Wine trade relationships can come to an end for many reasons. A frequent complaint by a producer is an importer’s alleged poor performance. Or an importer may have built distribution up to a decent level, but the producer feels he is unable to take it further. Or maybe the producer has simply decided he no longer needs the importer, and will make more money by dispensing with him.
We have many years’ experience of working with UK wine importers who are faced with the termination of a wine agency, distribution, joint venture or other contract.
- We can advise on how to handle the termination in order to minimise the pain and expense to you.
- We can also help you put new contracts and relationships in place (and, in particular, ensure that problems with previous contracts are avoided in the new ones).
We publish a Knowledge Bank Guide – Producer planning to terminate.
Compensation claims and dispute resolution
The termination of a relationship can prove very costly for an importer if it isn’t handled with care. An importer should take legal advice on where he stands, in particular as to:
- whether he has any claims against the producer for compensation on termination;
- whether he is entitled to withhold money he owes the producer in respect of wine supplied or customer payments collected on his behalf.
The key to minimising the potential damage is careful planning. We have represented wine importers on terminations, and handling resultant compensation claims, in particular claims for compensation under the Commercial Agents Regulations. With our specialised wine trade knowledge and experience, we can offer clients the best prospect of a successful outcome in these situations.
We can also help importers with other problems or disputes they need to resolve. For example, disputes over ownership of brands or trade marks, or how to enforce retention of title (ROT) when a customer becomes insolvent while still holding stocks of wine it hasn’t paid for – as in the recent collapses of First Quench and Oddbins (see below). See Compensation on termination, Damages claims and Dispute resolution.
Examples of recent work
- Restrictive covenants – We advised a UK agent, when termination was imminent, on the validity of restrictive covenants contained in the agency agreement which at face value substantially restricted its ability to offer substitute wine products to customers. We advised the agent that it was in a stronger position to negotiate exit terms with the producer than either of them had initially assumed. We also advised on the agent’s right to claim compensation as a commercial agent.
- Implications of winery takeover on agreement – We advised a UK agent on the impact of another producer’s takeover of a producer with whom it had an agency agreement.
- Wrongful termination and compensation – We advised a UK distributor on its rights following a producer’s termination of a distribution agreement with very little notice. This included its right to set-off and retain money owed to the producer pending resolution of the distributor’s substantial counterclaims against the producer for damages for wrongful termination and loss of profit.
- Enforcement of Retention of Title (ROT) – When First Quench went into administration in late 2009, and Oddbins followed suit in 2010, many suppliers were left with unpaid invoices, no credit insurance, and little prospect of payment. Without a retention of title (ROT) clause, that was that. If they had ROT, the administrators challenged it if they could. Even if the administrators admitted an ROT claim, in the case of First Quench there a further hurdle to get over – the warehouse holding the remaining stock refused to release it until somebody paid what FQ owed them. We helped a number of suppliers to make successful recoveries in both these cases – read full case study.
Other services for Wine Importers