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* When I saw the LA Times report about Pabst Brewing Co. moving its Woodridge, IL headquarters to Los Angeles, the first question that came to my mind was whether Attorney General Lisa Madigan might have run the company off. From the LA Times story…
The company, purchased last year for about $250 million by billionaire investor C. Dean Metropoulos, declined to comment about the reasons behind the move or how many local jobs it might create. Pabst spokesman Mark Semer said that Metropoulos’ two sons, Daren and Evan, both live in Los Angeles and run the company with their father, who lives in Greenwich, Conn. […]
The Metropoulos brothers introduced a new label last month called Blast by Colt 45 and signed rapper Snoop Dogg as a brand ambassador. Blast, a fruit-flavored malt beverage, has drawn the ire of attorneys general from more than a dozen states for its high alcohol content and youth-oriented advertising. Illinois Atty. Gen. Lisa Madigan has called the drink “binge-in-a-can.” [Emphasis added.]
* From Attorney General Madigan’s “binge-in-a-can” press release last month…
“Alcohol abuse among young people is a serious and alarming epidemic,” Attorney General Madigan said. “A product like this only serves to glamorize alcohol abuse and promote binge drinking, threatening the safety of those consuming it.”
The Attorneys General’s letter, joined by 17 other state, city and territory officials, details concerns over Blast, which amounts to a “binge-in-a-can.” The 12-percent alcohol concentration of Blast means a single 23.5 ounce container is equivalent to drinking an entire six-pack of typical American beer. Madigan said the promotion and marketing of Blast appeals to minors, with its brightly colored cans and fruit flavors and a marketing campaign featuring hip-hop artist Snoop Dogg.
* The company’s response from last month…
Blast is only meant to be consumed by those above legal drinking age and does not contain caffeine. As with all Pabst products, our marketing efforts for Blast are focused on conveying the message of drinking responsibly. To that end, the alcohol content of Blast is clearly marked on its packaging, we are encouraging consumers to consider mixing Blast with other beverages or enjoy it over ice, and we are offering a special 7 ounce bottle for those who prefer a smaller quantity, among other important initiatives.
* Woodridge’s management analyst Jack Knight released a statement over the weekend…
‘’According to Village sources, the owners of Pabst wanted to relocate their corporate headquarters to where they live in California. Pabst last reported to the Village that they have 26 employees at their Woodridge office and that they occupy 12,000 sq. ft. Pabst relocated to Woodridge from San Antonio in 2006, and the Village did not provide any incentives for them to relocate.”
The company did, however, get a ten-year, $1 million aid package from Illinois…
“The Midwest has always been home for Pabst Brewing Company, so we are excited to be re-establishing roots in Chicago and Illinois, where we plan to be for years to come. I thank Gov. Blagojevich and his team for facilitating this move and for the critical support to bring us here,” said Kevin Kotecki, CEO of Pabst Brewing Company.
No word yet on whether we’ll get any of that money back.
* From a memo sent to employees last Wednesday by John Cochrac, Pabst’s new CEO…
After much contemplation and several thorough reviews of the current Pabst’ corporate structure and capabilities, I have decided that we will be moving the headquarters to Los Angeles this summer and closing the Woodridge office. As we build a strong leadership team, it is imperative that we are all together and in one location. This is not an easy decision and we have a wonderful group of employees in Woodridge but I believe it is what is best for Pabst.
* But here’s the kicker: California Attorney General Kamala D. Harris signed the same letter that Lisa Madigan did. And it was that letter which coined the “binge-in-a-can” slam.
The only difference was that California’s attorney general did not issue a press release blasting the strange brew, as Madigan did. I also couldn’t find a story online where AG Harris had been quoted about the product.
So, I suppose Madigan’s eagerness to publicize her involvement might’ve had some impact, but you’d think that if the company wanted to move to a state with a friendly attorney general, it would’ve gone somewhere besides California. Instead, this was almost undoubtedly about moving the company close to the owner’s Hollywood trust fund babies, one of whom just bought Hugh Hefner’s LA mansion for $18 million in cash…
The boys also helped the champagne brand, Perrier Jouet, another Metropoulos brand, become featured in Snoop Dog and Limp Bizkit concerts, their father said.
* And these are the two Hollywood kids responsible for yanking their new toy out of Illinois. Dean with Snoop…
Daren with Warren G…
* Even so, the Illinois Republican Party still thinks somebody here is to blame. From its Facebook page…
If Pat Quinn can’t keep Pabst in IL, maybe Illinois Republicans can! Join us at 4PM [Friday] at Villain’s Bar & Grill, 649 S. Clark St., Chicago. A generous donor will buy the first 25 Pabst Blue Ribbon beers for patrons of the bar after 4:00 PM. to show support for Pabst, despite our high taxes from Pat Quinn.
Oh, please. California’s corporate income tax rate is 8.84 percent, which isn’t much different from Illinois’ new rate. Its highest personal income tax rate (which CEOs pay very close attention to) is 9.3 percent, far higher than ours. Its state sales tax rate is 8.25 percent, way higher than ours. And Los Angeles’ sales tax rate is 9.75 percent.
Toasting this company after it announced it’s leaving Illinois is beyond inappropriate.
posted by Rich Miller
Monday, May 16, 11 @ 3:30 am
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If you’re a young man that spent $18 million on Hugh Hefner’s old Holmby Hills House, you probably want the company you spent $250 million on closer to home.
Daddy’s a swell guy to pony up a quarter billion for Pabst, Colt 45, Strohs, Schlitz and Red, White and Blue. That’s a lot good money for a lot of bad beer.
Comment by wordslinger Monday, May 16, 11 @ 6:53 am
This company should be located back in milwaukee, anywhere else is fraud.
Comment by foster brooks Monday, May 16, 11 @ 7:53 am
Hubris, Lisa?
Comment by Cincinnatus Monday, May 16, 11 @ 8:15 am
Is it just me or dose Snoop seems seconds away from either smacking Dean or asking if he is Mike G from the Beastie Boys
Comment by OneMan Monday, May 16, 11 @ 8:34 am
Foster is right on. Milwaukee is where all beer manufacturers should be located.
Comment by Old Milwaukee Monday, May 16, 11 @ 8:43 am
The IL GOP is a huge embarrassing joke.
Their clueless chairman Pat Brady might want to save some drinks until after he oversees the huge election disaster heading his way next year. I don’t think the guy has the slightest idea what he’s doing.
Comment by just sayin' Monday, May 16, 11 @ 9:01 am
If that is a picture of Dean with Snoop I guess he could have come by that Viet Nam era Field Jacket honestly but he looks awfully good for a 64 year old.
Comment by Bigtwich Monday, May 16, 11 @ 9:15 am
What’s worse? Bending over backwards to prove that higher taxes and a more hostile business environment were not the reason for Pabst picking up and moving out of Illinois? Or bending over backwards to prove that higher taxes and a more hostile business environment were the reason for Pabst picking up and moving out of Illinois?
Or paying corporations millions to stick around in spite of our high taxes and more hostile business environment?
Isn’t the bottom line here that Illinois still has a more hostile business environment than most other states?
Aren’t we of the S.S. Illinois Titanic arguing over which ice berg caused the boat to stop floating?
Comment by Louis G. Atsaves Monday, May 16, 11 @ 9:19 am
–Isn’t the bottom line here that Illinois still has a more hostile business environment than most other states?–
Louis, if that’s the case, why does it have the fifth largest GSP in the union? Would the state be three or four if we didn’t have a “hostile” business environment?
Pabst moved to Illinois in 2006 from Texas, the alleged business Utopia of the country. Now, it’s moving to California, which is certainly counter-intuitive if “business climate” is a main consideration.
The kids live in LA. They have to do something during the day before hitting the clubs.
I’m not saying there aren’t problems. But a little reality is in order.
Comment by wordslinger Monday, May 16, 11 @ 9:30 am
I thought the GOP thing was pretty crass too, to be honest with you, it seems like they take glee in any misfortune that faces illinois, instead of getting their hands dirty and trying to solve problems…..
Comment by I'm Just Saying Monday, May 16, 11 @ 9:31 am
There was a study a few years back — can’t find it online — that showed a huge correlation between corporate relocations and the ceo’s place of residence. As in — if the new ceo is from Denver, you can pretty much bet that the company will be moving to Denver.
Comment by soccermom Monday, May 16, 11 @ 9:36 am
Wordslinger said,
“Louis, if that’s the case, why does it have the fifth largest GSP in the union?”
We’re the fifth largest state.
Comment by Cincinnatus Monday, May 16, 11 @ 9:40 am
What does Pabst Brewing actually do, anyways? The “company” is really just a portfolio of brands brewed under contract by MillerCoors.
Comment by lincoln's beard Monday, May 16, 11 @ 9:45 am
Cincy, what’s your point? Illinois is fifth in population because it is the fifth largest economy.
For Pete’s sake, it’s not because of the gentle year-round weather.
Comment by wordslinger Monday, May 16, 11 @ 9:48 am
From NPR’s Planet Money: Do the rich flee high tax states? No.
short version: http://www.npr.org/blogs/money/2011/04/29/135813061/studies-rich-dont-flee-high-tax-states
long version: http://www.npr.org/blogs/money/2011/04/22/135635574/the-friday-podcast-do-the-rich-flee-high-tax-states
Plus, we aren’t really a high tax state.
Comment by Pot calling kettle Monday, May 16, 11 @ 9:48 am
- wordslinger - Monday, May 16, 11 @ 9:48 am:
“Cincy, what’s your point? Illinois is fifth in population because it is the fifth largest economy.”
I am surprised at your difficulty understanding that it is not wholly unexpected that the 5th largest state have the 5th largest economy. Perhaps I don’t understand the issue as deeply as you.
Comment by Cincinnatus Monday, May 16, 11 @ 9:57 am
“I thought the GOP thing was pretty crass too, to be honest with you, it seems like they take glee in any misfortune that faces illinois . . .”
I think you’re right on I’m Just Saying. The IL GOP has become just like the Dems during George W’s administration, basically rooting for the country’s demise in the hope it would elevate themselves.
Didn’t work for them, W was reelected, and it’s not working for the IL GOP. Voters want leaders not cry babies.
Comment by just sayin' Monday, May 16, 11 @ 10:01 am
–I am surprised at your difficulty understanding that it is not wholly unexpected that the 5th largest state have the 5th largest economy. Perhaps I don’t understand the issue as deeply as you.–
It’s not difficult to understand and it was not written in the stars that Illinois would have the fifth largest population. That’s a result of having the business and job opportunities to support that population.
Comment by wordslinger Monday, May 16, 11 @ 10:04 am
Pabst will always be a Milwaukee beer.
The heir is giving Illinois the Dennis Hopper–Blue Velvet–Heineken treatment.
Pabst is a real American beer.
Comment by Jake From Elwood Monday, May 16, 11 @ 10:20 am
I guess we should then use GDP per capita, in which case we should be as well run as Washington, D.C.
Comment by Cincinnatus Monday, May 16, 11 @ 10:21 am
It’s not like Pabst moving to Illinois in 06 resulted in the Peoria PBR brewery re-opening.
Pabst is a shell of it’s former greatness, a mere holding company that buys up defunct brands, not an actual brewery.
Comment by Frank Booth Monday, May 16, 11 @ 11:29 am
Your right frank, they spend little in marketing also.
Comment by foster brooks Monday, May 16, 11 @ 11:48 am
That’s a result of having the business and job opportunities to support that population.
IL is blessed to be a gatekeeper at the pinch point of east-west transportation in the US at the southern end of Lake Michigan, and to have some of the richest prime farmland in the world. and a commerce center that historically fed off of the first 2 items. Other than that, we are about average, and things could change for the worst if we are not attentive competitors in the world economy.
Although it’s a good thing to have that yummy Drummer silty clay loam, no matter what.
Comment by Six Degrees of Separation Monday, May 16, 11 @ 11:49 am
Six, all very true. But then again, Indiana has all that, too.
The original premise was that Illinois has a hostile business environment. But private capital and labor made it the fifth largest economy, and as we know, both of those prereqs historically are very mobile in seeking the highest return.
Comment by wordslinger Monday, May 16, 11 @ 12:01 pm
Wordslinger, I can appreciate that Illinois has the 5th largest GSP in the nation. A few years back General Motors was either the largest or second largest auto manufacturer in the planet.
Size doesn’t matter if your losing money, jobs and resources due to your corporate culture and refusal to change. Management matters.
Illinois refuses to change or pretends that it is changing. GM deluded itself for a long time too.
My question pertained to both sides bending over backwards to prove their point that Pabst would have moved anyway because their new CEO’s lived elsewhere, or they would have moved anyway because of our high taxes and a more hostile business environment.
Heads you win, tails you lose. They still will move.
I seem to recall reading those brands being purchased from prior ownership, who was unable to keep them due to either regulations or inheritance taxes.
Comment by Louis G. Atsaves Monday, May 16, 11 @ 12:12 pm
Pabst almost certainly pays no corporate taxes in any state or at the federal level. It is a privately owned company, and thus can organize as an S corp. S Corps aren’t subject to corp taxes. (the GOP somehow omits this from their usual wailing). To the extent taxes make a difference for the HQ, it is thru personal income taxes–where CA is much higher than IL.
Comment by Svalka Monday, May 16, 11 @ 12:43 pm
I must say that it seems like if the business is big enough, that taxes simply don’t apply at either the Federal or State Level, even sometimes the municipal level.
My question is why even go through the motions of negotiating the specific tax break. Let’s just codify it in terms of business income, sort of a reversed taxing scheme for businesses. Otherwise, there is just no way to actually figure out expected tax revenue. We are currently in a race to the bottom between states. If I didn’t know any better, I think this would qualify under the interstate commerce clause as something that should and will be regulated.
Comment by JBilla Monday, May 16, 11 @ 12:45 pm
The kids want the business in LA, this time it’s not the state’s fault. Jimmy John’s acted like it was the rise in taxes but it was just an excuse as he had already moved to FL according to locals from Champaign. Sometimes they just want to move.
Comment by Bonsaso Monday, May 16, 11 @ 12:51 pm
Milwaukee obvious top choice.
But at least IL and Calif are in the US. Schlitz , “The Beer That Made Milwaukee Famous” and Pabst Blue Ribbon of “Rednecks and White Socks” fame are still American Beers.
Drink the big name brands and send your money to Belgium, South Africa , Canada , or ? Those conglomerates killed the ” Hamms Bear” and should never be forgiven.
Drink American.
Comment by x ace Monday, May 16, 11 @ 12:52 pm
Dean and Evan call to mind Aziz Ansari’s character on Parks & Recreation - wannabe “players”.
I toured the Pabst brewery in Milwaukee when I was a kid, when the company still brewed its beer. I think it was first sold to an out-of-town interest in the early 1980s was subsequently pillage for anything of value, and the Milwaukee brewery shuttered. I guess its interesting that the brand name lives on, but it all seems rather skin deep — which makes the move to LA even more logical. It’s more interesting that the locally brewed craft beer segment is the only thriving part of the beer industry.
Comment by davidh60010 Monday, May 16, 11 @ 1:04 pm
I have to echo the statements made by several who posted above. I would be much more worked up if Pabst was shuttering a brewery, but there was only a corporate office located here. Pabst shuttered its breweries years ago. The company was bought out and broken up and sold off piece by piece long ago. The Pabst family no longer owns the beer business. The beer is manufactured under contract by larger brewers like Miller a few days each month. Supposedly, the recipe is the same. Pabst is simply a holding company now that trades on consumer loyalty to old brand names. The business owns the rights to numerous regional beer names and logos, but the days of having an actual brewery are long gone.
Pabst used to be widely available in Springfield, but I do not know if that is the case now. Some local barkeeps have stocked Pabst to keep up with customer demands, but I am told it is difficult to deal with the company if you want the beer in kegs to serve on draught.
Comment by Esquire Monday, May 16, 11 @ 1:24 pm
davidh…
The guy you’re thinking of is Paul Kalmonovitz who bought up Pabst and many other well-remembered beers in the 1970s and 80s, and then slashed costs to the bone, including on marketing. Which likely led to the market share death spiral all their brands saw.
http://en.wikipedia.org/wiki/Paul_Kalmanovitz
After his death, for reasons never totally made clear, the company continued to operate for almost 20 years as the primary asset of the Paul & Linda Kalmanovitz trust, despite IRS rules that should have forced it’s sale by the mid-90s.
The trust is well remembered in Wisconsin as they wiped out health care coverage for several hundred Pabst brewery retirees.
One of the Kalmanovitz trust’s long time trustees, Conrad Hewitt later became Chief Accountant of the SEC from 2006-2008. Perhaps a life long fondness for PBR by the SEC’s chief accountant explains why the wheels came off the stock market around that time, but probably not.
http://www.milwaukeeworld.com/blog/2006/07/who-really-owns-pabst.html
Comment by Chicago Bars Monday, May 16, 11 @ 1:38 pm
The King of Beers will always be Bud.Pabst glory
day’s are in the distant past. Let the little rich
boy’s, take the little beer company to California
and they both will be soon forgotten.
Comment by mokenavince Monday, May 16, 11 @ 2:36 pm
When I was in eighth grade, our end-of-year trip was to Milwaukee. We were to tour the Pabst Brewery, the the geodesic domes, then while away the afternoon at the Milwaukee Zoo.
We hit the brewery about 10 a.m. The hour tour ended in a real cool beer hall, where the kids got pop — and the teachers/parent volunteers got Pabst.
Mucho Pabst. We spent a lot more time there then scheduled. I’m pretty sure the bus drivers were enjoying the brewery generosity, too (it was a different time).
We ended up blowing off the domes and spent about a half hour at the zoo. The busdrivers high-balled it home while the teachers and parents slept in the front seats. I recall there was a minor scandal when we got back home (late), but then again, it was a different time.
Comment by wordslinger Monday, May 16, 11 @ 2:51 pm
Its a high priced toy for a wealthy guys kids. There was no way it was going to stay in IL.
Comment by Ghost Monday, May 16, 11 @ 3:11 pm
Perhaps we should offer Pabst a tax break. At the same time, we should offer the Excedrine people on so we can have pills to take for our hangovers.
Comment by Cincinnatus Monday, May 16, 11 @ 3:16 pm
Geez, lighten up about the ILGOP Facebook comment, everyone. It’s hardly so vulgar that it deserves to be called “beyond inappropriate.” It’s not like the repub’s tax-and-spend mantra is a novel concept borne out of recent IL woes. It’s their brand. Who cares if they use it to capture a headline and try to boost their ranks? They’ll need all the help they can get after this remap.
Comment by PotatoSkins Monday, May 16, 11 @ 4:30 pm