TORONTO Feb 27 Miller Brewing Co, a subsidiary
of SABMiller Plc, said on Wednesday it is terminating
its Canadian license agreement with Molson Coors Brewing Co's
Canadian arm, as it believes its partner is
not doing enough to promote Miller brands in Canada.
Paul Gurr, who heads Miller operations in Canada, said the
company was taking the step as part of a drive to boost its
Canadian sales of brands such as Miller Lite, Milwaukee's Best
"While Miller brands make up only a small percentage of
Molson Coors' Canadian sales, this decision reflects our belief
that there exists the opportunity to grow Miller's brands in
Canada," Gurr said.
Miller said it provided Molson Coors in Canada with a
six-month notice of termination, on Jan. 1. The agreement is set
to be terminated as of July 22.
In a regulatory filing earlier this week, Molson Coors said
it has filed a lawsuit in the province of Ontario seeking to
prevent the termination of the license agreement.
"Miller alleges that we failed to meet certain volume sales
targets under the license agreement," Molson said in the filing.
"We do not believe Miller has any right under the license
agreement or otherwise to terminate the license agreement."
Miller said it is vigorously defending itself against that
action and maintains its right to terminate the agreement.
The company said it remains committed to the Canadian market
and Miller trademark brands will continue to be available in
The tussle is not expected to have an impact on the
partnership between the two companies in the United States. The
U.S. beer market is currently dominated by the world's largest
brewer, Anheuser-Busch InBev, and MillerCoors, a joint
venture between Molson Coors and SABMiller.
Earlier in February, Molson Coors reported a 28 percent
decline in its fourth-quarter profit as its tax bill more than
doubled and beer sales slumped in Canada, the brewer's top
Molson's Canadian business, which accounted for about half
its fourth-quarter revenue of $1.03 billion, was hit by a 20
percent rise in beer excise tax rates in the province of Quebec
and the National Hockey League player lockout.
The court case between the two sides is Molson Canada 2005
V. Miller Brewing Company, in the Superior Court of