Beam’s bid to dismiss lawsuit thrown out

Legal action against Beam will progress after its attempt to dismiss a complaint that it skewed its sales figures was thrown out by a federal judge.

Luxco’s lawsuit against Beam will progress over its purchase of the group’s Rebel Reserve Bourbon and other lesser-known brands

The US group sought to expel a complaint that it mislead Missouri-based drinks firm Luxco when selling off several of its value brands last year.

In January 2013, Beam Global, which has since become Beam Suntory, agreed to sell some of its lesser known brands, including Rebel Reserve Bourbon and Dark Eyes vodka, to Luxco for US$65 million in order to concentrate on its revenue-driving brands such as Pinnacle vodka and Jim Beam Bourbon.

Beam said that collectively, the brands generated around US$30m (excluding excise taxes) during 2012, through the sale of 1.8m cases.

However, Luxco has since launched a lawsuit for breach of contract, alleging that Beam misled the family-owned group with regards to its sales figures, claiming these figures were boosted through attachment to other flagship brands.

Beam sought to have the complaint dismissed last week, claiming that Luxco’s claims were based on “future sales and profitability”, which would be barred by the asset purchase agreement (APA). This bid was denied by federal judge Amy St. Eve.

Eve said the Maker’s Mark producer’s contentions were “baseless and mis-characterise Luxco’s first amended complaint.”

“Nowhere in Count One does Luxco make any allegations regarding future sales. Rather, Luxco’s claim alleges that Jim Beam provided incomplete data regarding the sales and volume history of the acquired brands,” she said.

A spokesperson for Beam said: “The ruling in this preliminary proceeding means we will have the opportunity to make our case based on facts.

“These claims are without merit, we will defend this case vigorously and we are confident that we will prevail.”