Bourbon maker Sazerac sues distributor over shortages, millions in unpaid bills
Sazerac, the maker of Pappy Van Winkle, Weller, Buffalo Trace, Blanton’s and other premium bourbons, has sued its former longtime distributor over millions in unpaid bills.
The spirits company, which owns distillers in Frankfort and Bardstown in Kentucky as well as offices in Louisville and New Orleans, filed a lawsuit on Jan. 13 in U.S. District Court in Louisville against Texas-based Republic National Distributing Co.
According to the complaint, RNDC owes Sazerac $38.6 million and counting in unpaid bills on wholesale liquor purchases made before the two stopped doing business together at the end of 2022.
According to Sazerac, RNDC’s continued refusal to pay outstanding invoices will cause damages of at least an additional $48 million. The spirits company is suing to get the payments.
Sazerac also alleges that the distributors have “bad-mouthed Sazerac in the marketplace, ceased cooperation with Sazerac and otherwise attempted to harm Sazerac by unfairly disrupting future sales and the transition to new distributors.”
Fireball is Sazerac’s biggest selling product by volume and revenue
Sazerac makes all kinds of alcohol products under about 400 different labels, including its best-seller by volume and revenue, Fireball Cinnamon Whisky. For more than a decade, Republic bought those products and resold them to retailers in about 30 states, according to the suit.
According to the suit, Republic “would oftentimes improperly condition the availability of certain high-end (and highly sought after) Sazerac products, such as Pappy Van Winkle, to its retail accounts on the purchase of non-Sazerac products, commonly known as “tie-in” sales.”
In September 2021, according to the lawsuit, Sazerac renegotiated its contract with Republic to eliminate RNDC’s role in sales and marketing, which Sazerac would take over, and RNDC would then be paid a flat per case fee, with incentives for “certain volume growths” including Fireball. But, according to the suit, after about six months RNDC reneged and began withholding payments and then in August 2022 RNDC terminated the contract altogether.
In January, according to the suit, RNDC raised prices on Sazerac products, canceled purchases and refused deliveries, creating shortages at stores that RNDC has blamed on Sazerac. Unhappy retailers have complained to Sazerac and threatened to stop buying its products.
RNDC’s response to the complaint had not been filed as of Jan. 20.
Both Republic and Sazerac declined to comment.
