One of the Mark Anthony Group (MAG) LLC’s longest standing partnerships has gone sour. The Vancouver-based wine seller is suing a California winery network for allegedly stopping the import of wine through the company with too short notice.
Fortunately for MAG, its contract with the Wine Group LLC (TWG) represents only a small fraction of revenue.
In a notice of civil claim filed February 10 in BC Supreme Court, MAG alleges that on August 3 last year TWG “unilaterally” terminated a contract in which MAG and its predecessor in the 1980s had been the exclusive importer and re-seller of TWG’s wines in Canada.
TWG was spun out of Coca Cola in 1981.
From August 2009 to August 2010, MAG generated $900,000 in revenue on $9 million in sales of TWG wines.
As of August 2010, the five-year annual growth rate of MAG’s sales of TWG wines was 15%.
However, MAG’s revenue stream through TWG represented a small portion of total annual sales.
According to previous estimates by BIV, MAG generated roughly $480 million in revenue in 2009.
In the suit, MAG alleges that TWG’s termination of their contract, with only 29-days notice, was not because of a grievance with its performance.
Rather, it was allegedly “simply a business decision.”
MAG is seeking a court declaration that 24 months is the reasonable notice period for TWG to end the contract.
As well, MAG is seeking damages equal to the value of the “reasonable” notice period.
According to online court documents, TWG filed suit on February 2 in Northern California District Court against MAG because of a contract dispute.