NERA's Role in Major Brands v. Diageo and Glazer's

The Situation

Major Brands, the largest distributor of alcoholic beverages in the state of Missouri coming into the year, petitioned the Court for relief against Diageo, a global alcohol manufacturer, for the alleged wrongful termination of longstanding agreements and understandings after Diageo announced it would transfer distribution of certain brands of spirits to a competitor, Glazer's Distributors of Missouri, Inc. Major Brands also petitioned for relief from Glazer's for tortious interference.

NERA’s Role

Counsel for Major Brands retained NERA Senior Vice President Dr. Alan Cox and Vice President Dr. Anne Gron to calculate damages based on lost profits. The NERA team performed a detailed analysis of distribution costs to identify the incremental costs associated with the terminated brands and combined this with an analysis of the revenue from the terminated brands to calculate the incremental profits attributable to the terminated brands. Using information on the terminated brands and industry forecasts, the NERA team projected lost profits for several damages horizons and discounted these for a present value of the lost profits. NERA's assessment showed that the lost profits calculation was reasonable in light of available "market-based" metrics of value including offers made in negotiations, transaction prices for related brand sales, and common stock valuation from related publicly-traded companies.

The Result

On 23 September 2014, the case was settled, with Diageo and Glazer's making a substantial payment to Major Brands.