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

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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