Good cause is determined by the Virginia Alcoholic Beverage Control Authority.In Virginia, termination requires good cause, according to this beer franchise law summary by the Brewers Association: And then Reyes has brought legal action against us before the Virginia Alcoholic Beverage Commission.” They did not do that, and thus we terminated Loveland. “Our contract says that they were supposed to share all the information regarding the sale. “Loveland, the selling distributor, refused to share information on the sale with us as per our contract,” reiterated Bell. With your ABCs, learn these five steps to make a better beer distributor contract. The problem is that all of the information on the sale was not shared, per their distributor contract, so Bell’s did not get the opportunity to properly vet Premium Distributors of Virginia. Why is Premium Distributors of Virginia and Reyes a problem in particular for Bell’s?īell said they aren’t the problem. The wholesaler could stop selling our beer completely and they would still be under no obligation to return our distribution rights. Based on previous litigation, there is almost no offense that a wholesaler can commit that would be enough to break the contract. Once that contract is signed, our distribution rights would be granted to that wholesaler in perpetuity. owning the brewery, wholesaler, and the retailer, which gives little incentive to sell products produced by other breweries) and increase opportunities for taxation.įor example, we could decide that we wanted a single wholesaler to sell our beer across the entire Commonwealth of Virginia. The introduction of the system was initially meant to decrease the possibility of monopolies (i.e. To simplify it, we suggest you read this excellent post from the Virginia Beer Co. See the Beer Franchise Act for all the minutia. In Virginia, signing a beer distribution contract falls under that painfully cliche married for life classification with the word “perpetuity” constantly popping up. Personally, I think Virginia’s laws are a bit antiquated.” I think those laws were written back when distributors were more mom-and-pop situations, and they were looking for protection from the very large companies that owned the breweries before craft beer was a thing. I think Virginia’s laws are written really skewed towards the middle tier. “I don’t think we’d have craft beer like we have it without the three tier system, and I’m generally supportive. “Generally, I think the three tier system has been good for craft beer,” reflected Bell. Now it’s ceasing statewide distribution as legal action might take place. Bell’s ceased shipments to Richmond in December as it attempted to terminate its contract. With the sale would go Bell’s distribution rights in Richmond. Last December, Premium Distributors of Virginia closed on the deal, making it the largest beer distributor in the Commonwealth of Virginia and solidifying Reyes as the biggest wholesaler in the Mid-Atlantic region. Loveland Distributing Co., Bell’s Richmond wholesaler, was purchased by Premium Distributors of Virginia, a subsidiary of Reyes Beer Division, the biggest distributor of beer in America. “It’s 300,000 CEs, so you know this is an unfortunate situation, but it appears that if we stay in the market that we could expose ourselves to a lot of financial risk.”īell’s is pulling its distribution from the entire state of Virginia because its distributor rights are in limbo in the Richmond area. “Yeah, it’s a lot of business,” explained Larry Bell, Bell’s Brewery founder. Bell’s is stopping distribution to Virginia, and not because of slowing business - the brand does quite well in the commonwealth (near five percent of its business). Unfortunately, that number is shrinking by one. Last summer, Bell’s added eight new states to its distribution network - Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont, New Jersey and Colorado - bringing its distribution footprint to 40 total states in addition to Puerto Rico and Washington, D.C. The Michigan-based brewing company actually started out as a homebrewing supply shop in the early ‘80s that eventually started selling its own beer and has grown into the seventh biggest craft brewer in America by sales volume, according to the Brewers Association’s 2017 list (the latest figures). 4 in Zymurgy magazine’s 2018 Best Beers in America survey (that’s a homebrew mag). Its Two Hearted Ale and Hopslam, for instance, were rated No. Bell’s Brewery is one of the biggest and most respected craft brands in American beer.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |