MillerCoors and Pabst Brewing completed a lawsuit on Wednesday where the chosen hipster brand claimed a bigger brewer lied about his ability to continue brewing Pabst beer to make the company go bankrupt.
The settlement came when the judges ended their second day of consideration after a two-week trial in Milwaukee District Court.
"We have achieved a peaceful settlement in this case and are happy to solve all the extraordinary problems with Pabst," MillerCoors said in a statement. Settlement details not disclosed.
Since 1999, Chicago-based MillerCoors has made and shipped almost all Pabst beers, which include the Blue Ribbon Pabst, Old Milwaukee, Lone Star, and Schlitz. Pabst lawyers argue in a 2016 corporate lawsuit that MillerCoors was worried that Pabst would cut its market share and devise a plan to stop brewing for smaller competitors. MillerCoors' lawyer called Pabst's claim a conspiracy theory and said the company only decided what made economic sense.
The agreement between MillerCoors and Pabst, which was founded in Milwaukee in 1844 but is now headquartered in Los Angeles, ended in 2020 but provides two possible five-year extensions. Companies disagree about how the expansion should be negotiated: MillerCoors believes that they have the discretion to determine whether it can be continued for brewing for Pabst, while Pabst says that companies must work "in good faith" to find a solution if Pabst wants extend the agreement, but MillerCoors has no capacity.
However, Pabst said internal documents from MillerCoors showed the company was worried about competition from Pabst and went as far as hiring a consultant to find a way to get out of the brewing agreement.
"They decided on a solution before determining their sufficient capacity," Adam Paris, one of Pabst's lawyers, said during the closing arguments Tuesday. "Their problem is not a capacity problem. Their problem is financial problems."
Pabst requires 4 million to 4.5 million barrels brewed every year and MillerCoors claims are the only choice. Pabst's lawsuit sought more than $ 400 million in damages and a court order for MillerCoors to honor his contract.
MillerCoors' lawyer, Eric Van Vugt, told the jury that Pabst presented "an honest and very interesting story of conspiracy and fraud," but it was not true.
"Most of what you hear is a complete distortion of the evidence. It is taken out of context, the facts are distorted, the keywords decrease," he said.
MillerCoors and Anheuser-Busch, which have the largest US market share at 24.8 percent and 41.6 percent, respectively, have lost business for smaller, imported, and wine and spirits independent beer in recent years, according to the Association Brewers, AS- based on trade groups. Overall, US beer sales declined, with shipments down from 213.1 million barrels in 2008 to 204.2 million in 2017, according to the association.
Anheuser-Busch did not enter into a brewing contract, leaving MillerCoors as the only US brewery with the capacity to make Pabst beer.
During negotiations on extension contracts in 2015, MillerCoors announced that it would close its brewing facility in Eden, North Carolina, and that in the end it might have to close other facilities in Irwindale, California. Pabst believes that MillerCoors refused to provide any information to prove his claim that the company no longer has the capacity to continue brewing Pabst beer.
MillerCoors' attorney told the court that the company was obliged to project its capacity in the future to determine whether he could continue his partnership with Pabst, and that it was always intended to continue boiling for Pabst until the contract expires, which included a two-year breeze That means MillerCoors will still brew Pabst until 2022.