Monopoly Protection & Other Wholesaler Issues

Monopoly Protection & Other Wholesaler Issues

Another key area of focus for Wine Institute’s State Relations team is preventing the spread of Monopoly Protection laws (also known as “franchise laws”) that make it difficult for wineries to do business in the states. Our team also deals with wholesaler issues such as “at rest” laws, “primary source” requirement, and other provisions specific to the three-tier system.

The State Relations team partners with local retailers and other supplier tier partners to oppose the expansion of monopoly protection laws. No states have passed new monopoly protection laws in more than a decade, and our team is continuing to pursue rollbacks to the existing statutes where opportunities might arise.

The map above shows:

• License States

License states do not participate in the sale of alcohol beverages and regulate through the issuance of licenses to industry members that do business within their states (CA is a license state).

• Control States

The state government acts as the wholesaler/distributor and retailer for some or all categories of alcoholic beverages. (NH, PA, UT and Montgomery County, MD act as both the wholesaler and retailer of wine, whereas MS and WY act as the wholesaler, with wine sold by private retailers in those states.) For more information about control systems go to the NABCA website.

• Franchise “Monopoly Protection” Law States

Laws which govern the relationship between the producer and the licensed distributor that safeguard the distributor and significantly restrict the ability of a winery to terminate the relationship in these states.