VPX Pharmaceuticals took its legal battle against PepsiCo to a second front this week as VPX-aligned company Quash Seltzer LLC filed a lawsuit alleging the conglomerate has threatened its prospective distribution partners out of doing business.
According to a complaint filed in the United States District Court Southern District of Florida, Quash claims that PepsiCo is attempting to disrupt the launch of its upcoming hard seltzer brand MIXX by telling prospective distributors that it owns exclusive distribution rights for the line. However, Quash claims that MIXX was not included in the distribution agreement VPX and PepsiCo entered last spring and that the line “did not even exist” at the time.
Quash also claims that the distribution agreement does not cover (and was never intended to cover) alcoholic beverages, a category that PepsiCo does not currently compete in.
“PepsiCo’s actions have caused, and, unless enjoined, will continue to cause, incalculable and irreparable harm to Quash and the MIXX hard seltzer line of alcohol products,” the complaint states.
Though the brand does not appear to currently be in the market, Quash is owned by VPX founder and CEO Jack Owoc, who is described by the complaint as the company’s “sole member.” In addition to the MIXX hard seltzer, Quash also makes a line of immunity shots called Quash Immunex containing antioxidants, vitamins and electrolytes which is set to launch soon. According to a sales sheet, the 3 oz. shots come in four flavors: Radical Skadattle, Rainbow Unicorn, Strawberry Blast and Triple Berry.
VPX entered the exclusive partnership with PepsiCo last April to distribute Bang Energy, but after facing months of declining sales the Florida-based energy drink brand moved to terminate the agreement on October 23. In November, VPX sued PepsiCo seeking an injunction to stop the conglomerate from making threats to Bang’s customers and wholesale distributors and publicly announced the breakup on November 17. Other products produced by VPX, such as Redline and Stoked, were not included in the agreement and have continued to be sold through other distributors.
Last month, an arbitrator ruled that Bang must honor the terms of the distribution agreement and cannot do business with distributors outside of the PepsiCo network until the original contract expires on October 24, 2023. PepsiCo then moved to dismiss VPX’s lawsuit on December 28, citing the arbitrator’s decision and VPX’s failure to state a claim. On January 11, VPX countered the motion to dismiss.
This new lawsuit notes that VPX’s sales team has been working to build a distribution network for Quash since last month, but it alleges that PepsiCo has disrupted the process, possibly as an attempt to “gain leverage” in the ongoing litigation. Several potential partners include attorneys Michael Madigan — who represents a number of beer distributors in Iowa, Indiana, Minnesota, Missouri, North Dakota and Wisconsin — and Dimitri Christopolous who represents a “large Chicago-based distributor.”
However, the suit claims Madigan has curtailed negotiations awaiting a written explanation from PepsiCo and distributors in “at least seven states” have also backed away from agreements with Quash.
“Without these distributors, Quash is bereft of any meaningful opportunity to introduce MIXX into the marketplace,” the complaint states.
Quash has asked the court to issue a preliminary and permanent injunction barring PepsiCo from telling distributors it has rights to MIXX and for monetary damages.
Neither PepsiCo nor VPX responded to requests for comment on this story.