Missouri Liquor Franchise Law Alive and Well

St. Louis, MO– Major Brands has won a clear legal victory in its battle over unlawful termination by Diageo North America. The ruling handed down by St. Louis 22nd Circuit Court Judge Robert H. Dierker June 20 firmly rejected Diageo’s claim that Major Brands was not a franchise, explicitly stating that “Major Brand’s agreement with Diageo constitutes a franchise.” In doing so, the Court declared a substantial win on the law for Missouri alcohol distributors.

The Court ruled that the Missouri Franchise Act applied to a multi-supplier liquor distributor, requiring statutory “good cause” for termination. The Court said Diageo had failed to demonstrate “good cause” and that its unlawful termination was motivated by the actions of Major Brand’s competitor, Glazer’s, and the “very sweet deal” it offered to Diageo to instigate the termination. Additionally, the Judge stated that he found Diageo’s lead witness’ testimony to “lack credibility”.

The court went on to say that Major Brands could be entitled to significant financial damages resulting from the “severe consequences” the loss of Diageo brands will cause its business. However, Judge Dierker denied Major Brands’ request for a preliminary injunction to prevent Diageo from terminating their franchise agreement July 1, saying the court could not oversee an ongoing business relationship.

“We won a significant victory today with the Court’s determination that Major Brands had a franchise relationship with Diageo and was wrongfully terminated. 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 Judge found Diageo’s lead witness, a senior executive, lacked credibility. Given the Judge’s findings, we are confident Major Brands will be able to recover from a Missouri jury the “severe” damages noted by the Court,” Sue McCollum, Major Brands CEO, said.