Photo of Daniel P. McGuire

Daniel P. McGuire focuses his practice on general corporate matters, such as mergers and corporate restructuring, and securities regulation. While in law school, Daniel served as a senior editor of the Ave Maria Law Review, and was twice elected to the Honor Board. He interned at the US Department of Justice, Environment and Natural Resources Division, in Washington, DC, and as a law clerk for the Wayne County Office of Corporation Counsel in Detroit. Read Daniel P. McGuire's full bio.

Over the past several months, 15 notable deals have taken place in the craft beer space, continuing a trend toward consolidation in the industry. While the terms of most transactions remain undisclosed, the deals generally fall into three buckets:

  1. Strategic deals designed to combine leading brands and brewers and leverage distribution capacity;
  2. Targeted asset acquisitions

I. Factual Background

During the 34-day government shutdown occurring between December 2018 and January 2019, producers and importers of beer, wine and distilled spirits needing label approval to bring new products to market were forced to wait until the shutdown was resolved, when TTB could begin again to process COLA applications. The difficulties presented by this situation included the prospect of needing to destroy valuable, perishable inventory.

Unable to obtain a COLA due to the shutdown, Atlas Brew Works (Atlas) filed suit in January in the US District Court for the District of Columbia, challenging the constitutionality of the COLA system. Atlas alleged that the requirement to obtain label approval violates the First Amendment, since, in the event of a government shutdown, the COLA requirement amounted to a prior restraint on protected speech. As the court explained in its opinion, Atlas’s argument boiled down to the claim that “a law that prohibits speech without regulatory approval becomes an outright ban on speech when the approval process is shuttered.” Shortly after the case was filed, the shutdown ended and Atlas received its COLA. The government asked the court to dismiss the case, arguing that it was now moot. After giving the parties several months in which to brief the issue, the court ruled in favor of the government’s motion, finding Atlas’s case moot.
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I. Introduction

On May 23, the Mississippi Supreme Court published its opinion in the case of Rex Distributing Company v. Anheuser-Busch, LLC, et al. The ruling partially reverses the trial court’s decision to dismiss all of Rex’s claims against Anheuser-Busch and rival distributor Mitchell Distributing Company (Mitchell). The ruling will allow Rex Distributing Company (Rex) to proceed with its lawsuit alleging that Anheuser-Busch violated Mississippi’s Beer Industry Fair Dealing Act (BIFDA) by refusing to approve Rex’s attempt to sell its distribution rights to Anheuser-Busch products. In addition, the ruling will allow Rex to proceed with a claim against Mitchell for tortious interference and civil conspiracy.

The ruling clarifies Mississippi beer franchise law by limiting the rights of beer suppliers in the context of distributor transfers, effectively rendering Anheuser-Busch’s “match and redirect” contractual provisions unenforceable under Mississippi’s Beer Industry Fair Dealing Act (BIFDA).
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On May 7, 2019, the Virginia Department of Alcoholic Beverage Control (VABC) published a decision confirming the enforceability of arbitration clauses in distribution agreements between brewers and beer distributors under Virginia’s Beer Franchise Act (BFA). In Loveland Distributing Co., Inc. and Premium of Virginia, LLC v. Bell’s Brewery, Inc., the VABC panel ruled unanimously in favor of compelling the parties to resolve their dispute through arbitration, as provided for in the parties’ distribution agreement (the Agreement).

The decision is good news overall for beer and wine suppliers hoping to avoid the cost of litigation before the VABC. Continue reading for details of the dispute and further considerations.
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