Provi Fights Motion to Dismiss Southern Glazer’s and RNDC Antitrust Lawsuit
E-commerce beverage-alcohol platform Provi defended its antitrust lawsuit against Southern Glazer’s Wine and Spirits and Republic National Distributing Co. (RNDC) this week, arguing the two distribution giants have relayed a “misleading narrative” to the court, Law360 reported.
Provi filed a complaint in March against the two companies – two of the largest wine and spirits distributors in the country – alleging the defendants worked to “boycott, disparage and tortiously interfere with Provi’s business.” The complaint was filed in the U.S. District Court for the Northern District of Illinois Eastern Division.
Southern Glazer’s and RNDC used the Provi platform to fulfill more than 120,000 alcohol orders totaling nearly $200 million in revenue between 2016 and 2021, according to the filing. In 2019, the two companies each introduced their own B2B e-commerce ordering services, SG Proof (Southern Glazer’s) and eRNDC (RNDC). The companies allegedly continued to accept orders through Provi for two years after the launches, then “nearly simultaneously” announced they would no longer use the marketplace.
“Defendants eventually faced the reality that retailers much prefer Provi over Proof and eRNDC … [and] Provi’s one-stop-shop marketplace drives unprecedented competition among distributors of alcohol products by enabling smaller distributors to do business with retailers in a way they could not before, thus threatening defendants’ longstanding distribution monopolies,” Provi argued.
Provi claims the two distributors created a coordinated campaign against its service, blocking the platform’s email domain, rejecting orders and “threaten[ing] its own sales associates with termination or discipline if they failed to comply.”
“[The defendants] have even admitted they imposed this prohibition for the very purpose of steering retailers away from Provi – something they could not achieve through competition with Provi when retailers were free to choose which marketplace to use,” Provi said Wednesday. “Forcing retailers to use Proof and eRNDC as an exercise of defendants’ conspiracy and monopoly power rather than competing against Provi for retailers’ business is inherently anti-competitive and unlawful.”
Southern Glazer’s and RNDC filed a motion to dismiss the lawsuit in June, describing Provi as a disgruntled “online matchmaker” whose business relies on distributors. The defendants have denied any boycott or campaign against Provi, and said the company cannot prove its “conclusory allegations” that the decision to stop using Provi “undermine[d] competition” in the marketplace.
Upslope Brewing Faces Lawsuit Over Electrolyte-Infused Hard Seltzer
Boulder, Colorado-based Upslope Brewing Company is facing a federal class action lawsuit over its Electrolyte Series Spiked Snowmelt hard seltzer, the Denver Post reported.
Spencer Heintz, of Colorado, and Megan Taylor, of Illinois, jointly filed a lawsuit on July 1 alleging Upsloped misled them through the labeling of the hard seltzer brand, by insinuating the offering provided health benefits through electrolytes.
Upslope launched its 5% ABV “electrolyte infused” hard seltzer in 2020 in a 12 oz. 12-pack featuring three flavors: Passionfruit & Mango, Grapefruit & Hops and Peach Lemonade. The brewery collaborated with Skratch Labs, adding the Boulder-based sports nutrition company’s “Sport Hydration Drink Mix” to Upslope’s existing hard seltzer recipe. The combination created a “quintessential post-adventure refreshment,” Henry Wood, Upslope VP of sales and marketing, said in a press release in 2020.
“The launch is a result of continued innovation to deliver hard seltzer drinkers the new flavor options they crave while remaining dedicated to Upslope’s love for the outdoors and offering palatable craft beverages that pair with adventure,” Upslope said in the release.
Heintz and Yalor’s lawsuit claims the marketing of the hard seltzer was “misleading” and “dangerous,” as “consumers do not receive the benefit of electrolytes when consuming” the product. Both described buying the hard seltzers believing they would provide hydration from electrolytes, according to the Denver Post. They are asking for the brewery to change its marketing, and award the plaintiffs an undisclosed amount of money.
“The insignificant amount of electrolytes, including nutrients calcium, magnesium, and potassium, in the products will not provide consumers with the health benefits that (the brewery’s) representations lead them to expect, and even worse, the product is actually dangerous to consumers’ health,” the lawsuit states.
Heintz and Taylor are being represented by attorneys at Gutride Safier, the same firm that filed a similar lawsuit last year in California against Molson Coors alleging the company misled consumers on the health benefits of Vizzy Hard Seltzer with the addition of Vitamin C.
A-B To Change Ritas Labeling to Include ‘Malt Beverage’ Disclaimer
Anheuser-Busch InBev (A-B) has agreed to label changes for its Ritas family of malt-based products, bringing to close a federal lawsuit from 2020, Bloomberg Law reported Tuesday, citing a Missouri federal court filing.
The lawsuit – filed by Megan Browning, Adam Kesselring, and others – alleged that A-B’s Rita beverages mislead consumers into believing the product contain spirits (e.g. Lime-a-Rita “sparkling margarita”) or wine (e.g. Rosé Spritz “sparkling rosé cocktail”). At the time of the filing, a A-B spokesperson described the Ritas family as a “well-known line of malt beverages” and said the lawsuit was filed “without merit,” according to the St. Louis Business Journal. While the Missouri court advanced the lawsuit in 2021, a similar suit in the Southern DIstrict of New York was voluntarily dismissed, according to Bloomberg.
A settlement of the civil suit was reported in April, but details of that settlement were just reported this week. A-B has agreed to add “malt beverage” to all Ritas packaging, and will include a disclaimer on its website that Rita offerings do not contain distilled spirits. The beer giant has also agreed to cash payments, including up to $21.25 per household (with proof of purchase after January 1, 2018), or up to $9.75 per household without purchase substantiation.
Additionally, A-B may have to pay plaintiffs up to $2.1 million for attorneys’ fees, as well as an additional $2,500 each for the six representatives in the case. A-B can oppose those numbers if the company chooses, according to Bloomberg.