Law Commons^™

Independent Craft Breweries Struggle Under Distribution Laws That Create A Power Imbalance In Favor Of Wholesalers, Daniel Croxall

William & Mary Business Law Review

Independent craft breweries are facing historic challenges under the COVID-19 pandemic. To make matters worse, many states prohibit a brewery from terminating a distribution contract with a wholesaler absent statutorily defined “good cause,” which typically means fraud, bankruptcy, or other illegal conduct. In this context, lagging sales or poor distribution performance are not grounds for a brewery to terminate a distribution contract. This means that it is nearly impossible, legally or financially, for an independent craft brewery to terminate a distribution contract with an unsatisfactory wholesaler. In essence, states have statutorily tipped the balance of power in favor of distributors …