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A beloved slacker beer brand hangs in balance as Pabst enters into major lawsuit against rival MillerCoors claiming that that company is trying to put Pabst out of business by terminating a long-term contract brewing agreement which would put a an end to its flagship, Pabst Blue Ribbon.
Here’s the deal…
Pabst is taking MillerCoors to court in a trial that began Monday, November 11.
MillerCoors has brewed Pabst brands, including Lone Star, Pabst Blue Ribbon, and Old Milwaukee, since 1999. And according to the Associated Press Pabst is alleging that MillerCoors is attempting to put it out of business by ending a long-running contract brewing partnership.
Contract brewing is a common practice in the beer biz. One company contracts with another to brew, package, and ship its beers. And the reasons for contract brewing vary.
To keep up with demand and broaden its reach Lawson’s Finest brews its bestselling IPA at Two Roads in Connecticut even though it has a full brewing facility in Vermont.
But Pabst doesn’t have its own brewery and Pabst’s lawyers contend the company has no way to brew its beers outside of its partnership with MillerCoors, which is slated to end in 2020.
MillerCoors is arguing that it has the sole right to determine whether it continues brewing for Pabst. And that the company is not required to brew Pabst beers after the end of the contract in 2020. The brewery also contends that Pabst won’t pay enough to justify an extension of that contract.
According to the Washington Post, Pabst says MillerCoors wouldn’t agree to an extension unless Pabst paid $45 per barrel — “a commercially devastating, near-triple price increase” from what it pays now.
At a March hearing the Drinks Business reported that MillerCoors tried to have the lawsuit dismissed entirely. Pabst attorney Adam Paris countered at that time that MillerCoors knew Pabst couldn’t accept that proposal “because it would have bankrupted us three times over.”
Pabst is seeking more than $400 million in damages and for MillerCoors to be ordered to honor its contract…
The trial, which is taking place at the Milwaukee County Circuit Court is shaping up to be a potential death match, at least for Pabst, whose fate now appears to be in the hands of a legal process that the beer industry will be watching closely…
