State Distribution Laws
New York
License Needed to Self-Distribute: Yes
Statute: NY CLS Al Bev § 51; NY CLS Al Bev § 52; NY CLS Al Bev § 64-c
In New York, brewers with a brewer’s license can apply for an additional wholesale license permitting them to self-distribute their products. Additionally, brewers holding a farm brewery license are permitted to self-distribute, and those holding a restaurant-brewery license are permitted to self-distribute beer specifically.
Brewers who enter into distribution agreements with wholesalers must use a written agreement. As part of those agreements, a brewer cannot unreasonably withhold their consent to the wholesaler transferring all or a portion of its interest under the agreement. Additionally, brewers are subject to New York’s rules on changing the price of beer which, among other things, prevents them from raising the price of their beer within 180 days of their last price decrease.
They cannot terminate or not renew these distribution agreements without good cause, or without giving the wholesaler an opportunity to cure the problem. Good cause first starts with the wholesaler not adhering to a brewer’s policy which is reasonable, nondiscriminatory, and essential to the distribution agreement, which the brewer imposes on other wholesalers. In order to terminate or not renew a distribution agreement for such cause, a brewer must send the wholesaler a notice of its intent to terminate or not renew the agreement, state their reasons for doing so, and the date it will take effect. Within 10 days of receiving this notice, the wholesaler may request the brewer submit a proposed plan to cure the deficiencies, after which the brewer must afford the wholesaler 15 days to submit their own plan, as well as an additional 75 days after that to implement it and cure the deficiency. If brewers violate these provisions, wholesalers may bring a cause of action for actual damages sustained by the brewer’s breach.
Brewers who brew less than 300,000 barrels of beer per year and make up less than 3% of the wholesaler’s total sales can terminate a distribution agreement without good cause, provided they pay the wholesaler the fair market value of the diminished distribution rights.
