S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  8962

                          I N  A S S E M B L Y

                            January 10, 2012
                               ___________

Introduced  by  M.  of A. BRINDISI, MORELLE -- read once and referred to
  the Committee on Economic Development

AN ACT to amend the alcoholic  beverage  control  law,  in  relation  to
  agreements between small brewers and beer wholesalers

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivision 4 of section 55-c  of  the  alcoholic  beverage
control law is amended by adding a new paragraph (c) to read as follows:
  (C) NOTWITHSTANDING ANY PROVISION OF THIS SUBDIVISION TO THE CONTRARY:
  (I)  ANY  BREWER WITH AN ANNUAL VOLUME AS DEFINED IN SUBPARAGRAPH (IV)
OF THIS PARAGRAPH OF LESS THAN THREE HUNDRED THOUSAND  BARRELS  OF  BEER
AND WHOSE SALES TO AN AFFECTED BEER WHOLESALER ARE THREE PERCENT OR LESS
OF  THE  BEER  WHOLESALER'S  TOTAL  ANNUAL  BRAND SALES MEASURED IN CASE
EQUIVALENT SALES OF TWENTY-FOUR--TWELVE OUNCE  UNITS  MAY  TERMINATE  AN
AGREEMENT  WITH  ANY  BEER WHOLESALER WITHOUT HAVING GOOD CAUSE FOR SUCH
TERMINATION, AS DEFINED IN PARAGRAPH (E)  OF  SUBDIVISION  TWO  OF  THIS
SECTION,  AND  SHALL  NOT BE SUBJECT TO LIABILITY TO THE BEER WHOLESALER
UNDER PARAGRAPH (B) OF SUBDIVISION SEVEN OF THIS SECTION PROVIDED  THAT,
PRIOR TO THE EFFECTIVE DATE OF THE TERMINATION, THE BREWER PAYS THE BEER
WHOLESALER  THE  FAIR MARKET VALUE OF THE DISTRIBUTION RIGHTS WHICH WILL
BE LOST OR DIMINISHED BY REASON OF THE TERMINATION. IF SUCH  BREWER  AND
BEER  WHOLESALER  CANNOT  MUTUALLY AGREE TO THE FAIR MARKET VALUE OF THE
APPLICABLE DISTRIBUTION RIGHTS LOST  OR  DIMINISHED  BY  REASON  OF  THE
TERMINATION,  THEN THE BREWER SHALL PAY THE BEER WHOLESALER A GOOD FAITH
ESTIMATE OF THE FAIR MARKET VALUE OF THE APPLICABLE DISTRIBUTION RIGHTS.
  (II) IF THE BEER WHOLESALER BEING TERMINATED UNDER SUBPARAGRAPH (I) OF
THIS PARAGRAPH DISPUTES THAT THE PAYMENT MADE BY  THE  BREWER  WAS  LESS
THAN  THE  FAIR  MARKET  VALUE OF THE DISTRIBUTION RIGHTS, THEN THE BEER
WHOLESALER MAY WITHIN FORTY-FIVE DAYS OF TERMINATION SUBMIT THE QUESTION
OF FAIR MARKET VALUE OF  THE  APPLICABLE  DISTRIBUTION  RIGHTS  LOST  OR
DIMINISHED  BY REASON OF THE TERMINATION TO BINDING ARBITRATION BEFORE A
PANEL OF THREE NEUTRAL ARBITRATORS  APPOINTED  IN  ACCORDANCE  WITH  THE
COMMERCIAL  ARBITRATION  RULES  OF THE AMERICAN ARBITRATION ASSOCIATION,
WHICH PANEL SHALL DETERMINE BY MAJORITY DECISION  WHETHER  THE  BREWER'S

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD01630-01-1

A. 8962                             2

PAYMENT MEETS THE REQUIREMENTS OF SUBPARAGRAPH (I) OF THIS PARAGRAPH. IF
THE  ARBITRATION  PANEL RULES THAT THE PAYMENT MADE BY THE BREWER TO THE
BEER WHOLESALER UPON TERMINATION WAS LESS THAN THE FAIR MARKET VALUE  OF
DISTRIBUTION  RIGHTS  LOST  OR  DIMINISHED BY REASON OF THE TERMINATION,
THEN THE BREWER MUST PAY THE BEER WHOLESALER THE DIFFERENCE BETWEEN  THE
PAYMENT MADE TO THE BEER WHOLESALER AND THE DETERMINED FAIR MARKET VALUE
PLUS  INTEREST.  IF THE ARBITRATION PANEL RULES THAT THE PAYMENT MADE BY
THE BREWER TO THE BEER WHOLESALER UPON TERMINATION  WAS  MORE  THAN  THE
FAIR MARKET VALUE OF DISTRIBUTION RIGHTS LOST OR DIMINISHED BY REASON OF
THE  TERMINATION,  THEN  THE  BEER  WHOLESALER  MUST  PAY THE BREWER THE
DIFFERENCE BETWEEN THE PAYMENT MADE  TO  THE  BEER  WHOLESALER  AND  THE
DETERMINED  FAIR  MARKET  VALUE  PLUS INTEREST. ALL ARBITRATION FEES AND
EXPENSES SHALL BE EQUALLY DIVIDED AMONG THE PARTIES TO  THE  ARBITRATION
EXCEPT  IF  THE  ARBITRATION  PANEL DETERMINES THAT THE BREWER'S PAYMENT
UPON TERMINATION WAS NOT A GOOD FAITH ESTIMATE OF THE FAIR MARKET VALUE,
THEN THE PANEL MAY AWARD UP TO ONE HUNDRED PERCENT  OF  THE  ARBITRATION
COSTS TO THE BREWER.
  (III)  NOTWITHSTANDING  ANY PROVISION OF THIS SECTION TO THE CONTRARY,
FOR PURPOSES OF THIS PARAGRAPH, THE TERM "BREWER" SHALL MEAN ANY  PERSON
OR  ENTITY  ENGAGED PRIMARILY IN BUSINESS AS A BREWER OR MANUFACTURER OF
BEER.
  (IV) FOR THE PURPOSE OF THIS PARAGRAPH, THE TERM "ANNUAL VOLUME" SHALL
MEAN:  (1) THE AGGREGATE NUMBER OF BARRELS  OF  BEER,  UNDER  TRADEMARKS
OWNED  BY  THAT  BREWERY  AND  BREWED,  DIRECTLY OR INDIRECTLY, BY OR ON
BEHALF OF THE BREWER DURING THE MEASURING PERIOD, ON A WORLDWIDE  BASIS,
PLUS  (2)  THE  AGGREGATE  NUMBER  OF BARRELS OF BEER BREWED, DURING THE
MEASURING PERIOD, DIRECTLY OR INDIRECTLY, BY OR ON BEHALF OF ANY  PERSON
OR  ENTITY  WHICH,  AT ANY TIME DURING THE MEASURING PERIOD, CONTROLLED,
WAS CONTROLLED BY OR WAS UNDER COMMON CONTROL  WITH  THE  BREWER,  ON  A
WORLDWIDE  BASIS.  ANNUAL  VOLUME  SHALL  NOT  INCLUDE BEER BREWED UNDER
CONTRACT FOR ANY OTHER BREWER. THERE SHALL BE NO DOUBLE COUNTING OF  THE
SAME BARRELS OF BEER UNDER CLAUSES ONE AND TWO OF THIS SUBPARAGRAPH.
  (V)  FOR  THE  PURPOSES OF THIS PARAGRAPH, THE TERM "MEASURING PERIOD"
SHALL MEAN THE TWELVE MONTH CALENDAR PERIOD  IMMEDIATELY  PRECEDING  THE
DATE  NOTICE  OF TERMINATION, AS REQUIRED UNDER SUBPARAGRAPH (I) OF THIS
PARAGRAPH, WAS GIVEN BY A BREWER TO THE BEER WHOLESALER.
  S 2. This act shall take effect on the first of January next  succeed-
ing the date on which it shall have become a law.