Jury awards St. Louis distributor Major Brands $12M in franchise law dispute with Jagermeister - St. Louis Business Journal - St. Louis Business Journal

A federal jury on Monday sided with Major Brands in its dispute with Mast-Jägermeister over the 2018 decision to drop the St. Louis-based company as its Missouri distributor.

The jury found for Major Brands in all counts except one, awarding $11.75 million in damages, plus attorneys fees and costs.

“It is a very, very good thing for the good people at Major Brands,” said CEO Sue McCollum. “It’s very good for the Missouri franchise law and it’s very good for Missouri companies that play by the rules.”

The verdict came a few hours after attorneys representing Major Brands and the two companies that it sued squared off during closing arguments in federal court in St. Louis.

They agreed the case was about money, but disagreed sharply on how.

Major Brands — the St. Louis-based whole distributor of wine, spirits and beer — in 2018 sued Jägermeister and wholesale competitor Southern Glazer's Wine and Spirits after the German liquor brand terminated its contract with Major Brands. It alleged Jägermeister violated Missouri's franchise law after ending its contract to sign with Miami-based Southern Glazer’s, according to the lawsuit.

Major Brands asserted that Southern Glazer’s "influenced" Jägermeister to cut its contract with Major Brands in order to have Southern Glazer’s become its local distributor.

Jägermeister terminated the contract because Southern Glazer’s offered it $10 million, then increased the amount to $25 million, said Richard Walsh Jr., an attorney with Lewis Rice who represented Major Brands.

Jan Paul Miller, a partner with Thompson Coburn who represented Jägermeister and Southern Glazer’s, denied that charge but he offered other reasons why the case revolved around the color green.

“We are here because of money,” he said, citing the request from Major Brands for $17 million in damages. He also said Jagermeister wanted to replace Major Brands because sales had been declining for 10 years and the company wanted a national distributor in Southern Glazer’s.

The jury heard several days of testimony about how Major Brands had worked with Jägermeister for more than 40 years, making "substantial investments" to market and distribute its products in the state, until the brand ended the contract in 2018.

Walsh said the evidence showed that Jägermeister admitted that the purported termination had nothing to do with Major Brands’ performance. He accused the CEOs of Jägermeister and Southern Glazer’s of lying during the trial.

During testimony earlier in the trial, McCollum said the deal was more than a monetary loss for the wholesaler.

“It affects Major Brands’s reputation when we lose a brand and we are terminated, because the presumption is in a franchise state you’ve been terminated for good cause…” she said, according to a court transcript.

McCollum said Jägermeister CEO Jeff Popkin and another company executive met with her on Feb. 13, 2018, to inform her that Jägermeister was entering into a national deal with Southern Glazer’s. She testified that she was “shocked.”

“We had had a very good year. We had unprecedented investment and we had no warning. There was no mention of cause or of good cause for the termination,” she testified.

But Miller asserted that Major Brands was well aware that Jägermeister wanted higher sales in Missouri. He also questioned how surprised Major Brands was by the termination, given that it filed a 70-paragraph, nine-count lawsuit 34 minutes after Jägermeister’s CEO told McCollum that he had a done deal with Southern Glazer’s.

Miller also said Jägermeister didn’t have a “franchise relationship” with Major Brands, saying the two companies were not “joined at the hip.” Major Brands spent a small amount of its net profits on promoting Jägermeister, Miller said. Sales of Jägermeister averaged only about 2% of Major Brands’ revenue from 2008 to 2017, he added.

“When Jägermeister left, it wasn’t a bump in the road,” said Miller, adding that Major Brands already was selling other brands and added more.

Major Brands ranked 41st of St. Louis’ top 150 privately-held companies, with revenue of $462 million in 2020, according to Business Journal research.

source: https://www.bizjournals.com/stlouis/news/2021/11/22/jury-sides-with-major-brands-franchise-law-dispute.html

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