If you’ve got a good verdict for Stone Beer, gimme a hell yeah!
The Stone court stunner, a B2B booze brouhaha heads to the Feds + more!
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Sometimes breweries sue each other over like, corporate espionage and monopolist practices and pay-for-play bullshit and whatnot. Usually it’s very boring and technical. But what this newsletter presupposes is… what if it wasn’t?
[SCENE: In a federal courtroom in San Diego, a three-week federal trademark lawsuit between macrobrewer Molson Coors and hometown craft brewer Stone Brewing Company has just come to a close. The eight-person jury, having only entered deliberations hours prior following attorneys’ closing remarks, files back into the courtroom. With hundreds of millions of dollars in alleged damages at stake over an allegedly , the tension is so thick you could cut it with one of those foam scrapers that Stella Artois always uses in its commercials to trick American drinkers into thinking the green-bottled swill they order at hotel bars is still brewed in Belgium. Lol. Anyway, where was I? Oh, right, the courtroom. A silence blankets this grand hall of justice; reporters who have covered this suit from its first complaint over four years ago shoot one another quizzical looks. Judge Roger Benitez receives the verdict from the jury foreman and reviews it with a granite gaze. Just then, from the plaintiff’s side of the courtroom, a hirsute figure leaps from his seat as though struck by lightning.]
Greg Koch, cofounder of Stone: If you’ve got a favorable jury verdict for Beer Jesus, gimme a ‘HELL YEAH!’
Eight-person jury, in unison: HELL YEAH!
[Together, they each throw their own paper planes towards Koch. He scrambles to catch them, his plaid-clad arms flailing like one of those car-dealership inflatables that Sweet D dances like when she’s drunk. Having gathered the airborne missives, Koch hoists them above his head and begins to speak, mouth framed as always by his trademark beard. (Not trademark in the sense of legally actionable, though; at least, not that I know of? Stone Brewing don’t sue Fingers challenge!) From his federal bench, Hizzoner Benitez moves to kibosh whatever Koch has planned.]
Hon. Roger Benitez: Order! Order! I demand you drop those jury verdicts at once, Mister Koch! ORDER!
Koch: I’m gonna read one verdict!
Jury, still in unison: WHAT?!
Koch: I’m gonna read two verdicts!
[Things carry on like this for some time. Judge Benitez calls the bailiffs to handcuff Koch he can the verdict aloud to the packed courtroom. But as it turns out, they’re wrestling fans too, and they join the call-and-response. In the gallery, trial observers produce posters that read “KOCH 3:16.” Benitez, nearly apoplectic, breaks his gavel calling for order.]
Koch: I’m gonna read eight verdicts!
Koch: I’m gonna read ni—
[He realizes he’s out of copies of the verdict, having cast them all aside in the theatrics already. As the crowd buzzes, he tries to subtly grab the paper closest to his feet. Everyone sees him do this.]
Koch, clearing throat: I’m gonna… read eight verdicts!
Jury, somewhat less enthusiastically: What?
[Koch begins to unfold the paper plane to read the verdict therein. Benitez, desperate to reclaim control of his courtroom, hastily interjects during the lull.]
Benitez: The jury finds Molson Coors guilty of trademark infringement and awards damages of $56 million to Stone Brewing Company. It finds that this infringement was not willful.
[Courtroom erupts in chaos. Jurors are Strawpedo-ing bombers of Arrogant Bastard. The bailiffs begin suplexing one another; their form is terrible. Koch jumps atop the plaintiff table and vigorously does the “suck it” move at the Molson Coors’ attorney pen. That’s X-Pac’s thing not Steve Austin’s, but no one seems to care on account of they’re all just figments of imagination anyway. Much more real: the $464 million Stone still has coming due with its private-equity investors next year. But we are WAY outside the scope of this counterfactual already, so we’ll save that for another act.]
Benitez, retreating to his chambers in disgust: I’m getting too old for this shit.
[SCENE: 1,200 miles away and a few days removed, Montana beer journalist Kate Bernot presses publish on her latest story, a look at actual-Steve Austin’s actually shockingly successful beer line with another Southern California craft brewer El Segundo. FADE TO: Another couple thousand miles and a couple days, and Fingers editor Dave Infante sits down at his laptop in suburban New Jersey desperate for a fresh angle on the Stone news that he did a whole Twitter thread about like four days ago. Stone Cold… Stone… he mutters to himself. Then, he begins to type…]
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🛒 B2B booze brouhaha heads to the Feds
If you were one of the most powerful alcohol wholesalers in the country, would you walk around convention centers flashing the finger sign from The Hunger Games at the other most powerful alcohol wholesaler in the country to acknowledge the power and might of the legislatively bestowed booze sinecure you both enjoy?
Probably not, because that would be incredibly weird and I just don’t get that vibe from you. And yet, there’s a new federal antitrust complaint making waves in the booze business this morning that alleges—among other, more significant things—that leadership at big-time booze distributors Souther Glazer’s and Republic National Distributing Company do exactly that at industry conferences. The document, filed Wednesday by B2B e-commerce marketplace/platform Provi, claims that (emphasis mine):
Entrenched and chummy, Southern and RNDC’s corporate leaders have been known at industry conferences to flash two upheld fingers to one another symbolizing that they are today—and will remain, if they have their way—the only two distributors of significance in the country.
Very normal shit!As for those “more significant” aspects of the complaint: Provi alleges that the two distributors are using their market power to coerce alcohol retailers not to process orders through its platform. In other words, the complaint says the distributors want their customers (which are also Provi’s customers) to work directly with the existing middlemen (the distributors) rather than another, possibly easier-to-use middleman (Provi) between the retailer and those middlemen (again, the distributors.)
Why are the distributors boxing Provi out of
The Capitol of Panem retailers? To “stifle the growth” of the platform and “degrade the value” of its data analytics services in order to consolidate control over the e-commerce B2B booze market…. or so sez the complaint. And as Provi makes sure to mention, Southern Glazer already operates its own e-commerce platform Proof to serve retailers without the need for—depending on your perspective—a streamlined software solution/impudent technological interloper. (The distributor is also in the process of building out its own digital marketing agency, DRAM, to help brands master the dark art of selling booze online.)
If stifling is indeed the goal, it hasn’t been going great thusfar: Provi closed an investment round in early 2021 that valued it at around $750 million; earlier that year, it announced that 10% of licensed alcohol retailers in the U.S. used its platform. In early 2022 it merged with SevenFifty, another booze e-commerce/content platform, for an unspecified sum to beef up its offering to retailers. The platform’s timing with the complaint may be good: the Biden administration’s antitrust focus on the alcohol industry has yielded a lot of industry agita but little in the way of outcomes thusfar. Maybe relevant regulators will take up the case as an opportunity to seem like they’re Doing Something™?
We’ll see in the coming weeks/months/etc. For more on how it might unfold, I did a quick mini-interview with Kristen Hawley, the journalist behind the excellent restaurant technology newsletter Expedite, to contextualize Provi’s legal shot across the wholesale bow in the broader legal F&B platform landscape:
Listen in above, and make sure to check out more of Hawley’s work at Expedite and follow her on Twitter.
🇲🇽 Roses are red, you can fry chicken in Crisco…
According to a press release I got the other day and just kinda like… squinted at for awhile, Jose Cuervo Tradicional will this summer open the first-ever “metadistillery” on Decentraland. (For those readers keeping score at home, that’s the same virtual-reality platform that Miller Lite used for its metaverse Applebee’s last month.) I don’t have a ton to say about this just yet or maybe ever because it’s impossible to distill tequila or anything inside a distillery inside the internet. But! Mexico’s Consejo Regulador del Tequila is typically pretty litigious about misuse of the “tequila” mark—it successfully bullied Elon Musk into toeing its line, for instance—and it would be very funny if they objected to whatever… this… is on the grounds that the metaverse is not, in fact, located in Jalisco. Then again I assume them Becle boys are pretty simpatico with agavecrats at the CRT, so that seems unlikely. Anyway: metadistillery! It’s a word now! I guess!
📲 The best Fingers meme ever and/or lately
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Hat tip to Friend of Fingers Jess Infante for spotting this particular nugget in the complaint.
enjoying the legal coverage, thank you. I think that Cuervo story is gonna be a good one to keep an eye on.
Great article, I cackled multiple times! I visited Stone for the first time this month on a trip to SD and had a lovely time. Thanks for covering the legal angles. *Raises glass of metamargarita to you*