View Daily Data Tracking History
View Bill Text
View Statement of Purpose / Fiscal Impact
H0234...........................................................by BUSINESS
VINTNER/WINERY - Amends existing law to provide for terms of compensation
in the event a vintner, winery, importer or dealer terminates, cancels or
refuses to renew a distribution agreement with a distributor.
02/14 House intro - 1st rdg - to printing
02/15 Rpt prt - to Bus
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 234
BY BUSINESS COMMITTEE
1 AN ACT
2 RELATING TO THE COUNTY OPTION KITCHEN AND TABLE WINE ACT; AMENDING SECTION
3 23-1328A, IDAHO CODE, TO PROVIDE FOR TERMS OF COMPENSATION IN THE EVENT A
4 VINTNER, WINERY, IMPORTER OR DEALER TERMINATES, CANCELS OR REFUSES TO
5 RENEW A DISTRIBUTION AGREEMENT WITH A DISTRIBUTOR AND TO MAKE TECHNICAL
6 CORRECTIONS.
7 Be It Enacted by the Legislature of the State of Idaho:
8 SECTION 1. That Section 23-1328A, Idaho Code, be, and the same is hereby
9 amended to read as follows:
10 23-1328A. PROHIBITION OF CERTAIN TRADE PRACTICES BETWEEN VINTNERS, WINER-
11 IES, IMPORTERS OR DEALERS AND DISTRIBUTORS -- COMPENSATION UPON TERMINATION,
12 CANCELLATION OR NONRENEWAL. (1) It shall be unlawful for any vintners, winery,
13 importer or dealer, directly or indirectly, or through an affiliate, subsid-
14 iary, officer, director, agent or employee:
15 (a) To require, by agreement or otherwise, that any distributors engaged
16 in the sale or distribution of wine in the state of Idaho purchase any
17 such wine or other distributed products from such person to the exclusion
18 in whole or in part of wine or other products made or imported by other
19 vintners, wineries, importers or dealers;
20 (b) To induce, by any means, any distributor engaged in the sale or dis-
21 tribution of wine to purchase from or distribute the wine or other prod-
22 ucts of any vintner, winery, importer or dealer to the exclusion of the
23 wine or products of other vintners, wineries, importers or dealers by any
24 means, including, but not limited to, the vintner's, winery's, importer's
25 or dealer's acquisition of any interest in the distributor's license, or
26 by acquiring any interest in the real or personal property owned, occu-
27 pied, or used by the distributor;
28 (c) To discriminate in price, allowance, rebate, refund, commission, dis-
29 count, or service between a distributor purchasing wine or a distributor
30 purchasing other products;
31 (d) To threaten any distributor with any discrimination prohibited under
32 subsection (1)(c) of this section, with the purpose or effect of changing
33 or maintaining resale prices of the vintner, winery, importer or dealer;
34 (e) To impose conditions or restrictions on a distributor not generally
35 imposed on other distributors; or
36 (f) To cause a termination, cancellation, nonrenewal or substantial
37 change in competitive circumstances in the relationship with the distribu-
38 tor without providing at least ninety (90) days' written notice of the
39 termination, cancellation, nonrenewal or substantial change in competitive
40 circumstances. The notice shall state all the reasons for termination,
41 cancellation, nonrenewal or substantial change in competitive circum-
42 stances and shall provide that the distributor has ninety (90) days from
43 the date of receipt by said distributor of the vintner's, winery's,
2
1 importer's or dealer's notice in which to rectify any claimed deficiency.
2 If the deficiency is rectified within ninety (90) days, the notice shall
3 be void. The notice provisions of this section shall not apply if the
4 reason for termination, cancellation or nonrenewal is insolvency, the
5 occurrence of an assignment for the benefit of creditors, or bankruptcy.
6 If the reason for termination, cancellation, nonrenewal or substantial
7 change in competitive circumstances is nonpayment of sums due for the pur-
8 chase of product, the distributor shall be entitled to written notice of
9 such default, and shall have twenty (20) days in which to remedy such
10 default from the date of delivery or posting of such notice.
11 (2)(a) In the event that an agreement between a vintner, winery, importer
12 or dealer (hereinafter referred to as "supplier") and a distributor is
13 terminated, canceled or not renewed by a supplier, the distributor shall
14 be entitled to reasonable compensation for the laid-in cost to the dis-
15 tributor of the inventory of the supplier's products, including any taxes
16 paid on the inventory by the distributor, together with a reasonable
17 charge for handling of the products.
18 (b) In addition to the compensation provided in paragraph (a) of this
19 subsection, if the agreement between a supplier and a distributor is ter-
20 minated, canceled or not renewed by a supplier in bad faith or for other
21 than good cause, the distributor shall be entitled to compensation from
22 the supplier for:
23 (i) The fair market value of any and all assets, including ancil-
24 lary businesses, relating to the transporting, storing or marketing
25 of the supplier's products; and
26 (ii) The good will of the business.
27 (c) The total compensation to be paid by the supplier pursuant to the
28 provisions of this subsection shall be reduced by any sum received by the
29 distributor from the sale of assets of the business used in the distribu-
30 tion of the supplier's products as well as the value such assets may have
31 to the distributor that are unrelated to the supplier's products.
32 (d) As used in this subsection, "fair market value" means the highest
33 dollar amount at which a seller would be willing to sell and a buyer would
34 be willing to buy those assets specified in paragraph (b)(i) of this sub-
35 section when both the seller and buyer possess all information relevant to
36 the transaction.
37 (3) Nothing in this section shall be deemed to prohibit vintners, winer-
38 ies, importers or dealers from selecting their own customers in bona fide
39 transactions not in restraint of trade.
STATEMENT OF PURPOSE
RS 11027
This proposal provides that in the event a vintner, winery,
importer or dealer terminates, cancels or refuses to renew a
distribution agreement with the wine distributor, the distributor
shall be entitled to reasonable compensation for the value of the
inventory, including taxes paid by the distributor on the inventory
and a reasonable charge for handling the products. If the
termination agreement is in bad faith or for reasons other than
good cause, the proposal permits the distributor to recover the
value of the good will of the business being terminated together
with the fair market value of business assets used in transporting,
storing or marketing the products, less the value such assets may
have to the distributor that are unrelated to the supplier's
business.
FISCAL NOTE
There is no fiscal impact associated with this legislation
CONTACT: Bill Roden
Jeremy Pisca
Idaho Beer & Wine Distributors Assn.
(208) 336-7930
STATEMENT OF PURPOSE/FISCAL NOTE H 23