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Sam Adams to Be Made in the Glass-Lined Tanks of Old Latrobe

The big story yesterday, reported by practically everybody, is that the Boston Beer Co. — makers of Samuel Adams beers — have signed a contract with City Brewing of Wisconsin to brew Sam Adams beer at the newly acquired Latrobe Brewery. It appears the relationship between Boston Beer Co. and City Brewing on this project will be some form of partnership, with Jim Koch’s company kicking in between three and seven million dollars to upgrade the Pennsylvania facility. In addition, “the parties are discussing the potential of Boston Beer having an ownership interest in the brewing facility.”

The parties expect the brewery to be up and running again in the second quarter, which means anytime over the next three months, and possibly as soon as next month. Happily, around 250 brewery employees should finally be back at work after InBev’s sale of the Rolling Rock brand — but not the Latrobe brewery — to Anheuser-Busch for $82 million closed the plant last July. Anheuser-Busch declined to buy the brewery and moved production to its facility in Newark, New Jersey, where it’s been brewing Rolling Rock for almost a year. Curiously, Boston Beer was one of the leading contenders in last year’s rumor mills surrounding who might buy the threatened Latrobe brewery and save it from closure. Federal, state and local officials and politicians worked tirelessly with InBev to find a buyer and rumored potential suitors also included Pittsburgh Brewing, Sierra Nevada and Yuengling before City Brewing bought it for an undisclosed amount.

Boston Beer’s co-packing contract with Miller is set to expire in October of next year, so this is seen by financial analysts as putting to rest any long-term concerns about meeting rising product demand. Sales volume increased 17% last year. Boston Beer President and CEO Martin Roper indicated that the Latrobe deal gives Sam Adams “increased flexibility” and they chose Latrobe brewery in part because of its heritage. As a result, yesterday afternoon shares of Boston Beer rose 66 cents to $33.74.

Samuel Adams has also been pursuing a property in Freetown, Massachusetts to build a brewery from scratch. According to company spokeswoman Michelle Sullivan. “’We’ve signed a purchase and sale on the site,’ Sullivan said, adding the company has also hired consultants to look into building plans.” Boston Beer also owns the Hudepohl-Schoenling in Cincinnati, Ohio and a smaller pilot brewery in Jamaica Plain, a little southwest of their headquarters in Boston, Massachusetts.

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