Public Act 097-1119
 
SB3399 EnrolledLRB097 18875 JLS 64113 b


  
    AN ACT concerning beer wholesalers.
  
 
    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 Section 7 as follows:
 



    (815 ILCS 720/7)  (from Ch. 43, par. 307)



    Sec. 7. Reasonable compensation. 

    (1) Subject to the right of any party to an agreement to 
pursue any remedy provided in Section 9, any brewer that 
cancels, terminates or fails to renew any agreement,
or 
unlawfully denies approval of, or unreasonably withholds 
consent, to any
assignment, transfer or sale of a wholesaler's 
business assets or voting
stock or other equity securities, 
except as provided in this Act, shall pay
the wholesaler with 
which it has an agreement pursuant to this Act
reasonable 
compensation for the fair market value of the wholesaler's

business with relation to the affected brand or brands.  The 
fair market
value of the wholesaler's business shall include, 
but not be limited to,
its goodwill, if any.

    (1.5) The provisions of this subsection (1.5) shall only 
apply if the brewer agrees to pay reasonable compensation as 
defined in subsection (1) and
the total annual volume of all 
beer products supplied by a brewer to a
wholesaler pursuant to 
agreements between such brewer and wholesaler represents 10% 
15%
 or less of the total annual volume of the wholesaler's 
business for all
beer products supplied by all brewers.  For 
purposes of this subsection (1.5)
only, "annual volume"
means 
the volume of beer products sold by the wholesaler in the 
12-month period
immediately preceding receipt of the brewer's 
written offer pursuant to this
subsection (1.5).

    If a brewer is required to pay reasonable compensation as 
described
in subsection (1) and the question of reasonable 
compensation is the only issue
between the parties,
the brewer 
shall, in good faith, make a written offer to
pay reasonable 
compensation.  The wholesaler shall have 30 days from receipt of

the written offer to accept or reject the
brewer's offer.  
Failure to respond, in writing, to the written offer shall

constitute rejection of the offer to pay reasonable 
compensation.  If the
wholesaler, in writing, accepts the 
written offer, the wholesaler shall
surrender the affected 
brand or brands to the brewer at the time payment is
received 
from
the brewer.  If the wholesaler does not, in writing, accept 
the brewer's
written offer, either party
may elect to submit 
the determination of reasonable compensation to expedited

binding arbitration.  If one party notifies the other party in 
writing that it
elects expedited binding arbitration, the other 
party has 10 days from receipt
of the notification to elect 
expedited binding arbitration or to
reject the arbitration in 
writing.
Failure to elect arbitration shall constitute

rejection of the offer to arbitrate.


        (A) If the parties agree to expedited binding 
    arbitration, the arbitration
shall
be subject to the 
    expedited process under the commercial rules of the 
    American
Arbitration Association.
The arbitration shall be 
    concluded within 90 days after the parties agree to

    expedited binding arbitration under this Section, unless 
    extended by the
arbitrator or one of the parties.  The 
    wholesaler shall retain the affected
brand or brands during 
    the period of arbitration,
at the conclusion of which
the 
    wholesaler shall surrender the affected brand or brands to 
    the
brewer upon payment of the amount determined to be 
    reasonable compensation,
provided the wholesaler shall 
    transfer the affected brand or brands to the
brewer
after 
    90 days if the arbitration proceedings are extended beyond 
    the 90 day
limit at the request of the wholesaler.  
    Arbitration costs shall be paid
one-half by the wholesaler 
    and
one-half by the brewer.  The award of the arbitrator 
    shall be final and binding
on the parties.


        (B) If the brewer elects expedited binding arbitration 
    but the wholesaler
rejects the offer to arbitrate:


            (i) The wholesaler may accept, in writing, any 
        written offer previously
made by the
brewer.  If the 
        wholesaler selects this option, the wholesaler must 
        surrender
the affected brand or brands to the brewer at 
        the time payment is received.  If
the
wholesaler 
        believes that the amount paid by the brewer is less 
        than reasonable
compensation under subsection (1), the 
        wholesaler may bring a proceeding under
subsection (2) 
        for the difference, but may not proceed under 
        subsection (3) of
Section 9; or


            (ii) The
wholesaler may proceed against the brewer 
        under Section 9, provided
the wholesaler must

        surrender the affected brand or brands to the brewer if 
        a proceeding under
Section 9 has not been initiated 
        within 90 days after the wholesaler rejects
the offer 
        to arbitrate.
Upon determination of reasonable 
        compensation pursuant to Section 9, the brewer
shall

        pay the wholesaler the amount so determined.
Until 
        receiving payment from the
brewer of the amount so 
        determined, the wholesaler shall retain the
affected 
        brand or brands.
If (a) the wholesaler retains the 
        affected brand or brands for a period of 2
years after 
        the wholesaler rejects the offer to arbitrate,
(b) the 
        amount of reasonable compensation has not been

        determined, and (c) an injunction has not been issued, 
        the brewer shall, in
good
faith, make a payment of 
        reasonable compensation to the wholesaler.  If, 
        however, the brewer fails to ship or make available 
        brands ordered by the wholesaler prior to the brewer 
        making any payment (including a good faith payment as 
        provided in this subsection) to the wholesaler, the 
        wholesaler shall be entitled to injunctive relief and 
        attorneys' fees and shall subject the brewer to 
        punitive damages. Upon
receipt of this
payment, the 
        wholesaler must surrender the affected brand or brands 
        to the
brewer, provided that such surrender shall not 
        affect the brewer's obligation
to pay all amounts 
        ultimately determined due to the wholesaler under this 
        Act.


        (C) If the wholesaler elects expedited binding 
    arbitration but the brewer
rejects, the brewer may proceed 
    under Section 9 for
the
purpose of
determining reasonable 
    compensation.
Upon determination of reasonable 
    compensation pursuant to Section 9, the brewer
shall
pay 
    the wholesaler the amount so determined.
Until receiving 
    payment from the
brewer of the amount so determined, the 
    wholesaler shall retain the
affected brand or brands.
If 
    (a) the brewer initiates a proceeding under Section 9 
    within 90 days after
the wholesaler rejects the offer to 
    arbitrate, (b) the wholesaler retains the
affected brand or 
    brands for a period of 2 years from the date the wholesaler

    rejects the offer to arbitrate, (c) the amount
of 
    reasonable compensation has not been
determined, and (d) an 
    injunction has not been issued, the brewer shall, in
good

    faith, make a payment of reasonable compensation to the 
    wholesaler. If, however, the brewer fails to ship or make 
    available brands ordered by the wholesaler prior to the 
    brewer making any payment (including a good faith payment 
    as provided in this subsection) to the wholesaler, the 
    wholesaler shall be entitled to injunctive relief and 
    attorneys' fees and shall subject the brewer to punitive 
    damages.  Upon
receipt of this
payment, the wholesaler must 
    surrender the affected brand or brands to the
brewer, 
    provided that such surrender shall not affect the brewer's 
    obligation
to pay all amounts ultimately determined due to 
    the wholesaler under this Act.

    (2) Except as otherwise provided in subsection (1.5), in 
the event that
the brewer and the beer wholesaler are unable to

mutually agree on the reasonable compensation to be paid for 
the value of
the wholesaler's business, as defined in this Act, 
either
party may maintain a civil suit as provided in Section 9 
or the matter
may, by mutual agreement of the parties, be 
submitted to a neutral
arbitrator to be selected by the parties 
and the claim settled in
accordance with the rules provided by 
the American Arbitration Association.
Arbitration costs shall 
be paid one-half by the wholesaler and one-half by
the brewer.  
The award of the arbitrator shall be final and binding on the

parties.

(Source: P.A. 96-482, eff. 8-14-09.)

 

    Section 99. Effective date. This Act takes effect upon 
becoming law.


Effective Date:  8/27/2012