Beam’s bid to block lawsuit dismissed by judge

Beam Inc’s bid to block a US$100 million lawsuit by the Sidney Frank Importing Company has been dismissed by a US federal court.

Beam Inc’s attempt block a lawsuit claiming it “wrongfully terminated” a supply contract for Michael Collins Irish whiskey has been dismissed by a New York federal court

In March 2013, the importer began legal proceedings against Beam Inc alleging the group had “sought to destroy” the Michael Collins Irish whiskey brand, seeking US$100m in damages.

Beam purchased the Cooley Distillery, which supplied whiskey for Michael Collins, for US$95m in 2011, and decided to cease some third party supply of its liquid once long-term contracts had come to an end.

New York-based Sidney Frank, however, claimed that its contract with the distillery was “wrongfully terminated” by Beam.

Lee Einsidler, CEO of Sidney Frank, said: “We are pleased by the court’s ruling although not surprised, as the facts are known and they will speak loudly for themselves.”

In addition to the importer’s claims of wrongful contract termination, Beam challenged Sidney Frank’s allegations that it had created “unfair competition” in the Irish whiskey market by “eliminating” Michael Collins in order to push its own Irish whiskey portfolio, including the Kilbeggan and 2 Gingers brands.

Beam also rejected Sidney Frank’s allegation that it had committed “tortious interference” by telling retailers that “there is no doubt, Michael Collins is going away”.

“The fact that the court ruled completely and entirely in our favour on all three causes of action clearly shows that, given our day in court, we will establish that our long-term contract with Cooley Distillery was in full force and effect, and that Beam wrongfully terminated the contract by unilaterally cutting off the whiskey supply at the source,” continued Einsidler.

He added that the company intends to show that Beam “internationally damaged” the Michael Collins brand in the eyes of consumers.

Beam has argued that no long-term contract between Cooley and Sidney Frank existed.

Upon announcing that some third party supply contracts would not be renewed, Beam said that this was to “ensure sufficient whiskey stocks are available to meet the growing demand for Cooley whiskeys, both now and in the future”.

Einsidler continued: “We will continue to actively pursue our claims in court no matter how long it takes, with the ultimate goal of telling our compelling story to a jury.

“We are eager to present all of the facts as we are convinced that the jury will send a message to Beam that its refusal to play by the rules of a free market has severe consequences.”

Of all Cooley’s third party supply contracts, Beam decided to acquire just one brand, 2Gingers Irish whiskey, which has since been rolled out across the States.

Beam Inc has been contacted by The Spirits Business for a further comment.