State Distribution Laws

License Needed to Self-Distribute: Yes
Statute: ORS § 471.200; ORS § 471.220

Oregon Statute

Oregon brewers who hold a brewery license are eligible to obtain a wholesale malt beverage and wine license, which permits them to self-distribute to retailers. Additionally, brewers who hold a brewery-public house license are permitted to self-distribute up to 7,500 barrels of beer per year.

Brewers that use wholesalers must have a written distribution agreement with those wholesalers and provide exclusive territories for the brands they are authorized to distribute.  Additionally, brewers are not allowed to:

• Force wholesalers to accept beer they haven’t ordered
• Set the resale prices for their products
• Require or prohibit a wholesaler from changing managers unless the manager fails to meet the brewer’s reasonable requirements
• Restrict a wholesaler from selling or distributing another brand of beer
• Unreasonably withhold their consent to the transfer of a wholesaler’s business

Brewers also cannot terminate or not renew their distribution agreements without good cause. Good cause exists when the wholesaler fails to comply with a reasonable and material term of its distribution agreement, which the brewer must have learned about within 2 years before taking action. The brewer must also provide the wholesaler with at least 90 days’ written notice of termination, allow the wholesaler 30 days to submit a plan to correct the problem, and allow an additional 60 days to actually fix the problem. However, brewers are allowed to immediately terminate their distribution agreements when:

• The wholesaler’s license is revoked for more than 31 days
• The wholesaler becomes insolvent, declares bankruptcy, or makes an assignment to the benefit of creditors
• The wholesaler commits fraud in its dealings with the brewer
• The wholesaler transfers its business without the brewer’s consent
• The wholesaler, or a 10% or more owner, is convicted of, or pleads guilty to, a felony

If a brewer terminates or doesn’t renew a distribution agreement, they must pay the wholesaler reasonable compensation for the laid-in cost of the wholesaler’s inventory, plus any tax paid on that inventory. Additionally, if the termination was done in bad faith or without good cause, the brewer will owe the wholesaler additional compensation for the fair market value for the assets used in distributing the brewer’s products and the goodwill of the business.

Fun Fact: Rogue Ales & Spirits is the only brewer-distiller-cooper in the country, producing beer, spirits, and crafting their own barrels in Newport, OR.