AB 1034

This bill eliminates the requirement that the sales territories for wholesalers

of fermented malt beverages (beer) be exclusive and makes related changes

applicable to self-distribution by brewers.

Under current law, a beer wholesaler may not sell or deliver any brand of beer

unless the wholesaler has entered into a written agreement with the brewer or

brewpub supplying the brand that grants to the wholesaler distribution rights and

identifies the designated sales territory for which these distribution rights are

granted. A brewer or brewpub may not grant to more than one wholesaler

distribution rights for the same brand in the same designated sales territory. A

wholesaler may not sell or deliver a brand of beer to a retailer located outside the

wholesaler's designated sales territory for the brand. There are limited exceptions

that allow another wholesaler or a brewer to distribute beer within a wholesaler's

exclusive sales territory, such as when the wholesaler is unable to service its

territory.

This bill eliminates the requirement that the distribution agreement between

a brewer or brewpub and a beer wholesaler grant the wholesaler exclusive brand

distribution rights within a sales territory.

Also under current law, a brewer that manufactures 300,000 or fewer barrels

of beer per year may sell and deliver its own beer to retailers if the brewer complies

with certain requirements, as applicable, to the same extent as if the brewer were

a wholesaler, including the requirement for an exclusive sales territory. As it does

for wholesalers, this bill eliminates the requirement for exclusive designated sales

territories for self-distribution by brewers that manufacture 300,000 or fewer

barrels of beer per year. The bill also clarifies that a brewer that self-distributes does

not need to maintain a written agreement with itself and does not need to unload and

reload beer at a wholesaler's warehouse. The bill also provides that certain other

provisions related to beer distribution do not apply to a brewer. Like a wholesaler,

a brewer may deliver beer to retailers only at their retail premises.