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Introduced Version House Bill 2949 History

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hb2949 intr
H. B. 2949


          (By Delegate Hunt)
          [Introduced March 15, 2013; referred to the
          Committee on the Judiciary then Finance.]




A BILL to amend and reenact §60-8-30 of the Code of West Virginia, 1931, as amended, relating to making it illegal for a manufacturer, winery, farm winery or supplier to deliver wine to a distributor without having an equitable franchise agreement; requiring the agreement to contain a written description of the territory the wine supplier assigns to the distributor; prohibiting a distributor from selling wine outside its franchise territory; permitting sales of convenience between distributors; prohibiting a retailer from purchasing wine from sellers outside the retailer's assigned territory; requiring due regard for the equities and just cause before an agreement between a supplier and distributor may be canceled; requiring ninety days written notice when seeking to cancel an agreement; providing exceptions; requiring sixty days written notice when a distributor desires to sell or transfer ownership; providing that a supplier has sixty days to respond; requiring a supplier who disapproves of the transfer to give written justification; and providing that if no response is received the transfer is approved by default.
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. Exclusive franchise agreements prohibited.
     It shall be is 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. transfer or deliver to a distributor any wine without first having entered into an equitable franchise agreement with the distributor. 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 of either party provided that notice of termination is include a written description showing the assigned territory by the supplier to the distributor. This requirement does not prohibit a distributor from receiving multiple territorial assignments. A distributor may not sell, offer for sale, distribute or deliver any wine outside the territory assigned to the distributor by the supplier of the wine or sell, offer for sale, distribute or deliver any wine to any licensed retailer whose principal place of business or licensed premises is within the assigned territory of another distributor of wine. However, this section does not prohibit sales of convenience between distributors licensed in this state where one distributor sells, transfers or delivers to another distributor a particular brand or brands for sale at wholesale. No licensed retailer may purchase wine except from the duly authorized distributor in whose assigned territory the licensed retailer is located.
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Agreements may not be canceled, terminated or rescinded without due regard for the equities of the supplier or distributor and without just cause. Notice of the cancellation, termination or rescission of a franchise agreement by either party must be 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 the 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. However, that ninety-day period and the notice of cancellation, termination or rescission does not apply if the cancellation, termination or rescission is agreed to in writing by both the supplier and the distributor involved or, in the event a distributor desires to sell or transfer his or her franchise, the distributor shall give to the supplier at least sixty days notice in writing of the impending sale or transfer and the identity of the person, firm or corporation to whom the impending sale or transfer and the identity of the person, firm or corporation to whom the sale or transfer is to be made and the other information as the supplier may reasonable request. A copy of the notice of sale or transfer shall be forwarded to the commissioner. The supplier shall be given sixty days to approve or disprove of the sale or transfer. If the supplier neither approves nor disapproves the sale or transfer within sixty days of the date of receipt of the notice, the sale or transfer of the franchise shall be deemed to be approved by the supplier. In the event the supplier disapproves the sale or transfer to the prospective franchises, transferee or purchaser, the supplier shall give written notice to the distributor, setting forth the reasons for the disapproval.


          
     NOTE: The purpose of this bill is to make it illegal for a winery or wine supplier to deliver wine to a distributor without first having an equitable franchise agreement. The bill requires the agreement to contain a written description of the assigned territory; The bill prohibits a distributor from selling wine outside of its franchise territory. The bill permits sales of convenience between distributors. The bill prohibits retailers from purchasing wine from sellers outside its assigned territory. The bill requires due regard for the equities and just cause before an agreement between a supplier and distributor may be canceled. The bill requires ninety days written notice when seeking to cancel an agreement. The bill provides exceptions. The bill requires sixty days' written notice when a distributor desires to sell or transfer ownership. The bill provides a supplier with sixty days to respond. The bill requires a supplier who disapproves of the transfer to give written justification. The bill provides that if no response is received the transfer is approved by default.


     Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.
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