Molson, Miller Brewing settle
Molson to relinquish Canadian distribution rights
Molson Canada and Miller Brewing Co, subsidiaries of Molson Coors and SABMiller respectively, have announced a settlement over the distribution of Miller trademark brands in Canada.
Under the agreement, Molson Canada will cease distributing Miller products in Canada from April 2015, with SABMiller regaining distribution rights. It will mark the end of the two companies’ 30-year partnership in the country.
Molson Canada initiated legal action after Miller Brewing gave notice in January 2013 that it wanted to end the distribution agreement as of July 2013.
Miller alleged that Molson Canada had failed to meet volume sales targets. It cited Miller Genuine Draft, saying that its sales were far below the targets set out in the contract and arguing that it could grow its brands better.
But Molson replied that Miller couldn’t end the licensing agreement, claiming that the targets it was set were supposed to be renegotiated.
Molson was granted a temporary injunction by an Ontario court in June 2013, preventing Miller from terminating the agreement, pending trial. The matter was due to go to court later this year.
The terms of the settlement were not disclosed, but Molson Coors spokesman Colin Wheeler told Brewers’ Guardian it was “business as usual” from now until April 2015 for the SABMiller brands the company supports in Canada.
He added that the company didn’t anticipate any jobs would be affected by the settlement.
SABMiller spokesman John Ratchford said: “Miller believes there is an opportunity to better serve Canadian retailers and consumers’ beer preferences through this transition. The decision to end the Licence Agreement with Molson Coors Canada reflects Miller’s commitment to grow its brands in Canada.”
The Miller products sold under the distribution agreement account for less than one per cent of Molson Coors’ global volume and about five per cent of its Canadian volume. Its brands include Miller Genuine Draft, Miller Lite and Miller High Life.
Previously, Miller had sued Molson in 2005, suggesting that Molson’s merger with Coors had reduced its incentive to promote Miller brands in Canada. But in 2007, the case was dropped and the two parties decided to extend their agreement.
MillerCoors, the Molson Coors and SABMiller American joint venture will continue to brew, market and distribute both companies’ products in the US.
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