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 beerwholesaler who distributes a product at the time a successor primarysource of supply acquires rights to a product under section 5 of thischapter.
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 brandof:
(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 primarysource of supply that acquires rights to a product under section 5 ofthis 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 theexisting wholesaler, for all or part of the existing wholesaler'sterritory, 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 threshholdprohibited
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 theproducts; or
(2) comply with this chapter to transfer the products to anotherwholesaler.
(b) If the products acquired by a successor represent at leastfifteen percent (15%) of an existing wholesaler's dollar sales in thetwelve (12) months preceding the closing of the transaction in whichthe 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 theproducts; 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 anexisting product; and
(2) who:
(A) does not reappoint the existing wholesaler to distributethe product;
(B) reduces the existing wholesaler's territory for theproduct; or
(C) offers to compensate the existing wholesaler in anamount less than the fair market value determined undersection 7 of this chapter;
must comply with this chapter. A successor's designee must alsocomply 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 thesuccessor's intent not to appoint the existing wholesaler for all or apart of the existing wholesaler's territory for the product not laterthan sixty (60) days after the closing of the transaction in which thesuccessor acquires the product. The successor shall mail the noticeby certified mail, return receipt requested, to the existing wholesaler.The successor shall include in the notice the names, addresses, andtelephone 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 distributionrights
Sec. 7. A successor's designee shall negotiate with the existingwholesaler to determine the fair market value of the existingwholesaler's right:
(1) to distribute the product in the existing wholesaler's territoryimmediately before the successor acquired rights to the productunder section 5 of this chapter; and
(2) as determined in an arms length transaction entered intowithout duress or threat of termination of the initial wholesaler'sright 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 theproduct until payment of the compensation agreed to under section7 of this chapter or awarded under section 11 of this chapter isreceived.
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 wholesalershall negotiate in good faith. If the parties fail to reach an agreementnot later than thirty (30) days after the existing wholesaler receivesthe notice under section 6 of this chapter, the successor's designee orthe existing wholesaler may send a written notice to the:
(1) other party; and
(2) American Arbitration Association or its successor ininterest;
declaring the party's intention to proceed with final and bindingarbitration administered by the American Arbitration Associationunder the American Arbitration Association's CommercialArbitration Rules.
(b) Notice of intent to arbitrate shall be sent, as provided insubsection (a), not later than thirty-five (35) days after the existingwholesaler receives notice under section 6 of this chapter. Thearbitration proceedings shall conclude not later than forty-five (45)days after the date the notice of intent to arbitrate is mailed to aparty.
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 withinIndiana 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) impartialarbitrator to be selected by the American Arbitration Association.The arbitration shall be conducted in accordance with the rules andprocedures 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 maynot enjoin or compel conduct. The arbitration is instead of all otherremedies 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 ofthe arbitration shall be equally divided by the parties engaged in thearbitration. 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 isextended by mutual agreement of the parties or by the arbitrator. Thedecision of the arbitration is final and binding on the parties. Underno circumstances may the parties appeal the decision of thearbitrator.
(c) A party who fails to participate in the arbitration hearingswaives all rights the party would have had in the arbitration and isconsidered 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 thecompensation under section 7 or 11 of this chapter not later thanthirty (30) days after the date of the settlement or arbitration award:
(1) the existing wholesaler shall remain the distributor of theproduct in the existing wholesaler's territory to at least the sameextent that the existing wholesaler distributed the productimmediately before the successor acquired rights to the product;and
(2) the existing wholesaler is not entitled to the settlement orarbitration 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 orprohibit 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 theexisting wholesaler or a successor wholesaler any right tocompensation if the existing wholesaler or successor wholesaler isterminated by the primary source of supply or predecessor sourcesupplier either for failure to comply with any provision in theagreement to distribute the product or in accordance withIC 7.1-5-5-9.
As added by P.L.224-2005, SEC.19.