Can a Beer Supplier Take Decades of Goodwill for Free? Coors’ 90-Day Fight
What good is a statutory right to cure a breach if a supplier can bypass it simply by waiting another thirty days? Coors Distributing’s lawsuits against Crown/Constellation and Mark Anthony Brands bring that question into focus. CDC alleges the suppliers are ending decades-long relationships without cause and seeks injunctions while the disputes proceed toward arbitration. Law 360 and Beer Business Daily have both covered the facts. But wholesalers in Colorado and around the country cannot afford to ignore the rationale and silliness behind the supplier argument that Colorado created an exception to franchise protections that destroys all value if a supplier sends a simple 90 day termination notice.
Colorado’s beer franchise statute, C.R.S. § 44-3-408(1), requires an identified contractual failure, certified notice, at least sixty days to cure, and another notice explaining any termination. Cure the problem and the termination notice becomes “null and void.” But subsection (3) says a supplier may terminate “at any time” on ninety days’ notice, with copies to its other wholesalers operating under the same agreement nationwide.
Read subsection (3) as an unrestricted right to replace any distributor, and the cure protection becomes elective. A supplier that cannot establish a breach—or knows the distributor will fix it—could simply choose the ninety-day route. What happens during those additional thirty days that makes a performing distributor’s continued contractual compliance irrelevant?
The compensation provisions mandating payment for termination under the statute deepen the problem because when a brand changes suppliers, subsection (4) establishes a buyout process: the replacement wholesaler pays fair market value, including goodwill, and the incumbent keeps distributing until paid. Yet subsection (7) disclaims statutory compensation when a successor supplier terminates under subsections (1) through (3). YES, subsection (3) is included in that.
That qualification and exemption from payment matters: subsection (7) concerns successor suppliers, not every termination by every supplier, and it does not erase independent contractual rights. Nevertheless, if subsection (3) allows any termination for any reason, why would a successor supplier use subsection (4)’s valuation-and-payment process when it could wait ninety days and invoke subsection (7)? That reading would turn a carefully specified buyout into an optional expense.
The nationwide-notice requirement provides a possible explanation. CDC argues subsection (3) addresses network-wide changes, including replacing a common agreement, withdrawing from a market, or discontinuing a brand—not moving valuable distribution rights from one wholesaler to another.
Other states expressly distinguish discontinuing a market from replacing its distributor. Florida’s § 563.022(11) and Wyoming’s § 12-9-110 condition their exceptions on discontinued production or statewide distribution of the affected portfolio; both separately address complete statewide discontinuance of individual brands. Louisiana’s § 26:805(F) adds a twenty-four-month restriction on resuming the affected brands. Tennessee’s § 57-5-506(1) imposes twelve months before the supplier can reintroduce a discontinued brand. Idaho’s § 23-1106(3) generally bars any supplier from reintroducing the withdrawn brand for six months after notice. (This is just a few, nearly every beer franchise law has some similar provision that allows for discontinuance or full withdrawal from the state or state + surrounding states.)
These provisions identify a different transaction: the brand leaves the market, rather than staying on the same shelves through someone else’s trucks. CDC alleges Mark Anthony has already selected Reyes as its replacement. On that allegation, this is a distributor change, not a market exit.
Could Colorado’s wording reflect an omitted market-withdrawal limitation? Possibly, but the legislative materials we located do not establish a drafting mistake. But the contrary text CANNOT be ignored: subsection (1) expressly excepts subsection (3), which grants an affirmative termination right. Suppliers can argue nationwide notice is a disclosure condition, not a requirement to terminate the entire network. Oklahoma also has similar ninety-day, nationwide-notice language without an express withdrawal limitation. These provisions read without context destroy all value and render other provisions meaningless or superfluous.
The distributor’s strongest argument is therefore structural, not simply that termination feels unfair: read the cure provisions, national notice, buyout mechanism, and compensation exception together. Otherwise, a statute that carefully protects continuity and goodwill in specified circumstances may also supply a route around those protections. Whether the supplier is leaving the market—or merely replacing the wholesaler that built it—deserves more attention than three words read in isolation.
