ustxtxb_obs_1977_12_30_50_00009-00000_000.pdf

One more for the road Pearl may still be “the beer that’s brewed right here,” as the radio jingle has it, but company ownership is moving far away from the heart of Texas. Southdown, Inc., the Houston cement-oil-sugar-and-candy conglomerate that owns Pearl, is about to deal away the beer firm and its canmanufacturing subsidiary to General Brewing Co. of San Francisco. The sale, expected to be completed Jan. 4, leaves tiny Spoetzl Brewery, maker of Shiner, as the last independent Texas beer firm in Texas. Pearl president Lee Birdsong would not disclose terms of the sale, but he did confirm that Pabst Brewing Co. had also been interested in buying the San Antonio company. In 1976, Pearl reported plant assets of $38 million, sales of $62 million, and a profit of half a million dollars. But the profit was not good enough for Pearl’s conglomerate parent. Birdsong said that Southdown’s returnon-investment is far better in its oil and cement businesses, and that the Southdown board was not optimistic about the prospects of reversing the decline in Pearl’s share of the Texas beer market conglomerate started to look for a way out. No one knows what to expect as a result of the sale, least of all Birdsong and other Pearl executives. To begin with, this is no ordinary corporate merger, with one faceless entity impersonally consuming another and business going on as usual. No, indeed, Pearl has been picked up by a blunt, crusty, honest-toGod tycoon of the old school who doesn’t like anyone getting in his way. Paul Kalmanovitz, a 72-year-old self-made man who immigrated to California from Eastern Europe in 1926 and made a fortune in West Coast real estate, is perfectly cast as a beer-barrel maverick in an age of corporate cool and advertising slick. Kalmanovitz got into the brewer’s trade in 1950 through a land deal that brought him ownership of Maier Brewing Corp. In the mid-’60s, he bought heavily into General Brewing Co., finally winning control of the company in 1971 and merging it with Maier. His brands include Lucky Lager, Regal, Fisher, Brew 102, such privatelabel beer as Brown Derby \(sold by private companyKalmanovitz owns 99 percent of the stockand the firm is not subject to many of the ownership disclosure requirements that the federal government has applied to publicly held corporations. The upshot is that not much is known about General Brewing. Little more was known about Kalmanovitz \(“I shy away from publicity and I don’t play golf, so I’m a mystery man,” he told until 1975, when he suddenly burst on the national beer scene with the purchase of a 52 percent interest in Falstaff, the country’s 11th largest brewer. He was not exactly a silent-partner type; he named himself chairman of the board of directors and president, cut the size of the board, fired many top managers, and moved the company’s headquarters from St. Louis to San Francisco. Several of the dismissed executives have filed suit against “Mr. Paul,” as Kalmanovitz is called in the Bay Area, charging that when he took over Falstaff, he made assurances that he wanted the men to stay on, then dumped them unceremoniously. The Securities and Exchange Commission also doesn’t like the way he moved in, formally charging last spring that he violated several securities laws in his takeover. Kalmanovitz merely claims that he is doing what is best for the company and the shareholders. So what if it means a few technical violations of SEC rules. Sue me, is his attitude. Kalmanovitz has simply dumbfounded his peers in the beer industry, a tidy corporate world where small brewers are supposed to follow the leaders quietly. In the first place, Kalmanovitz doesn’t believe in advertising, and he chopped Falstaff’s national promotion budget shortly after taking the reins. He thinks the way to compete is to cut costs and lower beer prices. He also refuses to join state and national brewers’ associations, and he drove industry leaders completely up the wall in the early ’70s by supporting Oregon’s ban on no-deposit, no-return bottles. Ohhe’s also given to suing big brewers that he thinks engage in anticompetitive practices, such as paying kickbacks to supermarkets in exchange for prominent shelf space. What does all this bode for Pearl? Birdsong will say only that when the GBC deal is consummated, he will confer with the new owners about his future. Of course, corporate headquarters now shift to San Francisco, though Birdsolg says he expects that Pearl managers will continue to operate out of San Antonio as a GBC subsidiary. No discussions have been held about marketing changes in Texas, but he expects that all the current brands \(Pearl, Pearl Light, Country Club, Texas sold here. Birdsong says the merger will have no effect on Pearl’s pending federal antitrust suit against Anheuser-Busch, which the Texas brew has accused of predatory pricing \(Obs., Won’t you come? The national Democratic Party oozed so much harmony at the 1976 presidential convention in New York City that it has decided to get the bunch together again for a 1978 meeting. Next year’s event is billed as a chance for the Carter administration, the Congress and the party to mix it up and discuss policy midway between presidential elections. The midterm conference will be held next December in Memphis, with 1,491 delegates in attendance, all chosen under procedures to be established by the 50 individual state parties. The Texas contingent is to be 70 strong: 48 of our delegates will be elected in the state’s 24 and 12 on an at-large basis. A group of ten ex-officio delegates will include the governor and nine Texas members of the Democratic National Committee. The delegation must be composed of equal numbers of men and women. State party officials told the Observer that rules for selecting delegates will be drawn up at the Jan. 21 meeting of the State Democratic Executive Committee. The Memphis conference will have a town-hall format: President Carter, Vice President Mondale, cabinet officers, congressional leaders and party officials will answer questions and discuss issues directly with the delegates. No one is clear yet on what is to come of all this interaction. THE TEXAS OBSERVER