Bad news for hipsters on a budget everywhere: PBR may be going extinct. As GrubStreet reports, Pabst Brewing Company is currently in a half-billion-dollar court battle with MillerCoors, the company Pabst outsourced its beer-making to, and it could result in the end of Pabst. Here's more:
Pabst currently pays MillerCoors nearly $80 million a year to brew its beer; MillerCoors says that, after 2020, it may no longer have the necessary resources available, and is threatening to let the contract expire unless Pabst agrees to a fee that’s closer to $200 million per year, an amount that Pabst contends would “bankrupt us three times over.”
“They should’ve been building big Budweiser-esque breweries all around the country 20 years ago,” says Matt Simpson, who runs the beer-consultancy business Beer Sommelier. Instead, if the deal really does end, Pabst will struggle to live on because there’s just no place available to brew as much beer as they need (which, in the industry, is measured in “barrels”). “It becomes an existential issue for Pabst,” says Eric Shepard, the executive editor of the trade publication Beer Marketer’s Insights. The four to four-and-a-half million barrels of brewing capacity that the company needs, Shepard explains, “are just not out there.”
[...] The situation for Pabst is precarious enough that people in the industry have started to openly wonder what happens if, or when, the deal with MillerCoors expires. Cornell University brewing expert Kaylyn Kirkpatrick says the logistics of brewing as much beer as Pabst does now “would be very challenging” but not necessarily impossible if Pabst allowed its various brands to be brewed by different companies: “Larger brands like Yuengling could brew some of them. Genesee might have another million barrels of capacity. Maybe Boston Beer Company” — which brews Samuel Adams — “could take another brand.”
Simpson, the beer consultant, stresses that regardless of the courtroom outcome, Pabst can only blame itself: “When you contract brew, you do so at the luxury of another brewer,” he says. The only good outcome for Pabst is if its lawyers “can prove MillerCoors is acting in bad faith, that there’s been a breach of contract.” Otherwise, he says, “Pabst is just — to use an industry term — SOL.” From there, it might only be a matter of time before we all have to use a different acronym when we talk about PBR: RIP.
While many current hipsters have moved on to 'Gansett, Tecate or Shiner, we hope we don't have to pour one out for PBR. What will they serve at Market Hotel now?
UPDATE: A Pabst spokesperson provided this official 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