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Missouri House Passes Franchise Protection Law That’s Tacked Onto Home Brewing Bill

May 9, 2013

Missouri legislators gave proponents of the state’s controversial liquor franchise bill a considerable boost yesterday—from an unlikely source. The franchise legislation that governs the relationship between beverage alcohol suppliers and distributors was put to a vote in Missouri’s House of Representatives on Wednesday, after it was tacked on as an amendment to Senate Bill 114—which concerns home brewing.

The House passed the bill by a vote of 110-48, providing the state’s franchise law supporters—most notably Missouri’s biggest distributor Major Brands—a much-needed victory.

Missouri’s franchise law has been in place since 1975. It prevents suppliers from terminating contracts with distributors without “good cause.” The law was dealt a harsh blow by a federal court in 2011, and since then, suppliers such as Diageo, Pernod Ricard and Bacardi have sought to alter their distribution arrangements in the state. Meanwhile, seeing the possibility of Missouri’s franchise law being invalidated, Miami-based Southern Wine & Spirits has attempted to enter the market and is currently fighting in court against the state’s residency requirement for distributors.

While the House approved the franchise protection bill, it’s still a long way from passage. It now needs to go before the state’s Senate—whose session ends in less than two weeks. Even if it wins passage there, it still may not be signed into law. Last year, Missouri Governor Jay Nixon vetoed a bill that would have enforced franchise legislation, expressing concern that it would lock suppliers into agreements with distributors “with no effective means of relief.”

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