HOUSE BILL NO. 4961

September 12, 2019, Introduced by Reps. Griffin, Hauck, Warren, Hoitenga, Crawford, Leutheuser, Hall, Webber, Wozniak, Kahle, Chirkun, Hertel, Bellino, Cambensy, Brixie, Elder, Sabo, Coleman, Byrd, Garza, Lasinski, Clemente, Shannon, Hood, Marino, Peterson, Witwer, Cherry, Liberati, Greig, Sheppard, Frederick, Sneller, Wentworth, Filler, Jones, Neeley, Eisen and VanSingel and referred to the Committee on Regulatory Reform.

A bill to amend 1998 PA 58, entitled

"Michigan liquor control code of 1998,"

(MCL 436.1101 to 436.2303) by adding section 608.

the people of the state of michigan enact:

Sec. 608. (1) The purpose of this section is to exercise this state's authority under section 2 of Amendment XXI of the Constitution of the United States to ensure an orderly market for the distribution and sale of alcoholic beverages.

(2) It is the intent of this state to provide access to this state's alcoholic beverage market to all licensed manufacturers of alcoholic beverages by ensuring the independence of wholesalers to distribute the brands of beer, wine, mixed spirit drinks, and mixed wine drinks of multiple manufacturers free from the interference or control of any 1 manufacturer.

(3) A manufacturer shall not do any of the following:

(a) Require a wholesaler to provide financial records directly or indirectly related to any of the following:

(i) The wholesaler's distribution of the brands manufactured or sold to the wholesaler by another manufacturer.

(ii) The compensation of a wholesaler's employees.

(iii) The wholesaler's business operations not directly related to the distribution of the brands manufactured or sold to the wholesaler by the manufacturer.

(b) Request a wholesaler to submit any of the wholesaler's financial records as a requirement for renewing or retaining an agreement.

(c) Require a wholesaler to spend a set amount of resources marketing or promoting the brands manufactured or sold by the manufacturer to the wholesaler that is based on the sales revenue derived by the wholesaler's distribution of the brands manufactured or sold to the wholesaler by the manufacturer.

(d) Ship beer, wine, mixed spirit drink, or mixed wine drink to a wholesaler that exceeds the order placed by the wholesaler or the forecast submitted by the wholesaler.

(e) Prohibit a wholesaler from distributing the brands the manufacturer manufactured or sold to the wholesaler in licensed vehicles that have markings or logos of brands manufactured or sold to the wholesaler by other manufacturers.

(f) Prohibit a wholesaler from distributing the brands manufactured or sold to the wholesaler by another manufacturer on a licensed vehicle that has the marking or logos of brands manufactured or sold to the wholesaler by the manufacturer.

(g) Require a distributor to pay for the development, installation, or use of reporting software owned or mandated by the manufacturer.

(h) Require a wholesaler to pay a fee or penalty, of any description, for noncompliance with a manufacturer requirement.

(i) Set or attempt to set the rates of compensation for wholesaler employees, including incentives.

(j) Prohibit a wholesaler from utilizing any wholesaler-owned, leased, or controlled property or equipment to market, promote, deliver, or distribute the brands manufactured or sold by another manufacturer to the wholesaler.

(4) A manufacturer that violates this section may be ordered to pay a civil fine as follows:

(a) For a first violation, a civil fine of not more than $1,000.00.

(b) For a second violation, a civil fine of not more than $2,000.00.

(c) For a third or subsequent violation, a civil fine of not more than $5,000.00.

Enacting section 1. This amendatory act does not take effect unless Senate Bill No.____ or House Bill No. 4960 (request no. 03939'19) of the 100th Legislature is enacted into law.