A manufacturer or out-of-state shipper permit must appoint a wholesaler to distribute their products to retailers in Connecticut. This creates a distributorship. After six months, the distributorship with the wholesaler you have appointed becomes permanent. Put another way, all product appointments are “for life”. Nevertheless, there are several options that may be available if you later decide that you want to change your wholesaler’s distributorship of your product.
Appointing an Additional Wholesaler
If you are a manufacturer or an out-of-state shipper of spirits or wine and already have an existing wholesaler, you may appoint one or more additional wholesalers for your product. You can appoint an additional wholesaler to sell your product throughout the state or for just a particular geographic territory, such as a county. This is called “dualing” your product.
To appoint an additional wholesaler for your product, you must send a letter to your existing wholesaler (or wholesalers, if you already have more than one) in which you notify them that you are appointing an additional wholesaler for your product. You must provide the name of your intended additional wholesaler in the letter, the geographic territory in which you intend to have the additional wholesaler distribute your product, and the specific name of the individual products or product line for each product you intend to have the additional wholesaler distribute.
The letter must be sent to your existing wholesaler by certified or registered mail with return receipt requested. Do not send via FedEx, UPS, or any other shipping service unless your current wholesaler agrees in writing. An additional copy of the letter must be sent simultaneously to the Department via email to dcp.liquorcontrol@ct.gov. Your letter to the Department should include the certified or registered mail tracking number for the letter sent to the existing wholesaler(s).
IMPORTANT:
- Please note that the appointment of the additional wholesaler(s) does not take effect until six (6) months after the date of your letter to your existing wholesaler(s) notifying them of the appointment of the additional wholesaler. You can skip the six-month waiting period only if your current wholesaler(s) agrees to waive it in writing to the Department.
- When you “dual” a wholesaler, you cannot intentionally short your existing wholesaler on product. You must still provide product to the existing wholesaler(s) and fulfill orders. If you do not have enough product to fulfill all orders to all your wholesalers, you must determine a fair and equitable way to allocate product. (Example: Wholesaler A is responsible for 75% of product sales in the state and Wholesaler B is responsible for 25%; Wholesaler A therefore gets 75% of the available product.)
- Please also note that a manufacturer or out-of-state shipper of beer cannot appoint an additional wholesaler for their product by following the process outlined above. Instead, a manufacturer or out of state shipper of beer must request a hearing approving the appointment of any additional wholesaler by following the hearing procedure outlined below.
Executing a Written Stipulation to Diminish or Terminate the Distributorship
You may ask your wholesaler to stop distributing your product in certain geographic territories in the state – which is sometimes called “diminishing” – while allowing them to continue distributing in other areas in the state. You may also ask your wholesaler to end their distributorship of your products throughout the state.
If your wholesaler agrees to your requested change, your wholesaler must provide a signed, written statement detailing the specific name and brand credential number for each product it has agreed to no longer distribute for you or the specific geographic territories in which it will no longer distribute your products. Your wholesaler must then send the letter to the Department via email to dcp.liquorcontrol@ct.gov with you on copy. The Department will review the letter and notify you and the wholesaler if the proposed change is approved.
Requesting a Hearing to Terminate or Change the Distributorship
If your wholesaler will not agree to your proposed diminishment or termination, or if you do not want to ask your wholesaler to agree to the proposed change, you may request a hearing before the Liquor Control Commission. To request a hearing, you must send a letter to your wholesaler notifying them that you are requesting a hearing and detailing the reasons why you are requesting the termination or diminishment of the distributorship.
Please note: If you are a manufacturer or out-of-state shipper of beer, you must request a hearing to appoint an additional wholesaler for your product (“dual”). Therefore, the letter you must send to your existing wholesaler and to the Department must explain the “just and sufficient cause” for the dual, specifically the reasons why you need to appoint an additional wholesaler for your beer product(s).
The letter must be sent to your existing wholesaler by certified or registered mail with return receipt requested. Do not send via FedEx, UPS, or any other shipping service unless your current wholesaler agrees in writing. An additional copy of the letter must be sent simultaneously to the Department via email to dcp.liquorcontrol@ct.gov. Your letter to the Department should include the certified or registered mail tracking number for the letter sent to the existing wholesaler(s).
IMPORTANT: A hearing cannot be scheduled unless you comply with all the statutory requirements. This means that if you do not provide evidence that you sent the letter to your wholesaler by certified or registered mail with return receipt requested, or if your letter does not detail the reason(s) why you are requesting a change in the distributorship, a hearing will not be scheduled.
The Hearing
Once the Liquor Control Division determines that your request for a hearing has complied with the statutory requirements, your request will be forwarded to the Department’s Legal Division for the scheduling of a hearing before the Liquor Control Commission. The Liquor Control Commission is an independent legal body that will ultimately determine whether to grant your request to change the distributorship.
The Legal Division will communicate with you and your wholesaler about the hearing, including about the method in which evidence will be displayed at the hearing. The hearing will be held electronically via the Microsoft Teams platform. Aside from coordinating with both parties about the scheduling of the hearing and the display of evidence, neither the Legal Division nor the Liquor Control Division will take a position as to whether your request to terminate or change the distributorship of your wholesaler should be granted.
You are responsible for demonstrating to the Liquor Control Commission that “just and sufficient cause” exists for terminating or changing your wholesaler’s distributorship of your product(s). Decisions from the Liquor Control Commission are publicly available. For more information about “just and sufficient cause," please refer to Connecticut General Statutes Section 30-17(a)(2).