Seismic Brewing is taking on Reyes Holdings, the largest beer wholesaler in the country and the eighth-largest private company in the United States, in a dispute that could daylight the power and leverage that large distributors hold over craft brewers. Reyes filed suit against Seismic after the Santa Rosa, California brewer refused to move their brands from DBI Distributing to Reyes after Reyes acquired DBI. Seismic then filed a cross complaint against Reyes.
The battle shines a light on the leverage that wholesalers have over the movement of brands from a distributor after it has been acquired. Craft brewers sometimes do not want to move their brands to the acquiring distributor, but are often not given a choice Most craft brewers don’t have the resources to fight a protracted and expensive lawsuit. Seismic is owned by Chris Jackson, a graduate of UC Berkeley’s law school and is the son of the late billionaire Jess Jackson, a lawyer who founded Jackson Family Wines and engaged in high-profile legal battles with the U.S. thoroughbred industry as well as his competitors in the wine industry.
Jackson contends that Reyes and its subsidiaries are engaging in anti-competitive practices that have unfairly forced out family distributors, placed onerous terms on small craft brewers and limited availability for consumers in the most populous regions in the state.
It will be an interesting story to watch unfold with big implications for the industry. Full story here.