(a) A supplier may amend, modify, terminate, cancel, discontinue or fail to renew an agreement with a wholesaler immediately upon written notice given by the supplier as provided in § 57-5-508 only if any of the following occurs:

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Terms Used In Tennessee Code 57-5-505

  • Agreement: means any agreement between a wholesaler and a supplier, oral or written, whereby a wholesaler is granted the right to purchase and sell a brand or brands of beer with an alcoholic content of five percent (5%) by weight or less sold by a supplier. See Tennessee Code 57-5-502
  • Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
  • Fraud: Intentional deception resulting in injury to another.
  • substantial partner: means a stockholder of or partner in the wholesaler who owns an interest of ten percent (10%) or more of the partnership or of the capital stock of a corporate wholesaler. See Tennessee Code 57-5-502
  • Supplier: means a manufacturer or importer of beer. See Tennessee Code 57-5-502
  • Wholesaler: means a person or entity that sells beer to retailers, but does not include any manufacturer authorized to sell directly to retailers pursuant to §. See Tennessee Code 57-5-502
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(1) Revocation of a governmental permit held by the wholesaler, whereby the wholesaler cannot service the wholesaler’s sales territory for a period of more than sixty (60) days;
(2) Insolvency of the wholesaler, the filing of any petition by or against the wholesaler under any bankruptcy or receivership law, or the assignment for the benefit of creditors or dissolution or liquidation of the wholesaler, where such condition materially affects the wholesaler’s ability to remain in business;
(3) Fraud by the wholesaler in dealings with the supplier or its products that adversely affects the interests of the supplier;
(4) Violation of § 57-6-104(f), if it was done at the direction or with the knowledge of a substantial stockholder or substantial partner. If a governmental permit held by a wholesaler is suspended temporarily so that the wholesaler cannot service its sales territory for a brand or brands, then upon agreement of the supplier of that brand or brands and the wholesaler whose permit has been suspended, another wholesaler who handles the same brand or brands can service the sales territory during the period of suspension; or
(5) The wholesaler has failed to pay for beer ordered and delivered in accordance with established terms with a supplier and fails to make full payment within five (5) business days after receipt of written notice of the delinquency and demand for immediate payment from the supplier.
(b) Where the wholesaler notifies the supplier in writing by certified mail of the wholesaler’s intent to cease distribution of a brand sold by the supplier, the supplier can amend, modify, terminate, cancel, discontinue or fail to renew the agreement immediately with respect to that brand.
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