State of Illinois
91st General Assembly
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Public Act 91-0247

HB1234 Enrolled                                LRB9103064LDmb

    AN ACT to amend the Beer Industry  Fair  Dealing  Act  by
changing Sections 1.1, 2, 5, and 9.

    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 Sections 1.1, 2, 5, and 9 as follows:

    (815 ILCS 720/1.1) (from Ch. 43, par. 301.1)
    Sec. 1.1.  As used in this Act:
    (1) "Beer" means a beverage  obtained  by  the  alcoholic
fermentation of an infusion or concoction of barley, or other
grain,  malt,  and  hops  in water, and includes, among other
things, beer, ale, stout, lager beer, porter  and  the  like.
For  purposes  of  this  Act only, the term "beer" shall also
include malt beverage products containing less than  one-half
of 1% of alcohol by volume and marketed for adult consumption
as an alternative beverage to beer.
    (2)  "Agreement"   means   any  contract,  agreement,  or
arrangement,  operating  standards,  or   amendments   to   a
contract, agreement, arrangement, or operating standards, the
effect  of  which  is  to  substantially change or modify the
existing  contract,  agreement,  arrangement,  or   operating
standards,  whether  expressed  or  implied,  whether oral or
written, for a definite or indefinite period between a brewer
and a wholesaler pursuant to  which  a  wholesaler  has  been
granted  the  right  to  purchase,  resell, and distribute as
wholesaler or master distributor any brand or brands of  beer
offered  by  a  brewer.  The  agreement  between a brewer and
wholesaler shall not be considered a franchise relationship.
    (3)  "Wholesaler" or "beer wholesaler" means any  person,
other  than  a manufacturer licensed under The Liquor Control
Act of 1934, who is engaged  in  this  State  in  purchasing,
storing,  possessing or warehousing any alcoholic liquors for
resale or reselling at wholesale, whether within  or  without
this State.
    (4)  "Brewer"  means  a  person  who  is  engaged  in the
manufacture of beer, a master distributor as defined in  this
Section,  a  successor  brewer  as defined in this Section, a
non-resident  dealer  under  the  provisions  of  the  Liquor
Control Act of 1934, a foreign importer under the  provisions
of  the  Liquor  Control Act of 1934, or a person who owns or
controls the trademark, brand, or name of beer.
    (5)  "Master Distributor" means a person who, in addition
to being a wholesaler, acts in the same or  similar  capacity
as  a  brewer or outside seller of one or more brands of beer
to other wholesalers on a regular basis in the normal  course
of business.
    (6)  "Successor  Brewer"  means any person who in any way
obtains the distribution  rights  that  a  brewer  or  master
distributor  once had to manufacture or distribute a brand or
brands of beer  whether  by  merger,  purchase  of  corporate
shares, purchase of assets, or any other arrangement.
    (7)  "Person"   means   a  natural  person,  partnership,
corporation,  trust,  agency,  or  other  form  of   business
enterprise.  Person  also  includes  heirs, assigns, personal
representatives and guardians.
    (8)  "Territory"   or   "sales   territory"   means   the
geographic area of primary sales responsibility designated by
an agreement between a wholesaler and brewer for any brand or
brands of the brewer.
    (9)  "Good cause" exists if the  wholesaler  or  affected
party  has  failed  to  comply  with essential and reasonable
requirements imposed upon the wholesaler or affected party by
the agreement.  The requirements may  not  be  discriminating
either  by their terms or in the methods of their enforcement
as compared with  requirements  imposed  on  other  similarly
situated wholesalers by the brewer.  The requirements may not
be  inconsistent  with this Act or in violation of any law or
regulation.
    (10)  "Good  faith"  means  honesty  in  fact   and   the
observance of reasonable commercial standards of fair dealing
in  the  trade as defined and interpreted under Section 2-103
of the Uniform Commercial Code.
    (11)  "Reasonable  standards  and  qualifications"  means
those criteria applied by the brewer  to  similarly  situated
wholesalers  during a period of 24 months before the proposed
change in manager or successor manager  of  the  wholesaler's
business.
    (12)  "Affected party" means a wholesaler, brewer, master
distributor,  successor brewer, or any person that is a party
to an agreement.
    (13)  "Signs" means signs described in Section 6-6 of the
Liquor Control Act of 1934.
    (14)  "Advertising materials" means advertising materials
described in Section 6-6 of the Liquor Control Act of 1934.
(Source: P.A. 89-83, eff. 6-30-95; 90-373, eff. 8-14-97.)

    (815 ILCS 720/2) (from Ch. 43, par. 302)
    Sec. 2.  Purposes. The purposes and  scope  of  this  Act
are:
    (A)  This Act is promulgated pursuant to authority of the
State  under  the provisions of the Twenty-First Amendment to
the  United  States  Constitution  to  promote  the  public's
interest in fair, efficient and competitive  distribution  of
malt  beverage  products  by  regulation and encouragement of
brewer and  wholesaler  vendors  to  conduct  their  business
relations toward these ends by:
    (i)  assuring  the  beer wholesaler is free to manage its
business enterprise,  including  the  wholesaler's  right  to
independently establish its selling prices; and
    (ii)  assuring  the brewer and the public of service from
wholesalers who will devote reasonable efforts and  resources
to sales and distribution of all the brewer's products, which
wholesaler  has been granted the right to sell and distribute
and maintain satisfactory sales levels.
    (B)  This Act shall be incorporated  into  and  shall  be
deemed   a  part  of  every  agreement  between  brewers  and
wholesalers and shall govern all  relations  between  brewers
and  their wholesalers to the full extent consistent with the
constitutions and laws of this State and the United States.
(Source: P.A. 82-946.)

    (815 ILCS 720/5) (from Ch. 43, par. 305)
    Sec. 5. Prohibited conduct. No brewer shall:
         (1)  Induce or  coerce,  or  attempt  to  induce  or
    coerce,  any  wholesaler  to engage in any illegal act or
    course of conduct either by threatening to amend, modify,
    cancel, terminate,  or  refuse  to  renew  any  agreement
    existing between the brewer and the wholesaler, or by any
    other means.
         (2)  Require   a   wholesaler   to   assent  to  any
    unreasonable  requirement,  condition,  understanding  or
    term  or  an  agreement  prohibiting  a  wholesaler  from
    selling the product of any other brewer or brewers.
         (3)  Directly or  indirectly  fix  or  maintain  the
    price at which a wholesaler may resell beer.
         (4)  Fail  to  provide  to  each  wholesaler  of its
    brands a written contract  which  embodies  the  brewer's
    agreement  with  its  wholesalers  and  conforms  to  the
    provisions of this Act.
         (5)  Require  any  wholesaler  to accept delivery of
    any beer, signs, advertising materials, or any other item
    or  commodity  which  has  not  been   ordered   by   the
    wholesaler,  or require any wholesaler to accept a common
    carrier for delivery of beer into this State  unless  the
    wholesaler  consents to the common carrier.  In the event
    a brewer adopts a uniform  practice  of  delivering  beer
    into   this   State  to  the  premises  of  all  licensed
    wholesalers, the brewer may select the common carrier  in
    this State.
         (6)  Require  a  wholesaler without the wholesaler's
    approval to participate in an arrangement for the payment
    or crediting by an electronic fund  transfer  transaction
    for  any item or commodity other than beer or to access a
    wholesaler's account for any item or commodity other than
    beer.
         (7)  Require  a  wholesaler   to   assent   to   any
    requirement  prohibiting  the  wholesaler from disposing,
    after notice to the brewer, of a product which  has  been
    deemed  salvageable by a local or State health authority.
    Nothing herein shall prohibit the brewer from having  the
    first  right to purchase the salvageable product from the
    wholesaler at a price not to exceed the original cost  of
    the  product  or  to  subsequently repurchase the product
    from the insurance company or salvage company.
         (8)  Refuse to approve or require  a  wholesaler  to
    terminate  a  manager  or  successor manager without good
    cause.  A brewer  has  good  cause  only  if  the  person
    designated   as  manager  or  successor  manager  by  the
    wholesaler  fails  to  meet  reasonable   standards   and
    qualifications.
         (9)  Present  an  agreement  to  a  wholesaler  that
    attempts  to  waive compliance with any provision of this
    Act or that requires the wholesaler to  waive  compliance
    with any provision of this Act. No brewer shall induce or
    coerce, or attempt to induce or coerce, any wholesaler to
    assent   to   any   agreement,   amendment,  renewal,  or
    replacement agreement that does not comply with this  Act
    and the laws of this State.
         (10)  Terminate or attempt to terminate an agreement
    on  the  basis  that  the  wholesaler refuses to purchase
    signs or advertising materials or any quantity  or  types
    thereof.
         (11)  Discriminate  against  a  wholesaler  who  has
    entered  into a contract relative to signs or advertising
    materials by not making signs or advertising materials or
    any quantity or types thereof available to the wholesaler
    when the brewer makes available such signs or advertising
    materials to other similarly situated wholesalers in this
    State.
         (12)  Present an agreement requiring the  wholesaler
    to arbitrate all disputes without offering the wholesaler
    in  writing  the  opportunity  to  reject arbitration and
    elect to resolve all disputes by maintaining a civil suit
    in accordance with this Act.
    No brewer who, pursuant to an agreement with a wholesaler
which does not violate antitrust laws, has designated a sales
territory for which the wholesaler is  primarily  responsible
or  in  which  the  wholesaler is required to concentrate its
efforts,  shall  enter  into  an  agreement  with  any  other
wholesaler for the  purpose  of  establishing  an  additional
wholesaler for the brewer's brand or brands in all or part of
the same territory.
    No  wholesaler who, pursuant to an agreement is granted a
sales territory for which it shall be  primarily  responsible
or  in which it is required to concentrate its efforts, shall
make any sale or delivery of  beer  to  any  retail  licensee
whose  place  of business is not within the territory granted
to the wholesaler.
(Source: P.A. 89-83, eff. 6-30-95; 90-373, eff. 8-14-97.)

    (815 ILCS 720/9) (from Ch. 43, par. 309)
    Sec. 9.  Judicial and other remedies.
    (1)  If the brewer or wholesaler who is  a  party  to  an
agreement  pursuant to this Act fails to comply with this Act
or otherwise engages in conduct prohibited  under  this  Act,
the  affected party may maintain a civil suit in court if the
cause of  action  directly  relates  to  or  stems  from  the
relationship  of  the individual parties under the agreement,
provided that any such suit shall be  filed  in  a  State  or
federal court of competent jurisdiction located in Illinois.
    In   any   legal  action  challenging  any  cancellation,
termination, or failure to renew, the brewer has  the  burden
of  proving  the  existence  of  good cause if the wholesaler
first makes a prima facie showing that good  cause  does  not
exist.
    (2)  A  brewer  or  wholesaler  may  bring  an action for
declaratory judgment for  determination  of  any  controversy
arising  under  this  Act or out of the brewer and wholesaler
relationship.
    (3)  Upon proper application to the court,  a  brewer  or
wholesaler may obtain injunctive relief against any violation
of this Act.
    (4)  In  any  action  under  subsection (1) the court may
grant such relief as the court  determines  is  necessary  or
appropriate considering the purposes of this Act.
    (5)  The  prevailing party in any action under subsection
(1) shall be entitled to (i) actual damages, (ii)  all  court
or  arbitration  costs,  and  (iii)  attorneys'  fees  at the
court's discretion.
    (6)  With respect to any dispute arising under  this  Act
or out of the relationship between brewer and wholesaler, the
wholesaler  and the brewer each has the absolute right before
it has agreed to arbitrate a particular dispute to refuse  to
arbitrate  that  particular  dispute.   Arbitration  shall be
conducted in accordance with the Commercial Arbitration Rules
of the American Arbitration Association and the laws of  this
State, and judgment upon the award rendered by the arbitrator
may  be  entered  in any court having jurisdiction.  A brewer
may not, as a condition  of  entering  into  or  renewing  an
agreement,  require  the  wholesaler  to agree to arbitration
instead of judicial remedies.
    (7)  If there is a finding by an arbitrator or a court in
a proceeding under this Section or under subsection (1.5)  or
(2) of Section 7 that a party has not acted in good faith, an
appropriate  penalty  shall  be assessed by the arbitrator or
the court against that party and,  in  addition,  that  party
shall  also  be ordered to pay all court or arbitration costs
and reasonable legal fees incurred by the other party in  the
proceeding.
(Source:  P.A.  89-716,  eff.  2-21-97;  90-91, eff. 7-11-97;
90-655, eff. 7-30-98.)

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

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