Teamsters: MillerCoors’ Eden Brewery closure makes industry less competitive

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The proposed mega-merger of SABMiller and Anheuser Busch-InBev, along with the related sale of SAB’s stake in MillerCoors to Molson Coors, is currently under review by the Department of Justice Antitrust Division.

The International Brotherhood of Teamsters has recently weighed in on a specific aspect of the merger—urging U.S. Attorney General Loretta Lynch to address what they say are the anti-competitive effects of MillerCoors’ decision to close a brewery in Eden, North Carolina.

The letter outlines effects of the closure on an industry that the Antitrust Division previously characterized in 2013 as not acting competitively. The Teamsters claim shutting down a facility that produces 4% of all the beer brewed in the U.S. would increase prices to consumers.

“Particularly damning is evidence, available to the Division, showing that the company decided to close and not sell the brewery because it did not want the facility to end up in the hands of a competitor,” says Teamsters President Jim Hoffa, adding that the closure would introduce inefficiencies and drive down output across the rest of MillerCoors’ breweries.

Pabst Brewing, whose products are primarily contract-brewed at the Eden facility, has also filed a lawsuit over the closure. The lawsuit characterizes MillerCoors’ move as “an improper attempt to frustrate Pabst’s contract rights, sabotage Pabst’s ability to compete and consolidate MillerCoors’ already large market share.” The suit alleges MillerCoors only offered to continue brewing Pabst products at three times the current rate.

MillerCoors responded to the Pabst suit, saying it has no obligation to extend the agreement beyond its scheduled termination in 2020, and that it has worked with Pabst to try to find another solution.

MillerCoors claimed last September when the closure was announced, that the Eden plant had a significant distribution overlap with their brewery in Shenandoah, Virginia—a newer facility the company says is better positioned to reach their Northeast markets.

The Eden plant’s closure was set for September 2016.