A Singapore beer distributor is suing NTUC Club in the High Court for over S$600k – here’s what you need to know

A major Singapore beer distribution company is claiming more than $441,000 (S$600,000) in damages and losses from NTUC Club through a lawsuit filed in the Supreme Court of Singapore for failing to exclusively sell its draft beer.

What started out as an amicable agreement in 2011 between NTUC Club and 6DM (which was formerly known as 6 Drunk Men) soured sometime in May this year.

This was after after 6DM discovered that an NTUC Club clubhouse in Choa Chu Kang which it supplied beer to had installed a beer tap from a competitor company to sell Carlsberg beer instead, according to court documents obtained by Business Insider.

NTUC Club is the leisure and entertainment arm of Singapore’s Labour Movement, while 6DM is a Singapore-owned company established in 2002 and distributes beers such as Pure Blonde, Foster’s Lager, Victoria Bitter, Crown Lager and Peroni Nastro Azzuro.

6DM had supplied draft beers such as Foster’s Lager and Pure Blonde to the said clubhouse called Jest D’Place, as well as three others located within NTUC Club premises islandwide.

In 2011, the four clubhouses were operated by Quebec Leisure International, a subsidiary of NTUC Club, but in June 2014, NTUC Club took over and operated them itself.

Their agreement comprised a sponsorship deal, which included a performance incentive based on beer sold, and a promotion and distribution deal.

As part of the terms, only draft beer supplied by 6DM could be sold and promoted at the four clubhouses.

However, sometime in late June last year, NTUC Club appointed a private operator Cue Guru to manage the operations of Jest D’Place.

“Cue Guru had its own arrangements with its beer supplier and installed a tap in the pool hall from its own beer supplier,” said court documents filed by NTUC Club.

This marked the start of their relationship going south.

6DM pulled the plug on the agreement on July 13 as a result of the alleged breach.

The amount 6DM is claiming for includes a reimbursement of the performance incentive as a result of the alleged breach as well as what it says was a loss of profit for selling beer to NTUC Club at a “preferential rate”.

Legal proceedings began in late July and has since seen NTUC Club file not only a defence but a counterclaim as well, citing that the stoppage of beer supply from 6DM caused “disruption” to its operations as some outlets were running low on beer.

As a result, NTUC Club said it had to “purchase beer from another supplier, at a higher price than they would have paid” to 6DM under their agreement.

NTUC Club claims that its existing beer supply was fully depleted by July 19 and it only managed to get fresh stock from a new supplier on Aug 3, which led to a loss of over $54,300 (S$74,000).

Business Insider understands that both parties are due for a mediation session on Nov 3.