Trial underway between beermakers Pabst and MillerCoors
MILWAUKEE (CBS 58) – Two local beermakers are facing off in trial.
Pabst Brewing Company claims MillerCoors breached a contract and is trying to put them out of business.
The trail is scheduled through November 30th.
It all revolves around a 1999 agreement between the two companies which is set to expire in 2020.
“Pabst gave MillerCoors all of its business,” explains Pabst attorney Adam Paris. “We told them they may brew all of our beer.”
Pabst is arguing MillerCoors wants to put them out of business, but MillerCoors isn’t buying it.
A contract signed between the two beermakers allowed MillerCoors to brew Pabst’s beer.
“The other side has said from day one the understanding was this contract would entitle them to production of beer from MIllerCoors in perpetuity that as long as we had the capacity we would continue to have a relationship,” explains MillerCoors attorney Eric Van Vugt. “That is found nowhere in any document”.
MillerCoors says with the decline in beer sales they were forced to close brewing facilities and would no longer have the capacity to brew for Pabst. Pabst says MillerCoors offered to sell those buildings to them but the price was too high.
“When my client, Pabst, told MIllerCoors that we wanted to continue with the brewing agreement, MIllerCoors wouldn’t let us do so at the price that’s set out in the contract,” says Paris. “That’s what we claim was the wrongful conduct”.
MillerCoors then agreed to extend the contract for $45 a barrel; a price Pabst said would bankrupt them.
Pabst says no other brewery has the capacity to brew for them under a contract.
Aside from having MillerCoors follow the contract, Pabst is also asking for more than $400 million in damages. A spokesperson for Pabst sent CBS 58 the following statement:
“Since 1844, Pabst has been offering authentic, great tasting and affordable beers to all Americans. From our flagship brand, Pabst Blue Ribbon, to our local legends, which include Rainier, Lone Star, Old Style, Stag, Stroh, Natty Boh, Olympia, and others – these iconic brands all have rich histories and deep roots in communities across the country. We are deeply disappointed that MillerCoors, the U.S. subsidiary of multinational brewing conglomerate Molson Coors, has willfully breached our 19-year agreement in an effort to stomp out the competition.
Even though MillerCoors’ market power is much larger than Pabst’s, we will not allow this industry bully to push us around. We are confident that the court will see MillerCoors’ fabricated “capacity” concerns for what they are: a thinly veiled, bad faith attempt to unlawfully hurt a competitor.”