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Molson, Miller Brewing settle battle over brand distribution in Canada

Boxed bottles of Coors Light beer, manufactured by Molson Coors Brewing Co., move along the production line ahead of shipping.

Chris Ratcliffe/Bloomberg

Beer giants Molson Canada and Miller Brewing Co. have settled their fight over who gets to sell Miller Genuine Draft in Canada.

The two companies announced Friday that they have amicably settled a legal dispute that has been going on for years. As of April 2015, Miller will take over the sales of Miller products, including the key Genuine Draft brand, which had been part of the Molson portfolio of beer in Canada.

Molson, a unit of Molson Coors Brewing Co., has had the exclusive rights to distribute Miller products – such as Genuine Draft – under an arrangement that goes back decades. But Miller wanted to end the arrangement, because it thinks it can do a better job of selling its own beer in Canada. Miller gave official notice in January 2013 that it wanted to end the deal as of July of that year, but Molson said that couldn't be done under the terms of the contract. It went to court in May 2013 to get a temporary injunction to keep the distribution arrangement in place until the merits of the dispute could be heard in court.

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A court date was set, but the two companies decided at the last minute to negotiate privately, rather than take it in front of a judge.

The key issue is the amount of Miller Genuine Draft that Molson has sold in Canada in recent years. From 2010 to 2012, the sales were far below the targets set out in the contract, and Miller, a unit of British-based SABMiller PLC, said that gave it the right to terminate its deal.

Molson said those targets were supposed to be renegotiated. In addition, it said in legal submissions that Miller Genuine Draft is a strategic brand in filling out its portfolio of beers, and losing it would cause "irreparable harm."

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