Senate Bill No. 605
(By Senators Williams and Minard)
[Introduced February 21, 2011; referred to the Committee on the Judiciary.]
A BILL to amend and reenact §60-8-30 of the Code of West Virginia, 1931, as amended, relating to allowing wine distribution agreements to be by geographic areas and not the state as a whole.
Be it enacted by the Legislature of West Virginia:
That §60-8-30 of the Code of West Virginia, 1931, as amended, be amended and reenacted to read as follows:
ARTICLE 8. SALE OF WINES.
§60-8-30. Distribution agreement.
(a) It shall be illegal for any manufacturer, winery, farm winery or supplier to enter into any exclusive franchise agreement with any distributor whereby any such distributor is given the exclusive right within this state or in any given territory within this state to distribute the product or products of such manufacturer which are to be sold or distributed pursuant to the provisions of this article. Further, All agreements between a manufacturer, winery, farm winery or supplier and a distributor must be in writing and on file with the commissioner and all such agreements must provide for termination, for cause only, of either party provided that notice of termination is provided in writing and by certified mail to the commissioner and all parties to the agreement ninety days prior to the termination date. Once the notice has been received by either party, the distributor shall: (1) Use the ninety-day period to deplete such distributor’s affected wine inventory; or (2) reach some agreement with the manufacturer, winery, farm winery or supplier to return unused salable wine inventory or receive payment for unused salable wine inventory. No new distributor shall be appointed until the conclusion of the ninety days or as the parties have otherwise agreed to complete the termination. For the purposes of this article, “salable” shall mean inventory fit for human consumption or as otherwise determined by the commissioner.
(b) A manufacturer, winery or supplier shall enter into an agreement with licensed wine distributors for the distribution of the products within a specific territory. The distributor is authorized to distribute the products within the territory covered by the agreement, however, no one distributor may be assigned the entire state as a territory: Provided, That the commissioner shall provide by legislative rule a dispute resolution mechanism to be authorized by the parties in the event there is an objection to the termination filed during the ninety-day period: Provided, however, That farm wineries are exempted from the provisions of this section as they apply to the territorial integrity of distribution rights of wines.
NOTE: The purpose of this bill is to allow for only territorial distribution of wines and not state-wide distribution rights.
Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.