K.O. at Pabst

The Pabst Brewing Co. has sponsored so many TV boxing matches that its name has practically become synonymous with fighting. Last week Pabst reluctantly sponsored one more fight--the first proxy fight in its 94-year history. The ring was a igth-floor hall in Chicago's Merchandise Mart. In one corner was short, pudgy Pabst President and Chairman Harris Perlstein, wearing grey suit, tan shoes and grey tie. In the other, the challengers: Robert and David Pabst, the grandsons of the Pabst founder, Fred Pabst, and Otto and Carl Spaeth, son and grandson respectively of the founder of Premier Malt, which bought out Pabst in 1932.

The Pabst-Spaeth group blamed Perlstein for the fact that the company has dropped from No. 1 in 1949 to eighth among U.S. brewers, last month reported a loss for 1957 of $2,871,200. The stock has dropped from 32 to 4. Fearing for their 25% share of the stock, the Pabst brothers enlisted the aid of the Spaeths to unseat Perlstein as president at the annual meeting.

Easy Victory. When the bell rang last week, Perlstein swarmed all over the opposition, won an easy knockout. His slate of directors polled 56% of the votes cast. After the count, the vanquished did not even get the chance to speak; when David Pabst tried to make a statement for the record, Perlstein cut him off--in the interest, he explained, of a brief meeting.

Behind the fight was a longstanding feud between Perlstein and the Pabst family. Perlstein was president of Premier Malt when it took over the old Pabst Corp. in 1932 in anticipation of Prohibition's demise. He became president of the new Premier-Pabst Corp., and Fred Pabst, son of the founder, later became chairman. Perlstein led the company through its period of greatest growth and profitmaking, saw it reach its biggest year in 1949 with a sales peak of $168,994,000. But Perlstein soon found himself hurt by his own success. Hit hard by the steadily flattening beer market, Pabst sales slid steadily. To make matters worse, Perlstein drew the wrath of the Pabst family for opposing their attempts to get more family members into the business.

When Fred Pabst retired in 1954, leaving the company without a Pabst as an officer for the first time in 90 years, the Pabst family increased pressure on Perlstein to bring in a new man to run the company. Perlstein brought in as president Marshall S. Lachner, a vice president of Colgate-Palmolive Co., kept the chairmanship for himself. But Lachner failed to halt Pabst's sliding sales, and in 1956, for the first time in its history, the company showed a loss. Last fall Perlstein got Lachner's resignation, took over as president as well as chairman, began reversing many Lachner policies. One new policy suited Lachner. Perlstein insisted on a severance contract providing Lachner with more than $3,000 a month through 1961, so long as he makes no criticisms of the Pabst firm or its officers during that time. So far, Lachner has kept prudently mum.

Pepsi Merger? After his victory, Perlstein announced that he will take up again a major project interrupted by the proxy fight: merger talks with the Pepsi-Cola Co. Perlstein started the merger talks while the proxy fight was brewing, but Pepsi President Alfred Steele broke off the talks when he saw that the fight was inevitable. Steele, who took over Pepsi when it was floundering and sent sales and profits soaring, apparently felt he could do the same for Pabst; Pabst also stood to gain by Pepsi's crack management and salesmanship.

If the Pepsi merger does not work out, Perlstein is thinking of consolidation with some other company. "This is the type of move.'' he says, "that would be quickly beneficial." And even Winner Harris Perlstein recognizes that Pabst needs something beneficial in a hurry.

This file is automatically generated by a robot program, so reader's discretion is required.