Historic brewery outside Olympia heads for history

After 107 years in business, four owners and countless bottles of beer raised high, the Miller brewery in Tumwater is closing its doors.

The Thurston County plant, smallest and least efficient of Miller's seven breweries, would require too much money to continue to operate, a company spokesman said.

"We did not take this decision lightly, and realize the historic value of this facility," said Michael Brophy, Miller's director of regional state affairs. "It's business, and this business is extremely competitive."

Nearly 400 workers will lose their jobs in batches as the plant phases out production, sending the 2 million barrels of beer it brews annually to the other plants.

Brophy said the Tumwater plant will be shut down by July 1. Its 350 hourly workers will be offered a severance package to be negotiated with their union. Brophy said some of the 50 salaried employees at the plant will be offered jobs elsewhere.

No plans have been made for the sprawling beige building, a community landmark seen from Interstate 5.

Residents can set their clocks by the factory's shift-change whistle, and the smell of malt and hops frequently wafts through town. The plant near scenic Tumwater Falls is the second-biggest tourist attraction in the area, after the nearby state Capitol.

The brewery started mixing hops and barley in 1896 when German-born master brewer Leopold Schmidt mixed hops, barley and the now famous Olympia water to churn out his first barrel of Olympia Pale Export.

He'd heard of the area's "naturally perfect" water and touted his beer's great taste because "it's the water."

The slogan that became a signature for the brewery is still used today, and most residents still call the facility the Olympia brewery.

Pabst bought the brewery in 1983, and Miller took over in 1999. That same year, Stroh Brewery went out of the beer business and sold its brands to Miller, moving production of Henry Weinhard and Rainier beer to the Tumwater plant.

Michael Showalter, manager of the neighboring Falls Terrace restaurant, remembers when the only beer he had on tap was Olympia. He's got dozens now, but being able to gesture out the window to the beer's origin is the kind of priceless customer experience he'll miss.

Brewery employees enjoy lunch and Friday-night drinks at Showalter's tables and bars, and visitors touring the brewery stop in to soak up the samples with some food.

The restaurant will likely take a temporary hit as a result of the closure. "They've been good to us," Showalter said. "I only hope that in the future, we get as good a neighbor."

Within Miller's walls, the rumor mill had been steadily grinding out fodder for employee speculation.

Few employees were surprised to get the news in a morning meeting.

"We saw it coming," said Keith Clark, a distribution worker. "It was time. It's gonna be hard, but people will get by."

Many were disheartened to be losing a job they loved, but few expressed hard feelings toward the employer that let them go.

"It's business — that's all it is," said Chris Reynolds, who worked for a contractor driving trucks. "I don't blame them."

Many believed it was inevitable. South African Breweries bought Miller in May to put Miller on par with rival Anheuser-Busch, which controls nearly 50 percent of the domestic beer market. Miller is second with 20 percent.

There was speculation the closure was linked to a dispute over a wastewater-treatment plant Miller had said it would build.

The company was behind on plans to start work on the $13 million facility.

Mike Strub, executive director of the intergovernmental LOTT Wastewater Alliance, which manages wastewater services around Olympia, had been leaning on Miller to announce its plans.

The brewery had failed to apply for permits for its own wastewater-treatment plant, missing a deadline in its contract with LOTT by 15 months.

"This is not the answer we wanted," he said.

The closure of Thurston County's biggest manufacturing employer will hit just as the area is bracing for mass state government layoffs because of budget cuts.

Beer fans will still be able to get a can of Miller High Life or a tall boy of Pabst Blue Ribbon at the corner store, but the loss of the brewery is one that locals mourn for more personal reasons.

Claudia Clark-Engstrom remembers taking spontaneous tours of the brewery when she was hot, uncomfortable and pregnant with her daughter more than 20 years ago.

An educational experience, yes, but she was more concerned with the breath of fresh air-conditioning.

Tours were stopped yesterday out of respect to brewery employees.

"It just makes the community feel a little less unique, seem a little less special when something like this changes," said Feliks Banel, deputy director of the Museum of History and Industry.

"It makes you take stock of what makes this area different."

Lisa Heyamoto: 206-464-2149 or lheyamoto@seattletimes.com

Information from The Associated Press was included in this report.

A brewery evolves

1896: Leopold Schmidt, impressed with the quality of artesian-well water in the area, establishes the Olympia Brewery.
1916: Prohibition in Washington state hits the brewery hard and pushes the Olympia and Tumwater economies into a minor depression.
1933: Prohibition ends nationally, and Olympia Brewing rebounds with a modernized plant.
1982: The Schmidt family signs a 20-year contract with the LOTT Wastewater Alliance to treat the brewery's wastewater.
1983: The brewery is sold to Pabst.
1999: The brewery is sold to Miller Brewing, leaving an outstanding sewage-plant-improvement bill; Miller says it wants to settle the bill and expand production.
February 2001: LOTT and Miller sign an agreement to disconnect Miller from the sewer system.
November 2001: The state Ecology Department denies Miller's permit to discharge wastewater into the Deschutes River.
2002: Philip Morris Cos. sells Miller Brewing, including its Tumwater plant, to South African Breweries (SAB) for $5.4 million.
2003: Miller announces it will shut down the Tumwater brewery by July 1.