Lawsuit claims Pyramid and distributor colluded on beer prices

Modern Brewery Age, August 14, 2000

According to a class action lawsuit filed last week, the concessionaire at Safeco Field in Washington state is reaping a windfall profit over and above the cost of the premium-priced beer, through an alleged conspiracy between a local brewery, its distributor and concessionaires.

The lawsuit, filed in King County Superior Court, alleges that Pyramid Breweries and its distributor Western Washington Beverage conspired with Service America Corporation (SAC), the concessionaire at Safeco Stadium and Seattle Tacoma International Airport concessionaire Host International to illegally circumvent Washington state law. That law mandates that breweries and distributors offer the same pricing to all retailers regardless of quantity.

The suit, filed by Jersey's All American Sports Bar on behalf of bars and taverns that purchase beer by the keg for resale, contends that Pyramid and Western Washington Beverage fraudulently disguised one of Pyramid's most popular brands, Pyramid Hefeweizen, under the name Bavarian Hefeweizen, and sold the beer exclusively to SAC and Host at a $25-per-keg discount.

According to Steve Berman, attorney representing Jersey's, this arrangement was an attempt to create a way to offer Safeco Field and Sea-Tac Airport volume discounts, something that Washington law expressly prohibits. Safeco Field is the state's largest retailer of beer.

According to the suit, Pyramid Ales and Western Washington Beverage offered the disguised Pyramid Hefeweizen to Service America and Host while refusing to sell it to other retailers.

"It is bad enough to pay $6 for a beer at Safeco Field, but to know that they are getting the beer cheaper than anywhere else in the state makes it even harder to swallow," said Steve Berman, attorney for the proposed lawsuit. "Considering the amount of tax money that went to build the stadium, the least Service America could do is give fans a fair shake when it comes to buying a beer."

According to Berman, documents uncovered during the preparation of the lawsuit show that Western Washington and Pyramid also offered the disguised Pyramid Hefeweizen to the Washington State Ferry System, another high-volume customer. The ferry system declined the offer.

The suit, filed on behalf of Jersey's All American Sports Bar, seeks to end the preferential pricing offered to Host and SAC, and to recover damages for all Washington state beer retailers.

The suit states that Service America and Host paid an average of $70 per keg of Pyramid beer. Jersey's, along with other Washington bars and taverns, pay around $95 for a keg of Pyramid beer.

According to attorney Berman, representatives of Pyramid met with the distributor and the other defendants to create the scheme. "The vision that comes to mind is a bunch of guys sitting in some back room, smoking cigars and coming up with a way to dupe the state and other beer resellers," Berman said. "We don't know whether they were smoking cigars, but we know all about their plans."

Steve Berman is managing partner of Hagens Berman in Seattle. He was the prime architect of the groundbreaking Liggett Tobacco settlement, which resulted in the release of thousands of previously privileged tobacco industry documents.

Berman also served as lead or co-lead council in a number of other high-profile cases including Washington Public Power Supply litigation, which resulted in a settlement exceeding $850 million.