§ 28-8A-5 — Supplier Prohibitions

A supplier shall not do any of the following:
(1) Fail to provide each wholesaler of the supplier’s brand or brands with a written agreement which contains in total the supplier’s agreement with each wholesaler, and designates a specific exclusive sales territory. Any agreement that is in existence on August 1, 2021, shall be renewed consistent with this chapter, and this chapter may be incorporated by reference in the agreement. No part of this chapter shall prevent a supplier from appointing, one time for a period not to exceed 90 days, a wholesaler to temporarily service a sales territory not designated to another wholesaler, until such time as a wholesaler is appointed by the supplier; and the wholesaler who is designated to service the sales territory during this period of temporary service shall not be in violation of this chapter, and, with respect to the temporary service territory, shall not have any of the rights provided under Sections 28-8A-7 and 28-8A-9.
(2) Fix, maintain, or establish the price at which a wholesaler shall sell any wine.
(3) Enter into an additional agreement with any other wholesaler for, or to sell to any other wholesaler, the same brand or brands of wine in the same territory or any portion thereof, or to sell directly to any retailer in this state.
(4) Coerce, or attempt to coerce, any wholesaler to accept delivery of any wine or other commodity which has not been ordered by the wholesaler. Provided, however, a supplier may impose reasonable inventory requirements upon a wholesaler if the requirements are made in good faith and are generally applied to other similarly situated wholesalers having an agreement with the supplier.
(5) Coerce, or attempt to coerce, any wholesaler to accept delivery of any wine or other commodity ordered by a wholesaler if the order was cancelled by the wholesaler.
(6) Coerce, or attempt to coerce, any wholesaler to do any illegal act or to violate any law or any regulation by threatening to amend, modify, cancel, terminate, or refuse to review any agreement existing between the supplier and wholesaler.
(7) Require a wholesaler to assent to any condition, stipulation, or provision limiting the wholesaler’s right to sell the brand or brands of wine or other products of any other supplier unless the acquisition of the brand or brands or products of another supplier would materially impair or adversely affect the wholesaler’s quality of service, sales, or ability to compete effectively in representing the brand or brands of the supplier presently being sold by the wholesaler. The supplier shall have the burden of proving that such acquisition of such other brand or brands or products would have such effect.
(8) Require a wholesaler to purchase one or more brands of wine or other products in order for the wholesaler to purchase another brand or brands of wine for any reason. If the wholesaler has agreed to distribute a brand or brands before August 1, 2021, the wholesaler shall continue to distribute that brand or brands, in conformance with this chapter.
(9) Request a wholesaler to submit audited profit and loss statements, balance sheets, or financial records as a condition of renewal or continuation of an agreement.
(10) Withhold delivery of wine ordered by a wholesaler, or change a wholesaler’s quota of a brand or brands if the withholding or change is not made in good faith.
(11) Require a wholesaler by any means directly to participate in or contribute to any local or national advertising fund controlled directly or indirectly by a supplier.
(12) Take any retaliatory action against a wholesaler that files a complaint regarding an alleged violation by the supplier of federal, state, or local law or an administrative rule.
(13) Require or prohibit, without just and reasonable cause, any change in the manager or successor manager of any wholesaler who has been approved by the supplier as of or subsequent to August 1, 2021. Should a wholesaler change an approved manager or successor manager, a supplier shall not require or prohibit the change unless the person selected by the wholesaler fails to meet the nondiscriminatory, material, and reasonable standards and qualifications for managers of Alabama wholesalers of the supplier which previously have been consistently applied to Alabama wholesalers by the supplier. The supplier shall have the burden of proving that a person fails to meet the standards and qualifications which are nondiscriminatory, material, and reasonable and have been consistently applied to Alabama wholesalers.
(14) Upon written notice of intent to transfer the wholesaler’s business, interfere with, prevent, or unreasonably delay, for longer than 30 days after the receipt of the notice, the transfer of the wholesaler’s business if the proposed transferee is a designated member.
(15) Upon written notice of intent to transfer the wholesaler’s business to a person other than a designated member, withhold consent to or approval of or unreasonably delay, for longer than 30 days after receipt of the notice, the transfer of a wholesaler’s business if the proposed transferee meets the nondiscriminatory, material, and reasonable qualifications and standards required by the supplier for Alabama wholesalers. The supplier shall have the burden of proving that the proposed transferee does not meet such standards and qualifications which are nondiscriminatory, material, and reasonable and have been consistently applied to Alabama wholesalers.
(16) Restrict or inhibit, directly or indirectly, the right of free association among wholesalers for any lawful purpose.

Legislative History

(Act 2021-419, §4.)