Molson Coors divests Irwindale brewery to rival Pabst
USA | Molson Coors Beverage Company is on track with its revitalisation plan, which includes streamlining the organisation and reinvesting resources into its brands and capabilities.
In November 2020, the company announced it had sold its brewery in Irwindale, California, to Pabst Brewing Company for an undisclosed sum.
In January already, Molson Coors said it would cease production in September. As part of an agreement, Pabst had 120 days to choose to buy the brewery, which opened in 1980 and employs about 470 workers, for USD 150 million.
Since 1998, Molson Coors has contract brewed for Pabst, which does not have a large brewery of its own. Although the contracted volume has declined over the years, it still came to over 4.7 million hl beer in 2019, for brands like Pabst Blue Ribbon, Lone Star, Schlitz, Old Milwaukee and others.
In 2019, Pabst ranked as the fifth-largest brewing company in the US. In 2018, the company shipped an estimated 5.3 million hl beer.
A significant volume of Pabst’s beers would have been produced at the Irwindale brewery, which churned out 5.6 million hl beer in 2019.
Media say that Pabst will not be keeping all of the current employees. Pabst is only looking to have 125 to 150 employees there. Molson Coors is expected to shift its volume to the company’s breweries in Golden, Colorado, and Fort Worth, Texas.
During contract negotiations between Molson Coors and Pabst in 2015 – the contract was to expire in 2020 – Molson Coors decided to shutter its Eden brewery in North Carolina, which also produced Pabst’s beers. A desperate Pabst offered to buy the plant for USD 100 million.
However, Molson Coors wanted to be done with contract brewing for Pabst and asked for USD 750 million, which Pabst in turn thought too much. In the end, Molson Coors sold the brewery for USD 2.8 million to a demolition and site development company.
In an effort to find a new contract brewer, in 2019, Pabst entered into an agreement with Wisconsin-based City Brewing to produce the company’s beers and other beverages until 2040.
