California Business and Professions Code § 25000.2

(a) For purposes of this section: (1) “Acquire” means to purchase, receive, assume, obtain, or otherwise come into possession or control of. (2) “Affected distribution rights” means the distribution rights to the product held by the existing beer wholesaler prior to the acquisition of the right to manufacture, import, or distribute the product by the successor beer manufacturer. (3) “Beer manufacturer” includes any holder of a beer manufacturer’s license, any holder of an out-of-state beer manufacturer’s certificate, or any holder of a beer and wine importer’s general license. (4) “Cancel” means to terminate, reduce, not renew, not appoint or reappoint, or cause any of the same. (5) “Existing beer wholesaler” means a beer wholesaler that distributes a product at the time a successor beer manufacturer acquires the rights to manufacture, import, or distribute that product. (6) “Fair market value” includes all elements of value, including, but not limited to, goodwill. (7) “Product” means a brand or brands of beer, as defined by Section 23006. (8) “Successor beer manufacturer” means a beer manufacturer or any person as defined by Section 23008, whether licensed or unlicensed, who acquires the rights to manufacture, import, or distribute a product. (9) “Successor beer manufacturer’s designee” means one or more distributors designated by the successor beer manufacturer to replace the existing beer wholesaler, for all or part of the existing beer wholesaler’s territory, in the distribution of the product. (b) (1) Any successor beer manufacturer that acquires the rights to manufacture, import, or distribute a product, and who cancels any of the existing beer wholesaler’s rights to distribute the product, shall comply with this section. (2) A successor beer manufacturer’s designee shall comply with this section. (c) (1) The successor beer manufacturer shall notify the existing beer wholesaler of the successor beer manufacturer’s intent to cancel any of the existing beer wholesaler’s rights to distribute the product. (2) The successor beer manufacturer shall mail the notice by certified mail, return receipt requested, to the existing beer wholesaler. The successor beer manufacturer shall include in the notice the name, address, and telephone number of the successor beer manufacturer’s designee or designees. (d) The successor beer manufacturer’s designee shall negotiate with the existing beer wholesaler to determine the fair market value of the affected distribution rights and, if the existing beer wholesaler and the successor beer manufacturer’s designee agree to the fair market value of the affected distribution rights, shall compensate the existing beer wholesaler in the agreed amount. The successor beer manufacturer’s designee and the existing beer wholesaler shall negotiate in good faith. (e) The existing beer wholesaler shall continue to distribute the product to at least the same extent that it distributed the product immediately before the successor beer manufacturer acquired rights to the product until receipt of the payment of the compensation agreed to under subdivision (d) is made or is awarded under subdivision (f). The successor beer manufacturer and the existing beer wholesaler shall act in good faith regarding the ongoing supply and distribution of the product. (f) If the successor beer manufacturer’s designee and the existing beer wholesaler are unable to mutually agree on the fair market value of the affected distribution rights within 30 days of the existing beer wholesaler’s receipt of the successor beer manufacturer’s notice pursuant to subdivision (c), the successor beer manufacturer’s designee or the existing beer wholesaler shall initiate arbitration against each other to determine the issue of compensation for the fair market value of the affected distribution rights no later than 40 days after the existing beer wholesaler’s receipt of the s

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