On January 12, 2021, Massachusetts Governor Charlie Baker signed into law Bill S2841 amending Chapter 138 of the General Laws by inserting Sec. 25E 1/2. Under M.G.L.A. 138 § 25E ½ "a brewery may, without good cause, terminate the right of a licensed wholesaler to whom such brewery has made regular sales of malt beverages subject to the provisions of this section."
- In order to qualify, breweries must produce less than 240,000 barrels of beverages in a year.
- Breweries must provide the affected wholesaler no less than 30 days' written notice and full compensation... the laid-in cost of the merchantable inventory plus the laid-in cost of the current sales and marketing material plus the fair market value of the distribution rights for the brands that are being terminated by the brewery. Nothing prevents a successor wholesaler from paying the compensation to the affected wholesaler directly or from compensating a brewery for any compensation paid by the brewery.
- Given a dispute between the brewery and the affected wholesaler that cannot be agreed upon within 30 days of notice, the parties may request that the amount be decided upon in arbitration conducted in the Commonwealth.
This new law is already the subject of a pending lawsuit in Massachusetts.
Originally published 6 April 2021.
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