A new law designed to encourage the growth of small breweries in New York went into effect. It makes it easier for brewers to part ways with the companies that distribute their beer.
BUFFALO, N.Y. — In 1996, New York State legislators signed a law to protect small beer wholesalers. It made it difficult for large multinational breweries to break their distribution contracts.
"If a brewer wanted to fight it, you would have to send a letter to the distributor and they had 30 days to respond," said Tim Herzog, Flying Bison Brewery founder. "After they responded to you, from the date they received their response, they had a further, I believe 60 days to amend their actions."
But the "Beer Franchise Law" had an unintended consequence.
"What they never foresaw was the fact that small breweries would open," Herzog said.
Flying Bison Brewery started making beer in 2000.
"It has flavor," Rick Lobaugh, a customer, said. "It tastes good and ever since I've found this place, I've been coming here."
For more than a decade, its founder has been fighting the law. Herzog said it left local breweries helpless when distributors weren't getting their products on the shelves.
"If you've got a $5,000 legal bill or you're negative $10,000 worth of sales and deliveries for a couple months, you're toast," he said. "You're out of business."
Now under state legislation that went into effect January 1st, breweries can offer to buy out the contract if they're unhappy.
"If they say no way, it automatically goes to arbitration so there's no more big lawyer fees. There's no more long court dates," Herzog said. "It cuts right to the chase."
Flying Bison has grown at least 40 percent this past year thanks in large part to the relationship it has with its distributor. But the founder said this law will be important as the company continues to grow.
"Now when I'm ready to move out of Western New York and I'm ready to move to other counties, if I have a distributorships that's not working out, I can get out of that distributorship and try out another distributorship," he said.
He said it will put more local craft brews on the shelves of Western New York stores.