Pabst says that MillerCoors tries to put it out of order

Ivan Moreno, Associated Press

Updated

1:18 PM, Sunday, November 11, 2018

MILWAUKEE (AP) – Pabst Brewing Company and MillerCoors are going to try, with hipster favorite Pabst regretting that MillerCoors will put it out of service by ending a prolonged partnership where it breaks Pabst's beer.

The case has high efforts for Pabst, whose lawyers claim that the company's existence is dependent on the partnership with Chicago-based MillerCoors, which manufactures, packages and ships almost all of its products, including Pabst Blue Ribbon, Old Milwaukee, Natty Boh and Lone Stands. MillerCoors said in the meanwhile that it is not obligated to continue brewing for Pabst, and that Pabst will not pay enough to justify it.

The Milwaukee County Circuit Court court begins Monday and is scheduled for 30 November. [19659013] Pabst's lawyers have said in court proceedings and hearings that MillerCoors LLC is about its brewing capacity to break away from Pabst and capture its share of the cheap beer market by interfering with Pabst's ability to compete. At a march hearing where MillerCoors tried to get the lawsuit rejected, Pabst attorney Adam Paris said "amazing documents" from MillerCoors that it went so far as hiring a consultant to "figure out ways to get rid of us". MillerCoors has called it a mischaracterization of the consultant's work.

The 1999 agreement between MillerCoors and Pabst, founded in Milwaukee in 1844, but now headquartered in Los Angeles, expires in 2020, but provides two possible five-year extensions. The companies doubt how the extensions should be negotiated: MillerCoors claims it has its discretion to decide whether it can continue to brew for Pabst, while Pabst says that companies must work "in good faith" to find a solution if Pabst wishes to extend the agreement but MillerCoors lacks capacity.

Pabst needs 4 million to 4.5 million barrels per year, claiming that MillerCoors is the only option. It seeks more than 400 million dollars in compensation and for MillerCoors to be ordered to honor its contract.

During the 2015 negotiations to extend the contract, MillerCoors announced that it would close the brewing plant in Eden, North Carolina, and could eventually close another plant in Irwindale, California. Pabst claims that MillerCoors refused to provide any information to substantiate his claim that it would no longer have the capacity to continue to brew Pabst's beer and that it would not consider renting the Eden plant and just selling it to an "astronomical "price.

Pabst says that MillerCoors would not agree on an extension unless Pabst paid $ 45 a barrel – "a commercially devastating, almost triple price increase" from what's now paying. In the March hearing, Paris said that MillerCoors knew that Pabst could not accept this proposal "because it would have knocked us three times."

MillersCoors said in connection with the trial that Pabst had a proposal to keep the Eden plant openly "commercially unreasonable" and that Pabst sought "a fall due through litigation" instead of offering enough to keep a facility open. It was also said that the plant closure was "to ensure long-term sustainability" by MillerCoors because thousands of new breweries have entered the market over the last decade.

MillerCoors and Anheuser-Busch, with the largest US market share of 24.8 percent and 41.6 percent, have gradually lost their business to less independent breweries, import and wine and liquories in recent years, according to the Brewers Association.

"The beer market has changed and beer lovers demand more and more variety, fresh flavors and local products from small and independent producers," said Bart Watson, CEO of the Brewers Association.

Total American beer sales have fallen, shipped down from 213.1 million barrels in 2008 to 204.2 million in 2017, according to the Brewers Association.

Pabst depends on MillerCoors because the only other American brewery capable of making its products is Anheuser-Busch, who does not make contract b shrimp, said Paris.

"It's really an existential problem for Pabst because it has no real alternatives," said Paris in March.

Paris said the report by MillerCoor's consultant employed in 2013, the company never mentions to act in good faith . Pabst's lawyers say that the report had a section about "eliminating Pabst entirely" and noting that MillerCoors had to close two breweries "to be sure they did not have excess capacity f or contract industry. "

MillerCoor's lawyer Eric Van Vugt told the court that the company did not rely on the consultant's report when it decided to close Eden or when it intends to close the Irwindale brewery.

"If we keep Irwindale open, yes, we can deliver their beer," said Van Vugt. "Nobody discusses it. It's the only factor we have to look at. "

___

Ivan Moreno is on Twitter: https://twitter.com/1TrueIvan