Mondavi Faces Suit Over Corking Deal

The maker of a new corking technology is suing Constellation Brands Inc. unit Robert Mondavi, alleging that the winemaker backed out of a deal to use the closure system on its wines.

Gardner Technologies is “facing financial ruin” because Mondavi abandoned an exclusive program to supply customers such as Whole Foods Market Inc. and Outback Steakhouse Inc. with wines using Gardner’s MetaCork technology for a test period of several months, according to court papers filed this month.

Napa, Calif.-based Gardner alleges that it lost all of its investors and more than $5.7 million in financing when Mondavi dropped an agreement to use MetaCork, which integrates a twist-off cap with a traditional cork.

The lawsuit, filed in Napa County Superior Court in California, seeks more than $7 million in damages as well as punitive damages.

Many wine producers have been seeking more consumer-friendly alternatives to traditional corks, though many have been wary of simple screw caps, which often are associated with cheap wines.

According to the lawsuit, Mondavi’s enthusiasm for the MetaCork program fizzled after Dennis Joyce became the head of its “lifestyle” business -- that is, wines below $15 a bottle -- this year.

“It became clear ... that Dennis Joyce had little regard for the promises made by [Mondavi] over the past year,” the lawsuit said.

Mondavi, which was bought by Constellation Brands this month, was in the midst of trying to sell its luxury wine assets and eliminating the controlling voting rights of the Mondavi family when it received Constellation’s offer.

Constellation could not be reached for comment.

The company’s shares climbed 7 cents to $46.27 on the New York Stock Exchange.