This briefing document provides an overview of the main themes and important aspects of Ohio Senate Bill 23, which proposes to amend section 1333.82 of the Revised Code concerning the state’s Alcohol Franchise Law. The bill focuses on revising the definitions within this section.
Main Themes and Important Ideas/Facts:
Senate Bill 23 primarily aims to modify the definitions used within Ohio’s Alcohol Franchise Law, specifically within section 1333.82 of the Revised Code. The key revisions and clarifications are as follows:
- Definition of “Alcoholic Beverages”: The bill explicitly defines “alcoholic beverages” as “beer and wine as defined in section 4301.01 of the Revised Code.” This clarifies the scope of the franchise law in terms of the types of alcoholic beverages covered.
- Revised Definition of “Manufacturer”: The definition of “manufacturer” is updated to exclude smaller beer producers. The proposed amendment states: “‘Manufacturer’ means a person, whether located in this state or elsewhere, that manufactures or supplies alcoholic beverages to distributors in this state. ‘Manufacturer’ does not include any person producing less than two hundred fifty thousand barrels of beer a year.” This introduces a production volume threshold, exempting smaller breweries from being classified as manufacturers under this specific law.
- Definition of “Distributor”: The definition of “distributor” remains largely consistent, defining it as “a person that sells or distributes alcoholic beverages to retail permit holders in this state, but does not include the state or any of its political subdivisions.” This clarifies who is considered a distributor within the context of the franchise law.
- Definition of “Franchise”: The definition of “franchise” is broad, encompassing “a contract or any other legal device used to establish a contractual relationship between a manufacturer and a distributor.” This highlights the various forms that a franchise agreement can take.
- Definition of “Good Faith”: The definition of “good faith” emphasizes fair and equitable conduct within the franchise relationship, aiming to prevent coercion or intimidation. It clarifies that certain actions do not constitute a lack of good faith: “‘Good faith’ means the duty of any party to any franchise, and all officers, employees, or agents of any party to any franchise, to act in a fair and equitable manner toward each other so as to guarantee each party freedom from coercion or intimidation; except that recommendation, endorsement, exposition, persuasion, urging, or argument shall not be considered to constitute a lack of good faith or coercion.“
- Definition of “Brand” (Wine Specific): The definition of “brand” is specifically applied to wine, focusing on distinct characteristics: “‘Brand,’ as applied to wine, means a wine different from any other wine in respect to type, brand, trade name, or container size.” This provides clarity for distinguishing different wine brands under the law.
- Definition of “Sales Area or Territory”: The definition of “sales area or territory” describes an exclusive geographic area assigned to a permit holder. It includes a provision regarding pre-existing retail location assignments: “‘Sales area or territory’ means an exclusive geographic area or territory that is assigned to a particular A or B permit holder and that either has one or more political subdivisions as its boundaries or consists of an area of land with readily identifiable geographic boundaries. ‘Sales area or territory’ does not include, however, any particular retail location in an exclusive geographic area or territory that had been assigned to another A or B permit holder before April 9, 2001.” This indicates the potential for grandfathering existing retail location assignments.
- Repeal of Existing Section: Section 2 of the bill states: “That existing section 1333.82 of the Revised Code is hereby repealed.” This confirms that the introduced version will entirely replace the current language of this section.
In summary, Senate Bill 23 primarily focuses on updating and clarifying the definitions within Ohio’s Alcohol Franchise Law (Section 1333.82 of the Revised Code). The most significant change appears to be the introduction of a production threshold for the definition of “manufacturer,” specifically excluding beer producers below 250,000 barrels annually. The other definitional updates provide further clarity on the scope and terms used within the law governing the relationships between alcohol manufacturers and distributors in Ohio.