On August 16, 2012, the Sixth Circuit issued its third decision of the summer addressing the franchise rights of wholesalers of beer and wine. The Court’s decision in Beverage Distributors, Inc. v. Miller Brewing Co. makes a clean sweep for Ohio distributors of beer and wine, as the Sixth Circuit also issued decisions in favor of distributors in Bellas Company v. Pabst Brewing Co. and Tri-County Wholesale Distributors v. The Wine Group, Inc. in the last three months.
The Court, in a unanimous opinion written by Judge Martin, found that the plaintiff alcoholic beverage distributors have the right to continue distributing Miller and Coors beer brands. The lawsuit sought to stop the termination of the distribution franchises for the Miller and Coors brands following the creation of a joint venture between Miller Brewing Company and Coors Brewing Company called MillerCoors, LLC.
MillerCoors asserted in its filings that the joint venture was authorized to terminate the distribution franchises, relying on a portion of the Ohio Alcoholic Beverage Franchise Act that addresses termination by successor manufacturers. The distributors asserted that MillerCoors could not take advantage of the successor manufacturer statute because Miller and Coors retained control over the joint venture – a situation in which the statute prohibits termination.
The Sixth Circuit rejected MillerCoors’ reading of Ohio law, preventing the termination of the franchises. Adopting the trial court’s reading of the statute, the Court held “Upon review, we agree with the reasoning of the district court and conclude that Miller and Coors ‘exercise control’ over MillerCoors.” The Court held that because MillerCoors exercised such control, it did not qualify as a successor manufacturer and could not terminate the distributors’ franchises.