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Dive Briefing:
- Beverage bottler Refresco has filed a lawsuit against Prime owner Congo Brands, claiming Congo pulled out of a contract to produce the hydrated beverage. According to documents filed in Delaware, Refresco is seeking $67.7 million from the beverage company.
- Prime, a line of hydration and energy drinks founded by YouTube stars Logan Paul and KSI, launched in 2022 to viral success. In the lawsuit, Refresco claims that part of its contract with Prime involves building a three-year plastic bottle production line at the bottler’s facility in Trousdale, Missouri.
- Refresco claimed that the Prime team “rejected” the contract and told the bottler it would be moving out of its facility.
Dive Insight:
Prime has gone from unprecedented hype to damaging claims since its debut. At one point, bottles of the drink sold for thousands of dollars when it was hard to find. Then it became embroiled in controversy over its high caffeine content and claims that the drink contained “forever chemicals,” the latter of which the brand denies. The Refresco lawsuit further extends its troubled tenure in the beverage sector.
Refresco, one of the largest bottlers in the U.S., said its contract with Prime stipulated that the trendy beverage company would produce 55.5 million cases of Prime beverages over three years. According to the lawsuit, if the beverage brand fails to purchase 90 percent of its bottles each year, it must pay a fee for every case it fails to purchase.
The bottler said the Prime deal had taken “significant time and expense” and that it had invested heavily in upgrading its manufacturing lines with new equipment to make the custom Prime bottles.
“Defendants and Refresco also knew that the leased lines would be useless to Refresco for an extended period of time while the new equipment was manufactured, shipped, and installed because they could not be used to produce products for other customers,” the lawsuit alleged. “Furthermore, because leased customer volume is typically secured a year in advance, Refresco could not quickly or easily fill the capacity that Prime promised to acquire but did not.”
The bottler said the $67.7 million will help it recoup the cost of upgrading the facility.
In the lawsuit, Refresco also points out that sales of Prime have declined over the past year, which it attributes to “a decline in social media buzz” about the drink. According to Nielsen data cited by Yahoo, sales of Prime in the UK were down 50% in April this year compared to the previous year.
