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Analysts say Maris case will have impact on brewery clout.

In an article in the St. Louis Post-Dispatch, August 12, writer Thomas Lee call the $50 million judgement against Anheuser-Busch "a drop in the keg," but notes that it is the first time that Anheuser has lost a distributor termination case.

Anheuser-Busch "is no longer the impregnable fortress," said Steve Scott, a Florida lawyer who has followed the case told the paper. "More and more distributors will feel it's not impossible to take them on."

And analysts say the Maris case will boost distributor bargaining power as consolidation continues apace.

"No doubt, (the verdict) is a significant result for wholesalers," said Smarr, now an alcoholic beverage industry attorney with law firm Brydon, Swearengen & England of Jefferson City told the Post-Dispatch.

"For the first time a wholesaler has prevailed in a major termination battle with a major brewer," Smarr told the paper. "Brewers may be more cautious on how to frame issues when terminating a wholesaler. They'd better make sure they have a bona fide case that can stand up in court."

However, Anheuser-Busch is reportedly asking Judge R.A. Green to set aside the jury verdict in the case and order a new trial. If that gambit is refused, Anheuser-Busch would file an appeal.

After the announcement of the verdict, Senior Executive Vice President Pat Stokes sent out a letter to the Anheuser-Busch wholesaler corps that downplayed the verdict against the company. "While we are disappointed with this verdict," he wrote, "we want you to know that our major focus in this legal proceeding has been the integrity of the wholesaler system. Let me assure you that we remain committed to our relationship with you and to our Equity Agreement. We will not let this single negative event alter the total commitment to quality that has brought about our mutual success."

Mark H. Rodman, owner of Beverage Distribution Consultants in Massachusetts says that the Mans verdict could have an effect on brewer-wholesaler consolidation negotiations. "It sends a warning signal to suppliers to change the way they rank and yank their distributors," said Rodman, a former general counsel to the National Beer Wholesalers Association. "It sounds a warning bell to major brewers that the price of consolidation and realignment may not be affordable. The Mans is the first case on record where a wholesaler has a legally protected property right, and if someone takes it away, they are entitled to fair market value, not what the supplier thinks it's worth."

While the verdict could push suppliers into offering wholesalers better consolidation deals, analyst Rodman does not foresee a flurry of lawsuits. "Very few legal teams can go toe-to-toe against A-B," he said.

According to the report in the Post-Dispatch, jury members felt that Anheuser had failed to prove that the Maris family had violated its contract to the point that termination was justified. The jury found that company president Rudy Mans had tried to correct problems cited by Anheuser-Busch inspectors.

Jurors also said they assigned little credibility to some of the ex-Maris employee witnesses brought by A-B. Amy Richard, the jury foreman, said they lacked credibility because they were immediately hired by the company Anheuser-Busch tapped to replace the Marises. "You don't terminate a contract based on the practices of employees and then hire them the next day," Richard told the Post-Dispatch in an interview several days after the verdict was announced.
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Publication:Modern Brewery Age
Article Type:Brief Article
Geographic Code:1USA
Date:Aug 20, 2001
Words:561
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