PBR Is Fighting for Its Existence
Pabst Brewing, maker of shitty canned beer from hipster dreams, is fighting for its own survival.
First, some history. Pabst Blue Ribbon and some of Pabst's other legacy beers are not brewed by an intrepid troupe of bearded lumberjacks in the outskirts of Portland. PBR and the rest are in fact brewed, packaged, and shipped by MillerCoors, the second largest brewer in the United States. Pabst and MillerCoors struck a deal in 2001 that outlined the arrangement, giving MillerCoors (at that time just Miller) access to the young, cool kid demographic. The deal expires in 2020, with a window to negotiate an extension. With that renegotiation deadline approaching, tension between Pabst and MillerCoors is way up.
Earlier this year Pabst filed a lawsuit against MillerCoors claiming MillerCoors was trying to rupture the partnership through nefarious means, including breach of contract, breach of anti-competition laws, fraud, and misrepresentation, CNBC reported. MillerCoors countered saying that it has the right to decide on its own if it can support brewing Pabst beer. The trial for that suit started Monday in Milwaukee and is scheduled through November 30.
At this month's trial, Pabst and MillerCoors will square off over this question: Is MillerCoors obligated to work on its partnership with Pabst, or can it cut Pabst off completely because Pabst is too expensive? It's like divorce court, but with beer. On the table is more than $400 million in damages sought by Pabst, plus its future, AP reports.
Pabst claims that during contract negotiations in 2015, MillerCoors asked Pabst to pay $45 per barrel of beer knowing it was "a commercially devastating, near-triple price increase" that would have bankrupted it, Pabst said. It says MillerCoors explored ways to "eliminate Pabst altogether," including closing two U.S. breweries so it could say it had no space to make PBR. One of those breweries has since been shuttered. In summary, Pabst believes MillerCoors is "lying about its brewing capacity to break away from Pabst and capture its share of the cheap beer market by disrupting Pabst's ability to compete," according to AP.
MillerCoors says that Pabst didn't offer enough money to keep the brewery open and is instead chasing a "windfall" with the lawsuit. And with big beer sales decreasing as Americans turn to craft options, MillerCoors argues it could be forced to close the second of those breweries, effectively evicting Pabst.
"If we keep [the second brewery] open, yes, we can supply their beer," an attorney for MillerCoors said in court. "No one disputes that. That's the only factor that we need to look at."
If Pabst loses the trial and MillerCoors nixes any contract extensions, then PBR might be toast. "It really is an existential issue for Pabst, because it has no real alternatives," Pabst's representative said earlier this year, implying Pabst can't build its own brewery or contract with another big beer industry leader.
And so the future of Pabst is being decided in court as we speak, with each beer company vying to prove its own financial situation is more dire than the other's. This "he said, she said" battle is enough to make anyone want to crack open a Tuesday morning beer. If that beer is a PBR, savor it.
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