USA: MillerCoors files response to lawsuit from Pabst Brewing Co.

MillerCoors has filed its response to a lawsuit from Pabst Brewing Co. claiming the larger company sabotaged Pabst's future by not extending an agreement to brew Pabst's products past 2020, Milwaukee Journal Sentinel reported on May 17.

MillerCoors denies it ever acted in bad faith, misled Pabst about future brewing capacity, tried to force an early termination of the current deal or engaged in any of the other bad commercial acts that Pabst alleges in its lawsuit.

In a 44-page answer filed on May 16, MillerCoors offers detailed rebuttals to most of Pabsts' claims, with the general tone that MillerCoors acted completely within the agreement and that Pabst did not, especially by resorting to the litigation that MillerCoors said Pabst had threatened months earlier.

Along with the answer, MillerCoors filed a motion to stay the proceedings and requested the court order mediation, the dispute-settling procedure called for in the parties' agreement.

That 2007 agreement calls for MillerCoors to brew Pabst through 2020. It currently makes some 45 Pabst products at seven MillerCoors plants.

The deal called for the two sides to begin negotiating in 2015 over whether to extend it five years. That was to give Pabst plenty of time to make other arrangements if MillerCoors decided it could not extend the agreement, according to MillerCoors.

Last year, MillerCoors decided it would not extend the agreement.

"That Pabst is dissatisfied with the conclusion of MillerCoors' Sufficient Capacity analysis does not change the fact that MillerCoors came to its conclusion in good faith and provided Pabst with ample information substantiating the same," the answer states.

MillerCoors, which says its production is down 15% since the company was created in 2008, says it has no obligation to maintain or create capacity just to benefit Pabst, especially without major financial input from Pabst.

As the answer notes, the two companies are not partners; Pabst is a customer of MillerCoors. And because of that, MillerCoors says it doesn't have information to know if extending their agreement is in fact essential for Pabst to compete in the market, as its lawsuit claims.

In its suit, Pabst claims that after MillerCoors announced plans to shutter its Eden, N.C., plant, it offered to buy or lease the plant.

MillerCoors calls those proposals "commercially unreasonable at best" and said Pabst "hinted at" paying $100 million "for a facility worth many multiples of that amount."

MillerCoors also raises five affirmative defenses, including that the written agreements between the firms bar Pabst's claims and that Pabst's damages, if any exist, were self-inflicted.

23 May, 2016