Bell’s Brewery distribution saga drags on in Richmond; eyed for state Supreme Court

One of Bell’s most popular beers is its Two Hearted Ale. (Submitted)

It was always going to be a long road leading Bell’s Brewery’s beers back to Virginia taps and shelves, but that process looks likely to drag on well into 2020.

The Michigan brewer, known for its popular Two Hearted Ale, continues its legal spat with the Virginia Alcoholic Beverage Authority over a distribution deal turned sour.

Bell’s on Feb. 27 appealed a Richmond Circuit Court judge’s opinion that left in limbo the brewery’s chance to be let out of its contract with distributing giant Reyes Beer Division.

Bell’s appeal would look to take the matter to the Court of Appeals of Virginia, with a goal of potentially having it heard by the Supreme Court of Virginia.

The ABC dustup is the result of Bell’s nearly two-year fight with Reyes subsidiary Premium Distributors of Virginia, which purchased Richmond-based Loveland Distributing Co. in late 2018.

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

Bell’s had signed with Loveland to distribute its beer locally in 2016, and Virginia’s distribution laws make it difficult for brewers to break contracts with distributors. By acquiring Loveland, Premium inherited the distribution rights to Bell’s, along with the rest of Loveland’s portfolio.

During the sale process, Bell’s requested specific information about the transfer of its rights to Premium, information it claims the distributors did not provide, thereby violating the terms of its contract.

Shortly after, Bell’s halted all shipments of its beer to Richmond and Virginia as a whole.

Bell’s wrote to Loveland, announcing its intent to terminate the contract, and the two sides argued their case before the authority last March. At first, the ABC ordered the two sides to settle the dispute through arbitration, which Bell’s founder Larry Bell has said he prefers.

But the ABC backpedaled last summer, saying it believes it does not have the authority to compel arbitration.

Bell’s appealed that decision, bringing the issue into Richmond Circuit Court. Shortly after, Premium and Loveland filed their opposition to Bell’s appeal.

Bell’s and Premium’s lawyers argued their sides at a Dec. 13 hearing at the Richmond courthouse, and in February, Judge Margaret P. Spencer wrote an opinion ruling the ABC does not have the authority to compel arbitration between the brewery and the distributor, and ordered the dispute be sent back to the ABC.

In her opinion, filed Feb. 14, Spencer notes that settlement is still an option for the two sides.

On Feb. 27, Bell’s appealed Spencer’s decision to the Court of Appeals of Virginia. No further hearing dates have been set.

Bell’s is represented by Cozen O’Connor attorneys Thomas Lisk and Chad Kurtz. Premium and Loveland are represented by Marston & McNally’s Walter Marston and Kevin McNally, and the ABC is represented by James Flaherty, Virginia’s assistant attorney general.

None of the attorneys responded to requests for comment.

This isn’t the first time Bell’s and Reyes have butted heads. In 2006, Bell’s ran into a similar situation in Illinois.

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