UPDATE BELOW
Nearly three months ago we told you that Dogfish Head was leaving its Chicago area wholesaler, Louis Glunz Distributing. Now we can tell you where they are going.
Dogfish Head’s entire portfolio of “Off-Centered Ales” will be distributed in the Chicago area by MillerCoors’ cluster of nine wholesalers.
Glunz, named Beer Distributor of the Year this year by Beverage World Magazine, has been distributing Dogfish Head beer since 2003.
The purchase of the rights for both New Holland and Dogfish Head distribution was made official today.
We’ve known of this plan since early October but were unable to confirm the switch using the tried-and-true journalistic method of the two-source rule; finding two people to verify the information on the record. So we’ve sat on it.
Meanwhile, Dogfish Head and Glunz have been duking it out in federal court the last few months trying to determine how much money DFH will be required to pay Glunz to switch distributors. According to the Illinois Beer Industry Fair Dealing Act, when a brewer terminates a contract with a distributor they are required to pay the distributor “reasonable compensation.” The two have been at odds over what compensation amount would be considered reasonable.
In fact, in the opinion of our legal analyst – Thom Vogelhuber – there didn’t appear to be any sort of settlement on the horizon.
“On November 1, attorneys for both sides entered into a discovery plan to exchange information, documents, and complete depositions. This process is expected to take at least until September of 2013 with the earliest possible trial date around November of 2013. Both sides have entered into informal settlement negotiations, which have been unsuccessful. Recent court documents released suggest a disagreement between the parties on the calculation of reasonable compensation, as well as tension over fundamental business principles for beer distribution.”
In a statement emailed to GuysDrinkingBeer this afternoon the MillerCoors distributors acknowledged that the lawsuit has been settled but would not release a final price tag.
“Louis Glunz Beer, Inc. and the distributors of the Chicagoland MillerCoors Distributor Cluster have closed on the sale of the distribution rights related to the Dogfish Head and New Holland Brands. The sales resulted in the dismissal of Glunz’ claims, and Dogfish Head’s counter-claims, and a purchase price was agreed to by the parties which is at the higher end of the range of fair market value for craft beer distribution rights in the State of Illinois.”
You can find in-depth coverage on the case here and here.
The nine wholesalers making up the Chicago area cluster include:
- Burke Beverage, McCook
- Chicago Beverage Systems, Chicago
- Euclid Beverage, North Aurora
- Hayes Beer Distributing Company, Alsip
- Chas. Herdrich and Son, McHenry
- Kloss Distributing, Gurnee
- Kozol Bros, Joliet
- Joseph Mullarkey Distributing, Glenview
- Town and Country Distributors, Itasca
The news of this wholesaler switch comes on the heels of the parent company of Chicago Beverage Systems, Reyes Beverage Group, purchase of craft-centric distributor Windy City, which is based in Warrenville, IL.
UPDATE
Chicago Beverage Systems Director of Operations Kevin McGillen chimed in below in the comments regarding concerns over the MillerCoors cluster carrying fewer DFH beers than what Glunz offered.
“As the Ops guy at CBS, I can say that we are prepping our warehouse for hundreds of new SKU’s between the two suppliers. We’re also investing in a new cooler for additional package and keg storage capability. [W]e wouldn’t spend like that for 8 new SKUS.”