An emergency arbitrator has ordered Bang Energy maker Vital Pharmaceuticals (VPX) to honour the terms of a distribution agreement with PepsiCo for the contract’s three-year notice period.
VPX entered into an exclusive partnership with PepsiCo in March this year to distribute the portfolio of Bang Energy beverages in the US.
Florida-based VPX then terminated the agreement in October ‘without cause’, according to the arbitrator’s 21-page decision document.* In addition, at the beginning of December, Bang announced that it had filed a lawsuit, claiming that “PepsiCo has engaged and continues to engage in gross misconduct”.
PepsiCo alleges that VPX has breached the terms of their agreement by failing to adhere to the requirement for an additional three-year notice period, following the delivery of a ‘notice of termination’.
Filing for arbitration on 23 November, PepsiCo asked for a declaratory judgement that it is the exclusive distributor of Bang for at least three years.
The beverage giant also requested, among other things, a declaratory judgement that VPX owes it a ‘separation amount’.
The interim ruling from the emergency arbitrator – in effect until a superseding order or award is issued by the arbitration tribunal – has ordered VPX to cease any actions to take distribution rights away from PepsiCo.
“We are pleased with the arbitrator’s emergency order that clarifies PepsiCo remains the exclusive distributor of Bang products in the United States until October 2023,” said PepsiCo in a statement.
“This order upholds the importance and enforceability of distributor agreements and reaffirms the high standard of integrity to which we hold ourselves and expect of our partners.
“As we’ve said before, serving our customers remains our top priority. To best serve our customers, bottling partners and our associates, PepsiCo will continue to abide by our agreement with VPX and vigorously defend and enforce our rights granted under the agreement.”
*With thanks to Beverage Digest for sharing this information.
© FoodBev Media Ltd 2020
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