PepsiCo sues NJ resort to enforce pouring rights

Pepsico Inc. is demanding at least $500,000 from a New Jersey resort that allegedly breached a pouring rights deal.

The Purchase-based beverage and snack conglomerate accused Crystal Springs Resort of colluding with a competitor, in an August 13 complaint filed in Westchester Supreme Court.

“Defendants chose to walk away from their contractual obligations,” the complaint states, “and began working with a competitor.”

Crystal Springs Resort, located in the Kittatinny Mountains of Northern New Jersey, about 37 miles west of Tarrytown, includes two hotels, six golf courses, day spas and restaurants, and is probably known more for its wine cellar than for its selection of soft drinks.

But in January 2019, the resort signed a beverage sales agreement by which it granted exclusive pouring rights to PepsiCo, according to the complaint. The deal was set to expire this past Jan. 31, unless the resort had failed to buy a certain quantity of PepsiCo beverages.

PepsiCo says it provided the resort with $300,000 in initial support funds; $50,000 a year in annual support; vending machines and other equipment; and numerous free products and rebates and sales commissions.

The resort terminated the deal abruptly in January and began working with a PepsiCo competitor, the complaint states, even though it had not purchased the minimum volume of products required by the pouring rights deal.

The resort also allegedly failed to repay a portion of “unearned” support funds, according to the complaint, and the equipment it returned was badly damaged.

The complaint does not identify the competitor or say how much PepsiCo products the resort was supposed to buy.

PepsiCo accused the resort of breach of contract, conversion of assets, and breach of the covenant of good faith and fair dealing.

Crystal Springs Resort did not reply to an email asking for its side of the story.

PepsiCo is represented by White Plains attorney Susan E. Galvão, of Bleakley Platt  & Schmidt.