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Latrobe Rumor Mill

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On Tuesday I heard that the buyer for the Latrobe Brewery was rumored to be D.G. Yuengling & Son of Pottsville, Pennsylvania. Recent news reports from local Pittsburgh media discuss that possibility plus address other potential buyers.

Sierra Nevada Brewing:

Steve Harrison, vice president of the Chico, California, brewer, said his company was not interested in the plant.

Ken Grossman, president of Sierra Nevada Brewing, said yesterday his firm was initially contacted by InBev after the sale.

“We had some casual interest when it first came on the market, but the facility is way too large for us to consider,” Grossman said, “and without a brand, well, it just doesn’t fit into our plans.”

Sierra Nevada produces 600,000 barrels a year of its own beer and does not do contract brewing for other beer companies. Latrobe Brewing produces 825,000 barrels annually but has capacity for 1.3 million.

Boston Beer Company:

Boston Beer Co. had conversations with Pennsylvania Governor Ed Rendell and because of opposition to its plans to build a brewery in Freetown, Massachusetts were considered a good candidate. “However, voters in Freetown on Monday approved a lucrative tax-increment financing proposal, an agreement that will give Boston Beer tax breaks averaging 33 percent for 20 years, said John S. Ashley, chairman of the Board of Selectmen in Freetown.”

“In addition to building a plant, Boston Beer Co. purchased a brewer in Cincinnati, Ohio, last year and spent $11 million on improvements. The company sold more than 1.3 million barrels of beer last year, according to its annual report.”

Boston Beer Company is “too far down the line” with plans to construct the new brewery in Massachusetts to be a serious contender for Latrobe.

D.G. Yuengling & Son:

The “chief operating officer for D.G. Yuengling & Son of Pottsville, Schuylkill County, said yesterday it already operates three breweries and is not actively seeking to add beer-making capacity.”

“It’s not us who is moving close to a deal. We already have a lot on our plate. But we never say never,” said David A. Casinelli, who pointed out the company operates two breweries in Pottsville and bought a former Stroh’s plant in Tampa, Florida, in 1999.

Further, “the governor said Yuengling did not express interest in the plant, to his knowledge.”

This had been the strongest contender in my mind because I’d heard their name from a friend who’d heard it from an industry insider. So either these news sources are smoke and mirrors or in fact Yuengling is not the potential buyer.

Pittsburgh Brewing Company:

Pittsburgh Brewing was an early name mentioned in reports but being in a Chapter 11 bankruptcy made that possibility more remote. They have not been seriously mentioned as a potential buyer for a couple of weeks now.

Conclusions:

Governor Rendell said there has been interest in purchasing the Latrobe Brewing plant from two brewers and four or five investor groups, but the investors were unable to come up with financing. As to who they are and who ultimately buys the Latrobe Brewery, if anyone, will still have to wait for an official pronouncement. Until then, it’s anybody’s guess.

Yuengling Rumored Buyer of Latrobe Brewery?

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A colleague of mine today heard from an industry insider that the new buyer of the Latrobe Brewery may be D.G. Yuengling & Son Brewery of Pottsville, Pennsylvania. Yuengling is the sixth largest brewer in the United States, having greatly increased their sales over the last several years. They also recently purchased the old Stroh’s Brewery in Tampa, Florida and built an additional facility in their hometown of Pottsville. By all accounts this expansion has been wonderful for their business and would give them both sufficient cash and the motivation to purchase another brewery to service the western part of the state and perhaps even expand into Ohio and West Virginia. So the rumor makes a lot of sense but only time will tell if it’s true or not.

New Buyer for Latrobe Brewery?

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InBev reportedly has a potential buyer for the Latrobe Brewery, but is keeping tight-lipped about who that buyer is, at least for now. They claim a letter of intent may be forthcoming, according to several accounts in various Pittsburgh area media. Pittsburgh Brewing Co. had been rumored to be a potental buyer but given the speed of this news it seems very unlikely that it is them since they would require bancktuptcy court approval to sign a letter of intent to purchase the brewery. My guess is that it will be an overseas brewer looking to produce their beer here in the states.

Update on Latrobe Brewery

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I was away this weekend camping with the family and some friends — which also meant I missed a great beer festival in Santa Rosa — and I’ve been trying to catch up on what I’ve missed. It seems there’s a lot of information flying around about what’s going on with the Latrobe Brewery sale/closing.

I read one forum post on the BrewBoard by a prominent (or at least active) member who took the position that Rolling Rock’s beer isn’t actually great craft beer and the Latrobe Brewery hasn’t been owned by the community for a long time now so what’s the big deal that it may be closed. It may be an unpopular position, but there is a lot of truth to it. InBev has owned the brewery for years and even my first post when the sale was announced I wrote about Rolling Rock’s faux micro status. It’s been marketed as a craft beer but generally the only people who bought that were bridge buyers and casual beer buyers. No hardcore beer geek thinks of Rolling Rock as a craft beer. But the potential closing of a an over sixty-year old brewery is another matter and erases any negative thoughts I have about the beer itself. Why? For one simple reason. I believe our brewing heritage should not disappear. I have mourned too many brewery closings in my brief lifetime. Back in the golden age of brewing — the latter quarter of the 19th Century — there were something like almost two-thousand breweries in this country. After Prohibition we lost more than half of them in one fell thirteen-year swoop. Over the subsequent half-century the number of breweries continued to steadily decrease until by the early 1980s there were only a few dozen left. If you read the Breweriana magazines you’ll quickly see how many abandoned and ruined breweries there are out there. And not all of them closed a long time ago. My wife and I visited the Olympia Brewery in Washington on our honeymoon not quite ten years ago. Olympia, of course, didn’t make a great beer but the brewery itself was beautiful and they had an unbelieveably amazing collection of beer steins. But it’s closed now. The Henry Weinhard brewery in downtown Portland — itself a beautiful brick building — was torn down only a few years ago. Now I didn’t drink either of those beers, either, but I still mourned their passing. And the same is quite appropriate for the Latrobe Brewery, too. The effort to save should be supported by all of us who love beer, regardless of personal feelings about Rolling Rock itself. It’s the history and heritage that is worth saving.

Here’s a round-up of recent news about the efforts to save the brewery:

On June 1, according to the Pittsburgh Tribune-Review, John Murtha, Democratic Congressman from Pennsylvania’s 12th District, announced his intention to broker a deal for the Latrobe Brewery and Pittsburgh Brewing, itself in financial trouble. The makers of Iron City Beer have been in Chapter 11 (reorganiztion) bankruptcy since last December. Funding would likely have to come from state resources. Latrobe Mayor Tom Marflak doubted this plan out of hand.

The next day, the Tribune-Review quoted Pittsburgh Brewing president Joseph Piccirilli was willing to meet with Representative Murtha regarding the purchase of the Latrobe Brewery. Piccirilli further stated, in the Pittsburgh Post-Gazette, that “The Latrobe Brewery is a beautiful facility. I’m in the beer business and it’s practically in my back yard. We are in the midst of union negotiations and we are working very hard to turn our financial situation around. But if we can schedule something, I’ll speak with the congressman.”

Friday, June 2, a spokesperson for Pennsylvania Governor Ed Rendell told reporters that Renaissance Partners, LLC, of Pittsburgh, “has been contacted by the state to study the Latrobe beermaking facility. Renaissance Partners works with the Governor’s Action Team on a regular basis.”

Yesterday, Governor Rendell said “he’ll offer incentives to any company that wants to buy Latrobe Brewing,” according to WTAE Channel 4 in Pittsburgh. From their coverage:

“The commonwealth’s going to come in and sweeten the pot a little bit and give some training money and incentive money so we can keep the jobs in Latrobe,” Rendell said. “There’s no guarantee, but we’re sort of getting our battle plan together.”

Monday, the Governor had spoken to InBev — the current owners of the brewery — and they informed him that “they had some interested investors in the facility.” According to the Tribune-Review report, InBev is “supposed to get back to [the state] this week.”

Today in a news brief, Governor Rendell says he is “guardedly optimistic” that a buyer can be found for the Latrobe Brewery, “including possibly finding another brewer to take over production or convincing private investor groups to buy the facility and develop a new brand.” The Governor’s made these remarks after a speech at the United Steelworkers Building in downtown Pittsburgh yesterday.

And as of this afternoon — around Noon — almost 18,000 people had signed the online petition to save the Latrobe Brewery. That’s three times as many signatures since the petition began almost two weeks ago.

With less than two months before the deadline passes and the brewery closes, at least there’s a lot of activity going on to try to save it. I tend to be pessimistic about these things but, as they say, hope springs eternal. Let’s prepare for the worst, but strive to do whatever each of us can to support the efforts to save the brewery. We owe it to every worker who ever set foot in a brewery to preserve what we can of the heritage that has brought each of us so much enjoyment throughout our lives.

Anheuser-Busch Reiterates: No Interest in Rolling Rock

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As of around Noon today, over 13,000 people had signed the online petition to save the Rolling Rock Brewery in Latrobe Pennsylvania. The effort is being made after Anheuser-Busch bought the Rolling Rock brand on May 19 from InBev.

But as Greg Clow, of The Bar Towel in Toronto, reminded me, the petition is likely doomed to fail for the simple reason that A-B does not own the brewery and is not the one selling it. Christina Gumola, the woman who wrote last week’s open letter to August A. Busch IV, later wrote to tell me that she did also simultaneously write a letter to InBev and attached the letter she wrote to A-B.

Still, Greg brings up an excellent point that I, and many others, haven’t been focusing on. I think we all got caught up in the moment but the truth is A-B can’t sell what they don’t own. It’s still possible, albeit very unlikely, that public pressure could cause A-B to ask InBev to renegotiate the deal to include the brewery in the sale but adding another $50 million to the deal — which is the rumored asking price — seems pretty farfetched at this point. Undoubtedly, that’s why the two were separated in the original deal. A-B doesn’t need another brewery and now InBev has one with nothing to brew in it.

Today’s Pittsburgh Tribune-Review makes even that remote possibility virtually impossible. In the article, Dave Peacock, Anheuser-Busch’s VP of business and finance operations, “yesterday reiterated the company has no interest in buying the brewery.”

“Because Anheuser-Busch owns 12 breweries and has the ability and capacity to brew Rolling Rock, we elected to purchase only the beer recipes and brand names, not the brewery operation,” Peacock said. “Like others, we hope InBev is able to sell (the brewery) to a suitable buyer who will maintain the employment.”

Sure he does. That’s just spin control, as Tom Dalldorf pointed out when we spoke Friday, the big breweries (A-B and Miller primarily) have been gobbling up and shutting down historic breweries for decades. That’s what big corporations do, they crush their competition and damn the consequences. In economics parlance, that’s called “externalities.” It’s a euphemistic term like “collateral damage” or “friendly fire” that disguises its true meaning. Externalities are the costs that society pays when big businesses wheel and deal. They’re the brewery closings and unemployment, the loss of tax revenue for a small community and the loss of heritage for everyone. And it may be the way business is done, but it’s those very decisions that are destroying so much of what used to make America great. As big businesses get bigger and bigger, merging with one another to create ever larger Frankenstein-like mega-corporations and international conglomerates who do their banking offshore to avoid paying taxes, it’s you, me and the people of Latrobe who are picking up the bill.

Anhesuer-Busch, in their negotiations for the purchase of Rolling Rock from InBev, knew exactly what the consequences would be for the brewery and the employees who toiled there making Rolling Rock since 1939. They knew InBev would have a devil of a time trying to sell the brewery, knew the employees would lose their livelihoods, knew another piece of American brewing history would die. They simply didn’t care and indeed weren’t allowed to care. Their shareholders wouldn’t let them. So those costs were externalized, meaning A-B and InBev didn’t have to concern themselves with what happens to Richard Pavlik, Christina Gumola’s father. That he will lose his job of over twenty years is somebody else’s problem.

But despite my dire pessimism and even with so much against it, the fight to save Rolling Rock is still worth fighting. Sometimes hopeless battles must be fought on principle alone. It’s the effort that is important. Sometimes it’s enough to know at least you tried.

In the words of Christina:

Of course my efforts may seem far fetched; however if people just accepted being told “no” and didn’t fight for what they believed in then chances are they are not too happy. I’ve always fought for what I believed in and most of the time had positive results by doing so. I am also a realist and understand that nothing may occur as a result of my efforts. At least I know that I tried! Fight for what you believe in — you won’t have the chance for what you want if you just let it go!!

Amen.

Daughter of Latrobe Brewery Employee Sends Open Letter to August A. Busch IV

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The letter posted below was forwarded to me by a good friend and colleague. It’s an open letter to August A. Busch IV regarding Anheuser-Busch’s plans to move production of the newly acquired Rolling Rock brand to Newark, New Jersey and sell the Latrobe Brewery. The town of Latrobe is in Western Pennsylvania, a little over 40 miles from Pittsburgh. It’s a small town, with a population of around 9,000 people. Arnold Palmer was born there, and so was Fred “Mr.” Rogers. It is believed the first professional football game was played in Latrobe (September 3, 1895) and the first banana split was made there (in 1894). Since 1893, it has been the home of the Latrobe Brewery and by and large, most people know the town of Latrobe because of Rolling Rock. Having grown up in a small town in Pennsylvania, I understand how seriously people take their history and heritage, how much it means to them. Sure there are economics involved in Latrobe, too, but it isn’t just about that. It’s also about people, small town loyalty and a real sense of community pride. So when the brewery employees were summarily told they had two months and then not only their jobs would be lost, but also a piece of the town’s heritage, it must have felt like the proverbial rug had been pulled out from under them.

That’s why I was surprised that the same day Anheuser-Busch announced the purchase of the Rolling Rock brand from InBev that they would also sour that news by mentioning that the Latrobe Brewery would be sold or closed. I’m sure it was simply an economy of scales argument, a business decision. But it would have been far more prudent to have waited to drop that bombshell until after the purchase story was out of the news cycle. Because, as the letter points out, A-B has been waxing poetic in ads and press releases about their corporate citizenship, their affinity for family, community and heritage. Of course that’s just propaganda, corporations don’t really care about those things, they just want to appear to care about those things because it improves their image. Corporations only have one function, making a profit, and are responsible to only one group of people: their shareholders. Oddly enough, though, when companies spin themselves as good guys, people actually expect them to act that way.

So Christina Gumola, the daughter of a Latrobe Brewing Company employee, sent the letter below to the president, vice president, and other board members at Anheuser-Busch regarding their recent purchase of Rolling Rock last Friday.

An online petition has also been set up to collect signatures with the goal of keeping Rolling Roock in Latrobe and keeping the town’s brewery open. As of 9:30 this morning, almost 6,000 people had signed the petition.

It’s doubtful that any emotional appeals to decency or a sense of family will carry any weight, which is ironic since A-B presents itself as a family company and has had numerous family members at its helm stretching back to its inception in the mid-1800s. I wish I wasn’t so realistic about this — some might say cynical — but unless the shareholders are convinced that profits will suffer by moving production and closing the brewery in Latrobe, I can’t see this decision being changed. But who knows, perhaps if there is enough of a hue and cry they may at least postpone the decision and wait until the furor has died down before closing the brewery.

But hope springs eternal and I certainly support the effort and wish them well, whatever the outcome.

An Open Letter to Anhesuer-Busch from Christina Gumola:

It was on Friday May 19, 2006, when I received a phone call from my father Richard Pavlik, who is a 22 year long employee of Latrobe Brewing Company, when I got the news. “The label was bought by Anheuser-Busch for $82 million.” I quickly asked about the future of his job in which he replied, “I have 60 days then I no longer have a job.” Immediately I broke down in tears for many reasons, one of which was my concern for the well-being of my parents and the effect this job loss will have on their lives. I have to admit that along with my sadness, I was very angry. “How could someone do this to, not only my father and the other 200+ employees of Latrobe Brewing Company, but to a whole community whose livelihood revolved around their pride and commitment to Latrobe Brewing Company-more specifically Rolling Rock beer.”

Despite my anger, I understand that Anheuser-Busch’s purchase of Rolling Rock was a decision based on business. However; I feel that this decision was made without an understanding of the devastating impact that the removal of Rolling Rock would have on the people of Latrobe and the surrounding communities. In addition, I feel that Anheuser-Busch may not have thought enough about how keeping Rolling Rock in Latrobe could help their own company from a business standpoint.

Ever since the announcement of Anheuser-Busch’s purchase of Rolling Rock and the plan to move it out of Latrobe, it’s as if a large dark cloud has settled over Latrobe. Not only has this decision gloomed the employees of Latrobe Brewing Company, but it has gloomed those who are also committed to the greatness that Rolling Rock brings to Latrobe. It feels as if someone took something so important out of our lives that we can never get back. I know that I am speaking for everyone who has pride in Rolling Rock when I say that we are truly hurt and devastated for this loss.

I found a noteworthy quote in an article dated March 30, 2006 from Anheuser-Busch. This article was titled ‘Who Would You Have A Beer With?’ Robert C. Lachky, executive vice president, global industry development, Anheuser-Busch Inc. is quoted saying that “Beer is about sharing moments and creating memories with good friends and family.” This quote could not be truer. Rolling Rock beer has allowed us to create these memories with our friends and family here in Latrobe. Though these moments and memories cannot be taken away, the opportunity to create more of them with our loved ones has been.

After Anheuser-Busch’s purchase of Rolling Rock, Mr. August A. Busch IV, president of Anheuser-Busch Inc. hit the nail head on when he was quoted for saying, “We have an ideal opportunity to grow this historic brand. This beer is not like others, and it’s consumer following is EQUALLY DISTINCTIVE.” It is apparent that Mr. Busch and other’s in Anheuser-Busch see Rolling Rock for what it is and for what THE PEOPLE OF LATROBE have made it. While Anheuser-Busch may be able to brew Rolling Rock beer using the same “time-honored” recipes, it is virtually impossible to replicate the committed employees of Latrobe Brewing Company and people of Latrobe, which go hand-in-hand with Rolling Rocks craftsmanship and heritage.
The history of Anheuser-Busch states that in 1864, Adolphus Busch joined the fledgling brewery that later became known as Anheuser-Busch. Though the early years were demanding, Mr. Adolphus Busch continued to have a keen vision for the success of the company. The history further indicates that the distinctive contributions made by each succeeding generations of the Anheuser-Busch family clearly show that the history of Anheuser-Busch isn’t a story about a company-it’s a story about people. People with dreams and perseverance. Like Anheuser-Busch, the story and history of Rolling Rock is not a story about a company, but a story about people. The Tito brother’s wanted a unique beer that could represent the heart and soul of Latrobe. As a result, Rolling Rock beer was introduced in 1939 and since that time, it has become more than a beer and a product of a company. Rolling Rock indeed became the heart and soul of the people of Latrobe. Telling someone that “I’m from Latrobe” is accompanied with an enormous sense of pride.

August Busch Sr.’s vision and determination to keep his company going during the Prohibition resembles the vision of the Latrobe Brewing Company employees and the people of Latrobe. We are determined to keep producing Rolling Rock beer in Latrobe where it belongs. History reports that August Busch Sr. was able to keep many of his skilled workers employed and his equipment up to date during the difficult time of the Prohibition. Obviously, he was able to see the importance of dedicated and skilled employees. I feel August Busch IV would be proud to employ the current workers at Latrobe Brewing Company. They are, indeed, highly skilled and committed to producing Rolling Rock. It is important to note that there has not been a labor dispute at the Latrobe Brewing Company in over 24 years. This is a clear indication of the dedication and loyalty of the employees in this establishment. Also during the Prohibition, Mr. Busch Sr. kept his equipment up to date. Likewise, recent additions and modifications to the equipment at Latrobe Brewing Company have been made to keep up with the demand of the highly sought after Rolling Rock beer in this competitive field.

After researching Anheuser-Busch’s history and values, I feel that a partnership with Rolling Rock, if kept in Latrobe, can be more beneficial for Anheuser-Busch as a company. The employees at Latrobe Brewing Company have these same values and commitment to the product that they make here.

Anheuser-Busch is known for, and prides itself, for their unique commitment to their belief statement, mission, and values. In fact, the Anheuser-Busch web-site relates that these values are “a concern for people, communities, and the environment.” I am asking that you please follow these values and show your support for our people and our community whose lives and passion revolve around having Rolling Rock Beer brewed in Latrobe. Please rethink your decision of taking the pride and passion out of our lives.

Anheuser-Busch Companies, Inc. Statement of Beliefs includes the following belief: The understanding that well-trained and motivated employees acting with the highest integrity are critical to our success. As a former part-time seasonal employee at Latrobe Brewing Company, I have witnessed first hand how the employees making Rolling Rock beer contribute to the company’s success through the dedication and pride the employees have in their jobs and the product they produce. I’ve also witnessed this dedication from retiree’s, such as Albert Pavlik my grandfather, who is a 35 year veteran of Latrobe Brewing Company.

Finally, The Vision of Anheuser-Busch states: Through all of our products, services and relationships, we will add to life’s enjoyment. We dedicated consumers of Rolling Rock beer and the employees of Latrobe Brewing Company understand how the product adds to life’s enjoyment. Please allow us to work together in Latrobe to accomplish the vision of Anheuser-Busch.

I sincerely thank you for your time,

Christina M. Gumola
Proud daughter of
Richard L. Pavlik-Employee of Latrobe Brewing Company

Latrobe Rallys to Save Brewery

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According to local Pittsburgh television station, WPXI Channel 11, a rally will be held today in downtown Latrobe, Pennsylvania by local leaders to build support for the Latrobe Brewery and “find a buyer for the Latrobe brewing company plant in an effort to save 250 jobs.”

Anheuser-Busch announced last week that it was buying Rolling Rock and would be moving production of the brand to Newark, New Jersey. A-B also plans to sell the Latrobe Brewery, which was founded in 1883. It will most likely close this summer, sometime in mid-July seems likeliest.

Channel 11 plans on running a live report on their five o’clock report by news reporter Katrina Owens.

The Latrobe Brewer in downtown Latrobe, Pennsylvania, seen here in 2001.

Heavyweight Brewing Down for the Count

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In two articles posted Saturday and this morning, the BeerYard is reporting that New Jersey’s iconoclastic Heavyweight Brewing will be throwing in the towel sometime this summer, most likely in mid-July. They have three more beers to brew and that’s it, according to the report. They’ll also be selling off their remaining stock of bottled beers.

In the BeerYard’s exclusive interview, owner Tom Baker indicated that he and his wife (and business partner) Peggy will most likely be looking to open a brewpub/good beer bar in the near future, probably in the Philadelphia area. So the news is bittersweet. While it’s sad news indeed that a craft brewer who made such interesting and delicious beers — I don’t think I ever had one of Tom’s beers I didn’t like — is closing, it sounds like there will still be a forum for Tom’s great beers, which is cause for great joy.

Heavyweight Brewing’s owners, Peggy Zwerver and Tom Baker.

Flying Dog Buys Frederick Brewing

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The Denver Business Journal is reporting that local brewery Flying Dog has purchased Frederick Brewing of Maryland, which will henceforth be known as Wild Goose Brewery. They currently brew under the labels Wild Goose, Blue Ridge and Crooked River. According to Flying Dog President Eric Warner, “Wild Goose will continue to make its craft brands such as Wild Goose and Blue Ridge, but also will make Flying Dog labels by a special licensing arrangement. The brewer expects to begin production of Flying Dog beers in June.”

My earliest memory of Frederick Brewery was that in 1997 they were the first to brew a hemp ale, Hempen Ale, which garnered them a certain amount notoriety … and sales.

Anheuser-Busch to Purchase Rolling Rock?

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Forbes magazine reported today that Anheuser-Busch is close to a completing a deal with giant international beer conglomerate InBev to purchase the brand Rolling Rock. Rolling Rock is brewed by Latrobe Brewing Co. of Pennsylvania. The information Forbes cited comes from De Standaard, quoting Caroline Levy, a UBS analyst.

UPDATE: In the earlier Forbes article InBev had declined comment but has now done so, which has generated a new updated article about the future of Rolling Rock.