Pabst and MillerCoors Settle Brewing Contract Lawsuit
In a battle of David vs. Goliath, it appears David has won, or at least survived to fight another battle. That's good news for Pabst fans.
Odd Contracts Make for Rough Partnerships
Demand for Pabst Blue Ribbon (PBR) outstripped its production years ago, thanks to the hipster and baby boomer generations. To compensate, in 1999, Pabst entered into a series of five-year production and distribution contracts with MillerCoors to produce PBR in its facilities. Surprisingly, Pabst no longer produces any of its own beers. But around 2016, MillerCoors said that it would be cutting its ties with Pabst in 2020 when their current contact expired, leaving Pabst totally in the lurch, since MillerCoors is the only large-scale beer producers to offer these sorts of production contracts. But this is where the facts of the case diverged.
Can Competitors Act in Good Faith?
Pabst claimed that MillerCoors wanted to cancel the contract in bad faith. It claims MillerCoors has plenty of capacity, but that MillerCoors wanted to put a dagger through the heart of PBR as a method of cut-throat competition, and was willing to shutter MillerCoors production plants, at least temporarily, to do it. Pabst claims that MillerCoors even hired a consultant to find a way to put Pabst out of business. But MillerCoors said that isn't true, and that PBR's fear of going out of business were an exaggeration, and that Pabst is just being paranoid.
Two weeks into the trial, while the jury was deliberating, the two sides reached a settlement at the eleventh hour. Is the eleventh hour Miller Time? Though terms were undisclosed, Pabst said "Pabst will continue to offer Pabst Blue Ribbon and the rest of our authentic, great tasting and affordable brews to all Americans for many, many years to come." Hipsters and baby boomers unite! No need to go running for the High Life or catch the Silver Bullet train to complicity. Cheers!
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