§ 17-101. Declaration of policy; definitions

   (a) Declaration of policy. -- It is the declared policy of the State of Maryland that it is necessary to regulate and control the agreements, franchises and relationships between manufacturers of beer and their distributors for the purpose of fostering and promoting temperance in the consumption thereof, and to promote respect for and obedience to the laws controlling the distribution and sale of beer. It is necessary to accomplish the declared policy in order to eliminate the undue stimulation of sales of beer in this State by manufacturers inducing, coercing, or attempting to induce or coerce, distributors of beer to do acts detrimental to the orderly and lawful distribution thereof by threatened or actual termination of the manufacturer and distributor relationship, directly or indirectly, by the establishment of dual distributors of a brand or brands thereof in a territory presently served by a distributor, or by the sale of the same brand or brands in one territory by more than one franchisee. It is the further declared policy of the State of Maryland that temperance and obedience to the laws controlling the distribution and ultimate sale of beer is promoted by legislation encouraging distributors of beer to make investments in their facilities to serve retail licensees by protecting them against the termination of such distributorships, or other acts described herein, without good cause for such termination or other such acts. The General Assembly further recognizes the distinction between the nature of the distribution of beer and other alcoholic beverages in that distributors of alcoholic liquors other than beer are franchised by manufacturers to distribute many brands of various kinds of alcoholic beverages and are not as vulnerable to the economic pressures of the manufacturers as are beer distributors, which traditionally handle mainly one, two or three brands of beer in their distributorships.

(b) Definitions. -- As used in this title and unless otherwise required by the context:

   (1) "Franchise" or "agreement" shall mean one or more of the following: (i) a commercial relationship between a beer distributor and a beer manufacturer of a definite duration or indefinite duration, which is not required to be evidenced in writing; (ii) a relationship whereby the beer distributor is granted the right to offer and sell the brands of beer offered by the beer manufacturer; (iii) a relationship whereby the beer distributor, as an independent business, constitutes a component of a beer manufacturer's distribution system; (iv) a relationship whereby the beer distributor's business is substantially associated with the beer manufacturer's brand, advertising or other commercial symbol designating the beer manufacturer; (v) a relationship whereby the beer distributor's business is substantially reliant on the beer manufacturer for the continued supply of beer; and (vi) a written or oral arrangement for a definite or indefinite period whereby a beer manufacturer grants to a beer distributor a license to use a trade name, trademark, service mark, or related characteristic, and in which there is a community of interest in the marketing of goods or services at wholesale, retail, by lease, or otherwise.

   (2) "Franchisee" means any beer distributor to whom a franchise or agreement as defined herein is granted or offered or any beer distributor who is a party to a franchise or agreement as defined herein.

   (3) "Franchisor" means any beer manufacturer who enters into any franchise or agreement with a beer distributor or any beer manufacturer who is a party to a franchise or agreement as defined herein.

   (4) "Beer distributor" shall mean any person importing or causing to be imported into this State, or purchasing or causing to be purchased within this State, any beer for sale or resale to retailers licensed under this article without regard to whether the business of such person is conducted under the terms of a franchise or any other form of an agreement with a beer manufacturer or manufacturers.

   (5) "Beer manufacturer" means every brewer, fermenter, processor, bottler or packager of beer located within or without the State of Maryland, or any other person whether located within or without the State of Maryland who enters into a "franchise" or an "agreement" with any beer distributor doing business in the State of Maryland.

   (6) "Person" means a natural person, corporation, partnership, trust, agency, or other entity as well as the individual officers, directors and other persons in active control of the activities of each such entity.

   (7) "Territory" or "sales territory" shall mean the area of sales responsibility designated by any agreement or franchise between any franchisee or franchisor for the brand or brands of any franchisor or any beer manufacturer.

HISTORY: 1974, ch. 877; 1989, ch. 5, § 15.