A Chesterfield-based liquor wholesaler is suing its supplier and a competitor for allegedly disrupting its business operations.
According to a lawsuit filed Monday, 618Spirits, LLC, which does business as ShowMe Beverages, became a franchisee of Sugarlands Distilling Co., LLC in 2016, as Sugarlands looked to enter the Missouri market.
Sugarlands is a liquor manufacturer based in Tennessee, but because Missouri law prohibits liquor suppliers from selling their products directly to retailers in the state, Sugarlands needed a Missouri-licensed wholesaler. Sugarlands’ products include vodka, whiskey, flavored moonshine and flavored liqueurs.
As Sugarlands’ sole Missouri wholesaler, ShowMe Beverages worked hard to get Sugarlands’ alcohol products on shelves in every major metropolitan area in the state, according to the lawsuit filed with St. Louis County circuit court.
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“The growth of Sugarlands’ presence in Missouri would not have been possible had it not been for ShowMe’s substantial investment of time, money and resources in Sugarlands’ name, brand and products,†the suit reads. And, ShowMe said the business rarely heard any complaints from the supplier.
But this month, Sugarlands told ShowMe Beverages that it was terminating their partnership. ShowMe Beverages informed Sugarlands’ that to do so without “good cause†would be in violation of Missouri’s franchise law.
Sugarlands’ then backed down and, instead, added St. Louis-based beer distributor Lohr Distributing Co., Inc. as a second wholesaler, ShowMe Beverages’ attorney said in the petition.
“Sugarlands was just buying time so it could work with Lohr to come up with a new plan to effectively squeeze ShowMe out,†the suit reads. “This was apparently Lohr’s idea in that Sugarlands’ owner told ShowMe: ‘Lohr told us how to do this.’â€
This is also a violation of Missouri’s franchise law, as the addition of Lohr Distributing has changed the relationship between ShowMe Beverages and Sugarlands without “good cause,†ShowMe Beverages argues.
As a result of the change, ShowMe Beverages’ attorney alleges in the suit that the business will see fewer sales and its relationship with retail partners will be hurt.
ShowMe Beverages further claims that Lohr Distributing is interfering with ShowMe Beverages’ business practices.
In recent months, ShowMe Beverages has explored selling its liquor distribution business to other local wholesalers. Interested wholesalers, like Lohr Distributing, signed non-disclosure agreements before ShowMe provided them with client and revenue information, according to the suit.
ShowMe Beverages claims that Lohr Distributing used the confidential information it received about Sugarlands to convince Sugarlands to “substantially change ShowMe’s franchise.â€
“Lohr either by affirmative misrepresentation or omission, misled Sugarlands into believing that Sugarlands was authorized under the law to substantially change ShowMe’s franchise without good cause, even though no such legal authority existed,†the suit reads.
The Chesterfield distributor is asking the court for more than $25,000.
When reached for comment, Sugarlands said that the company has elected to establish dual distributorship with both ShowMe Beverages and Lohr Distributing in accordance with state law.Â
“We look forward to expanding our presence in Missouri through increased distribution across the state,†Sugarlands spokesperson Sammy Eanes said in an email.
Lohr Distributing Co. did not immediately respond to requests for comment.
Editor’s note: This story was updated Wednesday at 12:23 p.m. to include comment from Sugarlands.
