US: Beer giants up against Canadian brewers in 7th Circuit

According to a report from Courthouse News, the 7th Circuit weighed the reach of US antitrust laws in a case accusing Anheuser-Busch and Molson Coors of making secret deals with Canadian authorities to promote sales of their beer at the expense of small breweries.

Last year, Mountain Crest sued Anheuser-Busch and Molson Coors, America’s first and second largest breweries, claiming they abused their monopoly power to restrain trade – particularly, beer exports to Ontario, Canada.

Mountain Crest, the 21st largest brewer in the US, brews beer for Ravinder Minhas, a Canadian entrepreneur, for export to Alberta. Since 2009, it’s been trying to expand its market to Ontario, but claims the defendants have stiff-armed it through “secret agreements.”

This secret agreement allegedly stipulated that if any small brewer, like Mountain Crest, wanted to sell 12 or 24-packs of beer in Ontario, they would have to pay listing, handling, and service charges to sell through The Beer Store. Anheuser Busch and Molson Coors brands were exempt from the fees.

A federal judge dismissed the lawsuit as barred by the act-of-state doctrine, because all the challenged conduct is governed by a contract with the Ontario government.

But Mountain Crest’s attorney Charles Benoit told a 7th Circuit panel Friday, November 2,  that this interpretation of the law immunizes illegal conduct abroad by American companies.

“Can a beer company offer $10 million [to a foreign government] to block all other beer sales? The [act-of-state] doctrine cannot be a defense,” Benoit told the three-judge panel. “It’s absurd.”

He argued, “It is clear the Sherman Act was intended to protect US exporters.”

Anheuser-Busch controls 45% of the US beer market and 43% of the Canadian market.

Full Content: Court House News