Minnesota Brewing Closed

Minnesota Brewing closes its doors Tony Kennedy Star Tribune Published Jun 25, 2002 The owners of Minnesota Brewing Co. closed the doors on nearly 150 years of state beer-making history Monday by shutting down the former Jacob Schmidt brewery on St. Paul's W. 7th Street. It was the last old-line brewery in the Twin Cities that hadn't dried up as a result of ever-increasing domination of the industry by national labels Budweiser, Miller and Coors. The company had filed for bankruptcy protection in February. The brewery's chief brand, Grain Belt Premium, might live on, but only if another regional brewer buys it or agrees to make it under a production contract. "It's a sad deal," said Glen Quant, the most senior of all 120 workers left jobless by the plant closing. "We stopped filling bottles about noon. At 3 p.m., they shut down all the [packaging] lines for good and called us into a meeting," Quant said. St. Paul City Council Member Chris Coleman called the plant an "old, important St. Paul institution." He said it's unfortunate that the brewery has failed while the business meant to help it succeed, a controversial ethanol plant, will continue to operate. With the brewery's creaky bottling line operating under a leaky roof, bankers overseeing the company's bankruptcy reorganization finally gave up hope for a turnaround and demanded the keys. The shutdown came four years and nine months after a similarly sudden shutdown hit the equally historic Stroh Brewery on St. Paul's East Side. Some former Stroh workers had found jobs at Minnesota Brewing. Lisa Nasseff, a spokeswoman for Minnesota Brewing, said a piecemeal liquidation of the old Schmidt plant is the most likely scenario. "I don't think anyone would be horribly optimistic at this point" that someone would reopen it, Nasseff said. Minnesota Brewing Chief Executive Officer Jim Freeman called Monday a sad day in the plant's history. The first beer was made on the site in 1855 by German settlers. "Over 100 families who relied on the brewery for their income will be looking for other employment opportunities," Freeman said in a prepared statement. Because it was raining, the impromptu meeting to announce the shutdown was held in the brewery's entertainment rathskeller, the site of countless private parties, political fundraisers and community meetings over the years. "There were some real long faces in that meeting," said Tom Swanda, a 36-year plant veteran who commiserated briefly in the employee parking lot with co-workers. The lot was empty within 30 minutes of the announcement. "A lot of guys have to go home and tell their wives that they are out of a job," Swanda said. Ruth Suttles, a 22-year veteran of the bottling line, said she was operating the pasteurizer when production was halted. "All the cans are still in there, everything just stopped," she said. Timing was a surprise Suttles and other workers knew the company was facing large debts -- more than $14 million -- but the timing of the shutdown was a surprise. Since February, when Minnesota Brewing filed for bankruptcy protection to duck pressure from unpaid creditors, there were muted hopes of a turnaround. All was lost when the brewery couldn't keep up with production orders for its largest customer, the owners of Mike's Hard Lemonade. Mike's was made under contract at the St. Paul plant. Suttles said workers don't know whether Minnesota Brewing and its parent, MBC Holdings Inc., will honor labor agreements that call for severance and vacation pay. She said there was no 60-day plant-closing notification, as required by federal law, because of the bankruptcy status. "I just think we were done wrong," Suttles said. In recent years, the brewery operated with as many as 160 full-time workers during peak summer months. The remaining ethanol plant, which was built in 1999 with the help of state ethanol subsidies, employs 14 people. It was designed to save the brewery by sharing brewery overhead expenses. "Now all Minnesota has left is a stinky ethanol plant near downtown St. Paul," said Jay Mitzuk, a brewery worker since 1972. Pat Dwyer, co-owner of Grumpy's Bar in Minneapolis and a supporter of Minnesota beer brands, said he hopes the Grain Belt label is picked up by another brewery. Originally, the beer was made in northeast Minneapolis and was a fierce rival with the St. Paul-based Schmidt brand. "It was hard enough to see it move from Minneapolis to St. Paul," Dwyer said. "But this breaks my heart. I'll still support it, though." Grain Belt's prospects Mark Stutrud, founder of St. Paul-based Summit Brewing Co., said he would be interested in acquiring the Grain Belt label if it is priced reasonably. New Ulm-based August Schell Brewing Co. also has expressed some interest. "It's a sad state of affairs," Stutrud said of Monday's plant shutdown. Summit operates out of an all-new, right-sized brewery on the bluffs of the Mississippi River near Interstate Hwy. 35E. The old-line plants were huge by comparison, built in an era when regional beers such as Grain Belt, Schmidt and Hamm's had large market shares. When Budweiser, Miller and Coors took hold as national beers, the old regional plants were left with too much unused capacity, Stutrud said. Minneapolis businessman Bruce Hendry is chairman of MBC Holdings, the company that operates the ethanol plant and brewery. He could not be reached for comment. With the help of government subsidy, Hendry bought the idle St. Paul brewery in 1990. It had been mothballed by previous owner G. Heileman Brewing Co. of LaCrosse, Wis., which was the last company to produce the flagship Schmidt brand in St. Paul. Though the brewery chronically lost money, Hendry and fellow investors received rent payments from the beer plant as owners of the property. -- Kevin Duchschere contributed to this report. David Berg President, Minnesota Craft Brewer's Guild Head Brewer, Water Tower Brewing Company