Legal wrangling continues in Bell’s Brewery distribution dispute

Bell’s Oberon Ale and Two Hearted Ale are among its most popular beers. (Courtesy Bell’s)

It appears it may be a while before Bell’s Brewery beers come back to Virginia.

Premium Distributors of Virginia and Loveland Distributing Co. this month filed their opposition to Bell’s petition for appeal in Richmond Circuit Court.

It marks the latest step in a legal saga over the distribution rights to Bell’s beer in Richmond and across Virginia – and the legal wrangling looks to be far from over.

Filings have stated that “not only is this case not fully resolved, it is nowhere close to being resolved.”

The squabble began last October when Premium, a subsidiary of industry giant Reyes Beer Division, agreed to terms to acquire locally based Loveland in a deal that would have handed over the rights to sell Bell’s beer in Virginia.

Premium Distributors of Virginia’s Richmond location at 2290 Dabney Road, formerly Loveland Distributing Co.’s headquarters. (Mike Platania)

However, Bell’s didn’t approve of the transfer of its distribution rights and claimed that the distributors didn’t provide specific information about the deal to them when requested. Shortly after, the Kalamazoo, Michigan-based brewery halted shipments of all of its beer, including its popular Two Hearted Ale, to Richmond and Virginia as a whole.

The Virginia Alcoholic Beverage Authority was overseeing the matter and initially ordered that the parties settle it through arbitration in May.

But in July, the ABC issued an order that stated it doesn’t have the authority to compel arbitration and that only courts have such power.

Bell’s, which wants to settle the matter in arbitration, appealed that order in late August. Doing so sent the case into Richmond Circuit Court.

Now Loveland and Premium are opposing Bell’s appeal, claiming it “is improper under the Virginia Administrative Process Act.”

The distributors are asking the court to dismiss the appeal and “allow the case to proceed to a final determination in accordance with the procedures of the Beer Franchise Act and VAPA.”

That would mean letting it be heard once again by the ABC.

Loveland and Premium are represented by Kevin McNally and Walter Marston of Marston & McNally. In an email Thursday, McNally said it’s the policy of their firm and of their clients to not discuss pending litigation.

Bell’s is represented by Thomas Lisk and Chad Kurtz of Cozen O’Connor, who were not available for comment.

On Sept. 19, the Virginia ABC filed nearly 1,500 pages of records consisting of emails and letters between the parties, and transcripts of its board hearings on the matter. Assistant Attorney General James Flaherty also entered the case on the ABC’s behalf on Sept. 19.

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John Signs

So in the end, what does Bell what to see happen?? Does it want a different distributor??

David Humphrey
David Humphrey

The way it was explained to me was that the owner of Bell’s and the owner of the Premium Distributers (they bought Loveland) do not get along at all. So when Bell’s would rather not distribute beer to Virginia than to have their beer distributed by Premier. In short, yes they want a different distributer to sell their beer, but the catch is in Virginia you cannot simply cancel your agreement with one distributer and immediately go with their competitor. In Virginia there is a waiting period for you to switch distributers unless a deal has run its course or… Read more »

Ed Christina

Would you happen to know what that time period is?
Also, what is the justification for such a law, I can’t see it helping the customer or the brewer, just the distributor.

David Humphrey
David Humphrey

Actually reading some more when a brewery signs with a distributer in Virginia they sign “in perpetuity”. So as long as they have a beef with Reyes, who owns Premium, and they have the distribution rights then Bells won’t be back to Virginia. The article linked below did a pretty good job summing it up. Much of the power lies with the distributers. I can understand why it was originally done bc of monopolies, but you would think there really needs to be some kind of out for them.

Ed Christina

Wow. Why on earth would you limit a business like a brewer, and force them into a life long pact with a distributor?
If it ever made sense it sure does not now.
BTW, I just found out my local 7-11 can now deliver alcoholic products to my door.
The old model of distributors seems pretty archaic with the new methods of distribution.

David Humphrey
David Humphrey

I don’t think anyone has ever claimed Virginia’s alcohol laws are “modern”. It is much the same as the car dealership rules that block Tesla from direct distribution in Virginia. The rules were made in a time where they made more sense but not anymore. I could see locking in a minimum time bc of investment on the part of distributors, but there needs to be more rights given to breweries as well.

Ed Christina

It seems like a legalized oligarchy.