AB InBev subsidiary Budweiser Brewing Group UK&I (BBG) struck a deal in November 2021 with JDW to serve its beers to the managed pubco for the following 20 years, ending a contract the pub group had with Heineken for 41 years.
However, the deal stipulated JDW would display a pre-agreed number of AB InBev beers, which include Budweiser and Stella Artois, on the T-bars that sit on the bars of the pubco’s 843 pubs. The high court dispute concerns which company was responsible for that work.
Separate agreement argument
According to the Sunday Times, JDW claims both companies assumed AB InBev was responsible, saying this was standard industry practice but AB InBev denies this, stating the work must be subject to a separate agreement.
JDW is seeking a declaration that AB InBev is responsible. If the court rules Tim Martin-chaired JDW is responsible, it is seeking a temporary injunction to stop the “real and substantial threat” of AB InBev terminating the contract.
Court documents show AB InBev sought price increases last year as the cost-of-living and inflation rose quickly. JDW, which serves a pint of Stella Artois for as little as £3.60, claims AB InBev complained the arrangement had become “uncommercial”. JDW added AB InBev indicated it had the right to withhold supply if prices did not rise. AB InBev denied it threatened to withhold supply.
AB InBev argued JDW’s case was a “transparent attempt” to rewrite the agreement to excuse its own “material breaches” of contract, arising from the failure to display a sufficient number of its beers on the T-bars.
Right to end contract claim
AB InBev is seeking a declaration that it has the right to end the contract, saying its preference was not to do so, as long as JDW carried out the work.
A counter-claim for damages in the event that it does end the agreement has been lodged by AB InBev. If it had terminated the deal on 27 January 27, for example, AB InBev said it would be eligible for damages of £9.9m in addition to compensation for lost sales and profits.
A JDW spokesman said: “Wetherspoon is involved in a contractual dispute with AB InBev UK Limited (trading as Budweiser Brewing Group), who supply draught and packaged products, and related services, to the company.
“Unfortunately, the parties were unable to resolve this dispute and therefore Wetherspoon regrettably had no choice but to commence court proceedings.
“We value our commercial relationship with Budweiser and hope that the dispute can be resolved as quickly as possible.
“We do not consider it would be appropriate to share further details at this time due to the ongoing nature of the legal dispute.”
AB InBev/BBG UK&I was approached for further comment.