Published On: Tue, Jan 18th, 2011

Legal row takes fizz out Budweiser project

A legal wrangle has brought a project to brew the world-famous Budweiser beer in Vietnam’s southern Long An province to a standstill.

The brewery project, licensed back in 2008 to the world’s largest brewer Anheuser-Busch InBev and US-based Gannon International, aims to produce Budweiser beer in Vietnam and expand the presence of the brand in this country.

However, a dispute between Gannon International, Ignition Capital, Sandalwood Investment Limited and an American businessman has stopped work on the project.

The tussle began when Gannon International accused Walter Blocker, former chief executive officer of its subsidiary Gannon Vietnam Limited, along with US-based Ignition Capital and Sandalwood Investment Limited, of illegally attempting to divest Gannon International’s investment from Gannon Brewery Joint Stock Company, the company formed to assist Anheuser-Busch InBev in the building of the Budweiser brewery.

Gannon International alleged that Blocker, Ignition Capital and Sandalwood Investment Limited had made a fraudulent call for capital contributions in May last year, one week after Blocker announced his resignation from Gannon International. The capital call letter demands that Gannon International, through its subsidiary Gannon Vietnam Limited, commit to a capital infusion or else be divested of its shares in Gannon Brewery Joint Stock Company.

Gannon International said the call for funds had been made without the knowledge or approval.

A Gannon International document submitted to a civil court in the US state of Missouri claims that Blocker stole and misused hundreds of thousands of dollars belonging to the group and refused to allow Gannon International access to the books and records of companies owned by them.

Gannon International has been present in Vietnam since 1994 and runs manufacturing, property, logistics and distribution operations.

Gannon International said it was now in danger of losing its entire business unit in Vietnam, including investment in Gannon Brewery Joint Stock Company.

“The harm suffered by Gannon International through these illegal and tortious actions cannot be adequately compensated through money damages,” the group said in the document.

But Blocker, who is currently on the board of the American Chamber of Commerce in Vietnam, told VIR that these allegations were completely baseless.

“At no time did I ever take money or breech any fiduciary responsibilities and there is no evidence to support this claim. No judgment has been made from the court about these commercial claims which is now being defended in civil court in Missouri,” said Blocker.

Blocker’s lawyer, James O’Brien, a Partner at the US firm Lewis Rice Fingersh said: “If this civil case goes on it will become clear that Gannon has taken some real liberties against Walter Blocker and his good name.”

Marianne Amssoms, vice president of global communications at Anheuser-Busch InBev, declined to speculate on how this dispute might impact on the brewer’s investment in Vietnam, saying that it was not involved in the Missouri lawsuit.

However, she said Gannon Vietnam Limited had ceased distributing Budweiser beer in Vietnam. The current distributor for Vietnam is Redwood Holdings US.

Blocker also refused to comment on whether the current legal proceeding would force Ignition Capital, Sandalwood Investment Limited and Anheuser-Busch InBev to withdraw from the project.

But an unnamed official at Long An province’s Department of Planning and Investment said the legal dispute was the major reason that construction of the Budweiser brewery had ground to a halt. – VIR

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