Two beer companies that produce some of the most popular brews in Texas and around the country are engaged in an ongoing legal battle. MillerCoors and Pabst Brewing are headed toward a November trial on a contract dispute involving the brewing agreement between the companies. Under a contract that has been in place for decades, MillerCoors brews all of Pabst’s beers, including its most popular name, Pabst Blue Ribbon. This agreement is scheduled to come to an end in 2020, and it includes two renewal options. However, MillerCoors has cast doubt on the continuation of the agreement, noting that it may not have the ability to keep up the relationship.
However, for Pabst, the stakes are particularly high. It is prohibitively expensive to build a new brewery, and only a small number of U.S. breweries can generate the type of volume needed for Pabst’s beer production. Pabst has filed a $500 million lawsuit against MillerCoors, accusing the other beer company of breach of contract, breach of anti-competition laws, misrepresentation and fraud. MillerCoors, on the other hand, avers that it has the right to decide whether it is able to renew the contract.
MillerCoors says that it is facing declining sales in the U.S. and may not be able to renew, stating that the contract allows both parties to make that decision based on their own interests. It also says that it is not required to provide a solution for Pabst. However, Pabst alleges that MillerCoors is attempting to seek advantage in the competitive beer industry by terminating the agreement and suppressing Pabst sales.
When businesses make agreements to work together, this situation can give rise to strong relationships but also contentious contract disputes. A business law attorney can work with a company to ensure that its contracts are tightly drafted and that the agreements made by the company reflect its own best interests for the future.