The New York State Brewers Association is asking for help from beer fans.
We are asking for your support of the NY Craft Brewers’ efforts to pass an important amendment to the laws governing beer distribution in New York.
Under current law, it is very difficult, expensive and sometimes practically impossible for small brewers to switch from one wholesale distributor of their beer to another. The laws now in effect were enacted about 15 years ago to protect beer wholesalers from unfair distribution contract termination by large, multinational breweries. Wholesalers were legitimately concerned because all too often when a brewery moved its brands, the former wholesaler went totally uncompensated for all the time and effort spent in building sales of those brands.
In 2008, however, the beer and brewing landscape is very different. Although there are fewer wholesalers, those remaining are much larger companies and while multinational breweries certainly exist, the rise and proliferation of small, local craft breweries means that many brewers are smaller than the wholesalers they do business with.
Yet, these small craft brewers are required to operate under the same “franchise” laws that were created to protect the wholesalers from large brewers. Unfortunately, today these same franchise laws are being used by wholesalers to lock in the distribution rights and restrict access to market for these small brewers. Clearly, this is not good for small brewers, but it’s also very bad for consumers because it means less choice in terms of fewer brands and fewer breweries available on store shelves.
S 6101 proposes a change to that law so that any small brewer that is less than 5% of a wholesaler’s business will have the ability to terminate a relationship with a wholesaler providing they pay fair compensation to that wholesaler, i.e. what the brand has transferred for with other wholesalers over the past 12 months or a minimum of 2 times gross profit. Thus, S 6101 relieves small brewers from the franchise laws but importantly would continue to compensate the wholesaler for value of the brand rights if they are terminated.
On behalf of the New York State Brewers Association, please call or email your New York State Senator at his or her Albany office as soon as possible and urge them to support S 6101. This bill has already passed the Assembly and could come up for a vote in the Senate at any time.
Here’s how to contact Senators.
For more information visit Support Your Local Brewery.