§ 3-5-1107 - Prohibited acts by supplier. - Arkansas Statutes

3-5-1107. Prohibited acts by supplier.

A supplier shall not do the following:

(1) Fail to provide to each wholesaler of the supplier's brand or brands with a written agreement which contains, in total, the supplier's agreement with each wholesaler and designates a specific exclusive sales territory. Any agreement which is in existence on January 31, 1991, shall be renewed consistent with this subchapter, provided that this subchapter may be incorporated by reference in the agreement. Provided, however, nothing contained herein shall prevent a supplier from appointing, one (1) time for a period not to exceed ninety (90) days, a wholesaler to temporarily service a sales territory not designated to another wholesaler, until such time as a wholesaler is appointed by the supplier; and such wholesaler who is designated to service the sales territory during this period of temporary service shall not be in violation of this subchapter, and, with respect to the temporary service territory, shall not have any of the rights provided under 3-5-1108 and 3-5-1111;

(2) Fix, maintain, or establish the price at which a wholesaler shall sell any beer;

(3) Enter into an additional agreement with any other wholesaler for, or to sell to any other wholesaler, the same brand or brands of beer in the same territory or any portion thereof, or to sell directly to any retailer in this state;

(4) Require any wholesaler to accept delivery of any beer or other commodity which has not been ordered by the wholesaler. Provided, however, a supplier may impose reasonable inventory requirements upon a wholesaler if the requirements are made in good faith and are generally applied to other similarly situated wholesalers who have an agreement with the supplier;

(5) Require any wholesaler to accept delivery of any beer or other commodity ordered by a wholesaler if the order was properly cancelled by the wholesaler in accordance with the supplier's procedures;

(6) Require any wholesaler to do any illegal act or to violate any law or regulation by threatening to amend, modify, cancel, terminate, or refuse to renew any agreement existing between the supplier and wholesaler;

(7) Require a wholesaler to assent to any condition, stipulation, or provision limiting the wholesaler's right to sell the brand or brands of beer of any other supplier unless the acquisition of the brand or brands of another supplier would materially impair or adversely affect the wholesaler's quality of service, sales, or ability to compete effectively in representing the brand or brands of the supplier presently being sold by the wholesaler; provided the supplier shall have the burden of proving that such acquisition of such other brand or brands would have such effect;

(8) Require a wholesaler to purchase one (1) or more brands of beer products in order for the wholesaler to purchase another brand or brands of beer for any reason. Provided, however, a wholesaler that has agreed to distribute a brand or brands before January 31, 1991, shall continue to distribute the brand or brands in conformance with this subchapter;

(9) Require a wholesaler to submit audited profit and loss statements, balance sheets, or financial records as a condition of renewal or continuation of an agreement;

(10) Withhold delivery of beer ordered by a wholesaler, or change a wholesaler's quota of a brand or brands if the withholding or change is not made in good faith;

(11) Require a wholesaler by any means directly to participate in or contribute to any local or national advertising fund controlled directly or indirectly by a supplier;

(12) Take any retaliatory action against a wholesaler that files a complaint in good faith regarding an alleged violation by the supplier of federal, state, or local law or an administrative rule as a result of that complaint;

(13) Require or prohibit any change in the manager or successor of any wholesaler who has been approved by the supplier as of or subsequent to January 31, 1991, unless the supplier acts in good faith. Should a wholesaler change an approved manager or successor manager, a supplier shall not require or prohibit the change unless the person selected by the wholesaler fails to meet the nondiscriminatory, material, and reasonable standards and qualifications for managers consistently applied to similarly situated wholesalers by the supplier. Provided, however, the supplier shall have the burden of proving that such person fails to meet such standards and qualifications;

(14) Upon written notice of intent to transfer the wholesaler's business, interfere with, prevent, or unreasonably delay, not to exceed thirty (30) days, the transfer of the wholesaler's business if the proposed transferee is a designated member;

(15) Upon written notice of intent to transfer the wholesaler's business other than to a designated member, withhold consent to or approval of, or unreasonably delay, not to exceed thirty (30) days after receipt of all material information reasonably requested, a response to a request by the wholesaler for any transfer of a wholesaler's business if the proposed transferee meets the nondiscriminatory, material, and reasonable qualifications and standards required by the supplier for similarly situated wholesalers; or

(16) Restrict or inhibit the right of free association among wholesalers for any lawful purpose.