MillerCoors‘ Eden brewery is responsible for 12.5% of MillerCoors’ production capacity and 4% of all beer production in the United States.
“If this closure is permitted to move forward, it will not only affect good American jobs—roughly 500 at the brewery alone—but also negatively impact competition in the industry. The impact on consumers, we believe, will become apparent within months after the transactions take place and is likely to persist for years,” Teamsters Union President James Hoffa said in a letter to Attorney General Loretta Lynch.
“Reductions in industry capacity of this magnitude translate directly into higher prices for consumers, particularly in an industry that the Antitrust Division itself characterized in 2013 as not behaving competitively.”
Furthermore, Hoffa suggests, closing Eden is likely to introduce significant inefficiencies and drive down barrelage output in the remaining MillerCoors breweries.
“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,” Hoffa said.
“The companies involved, no doubt, would like to see the investigation wrapped up in short order so they can complete their mega-merger,” Hoffa said. “Their desire to expedite cannot take precedence over the need to ‘get it right’ for consumers and working families.”
A recent lawsuit filed by Pabst Brewing Co. against notes that Pabst, whose products are produced by MillerCoors on a contract basis primarily at the Eden facility, alleged that within weeks of announcing the Eden closure, MillerCoors informed Pabst it would no longer have “sufficient capacity” to produce its products beyond the current contract. According to the lawsuit, MillerCoors then demanded three times the price to continue brewing its products.
The Teamsters have urged that the Eden brewery be divested to a buyer who will keep the brewery operating in the relevant market.
“On behalf of the International Brotherhood of Teamsters, I urge the (Justice) Department to take the time necessary to address the anticompetitive effects created by the Eden brewery closure in order to protect the interests of workers and consumers,” the letter concludes.