BF sues Diageo, Diageo fights back
Brown-Forman, which owns leading whisky brand Jack Daniel's, has filed a lawsuit against its former UK distributor Diageo. BF said the lawsuit was to gain judicial confirmation that it has no legal obligation to renew the distribution arrangements.
Diageo Great Britain was the exclusive distributor of Jack Daniel's Tennessee Whiskey in the UK until July 31. According to BF, Diageo had an option to renew the agreement on two conditions: the meeting of predefined performance targets, and the payment of a renewal fee. BF says that Diageo has done neither of these things so it is not obliged to continue the arrangement.
However, Diageo is making a counterclaim. The former distributor says it has the right to renew and is claiming for lost profits of $54-66 million. BF said that, according to its legal advice, Diageo's lawsuit would not hurt its financial position. The revelations were made in an SEC filing last week.