Selling Products from Out-of-State Manufacturers

Selling Products from Out-of-State Manufacturers – Some members have inquired about the possibility of selling products from craft breweries located in other states.  Under the beer distribution system in Pennsylvania, out-of-state manufacturers are required to give distribution rights for their products to importing distributors for a specific geographical area within Pennsylvania.  A written territorial agreement between the out-of-state manufacturer and its importing distributor regulates, among other things, the geographical area in which the importing distributor may sell the brewery’s products in Pennsylvania.  Once a territorial agreement is in place, importing distributors may then sell the products to other importing distributors, distributors and other licensees within their appointed territories.  If no importing distributors exist to service these accounts, a distributor could elect to convert its existing distributor license to an importing distributor license.  Distributor licensees are able to exchange or convert their existing licenses from a D to an ID (or vice versa) by filing an application with the PLCB.  Upon receipt of the application and required fees, the PLCB will conduct an investigation to verify the distributor meets the requirements of the Liquor Code.  If the PLCB approves an application for conversion for a D to an ID, the distributor could then enter into a territorial agreement with the out-of-state brewery to sell its products within a particular territory.  An application for exchange of license must be filed with the PLCB at least thirty (30) days prior to the effective date of the license period or, thereafter, thirty (30) days prior to each six (6)-month interval to be considered and processed.  An ID license issued in exchange for a D license will become effective either at the beginning of the next license period or at six (6)-month intervals, depending upon the date the application is filed.