Alcoholic Beverage Distribution Agreement

The distributor told Slapstick that it was taking a chance to get an un torpedoed brand in new markets and would invest a lot of time and money to create a slapstick beer market in the United States. In exchange for this investment, the distributor was not willing to accept a contract that made the distributor easier to replace. In addition, the agreement did not contain any termination provision for non-reticent or convenience. The distributor only authorized termination for a limited number of specific cases. During the first year with the new distributor Slapstick learned that manufacturers and distributors often disagree on the presence and responsibility of the cause of termination. This information must be clearly defined in the protection contract for all parties. Relationships between manufacturers and distributors of craft beverages begin and develop over time. They`re growing up. They`re maturing. Sometimes they degrade. They ended up perishing. External factors regularly increase the pressure on the distributor and manufacturer of craft beverages who request a change to the dealer agreement after a 30-day period. If the agreement allows for changes later this year, there are few problems.

However, if the agreement allows for changes only once a year, one or both partners must face undue pressure until the agreement can take such an annual change into account. The best distribution agreements allow for changes during the year. After about 18 months, it was clear that the relationship had deteriorated and that a new distributor had to be chosen. As any entrepreneur knows, the real test of any agreement is what happens when the parties split up. The agreement did not specify which products were returned for the loans and the timetable for these returns was set. The already tense situation has been compounded by differences in expectations on issues related to the transition period on both sides. Distributors have argued for exclusive territory, as without them, the distributor is not encouraged to provide adequate resources for distribution development for the producer. Distributor franchises can be exclusive and there is no other distributor that takes franchises in the territory; or not exclusively, where the new distributor could be one of several distributors that are franchised in the territory.

Although this seemed reasonable from the outset, Slapstick learned that the allocation of an exclusive distribution in a region constituted an unnecessary leap of faith, without a proven balance sheet justifying such a monopoly. However, slapstick accepted an exclusive area, but lost the ability to franchise an additional distributor if the turnover was below target or when the sales team was below average. At the Craft Brauerei symposium, Slapstick learned that it was better to design the distribution agreement so that the distributor would not be exclusive, but only a franchise distributor. An oral agreement would indicate that if a supplier`s objectives were met, no additional distributors would be allowed into the non-exclusive territory. Such an agreement encourages the distributor to promote it without restricting the manufacturer`s options.