Pete Coors on tap: beer baron speaks his mind on politics, parenthood and the Molson merger

ColoradoBiz, May, 2005 by Robert Schwab

Pete Coors, with his November run for senator over and the merger of his family's Coors Brewing Co. with Molson Inc. of Canada complete, has become the patrician pillar of Colorado's most enduring, most powerful and most popular business family.

In an exclusive interview with ColoradoBiz, Coors said he discovered how many friends he has as he traveled the length and breadth of the state during his campaign.

He also said he would consider a future political campaign if the time and the office were right for him. But for now, he said, he wants to get back to the business of making beer.

Because he remains Colorado's best-known business figure, ColoradoBiz asked Coors to sit down with us to talk about the merger and any political options that remain open to him.

The interview was conducted March 22 in an oak-paneled conference room on the grounds of the Golden brewery's historic Clear Creek complex. Coors was relaxed, relieved--it seemed--that both major events in his life are now behind him.

And he was looking forward to helping to run an international brewing company. An edited transcript of his interview--minimally rearranged for readability--follows:

Q CB: WHAT'S NEXT FOR THE MERGED BEER COMPANIES?

Coors: We've hired Frits van Paaschen (president of Molson Coors Brewing Co.'s U.S. operations). It will be his responsibility whether he decides to re-organize and how. We have time. We're not going to be in any rush. We did announce the closing of Memphis (a Coors brewery there), and that is something we have been working on for some time. The corporate center will move downtown. We really should have done that probably a couple of years ago--because we've operated as a corporate staff on a global perspective for quite some time.

Q CB: WHAT WILL YOUR ROLE BE?

Coors: I will continue to keep my current job, basically, which is chairman of the (Coors Brewing) company.

I will be the liaison between our family ownership in the company and the company at the corporate level. In fact, we just filmed four more commercials. Do you believe that! They still want me to do that!

So I'll continue to be pitchman, I'll continue to work with our distributors and our retailers throughout Coors in the U.S. I'll probably begin to spend a little bit more time in Canada. I don't know much about how that business is structured other than the relationship that we've had for a number of years with Coors Light up there, and we'll have to see what happens to Brazil. That's a whole different problem. It is (new) to me. Molson bought the Brazil operation three years ago, roughly about the same time we bought the U.K., and they've had some struggles down there. It's a great market, it's a huge market but it's a very difficult market.

Q CB: HOW IS THE MERGER GOING TO AFFECT THE COORS FAMILY'S TRADITIONAL ROLE IN COLORADO BUSINESS?

Coors: Not much. Coors Brewing Co. will continue to operate as it has. We (at Coors) realized a number of years ago that if we didn't grow on a global basis we were going to be at risk of being able to survive against the other giants in the industry. And we wanted to stay in the beer business. Although we don't have 100 percent of the voting stock as we once did--we have 33 and a half (percent). We have through the voting trust, virtual control the same as we had in the past. And that was a very important thing to the Coors family when we structured this deal. It's very unique in American business by the way, there aren't many of these.

Q CB: HOW DOES BEING LARGER FUNDAMENTALLY IMPROVE YOUR POSITION IN THE MARKET?

Coors: Well, as we've announced, we've committed to $175 million of synergies. They will come from a combination of things, including the closing of the Memphis brewery, building a brew line in Virginia that was announced to be about $45 million in savings and putting other things in place. Being larger allows us to have more negotiating power with large suppliers for aluminum cans, glass and other things.

We've worked together with Molson for years, so we're very familiar with each other.

Q CB: ANY PLANS TO SELL OFF ANY OF THE COORS GOLDEN PROPERTY?

Coors: We're going to continue to brew beer here. But there are some things that we're learning about brewing that will be instilled into the new brew house in Virginia that could be applied here. This brewery, if you think about it, is 30 to 40 years old. We were building capacity in the '60s and into the '70s. Other than upgrading packaging lines, which we will continue to do because the technology improves, rather than putting band-aids on old equipment, it's cost-effective to take out old lines and build new ones. We're going to continue to have a huge presence in Colorado.

Q CB: WHAT ABOUT POLITICS? YOU LOST YOUR SENATE RACE, BUT SINCE THEN POLITICAL DEBATE IN COLORADO HAS FOCUSED ON REVIVING THE ECONOMY. AND SUGGESTIONS?

Coors: Sure. But whether the people of Colorado have an appetite for making those changes is another question. My whole campaign was about less taxes, and every initiative that was on the ballot that had to do with a tax increase, everybody voted for it. So maybe we're not overtaxed like I think we are.