An Act To Assist Small Beer Manufacturers
Maine Legislature, Session 129, LD 1761
Committee Amendment CA_A_S281 (Senate)
Amends: 28-A MRSA §2, 28-A MRSA §1355-A, 28-A MRSA §1361, 28-A MRSA §1455, 28-A MRSA §1457

FffiST REGULAR SESSION 
COMMITTEE AMENDMENT " A " to S.P. 593, L.D. 1761, Bill, "An Act To 
Assist Small Beer Manufacturers" 
Amend the bill by striking out the title and substituting the following: 
'An Act To Assist Small Beer Manufacturers and Small Hard Cider Manufacturers' 
Amend the bill by striking out everything after the enacting clause and inserting the 
following: 
'Sec. 1. 28-A MRSA §2, sub-§2-B is enacted to read: 
2-B. Barrel. "Barrel" means 31 United States gallons. 
Sec. 2. 28-A MRSA §2, sub-§29, as amended by PL 1993, c. 730, §12, is further 
amended to read: 
29. Small brewery. "Small brewery" means a facility that is brev,'lll:g, lagerin.g and 
kegging, bottling or paekaging brews. lagers and kegs, bottles or packages its own malt 
liquor, not to exceed 50,000 gallons 30,000 barrels per year. 
Sec. 3. 28-A MRSA §2, sub-§29-B, as enacted by PL 2011, c. 629, §5, is 
amended to read: 
29-B. Small winery. "Small winery" means a facility that is fermenting, aging and 
bottlmg its own witIB, not to 6*.eeed 50,000 galloB:s per year. ferments, ages and bottles: 
A. Up to 50,000 gallons per year of its own wine that is not hard cider; and 
B. Up to 3,000 barrels per year of its own wine that is hard cider. 
Sec. 4. 28-A MRSA §1355-A, sub-§1, as enacted by PL 2011, c. 629, §22, is 
amended to read: 
1. Issuance of licenses. The bureau may issue manufaerarer lieeB:ses to distill, 
reetify, brew or bottle spirits, 1.vine or malt liquor to distillers, reetifiers, bre1;r,rers, bottlers 
and vlineries operating licenses under this section to breweries, small breweries, wineries, 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" JI "to S.P. 593,L.D. 1761 f .• : •. ,\;) 
small wineries, distilleries and small distilleries in the State that operate under federal law 
and federal supervision. 
Sec. 5. 28-A MRSA §1355-A, sub-§3, ,r,rA and B, as enacted by PL 2011, c. 
629, §22, are amended to read: 
A. A holder of a brewery license may produce more than 50,000 gallons 30,000 
barrels of malt liquor per year. 
B. A holder of a small brewery license may produce not more than 50,000 gallons !ill 
to 30,000 barrels of malt liquor per year. 
(1) Upon application by a holder of a small brewery license 1.vhose brewery that 
has produced malt liquor in an amount that exceeds 50,000 gallons 30,000 barrels 
in one year, the bureau may renew that holder's small brewery license for only 
one additional year. 
(2) A holder of a small brewery license may sell or deliver its products to 
licensed retailers or wholesalers. The licensee may sell, on the premises for 
consumption off the premises, malt liquor produced at the licensed premises by 
the bottle, by the case or in bulk to licensed retailers, including, but not limited 
to, off-premises retail licensees, restaurants and clubs. Notwithstanding section 
1361, the holder of a small brewery license may sell its products directly to a 
retail licensee under this paragraph without selling to a wholesale licensee. 
Sec. 6. 28-A MRSA §1355-A, sub-§4, ,r,rA and B, as enacted by PL 2011, c. 
629, §22, are amended to read: 
A. A holder of a winery license may produce more than 50,000 gallons per year of 
1.vines, sparkling wines and fortified 1.vines wine that is not hard cider and may 
produce more than 3,000 barrels per year of wine that is hard cider. 
B. A holder of a small winery license may produce not more than up to 50,000 
gallons per year of 1.vines, sparkling 1.viaes and fortified ,,.vines wine that is not hard 
cider and may produce up to 3,000 barrels per year of wine that is hard cider. 
(1) A holder of a small winery license may sell or deliver its products to licensed 
retailers or wholesalers. The licensee may sell, on the premises for consumption 
off the premises, any wine produced at the licensed premises by the bottle, by the 
case or in bulk to licensed retailers, including, but not limited to, off-premises 
retail licensees, restaurants and clubs. Notwithstanding section 1361, the licensee 
may sell its products directly to a retail licensee under this paragraph without 
selling to a wholesale licensee. 
(2) A holder of a small winery license, upon application to and approval of the 
bureau and payment of the license fees, may obtain licenses for off-premises 
consumption for up to 2 additional locations other than the location of the in-state 
manufacturer licensed under this section. 
The holder of the licenses is not 
required to conduct any bottling or production at the additional licensed locations 
but may conduct all activities permitted by this section at the additional licensed 
locations. 
COMMITTEE AMENDMENT 
COMMITTEEAMENDMENT"t\ "toS.P.593,L.D.1761 (')' :)J)) 
Sec. 7. 28-A MRSA §1361, sub-§4, as amended by PL 2011, c. 629, §23, is 
further amended to read: 
4. No sales of malt liquor or wine to person without wholesale license. No 
certificate of approval holder, except a licensed small brewery or small winery liosnsee 
allmved authorized under section 1355-A to sell its own products directly to retailers, 
may sell or cause to be transported into the State any malt liquor or wine to any person to 
whom a Maine wholesale license has not been issued by the bureau. Malt liquor or wine 
must be delivered to the place of business of the wholesaler as shown in the wholesaler's 
license, must be unloaded and inventoried at the wholesaler's premises upon the 
O 
wholesaler's receipt of the shipment and must come to rest before delivery is made to any 
retailer to enable the bureau to inspect and inventory wholesale warehouses for the 
purpose of verifying taxes that are required to be paid on malt liquor and wine purchased 
by importers. 
Sec. 8. 28-A MRSA §1455, sub-§1, as enacted by PL 1987, c. 45, Pt. A, §4, is 
amended to read: 
1. Written notice. Before any termination procedure initiated by the certificate of 
approval holder, the certificate of approval holder shall give the wholesale licensee 
written notice of any claimed deficiency existing in hls the wholesale licensee's territory 
and the certificate of approval holder shall give the wholesale licensee reasonable time QL. 
if the certificate of approval holder is a small beer manufacturer or a small hard cider 
manufacturer, at least 30 days to correct the claimed deficiency or deficiencies. After this 
reasonable time has elapsed, the certificate of approval holder shall provide the wholesale 
licensee at least 90 days prior with written notice of a-ny the certificate of approval 
holder's intent to amend, cancel. terminate, oanoel or not refuse to continue. refuse to 
renew a-ny or cause the wholesale licensee to resign from an agreement. The notioe must 
state all the reasons for the at least 90 days prior to the effective date of the intended 
amendment, cancellation, termination, oanoellation refusal to continue, refusal to renew 
or nonrenewal causing of resignation. The written notice must state all of the reasons for 
the intended amendment. cancellation, termination. refusal to continue, refusal to renew 
or causing of resignation. The notice provisions of this section do not apply if the reason 
for the intended amendment, cancellation, termination, oanoellation refusal to continue, 
refusal to renew or nonrenswal causing ofresignation is: 
A. The bankruptcy or insolvency of the wholesale licensee; 
B. An assignment for the benefit of creditors or similar disposition of the assets of 
the wholesale licensee's business; 
C. Revocation of the wholesale licensee's license; or 
D. Conviction or a plea of guilty or no contest to a charge of violating a law relating 
to the business that materially affects the wholesale licensee's ability to remain in 
business. 
For purposes of this section. "small beer manufacturer" and "small hard cider 
manufacturer" have the same meanings as in section 1457. subsection 1-A. 
Sec. 9. 28-A MRSA §1457, as enacted by PL 1987, c. 45, Pt A, §4, is amended to 
read: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT"! i- "to S.P. 593, L.D. 1761 { 
§1457. Compensation 
I 
\ 
,\ 
1. Reasonable eompensation. Any certificate of approval holder which amends, 
cancels, terminates or refuses to continue or renew- any agreement, or causes a vAiolesale 
licsnsee to resign, unless for good cause shown, as defmed in section 1454, from an 
agreement or unreasonably vlithholds consent to any assignment, transfer or sale of a 
1.vholesale licsnsee's business, shall pay the viholesale licensee reasonable compsnsation 
for the value of the 1vvholesale licensee's business related to the terminated brand or 
brands. The value of the wholesale licensee's business inoludes invsntorv and other 
tangible assets and its good 1.vill. 
1-A. Definitions. As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A. "Affected brand or brands" means the brand or brands of a certificate of approval 
holder that will no longer be distributed by a wholesale licensee after the certificate 
of approval holder makes a triggering change to the agreement between the certificate 
of approval holder and the wholesale licensee. 
B. "Case equivalent" means a volume equivalent to 24 12-ounce units. 
C. "Good cause" has the same meaning as described in section 1454. 
D. "Small beer manufacturer" means a small brewery or out-of-state brewer that 
brews, lagers and kegs, bottles or packages its own malt liquor, not to exceed 30,000 
barrels per year. 
E. "Small hard cider manufacturer" means a small winery or out-of-state winery that 
ferments, ages or bottles any amount of wine, as long as it ferments, ages or bottles 
no more than 3,000 barrels per year of wine that is hard cider. 
F. 
"Triggering change" means an amendment, cancellation in whole or in part, 
termination, refusal to continue or refusal to renew an agreement by a certificate of 
approval holder or the resignation of a wholesale licensee from an agreement if the 
resignation is caused by the certificate of approval holder, unless good cause can be 
established or proven for the amendment, cancellation, termination, refusal to 
continue, refusal to renew or caused resignation. "Triggering change" includes the 
unreasonable withholding of consent by a certificate of approval holder to any 
assignment, transfer or sale of a wholesale licensee's business. 
1-B. Reasonable compensation; general rule. Except as otherwise provided in 
subsections 1-C and 1-D, if a certificate of approval holder makes a triggering change to 
an agreement, the certificate of approval holder shall pay the wholesale licensee 
reasonable compensation for the fair market value of the wholesale licensee's business 
related to the affected brand or brands. The fair market value of the wholesale licensee's 
business related to the affected brand or brands includes inventory and other tangible 
assets and the wholesale licensee's good will. 
1-C. Exception; small beer manufacturer or small hard cider manufacturer. 
Notwithstanding subsection 1-B, a small beer manufacturer or small hard cider 
manufacturer must pay a wholesale licensee reasonable compensation in accordance with 
subsection 1-D if: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" f\ "toS.P. 593,L.D. 1761 (c:.::,. J):5\') 
A. The small beer manufacturer makes a triggering change to an agreement that 
prevents the wholesale licensee from continuing to distribute a brand or brands of 
malt liquor or the small hard cider manufacturer makes a triggering change to an 
agreement that prevents the wholesale licensee from continuing to distribute a brand 
or brands of hard cider; and 
B. During the 12-month period immediately preceding the date on which the small 
beer manufacturer or the small hard cider manufacturer provides the wholesale 
licensee with the first written notice of the triggering change, if notice is required 
under section 1455, or the date on which the small beer manufacturer or small hard 
cider manufacturer unreasonably withholds its consent to any assignment. transfer or 
sale of the wholesale licensee's business. the total number of case equivalents of the 
affected brand or brands of malt liquor or hard cider distributed by the wholesale 
licensee was less than 10,000 and represented no more than 3% of the total number of 
case equivalents of all brands of liquor for all certificate of approval holders that were 
distributed by the wholesale licensee. 
1-D. 
Reasonable compensation; alternative calculation. 
Notwithstanding 
subsection 1-B. if a small beer manufacturer or small hard cider manufacturer makes a 
triggering change to an agreement that meets the requirements of subsection 1-C. the 
small beer manufacturer or small hard cider manufacturer shall pay the wholesale 
licensee reasonable compensation for the fair market value of the wholesale licensee's 
business related to the affected brand or brands of malt liquor or hard cider in accordance 
with this subsection. 
A. If the wholesale licensee's total gross profits with respect to the affected brand or 
brands during the 12-month period described in subsection 1-C were equal to or less 
than the wholesale licensee's total gross profits with respect to the affected brand or 
brands during the next preceding 12-month period. the small beer manufacturer or 
small hard cider manufacturer shall pay as reasonable compensation an amount equal 
to the wholesale licensee's total gross profits with respect to the affected brand or 
brands during the 12-month period described in subsection 1-C. 
B. If the wholesale licensee's total gross profits with respect to the affected brand or 
brands during the 12-month period described in subsection 1-C were greater than the 
wholesale licensee's total gross profits with respect to the affected brand or brands 
during the next preceding 12-month period. the small beer manufacturer or small hard 
cider manufacturer shall pay as reasonable compensation an amount equal to twice 
the wholesale licensee's total gross profits with respect to the affected brand or brands 
during the 12-month period described in subsection 1-C. 
This subsection does not govern the reasonable compensation that a small hard cider 
manufacturer is required to pay a wholesale licensee for the fair market value of the 
wholesale licensee's business related to an affected brand or brands of wine that is not 
hard cider. 
1-E. Waiver. Notwithstanding section 1462. nothing in this chapter prevents a 
wholesale licensee from limiting or waiving its right to receive reasonable compensation 
under subsection 1-B or 1-D from a small beer manufacturer or a small hard cider 
manufacturer in an agreement between the wholesale licensee and the small beer 
manufacturer or the small hard cider manufacturer. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "h "to S.P. 593,L.D. 1761 
2. 
Neutral arbitrator. If the certificate of approval holder and the wholesale 
licensee are unable to agree on the amount of reasonable compensation to be paid for the 
fair market value of the wholesale licensee's business, as defined in subsection 1 related 
to the affected brand or brands of the certificate of approval holder, they shall submit the 
matter to a neutral arbitrator selected by the parties, or, if they cannot agree, by the Chief 
Justice of the Supreme Judicial Court. The costs of the arbitration shall must be paid 1/2 
by the wholesale licensee and 1/2 by the certificate of approval holder or otherwise the 
arbitration proceeding shall must be governed by the Maine Uniform Arbitration Act. 
The arbitrator shall issue a written decision on the matter no later than 45 days after the 
date of the commencement of the arbitration proceeding. 
3. Distribution during arbitration. Notwithstanding any provision of this Title to 
the contrary or the terms, conditions or other provisions of any agreement, when a small 
beer manufacturer or a small hard cider manufacturer makes a triggering change to an 
agreement, the small beer manufacturer or the small hard cider manufacturer may 
immediately: 
A. If the small beer manufacturer is a small brewery. sell the affected brand or 
brands of malt liquor directly to retail licensees in the wholesale licensee's territory in 
accordance with section 1355-A, subsection 3, paragraph B, subparagraph (2); 
B. If the small hard cider manufacturer is a small winery, sell the affected brand or 
brands of hard cider directly to retail licensees in the wholesale licensee's territory in 
accordance with section 1355-A, subsection 4, paragraph B, subparagraph (1); 
C. Appoint one or more new wholesale licensees to sell the affected brand or brands 
of malt liquor or hard cider in all or any portion of the territory of the wholesale 
licensee subject to the triggering change; or 
D. Engage in any combination of actions described in paragraphs A, B and C. if 
applicable.' 
Amend the bill by relettering or renumbering any nonconsecutive Part letter or 
section number to read consecutively. 
SUl\1lVIARY 
This amendment makes the following changes to the bill: 
1. It clarifies that only in-state entities are eligible for manufacturing licenses issued 
by the Department of Administrative and Financial Services, Bureau of Alcoholic 
Beverages and Lottery Operations under the Maine Revised Statutes, Title 28-A, section 
1355-A; 
2. Similar to the bill's provision regarding small breweries, it changes the defmition 
of "small winery" by increasing the amount of wine that a small winery may produce. 
Under current law, a small winery may produce up to 50,000 gallons per year of wine, 
including hard cider. Under the amendment, a small winery may produce up to 50,000 
gallons per year of wine that is not hard cider and may produce up to 3,000 barrels per 
year of wine that is hard cider; 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT"/-\ "to S.P. 593, L.D. 1761 ( '=', • :~l\1) 
3. Similar to the definition of "small beer manufacturer" in the bill, it defmes "small 
hard cider manufacturer" as a licensed Maine small winery or out-of-state winery that 
ferments, ages or bottles any amount of wine, as long as it ferments, ages or bottles no 
more than 3,000 barrels per year of wine that is hard cider; 
4. It applies the provisions of the bill that affect the relationship between a wholesale 
licensee and a small beer manufacturer to the relationship between a wholesale licensee 
and a small hard cider manufacturer, including by establishing the amount of reasonable 
compensation that a small hard cider manufacturer must pay to a wholesale licensee when 
it terminates the authority of the wholesale licensee to distribute its hard cider products 
and by authorizing the small hard cider manufacturer to continue selling its products 
during the arbitration of any dispute between the parties regarding the amount of 
reasonable compensation; 
5. Under current law, when any manufacturer and wholesale licensee disagree over 
the amount of reasonable compensation due after the manufacturer amends or terminates 
the contract between the parties in a way that removes the wholesaler's authority to 
distribute one or more of the manufacturer's brands of liquor, the parties must submit the 
reasonable compensation question to arbitration. Under the amendment, the arbitrator is 
directed to issue a written decision on the matter no later than 45 days after the date of the 
commencement of the arbitration proceeding; and 
6. 
The amendment also makes several technical changes and reorganizes the 
structure of the bill. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Fiscal Detail and Notes 
Approved: 06/08/19 .:tP.ac:.. 
LD 1761 
LR939(02) 
An Act To Assist Small Beer Manufacturers 
Fiscal Note for Bill as Amended by Committee Amendment 'i," i '-
Committee: Veterans and Legal Affairs 
Fiscal Note Required: Yes 
Fiscal Note 
Minor cost increase - General Fund 
' 
';t\\ ) 
Any additional costs to the Bureau of Alcoholic Beverages and Lottery Operations as a result of changes to the 
definitions of a small winery, small beer manufacturer, small hard cider manufacturer and how agreements between 
wholesale licensees and small beer manufacturers and small cider manufacturers are constructed are anticipated to be 
minor and can be absorbed within existing budgeted resources. 
LR0939(02) - Fiscal Note - Page 1 of 1