Illinois State Senate Proposes Change to Expedited Arbitration Provisions of the Beer Industry Fair Dealing Act

Distribution TruckThere’s a proposed amendment to the Beer Industry Fair Dealing Act that seeks a nuanced change to Illinois’ liquor laws.

Illinois Senate Bill 3399 is up for its second reading on March 21st.  The proposal decreases the threshold for the expedited binding arbitration venue provisions of subsection 1.5 of Section 7 of BIFDA from 15% or less to 10% or less. 

Currently, if a brewer and a wholesaler have a disagreement under BIFDA and the brewer is required to pay reasonable compensation to the wholesaler then the parties can offer each other the ability to arbitrate their dispute rather than proceeding through the courts to resolve the issue of reasonable compensation – and only the issue of reasonable compensation.  The provisions do not apply if there are issues beyond reasonable compensation that the brewer and the wholesaler have to work out.

Right now, those brewers who’s products amount to 15% or less of the wholesaler’s annual volume of beer products have the ability to try for the arbitration provisions of subsection 1.5 – which is great if you like arbitration.  The proposed bill would lower the ceiling on the ability to arbitrate under subsection 1.5 by changing this liquor law to read 10% or less instead of 15% or less.  This means that those brewers with wholesaler contracts that provide 10%-15% of the wholesaler’s annual volume in beer products are could potentially lose the right to this form of somewhat forced, mutual and expedited arbitration.

The full text of the amendment can be found here.