Fighting an ugly court case, but in charge of distributing more than a half-million cases of beer annually, Northern Nevada-based beer wholesaler Crown Beverages ceased operations on June 30, Brewbound has learned.
According to two employees who answered the phone at Crown’s headquarters in Sparks, Nevada, the company stopped distributing beer just eight days before it agreed to dismiss a wrongful termination lawsuit against popular craft beer maker Sierra Nevada Brewing.
The shuttered Nevada wholesaler, which delivered a variety of domestic, import, and craft beers throughout the northern part of the state, is still in the process of winding down operations at its warehouse, according to the employees.
Crown Beverages owner Paul Bond could not immediately be reached for comment, but a September update to his LinkedIn profile indicates that he is now “semi-retired.”
Many of the beer brands Crown once distributed have found a new route to market via competing wholesalers that deliver to retailers in the area.
According to Keith Gass, a senior vice president for Southern Glazer’s Wine & Spirits, the wholesaler acquired the rights to distribute about 500,000 cases of beer from 10 companies, including: Sierra Nevada, Pabst Brewing, Diageo (Guinness), Stone Brewing, Sapporo (now including Anchor Brewing), Lost Coast, Gambrinus (Shiner and Trumer), BJ’s and Moosehead, which is imported by U.S. Beverage.
A purchase price was not disclosed.
“We’re privileged to be able to represent these historic brands,” said Ian Staller, the company’s executive vice president. “This elevates us and makes it a greater offering for our customers that we deliver to.”
In early July, Southern Glazer’s began offering the acquired brands to retailers in northern Nevada, Staller said. It also hired “a few” Crown employees to help with the transition, he added.
The rights to at least one small craft brewery, Knee Deep, were not acquired by Southern Glazer’s, however. The Auburn, California-based brewery has since signed with Vin Sauvage for coverage throughout the state.
Additional brand transitions were unclear as of press time.
Crown Beverages had been embroiled in a lawsuit against Sierra Nevada dating back to last November. At the time, the wholesaler claimed that Sierra had wrongfully terminated Crown’s distributor agreement, which was established on December 1, 1986.
In terminating its contract with Crown, Sierra cited a “long history of poor performance,” and claimed that Bond had routinely harassed and bullied the brewery’s sales representatives. In court filings, Sierra Nevada alleged that it had asked Bond to stop “intimidating” the beer company’s employees and to “ensure that firearms were no longer present at meetings.”
“Sierra Nevada employees observed [Bond] intoxicated and firearms on Crown’s premises,” the beer company alleged. “In that dangerous environment, he would berate them and others with vulgar, hostile language, often in response to Sierra Nevada’s concerns about negative feedback from the market on Crown’s poor performance.”
Additionally, Sierra Nevada accused Bond of threatening its retail partners, among them a Safeway manager who had accused a Crown merchandiser of forging a signature on an activity log.
Finally, on July 7, eight days after Crown closed its doors, the wholesaler agreed to “voluntarily dismiss” the action “with prejudice.”
According to LinkedIn, Bond started his career in distribution by loading trucks at Crown in August 1985. After numerous promotions, Bond and his wife, Jaye, acquired majority ownership of the business over a three-year period beginning in 2014, according to court documents.
After publication, Brewbound spoke with Leif Reid, an attorney who had represented Crown in its lawsuit against Sierra Nevada.
According to Reid, Nevada franchise law allows beer manufacturers that produce fewer than 2,500 barrels annually to terminate contracts with distributors without needing to show “good cause.” Reid added that as many as 10 small suppliers previously represented by Crown fell below the 2,000-barrel threshold and were released from their contracts.
Reid called Crown’s dispute with Sierra Nevada “contentious,” but he said the two parties reached an “amicable resolution” that allowed the brewery to exit its nearly 30-year partnership with the wholesaler.
“In the end, I think everybody got what they wanted,” he said.