Stroh Sells Out: Pabst, Miller Pick Up Brands
150-year-old company to sell or close breweries
April, 1999In the "brews on first" world of American mega-brewing, another strikeout was recorded on February 8. Stroh Brewing Company of Detroit, MI, the nation's fourth-largest brewer, announced that it was getting out of the beer business. The 150-year old company ended months of speculation about its future with the sale of its major brands to rivals Pabst and Miller. The wave of Stroh's demise struck the Northwest hard as major regional brands here changed hands.
Under the new agreement, Seattle's Rainier Beer went to Pabst, which also produces Olympia. Portland's Blitz-Weinhard brands were acquired by Miller (itself a division of tobacco giant Philip Morris), including Henry's, Mickey's, Olde English 800, and Hamm's.
Since both Rainier and Blitz-Weinhard were contract brewing other beers in the Northwest under Stroh , notably Pete's (Seattle) and Samuel Adams (Portland), the future of these arrangements was also thrown into doubt by the deal. The Boston Beer Co., however, owners of Samuel Adams, has indicated that Pabst will honor the former contract relationship it has with Stroh's.
The biggest question, however, lies in the future of the Rainier and Blitz-Weinhard breweries themselves. Stroh has already sold its Lehigh Valley, PA brewery to Pabst, and has announced that the Northwest breweries will be sold or closed within 90 days. Even though the company has maintained in a press releases that it will retain "a significant number" of its 2,800 employees nationwide during its nine-month downsizing "transition", it is not known how workers in the Northwest will be affected. The Rainier Brewery alone, a Seattle landmark since 1916, has some 230 employees. Neither brewery would comment to Beer Notes about the situation.
Speculation in the industry is rampant that the Gambrinus Corporation of San Antonio, TX, which bought Pete's Ales last year and owns BridgePort Brewing Company in Portland, may be a potential buyer for one or both breweries. Gambrinus is riding high with its distribution rights to Corona, the number one U.S. import. BridgePort also reported a 36% increase in its IPA sales last year.
In the Midwest, the future of Stroh's LaCrosse brewery is in doubt. The former Heilemann plant is a large, modern facility with a capacity of up to 10 million barrels per year. Speculation on the street is that the LaCrosse brewery will be closed by the end of 1999. No likely buyers appear to be on the horizon, although Gambrinus has come up here as well. An outside possibility is a foreign brewer with an eye on entering the U.S. market, although most industry observers think this is unlikely.
The current scorecard of major beer brands reads as follows: Pabst now produces Olympia, Rainier. Falstaff, Ballantine, Lucky Lager, Pearl, Stroh's, Schlitz, Schaefer, Schmidt, Old Style, Lone Star, Special Export. Pabst Blue Ribbon, Old Milwaukee, Colt 45, Country Club Malt Liquor, and Schlitz Malt Liquor. Miller now makes Miller Genuine Draft, Miller Light, Henry Weinhard's, Mickey's Malt Liquor, Olde English 800, Hamm's, and other brands.
