(Scottsdale, AZ) – Four Peaks Brewing Company filed a lawsuit earlier this month in order to rid itself of its only in-state distributor, Alliance Beverage Distributing, and enable it to proceed with a new distributor.
The brewery has sent this note out to trade partners:
As you may have heard, we have begun the process of changing distributors. We are simply doing what’s best for Four Peaks, our employees, our customers and you. Though our lawyers have asked us to say as little as possible, we need you to know that for the time being, it’s business as usual for Four Peaks. We will continue to produce the great beer you have come to know and love, and until further notice, distribution will remain as it has been. Certainly, we are hopeful there will be a swift and seamless transition to a new distributor in the very near future.
That process begins with outlining to Superior Court Judge, George Foster, how Alliance Beverage wronged the company.
Among the several complaints that Four Peaks lists, according to the court filing, are, “Alliance has failed properly to maintain the quality of Four Peaks’ products through the distribution cycle” and “Alliance has provided ‘out of code’ product to retail resellers of Four Peaks’ product.”
In Arizona, a supplier can terminate a commercial agreement (one that establishes a “franchise” or contract between the two parties) with a wholesaler “in good faith and with good cause” according to the state’s statutes.
This case is unique because Four Peaks is alleging that the two companies never established a valid franchise. Four Peaks says that the relationship doesn’t meet any of the three criteria for a franchise as set forth by the statutes.
Moreover, Four Peaks says that, even if the court decides that it is a valid franchise, that the company would still be terminating such a relationship “in good faith and with good cause” due to Alliance’s alleged wrongdoing.
Four Peaks already has an agreement in place with Hensley Distributing that would go into effect once the dispute with Alliance is resolved. Four Peaks has conceded that it would provide fair market value for the franchise to Alliance in order to move forward with Hensley though the filing states that Alliance would “reject this offer.”
According to a Four Peaks spokesperson, Alliance was granted an extension this week to file a response to the complaint until July 17th.
Four Peaks Brewing was founded in 1996 and production grew 57% to 36,000 barrels of beer last year, according to The Brewers Association.