ALCOHOL LAW ADVISOR
ALCOHOL LAW ADVISOR
Regulatory and Distribution Law Updates for the Alcohol Industry
ALCOHOL LAW ADVISOR
Regulatory and Distribution Law Updates for the Alcohol Industry
beer distributors
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Arbitration Clause in Beer Distribution Agreement Enforced by the Virginia ABC

On May 7, 2019, the Virginia Department of Alcoholic Beverage Control (VABC) published a decision confirming the enforceability of arbitration clauses in distribution agreements between brewers and beer distributors under Virginia’s Beer Franchise Act (BFA). In Loveland Distributing Co., Inc. and Premium of Virginia, LLC v. Bell’s Brewery, Inc., the VABC panel ruled unanimously in favor of compelling the parties to resolve their dispute through arbitration, as provided for in the parties’ distribution agreement (the Agreement). The decision is good news overall for beer and wine suppliers hoping to avoid the cost of litigation before the VABC. Continue reading for details of the dispute and further considerations. A. The Dispute Loveland and Bell’s had executed the Agreement in June 2015 for the distribution of Bell’s brands in portions of Virginia. The Agreement states that “All claims disputes and other matters arising out of or relating to this Agreement …...

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Texas Court Affirms Constitutionality of Statute Prohibiting Brewers from Selling Distribution Rights to Their Products

Texas craft beer distributors received an early Christmas present in 2017. On December 15, 2017, the Texas Court of Appeals for the Third District, at Austin issued an opinion in Texas Alcoholic Beverage Commission v. Live Oak Brewing Co., et al. (NO. 03-16-00786-CV) in which the court overturned a lower court’s determination that a statute prohibiting self-distributing brewers from selling the distribution rights to their products was unconstitutional under the Texas Constitution. In 2014, Live Oak Brewing Co., Revolver Brewing and Peticolas Brewing Co. (all Texas-based craft breweries that self-distribute) joined together in a suit against the Texas Alcoholic Beverage Commission (Commission) challenging the constitutionality of a provision in Texas’ alcohol beverage control law that prohibits brewers from selling the distribution rights to their products. The provision at issue, Tex. Alco. Bev. Code § 102.75(a)(7), provides that it is unlawful for a brewer...

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