State Distribution Laws
South Carolina
License Needed to Self-Distribute: No
Statute: S.C. Code Ann. § 61-4-940
Brewers in South Carolina are not permitted to self-distribute their products and must use wholesalers for that process. These distribution agreements must be in writing and designate exclusive territories for the wholesalers distributing specific brands. Wholesalers are also required to file copies of these distribution agreements with the state. Additionally, among other things, brewers are prohibited from:
- Setting the resale price for their products
- Requiring wholesalers to submit sales records or other information about other brands they distribute
- Requiring the wholesaler hire or fire certain personnel, or setting their pay rates
- Requiring the wholesaler to contribute to an advertising fund controlled by the brewer
- Attributing risk of loss, ownership, or other financial interest to the wholesaler before the beer is in their possession
- Requiring the wholesaler pay for the development, installation, or use of any software used or required by the brewer
- Unreasonably withholding their consent to the transfer of a wholesaler’s business
Brewers also cannot terminate their distribution agreements without just cause or provocation, or without considering the interests of the wholesaler. The brewer must also provide the wholesaler with at least 60 days’ written notice of termination, stating the reasons why they are terminating the agreement. However, brewers are allowed to immediately terminate their distribution agreements when:
- The wholesaler becomes insolvent or bankrupt
- The wholesaler has its license revoked which impairs its ability to continue business
- The wholesaler is convicted of a violation of law that impairs its ability to continue business
If a brewer terminates its distribution agreement without just cause or without giving proper notice, the wholesaler can bring a claim against the brewer seeking damages or an injunction. If the court finds that the brewer violated the distribution rules, the state may also choose to revoke the brewer’s license.
