Assemblymember Brindisi Authors Legislation to Help Small-Business Breweries

April 19, 2012

Assemblymember Anthony J. Brindisi (D-Utica) announced that legislation he authored to give small breweries a new avenue for terminating unfavorable, exclusive contracts with beer wholesalers passed the Assembly (A.8962).

"Our current law is outdated and based on a marketplace that no longer exists," Assemblymember Brindisi said. "What was envisioned as a law to protect small businesses has actually hurt the many independent breweries in New York State. This new legislation would open up the market and help small brewers expand their businesses."

The 1996 Beer Franchise Law strengthened distributing contracts to protect small, family-owned wholesalers from arbitrary termination by large multinational breweries. However, as a result, the number of wholesalers in New York State dropped from 112 in 1996 to fewer than 60 today, and those that remain have grown considerably in size and resources, Assemblymember Brindisi noted.

During the same time, small independent breweries have experienced a boom, growing from less than 20 to 63 statewide. Due to the 1996 law, many are locked into exclusive contracts with large wholesalers that are not actively supporting or selling their brand. Currently, their only recourse is a lengthy, costly legal process with no assurance of success. The new law would give small breweries the right to terminate contracts and seek a more profitable opportunity, Assemblymember Brindisi said.

"Small businesses, like the breweries that would be affected by this legislation, are a driving force for new jobs in our community," Assemblymember Brindisi said. "If breweries have the ability to leave unfavorable contracts, it will spur growth and expansion of their business, creating more good-paying jobs for our hardworking families."

Small brewers are classified under the legislation as brewers whose annual volume is less than 300,000 barrels of beer and whose sales to a wholesaler are 3 percent or less of a multi-brand beer wholesaler’s annual business. This includes the Utica-based Matt Brewing Company, which produces Saranac Beer.

"I want to thank Assemblyman Brindisi for his work moving this very important legislation forward," said Nick Matt, Chairman and CEO of the FX Matt Brewing Company. "This legislation takes a major step forward to level the playing field for companies like ours. Unfortunately, small brewers sometimes find themselves in a relationship that is not working, and this legislation will help solve that problem and importantly help our industry continue to grow and provide more jobs. Craft Brewing is a growing segment of the economy and giving small brewers better access to market will help that growth and in turn help provide jobs and strengthen the state economy. "

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