State Distribution Laws

License Needed to Self-Distribute: Yes
Statute: Title 37A:2-102, 2-132, and 3-113

Oklahoma Statute

Oklahoma brewers that produce less than 65,000 barrels per year can hold a small brewer license which allows them to also apply for a small brewer self-distribution license. Small brewers can also hold a brewpub license or charitable collaboration brewer license, under which they can also self-distribute with the appropriate add-on self-distribution license.

Oklahoma brewers using wholesalers to distribute their products must enter into written distribution agreements with those wholesalers that designate exclusive territories for those wholesalers. They also cannot terminate those agreements without following specific procedures. First the brewer must have good cause for terminating the agreement and must send the wholesaler notice of the problem, providing them 60 days to cure it (or longer if reasonably required). If the wholesaler has not cured the problem within the specified timeframe, the brewer can send another notice to the wholesaler notifying them of the continued problems, the action the brewer is going to take, and the date it takes effect. However, brewers are permitted to immediately terminate a distribution agreement if:

• The wholesaler does not pay the brewer upon written demand for payment
• The wholesaler’s business falls into bankruptcy, insolvency or assignment to creditors
• The wholesaler’s license is suspended or revoked for more than 14 days
• The wholesaler has been convicted of a felony which negatively affects the goodwill of the wholesaler or brewer, unless that owner’s interest is bought out prior to the conviction
• The wholesaler transfers more than 10% of its ownership interest without the brewer’s consent, which the brewer can’t unreasonably withhold
• The wholesaler engages in fraudulent conduct in its dealings with the brewer
• The wholesaler stops business for more than 5 consecutive business days, unless caused by some kind of force majeure
• The wholesaler intentionally sells outside of its territory

Additionally, after terminating the distribution agreement, the wholesaler has 120 days to sell its interest in the distribution agreement before a brewer can bring on a different wholesaler. These provisions do not apply to small brewers who can terminate a distribution agreement at any time provided they pay the wholesaler the fair market value for the distribution rights prior to termination.

Fun Fact: When Oklahoma gained statehood in 1907, it entered the Union as a prohibition state, which it remained until 1933 with the repeal of federal prohibition.