MillerCoors Becomes Casualty Of Minn. Shutdown

MINNEAPOLIS (WCCO/AP) — Miller, Coors and other popular beers may disappear from Minnesota stores and bars within days because brewing giant MillerCoors lacks the proper licenses due to the state's government shutdown.

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 spokesman for the Department of Public Safety, said Wednesday.

State alcohol enforcement officials who remain on the job recently told officials with Chicago-based MillerCoors, L.L.C., that they need to come up with a plan soon for pulling their products he said.

"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 spokesman Julian Green said 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 said. "Especially when it impacts the livelihoods of our distributors and retailers, and ultimately impacts our consumers who can't buy our brands."

WCCO's Adam Carter Interviews Julian Green

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 aren't in danger because their licenses are good through 2012, MillerCoors spokesman Tom Ryan said.

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's 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 the 13th. Neville said the state didn't 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 didn't 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's what many retailers have already done. They're 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's not clear if discussions could solve the problem, however. Neville said alcohol control officials determined they couldn't 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 didn't 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 Oct. 1. "Our agents, I know, are looking at other brands," he said.

The potential loss of popular MillerCoors beers comes as another blow to liquor store, restaurant and bar owners who were thinking things couldn't get any worse, said Frank Ball, executive director of the Minnesota Licensed Beverage Association.

"It could be 102 degrees this weekend," Ball said. "We need cold beer."

And unless the shutdown ends soon, more than 300 bars, restaurants and liquor stores won't be able to replenish any of their liquor supply.

The State Department of Public Safety said it's because of expired state-issued buyer's cards.

"In that last crush, we had a lot of people processing those buyers cards and unfortunately, not all of them got processed," said Neville.

The Ugly Mug in downtown Minneapolis falls in the group of those who had already started processing when the shutdown happened.

"This is not just my livelihood, this is a lot of people's livelihood. The ripple effects of this will be felt throughout the state and further," said Ugly Mug Owner Erik Forsberg.

While state officials said it's not personal, several business owners disagree.

"We don't want to put people out of business, but there's nothing within the statue that allows us to accommodate anybody outside of what the statute says," said Neville.

George Medich owns Value Liquor in the Twin Cities. He said a lot of people have called his store simply to ask what's going on with having beer pulled from his store's shelves. Others have stopped in to buy those specific brands of beer before they can be removed. He said he's having a hard time comprehending that the state government shutdown is now affecting liquor sales.

"It's unbelievable to think that this is happening," Medich said.

Medich said to have 39 brands of beer removed from his store shelves would account for about 25 percent of what he carries. He said it would be a much larger issue across the state than it would be at his store.

"It would be a logistical nightmare to pull 39 brands of beer off the shelves across the state of Minnesota," Medich said. "As far as my customer base is concerned, they'll find something else. So I really don't think it's going to hurt our sales."

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