Beck's distribution hits snag

Interbrew must wait to make it part of Labatt USA operations

May 28, 2002 - A legal dispute has kept Interbrew from integrating the distribution of Beck's beer in the United States with its Labatt USA operation. The Belgian brewer said it would likely have to wait three months to resolve the dispute and achieve full cost savings from merging distribution.


Interbrew plans to appeal a U.S. court order which suspended the integration of Beck's after its partner in the Labatt USA joint venture complained it had not been consulted. In the meantime, Interbrew must distribute Beck's through the German brand's own U.S. network.

The $1.6-billion purchase of Beck's was announced in August and completed in February.

On Thursday, the U.S. District Court for the Southern District of New York imposed a preliminary court injunction against Interbrew following a complaint filed by Wisdom Import Sales.

The court said that although Wisdom had not proved it would suffer any commercial harm from the integration of the Beck's brand, its consent was required under the terms of the companies' agreement. It also ordered Wisdom to post a $5 million bond to cover any damages Labatt USA might suffer if the injunction is overturned.

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