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2023 SESSION
23102796DBe it enacted by the General Assembly of Virginia:
1. That the Code of Virginia is amended by adding in Title 59.1 a chapter numbered 56, consisting of sections numbered 59.1-593 through 59.1-597, as follows:
§ 59.1-593. Definitions.
As used in this chapter, unless the context requires a different meaning:
"Agreement" means a commercial relationship that is not required to be evidenced in writing between a soft drink company and a bottler pursuant to which the soft drink company authorizes the bottler to bottle, can, sell, manufacturer, or distribute one or more of the soft drink company's brands of soft drink products and in connection the use of a brand name, trade name, trademark, service mark, logo, typeface, or other advertising or commercial symbol.
"Bottler" means any person or entity that, pursuant to an agreement, receives, stores, bottles, manufacturers, distributes, or sells soft drink products at wholesale to institutional, commercial, or industrial users.
"Soft drink company" means a person that has, by virtue of ownership or control of recipes, formulas, brand names, trade names, trademarks, service marks, or other intellectual property, the authority to grant another person the right or license to manufacture, distribute, or sell soft drink products and soft drink flavors employing the recipes or formulas of such soft drink company and bearing the brand name, trade name, trademark, service mark, or other identifiers of the soft drink company.
"Soft drink flavor" means any type of flavor, beverage base, syrup, extract, concentrate, powder, or other compound prepared for use as a flavoring for soft drink products.
"Soft drink product" means any nonalcoholic beverage subject to annual levy pursuant to the excise tax imposed by the Virginia Soft Drink Excise Tax Act (§ 58.1-1700 et seq.).
§ 59.1-594. Soft drink company; transfer of business.
A. No soft drink company shall unreasonably withhold or delay consent to any transfer of a bottler's business or transfer of the stock or other interest in the bottler's business, provided that the proposed transferee bottler meets the soft drink company's material and reasonable qualification requirements. A soft drink company may request that the proposed transferee bottler provide information as is reasonably necessary to determine whether the proposed transferee bottler meets its qualification requirements. If a soft drink company determines that a proposed transferee bottler does not meet such requirements, it shall give the proposed transferee bottler written notice thereof, stating the reasons for the soft drink company's withholding its consent to the transfer. A soft drink company shall render its decision to approve or reject a proposed transfer and provide notice to the proposed transferee bottler within 45 days of receiving requested information from the proposed transferee bottler. No proposed transferee bottler shall be disqualified from acting as a bottler for a soft drink company solely because it is a publicly held corporation.
B. Notwithstanding the provisions of subsection A, no soft drink company shall withhold consent to, or in any manner retain a right of prior approval of, the transfer of a bottler's business to a principal owner of the bottler or a family member. As used in this subsection, "family member" means a spouse, parent, sibling, child, stepchild, or lineal descendant, including those by adoption, of a bottler or a principal owner of a bottler.
C. Upon the transfer of a bottler's business, the transferee bottler shall assume all obligations imposed on and succeed to all the rights held by the previous bottler by virtue of any agreement, consistent with this chapter, between the previous bottler and any soft drink company entered into prior to the transfer.
D. In any dispute as to whether a soft drink company has unreasonably withheld its consent to the transfer of a bottler's business or the transfer of the stock or other interest in the bottler's business in violation of this section, the soft drink company shall bear the burden of proving that the transferee bottler failed to meet its material and reasonable qualifications as required for all of the soft drink company's bottlers.
§ 59.1-595. Notices.
Notices required under this chapter shall be delivered by hand, by any form of United States mail service, including regular, certified, registered, or overnight mail, or by commercial delivery service.
§ 59.1-596. Jurisdiction; remedies.
Jurisdiction to hear and determine cases and controversies arising under the provisions of this chapter shall be in the circuit court of the city or county wherein the bottler has its principal place of business in the Commonwealth. The court may grant equitable relief as necessary to remedy the effects of conduct prohibited under this chapter, including declaratory judgment and injunctive relief.
§ 59.1-597. Waiver of chapter void.
The provisions of this chapter shall be deemed to be incorporated in every agreement subject hereto and shall supersede and control all other provisions of the agreement inconsistent with the provisions of this chapter. No soft drink company shall require any bottler to waive compliance with any provision of this chapter. Any contract or agreement purporting to waive compliance with any provision of this chapter shall be void and unenforceable to the extent of the waiver. Nothing in this chapter shall be construed to limit or prohibit good faith settlements of disputes voluntarily entered into between parties.