Major Brands Wins In Court, But Still Loses Diageo Business In MissouriJune 27, 2013
Major Brands has prevailed in its court battle against Diageo, but the distributor is still losing its top supplier’s business. Missouri 22nd Circuit Court judge Robert Dierker rejected Diageo’s claim that Major Brands was not a franchise, explicitly stating that “Major Brands’ agreement with Diageo constitutes a franchise.” Dierker ruled that Diageo failed to demonstrate “good cause” when terminating its alliance with Major, and that the move was spurred by the “very sweet deal” that Glazer’s offered Diageo to instigate the termination.
“We won a significant victory with the court’s determination that Major Brands had a franchise relationship with Diageo and was wrongfully terminated,” said Major CEO Sue McCollum. “The Judge understood that the termination was not for ‘good cause’ but was instead motivated by the lucrative offer made by our in-state competitor, Glazer’s, which indemnified Diageo as part of its deal.”
The court went on to say that Major could be entitled to significant financial damages resulting from the “severe consequences” the loss of Diageo brands will cause its business. However, Dierker denied Major’s request for a preliminary injunction to prevent Diageo from terminating their agreement July 1, saying the court could not oversee an ongoing business relationship. For its part, Diageo said in a statement, “We are pleased that with this decision of the court, we can now move all of our spirit and wine brands to Glazer’s in Missouri.”