A familiar brand of bottled water in Texas and across the country is being sued by three of its former distributors. The companies are suing Fiji Water, alleging that the water company breached its contract with them when it changed to self-distribution rather than working with local beverage companies. The three distributors say that Fiji ordered retail stores selling the water brand in their area to stop accepting deliveries from their companies. They also say that the company refused to negotiate changes to the terms of their accounts with large retailers like CVS, Target and Publix.
The three distributors accuse Fiji of breach of contract, concealment, false promises, breach of covenant of good faith and fair dealing, and unfair trade practices. The contract dispute arose after Fiji announced in July 2018 that it was ending its partnership with Keurig Dr Pepper, which represented 70% of the water brand’s distribution nationwide. The remaining 30% of distribution was handled by independent companies, including the three plaintiffs. Their contracts ended in 2019, but Fiji retained the right to cancel them.
Their agreements set aside specific exclusive distribution territories for each company, but Fiji retained its right to sell the product to national chains in the area. However, the agreement also required Fiji to discuss this plan with the distributor and negotiate a fair agreement. Fiji allegedly did not end its contract with the independent distributors when it announced the end of its larger contract. The distributors say they were assured their contracts would not change. They allege that they each lost over $25,000 each as a result.
Business contracts are often essential, but when a dispute emerges, the effects can be costly. A business law attorney may help a company to take action when another firm breaches an agreement or refuses to comply with its terms.