§ 57-5-503 — Prohibitions

Tennessee § 57-5-503

• Jurisdiction: Tennessee
• Title: 57

Text

The following are prohibited under this part: (1) A wholesaler shall not: (A) Transfer the wholesaler's business without giving the supplier written notice of the proposed transfer of the business as required by this part; or (B) Transfer the wholesaler's business without receiving the supplier's written approval for the proposed transfer, where required by an agreement and consistent with this part; (2) A supplier shall not: (A) Coerce, or attempt to coerce, any wholesaler to do any illegal act or to violate any law or regulation either by threatening to amend, modify, cancel, terminate, or refuse to renew any agreement existing between the supplier and the wholesaler, or by any other means; (B) Coerce, or attempt to coerce, any wholesaler to accept delivery of any beer or other commodity which has not been ordered by the wholesaler or, if ordered, has been cancelled by the wholesaler in accordance with reasonable cancellation procedures of the supplier. A supplier may impose reasonable inventory requirements upon a wholesaler if the requirements are made in good faith and are generally applied to other wholesalers in Tennessee and adjoining states having an agreement with the supplier; (C) Withhold delivery of beer 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; (D) Require a wholesaler to purchase one (1) or more brands of beer or other products in order for the wholesaler to purchase another brand or brands of beer for any reason. If a wholesaler has agreed to distribute a brand or brands before March 1, 1990, that wholesaler shall continue to distribute the brand or brands in conformance with this part; (E) Require a wholesaler to assent to any condition, stipulation or provision unreasonably limiting the wholesaler's right to sell a brand or brands of beer or other products of any other supplier; (F) Require a wholesaler to submit audited financial information, including, but not limited to, profit and loss statements, balance sheets, financial records or specific information regarding competitive brands, as a condition of renewal or continuation of an agreement; (G) Require a wholesaler by any means to participate directly in or contribute to any local or national advertising fund or purchase any merchandising material controlled either directly or indirectly by the supplier; (H) Require a wholesaler to terminate the designation of an individual as a manager or successor manager without just cause. A supplier has just cause to require termination of the designation of an individual as a manager or successor manager only if the person designated by the wholesaler fails to meet reasonable standards and qualifications. In any action challenging such termination, the supplier shall have the burden of proving that such person fails to meet such standards and qualifications; (I) Take any retaliatory action against a wholesaler who files a complaint with any regulatory body or in any court of law regarding an alleged violation by the supplier of federal, state or local law or of any administrative rule; or (J) Threaten to cancel or withhold credit, or to reduce the time period normally given the wholesaler to make payment on a delivery from the supplier as a means of compelling the wholesaler to meet certain standards of performance in any area of business not directly related to credit.

Legislative History

Acts 1990, ch. 618, § 3.