State Distribution Laws
Pennsylvania
License Needed to Self-Distribute: Yes
Statute: 47 P.S. § 4-431
In Pennsylvania, brewers holding a brewer’s license are permitted to self-distribute. However, if those brewers also hold an add-on hotel, restaurant, or brew pub license, they are not allowed to self-distribute. Brewers with an alternating brewer’s license are also not permitted to self-distribute.
Brewers who use wholesalers must provide those wholesalers with written distribution agreements that have exclusive territories for the brands they’re authorized to distribute. Copies of these distribution agreements must be kept at the brewer’s premises, and the wholesaler must file a copy of the agreement with the Board of Malt Beverage Compliance. Additionally, among other things, brewers are prohibited from:
- Forcing wholesalers to accept beer they haven’t ordered
- Preventing wholesalers from selling other brands or products
- Setting the resale price for their products
- Unreasonably interfering with the transfer of a wholesaler’s business
Brewers also cannot modify, terminate or not renew their distribution agreements without good cause. Good cause is when the wholesaler fails to substantially comply with an essential, reasonable, and commercially acceptable term of its distribution agreement. The brewer must also provide the wholesaler with at least 90 days’ written notice of modification/termination, and that notice must state the reasons they are modifying or terminating the agreement. The wholesaler will then have 90 days after receiving the notice to cure the claimed deficiency. However, brewers are allowed to immediately terminate their distribution agreements when:
- The wholesaler becomes insolvent, bankrupt, or makes an assignment to the benefit of creditors
- The wholesaler has its license suspended or revoked for more than 30 days
- The wholesaler engages in fraudulent conduct inits dealings with the brewer
Wholesalers who feel their distribution agreement was terminated without good cause may file a motion with the courts in the jurisdiction where they are located, seeking an injunction against the termination.
