Beer Giants Settle Fight Over Brewing Deal

MILWAUKEE (CN) – Pabst Brewing Co. and MillerCoors, two household names in beer, reached a settlement late Wednesday over Pabst’s claims that MillerCoors breached a brewing contract and was trying to put Pabst out of business.

In this Nov. 8, 2018, file photo, cases of Pabst Blue Ribbon and Coors Light are stacked next to each other in a Milwaukee liquor store. MillerCoors and Pabst Brewing Co. settled a lawsuit Wednesday, Nov. 28, 2018, in which the hipster’s brand of choice claimed the bigger brewer lied about its ability to continue brewing Pabst’s beers to put that company out of business. (AP Photo/Ivan Moreno, File)

Specific terms and figures of the settlement were not immediately available, but it seems that, for now, Pabst’s future is safe.

Since Nov. 2, the two companies had been in a Milwaukee County Circuit Court trial presided over by Judge Timothy Witkowiak.

After closing arguments wrapped on Tuesday, the case went to the jurors. Their deliberations were interrupted by the announcement of the undisclosed settlement Wednesday afternoon.

A Pabst spokesperson said in a statement that the beer giants “have amicably resolved all outstanding issues in the case.”

“Pabst will continue to offer Pabst Blue Ribbon and the rest of our authentic, great tasting and affordable brews to all Americans for many, many years to come,” the statement continued.

Pabst brought the lawsuit to the door of MillerCoors claiming it violated a contract between the companies by planning to cut ties and end a longstanding partnership through which MillerCoors brews Pabst’s beer.

The partnership began in 1999 in order to keep Pabst afloat. The parties renegotiated the arrangement in 2010, with the contract set to expire in 2020 with the caveat of a two-year wind-down provision.

Then, in 2015, MillerCoors told Pabst that it would not be able to shoulder Pabst enough to extend their deal through 2025, while leaving the window open for the two-year wind-down that would take the business relationship through 2022.

At the time of that announcement, MillerCoors announced it was going to have to close its facility in Eden, North Carolina, due to an overlap in distribution between that plant and another MillerCoors’ brewing facility in Shenandoah, Virginia

Pabst sued in 2016 claiming MillerCoors wanted to put it out of business, in part for fear that Pabst could be irksome competition in a crowded adult beverage market that has been steadily moving toward crafty, small barrel, locally produced drinks.

Pabst argued the contract left it the option to sign on to a five-year extension. MillerCoors countered that option was only viable if it has the capacity to continuing brewing Pabst beer.

Pabst has said its very existence relies on its partnership with MillerCoors, which makes, packages and ships nearly all of its products, including the flagship Pabst Blue Ribbon in addition to Old Milwaukee, Natty Boh and Lone Star.

Under the arrangement, MillerCoors brews about 5 million barrels of Pabst Blue Ribbon per year in addition to the other lines it carries.

MillerCoors argued that its only motivation for ending the partnership is concern for its own survival in a competitive marketplace and that the revenue it makes off of Pabst’s products was not enough to justify the continuation of their deal.

It maintained that the brewing contract allows it the discretion to determine its future capacity to carry on the arrangement and make the call on an extension based on that.

Representatives for MillerCoors and Pabst could not be reached for comment Thursday.

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