Texas without Lone Star Beer? Pabst dispute could bring last call
When the news stories started to circulate about the dispute between beer companies Pabst and MillerCoors — which could end with Pabst being driven out of business — many of them took the same tack: “Ha-ha, those hipsters won’t be able to drink their Pabst Blue Ribbon anymore.”
Well, guess what, Texans.
Pabst also owns Lone Star Beer. And Pearl, if your Texas pride runs that deep.
Both are just as threatened by this dispute as PBR and any of the 19 other brands Pabst owns, including Schlitz, Stroh’s, Old Milwaukee and Colt 45 Malt Liquor.
A potential Texas without Lone Star Beer? Let’s look at how this happened.
Since Pabst shut down San Antonio’s Pearl Brewery in 2001, all of Pabst’s beers have been brewed by contract at Miller breweries. Lone Star and Pearl are brewed at the Miller facility in Fort Worth.
The contract between Pabst and Miller (now MillerCoors) runs through 2020, with the possibility of two five-year extensions. MillerCoors has said that it no longer has the capacity to brew Pabst’s beers and won’t extend the contract except at a price Pabst says is not feasible.
And so Pabst is suing MillerCoors. The trial is underway and is expected to run through November.
Citing the litigation, Pabst did not answer questions but released a statement which read, in part: “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.”
If it seems like a bad idea to file an accusatory lawsuit to force a company to work with you, Pabst says they have no other option. Without any breweries of their own — and a need for about 4 million barrels of beer a year — Pabst says it cannot survive without the deal with MillerCoors. (An Associated Press story reports that industry giant Anheuser-Busch does not do contract brewing.)
All this looks bad for Lone Star Beer.
The Texas icon was born in 1940 when the Muehlebach Brewing Co. of Kansas City, Mo., purchased a San Antonio brewery built in 1934 by the Champion Brewing Co.
(The beer does brand itself as “Since 1884” but that is a mischaracterization, at best. The Lone Star Brewery established by Adolphus Busch that year has zero relation to today’s beer except the name.)
The Lone Star Brewing Co. split off from Muehlebach by the end of the 1940s and gradually grew into the “National Beer of Texas,” culminating in its 1970s heyday when giant armadillos prowled the air waves, musicians sang its praises and Austin artist Jim Franklin was the creative force behind the “Long Live Long Necks” ad campaign.
But this is where things get a little strange (and now a little hopeful) for Lone Star. In 1976 the brewery was sold to Olympia in Washington. And again in 1983 to G. Heileman in Wisconsin. And again to Stroh in 1996, when the San Antonio brewery was shuttered. Then when Stroh went out of business in 1999, Pabst purchased both the Stroh’s and Lone Star brands.
It seems likely, with money to be made in Texas, that if Pabst did go out of business, somebody would purchase the Lone Star Beer brand and it would soon return to the market.
There is little such hope for Pearl, which likely only still exists because Pabst is actually the old Pearl. Confused? In 1985, Pearl’s parent company, S&P, purchased the Pabst Brewing Company, kept the name and moved the headquarters from Milwaukee to San Antonio.
Pearl, dating back to 1886, is Texas’ oldest beer, but now gets by in semi-retired fashion. Only available in 12-packs of canned Pearl or Pearl Light, Pearl has no advertising and — despite a vivid history — little current cultural cachet. If Pabst were to go under, Pearl would likely vanish.
One thing for sure is that the folks in Shiner are watching this trial carefully. Though the Spoetzl Brewery has positioned itself well to compete in today’s craft beer market, they probably wouldn’t miss a chance to market Shiner Premium as the last of the original Texas beers.