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Posted by NJ Senate Democrats on December 08, 2005 at 18:06:26:
FOR RELEASE: Immediate
December 8, 2005 CONTACT: Jason Butkowski
Tel: (609) 292-5215 KENNY BILL PROVIDING CONTRACT PROTECTIONS FOR BEER WHOLESALERS APPROVED Legislation Would Protect and Encourage Investments from Wholesalers in NJ TRENTON - A bill sponsored by Senate Majority Leader Bernard F. Kenny, Jr.,
which would provide contract protections to beer and other malt alcoholic
beverage wholesalers when dealing with brewers was approved by the Senate
today by a vote of 36-1, receiving final legislative approval. "Alcoholic beverage wholesalers spend staggering amounts of
money in building a market for their products," said Senator Kenny,
D-Hudson. "A successful marketing campaign can have many different facets,
from local pub relations, promotional costs, media buys and so much more.
Unfortunately, as of right now, there are no guarantees that once the market
is built and a brewer achieves success that they have to show any loyalty to
the wholesaler who spent so much out of pocket to get their name out there,
and in some instances, wholesalers have lost millions on a brewer that flew
the coop once they became popular." The bill, S-2170, would establish permissible terms that may
appear in contracts between brewers of malt alcoholic beverages and
wholesalers. Known as the Malt Alcoholic Beverage Act, the bill would
require contracts to meet certain reasonable standards, set forth in the
bill and through case law, and would prohibit brewers from leaving a
contract, unless it could be proven that the wholesaler had violated one of
the reasonable standards set in the contract. The bill would also set up a
regulatory structure for the wholesale distribution of malt alcoholic
beverages in New Jersey, and it would apply to brewers around the world, so
long as they contract with New Jersey wholesalers. "A wholesaler-brewer relationship is a business model based
entirely on trust, and really, not much more," said Senator Kenny. "There
is nothing to stop a brewer from turning on a longtime wholesaler, who has
invested personal capital towards the success of their beverage, and going
with a higher bidder. This bill, essentially, puts ethical business
practices into law when it comes to the alcoholic beverage industry." The bill now heads to the Governor to be signed into law. It
was approved by the Senate Law, Public Safety and Veterans' Affairs
Committee in September. ###
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