Public Act 096-0482
 		





SB1282 Enrolled
LRB096 08404 KTG 18516 b






    AN ACT concerning business.

 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:


 
    Section 5. The Liquor Control Act of 1934 is amended  by 
changing Section 6-9 as follows:
 



    (235 ILCS 5/6-9)  (from Ch. 43, par. 126)



    Sec. 6-9. 
Registration of trade marks; sale within 
geographical area;
delivery to authorized persons.  The 
Legislature hereby finds and declares
that for purposes of

ensuring the preservation and enhancement of interbrand 
competition in
the alcoholic liquor industry within the State, 
ensuring that importation
and distribution of alcoholic liquor 
in the State will be subject to
thorough and inexpensive 
monitoring by the State, reducing the
importation of illicit or 
untaxed alcoholic liquor into the State,
excluding misbranded 
alcoholic liquor products from the State,
providing incentives 
to distributors to service and sell to larger
numbers of retail 
licensees in the geographic area where such
distributors are 
engaged in business, and reducing the amount of
spoiled and 
overaged alcoholic liquor products sold to consumers,
it is 
necessary to restrict the purchase of alcoholic liquors at

wholesale in the State to those persons selected by the 
manufacturer,
distributor, importing distributor or foreign 
importer who owns or
controls the trade mark, brand or name of 
the alcoholic liquor
products sold to such persons, and to 
restrict the geographic area
or areas within which such persons 
sell such alcoholic liquor at
wholesale, as provided in this 
Section.

    Each manufacturer, non-resident dealer, distributor, 
importing distributor,
or
foreign importer who owns or controls 
the trade mark, brand or name of
any alcoholic liquor shall 
register with the State Commission, in the Chicago
office, on 
or before the effective date, the name
of each person to whom 
such manufacturer, non-resident dealer, distributor,
importing

distributor, or foreign importer grants the right to sell at 
wholesale
in this State any such alcoholic liquor, specifying 
the particular trade
mark, brand or name of alcoholic liquor as 
to which such right is
granted, the geographical area or areas 
for which such right is granted
and the period of time for 
which such rights are granted to such person.
Each 
manufacturer,
non-resident dealer, distributor or importing 
distributor, or foreign
importer who is required to register 
under this Section must furnish a copy
of the registration 
statement at the time of appointment to the person who has
been 
granted the right to sell alcoholic liquor at wholesale.  
However, if a
person who has been appointed the right to sell 
alcoholic liquor at wholesale
does not receive a copy of the 
registration statement as required under this
Section, such 
person may file a registration statement with the State

Commission, provided that the person furnishes a copy of that 
registration
statement to the manufacturer, non-resident 
dealer, distributor, importing
distributor, or foreign 
importer within 30 days of filing the registration
statement.  
The registration statement shall state:

    (1) the name of the person appointed;

    (2) the name of the manufacturer, non-resident dealer, 
distributor,
importing distributor, or foreign importer from 
whom the person received the
right to sell alcoholic liquor;

    (3) the particular trade mark, brand, or name of alcoholic 
liquor
as
to
which the right to sell at wholesale is granted; 
and

    (4) the geographical areas for which the right to sell at

wholesale
is
granted.

    Such manufacturer, non-resident dealer, distributor, 
importing distributor,
or
foreign
importer may grant the right 
to sell at wholesale any trade mark, brand
or name of any 
alcoholic liquor in any geographical area to more than
one 
person. If the registration is received after the effective 
date, the
Commission shall treat the date the registration was 
received in the Chicago
office as the effective
date.  Such 
registration shall be made on a form prescribed by the
State 
Commission and the State Commission may require such 
registration
to be on a form provided by it.

    A non-resident dealer or foreign importer who is not a 
manufacturer shall file the registration statement jointly 
with the manufacturer identifying the person authorized by the 
manufacturer to sign the registration statement on behalf of 
the manufacturer. 
    No such registration shall be made
in any other manner than 
as is provided in this
Section and only those persons 
registered by the manufacturer, non-resident
dealer, 
distributor, importing distributor or foreign importer, shall 
have
the right to sell at wholesale in this State, the brand of 
alcoholic liquor
specified on the registration form.

    However, a licensed Illinois distributor who has not been 
registered to
sell a brand of alcoholic liquor, but for a 
period of 2 years prior
to
November 8, 1979 has been engaged in 
the purchase of a brand for resale
from a licensed Illinois 
distributor who has the right to sell that brand
at wholesale, 
may continue to purchase and resell the brand at wholesale,
and 
may purchase from the same distributor and resell at wholesale 
any
new brands of the same manufacturer, provided that:


        (1) Within 60 days after November 8, 1979 he identifies 
    the brand which
he so purchased to the State Commission and 
    the Commission within 30 days
thereafter verifies that the 
    purchases have occurred;


        (2) Thereafter, he notifies the State Commission in 
    writing of any brands
of the same manufacturer which he 
    wishes to purchase from the same distributor
that were not 
    available for distribution on or before November 8, 1979,

    and that the Commission within 30 days of such notification 
    verifies
that the brand is a new brand of the same 
    manufacturer, and that the same
licensed Illinois 
    distributor has the right to sell the new brand at 
    wholesale;


        (3) His licensed business address is within the 
    geographical area for
which the licensed Illinois 
    distributor from whom the purchases are made
has the right 
    to sell said brand or brands of alcoholic liquor; and


        (4) His sales are made within the geographical area for 
    which the licensed
Illinois distributor from whom the 
    purchases are made has the right to sell
the brand or 
    brands of alcoholic liquor and only to retail licensees 
    whose
licensed premises are located within the 
    aforementioned geographical area.

    No person to whom such right is granted shall sell at 
wholesale in
this State any alcoholic liquor bearing such trade 
mark, brand or name
outside of the geographical area for which 
such person holds such
selling right, as registered with the 
State Commission, nor shall he
sell such alcoholic liquor 
within such geographical area to a retail
licensee if the 
premises specified in such retailer's license are
located 
outside such geographical area.
Any licensed Illinois 
distributor who has not been granted the right to sell
any 
alcoholic liquor at wholesale and is purchasing alcoholic 
liquor from a
person who has been granted the right to sell at 
wholesale may sell and deliver
only to retail licensees whose 
licensed premises are within the same
geographical area as the 
person who has been granted the right to sell at
wholesale.

    No manufacturer, importing distributor, distributor, 
non-resident dealer,
or foreign
importer shall sell or deliver 
any package containing alcoholic liquor
manufactured or 
distributed by him for resale, unless the person to whom
such 
package is sold or delivered is authorized to receive such 
package
in accordance with the provisions of this Act.

(Source: P.A. 92-105, eff. 1-1-02.)

 
    Section 10. The Beer Industry Fair Dealing Act is amended  
by changing Section 7 as follows:
 



    (815 ILCS 720/7)  (from Ch. 43, par. 307)



    Sec. 7. Reasonable compensation. 

    (1) Subject to the right of any party to an agreement to 
pursue any remedy provided in Section 9, any Any brewer that 
cancels, terminates or fails to renew any agreement,
or 
unlawfully denies approval of, or unreasonably withholds 
consent, to any
assignment, transfer or sale of a wholesaler's 
business assets or voting
stock or other equity securities, 
except as provided in this Act, shall pay
the wholesaler with 
which it has an agreement pursuant to this Act
reasonable 
compensation for the fair market value of the wholesaler's

business with relation to the affected brand or brands.  The 
fair market
value of the wholesaler's business shall include, 
but not be limited to,
its goodwill, if any.

    (1.5) The provisions of this subsection (1.5) shall only 
apply if the brewer agrees to pay reasonable compensation as 
defined in subsection (1) and when
the total annual volume of 
all beer products supplied by a brewer to a
wholesaler pursuant 
to agreements between such brewer and wholesaler represents 15%

20% or less of the total annual volume of the wholesaler's 
business for all
beer products supplied by all brewers.  For 
purposes of this subsection (1.5)
only, "annual volume"
means 
the volume of beer products sold by the wholesaler in the 
12-month period
immediately preceding receipt of the brewer's 
written offer pursuant to this
subsection (1.5).

    If a brewer is required to pay reasonable compensation as 
described
in subsection (1) and the question of reasonable 
compensation is the only issue
between the parties,
the brewer 
shall, in good faith, make a written offer to
pay reasonable 
compensation.  The wholesaler shall have 30 days from receipt of

the written offer to accept or reject the
brewer's offer.  
Failure to respond, in writing, to the written offer shall

constitute rejection of the offer to pay reasonable 
compensation.  If the
wholesaler, in writing, accepts the 
written offer, the wholesaler shall
surrender the affected 
brand or brands to the brewer at the time payment is
received 
from
the brewer.  If the wholesaler does not, in writing, accept 
the brewer's
written offer, either party
may elect to submit 
the determination of reasonable compensation to expedited

binding arbitration.  If one party notifies the other party in 
writing that it
elects expedited binding arbitration, the other 
party has 10 days from receipt
of the notification to elect 
expedited binding arbitration or to
reject the arbitration in 
writing.
Failure to elect arbitration shall constitute

rejection of the offer to arbitrate.


        (A) If the parties agree to expedited binding 
    arbitration, the arbitration
shall
be subject to the 
    expedited process under the commercial rules of the 
    American
Arbitration Association.
The arbitration shall be 
    concluded within 90 days after the parties agree to

    expedited binding arbitration under this Section, unless 
    extended by the
arbitrator or one of the parties.  The 
    wholesaler shall retain the affected
brand or brands during 
    the period of arbitration,
at the conclusion of which
the 
    wholesaler shall surrender the affected brand or brands to 
    the
brewer upon payment of the amount determined to be 
    reasonable compensation,
provided the wholesaler shall 
    transfer the affected brand or brands to the
brewer
after 
    90 days if the arbitration proceedings are extended beyond 
    the 90 day
limit at the request of the wholesaler.  
    Arbitration costs shall be paid
one-half by the wholesaler 
    and
one-half by the brewer.  The award of the arbitrator 
    shall be final and binding
on the parties.


        (B) If the brewer elects expedited binding arbitration 
    but the wholesaler
rejects the offer to arbitrate:


            (i) The wholesaler may accept, in writing, any 
        written offer previously
made by the
brewer.  If the 
        wholesaler selects this option, the wholesaler must 
        surrender
the affected brand or brands to the brewer at 
        the time payment is received.  If
the
wholesaler 
        believes that the amount paid by the brewer is less 
        than reasonable
compensation under subsection (1), the 
        wholesaler may bring a proceeding under
subsection (2) 
        for the difference, but may not proceed under 
        subsection (3) of
Section 9; or


            (ii) The
wholesaler may proceed against the brewer 
        under Section 9, provided
the wholesaler must

        surrender the affected brand or brands to the brewer if 
        a proceeding under
Section 9 has not been initiated 
        within 90 days after the wholesaler rejects
the offer 
        to arbitrate.
Upon determination of reasonable 
        compensation pursuant to Section 9, the brewer
shall

        pay the wholesaler the amount so determined.
Until 
        receiving payment from the
brewer of the amount so 
        determined, the wholesaler shall retain the
affected 
        brand or brands.
If (a) the wholesaler retains the 
        affected brand or brands for a period of 2
years after 
        the wholesaler rejects the offer to arbitrate,
(b) the 
        amount of reasonable compensation has not been

        determined, and (c) an injunction has not been issued, 
        the brewer shall, in
good
faith, make a payment of 
        reasonable compensation to the wholesaler.  If, 
        however, the brewer fails to ship or make available 
        brands ordered by the wholesaler prior to the brewer 
        making any payment (including a good faith payment as 
        provided in this subsection) to the wholesaler, the 
        wholesaler shall be entitled to injunctive relief and 
        attorneys' fees and shall subject the brewer to 
        punitive damages. Upon
receipt of this
payment, the 
        wholesaler must surrender the affected brand or brands 
        to the
brewer, provided that such surrender shall not 
        affect the brewer's obligation
to pay all amounts 
        ultimately determined due to the wholesaler under this 
        Act.


        (C) If the wholesaler elects expedited binding 
    arbitration but the brewer
rejects, the brewer may proceed 
    under Section 9 for
the
purpose of
determining reasonable 
    compensation.
Upon determination of reasonable 
    compensation pursuant to Section 9, the brewer
shall
pay 
    the wholesaler the amount so determined.
Until receiving 
    payment from the
brewer of the amount so determined, the 
    wholesaler shall retain the
affected brand or brands.
If 
    (a) the brewer initiates a proceeding under Section 9 
    within 90 days after
the wholesaler rejects the offer to 
    arbitrate, (b) the wholesaler retains the
affected brand or 
    brands for a period of 2 years from the date the wholesaler

    rejects the offer to arbitrate, (c) the amount
of 
    reasonable compensation has not been
determined, and (d) an 
    injunction has not been issued, the brewer shall, in
good

    faith, make a payment of reasonable compensation to the 
    wholesaler. If, however, the brewer fails to ship or make 
    available brands ordered by the wholesaler prior to the 
    brewer making any payment (including a good faith payment 
    as provided in this subsection) to the wholesaler, the 
    wholesaler shall be entitled to injunctive relief and 
    attorneys' fees and shall subject the brewer to punitive 
    damages.  Upon
receipt of this
payment, the wholesaler must 
    surrender the affected brand or brands to the
brewer, 
    provided that such surrender shall not affect the brewer's 
    obligation
to pay all amounts ultimately determined due to 
    the wholesaler under this Act.

    (2) Except as otherwise provided in subsection (1.5), in 
the event that
the brewer and the beer wholesaler are unable to

mutually agree on the reasonable compensation to be paid for 
the value of
the wholesaler's business, as defined in this Act, 
either
party may maintain a civil suit as provided in Section 9 
or the matter
may, by mutual agreement of the parties, be 
submitted to a neutral
arbitrator to be selected by the parties 
and the claim settled in
accordance with the rules provided by 
the American Arbitration Association.
Arbitration costs shall 
be paid one-half by the wholesaler and one-half by
the brewer.  
The award of the arbitrator shall be final and binding on the

parties.

(Source: P.A. 89-716, eff. 2-21-97.)

 

    Section 99. Effective date. This Act takes effect upon 
becoming law.