Beam sued after cutting Cooley supply contract

4th March, 2013 by Becky Paskin

Sidney Frank Importing Company (SFIC) is suing Beam for US$100 million, claiming the US multinational reneged on its Michael Collins whiskey supply contract.

Michael Collins Irish whiskey

Sidney Frank claims Beam is attempting to cut the number of independent Irish whiskeys, like Michael Collins

The New York-based importer claims its contract to obtain a whiskey supply from Irish distillery Cooley has been cut off before it expires.

SFIC claims Beam, which bought the Cooley distillery for $95m in 2011, cancelled the contract for the benefit of its Kilbeggan Irish whiskey brand.

In its complaint, SFIC said: “Cooley unilaterally and wholly without justification abandoned its supply contract with SFIC.

“Beam orchestrated this move in order to monopolise Cooley’s production capacity for the benefit of its Kilbeggan brand, which Beam is aggressively promoting in the US where Michael Collins had been ascending rapidly.”

The importer also claims Beam’s move is part of a strategy to cut the number of independent Irish whiskeys on the market.

Upon its acquisition of Cooley, Beam immediately cut off supply to some third party brands, but gave “appropriate” notice periods to those with existing supply contracts. At the time, the US-based drinks group claimed the move was to “ensure sufficient whiskey stocks are available to meet the growing demand for Cooley whiskeys, both now and in the future”.

However Beam decided to acquire 2 Gingers, a former Cooley supply whiskey, in December last year to “expand our Irish Whiskey business in the US”.

Clarkson Hine, a Beam spokesman, told Bloomberg the group would be challenging SFIC’s claims: “We have been in commercial discussions with Sidney Frank regarding this matter. We are confident in our position and that we will prevail.”

Michael Collins was launched in 2006, and went on to sell 9,000 cases in 2011. Kilbeggan has recently ramped up its marketing drive in the US – Irish whiskey’s largest market – where it currently holds a 1% market share. Its largest competitor is Jameson, which sold four million cases in 2011/12.

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