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Monday, April 22, 2024 | Back issues
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3 Counterclaims Survive Battle Over Singha Beer

(CN) - A federal judge in San Francisco allowed a distributor to pursue three counterclaims against the maker of Singha beer in a battle over the rights to import and distribute Thailand's "oldest and most popular beer" in the United States.

The dispute centered on whether Paleewong Trading Co. had an exclusive arrangement with Boon Rawd Trading International (BRTI), the export arm of the family brewery founded by Boonrawd Sreshthaputra over 75 years ago.

Paleewong began importing and distributing Singha beer in the 1970s, and soon became Boon Rawd's only U.S. importer and distributor.

When BRTI took over as the exporter of Boon Rawd products in 2000, Paleewong claimed there was a "mutual understanding" that it would continue to be the exclusive U.S. distributor.

But in 2003, BRTI formed a company called Singha North America to import and distribute Singha in certain U.S. territories.

Paleewong viewed the new company as a threat, claiming it was formed to push it out of the U.S. market, despite BRTI's assurance that the new entity wouldn't encroach on any of the veteran distributor's territories.

Over the next few years, BRTI allegedly tried to acquire Paleewong's importation rights, first by offering to share them and then by trying to buy them outright for $3 million.

Paleewong agreed to the $3 million offer, but BRTI allegedly backed out and renewed its efforts to squeeze out Paleewong by giving other distributors better prices, letting Singha North America import Boon Rawd into California, fabricating complaints about Paleewong and making unreasonable demands.

Last November, BRTI allegedly rejected an offer to buy Paleewong's importation rights and announced that it would be terminating those rights on Dec. 31.

BRTI sued, and Paleewong filed seven counterclaims, three of which survived BRTI's motion to dismiss: one for breach of implied import agreement, which BRTI never challenged, and counterclaims for intentional interference with prospective economic advantage and breach of good faith and fair dealing, which Judge Alsup limited to conduct that occurred on or after Dec. 21, 2007.

Alsup granted BRTI's motions to dismiss counterclaims for breach of contract, promissory estoppel, conversion, unjust enrichment and violation of the California Franchise Relations Act.

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