New Law Gives Leeway to Small Brewers

By Matt Porter

January 2, 2013 Updated Jan 2, 2013 at 8:08 PM EDT

Binghamton, NY (WBNG Binghamton) In New York, craft and micro brewing has exploded in popularity.

A bill passed by the state legislature and signed into law by Gov. Andrew Cuomo took effect this week allowing small brewers to end a contract if the agreement is shown to be unfavorable to the brewer.

The brewer must have an annual volume of less than 300,000 barrels and provide fair compensation to the wholesaler upon termination of the agreement.

Before building his own brewery in 2011, Seth Weisel of Binghamton's Galaxy Brewing Company worked for other craft brewers who found themselves caught in bad long term contracts.

"It's going to help craft brewers especially the smaller ones like myself," said Weisel, "Our brands won't get gobbled up by a large distributor that doesn't have any intent to sell the beer."

He said brewers used to think a contract with a big distributor was a good thing, but that hasn't always been the case.

"They would get the brand just because they didn't want their competitors to have it," Weisel said.

He said the freedom to end a bad contract is an added security.

"It does take a little bit of the stress of, 'Oh My God, I'm going to be locked into this thing forever, and if it goes bad, I'm never going to be able to get out,'" said Weisel.

The number of micro and craft brewers in New York has gone up from fewer than 20 brewers to 63 in the last 15 years.

"There's always new beers coming up and people are always trying new things," said Dustin Fargnoli, vice president of the local distributor "Sam the Beer Man."

Meanwhile, distributors have consolidated and shrunk from 112 to less than 60.

That's led to the the situation where legislators felt they needed to even the playing field for smaller, local breweries.

The law should also help smaller distributors get new contracts that would have been taken by larger ones before.

Weisel plans to open his Galaxy Brewing Company later this year.

He said the new law will help him start on the right foot.

"To be able to find a distributor that wants your brand and wants to sell it and distribute it," he said.

Giving customers more cheers with local beers.