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Mike Fleck still feels the sting whenever he sees the billboard. You can't miss it if you are heading east on Route 37, a hypnotic unfurling of strip malls, pizza joints, and chain stores in Toms River, New Jersey. The message: "Benjamin Moore has a new home. House of Paints," followed by an address less than two miles down the road.

A few yards past the sign stands Flecks Paint Spot, a Benjamin Moore dealer for 18 years. Last May, Benjamin Moore unceremoniously yanked its line from Fleck's two paint stores, costing him $350,000 worth of annual business--18 percent of his sales for 2008. Benjamin Moore told Fleck that, as one of its signature store dealers, he had violated his contract by letting his sales of the product fall and by failing to stock one of its new lines. But Fleck believes the company had another motive: to punish him for joining the Coatings Alliance, a cooperative of paint retailers that manufactures its own products. As a member, Fleck has a financial stake in selling C2, the alliance's line of premium paints, which he offered alongside cans of Benjamin Moore. "I think [Benjamin Moore] wants to stick my head on London Bridge and make an example of me," Fleck says. A spokesman for Benjamin Moore declined to comment.

The Coatings Alliance was born of one man's exile from Corporate Color. Tom Hill III, a vice president of research and development at paint company Pratt & Lambert, was cut loose in 1996 after Sherwin-Williams acquired his employer. After turning consultant, Hill heard frequent complaints about paint manufacturers focusing on the big-box chains and ignoring smaller chains. "The big companies knew how to sell to the Home Depots and Wal-Marts of the world," says Hill. "They did not know how to deal with the independent ...