January 16, 2009

Capital Coors claiming loss in sale to DBI when Crown, others left distributor

Capital Coors Co. has sued three breweries claiming a loss of about $10 million after the trio refused to transfer their brands as part of Capital’s sale to another distributor.

Capital, in its lawsuit filed last week in Sacramento, is seeking damages for alleged violation of California’s business and professions code from Crown Imports LLC in Chicago, Butte Creek Brewing Co. in Chico and Bison Brewing Co. in Berkeley.

The lawsuit might be the first test case of a 2000 state law that strengthened fair market value protections for beer distributors, industry professionals said. The law requires beer manufacturers to pay distributors if they unreasonably deny a sale or transfer of brands.

The industry is closely watching the case, said Benj Steinman, editor of trade publication Beer Marketer’s Insights.