Distributor Agreements: 'Til Death Do Us Part?

Many early stage wineries market their products via tasting room sales, wine clubs, direct-to-consumer shipments and, to the extent permitted, self-distribution to local restaurants, grocery stores, and wine stores.  Eventually, winery growth will necessitate working with a distributor, a relationship not to be entered into lightly. 

​A distributor becomes an ambassador for the winery’s brand and, once retained, the supplier may have little control over how its wine is marketed.  Further, these relationships can be difficult or financially impossible to break once established.

Supplier/distributor relationships are governed by franchise laws in many states.  In the absence of franchise laws, the relationship is defined entirely by a distribution agreement between the parties.  But, even in franchise states, the distribution agreement can play a critical role, particularly in the termination of the distributor relationship.

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