Reading Eagle (PA), 11/14/2002
By Dan Kelly
Nov. 14--D.G. Yuengling and Sons beer will continue to flow freely into Berks
County from the Pottsville brewery thanks to an agreement Wednesday in county
court.
Yuengling will continue to use Northeastern Distributing Co. Inc., Wyomissing,
as its exclusive distributor in Berks and Northeastern will not try to sell
those rights without court approval, according to an agreement drafted by Judge
Jeffrey L. Schmehl.
Schmehl also granted both sides 120 days to pore over each other's business and
financial records in hopes of reaching a settlement before the case is scheduled
for trial.
"We're delighted that we are going to be able to continue to bring Yuengling to
Berks County and to Philadelphia," said Northeastern Attorney William T. Hangley
of Philadelphia.
"We are still working very hard to settle this case," said Frederick H. Hobbs,
attorney for Yuengling.
A dispute between Yuengling and Northeastern came to a head last month when
Northeastern, which has been exclusive distributor of Yuengling products since
1990, tried to sell those rights to All Star Distributing, Sinking Spring, for
$5.7 million.
Chilled by the move, Yuengling officials responded by issuing a letter
terminating Northeastern's rights effective Nov. 4. Yuengling argued in court
papers that Northeastern does not have the authority to sell exclusive rights to
their products.
Yuengling then tapped Eagle Distributing Co., 850 Laurel St., as their new Berks
distributor, according to court papers.
However, before Yuengling could cap that deal Hangley asked Schmehl for a
restraining order that would bottle up the distribution rights before Yuengling
could sell them.
After 2 1/2 hours of closed-door negotiations Wednesday, Hobbs told Schmehl the
nation's oldest brewer would not move to terminate Northeastern's distribution
rights as long as Northeastern did not move to sell the exclusive rights to
another distributor.
Hangley told Schmehl that Northeastern would continue the status quo until the
brouhaha over distribution rights could settled by the parties or in court.
After the hearing, Hangley and Hobbs each said they believe the dispute can be
resolved without a trial.
"Ultimately, we will establish that Northeastern is a primary and established
distributor under the laws of Pennsylvania," Hangley said. "We couldn't be
happier with today's decision."
Hobbs, a former state senator from Schuylkill County, said Pennsylvania's beer
distribution laws tend to be complicated.
"The issues here are bewildering, but they're important to people in the beer
business," Hobbs said. "Frankly, it's my hope that it settles."
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(c) 2002, Reading Eagle, Pa. Distributed by Knight Ridder/Tribune Business News.