The Russians just bought Pabst. Here's why it's a big deal for American beer.
Yesterday afternoon, as iPhone 6 buzz reached its inevitable crescendo, The New York Times reported that Pabst Brewing Company had been sold to a Russian company called Oasis. That's right -- Mother Russia's icy grip is now wrapped firmly around a bounty of America's proudest, most historic cans.
The price -- somewhere between $700 and $750 million cash -- marked a colossal payday for its seller, food-and-drinks magnate Dean Metropoulos. He bought the brewer for $250 million four years ago and turned it into a lucrative third wheel in the ongoing slugfest between SABMiller & AB InBev. For Metropoulos, this sale means he can focus on his other business (Twinkie, which he also bought a few years back) while warming his hands around a firing barrel full of money. Which, y'know, is nice for him.
But what does Pabst Brewing's new Russian overlord mean for the American Drinking Public? A lot. Here are all the reasons this sale is a big freakin' deal.
1. Pabst Brewing Co. has been American-owned for longer than the existence of the telephonePabst Brewing Company's beginnings are semi-ancient history -- Best and Company (its former name) was pumping out barrels of brew in Milwaukee as early as 1844. For reference, Alexander Graham Bell didn't get off his lazy ass and invent the telephone 'til 1875. So yeah: this is a lot of history we're talking about here.
2. It's also way bigger than "just" PBRIf you're an out-of-touch snark-wombat who still thinks Pabst Blue Ribbon is "for hipsters", you may be thinking: who cares? The Russians can have that hipster swill. People still say "hipster", right?
But wake up, ill-informed snark-wombat! PBR is but one of about 30 beers PBC brews, and most of 'em are steeped in just as much American drinking legacy as the Blue Ribbon beer. Labels like:this country's dive bars know that each of those beers is cultishly served in its respective region. In other words, it's not "just" PBR history & reputation in jeopardy. Stow the snark, wombat.
3. It's unlikely, but the operation could movePBC operates as a contract brewer, meaning it doesn't own its own facilities, but instead leases the space & services from already-standing facilities. (The Boston Beer Company, brewer of Sam Adams, has been famously successful on this model as well.)
With corporate HQ in Los Angeles (California beer's economic output is the country's largest, by state), it'd be counterintuitive to relocate production. Even if Oasis did go that route, it almost certainly wouldn't be overseas -- too many factors to control. But, the fact is, PBC is a moveable feast.
4. Twinkies may be a foreign-capture risk, tooRemember Metropoulos? So in addition to owning Pabst until yesterday, he also currently controls Twinkie (plus Mrs. Butterworth's & Vlasic Pickles). According to The Wall Street Journal, his business specialty is buying, improving, and selling food & drink companies, and he's clearly very good at it. Sleep easy knowing America's favorite yellow cake-thing could be in the hands of a globally-minded master of the universe!
5. There aren't too many true American-owned breweries leftObviously, there are a bajillion craft & small-scale breweries that are owned & operated on American soil, but as far as domestic beer-makers with national (or close to it) scale, we're down to Boston Beer Co. (Sam Adams), Yuengling, and a few others.
6. There might be more brewery-buying on the wayJust a few days before the Russians grabbed Pabst, SABMiller made an (unsuccessful) attempt to buy Heineken. And now it's rumored that ABI is gearing up to make a bid for SABMiller. (Beer Business Daily, one of a few industry rags, summed up the fiscal brew maneuvers in real time.) While Oasis' acquisition of PBC is small potatoes compared to a failed Miller/Heiney or Miller/ABI marriage, the slim interval between the two deals indicates the industry's tectonic plates are shifting right now.
But there IS good newsIt's not all doom & gloom now that the Ruskies control Pabst's portfolio. For one thing, Oasis' chairman is an American citizen (and Columbia grad! Go Lions!) named Eugene Kashper. Kashper got his start at Stroh's (a once-proud Detroit empire that PBC picked up at the turn of the century), so he knows how the American market works.
For another, "700" is a lot of millions. An investment that size means Kashper & co. probably won't be making any waves right away, if they plan to at all. For now, PBC headquarters will remain in LA, and it'll be business as usual.
Forgetting the alarming fact that RUSSIA NOW CONTROLS OUR BEER, the biggest takeaway is a simple reminder: the beer industry is global, and the beer you order might not come from the place that its marketing implies. So pick a beer you like drinking, and enjoy it while you can.