MillerCoors vs. Minnesota

Published in CSP Daily News

Shutdown, paperwork snafu may require brewer to remove its brands from state stores

MINNEAPOLIS -- Miller, Coors and other popular beers may disappear from Minnesota stores and bars within days because brewing giant MillerCoors LLC lacks the proper licenses due to the state's government shutdown, according to an Associated Press report.

MillerCoors has 39 "brand label registrations" with the state that expired last month, and the employees who process renewals were laid off when state government shut down July 1 in a budget dispute, Doug Neville, a spokesperson for the Department of Public Safety, told the news agency Wednesday.

State alcohol [image-nocss] enforcement officials who remain on the job recently told officials with Chicago-based MillerCoors that they need to come up with a plan soon for pulling their products. "I think we're looking at days instead of weeks before some action needs to be taken, but I don't have an exact date," Neville said.

MillerCoors spokesperson Julian Green said that the brewer still hopes to resolve the dispute through discussions with state alcohol regulators, but didn't rule out legal action.

"With 39 brands at stake in one of our largest markets in the country, during one of the highest selling periods in the summer, we don't take our business of ensuring proper state licenses lightly," Green told AP. "Especially when it impacts the livelihoods of our distributors and retailers, and ultimately impacts our consumers who can't buy our brands."

The affected brands include not only the Miller and Coors lines, but a long list of regional and craft beers such as George Killian's and Blue Moon and imports such as Pilsner Urquel and Molson. Leinenkugel beers are not in danger because their licenses are good through 2012, MillerCoors spokesperson Tom Ryan told AP.

The same problem might affect other brewers as well as wineries and distillers at some point, Neville said. And it comes as hundreds of bars, restaurants and liquor stores across the state are running afoul of a similar renewal requirement that is starting to leave them unable to replenish their supplies as the hottest part of the year approaches.

Minnesota requires that brewers, wineries and distillers take out brand label registrations for products they sell in the state. They cost only $30 and are good for three years. MillerCoors' registrations expired June 13.

Green said MillerCoors submitted its paperwork and the check on time on June 13. Neville said the state did not receive them until June 15, two days after the registrations expired.

Whether it was the 13th or 15th might not have mattered because the check was for $1,380, a $210 overpayment, Green said. That delayed the process. The state received a second check for the right amount on June 27, he said.

But by that time, Neville said, employees in the department's alcohol enforcement division did not have time to process the renewals before they were laid off. On top of that, he said, the computer database they use to process renewals was taken offline along with some other systems so the department's skeleton IT crew can concentrate on maintaining more critical systems relied upon by law enforcement agencies.

Companies with shutdown disputes can turn to the state courts, which have set up a process for handling pleas for help overseen by Ramsey County Chief Judge Kathleen Gearin and an appointed special master, former state Supreme Court Chief Justice Kathleen Blatz.

That is what many retailers have already done. They are required to have $20 "buyer's cards" to purchase liquor from wholesalers, and they must be renewed annually by the same laid-off employees that process brand registrations. Hundreds of those cards have expired or will soon. So retailers went before Blatz on Tuesday to ask for an order to recall some employees to process renewals. A decision is pending.

Green said MillerCoors wants to reach a solution through discussions short of legal action. "For now, we're still selling beer in the state, but we hope we can bring this issue to a resolution because there are a number of Minnesota businesses at stake. In this environment we don't want to see these businesses negatively impacted."

It is not clear if discussions could solve the problem, however. Neville said alcohol control officials determined they could not just look the other way and let MillerCoors do business as usual. "Our enforcement agents looked carefully at the statute, and there nothing in there that lets us make any special arrangements with anybody," Neville said.

Neville did not know which other producers besides MillerCoors, the country's No. 2 brewer, might be affected, but said St. Louis, Mo.-based Anheuser-Busch Cos. Inc., the largest U.S. beer maker, is safe at least until October 1. "Our agents, I know, are looking at other brands," he said.