State Distribution Laws

License Needed to Self-Distribute: Yes
Statute: Iowa Code § 123.124

Iowa Statute

In Iowa, breweries with a Class “A” beer permit are permitted to self-distribute to licensed retailers.

Iowa also has regulations governing the brewery/wholesaler relationship. Brewers and wholesalers are required to enter into written distribution agreements which designate the wholesaler’s exclusive territory. Among other things, brewers and wholesalers are not permitted to amend, cancel or fail to renew a distribution agreement unless they provide the other side with 90 days’ written notice, stating their intent to cancel/not renew, their reasons for doing so, and the date it will take effect. Additionally, brewers must have good cause for terminating a distribution agreement. According to Iowa, good cause exists when:

• the wholesaler fails to comply with a reasonable and materially significant provision of the distribution agreement
• the brewer learned about the failure within the past 24 months
• the brewer provides the wholesaler with written notice of its failure to comply, and
• the brewer gives the wholesaler 30 days to come up with a plan to cure the non-compliance, and another 90 days after that to come back in to compliance

That being said, brewers are permitted to terminate a distribution agreement without notice and without good cause when:

• the wholesaler fails to pay overdue amounts upon written demand from the brewer
• the wholesaler assigns its assets to a creditor
• the wholesaler becomes insolvent or declares bankruptcy
• the dissolution or liquidation of the wholesaler
• the wholesaler is convicted or pleads guilty to a crime which materially and adversely affects its ability sell beer
• the wholesaler’s license is revoked for more than 31 days
• the wholesaler attempting to transfer 10% or more of its voting stock without first getting approval from the brewer (which the brewer cannot unreasonably withhold)
• the wholesaler engages in fraudulent conduct in its dealings with the brewer
• the wholesaler sells outside of the geographic territory designated in the distribution agreement

If a brewer terminates a distribution agreement, it must pay the wholesaler reasonable compensation for the fair market value of the wholesaler’s business. Additionally, brewers are also prevented from:

• fixing the resale price of their products
• requiring wholesalers to accept beer they haven’t ordered
• including unreasonably conditions or requirements in the distribution agreement
• requiring or preventing the wholesaler from changing managers, unless it is done in good faith
• discriminating between wholesalers with regards to the prices and terms of the distribution agreements unless the differences are based on reasonable grounds
• requiring the wholesaler to purchase one product as a condition of purchasing another
• requiring the wholesaler to participate in an advertising fund
• restricting the free association of wholesalers

Fun Fact: If you pick hops in Iowa you must use a box that is 36 inches long, 18 inches wide, and 23 1/4 deep.