Update on New Holland Brewing / Pabst Brewing Transaction
This morning, we shared news that New Holland Brewing of Michigan was entering into a partnership with Pabst Brewing. In the press release, it was mentioned that the partnership was to utilize the strength of Pabst Brewing’s sales and distribution arm and likewise a way for Pabst to provide its accounts with a higher end beer product as an alternative to their usual industrial lager and malt liquor portfolio.
Many of the recent craft beer acquisitions have used careful language dancing around the act of selling, buying out, and acquisition by using the cleverly used term “partnership.” In almost all cases, the partnership has been code for ownership. We have been longtime friends and fans of New Holland Brewing, so in addition to the shock of this announcement, we were under the assumption that at the very least, some ownership of New Holland changed hands to the Pabst Brewing Company. With that said, we quickly reached out to our contacts at New Holland Brewing to seek clarification, knowing there was a good chance mum could be the word.
We heard back from New Holland’s Joel Peterson, and he told us that 0% ownership has changed hands. “New Holland remains 100% independent and that is the “specialness” of this deal. We feel it is unique in that equity has been a part of all/most past deals between big and small breweries.”
Pabst Brewing CEO Simon Thorpe added: ““To my knowledge, this is the first deal in the history of craft beer where a large supplier is getting into a partnership with a small brewer without taking any ownership or receiving any option to buy the shares. This is a long-term agreement set up so that it can last for the next 20 years and beyond. It is not about Pabst simply selling some New Holland beer for a fee – there is a bigger idea in what we are building together that speaks to mutual trust, true partnership and a long-term vision of what we can accomplish.”
With a large macro beer corporation partnering, but not owning this craft brewery, we reached out to Julia Herz of the Brewers Association to get any insight to New Holland’s inclusion under the craft brewers umbrella. “This is is brand new news, and something we are aware of but have not discussed. Every year we talk with brewers about how many barrels they make, who owns the company, etc. This is something we haven’t examined yet and has not been decided on. We don’t add and subtract brewers every time a significant change is made the minute it happens.” When we pressed Julia for a scenario like this one, she stood firm saying that every year, all brewers are reviewed for status change.