Monster Expects to Transition Distribution Rights by March 1


Dear Client:

For those A-B distributors who have been waiting to learn when they will lose Monster in the wake of Coke's recently announced 16.6% stake, the company shared some details in a letter to them just yesterday. Monster expects to secure regulatory approvals so that the deal will close by early 2015. As such, they indeed "expect to transition distribution rights" to Coke bottlers in a large portion of the U.S. and are " currently targeting a March 1, 2015 date. In the event that the approvals are granted sooner, the transaction may close earlier."

Of course the close is still subject to many conditions and regulatory approvals.

Monster also advised their A-B partners that, though they've been advised of losing the brand, it should be "business as usual" in their waning days of its stewardship.

"There is currently no change in the status of, nor will the transactions with Coca-Cola have any immediate effect on, your ongoing distribution rights under your Distribution Agreement with Monster. With that said, we trust that we will be able to count on you to continue to perform your obligations under your Distribution Agreement to the same high standards as you have in the past." That includes things like maintaining shelf space for Monster, launching innovations, investing in coolers, securing incremental displays, not distributing competitive brands, etc. Investment spends are "encouraged." They also promised a forthcoming letter on remaining inventory reimbursements and "favorable compensation for cooler investments."

"By continuing to fully comply with your Distribution Agreement, you will maximize your severance payment in the event of the termination of your Distribution Agreement. Please note that any severance payment that may be due to you is conditional on there being no breach of the Distribution Agreement by you," per correspondence.

Until tomorrow, Harry

"I love being a writer. What I can't stand is the paperwork."
- Peter De Vries

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