It’s been a month of big changes for New York’s small brewers; two weeks ago, Governor Andrew Cuomo traveled to the Matt Brewery in Utica to sign a law that created a special tax designation for farmer/brewers in the state.
But the bigger news took place late last night, according to the New York Brewers Association (NYBA), when Gov. Cuomo signed a law that allows the state’s smaller brewers to more easily terminate their distribution contracts.
Under the terms of the Small Brewers Bill, New York State brewers who produce fewer than 300,000 barrels annually — or a total of less than three percent of the distributor’s total annual brand sales — may terminate their contract without penalty provided they pay the distributor fair market value for terminating the contract.
“Gone are the days when a distributor can basically promise you the moon and deliver next to nothing,” said Scott Vaccaro, founder of Captain Lawrence Brewery in Elmsford, New York.
The bill designated an arbitration process for the settlement of disputed value amounts.
The NYBA released a statement applauding the bill, saying the “combination of laws give us the help we need to continue growing our business.”
The new law is in line with other provisions proposed by brewing associations across the country that would allow craft brewers to more easily move between wholesalers. It has been the fear of those manufacturers that they could suffer from a lack of service, particularly if their wholesalers face pressure from larger suppliers.
Wholesalers, for their part, remain concerned that they will build brands only to see them leave without receiving fair market value.
Release from the New York Brewers Association is below:
STATEMENT FROM THE NEW YORK BREWERS ASSOCIATION:
ALBANY, NY — The New York Brewers Association announced today that the Small Brewers Bill that was passed by both the Senate and the Assembly was signed into law last night by Governor Andrew Cuomo. The bill relates to the agreement between the brewer and the distributor. For New York State brewers producing less than 300,000 bbls annual, or 3% of the distributors total annual brand sales, brewers may terminate their contract provided that the brewer pays the distributors Fair Market Value (FMV) for terminating the contract (establish good faith); arbitration decides fair market value disputes.
The Small Brewers Bill, in combination with the Farm Brewers Bill, the Production Tax Credit and Brand Label Registration exemption will work together to grow the craft beer industry in New York State.
Governor Andrew Cuomo and state lawmakers have clearly recognized the contribution the craft brewing industry is making to revive the state’s economy, create jobs and demonstrate that New York is indeed ‘Open for Business.’ The combination of laws give us the help we need to continue growing our businesses.
“On behalf of all of New York’s more than 100 craft breweries, we would like to tip our pints to Governor Cuomo, Senate Majority Leader Dean Skelos and Speaker Sheldon Silver, in addition to our greatest member advocates in both houses, including State Senator Joseph A. Griffo and Assemblyman Anthony J. Brindisi. This was truly a bipartisan effort on the part of Albany to not only do what was fair, but also to do what is right for small business, and ultimately all New Yorkers stand to benefit.”
New York’s craft beer industry has nearly doubled in size this past decade, contributing $200 million in sales to the state’s economy and accounting for around 3,000 direct jobs — and nearly 100,000 indirect jobs when positions that rely on this industry such as wholesalers, retailers and suppliers are included as well.
To learn more, visit www.thinknydrinkny.com.
The New York State Brewers Association (NYSBA) is an organization of breweries dedicated to advancing the local brewing industry throughout New York State. The NYSBA is devoted to the continued growth of the state’s local brewing movement through increased awareness of the industry’s contribution to New York’s economy.