CHAPTER 25. PRODUCT TRANSFER BETWEEN WHOLESALERS
IC 7.1-3-25
Chapter 25. Product Transfer Between Wholesalers
IC 7.1-3-25-1
"Existing wholesaler"
Sec. 1. As used in this chapter, "existing wholesaler" means a beer
wholesaler who distributes a product at the time a successor primary
source of supply acquires rights to a product under section 5 of this
chapter.
As added by P.L.224-2005, SEC.19.
IC 7.1-3-25-2
"Product"
Sec. 2. As used in this chapter, "product" means an existing brand
of:
(1) beer (as defined in IC 7.1-1-3-6); or
(2) flavored malt beverage (as defined in IC 7.1-1-3-16.7).
As added by P.L.224-2005, SEC.19.
IC 7.1-3-25-3
"Successor"
Sec. 3. As used in this chapter, "successor" means a primary
source of supply that acquires rights to a product under section 5 of
this chapter.
As added by P.L.224-2005, SEC.19.
IC 7.1-3-25-4
"Successor's designee"
Sec. 4. As used in this chapter, "successor's designee" means one
(1) or more beer wholesalers designated by a successor to replace the
existing wholesaler, for all or part of the existing wholesaler's
territory, in the distribution of the existing product.
As added by P.L.224-2005, SEC.19.
IC 7.1-3-25-4.5
Transfer of products meeting sales percentage threshhold
prohibited
Sec. 4.5. (a) Except as provided in subsection (b), a successor,
upon acquiring products, shall:
(1) reappoint the existing wholesaler for:
(A) all acquired products; and
(B) the territories covered by the existing wholesaler for the
products; or
(2) comply with this chapter to transfer the products to another
wholesaler.
(b) If the products acquired by a successor represent at least
fifteen percent (15%) of an existing wholesaler's dollar sales in the
twelve (12) months preceding the closing of the transaction in which
the successor acquires the products, the successor:
(1) shall reappoint the existing wholesaler for:
(A) all acquired products; and
(B) the territories covered by the existing wholesaler for the
products; and
(2) may not transfer the product to another wholesaler.
As added by P.L.11-2009, SEC.1.
IC 7.1-3-25-5
Successor requirements
Sec. 5. A successor:
(1) who acquires the rights to manufacture or distribute an
existing product; and
(2) who:
(A) does not reappoint the existing wholesaler to distribute
the product;
(B) reduces the existing wholesaler's territory for the
product; or
(C) offers to compensate the existing wholesaler in an
amount less than the fair market value determined under
section 7 of this chapter;
must comply with this chapter. A successor's designee must also
comply with this chapter.
As added by P.L.224-2005, SEC.19.
IC 7.1-3-25-6
Notice to wholesaler of change in territory
Sec. 6. The successor shall notify the existing wholesaler of the
successor's intent not to appoint the existing wholesaler for all or a
part of the existing wholesaler's territory for the product not later
than sixty (60) days after the closing of the transaction in which the
successor acquires the product. The successor shall mail the notice
by certified mail, return receipt requested, to the existing wholesaler.
The successor shall include in the notice the names, addresses, and
telephone numbers of the successor's designees.
As added by P.L.224-2005, SEC.19. Amended by P.L.11-2009,
SEC.2.
IC 7.1-3-25-7
Determination of fair market value of wholesaler's distribution
rights
Sec. 7. A successor's designee shall negotiate with the existing
wholesaler to determine the fair market value of the existing
wholesaler's right:
(1) to distribute the product in the existing wholesaler's territory
immediately before the successor acquired rights to the product
under section 5 of this chapter; and
(2) as determined in an arms length transaction entered into
without duress or threat of termination of the initial wholesaler's
right described in subdivision (1).
As added by P.L.224-2005, SEC.19.
IC 7.1-3-25-8
Territory continues until compensation received
Sec. 8. The existing wholesaler shall continue to distribute the
product until payment of the compensation agreed to under section
7 of this chapter or awarded under section 11 of this chapter is
received.
As added by P.L.224-2005, SEC.19.
IC 7.1-3-25-9
Arbitration
Sec. 9. (a) The successor's designee and the existing wholesaler
shall negotiate in good faith. If the parties fail to reach an agreement
not later than thirty (30) days after the existing wholesaler receives
the notice under section 6 of this chapter, the successor's designee or
the existing wholesaler may send a written notice to the:
(1) other party; and
(2) American Arbitration Association or its successor in
interest;
declaring the party's intention to proceed with final and binding
arbitration administered by the American Arbitration Association
under the American Arbitration Association's Commercial
Arbitration Rules.
(b) Notice of intent to arbitrate shall be sent, as provided in
subsection (a), not later than thirty-five (35) days after the existing
wholesaler receives notice under section 6 of this chapter. The
arbitration proceedings shall conclude not later than forty-five (45)
days after the date the notice of intent to arbitrate is mailed to a
party.
As added by P.L.224-2005, SEC.19.
IC 7.1-3-25-10
Location of arbitration proceedings; general provisions
Sec. 10. (a) The arbitration shall be conducted in the city within
Indiana that:
(1) is closest to the existing wholesaler; and
(2) has a population of more than fifty thousand (50,000).
(b) The arbitration shall be conducted before one (1) impartial
arbitrator to be selected by the American Arbitration Association.
The arbitration shall be conducted in accordance with the rules and
procedures of the American Arbitration Association.
As added by P.L.224-2005, SEC.19.
IC 7.1-3-25-11
Monetary award only
Sec. 11. The arbitrator's award must be monetary only and may
not enjoin or compel conduct. The arbitration is instead of all other
remedies and procedures.
As added by P.L.224-2005, SEC.19.
IC 7.1-3-25-12
Arbitration costs; decision of arbitrator binding
Sec. 12. (a) The cost of the arbitrator and any other direct costs of
the arbitration shall be equally divided by the parties engaged in the
arbitration. All other costs shall be paid by the party incurring them.
(b) The arbitrator shall render a decision not later than thirty (30)
days after the conclusion of the arbitration unless this time period is
extended by mutual agreement of the parties or by the arbitrator. The
decision of the arbitration is final and binding on the parties. Under
no circumstances may the parties appeal the decision of the
arbitrator.
(c) A party who fails to participate in the arbitration hearings
waives all rights the party would have had in the arbitration and is
considered to have consented to the determination of the arbitrator.
As added by P.L.224-2005, SEC.19.
IC 7.1-3-25-13
Failure to receive compensation
Sec. 13. If the existing wholesaler does not receive payment of the
compensation under section 7 or 11 of this chapter not later than
thirty (30) days after the date of the settlement or arbitration award:
(1) the existing wholesaler shall remain the distributor of the
product in the existing wholesaler's territory to at least the same
extent that the existing wholesaler distributed the product
immediately before the successor acquired rights to the product;
and
(2) the existing wholesaler is not entitled to the settlement or
arbitration award.
As added by P.L.224-2005, SEC.19.
IC 7.1-3-25-14
Good faith settlements not prohibited
Sec. 14. Nothing in this chapter shall be construed to limit or
prohibit good faith settlements voluntarily entered into by the parties.
As added by P.L.224-2005, SEC.19.
IC 7.1-3-25-15
Not applicable to wholesaler's breach of distribution agreement
Sec. 15. Nothing in this chapter shall be construed to give the
existing wholesaler or a successor wholesaler any right to
compensation if the existing wholesaler or successor wholesaler is
terminated by the primary source of supply or predecessor source
supplier either for failure to comply with any provision in the
agreement to distribute the product or in accordance with
IC 7.1-5-5-9.
As added by P.L.224-2005, SEC.19.