Conford, Freund and Sullivan. The opinion of the court was delivered by Sullivan, J.A.D.
James M. McCunn & Co., Inc. (McCunn) appeals from the conclusions and order of the Acting Director of the Division of Alcoholic Beverage Control, requiring McCunn to sell and continue to sell to Fleming & McCaig, Inc. (McCaig) alcoholic beverages "on terms usually and normally required" by McCunn.
McCunn is an importer of alcoholic beverages and is the sole distributor in the United States of John Begg Scotch whiskey and Tanqueray gin. McCaig has been a liquor wholesaler in New Jersey for more than 25 years.
It has been McCunn's policy to effect distribution in New Jersey through one wholesaler as the sole distributor. McCaig became the sole distributor for McCunn in 1947 and continued in that capacity until 1952 when by mutual agreement John Barry, who had been McCaig's sales manager, took over the prime distributorship for McCunn. However, McCaig continued to sell McCunn's products as subdealer by purchasing from Barry at an "override" of $1.50 per case.
In the spring of 1961 Barry decided to retire from the business as a wholesaler and offered to sell his accounts to McCaig for $15,000. Discussions were had with McCunn who was willing to appoint McCaig as prime distributor in place of Barry if agreement could be reached as to a purchase commitment by McCaig. Ultimately such an agreement was worked out. Effective June 30, 1961, McCaig purchased Barry's accounts for $15,000 and also bought Barry's inventory of 1,200 cases of Begg Scotch. McCaig also agreed to purchase from McCunn an additional 6,800 cases of Begg
Scotch and 1,000 cases of Tanqueray gin for the period July 1, 1961-March 31, 1962. McCunn thereupon wrote to the Alcoholic Beverage Control Board of New Jersey notifying it that as of July 1, 1961, it had appointed McCaig as its primary distributor in New Jersey for Begg Scotch and Tanqueray gin.
In addition to effecting distribution in New Jersey through one wholesaler as the prime distributor, it had also been McCunn's policy to enter into a yearly agreement with its prime distributor for the fiscal year April 1 to March 31, whereby the prime distributor committed itself to the purchase of fixed quantities of McCunn's products. Pursuant to such policy Barry had purchased 7,330 cases of Begg Scotch for the fiscal year April 1, 1959 to March 31, 1960, and had purchased 8,655 cases of Begg Scotch for the following fiscal year.
As heretofore noted, when Barry sold to McCaig effective June 30, 1961, he still had in inventory 1,200 cases of Begg Scotch.
On March 1, 1962 McCaig notified McCunn that it still had 5,200 cases of Begg Scotch on hand and would be unable to make any commitment at that time for additional purchases of Begg Scotch for the ensuing year. McCaig, however, indicated its desire to remain as prime distributor.
In May 1962 McCaig was notified by McCunn that the prime distributorship would be terminated as of August 1, 1962. On July 16, 1962 McCunn notified the Division that Joseph H. Reinfeld, Inc., and Majestic Wine & Spirits Corporation (two affiliated wholesalers, the former also being owner of a 35% interest in McCunn) had been appointed as McCunn's prime distributors. Thereafter McCunn refused to do business with McCaig or fill its purchase orders.
In August 1962 McCaig filed a petition with the Director of Alcoholic Beverage Control to require McCunn to continue to fill McCaig's orders. The petition sought relief under N.J.S.A. 33:1-93.1 et seq. , the provisions of which are as follows.
"There shall be no discrimination in the sale of alcoholic liquors by distillers, importers, and rectifiers of nationally advertised brands of alcoholic liquors to duly licensed wholesalers of alcoholic liquors in this State.
In the event any distiller, importer, or rectifier shall refuse to sell to any individual wholesaler any amount of alcoholic liquor or comply with the provisions of this act, then the wholesaler shall petition the Commissioner of Alcoholic Beverage Control setting forth the facts and demanding a ...