Hold Onto Your PBR: A Pabst Blue Ribbon Shortage Is Looming
The brand is facing an upcoming legal battle with MillerCoors that could affect its future.
Pabst Blue Ribbon: It’s more than just an iconic American beer; it’s also the poster child for a brand brought back from the brink by sheer consumer willpower – bottoming out with production under a million barrels in 2001, but shipping about 2.5 million barrels last year. And yet, now, Pabst may be facing another battle for survival – this time a legal one – against another beer giant: MillerCoors.
MillerCoors and Pabst Brewing are reportedly set to go to trial this November as part of an ongoing legal dispute. According to CNBC, at issue is a decades-old agreement where MillerCoors handles production on all of Pabst’s legacy beers – including the brand’s signature PBR. That agreement is apparently set to expire in 2020, and though it comes with options to renew, MillerCoors, which has been facing its own struggles in a declining beer market, wants out of the deal.
Pabst has a lot at stake with a renewal: Finding another brewery with millions of barrels worth of brewing capacity to contract with would be extremely difficult (or even impossible), and the other option, building their own brewery of that size, is neither easy nor cheap. If MillerCoors is able to terminate the agreement, Pabst Brewing would probably have to make some tough choices about its legacy brands – which also includes other well-known names like Old Milwaukee and Colt 45 –potentially leading to a dreaded PBR shortage.
Though declining to produce another company’s beer might seem like a cut-and-dry choice for MillerCoors, CNBC suggests that Pabst legal argument is that MillerCoors’s decision is anti-competitive. MillerCoors has reportedly said that the company may be shutting some breweries and won’t have the capacity to continue brewing Pabst’s brands, stating that the deal is “an arm's length agreement which allows the parties to look for their own best interest.” However, Pabst believes that the move may actually be a way to strong-arm its brands out of the market with the hope that PBR drinkers might opt for a MillerCoors product instead, an argument that a judge apparently saw as plausible during a hearing in April. “There is also evidence that MillerCoors may have also used information relating to the business effects on Pabst of terminating the Brewing Agreement, information which would be improper as it doesn't relate to a sufficient capacity determination,” the judge wrote according to CNBC.
Regardless, it’s definitely not yet time to start stockpiling PBR yet… Pabst Blue Ribbon is not the kind of beer that will age well until 2020. But for Pabst diehards, it’s probably worth keeping an eye on how this story develops. If there’s a PBR can-like silver-lining to this story, it’s that Pabst has survived before; there’s no reason to think it couldn’t persevere again.