MillerCoors Accused of Restraining Trade

PITTSBURGH (CN) - MillerCoors illegally restrains trade by refusing to let a beer wholesaler sell its craft and specialty beers because it sells competing products from Anheuser-Busch, the wholesaler claims in court.

Frank B. Fuhrer Wholesale Co. sued MillerCoors, Coors Brewing Co., and Molson Coors Brewing Co., in the Allegheny County Court of Common Pleas.

It claims the defendant beer giant refused to let it sell new craft beers unless the wholesaler agreed to create a new corporate entity to separate its sales from Anheuser-Busch.

Fuhrer is the 17th largest beer wholesaler in the country, it claims in its lawsuit. "Craft/specialty beers are the future of the beer industry. While sales of many traditional domestic beer brands either have remained flat or declined over the past four to five years, sales of craft/specialty beers have had double-digit growth trends," the complaint states.

Fuhrer, of Pittsburgh, adds: "MillerCoors specifically stated that Anheuser-Busch was its main competitor and that, to be considered for distribution rights for new craft/specialty beers in the future, Fuhrer would need to create a separate entity that did not distribute or sell Anheuser-Busch products. MillerCoors demanded this despite the fact that such a demand is illegal under Pennsylvania law and despite the fact that Fuhrer maintains a contractual relationship with Anheuser-Busch."

Fuhrer says it sells about 16 million cases of domestic, imported and craft/specialty beers annually in more than 10 counties in Western Pennsylvania, with annual sales close to $245 million.

Fuhrer began operations by buying a small Anheuser-Busch wholesaler in 1982. It claims that it helped to establish Coors as a major brand through a distribution and sales agreement that began in 1988, and that Fuhrer has been an exclusive distributor of Coors products in a nine-county area, including metropolitan Pittsburgh, since 1997.

Fuhrer claims it is "by far" the largest beer wholesaler in Southwestern Pennsylvania, and has been awarded Coors' most prestigious award, Founder's Award.

When Coors merged with Miller in July 2008, Fuhrer's distributorship agreement was transferred from Coors to the new MillerCoors.

But Fuhrer claims: "Even though Fuhrer has been the largest and one of the most successful distributor of Coors products in the country (and the exclusive distributor in Southwestern Pennsylvania) for decades, MillerCoors did not approach Fuhrer about selling Batch 19."

Batch 19 is a new craft/specialty beer.

The complaint continues: "Instead MillerCoors gave the distribution rights for Batch 19 to Wilson-McGinley (a much smaller and less successful distributor in the Pittsburgh area) and other smaller Miller wholesalers in Fuhrer's territory."

Fuhrer claims the insult was repeated with two newer specialty beers.

"When asked why craft/specialty beers were not being assigned to Fuhrer, MillerCoors told Fuhrer, repeatedly and in no uncertain terms, that MillerCoors will not assign new craft/specialty beers to Fuhrer because Fuhrer sells products for Anheuser-Busch," the complaint states.

At a May meeting, Fuhrer claims, it offered to create a sales director position dedicated exclusively to MillerCoors products, but a MillerCoors vice president rejected it and "set forth far more draconian conditions that Fuhrer would have to meet for MillerCoors to consider assigning new craft/specialty beers to Fuhrer.

"Specifically, those conditions required Fuhrer to create a new corporate entity dedicated exclusively to MillerCoors products. Perhaps most significantly, Fuhrer could not have ownership control over the new corporate entity. Instead, the voting stockholders of Fuhrer could hold no more than 49.9 percent of the new entities' voting stock," the complaint states.

"In addition, a majority of the directors on the new entities' board could not be members of Fuhrer's board of directors.

"The new entity also must have a chief financial officer or controller dedicated exclusively to the new entity.

"In making this proposal, MillerCoors must not have been aware that the Pennsylvania Liquor Code forbids a person from having an interest in more than one distributor," the complaint states.

Fuhrer claims that "MillerCoors violated Pennsylvania law by refusing to assign craft/specialty beers to Fuhrer because Fuhrer sells products of another manufacturer, namely Anheuser-Busch, and by demanding that Fuhrer create a new corporate entity designated exclusively to selling MillerCoors products in order to be considered for new craft/specialty beers introduced by MillerCoors."

Fuhrer seeks an injunction and damages for restraint of trade, tortious interference with contract, and violation of the state liquor code.

It is represented by Richard Eizak with Cohen Grigsby.

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