MillerCoors kicked off state shelves

  • Article by: ERIC ROPER , Star Tribune
  • Updated: July 13, 2011 - 10:12 PM

MillerCoors fights to keep beer on shelves after licenses expire.

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Stocking up: Diane O’Brien of New Brighton grabbed a 12-pack of Miller Genuine Draft on Wednesday afternoon from a cooler at Surdyk’s in Minneapolis. Because of expired licenses that can’t be renewed during the state government shutdown, MillerCoors has been ordered to stop distributing 39 brands of beer in the state. The brewing giant is vowing to fight.

Photo: Richard Sennott, Star Tribune

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The MillerCoors brewing company landed in the cross hairs of Minnesota's government shutdown Wednesday when state officials said it would have to stop selling its beer in the state because of expired licenses.

The Department of Public Safety told the brewer it must stop distribution in Minnesota and devise a plan to pull its product from the shelves, including Coors, Coors Lite, Miller Lite, Miller High Life and 35 other name-brand beers. That would decimate choices for consumers. MillerCoors supplies 38 percent of the beer sold in Minnesota, and the state is one of the top five markets in the country for the brewing giant.

MillerCoors officials said on Wednesday they intend to fight the state and keep distributing. "We believe we've followed all applicable state laws on this," said Julian Green, director of media relations for MillerCoors. "It is our feeling that if we follow all state laws then we should be permitted and have the right to sell our products in the state."

But Department of Public Safety spokesman Doug Neville said the law is the law. "There's really nothing in the statute that allows us to make an accommodation for anybody," he said.

Retailers, meanwhile, were reduced to helpless spectators Wednesday, in yet another unexpected twist to a budget stalemate that has dragged on for 14 days and touched all corners of Minnesota.

"My advice would be come in and buy it now. Stock up," said John Wolf, owner of Chicago Lake Liquors in Minneapolis. He is unsure how it will affect business, since customers may simply opt for other brands of beer.

At Primetime Sports Bar & Grill in Burnsville, 85 percent of the beer sold is MillerCoors.

"Obviously if it completely cut off, that would make a huge impact on my business," said Dave Sperling, general manager of Primetime.

Eric Shepard, executive editor of the trade publication Beer Marketer's Insights, said he's never heard of a similar precedent in other states and said the situation is "serious" for MillerCoors.

"Do you think they are really going to go and pull the beer off the shelves?" Shepard asked. "Who's going to do it?"

No license, no beer

The problem stems from brand label registrations that brewers must renew with the state every three years, showing the label on each brand of beer. MillerCoors attempted to renew in mid-June, but, according to company officials, sent the state a check for more than the required amount. Green said the company followed up with a new check, which the state received June 27.

But on June 30, one day before the government shutdown, the company received a letter from the state that its brand licenses had expired. State employees who would typically renew those licenses have been deemed noncritical during the shutdown and laid off.

How or when the products would be removed remained unclear. MillerCoors continued distributing on Wednesday night, despite violating state law. State statute says alcohol without an approved brand label cannot be sold in Minnesota, and administrative rules direct state officials to confiscate it.

"That's why we reached out to them earlier this week to try to work with them to find a way to stop their distribution and their sales," Neville said. "Because we figure they're good corporate citizens. And we're still hopeful that they'll work with us."

Said Green: "We are currently in discussions and hoping that we can get a resolution with the state."

Heading to court or to the court-appointed special master might be next if no agreement can be reached.

Frank Ball, who represents thousands of liquor retailers in the state for the Minnesota Licensed Beverage Association, said many of his members "are buying as much MillerCoors product as they can, because they don't know what's going to happen."

The association also is coping with the shutdown's effect on individual bar owners, hundreds of whom can no longer buy alcohol because of purchasing licenses that expired at the end of last month. The association has petitioned the special master to let them continue buying.

Leinenkugel beer, which is owned by MillerCoors, will not be affected since it renews separately.

But if the shutdown were to last into October, another brewing behemoth would have to grapple with an expired license: Anheuser-Busch, responsible for 48 percent of all U.S. beer sales and producers of Bud and Bud Light.

Craft beer, anyone?

Staff writer Mike Hughlett contributed to this report. Eric Roper • 651-222-1210 Twitter: @StribRoper

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