Senate Passes Legislation To Resolve Decade-Long Dispute Between Brewers & Wholesalers in Massachusetts

BOSTON (The Massachusetts State Senate on Thursday unanimously passed legislation that resolves a decade-long distribution dispute between brewers and wholesalers in the Commonwealth.

“Craft brewing is an industry that has grown in Massachusetts as a result of innovation, entrepreneurship, hard work and dedication to supporting small businesses, and is now thriving,” said Senate President Karen E. Spilka (D-Ashland). “Solving this decade-long dispute was a priority of mine long before becoming Senate President and I look forward to seeing this important agreement codified in law. I would like to thank my colleagues Senators Paul Feeney, Joe Boncore and Cindy Creem for their efforts and the Massachusetts Brewers Guild and Beer Distributors of Massachusetts for their determination in reaching this landmark compromise.”

“The MBG is incredibly grateful for the support and leadership of Senate President Spilka in advocating for franchise law reform,” said Sam Hendler, President of the Massachusetts Brewers Guild and co-founder of Jack’s Abby Craft Lagers. This agreement is a victory for the more than 200 craft breweries across Massachusetts that have become pillars of their communities, helping local economies to thrive and drawing tourism to new areas. It took the collective effort of our counterparts in the legislature, the brewing community and the wholesalers to ensure we are able to continue our work as craft brewers now and for years to come.”

“The Beer Distributors of Massachusetts are tremendously appreciative of the work, support, and leadership provided by Senate President Spilka in encouraging the Brewers Guild and the Beer Distributors to agree on franchise law reform that has been disputed for the past 10-years” said Joe Salois, owner & president of Atlas Distributing, Inc., Auburn. “The efforts, leadership, and uncompromising willingness to reach agreement by the brewers, distributors, and legislature was a driving force in this achievement.”

The legislation, An Act Relative to Craft Brewers (S.2829), represents the agreement reached by The Massachusetts Brewers Guild, representing craft breweries, and the Beer Distributors of Massachusetts after good-faith negotiations encouraged by Spilka and her Senate colleagues.

The act now moves to the Massachusetts House of Representatives.

“This bill will update our current franchise laws to reflect the modern marketplace, protect jobs and level the playing field for emerging brewers here in the Commonwealth,” said Senator Michael J. Rodrigues (D-Westport), Chair of the Senate Committee on Ways and Means.  “I applaud the spirit of compromise shown by brewers and distributors to get this done and reach agreement during this time of great uncertainty.  Thank you to Senate President Spilka for her leadership and Senators Feeney, Boncore and others for their hard work to ensure we pass this legislation today.”

“This agreement and resulting legislation is indicative of the importance of a growing beer industry here in Massachusetts. Both the brewers and distributors came together to forge an agreement that protects jobs, promotes economic growth and entrepreneurship, and benefits consumers,” said Senator Paul Feeney (D-Foxborough). “I am proud to have played a role, along with Senate President Spilka and Senator Creem in providing the environment and sense of urgency that allowed this deal to be reached by these two very willing stakeholders. This legislation should signal to the industry that the Commonwealth is supportive of this growing sector and that a network of local and independent distributors and workers are ready to bring their product to market.”

“Massachusetts is home to more than 200 breweries that represent the unique culture and contours of our local communities,” said Senator Joe Boncore (D-Winthrop). “This legislation will create a level playing field for craft brewers. Now, perhaps more than ever, it is critical that we support small and local businesses as we work towards economic recovery from the COVID-19 pandemic.”

“The growth and expansion of the craft brewery business over the last decade has been a welcome addition to the State economy,” said Senate Majority Leader Cindy Creem (D.Newton). “I applaud all the parties involved for reaching an agreement that will allow this industry to flourish both now and into the future.” 

In Massachusetts, current law makes it difficult for a brewer to end a relationship with their distributor, jeopardizing potential growth.

The compromise legislation (S.2829) would allow a brewery that produces less than 250,000 barrels (or just over 3.4 million cases) a year to end their relationship with a distributor with a 30-day notice and other certain protections.

If a distribution contract is terminated, the brewery would be responsible for fairly compensating the wholesaler the fair market value of the distribution rights in addition to other costs for inventory and marketing investments.

The legislation calls for both parties to engage in an expedited arbitration process to resolve such issues.

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