Kansas City, Mo — House Bill 526 passed both chambers of the Idaho legislature unanimously. The bill was then signed into law by Governor Butch Otter on March 22nd, and will become effective July 1, 2018.
The bill amends Idaho dealer statutes to prohibit manufacturers from substantially changing a dealer’s competitive circumstances as it relates to a dealer’s ability to compete with another dealer that sells the same brand of equipment. In other words, it prohibits a manufacturer from placing a dealership in an existing dealer’s area of responsibility if they carry the same line of equipment. The prohibition on such conduct would be enforceable even if the contract between a dealer and manufacturer states otherwise.
The language in this bill reflects one of the nine dealer principles created by the equipment dealer industry. Those nine principles are a consensus among equipment dealers of what should be included in state dealer statutes to create pro-competitive business environments for the dealer and their customers.
The competitive circumstances language specifically addresses the issue of consolidation and how the manufacturers go about it. “As an association, we represent dealers of all sizes” said John Schmeiser, CEO, Western Equipment Dealers Association. “We have heard from our members that manufacturers influence and even coerce dealers into making decisions on whether to grow or sell their business. WEDA firmly believes that this should be a decision driven by what’s best for the dealer, not the manufacturer. This legislation ensures more balance and that dealers have some power to make those choices,” said Schmeiser.
During the legislative process, WEDA worked with the manufacturers to build consensus on the bill. The collaborative process resulted in amendments to the bill that removed manufacturer opposition to it. Maintaining good relationships with manufacturers throughout the legislative process is a key component to the success of the legislation and ultimately our industry.
Eric Wareham, vice president of Government Affairs, Western Equipment Dealers Association said, “Special recognition is warranted for representative Vito Barbieri, chairman of the House Committee on Business. His efforts to bring all the stakeholders together and to educate his colleagues about the importance of the bill were instrumental in passing the legislation. We thank him for his time and work on this bill to strengthen Idaho dealer statutes and thereby strengthen Idaho agriculture.”
The fifth installment of Farm Equipment’s Dealership Minds series, 9 staff members traveled to Kentucky to experience first-hand how a successful dealership — H&R Agri-Power — headquartered in the No. 1 ag county in Kentucky operates.