Local brewery takes on ‘king of beers’ in lawsuit
A lawsuit involving a local micro brewery against the “king of beers” faces its first judicial hurdle this June.
Lake Tahoe Brewing Company, along with three other California beer producers, filed a class action suit against Anheuser-Busch in a San Jose, Calif. court. Judge Spencer Williams will decide on June 24 whether the lawsuit should be certified. The plaintiffs must prove they have similar problems as a result of the alleged anticompetitve practices by Anheuser-Busch.
“Once we get the judge’s stamp of approval, the potential liability goes up tremendously,” said Jim Andrews, one of the attorneys representing LTBC. “With having an entire group claiming the same thing, the amount we can ask for multiplies.”
The four breweries claim that the manufacturer of Budweiser and Michelob told loyal wholesalers to exclusively promote Busch products. In return, the company would provide distributors vehicles, establish new territories and pay off expense accounts.
Joining LTBC are El Toro Brewing Co. of Morgan Hill; Anderson Valley Brewing of Boonville; and St. Stan’s Brewing Co. of Modesto.
“This legal stuff takes awhile but we are very patient,” said LTBC chief financial officer Eric Bledsoe. “We are moving ahead and hopeful we can get this before a jury by next year.”
Lake Tahoe Brewing was gaining more popularity in regional markets several years ago. The local micro brewery entered into two-year agreements with five Bay Area distributors in 1995. The same year, Anheuser-Busch launched a campaign that allegedly was aimed at eliminating wholesalers who didn’t market Budweiser, according to the lawsuit. Bledsoe said the St. Louis-based beer giant got LTBC’s five Bay Area distributors to break their agreements in favor of lucrative incentives. The Tahoe brew was taken off many store shelves and out of pubs.
“The fact that their senior executive had an intent to get more of a market share is a good point for us,” said lead legal counsel Bruce Simon. “Combine that with the request to wholesalers to exclusively distribute their products and you find that is the only way to take away our clients’ market share.”
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