A. Except as provided in subsection F of this section, a small brewer is not subject to the termination provisions of this section.
B. 1. Except as provided in subsections C, D and E of this section, no brewer shall terminate a distributor agreement with any beer distributor unless all of the following occur:
2. If a beer distributor cures an alleged noncompliance within the cure period provided in subparagraph b of paragraph 1 of this subsection, any notice of termination from a brewer to a beer distributor shall be null and void.
C. A brewer may immediately terminate a distributor agreement, effective upon furnishing written notification to the beer distributor by certified mail, return receipt requested, for any of the following reasons:
1. The beer distributor's failure to pay any account when due and upon written demand by the brewer for such payment, in accordance with agreed payment terms;
2. The assignment or attempted assignment by the beer distributor for the benefit of creditors, the institution of proceedings in bankruptcy by or against the beer distributor, the dissolution or liquidation of the beer distributor or the insolvency of the beer distributor;
3. The revocation or suspension of, or the failure to renew for a period of more than fourteen (14) days, a beer distributor's state, local or federal license or permit to sell beer in this state;
4. The beer distributor has been convicted of a felony that, in the brewer's sole judgment, adversely affects the goodwill of the beer distributor or brewer;
5. A beer distributor has been convicted of, found guilty of or pled guilty or nolo contendere to, a charge of violating a law or regulation of the United States or of this state if it materially and adversely affects the ability of the beer distributor or brewer to continue to sell its beer in this state;
6. Any attempted transfer of ownership of the beer distributor, stock of the beer distributor or stock of any parent corporation of the beer distributor, or any change in the beneficial ownership or control of any entity having control of the beer distributor, without obtaining the prior written approval of the brewer, which may not be unreasonably withheld, except as may otherwise be permitted pursuant to a written agreement between the parties;
7. Fraudulent conduct in the beer distributor's dealings with the brewer of beer, including the intentional sale of beer outside the brewer's established quality standards;
8. Cessation of the beer distributor to conduct business for five (5) consecutive business days, unless conducting the business is prevented or rendered impractical due to events beyond the distributor's reasonable control as a result of an act of God, an insured casualty, war or a condition of national, state or local emergency; or
9. Any sale of beer, directly or indirectly, to customers located outside the territory assigned to the beer distributor by the brewer unless expressly authorized by the brewer.
Provided, the beer distributor shall have the opportunity to sell the brewer's brands for one hundred twenty (120) days after termination in accordance with the distributor agreement.
D. The brewer shall have the right to terminate an agreement with a beer distributor at any time by giving the beer distributor at least ninety-days' written notice by certified mail, return receipt requested; provided, the brewer shall give a similar notice to all other beer distributors in all other states who have entered into the same distributor agreement with the brewer.
E. If a particular brand of beer is transferred by purchase or otherwise from a brewer to a successor brewer, the following shall occur:
1. The successor brewer shall become obligated to all of the terms and conditions of the agreement in effect on the date of succession. This subsection applies regardless of the character or form of the succession. A successor brewer has the right to contractually require its beer distributor to comply with operational standards of performance, if the standards are uniformly established for all of the successor brewer's distributors. A successor brewer may, upon written notice, terminate its agreement, in whole or in part, with a beer distributor of the brewer it succeeded, for the purpose of transferring the distribution rights in the beer distributor's territory to a new beer distributor, provided that the successor beer distributor first pays to the existing beer distributor the fair market value of the existing distributor's business with respect to the terminated brand or brands;
2. If the successor brewer decides to terminate its agreement with the existing beer distributor for purposes of transfer, the successor brewer shall notify the existing beer distributor in writing of the successor brewer's intent not to appoint the existing beer distributor for all or part of the existing beer distributor's territory. The successor brewer shall mail the notice of termination by certified mail, return receipt requested, to the existing beer distributor. The successor brewer shall include in the notice the names, addresses and telephone numbers of the successor beer distributor or distributors;
3.a.the successor beer distributor shall negotiate with the existing beer distributor to determine the fair market value of the existing beer distributor's right to distribute in the existing beer distributor's territory. The successor beer distributor and the existing beer distributor shall negotiate the fair market value in good faith, and
4.a.if the successor beer distributor and the existing beer distributor fail to reach a written agreement on the fair market value within thirty (30) days after the existing beer distributor receives the notice required pursuant to paragraph 2 of this subsection, the successor beer distributor or the existing beer distributor shall send a written notice to the other party requesting arbitration pursuant to the Uniform Arbitration Act, Part 2 of Article 22 of Title 13, C.R.S. Arbitration shall be held for the purpose of determining the fair market value of the existing beer distributor's right to distribute in the existing beer distributor territory,
F. 1. In addition to termination rights that may be set forth in a distributor agreement, a small brewer who manufactures less than twenty-five thousand barrels of beer annually may terminate a distributor agreement with any beer distributor provided that, prior to the effective date of the termination, the small brewer pays the beer distributor the fair market value of the distribution rights which will be lost or diminished by reason of the termination.
2. If such small brewer and beer distributor cannot mutually agree to the fair market value of the applicable distribution rights lost or diminished by reason of the termination, then the brewer shall pay the beer distributor a good faith estimate of the fair market value of the applicable distribution rights.
3. If the beer distributor being terminated under paragraph 2 of this subsection disputes that the payment made by the small brewer was less than the fair market value of the distribution rights, then the beer distributor may within forty-five (45) days of termination submit the question of fair market value of the applicable distribution rights lost or diminished by reason of the termination to binding arbitration before a panel of three neutral arbitrators appointed in accordance with the commercial arbitration rules of the American Arbitration Association, which panel shall determine by majority decision whether the small brewer's payment meets the requirements of paragraph 2 of this subsection.
4. If the arbitration panel rules that the payment made by the small brewer to the beer distributor upon termination was less than the fair market value of distribution rights lost or diminished by reason of the termination, then the small brewer must pay the beer distributor the difference between the payment made to the beer distributor and the determined fair market value plus interest.
5. If the arbitration panel rules that the payment made by the small brewer to the beer distributor upon termination was more than the fair market value of distribution rights lost or diminished by reason of the termination, then the beer distributor must pay the small brewer the difference between the payment made to the beer distributor and the determined fair market value, plus interest.
6. All arbitration fees and expenses shall be equally divided among the parties to the arbitration, except if the arbitration panel determines that the small brewer's payment upon termination was not a good-faith estimate of the fair market value, then the panel may award up to one hundred percent (100%) of the arbitration costs to the small brewer.
G. 1. Any beer distributor or brewer who is aggrieved by a violation of any provision of subsections B and D of this section shall be entitled to recovery of damages caused by the violation. Except for a dispute arising under subsection E of this section, damages shall be sought in a civil action in any court of competent jurisdiction.
2. Any dispute arising under subsections B and D of this section may also be settled by such dispute resolution procedures as may be provided by a written agreement between the parties.
H. Nothing in this section shall be construed to limit or prohibit good-faith settlements voluntarily entered into by the parties.
I. Nothing in this section shall be construed to give a beer distributor any right to compensation if an agreement with the beer distributor is terminated by a brewer pursuant to subsections B, C and D of this section.
J. No brewer shall require any beer distributor to waive compliance with any provision of the Oklahoma Alcoholic Beverage Control Act.
K. No brewer shall charge or accept, and no beer distributor shall pay or provide, any money, property, gratuity, rebate, free goods, shipping charges different than those charged for all beer distributors, allowances, thing of value or inducement from a beer distributor in exchange for the brewer entering into a distributor agreement with the beer distributor. However, a brewer who also holds a beer distributor license and desires to sell all or a portion of its beer distribution rights and business, or a holder of small brewer license who desires to change its election from self-distribution to the use of a distributor agreement may accept a payment for the fair market value of its existing and established distribution business in the subject territory.
L. This section shall apply to any agreement entered into and any renewals, extensions, amendments or conduct constituting a modification of a distributor agreement by a brewer or cider manufacturer existing on or after the effective date of this act.
M. Where a cider manufacturer distributes cider through a beer distributor, the rights and obligations of the cider manufacturer, the distributor, a successor cider manufacturer and a successor distributor shall be the same as the rights and obligations provided in this section for a brewer, beer distributor, successor brewer and successor beer distributor.
Added by Laws 2016, c. 366, § 81, eff. Oct. 1, 2018. Amended by Laws 2017, c. 364, § 16, eff. Oct. 1, 2018.
NOTE: Laws 2016, c. 366, was conditionally effective upon passage of State Question No. 792, Legislative Referendum No. 370, which was adopted at election held on Nov. 8, 2016.
Structure Oklahoma Statutes
§37A-1-101. Short title - Oklahoma Alcoholic Beverage Control Act.
§37A-1-102. Policy and scope of act.
§37A-1-104. Creation and purpose of ABLE Commission - Members - Interim licenses.
§37A-1-105. Commission member qualifications – Organization.
§37A-1-106. Exercise of police power.
§37A-1-107. Commission powers and duties.
§37A-1-108. Commission Director - Powers and duties.
§37A-1-109. Powers and authority of peace officers.
§37A-1-110. Restrictions on Commission members and employees – Penalties.
§37A-1-112. Good standing with Oklahoma Tax Commission required.
§37A-2-101. Annual license fees - Administrative fees.
§37A-2-102. See the following versions:
§37A-2-102.1. Charitable Collaboration Brewer License.
§37A-2-102v1. Brewer license - Small brewer license - Small brewer self-distribution license.
§37A-2-102v2. Brewer license - Small brewer license - Small brewer self-distribution license.
§37A-2-103. Distiller license.
§37A-2-104. Winemaker license.
§37A-2-105. Winemaker self-distribution license.
§37A-2-106. Rectifier license.
§37A-2-107. Wine and spirits wholesaler license.
§37A-2-108. Beer distributor license.
§37A-2-109. Retail spirits license - Retail wine license - Retail beer license.
§37A-2-110. See the following versions:
§37A-2-110v1. Mixed beverage license.
§37A-2-110v2. Mixed beverage license.
§37A-2-111. Bottle club license.
§37A-2-113. Caterer license - Rules and restrictions.
§37A-2-114. Special event license - Public event licenses.
§37A-2-115. Special event licenses - Rules and restrictions.
§37A-2-116. Hotel beverage license.
§37A-2-117. Hotel beverage license - Rules and restrictions.
§37A-2-118. Airline/railroad/commercial passenger vessel beverage license.
§37A-2-119. Airline/railroad/commercial passenger vessel beverage license - Qualifying licensee.
§37A-2-120. Wholesaler's agent license.
§37A-2-122. Industrial license.
§37A-2-124. Private carrier license.
§37A-2-125. Bonded warehouse license.
§37A-2-127. Sacramental wine supplier license.
§37A-2-128. On-premises beer and wine license.
§37A-2-129. Charitable auction or charitable alcoholic beverage event license.
§37A-2-130. Mixed beverage/caterer combination license.
§37A-2-131. Small farm winery license.
§37A-2-132. Brewpub license - Brewpub self-distribution license.
§37A-2-134. Additional hours license.
§37A-2-135. Manufacturer's license - Nonresident seller license.
§37A-2-136. Manufacturer's agent license.
§37A-2-137. Restriction against additional licenses or permits outside of this Act.
§37A-2-140. Personal use permit.
§37A-2-141. Applicants for certain licenses to publish a notice of intention to apply.
§37A-2-142. Information to be furnished by license applicants.
§37A-2-143. Information to be furnished by corporate applicants.
§37A-2-143.1. Promulgation of rules for employee license payment plans.
§37A-2-144. Information to be furnished by limited liability company applicants.
§37A-2-145. Eligibility of persons pardoned for a felony.
§37A-2-148. Grounds to revoke or suspend licenses.
§37A-2-149. Written notice of denial, suspension or revocation of licenses.
§37A-2-150. Hearing for aggrieved person.
§37A-2-151. Commission authority to conduct initial hearing.
§37A-2-152. Appeal from order of Commission - District court appeal - Supreme Court appeal.
§37A-2-154. Display of license.
§37A-2-158. Suspension of licenses by Governor in cases of natural disaster or civil disturbance.
§37A-2-159. Complimentary beverage license.
§37A-2-160. Satellite tasting room license.
§37A-2-161. Curbside pickup and delivery.
§37A-3-102. Commission authority to promulgate rules.
§37A-3-105. Wineries - Shipping to other states - Monthly report of shipments.
§37A-3-106. Direct Wine Shipper's Permit – Requirements.
§37A-3-107. Scope of statutory regulation for sales and distribution of designated brands of beer.
§37A-3-110. Licensed beer distributor - Sales and distribution restrictions.
§37A-3-112. Operation and maintenance conditions for brew pubs.
§37A-3-113. Small brewers - Sales to licensed distributors or retailers - Direct sales to consumers.
§37A-3-114. Resale of beer restrictions for retailers - Violations – Penalties.
§37A-3-115. Withdrawal of beer from retailer's stock.
§37A-3-116.1. Manufacturers without a designated wholesaler - Posting requirements.
§37A-3-116.2. Designated wholesalers or beer distributors - Posting requirements.
§37A-3-116.3. Wholesalers - Electronic publishing of price catalog.
§37A-3-116.4. Top brand products – Offered to all wholesalers without discrimination.
§37A-3-117. Sale of alcoholic beverages packaged with nonalcoholic promotional items.
§37A-3-118. Retail sales of alcoholic beverages - Minimum price markup – Exceptions.
§37A-3-122. Business interests in interactive entertainment facilities.
§37A-3-126. Bottle clubs - Restrictions on hours to dispense, serve or consume alcoholic beverages.
§37A-4-101. Municipal authority to enact ordinances.
§37A-4-103. Municipal zoning authority.
§37A-4-104. Municipal occupational tax.
§37A-4-105. County occupational tax.
§37A-4-106. Enforcement of the Oklahoma Alcoholic Beverage Control Act.
§37A-5-101. Excise tax on alcoholic beverages.
§37A-5-102. Intent of excise tax.
§37A-5-103. Excise tax exemptions.
§37A-5-104. Distribution of excise tax revenue.
§37A-5-106. Gross receipt tax revenue - General Revenue Fund.
§37A-5-107. Mixed beverage tax permit - Violations – Penalties.
§37A-5-109. Credit or refund for money paid for stamps.
§37A-5-112. Distributor permit - Wholesaler permit - Permit applications.
§37A-5-116. Hearing to determine whether taxes are unpaid - Order to confiscate and forfeit.
§37A-5-117. Sale of forfeited alcoholic beverage.
§37A-5-119. Alcoholic beverages other than beer - Sealed cases required.
§37A-5-120. Licensees required to keep books and records.
§37A-5-122. Manufacturer and brewer subject to licensing - Monthly itemized and verified report.
§37A-5-124. Bond required for manufacturers, brewers, importers, brokers and others.
§37A-5-127. County excise boards - Yearly revenue estimates.
§37A-5-128. Alcoholic Beverage Control Fund - Alcoholic Beverage Governance Revolving Fund.
§37A-5-129. Oklahoma Viticulture and Enology Center Development Revolving Fund.
§37A-5-130. Authority to promulgate rules on labeling of alcoholic beverages.
§37A-5-131. Alcoholic beverage not labeled in conformity with rules.
§37A-5-132. Brand label required - Application for registration of brand label - Form – Fees.
§37A-5-133. Refilling of containers prohibited - Infused drinks requirements.
§37A-5-136. Tax discount for mixed beverage tax permit holders.
§37A-6-101. Prohibited acts - Violations – Penalties.
§37A-6-102. Prohibited acts of licensees.
§37A-6-102.1. Serving of tasting flights.
§37A-6-103. Prohibited acts of retail spirits licensees.
§37A-6-104. Prohibited acts of wholesaler licensees.
§37A-6-106. Prohibited acts of bottle club licensees.
§37A-6-107. Prohibited acts of special event or caterer licensees.
§37A-6-108. Prohibited acts of holders of retail wine or retail beer licenses.
§37A-6-111. Authority to remove persons while making arrests.
§37A-6-113. Unlawful to possess alcoholic beverages with intent to sell without procuring a license.
§37A-6-116. False or fraudulent return in connection with any tax imposed by Act – Penalties.
§37A-6-118. Unlawful selling, delivering, possessing and buying alcoholic beverages – Penalties.
§37A-6-120. Selling, furnishing or giving alcoholic beverages to persons under 21 - Penalties.
§37A-6-122. Payment of federal tax for liquor dealers prima facie evidence.
§37A-6-123. Selling alcoholic beverages during unauthorized day or hours – Penalties.
§37A-6-124. Permitting a person to be drunk or intoxicated on licensed premises – Penalties.
§37A-6-125. Violations of Act with no specific penalty – Penalties.
§37A-6-127. Purpose of issuing search warrants – Forfeiture.
§37A-6-128. Order to show cause for witnesses before Commission – Penalties.
§37A-6-129. Powdered alcohol - Unlawful use, purchase, sale or possession.
§37A-7-101. Short title - Oklahoma Cocktails To Go Act of 2021.
§37A-7-104. Third-party delivery services not permitted .
§37A-7-105. Delivery or carry out not permitted in certain situations.