Alaska Loses in Termination Case

Alaska Brewing loses $5.5 million in Seattle distributor termination case

Alaskan Brewing Co. lost $5.5 million ruling in a Washington state appeals court this week.

The suit came after Alaskan Brewing terminated a Seattle-based distributor awarded those rights to a new network of distributors.

The distributor, Alaska Distributors Co., filed for arbitration. The arbitrator awarded damages of $5.5 million to the distributor based on the fair market value of its lost distribution rights.

During the case, the brewery had argued that its contract with Alaska Distributors limited the distributor’s damage claims to $1.4 million. The appeals court disagreed. The court said those terms in the contract were moot because the brewery didn’t provide proper notice of its decision to cancel the distribution rights.

The brewery said in an e-mail to its employees this week that it has “three strong partners in our new distributor network, who are covering all the costs required to acquire the Alaskan brand, including the $5.5 million dollars listed in this decision.”

Alaskan Brewing said the distributors purchased the rights in 2009 and have already paid the disputed funds.