State Distribution Laws

License Needed to Self-Distribute: Yes
Statute: N.D. Cent. Code, § 5-01-21

North Dakota Statute

In North Dakota, brewers that do not produce more than 25,000 barrels per year and hold a brewer taproom license may self-distribute to retailers if they:

• Use their own equipment, trucks and employees to deliver the beer
• Limit deliveries (other than draft beer) to the case equivalent of eight barrels per day to each retailer
• Do not self-distribute more than 10,000 barrels per year

If North Dakota brewers decide to use a wholesaler to distribute their products, they must enter into a written agreement with those wholesalers and must provide those wholesalers with exclusive territories. Additionally, brewers cannot:

• Set the resale price of their products
• Force wholesalers to accept products they haven’t ordered
• Restrict a wholesaler’s ability to sell other products or brands, unless it materially impairs the wholesaler’s ability to market and sell brewer’s products
• Require a wholesaler to purchase one product as a condition of purchasing another
• Force a wholesaler to disclose information about the wholesaler’s accounts or other suppliers
• Discriminate between wholesalers
• Restrict the free association between wholesalers
• Require or restrict a wholesaler’s change in management unless manager does not meet essential, reasonable, and nondiscriminatory requirements
• Unreasonably prevent or delay the transfer of the wholesaler’s business

If a brewer has a distribution agreement with a wholesaler, the brewer cannot modify, terminate, or not renew a distribution agreement without good cause or without providing the wholesaler with proper notice. A brewer must send the wholesaler a notice of its intent to modify, terminate, or not renew the agreement, state their reasons for doing so, and the date it will take effect. They must also allow the wholesaler 90 days to cure the deficiency. Good cause includes, but is not limited to:

• Revocation of the wholesaler’s license
• The wholesaler’s bankruptcy or insolvency
• Assignment to the benefit of creditors
• Wholesaler’s failure to comply with a reasonable and material requirement of the agreement

If a brewer terminates an agreement without good cause, without giving notice, or without giving the wholesaler a chance to correct the issue, the brewer will owe the wholesaler reasonable compensation for the diminished value of the wholesaler’s business. However, a brewer does not need to follow the notice requirements or give the wholesaler an opportunity to cure the problem if:

• The wholesaler becomes insolvent or files for bankruptcy
• The wholesaler’s license is revoked
• The wholesaler assigns its assets to the benefit of creditors
• The wholesaler is convicted or pleads guilty to a charge that materially affects its ability to stay in business

Fun Fact: It is illegal to serve beer and pretzels together at a bar, even in a restaurant.