SB281 Alabama 2020 Session

Summary

Primary Sponsor

J.T. WaggonerSenator

Republican

Session

Regular Session 2020

Title

Alcoholic beverages,to create permitting procedure to allow certain wine manufacturers to ship wine directly to consumers in state, to require licensed importers and manufacturers of wine to enter into exclusive franchise agreements with wholesalers, and to provide for reporting requirement and penalties, Secs. 28-3A-6.1, 28-8A-1 to 28-8A-11, inclusive, added; Sec. 28-1-4 am'd.

Summary

SB281 would allow certain small wine producers to ship wine directly to Alabama residents and require exclusive franchise agreements between wine suppliers and wholesalers, with expanded oversight by the ABC Board.

What This Bill Does

It creates a wine direct shipper license for small wineries (less than 50,000 gallons per year) to ship limited quantities of wine directly to individuals in Alabama, with caps, age checks, labeling, and tax-reporting requirements. It also requires all wine importers and manufacturers to enter exclusive franchise agreements with wholesalers for designated sales territories and sets rules for modifying, terminating, or renewing those agreements. Additionally, it establishes a new Chapter 8A to regulate the three-tier system, define terms, prohibit certain supplier actions, provide remedies, and outline enforcement and dispute resolution. The act also clarifies penalties for direct shipments without a license and directs ABC Board oversight and implementation.

Who It Affects

• Small wine manufacturers (less than 50,000 gallons per year) who may apply for and operate a wine direct shipper license to ship wine directly to individual consumers in Alabama.
• Wine suppliers, importers, and wholesalers who must establish exclusive sales territories and franchise agreements, comply with new distribution rules, and face enforcement, penalties, and potential compensation or arbitration in disputes.

Key Provisions

• Creates 28-3A-6.1 and a wine direct shipper license allowing eligible manufacturers to ship up to 12 nine-liter cases per household per year to Alabama residents 21+ from the licensee's manufacturing site; requires labeling, tax remittance, audits, and a licensing process with fees and annual renewal.
• Amends 28-1-4 to regulate shipments; direct wine shipments to individuals are only allowed under the new direct shipper license and shipments from outside the state are generally restricted to licensed recipients in Alabama.
• Adds Chapter 8A (Sections 28-8A-1 to 28-8A-11) to govern territorial franchises: suppliers must grant exclusive sales territories to wholesalers, restrict certain supplier actions, outline conditions for amendments/terminations, define terms (supplier, wholesaler, territory, etc.), and provide for remedies, arbitration, and damages for violations.
• Requires a three-tier system framework: wholesalers must service designated territories, prohibits certain coercive practices, and provides enforcement mechanisms including civil actions, punitive damages in specified bad-faith cases, and venue provisions.
• Effective date and related constitutional note: the act becomes effective August 1, 2020, and includes provisions related to Amendment 621 of the Alabama Constitution regarding local funds expenditures.

AI-generated summary using openai/gpt-5-nano on Feb 23, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Alcoholic Beverage Control Board