If | 17 | | (a) the brewer initiates a proceeding under Section 9 | 18 | | within 90 days after
the wholesaler rejects the offer to | 19 | | arbitrate, (b) the wholesaler retains the
affected brand or | 20 | | brands for a period of 2 years from the date the wholesaler
| 21 | | rejects the offer to arbitrate, (c) the amount
of | 22 | | reasonable compensation has not been
determined, and (d) an | 23 | | injunction has not been issued, the brewer shall, in
good
| 24 | | faith, make a payment of reasonable compensation to the | 25 | | wholesaler. If, however, the brewer fails to ship or make | 26 | | available brands ordered by the wholesaler prior to the |
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| 1 | | brewer making any payment (including a good faith payment | 2 | | as provided in this subsection) to the wholesaler, the | 3 | | wholesaler shall be entitled to injunctive relief and | 4 | | attorneys' fees and shall subject the brewer to punitive | 5 | | damages. Upon
receipt of this
payment, the wholesaler must | 6 | | surrender the affected brand or brands to the
brewer, | 7 | | provided that such surrender shall not affect the brewer's | 8 | | obligation
to pay all amounts ultimately determined due to | 9 | | the wholesaler under this Act.
| 10 | | (2) Except as otherwise provided in subsection (1.5), in | 11 | | the event that
the brewer and the beer wholesaler are unable to
| 12 | | mutually agree on the reasonable compensation to be paid for | 13 | | the value of
the wholesaler's business, as defined in this Act, | 14 | | either
party may maintain a civil suit as provided in Section 9 | 15 | | or the matter
may, by mutual agreement of the parties, be | 16 | | submitted to a neutral
arbitrator to be selected by the parties | 17 | | and the claim settled in
accordance with the rules provided by | 18 | | the American Arbitration Association.
Arbitration costs shall | 19 | | be paid one-half by the wholesaler and one-half by
the brewer. | 20 | | The award of the arbitrator shall be final and binding on the
| 21 | | parties.
| 22 | | (Source: P.A. 96-482, eff. 8-14-09.)
| 23 | | Section 99. Effective date. This Act takes effect upon | 24 | | becoming law.
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