Liquor Group Wins Litigation: Alcohol Brands Forced Adhere To Contract or Face Legal Liquidation

July 14, 2011 Jacksonville, FL – Public records show that Liquor Group Wholesale, Inc. (Publicly Traded: LIQR) and Liquor Group Florida, LLC., their State Level Distribution Customer have completed another Alcohol Brand litigation in their favor, this is the most recent in a series of litigation victories for the company.

Court records show that the initial claim was filed in against a brand supplier of LIQR, Liquor Group Holding, LLC. (LGH), but was revised to include many other Liquor Group companies in an attempted litigation “drag net”.

The Judge in Duval County Civil Court determined that a brand that contracted with LGH for distribution cannot simply add any/all Liquor Group companies as Defendants in the case just because they provided services on behalf of LGH, regardless of the binding Arbitration status or any outstanding claims of the contract. This process would either force a default or require each of the various Liquor Group named entities to defend the litigation, which was found to be procedurally improper and unfair by the courts. The opposing brand in this instance not only lost against LGH, but may now have to defend against Counterclaims and Sanctions levied against them by Liquor Group Florida, LLC. and Liquor Group Wholesale, Inc. for attorneys fees and costs.

So what’s the problem?

The basic principle is simple: Brands contracted for distribution must abide by the term length and conditions of their contracts, and they must pay for the marketing and expenses that they contract for; or they face treble damages or liquidation of inventory to cover the uncollected fees and costs. The records show that Liquor Group only uses this process as a last resort, giving brands six full months to bring their contract into compliance, and then implements under strict State and Federal guidelines. Other distributors are not so patient, many have a 30 or 60 day clause to quicken the process.

LIQR not the only ones…

Though the premise seems straightforward, during the 2009-2010 economic down-turn, many alcohol beverage brands within the US found themselves unable or unwilling to support the sale of their products by providing their distributor/brokerage partners with the contracted adequate marketing monetary support; and many others simply failed to repay their bill-backs for services such as brokerage fees and delivery fees due in Control States. Court records in Florida, Texas, California and New York show that most every major alcohol distributor in the US litigated heavily with brand suppliers during this timeline, mostly to enforce contracts or collect on bill-backs.

The Results are in:

This lack of follow through by brands had a massive cumulative negative effect on all major alcohol industry distributors/brokers throughout the US, leaving many distributors and brokerages out of business by 2011, (public records show that more than 35% of state level distribution/brokerage licenses terminated during this time period). Many of the remaining distribution/brokerage companies have been unable to recover or recoup these losses from their brand suppliers due to inadequate or unenforceable contracts.

Although according to their 2009-2010 public disclosures, LIQR suffered many hundreds of thousands in “uncollectable” invoices from various brand suppliers due to this unsettling situation, the contracts they utilized specifically address these very issues, which resulted in a much smaller number of brands defaulting on agreements without recourse than average distributors or brokerages; and the vast majority of brands who did default in their agreements yielded profits to the companies through public auction style liquidations of inventory held to defray or cover costs incurred by these brand suppliers.

Is it getting any better?

At the height of the economic downturn, LIQR was involved in 15 cases related to brand defaults, brand issues or brands attempting termination without cause, which considering the 3,000+ brands represented in 33 US States, that number does not seem so dramatic. Currently the number of outstanding cases has decreased dramatically, a spokesperson for LIQR states that they are now only involved in two brand related litigations, both tied to contracts with LGH, and the company contemplates that both will be resolved favorably.

Liquor Group Expanding Diageo $2BN Portfolio across US

June 6, 2011 – London, England – The World's Largest Spirits Company, London-based Diageo (DEO), is known as the maker of leading alcohol brands including: Johnnie Walker Whisky, Jose Cuervo Tequila, Crown Royal Canadian Whisky, Captain Morgan Rum and Smirnoff Vodka. However, they now have a new $2.3 Billion feather in their cap: Mey Icki Distillery, Turkey's largest spirits company, that holds an 80 percent share of the country's top-selling spirit categories, lead by Binboa Vodka.

April 2011, Liquor Group Wholesale (LIQR) began implementing their domestic distribution strategy commencing in Florida; marking the first time Binboa Vodka had ever been sold in the US. Due to overwhelming success, the Binboa Vodka product line is now expanding with Liquor Group into Illinois, Michigan, Pennsylvania and Virginia.

Binboa Vodka has award winning flavors including: Red Apple, Satsuma, Red Orange and Strawberry, suiting the palates of Young, Hip and Daring Taste Aware Consumers. Binboa Vodka uses a marketing approach based on Cerebral Mid-Twenties Survey Advertising Campaigns; slogans include: “On a Night Out, 95% of Party Goers Meet New People, 5% Remember Their Names Afterwards…” and “On a Friday Afternoon, 4% of People Work, 96% Pretend To Work.” Uniquely packaged high quality spirits coupled with catchy marketing earned Binboa Vodka the largest market share in segments of Europe and Asia, and now the target is the US.

“Liquor Group understands the multi-billion dollar potential identified by Diageo Executives that purchased this brand, notably long before ever selling a single bottle into the US, the largest market in overall sales in the world.” says C. J. Eiras, CEO of Liquor Group Wholesale “Binboa Vodka enjoyed immediate results from our Patent-Pending Bailment Distribution Model, and we feel strongly that this expansion is only the beginning of a larger move forward.”

About Diageo

Diageo is the world's leading premium drinks business with an outstanding collection of beverage alcohol brands across spirits, beer and wine. These brands include Johnnie Walker, Crown Royal, J&B, Windsor, Buchanan's and Bushmills whiskies, Smirnoff, Ciroc and Ketel One vodkas, Baileys, Captain Morgan, Jose Cuervo, Tanqueray and Guinness.

Diageo is a global company, with its products sold in more than 180 countries around the world. The company is listed on both the New York Stock Exchange (DEO) and the London Stock Exchange (DGE). For more information about Diageo, its people, brands, and performance, visit us at Diageo.com. For our global resource that promotes responsible drinking through the sharing of best practice tools, information and initiatives, visit DRINKiQ.com.

Celebrating life, every day, everywhere.

About Liquor Group Wholesale

Liquor Group Wholesale, Inc. (LIQR) is an emerging alcohol distribution/brokerage organization representing thousands of brands with operations in 33 US States. Our Manufacturer to State level conveyance utilizes a Patent-Pending business model focused on providing unique trade channels for many of the world’s leading & emerging alcohol beverage brands. Current/historical financial information at: www.LiquorGroup.com and www.SEC.gov

$2.1 BN Brand Launched in the US by Liquor Group

The news hit the NASDAQ Building all day long:

In late February 2011, Diageo (NYSE:DEO) the world's largest spirits maker, announced that it had agreed to buy Mey Icki Distillery, Turkey's biggest spirits company, that holds an 80 percent share of the country's top-selling spirit categories. London-based Diageo, is the maker of leading alcohol brands including Johnnie Walker whisky, Captain Morgan Rum, Jose Cuervo Tequila and Smirnoff vodka to name a few, acquired Mey Icki and their entire portfolio of products for $2.1 billion in cash from the private equity firms TPG Capital whom manages$48BN in assets with operations worldwide, and Actera, a Turkish Based fund operating in excess of $500 million.

Liquor Group Wholesale (Publicly Traded: LIQR) and it’s privately held state level distribution network was chosen to implement the initial 2 year US distribution strategy for the Mey Icki Portfolio, which is lead by Binboa Vodka; and the first containers of the vodka the have already landed on US shores at Liquor Group distribution hubs. Binboa comes in award winning bold flavors including: Red Apple, Satsuma, Red Orange and Strawberry, to suit the palates of the new “Daring Taste Aware Consumer”. These products are already funneling through the State Level Customer Distribution Channels of Liquor Group, are being registered for sale in various states and are moving towards end consumers.

“Liquor Group is very pleased to be selected among all of the larger distributors commonly used by major portfolios like Diageo to launch and develop these important brands throughout the US.” says C. J. Eiras, CEO of Liquor Group Wholesale “Our unique abilities and flexibility-to-market allows Liquor Group to achieve distribution success for smaller and larger brands; Binboa will see immediate results at the cash registers due to our Patent-Pending Bailment Distribution Model.”

Binboa’s successful marketing approach has been based on a 'Cerebral' Mid-Twenties Survey Style Advertising Campaign; including such slogans as: “On a Night Out, 95% of Party Goers Meet New People, 5% Remember Their Names Afterwards…” and “On a Friday Afternoon, 4% of People Work, 96% Pretend To Work.” High quality spirits coupled with this catchy marketing approach has earned Binboa Vodka the largest market share in segments of Europe and Asia, and will appeal to hip, market savvy US consumers as well. Eiras summarized: “Since Diageo has spent more on this acquisition than Bacardi spent on the purchase of Grey Goose Vodka, we at Liquor Group are confident that this Portfolio is well positioned for success.”