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H0178..............................................................by BUSINESS
WINE DISTRIBUTORS - Amends existing law to revise certain trade practices that
are prohibited between vintners, wineries, importers or dealers and
distributors.
02/06 House intro - 1st rdg - to printing
02/07 Rpt prt - to Bus
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-seventh Legislature First Regular Session - 2003
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 178
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 PROHIBIT THE IMPOSITION OF CONDITIONS OR RESTRIC-
4 TIONS ON DISTRIBUTORS THAT ARE NOT GENERALLY IMPOSED ON OTHER DISTRIBUTORS
5 WITHIN THE STATE OF IDAHO, TO REQUIRE GOOD CAUSE FOR THE TERMINATION, CAN-
6 CELLATION, NONRENEWAL OR SUBSTANTIAL CHANGE IN COMPETITIVE CIRCUMSTANCES
7 IN THE RELATIONSHIP WITH A DISTRIBUTOR, TO DEFINE GOOD CAUSE, TO REQUIRE
8 WRITTEN NOTICE, TO PROVIDE FOR THE OPPORTUNITY TO CORRECT DEFICIENCIES, TO
9 PROVIDE CORRECT TERMINOLOGY AND TO PROVIDE THAT SUCCESSORS IN INTEREST TO
10 VINTNERS, WINERIES, IMPORTERS OR DEALERS SHALL BE BOUND BY CERTAIN TERMS
11 AND CONDITIONS.
12 Be It Enacted by the Legislature of the State of Idaho:
13 SECTION 1. That Section 23-1328A, Idaho Code, be, and the same is hereby
14 amended to read as follows:
15 23-1328A. PROHIBITION OF CERTAIN TRADE PRACTICES BETWEEN VINTNERS, WINER-
16 IES, IMPORTERS OR DEALERS AND DISTRIBUTORS. (1) It shall be unlawful for any
17 vintners, winery, importer or dealer, directly or indirectly, or through an
18 affiliate, subsidiary, officer, director, agent or employee:
19 (a) To require, by agreement or otherwise, that any distributors engaged
20 in the sale or distribution of wine in the state of Idaho purchase any
21 such wine or other distributed products from such person to the exclusion
22 in whole or in part of wine or other products made or imported by other
23 vintners, wineries, importers or dealers;
24 (b) To induce, by any means, any distributor engaged in the sale or dis-
25 tribution of wine to purchase from or distribute the wine or other prod-
26 ucts of any vintner, winery, importer or dealer to the exclusion of the
27 wine or products of other vintners, wineries, importers or dealers by any
28 means, including, but not limited to the vintner's, winery's, importer's
29 or dealer's acquisition of any interest in the distributor's license, or
30 by acquiring any interest in the real or personal property owned, occu-
31 pied, or used by the distributor;
32 (c) To discriminate in price, allowance, rebate, refund, commission, dis-
33 count, or service between a distributor purchasing wine or a distributor
34 purchasing other products;
35 (d) To threaten any distributor with any discrimination prohibited under
36 subsection (1) (c) of this section, with the purpose or effect of changing
37 or maintaining resale prices of the vintner, winery, importer or dealer;
38 (e) To impose conditions or restrictions on a distributor not generally
39 imposed on other distributors within the state of Idaho; or
40 (f) To cause a termination, cancellation, nonrenewal or substantial
41 change in competitive circumstances in the relationship with the distribu-
42 tor without providing at least ninety (90) days' written notice of the
43 termination, cancellation, nonrenewal or substantial change in competitive
2
1 circumstances. The notice shall state all the reasons for termination,
2 cancellation, nonrenewal or substantial change in competitive circum-
3 stances and shall provide that the distributor has ninety (90) days from
4 the date of receipt by said distributor of the vintner's, winery's,
5 importer's or dealer's notice in which to rectify any claimed deficiency
6 good cause. Good cause exists when the distributor has failed to comply
7 substantially with essential and reasonable requirements imposed upon him
8 by the vintner, winery, importer or dealer, that are not discriminatory as
9 compared with requirements imposed on other distributors in Idaho, either
10 by their terms or in the method of their enforcement, and that are not in
11 violation of any law, rule or regulation. The vintner, winery, importer or
12 dealer shall give ninety (90) days' written notice of the intended termi-
13 nation, cancellation, nonrenewal or substantial change in competitive cir-
14 cumstances to the distributor, stating specifically the manner in which
15 the distributor has failed to comply substantially with such essential and
16 reasonable requirements. The distributor shall be given adequate opportu-
17 nity during such ninety (90) day period to use good faith efforts to cor-
18 rect the deficiencies set forth in the notice. If the deficiency is recti-
19 fied within ninety (90) days the notice shall be void. The notice provi-
20 sions of this section shall not apply if the reason for termination, can-
21 cellation or nonrenewal is insolvency, the occurrence of an assignment for
22 the benefit of creditors, or bankruptcy. If the reason for termination,
23 cancellation, nonrenewal or substantial change in competitive circum-
24 stances is nonpayment of sums due for the purchase of product, the dis-
25 tributor shall be entitled to written notice of such default, and shall
26 have twenty (20) days in which to remedy such default from the date of
27 delivery or posting of such notice.
28 (2) Nothing in this section shall be deemed to prohibit vintners, winer-
29 ies, importers or dealers from selecting their own customers distributors in
30 bona fide transactions not in restraint of trade; provided however, a succes-
31 sor to the interest of a vintner, winery, importer or dealer in a particular
32 brand or brands, or label or labels of wine, whether acquired by purchasing of
33 the brand or label name or all or substantially all of the stock or assets of
34 the supplier of that brand or brands or label or labels, or who has been
35 granted the marketing rights to a particular brand or brands or label or
36 labels of wine shall be bound by all terms and conditions of the relationship
37 with a distributor with respect to that brand or brands or label or labels in
38 effect immediately prior to the date of the succession to such interest and
39 the successor in interest may only terminate, cancel, nonrenew the relation-
40 ship, or cause a substantial change in competitive circumstances in the rela-
41 tionship as provided in subsection (1)(f) of this section.
STATEMENT OF PURPOSE
RS 12629
The legislation clarifies certain rights and duties governing the
business relationship between wine suppliers and distributors.
The proposed legislation establishes standards of good faith and
fair dealing to the relationship between the wine suppliers and the
distributors. It recognizes the right of a supplier to terminate
agreements for good cause and requires distributors to meet reasonable
standards and qualifications that are nondiscriminatory.
This legislation is necessary to assure that Idaho s wine
distributors who build the good will for the products they sell and
who meet reasonable requirements established by the suppliers will be
treated fairly and not subject to arbitrary decisions causing the loss
of their businesses.
FISCAL IMPACT
There is no fiscal impact.
Contact: Bill Roden
Jeremy Pisca
Idaho Beer & Wine Distributors
Telephone: 208-336-7930
STATEMENT OF PURPOSE/FISCAL NOTE H 178