MillerCoors wants to end a longstanding deal with Pabst Brewing Company to brew its products, and the pair of beer companies headed to court Monday over the latter’s allegations that MillerCoors is trying to put it out of business.
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The $400 million lawsuit is over Pabst’s allegations that MillerCoors is lying about its brewing capacity in order to terminate the partnership and take over its share of the market.
“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,” a Pabst spokesperson said in a statement to FOX Business.
At a March hearing in which MillerCoors tried to have the lawsuit dismissed, Pabst attorney Adam Paris said "stunning documents" obtained from MillerCoors show that it went as far as hiring a consultant to "figure out ways to get rid of us." MillerCoors has called that a mischaracterization of the consultant's work.
“Even though MillerCoors’ market power is much larger than Pabst’s, we will not allow this industry bully to push us around,” a Pabst spokesperson said. “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.”
MillerCoors, which did not return FOX Business’ request for comment, is responsible for producing, packaging and shipping the majority of Pabst’s products, which include Blue Ribbon, Colt 45 Malt Liquor, Lone Star, among a host of other beers. Pabst has said MillerCoors – which is the second-largest U.S. beer company behind Anheuser-Busch – is its only option to fulfill those needs.
The pair have a contract set to expire in 2020, but do not agree on how the agreement can fairly be terminated.
MillerCoors wants Pabst to pay more for its services, though the latter claims it is unable to meet price objectives.
The dispute comes as beer sales from the country’s largest producers are on the decline.
Total dollar sales at MillerCoors declined 2 percent as of June, according to data from market research firm IRI, as reported by BrewBound. Anheuser-Busch also experienced a sales decline during the same timeframe.
In an interview with FOX Business last month, “Bar Rescue” host Jon Taffer pointed to the legalization of recreational marijuana as one reason why Americans are drinking less beer. Other reports have alleged that younger generations’ preference for wine and hard liquor is responsible.
The trial is set to begin on Monday in Milwaukee.
The Associated Press contributed to this story.