State Distribution Laws
Montana
License Needed to Self-Distribute: Yes
Statute: Mont. Code Anno., § 16-3-214
In Montana, brewers who manufacture less than 60,000 barrels of beer per year may self-distribute to retailers using their own trucks, equipment, and employees, provided they: 1) don’t provide more than the case equivalent of 8 barrels a day to each retailer (other than draught beer), and they don’t self-distribute more than 10,000 barrels per year.
If Montana brewers decide to use a wholesaler to distribute their products, they must enter into a written agreement with those wholesalers, which must be filed with the state, and must provide those wholesalers with exclusive territories for the products they are authorized to distribute. This means that a brewer could have multiple wholesalers operating in the same area, provided they are distributing different products. Brewers also aren’t allowed to set the resale price of their products.
If a brewer has a distribution agreement with a wholesaler, the brewer cannot terminate or not renew a distribution agreement without just cause, which must be consistent with the standards the brewer applies to its other wholesalers. Just cause is generally the wholesaler’s failure to comply with a reasonable requirement of the distribution agreement. Wholesalers also cannot transfer their interest in a distribution agreement without written consent from the brewer, but the brewer cannot unreasonably withhold that consent, and must base its decision on the capabilities of the transferee. In addition to these restrictions, the brewer’s distribution agreement must:
- Designate the territory
- Clarify that the wholesaler has the right to select the products it wants to distribute
- Have a procedure outlining how the brewer will handle deficiencies in the wholesaler’s distribution
- Provide that the wholesaler will receive at least 60 days’ notice of the brewer’s intent to terminate the agreement
- State that the agreement is governed by the laws of Montana, and any disputes will be litigated in Montana, and
- Not include a jury waiver clause
