Wisconsin Supreme Court Decides Against Protecting Wine Distributors

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Most states use so-called Franchise Laws or other legal mechanisms to effectively lock alcohol producers into contracts with distributors. But the Wisconsin Supreme Court recently handed down a decision involving the state's Fair Dealership Law, which protects alcohol distributors by making distributor contracts harder to terminate. In its ruling, WisBar News reports that the court held Wisconsin wine distributors were not protected under this system:

In an unusual certification from the U.S. Court of Appeals for the Seventh Circuit, the Wisconsin Supreme Court has ruled (4-3) that “dealerships” with wine distributors are not protected by the Wisconsin Fair Dealership Law (WFDL).

Capitol-Husting Co. Inc. and another wine distributor argued that importer Winebow Inc. could not unilaterally terminate their business relationship under the WFDL, Wis. Stat. chapter 135, which says dealership agreements cannot be cancelled unless the grantor shows good cause to cancel the agreement.

But Winebow argued that showing good cause was not needed because the wine distributors are not protected by the WFDL. Specifically, Winebow argued that the WFDL protects “intoxicating liquor” dealerships, which doesn’t include wine.

The Seventh Circuit Court of Appeals certified the case to the state Supreme Court to ask whether the definition of a “dealership” includes wine grantor-dealer relationships...

Read more about the ruling here.