Present: Carrico, C.J., Compton, Stephenson, and Keenan, JJ., 

and Poff, Senior Justice, Whiting, Senior Justice, and Cochran, 

Retired Justice 

SIMS WHOLESALE COMPANY, 

INC., ET AL. 

OPINION BY JUSTICE A. CHRISTIAN COMPTON 

v. Record No. 951144 April 19, 1996 

BROWN-FORMAN CORPORATION 

VIRGINIA ALCOHOLIC BEVERAGE 

CONTROL BOARD 

v. Record No. 951142 

BROWN-FORMAN CORPORATION 

FROM THE COURT OF APPEALS OF VIRGINIA 

 In these appeals in a case originating before an 

administrative agency, we are confronted with a question of 

statutory interpretation. 

 We are dealing with Virginia's Wine Franchise Act (the Act), 

Code §§ 4.1-400 through -418 (Repl. Vol. 1993), a part of the 

Alcoholic Beverage Control Act. This controversy arose in 

September 1989. At that time, the Act was codified in §§ 4-

118.42 through -118.61 (Supp. 1989). The Act's provisions 

pertinent to this appeal are the same in both versions. Thus, 

for clarity we shall refer to the statutes in effect at the time 

of the May 1995 decision from which this appeal was taken, that 

is, the version found in the 1993 Replacement Volume of the Code. 

 The Act is to be "liberally construed and applied to promote 

its underlying purposes and policies." Code § 4.1-400. One such 

purpose and policy is to "promote the interests of the parties 

and the public in fair business relations between wine 
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wholesalers and wineries, and in the continuation of wine 

wholesalerships on a fair basis." Id. The Act defines "winery" 

to include any corporation which enters into an agreement with 

any Virginia wholesale wine licensee and which "manufactures or 

sells any wine products, whether licensed in the Commonwealth or 

not." Code § 4.1-401. 

 Other stated purposes and policies included in the Act are 

to "preserve and protect the existing three-tier system for the 

distribution of wine," Code § 4.1-400(2); to "prohibit unfair 

treatment of wine wholesalers by wineries" and to "define certain 

rights and remedies of wineries in regard to cancellation of 

franchise agreements with wholesalers," id. at (3); and, to 

"establish conditions for creation and continuation of all 

wholesale wine distributorships" consistent with all applicable 

laws, id. at (4). 

 The focus of this appeal is upon a winery's attempted 

cancellations unilaterally of agreements with certain Virginia 

wine wholesalers. As pertinent, the Act provides that "no winery 

shall unilaterally amend, cancel, terminate or refuse to continue 

to renew any agreement" unless the winery has given the required 

statutory notice and unless "good cause" exists for such 

cancellation or termination. Code § 4.1-406. 

 The Act further provides, "Good cause shall include, but is 

not limited to" certain enumerated circumstances. Id. Among the 

circumstances is revocation of the wholesaler's license to do 
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business in the Commonwealth; bankruptcy or receivership of the 

wholesaler; assignment for the benefit of creditors or similar 

disposition of the wholesaler's assets; and a wholesaler's 

failure to comply, without reasonable justification, with any 

written, material requirement imposed by the winery. Id. 

 The Act also provides, "Good cause shall not include the 

sale or purchase of a winery." Id. In addition, the Act 

provides that, except for "discontinuance of a brand or for good 

cause as provided in § 4.1-406, the purchaser of a winery shall 

become obligated to all of the terms and conditions of the 

selling winery's agreements with wholesalers in effect on the 

date of purchase." Code § 4.1-405(A). 

 And, if a winery accomplishes termination or cancellation of 

an agreement without good cause, the Act provides a procedure for 

the wholesaler to receive from the winery reasonable compensation 

for the value of the agreement. Code § 4.1-409(A). 

 This case has been litigated upon a stipulation of facts. 

Appellee Brown-Forman Corporation (the winery), with principal 

offices in Louisville, Kentucky, manufactures and sells wine 

products. Prior to September 27, 1989, the winery supplied its 

brands of wines to certain Virginia wholesalers for distribution 

in designated territories pursuant to written agreements. In the 

agreements, the parties expressly acknowledged the contracts were 

subject to the Act. 

 The winery, exercising its business judgment, determined 
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that its brands could be more effectively marketed by fewer 

wholesalers over broader geographic areas. The winery's 

experience had been that consolidation of its brands into fewer 

wholesalers increases "market penetration," sales of its 

products, and profits for both the winery and its wholesalers. 

Thus, by letters dated September 27, 1989, the winery notified 

Virginia wholesalers of its "major reorganization of its sales 

organization" and that it would terminate existing agreements. 

The winery planned to consolidate from 18 wholesalers in Virginia 

to four. 

 Eleven of the wholesalers are parties appellant. They are: 

 Sims Wholesale Company, Inc.; House of Beverages, Inc.; James 

River Beverage Company; Holston Valley Distributing Co., Inc.; 

Circle Sales, Inc.; Roanoke Distributing Co., Inc., trading as 

J.P. Distributing; Shenandoah Valley Distributing Co., Inc., 

trading as Dixie Beverage Company; Service Distributing, Inc.; 

Lawrence and Nester Distributing Company; Eastern Shore Beverage 

Distributing, Inc.; and Virginia Imports, Ltd. 

 Shortly after receiving the termination notices, the 

wholesalers filed petitions with the Virginia Alcoholic Beverage 

Control Board (the Board) seeking a determination that the winery 

had violated the Act, and asking that the notices of intent to 

terminate the agreements be declared null and void. 

Subsequently, the parties presented the cases to the Board on the 

stipulation with a single issue for consideration. 
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 The following additional facts are included in the 

stipulation. The winery's termination notices did not allege any 

deficiencies on the part of the wholesalers. The winery's 

decision to market its brands through fewer wholesalers over 

broader geographic areas, when viewed from the winery's 

perspective, was in its economic self interest. The winery's 

decision that its own economic self interest is served by the 

consolidation, while erroneous from the wholesalers' perspective, 

is not clearly arbitrary, capricious, or irrational from the 

winery's perspective. The winery's decision was made in good 

faith and constitutes a good faith exercise of business judgment. 

 The parties stipulated that the sole issue presented is 

whether the good faith exercise of business judgment by the 

winery, absent any evidence of deficiencies in the wholesalers' 

performances, is "good cause" pursuant to the Act for the winery 

to terminate unilaterally its agreements with the wholesalers 

without reasonable compensation. 

 Following a hearing, a panel of the Board's hearing officers 

concluded in July 1991 that the Act "contains no language that 

permits a winery's unilateral cancellation of agreements with 

wholesalers in order to consolidate its distributors and to 

enhance its economic interests in the absence of wholesaler 

deficiency." On appeal, the Board adopted the panel's decision, 

ruling that the winery's reasons for terminating its agreements 

with the wholesalers do not constitute good cause within the 
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meaning of the Act. 

 The winery appealed the Board's decision to the Circuit 

Court of Fairfax County. Although not agreeing with all the 

Board's reasoning, the court (Judge Jane Marum Roush), in a 

January 1994 letter opinion, affirmed the Board's decision. The 

court determined "that the specific business judgment exercised 

by Brown-Forman in this case to streamline its operations, 

without more (and particularly without allegations of any 

deficiencies on the part of the wholesalers), is not sufficient 

`good cause' under the statute." The court noted that, contrary 

to the winery's argument, the winery "is not shackled to the 

wholesalers until it is forced by the economic inefficiencies of 

the agreements to go out of business . . . . Instead, it must 

continue its agreements with the wholesalers or pay them 

reasonable compensation for the value of the agreements." 

 The winery appealed the circuit court's decision. 

Subsequently, a panel of the Court of Appeals ruled unanimously 

in favor of the winery. Brown-Forman Corp. v. Sims Wholesale 

Co., 20 Va. App. 423, 457 S.E.2d 426 (1995). The court 

determined that the term "good cause," as it relates to 

termination of a distribution agreement under the Act, is 

unambiguous. "Considered together and in proper context, the 

words simply mean a `well-founded' `reason.'" 20 Va. App. at 

431, 457 S.E.2d at 430. Accordingly, the appellate court agreed 

with the trial court that the Board erroneously restricted 
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statutory "good cause" to instances of wholesaler deficiency, and 

remanded the proceeding to the Board for reconsideration of the 

issue. Id. 

 Determining that the decision of the Court of Appeals 

involves a matter of significant precedential value, Code § 17-

116.07(B), we awarded the wholesalers and the Board separate 

appeals. 

 Initially, we shall dispose of an argument advanced by the 

Board, but not the wholesalers, that the Court of Appeals failed 

to give proper deference to the Board's decision. Pointing out 

that courts play a limited role in reviewing agency decisions 

under the pertinent provisions of the Administrative Process Act, 

Code § 9-6.14:17, the Attorney General argues "the judiciary 

should not substitute its judgment for that of the Board 

concerning how the Act should be implemented" when, as here, the 

Board interprets the Act consistent with legislative guidelines. 

 The Attorney General contends the Court of Appeals' decision 

violates that principle. We do not agree the Board's decision in 

this case should be accorded the great deference urged by the 

Attorney General. 

 The sole issue involves a question of statutory 

interpretation. The issue does not involve "the substantiality 

of the evidential support for findings of fact," id. at (iv), 

which requires great deference because of the specialized 

competence of the agency. Instead, when, as here, the question 
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involves a statutory interpretation issue, "little deference is 

required to be accorded the agency decision" because the issue 

falls outside the agency's specialized competence. JohnstonWillis, Ltd. v. Kenley, 6 Va. App. 231, 246, 369 S.E.2d 1, 9 

(1988). In sum, pure statutory interpretation is the prerogative 

of the judiciary. See Hampton Roads Sanitation Dist. Comm'n v. 

City of Chesapeake, 218 Va. 696, 702, 240 S.E.2d 819, 823 (1978). 

 Thus, we turn to the question of law presented, the crux of 

the issue being to determine the meaning of "good cause" as used 

in the Act. The wholesalers and the Board, contending the term 

as employed in Code § 4.1-406 is ambiguous, argue "good cause" 

does not exist unless there are wholesaler deficiencies. The 

winery, contending the Court of Appeals correctly ruled the term 

to be unambiguous, argues that "good cause" under § 4.1-406 is 

always satisfied when a winery terminates a wholesale agreement 

unilaterally in the good faith exercise of its business judgment. 

 In order to decide the precise issue presented by these 

stipulated facts, there is no necessity for us to rule on the 

question whether the term "good cause" is clear or vague. We 

will agree with the Court of Appeals and assume without deciding 

that the term as used in § 4.1-406 is unambiguous. Nonetheless, 

we disagree with the Court of Appeals that § 4.1-406 "good cause" 

merely means "a `well-founded' `reason.'" Brown-Forman Corp., 20 

Va. App. at 431, 457 S.E.2d at 430. 

 Like the circuit court, we decline to adopt either argument 
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made by the opposing parties. We reject the position of the 

wholesalers and the Board that "good cause" under the statute as 

it existed in September 1989 requires in every instance 

establishment of wholesaler deficiency. Were that the case, the 

legislature performed a meaningless act by including in the 

statute an example of what is not "good cause," that is, the term 

"shall not include the sale or purchase of a winery." Every part 

of a statute is presumed to have some effect and no part will be 

treated as meaningless unless absolutely necessary. Raven Red 

Ash Coal. Corp. v. Absher, 153 Va. 332, 335, 149 S.E. 541, 542 

(1929). 

 We also reject the position of the winery, implicitly 

endorsed by the Court of Appeals, that "good cause" always exists 

when a winery unilaterally cancels a wholesaler agreement in the 

good faith exercise of its business judgment. Under such an 

approach, potentially any decision of a winery, not made in bad 

faith or arbitrarily, to so terminate existing agreements could 

be viewed as a good faith exercise of business judgment. If such 

a decision were sufficient to establish "good cause," the Act's 

statutory protections also would be meaningless. See WrightMoore Corp. v. Ricoh Corp., 908 F.2d 128, 137 (7th Cir. 1990) 

(franchisor's nonrenewal of distributorship agreement for 

internal economic reasons, though not shown to be in bad faith, 

was not for good cause). 

 An examination of the winery's specific business decision 
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made in this case requires the unavoidable conclusion that the 

winery has not established sufficient "good cause" under the 

statute. According to the stipulation, the winery's "basis for 

the terminations was its desire to consolidate its brands into 

fewer wholesalers over broader geographic areas." 

 To determine whether "consolidation" or so-called "downsizing" amounts to statutory "good cause," we examine other 

portions of the Act, specifically portions dealing with the sale 

of a winery. Code § 4.1-406, as we have noted, provides that 

"good cause" shall not include the sale or purchase of a winery. 

 Code § 4.1-405(A) provides that, except for discontinuance of a 

brand or for § 4.1-406 "good cause," the purchaser of a winery is 

obligated to all the terms and conditions of the seller's 

agreements with wholesalers in effect on the purchase date. Code 

§ 4.1-405(B)(1) provides that if the surviving winery distributes 

in Virginia brands of the nonsurviving winery, which that winery 

marketed prior to the purchase, those brands shall be distributed 

through any wholesalers who were distributors in Virginia for the 

nonsurviving winery. 

 As the circuit court observed, the purchase and sale of a 

winery likely may lead to some duplication in the pre-sale 

distribution network of the two wineries thus requiring "some 

streamlining or other internal reorganization" by the surviving 

winery. In other words, when one winery purchases another, thus 

inheriting a duplicative network of Virginia distributors, 
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efforts to consolidate become probable. Yet the statute 

specifically provides that the sale or purchase of a winery is 

not "good cause" for termination of wholesaler agreements. If 

the General Assembly had meant that a winery's consolidation of 

its distributorships to streamline operations would amount to 

"good cause," it would have so provided in the situation of a 

sale or purchase of a winery. 

 Thus, we hold, under the stipulated facts, that the winery's 

good faith exercise of business judgment, there being no evidence 

of deficiencies in the wholesalers' performances, is not "good 

cause" under the Act for the winery to terminate unilaterally its 

agreements with the wholesalers without reasonable compensation. 

 Before concluding, we shall mention a contention made by the 

wholesalers, but not the Attorney General, during oral argument 

at the bar of this Court on February 29, 1996. Two days prior to 

the argument, counsel for the wholesalers notified the Court of 

an enactment passed by the General Assembly and signed into law 

by the Governor as emergency legislation effective February 26, 

1996. This enactment amended § 4.1-406 of the Act. 

 In essence, the amendment provides that "good cause" shall 

not be construed to exist without a finding of a material 

deficiency for which the wholesaler is responsible. According to 

its provisions, the amendment applies in any case in which "good 

cause" is alleged to exist based on circumstances not 

specifically set forth in the subdivisions of the statute that 
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enumerate certain examples of wholesaler deficiencies. The 

enactment also provides: "That the provisions of this act are 

declaratory of existing law." Acts 1996, ch. 3. 

 At the bar, counsel for the wholesalers contended that, in 

the amendment, the General Assembly made "a legislative 

interpretation of the original Act." Counsel said, however, that 

the amendment is "not binding on this Court," that it is 

"persuasive" only, and that the Court can "weigh" the amendment 

"however you see fit." Counsel for the winery contended inter

alia that the amendment, enacted while the very issue it 

addresses was being considered by the Court, is unconstitutional 

because it violates the separation of powers doctrine set forth 

in Article I, Section 5 of the Constitution of Virginia ("the 

legislative, executive, and judicial departments of the 

Commonwealth should be separate and distinct"). Counsel for the 

winery also argued that the amendment is retroactive legislation 

impairing the obligation of its contracts in violation of Article 

I, Section 11 of the Constitution of Virginia, citing Heublein, 

Inc. v. Department of Alcoholic Beverage Control, 237 Va. 192, 

196-97, 376 S.E.2d 77, 78-79 (1989) (pre-1989 version of the Act 

declared unconstitutional in its entirety). 

 We shall not rule on the effect, if any, of the enactment on 

the issue presented in this case because we have confined our 

analysis of the Act to the provisions that were in place in 

September 1989 when this controversy arose. 
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 Accordingly, the judgment of the Court of Appeals will be 

reversed and final judgment will be entered here reinstating that 

portion of the Board's "Final Decision and Order" dated 

November 22, 1991, as follows: 

 "It is ordered that the notices of intent dated 

September 27, 1989 to terminate the agreements between 

the respondent[] and the petitioners be, and hereby are 

declared null and void. 

 "It is further ordered that respondent Brown-Forman be, 

and hereby, is, ordered to (i) continue its agreements 

with the petitioners for the distribution of its wines 

within the petitioners' primary areas of responsibility 

or (ii) in the alternative, pay the petitioners 

reasonable compensation for the value of the agreements 

pursuant to Section 4-118.50 [now § 4.1-409] of the 

Act." 

Reversed and final judgment.