Pabst Forced To Sell Itself, IRS Claims It Has Rent To Pay

Hello!

“Charity” is not a word commonly associated with most brewers. Any time beer has gotten you laid, helped you crush Sapporo cans on your forehead or humiliate freshmen, it was not because some mystical caring entity bestowed the Power Cosmic upon you. It’s because you were blind stinkin’ drunk. If you want to know charity, let me introduce you to the Kalmanovitz Charitable Foundation.

KCF was named for Paul Kalmanovitz, a brewing magnate who owned such breweries as Maier, Falstaff, Ballantine, National Bohemian, Stroh’s, Pearl, and recently, Pabst. Kalmanovitz was never the brewer of these beers, but purchased them to revive the brands. The Foundation was established using the bulk of his $250M fortune and provides financial contributions to universities, hospitals, and specialized care providers.

the honorable Paul Kalmanovitz

Kalmanovitz’ final corporate acquisition before his death in 1987 was Pabst. That 1985 purchase escaped IRS oversight for 20 years. No, Paul Kalmanovitz was not a tax cheat. He just owned a brewery for too long. The IRS, citing Section 509 (a), mandated that KCF must relieve itself of ownership of the Brewery to retain its tax-exempt status. This was in 2005, twenty years after the purchase. Being the benevolent overlord that it is, the IRS granted KCF an additional 5 year extension so it could properly vet any prospective owner. That brings us to the pickle guy.

On May 26, 2010, the sale of Pabst to C. Dean Metropoulos was finalized and publicly announced. Metropoulos is a Detroit-born food industry investor, notable for his acquisitions of the Vlasic and Bumble-Bee brands, adds multiple beer brands to his portfolio for a mere $250M. Pickles, tuna, cheap beer…this man must have a ridiculous fridge at home.

sexy. or not. whatevs.

What ties Kalmanovitz and Metropoulos together is their ability to purchase established brands and revitalizing them in the market. At some point, every brand, regardless of reputation, needs new energy. What Kalmanovitz did for nearly 40 years was take regional brews semi-/national. What does Pabst need from Metropoulos? Yes, Pabst only commands 2% of the American beer market, even after a 33% increase in sales during fiscal year 2009. It has a spot with the college and hipster crowds as the preferred niche beer, with effectively NO ACTIVE marketing. It becomes a question of Metropoulos wanting to compete with the Big 3, or just wanting to cash in on drunk kids. It’s probably both. I’ll be on my couch with a tuna melt covered in relish awaiting the answer.

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