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Bacardi avoids £51m claim in Brown-Forman lawsuit

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twentieth Might, 2021 by Kate Malczewski

Bacardi has escaped a £51.5 million (US$73 million) lawsuit raised by its former distribution companion Brown-Forman.  

Bacardi portolio

Bacardi and Brown-Forman ended their 18-year partnership in April 2020

On Wednesday (19 Might), a London court docket decided that Bacardi UK shouldn’t be required to make funds its subsidiary allegedly owes Brown-Forman beneath a cost-sharing deal. 

Bermuda-based Bacardi and American firm Brown-Forman first shaped a UK distribution alliance in 2002 and formally ended their relationship in April 2020, after 18 years.

The cut up severed the alignment between Bacardi’s manufacturers – Bombay Sapphire gin, Gray Goose vodka and Patrón Tequila, amongst others – and Brown-Forman’s portfolio, which incorporates Jack Daniel’s whiskey, Woodford Reserve Bourbon and Slane Irish whiskey. 

In a written argument to the court docket, Brown-Forman acknowledged the businesses determined to go their very own methods after Bacardi introduced on a brand new world chief government who sought structural adjustments to the enterprise’ Northern Europe operations.

Brown-Forman sued Bacardi earlier this yr for the £51.5m sum in query, citing funds owed from a cost-sharing settlement inked with a Bacardi subsidiary in 2016. 

The Bacardi subsidiary has put ahead its personal cross-claim towards its former distribution companion, in search of remuneration for its work as a business agent for the Jack Daniel’s proprietor. Each Brown-Forman’s unique declare and Bacardi’s counterclaim will transfer ahead to arbitration. 

In an emailed assertion, a spokesperson from Bacardi informed The Spirits Enterprise the corporate was “happy” with the court docket’s determination.

“For 18 years, Bacardi’s gross sales and buyer advertising groups constructed for Brown-Forman a few of the UK’s most extremely valued spirit manufacturers,” the spokesperson stated.

“It’s this extraordinary worth which Brown-Forman continues to take pleasure in and profit from in its personal UK operations. The arbitration proceedings initiated by Bacardi relating to our proper to compensation for our function as business agent for Brown-Forman are ongoing.

“The ruling demonstrates now we have acted correctly and with integrity. Doing the fitting factor shouldn’t be all the time straightforward however its significance to Bacardi can’t be overstated.”

Brown-Forman declined to touch upon the ruling.

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