PBR and Other Classic Beers Could Stop Production by 2020
An upcoming lawsuit threatens to put several classic American beers — including Lone Star and Pabst Blue Ribbon — out of business once and for all.
Pabst Brewing Company and MillerCoors are currently battling it out in a Milwaukee courtroom over a lawsuit Pabst brought, claiming MillerCoors intends to put the brewing company out of business by ending a long-term partnership to brew Pabst's beers. Under the terms of that partnership, MillerCoors brews, packages and distributes most of Pabst's products, including PBR, Old Milwaukee, Natty Boh and Lone Star beers.
That deal has been in place since 1999, according to Time magazine, and it is set to expire in 2020. MillerCoors now claims that it's to the company's financial disadvantage to keep brewing for Pabst, and it wants to either renegotiate the existing agreement or terminate it altogether. Pabst took the brewing giant to court, seeking $400 million in damages and a court order to renew. The company is arguing that MillerCoors is trying to scuttle the deal by making unreasonable financial demands that it knows Pabst cannot meet.
Pabst is claiming MillerCoors is trying to force the company out of existence so it can capture its current share of the market for cheaper beer. One key argument centers on a brewing center MillerCoors closed in 2015, which limited its ability to provide the kind of capacity Pabst requires. Pabst claims that a consultant's report advised closing that facility as a means to make the argument it could no longer provide what Pabst needed. The company also alleges MillerCoors would not agree to extend the current deal unless Pabst paid $45 per barrel, which the company describes as “a commercially devastating, near-triple price increase.” At a hearing in March, Pabst attorney Adam Paris claimed MillerCoors knew Pabst couldn’t accept that proposal “because it would have bankrupted us three times over.”
Paris also claims to have uncovered “stunning documents” showing that MillerCoors hired its consultant solely to “figure out ways to get rid of us.” MillerCoors says that was not the consultant's job.
Pabst is dependent on its current deal with MillerCoors because only one other U.S. brewer, Anheuser-Busch, has the capacity to make its products at current levels. But Anheuser-Busch does not do contract brewing, leaving Pabst with no way forward if the MillerCoors deal expires in 2020.
“It really is an existential issue for Pabst because it has no real alternatives,” Paris says.
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