Ohio Court Rules Against Attempt by Pabst to Terminate Ohio Distributors

admin — Tue, 15 Mar 2011 22:35:34 +0000

An Ohio judge ruled for distributors and against Pabst in its effort to terminate distributors. Pabst Brewing Co. stock was sold to Pabst Holding Co and Pabst Holding claimed to be a successor manufacturer. They terminated existing distributors under OH Franchise Act and the distributors brought this matter to court. The court stated that interpretation of Franchise Act unnecessary because the legal issue turns on the provisions of the distributor agreements. The distributor agreements in question require sixty day notice before termination. Pabst did not provide notice within sixty days. As such the court held that Pabst breached the distributor agreements by failing to give sixty day notice prior to termination. Pabst’s attempted termination was ineffective and the distributor agreements continue to bind Pabst.

This judge also has other supplier termination cases before him. His opinion in the Pabst case can be found here.

Thanks to Dave Raber for the heads up.

California Attorney General Warns Suppliers and Importers: Do Not Control Other Licensees

admin — Mon, 15 Feb 2010 21:06:20 +0000

In a very forceful advisory, the California Attorney General has made it clear that California law does not allow suppliers to micromanage and control distributor licensees. This guidance apparently went to over 600 importers and suppliers.

The staff of the attorney general actually spent time reviewing the proposed supplier contracts to state law and were very concerned about the approach by the suppliers. These contracts that were unilaterally imposed by suppliers on distrtibutors contained a wide variety of impermissible intrsusions into the beer distributors license.

“Licensure is the foundation of California’s regulatoory system of alcoholic beverages. and is fundamental to the State’s control under Section 2 of the Twenty-First Amendment and Section 22 of Article XX of the California Constitution.”

It further held; “We consider any attempt to enforce the provisions of these contracts to be an unlawful, prohibited exercise of control by a manufacturer over an independently licensed wholesaler.”

Several states including Michigan and Georgia have already pointed out how a proposed supplier contract violate state laws. I expect many more states to utilize the guidance of the California Attorney General in their states in the weeks ahead.

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Ohio Court Rules Against Attempt by Pabst to Terminate Ohio Distributors

California Attorney General Warns Suppliers and Importers: Do Not Control Other Licensees