I’ve never had a PBR, so maybe all those hipster poseurs really do like the stuff, but their favourite ironic drink may be in danger, as Pabst is suing MillerCoors to force them to keep brewing the stuff for Pabst:
A Wisconsin courtroom was the setting this week for a lawsuit pitting some of the biggest names in watery American beer against each other. The case pits “hipster favorite” Pabst, parent of PBR, against the much larger MillerCoors, which Pabst claims wants “to put it out of business.”
Earlier this year, Pabst sued MillerCoors, alleging MillerCoors has engaged in “breach of contract, breach of anti-competition laws, fraud, and misrepresentation.” The companies’ currently have an agreement in which MillerCoors brews Pabst’s beer brands. That agreement is about to end, and MillerCoors seems ambivalent about renewing the contract. Pabst has asked the Wisconsin court to award it $400 million in damages and to force MillerCoors to renew the contract.
The case, which is being heard in state court in Milwaukee, could decide the future of Pabst’s entire portfolio of beers, from PBR to Old Milwaukee, Lone Star, Old Style, Colt 45, Natty Bo, Rainier, Schlitz, Olympia, Stroh’s, Schaefer, Schmidt’s, Pearl, and Blatz.
MillerCoors brews Pabst’s beers under a 1999 contract—a type of agreement known in the industry as contract brewing—that is set to expire in 2020. That contract contemplated two potential five-year renewals. MillerCoors argues the company should be free to determine whether to renew the contract, while Pabst alleges “that the two need to find a solution together if Pabst wants to continue the agreement.” Pabst also insists MillerCoors has a good-faith obligation to negotiate a renewal.
MillerCoors hasn’t foreclosed on continuing its partnership with Pabst. For example, it’s considered selling its Irwindale, California, facility to Pabst, or continuing to brew Pabst’s beers there at a much higher cost.
Pabst insists the only way the company can continue to exist is if MillerCoors, which is owned by Molson Coors, continues to produce its beers under contract at a cost Pabst finds fair. That may be true. Pabst doesn’t brew beer, and AB InBev, which owns industry leader Budweiser and which is likely the only other brewer large enough to produce the full Pabst line, forswears the contract-brewing model.
As Tim Worstall put it earlier this week: “Basically, and not accurately, Pabst books the advertising space and MillerCoors does everything else. And given that it’s the brand bit of brewing that makes the money, not the brewing bit, why would you continue such an arrangement if you didn’t have to?”
As Iowahawk put it, “Oh cripes when will I ever learn not to trigger the Beer Snobs”:
