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Public Act 097-1119


 

Public Act 1119 97TH GENERAL ASSEMBLY

  
  
  

 


 
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