Judge keeps distribution deal in place after Coors warns of big losses

A Denver judge has temporarily prohibited the maker of Corona and Modelo from canceling its distribution deal with Coors, which that brewery warned would cost it more than $100 million.

“Constellation products that Coors Distributing Company distributes represent a significant portion of CDC’s distribution business,” Judge Adam Espinosa decided Wednesday. “CDC is at risk of significant reputational harm and termination of other distribution agreements.”

The judge’s order bars Constellation Brands from canceling a contract with Coors that allows the latter to sell Constellation beers in and around Denver until an arbitrator can determine whether Constellation had the right to cancel it without cause, as it tried to do in September.

“CDC has presented sufficient credible evidence demonstrating a reasonable probability of success on the merits in arbitration,” Espinosa decided at 9:30 p.m. Wednesday.

A CDC spokesperson declined to comment on the order. Spokespeople for Constellation, a publicly traded Chicago company, did not respond to requests for comment.

Last month, Coors Distributing filed emergency lawsuits against Constellation and another alcohol manufacturer — Mark Anthony Brands, which makes White Claw and Mike’s Hard Lemonade — to prevent them from ending their long-standing Denver distribution deals.

CDC, a subsidiary of Molson Coors with 450 employees, argued the beermakers cannot cancel the contracts so suddenly without a reason. Constellation and Mark Anthony dispute that.

“Constellation’s termination notice came as a complete surprise to me and the entire CDC business,” Michael Nuss, the president of CDC, wrote in an affidavit on Sept. 25, adding that CDC has been Constellation’s distributor for 30 years and helped double its market share.