Liquor Industry News 1-25-13

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1-25-13 Today is a Biodynamic FLOWER Day.

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Maker of Jim Beam to close former White Rock facility in Lewiston, lay off 160 workers

 

Source: BDN Maine

Jan 25th

 

Beam Inc., maker of Jim Beam bourbon, announced on Thursday that it will shut down production at its Lewiston facility and shift production of Pinnacle Vodka and Calico Jack Rum to a facility in Kentucky.

 

The 160 employees who work at Beam’s plant in Lewiston will lose their jobs, Paula Erickson, a spokeswoman for Beam, told the Bangor Daily News on Thursday.

 

Employees in Lewiston were told of the decision on Thursday afternoon, Erickson said. All production of Pinnacle and Calico Jack will be shifted to a Beam facility in Frankfort, Ky., but the changes won’t be immediate. The consolidation will take place over the next 15 months and be complete by April 2014, she said.

 

“We wanted to give the workforce as much advance notice as possible,” she said.

 

She continued: “On the flip side, in transferring the operations we will be creating 45 new jobs in Frankfort. There are some positions that anybody in Lewiston . if they wanted to relocate, they could go for these jobs. I realize Kentucky is far away from Maine.”

 

Consolidating production in Frankfort will be more efficient and save the company money, she said.

 

“All of our production is out of Kentucky. This specific facility in Frankfort, Ky., recently underwent an expansion and it has extra capacity in it,” she said. “To have efficiencies in that core area it just makes sense.”

 

Beam acquired the Pinnacle and Calico Jack brands from White Rock Distilleries in April of last year, Erickson said. At the time, Erickson told the BDN there were 180 employees at the Lewiston facility.

 

With nearly 3 million cases produced a year, Pinnacle by far is the biggest brand coming out of Lewiston, she said. She didn’t immediately know how many cases of Calico Jack was produced in Lewiston.

 

In a statement, Ian Gourlay, Beam’s senior vice president of global operations and supply chain, said the decision to shift production from Maine to Kentucky was “a logical step,” and that it is in no way a reflection of the “dedication and hard work” of Beam’s employees in Lewiston.

 

Erickson said Beam will be looking to sell the Lewiston facility.

 

The news is the second blow to Lewiston this week. On Tuesday, Geiger announced it was shutting down its manufacturing business in Lewiston and laying off 75.

 

CORRECTION:  An earlier version of this article stated Beam employs 100 people in Lewiston. The company actually employs 160.

 

 

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Washington: Distributors and Teamsters oppose the Costco Liquor Loophole

 

HB 1161 would make small retailers less competitive and reduce consumer choice

 

Source: Gallatin Public Affairs

January 24, 2013

 

The House Government and Oversight Committee will hear HB 1161 – The Costco Liquor Loophole Bill – today.

 

“We find it amazing that Costco and other proponents of I-1183 are attempting to change the wording of their own initiative only months after the law was implemented,” said John Guadnola, executive director of the Association of Washington Spirits & Wine Distributors.

 

Backers of Initiative 1183 promised voters that privatizing our state’s liquor system would not impact state funding levels from liquor. They said the taxes and fees in the initiative would keep the state whole. To do this 1183 imposes a 17% fee on retailers, and a 10% fee on distributors, and it forces distributors to pay a lump sum of $150 million (less distributor fees already received) for the right to do business in Washington.

 

“Costco deceived the voters of Washington State when they pushed through Initiative 1183 last year, now they are deceiving Washington Bar and Restaurant owners and our Legislators in HB 1161, a plan designed to benefit their own business interests at the expense of the citizens and small business owners of Washington,” said Rick Hicks President of Joint Council of Teamsters No. 28.

 

What Costco now aims to do with HB 1161 is to exempt itself from paying the 17% retail fee when selling to bars and restaurants. In addition, Costco is currently in a lawsuit to exempt itself from the 10% distributor fee on spirits sourced directly from manufacturers.

 

“Costco is trying to have their cake and eat it too,” continued Guadnola. “They want to act like a distributor, but not pay into the system.”

 

HB 1161 would also strengthen the market position of big box retailers at the expense of smaller retailers. Stores like Costco would have an additional advantage over former state-owned and contract store owners in areas throughout the state where big box stores exist.  As our state sees smaller stores close, consumers will have to rely on big box stores like Costco who carry only a fraction of the products of former state-run stores.  

 

 

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Report: Craft Beer Set to Triple by 2017

 

Still, craft beer’s future isn’t picture-perfect

 

Source: InvestorPlace

By Nate Wooley

Jan 24, 2013

 

Shamrock BeerA research report shows that the growth of the popularity of craft beer is going to continue.

 

Research firm Mintel took a look at the popularity of the specialty brews. Growth was strong from 2007 through 2012 – the height of the recession – so what does the future hold for craft beer?

 

More growth, apparently.

 

Sales of craft beers doubled during the time studied and are expected to triple by 2017, the report found. Already increasing consumer demand for craft beer – combined with a younger generation that has been raised on non-mass-market beers – means growth should boom in the future.

 

One concern, however, is that the number of craft breweries in the market is exploding. Mintel warned that its findings indicated that 1,200 breweries are in the planning stages (the U.S. already has about 2,100), and even established brands could find the market tempted more by new beers than by their already in-place beverages.

 

Also a challenge, of the prime buying market – those in the millennial and Gen X demos – fewer than 20% thought that craft beers presented a greater value. To cope with that, brewers must do a better job of educating beer drinkers beyond the younger millennial group that is their core market.

 

 

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Craft Beer Sales Continue To Rise

 

Source: Marketing Daily

by Tanya Irwin

Jan 24th

 

Despite the economic downturn, craft beers are defying recessionary trends with an impressive upward swing, according to Mintel.

 

The latest research by Mintel on the craft beer market in the U.S. shows that sales of craft beer nearly doubled between 2007 and 2012, increasing from $5.7 billion in 2007 to $12 billion in 2012.

 

The trend toward craft beer options is set to enjoy robust growth through 2017, with Mintel forecasting the segment to grow to $18 billion by 2017 – a result that will see the segment tripling in the decade between 2007 and 2017.

 

“Unlike its domestic and imported beer counterparts, craft beer has been able to defy overall beer market trends and continue expansion during the economic downturn and subsequent slow recovery,” said Jennifer Zegler, beverage analyst at Mintel, in a release. “While the craft and craft-style beer category remains a small segment of the $78 billion U.S. beer industry, the category has been able to stabilize the overall beer industry, which has experienced volume declines in the domestic and imported beer categories since 2008.”

 

Nearly a quarter (24%) of consumers who drink beer indicate that in 2012 they drank more craft beer sold at stores compared to 2011. More than one in five (22%) report consuming more craft beer in bars or restaurants.

 

Mintel research shows that craft beer’s sweet spot is with 25- to 34-year-old consumers (older Millennials). While overall, some 36% of U.S. consumers drink craft beer, half (50%) of older Millennials do so. And craft beer also wins on taste. Some 43% of both Millennials and Generation X say that craft beer tastes better than domestic beer, compared to 32% of Baby Boomers.

 

Although successful, craft beer is not free from challenges. Only 17% of Millennials and 18% of Generation X say that craft beer is a better value. A majority (56%) of consumers of all ages feel that domestic beer is a better value compared to craft beer. Furthermore, Mintel research found that nearly half (45%) of consumers would try more craft beers if they knew more about them.

 

Despite the variety of beer releases created by craft breweries, craft beers are not yet everyday beer choices for most drinkers due to a lack of understanding about their taste profiles, Zegler says.

 

“To continue growing, craft beer must be its own best advocate and expand appeal beyond Millennials who are most likely to consume craft beer,” she said. “An additional barrier is lack of knowledge. Craft brewers need to focus on education through tastings and classes that inform consumers about the differentiation in flavor between craft beer and other alcoholic drinks.”

 

Mintel research also found that 50% of overall craft beer drinkers express interest in locally made beer, and 25% are interested in purchasing craft beer where it was brewed. Another 39% say they are influenced to purchase a craft beer if it has a personality to which they can relate.

 

 

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Inspiring Story

 

Fedway’s Perfect Storm (Excerpt)

 

Source: Beverage Media Group

Kristen Wolfe Bieler

January 23, 2013   

 

After suffering catastrophic damage from Hurricane Sandy, the New Jersey wine & spirits wholesaler rebounds with an equal demonstration of force.

 

On Monday night, October 29th, Hurricane Sandy hit the U.S.’s northeast coast breaking records and inflicting unimaginable destruction. Coinciding with high tide and the full moon, the storm brought to shore tidal surges of 16 feet in some places. Although the historic water invasion receded after only several hours with the tide, Sandy would cost the state of New Jersey alone a mind-numbing $29.4 billion.

 

At Fedway Associates, Inc., one of the Garden State’s largest wine and spirit wholesalers, storm preparations had been taken. After all, with its warehouse and main office in the town of South Kearny nestled between the Passaic River to the west and the Hackensack River to the east, the company was no stranger to storms or flooding, having weathered Irene a year earlier. Trucks had been driven to higher ground, the IT system moved to the office’s second floor and in the warehouse-which rarely saw water enter-a number of pallets had been lifted several feet off the floor.

 

Yet Sandy proved to be a different animal entirely. “We’ve had storms before, but nothing like this,” says Neil Barnett, Fedway’s President. “We’ve been based here for the last 40 years and never had any reason to worry that our warehouse operation would be in a serious danger zone.”

 

Security guard David Kengere was on-duty inside the warehouse Monday night. He noticed water seeping in around 8pm, and he began to frantically unplug electrical equipment and move it to the second floor, but he only managed to reach one machine: “I was knee-deep in water, and it was coming in so quickly that I realized I would not make it back to the second floor if I tried for more.” Kengere, who had also been on duty the night Irene struck in August 2011, sat in complete darkness-except for his cell phone flashlight-and watched in helpless astonishment as the destruction began to unfold.

 

Sandy’s tidal surge hit hard, blowing off many of Fedway’s warehouse doors as 10 feet of water forced its way in. The cardboard in stacked pallets was quickly soaked through, and the massive towers began to collapse, each creating tsunami-like waves that caused more destruction. Kengere recalls the first pallet to go down was Castello Banfi, followed by a tower of Cavit Pinot Grigio. By 6am the next morning, the water had receded by several feet, but much of it still stuck inside the building behind closed doors. It was surreal: “When I opened the doors to release the water, I saw fish swimming out,” recalls Kengere.

 

Shock & Devastation

 

Fedway Chairman & CEO, Richard Leventhal, was the first on the scene Tuesday morning, somehow managing to drive to the warehouse from his home in Tenafly. Today, over two months later, he is still unable to fully describe the devastation-”It is impossible to put into words,” he explains. When Leventhal entered the office, he saw the water and debris line at 6 feet along the walls-the entire first floor of the company’s headquarters had been destroyed. With the help of a maintenance worker, Leventhal got into the warehouse and saw the full scale of the wreckage. His first call, from a gas station down the road at 9:30am, was to Barnett, who was unable to leave his neighborhood due to dozens of downed trees and power lines.

 

“Essentially, Richard told me we were screwed,” Barnett recalls. “He told me that we had basically lost our entire inventory and infrastructure and he did not know what we were going to do.” Yet Leventhal, who does recall allowing himself “about an hour of self-pity,” soon called Barnett back. “On that second call, only an hour later, he told me we were going to get through this and we would be back in action before anyone would think it was possible,” Barnett describes. “Right then, he essentially eliminated the mourning period.”

 

Click the link to read the rest of the story……………..

 

http://www.beveragemedia.com/index.php/2013/01/fedways-perfect-storm/#.UQJMtWchGck

 

 

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Oregon: Liquor privatization issue still percolating in Oregon

 

Source: The Oregonian

Jeff Mapes

January 24, 2013

 

After the bumpy start for Washington’s liquor privatization law last year — which included price hikes that led some consumers fleeing to stores across the border — you might think the issue is off the table in Oregon.

 

It doesn’t appear to be the case.   Both sides are preparing for a potential battle here.

 

Oregon beer and wine distributors, which generally like Oregon’s current state-run system, recently spent $16,000 on a poll exploring public attitudes toward privatization.

 

And the Northwest Grocery Association, which pushed privatization in Washington, is working on its own survey on public attitudes toward ending the state’s monopoly on retail liquor sales.

 

Joe Gilliam, who heads the grocery association, said his group will ask the Legislature to consider privatization legislation, although he conceded it is more likely his group would be forced to go to the ballot with an initiative to have any real chance of success.

 

Paul Romain, the longtime lobbyist for the beer and wine distributors, didn’t release the poll conducted by Davis, Hibbitts & Midgehall of Portland.  But he asserted that voters here are pretty soured on the notion of liquor privatization.

 

“They so screwed it up in Washington state that if you threatened to set off a nuclear device in this state you couldn’t pass it,” quipped Romain.

 

Indeed there was a lot of initial bad publicity about privatization, which was approved by voters in November of 2011 and took effect in April of 2012.  The biggest surprise was that the prices of many products went up, and sales actually increased at some Oregon stores as Washingtonians came across the border.

 

In part that was due to the simple fact that Washington has levied higher taxes on liquor than Oregon, and the initiative was written to maintain the flow of revenue to the state.

 

But Gilliam also the state also botched the transition, leading to supply shortages that, in particular, forced some bar and restaurant owners to buy in Oregon.  He also claimed that distributors have been “gouging” consumers.

 

Gilliam argued that the problems are being worked out, and liquor sales in Washington are now on a steady upward trend.  He said he believes that price is not the only issue voters consider.  Many believe the government shouldn’t be in the liquor business, and many consumers want the convenience of being able to buy liquor at a broader number of outlets.

 

The grocers might have made more headway on that argument if Republicans had maintained at least partial control of the House.  But Democrats have generally shown less interest in privatization.

 

Romain argued that consumers won’t save money on privatization, but that distributors aren’t necessarily opposed to it.  They’re just worried that an initiative written by the grocers will disadvantage distributors.

 

UPDATE: Romain says it is unfair of Gilliam to blame distributors.  He sends along a price comparison done by his group that lays the price differences among Washington, Oregon and California (which has much lower liquor prices) to the tax bite.

 

Whatever the case, you can feel the different interest groups continuing to maneuver in the background.  We’ll  see if it breaks back into public attention in advance of the 2014 election.

 

 

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Reed Smith Hooks 3 Other Firms In Vodka Trademark Fight

 

Source: Law360

By Jonathan Randles

January 24, 2013

 

A New York state appeals court on Thursday granted Reed Smith LLP’s bid to have three other law firms face liability in a $100 million legal malpractice complaint over the licensing of the trademark Belvedere vodka.

 

An appeals court in Manhattan overturned a lower court and reinstated Reed Smith’s third-party claims for contribution against the other firms, Berry & Perkins, Fross Zelnick Lehrman & Zissu PC and Barack Ferrazzano Kirschbaum & Nagelberg LLP. In the underlying complaint,  Millennium Import LLC, a beverage company, contends Reed Smith bungled its efforts to renew a Belvedere trademark from a California winery for use on its vodka.

 

Reed Smith has a “viable” legal malpractice claim that the three other law firms, which also counseled Millennium on the licensing deal, contributed to the company’s damages, the ruling said. After being sued by the winery for breaching the agreement, Millennium settled for $83 million.

 

The appeals court said Thursday that the lower court was wrong when it determined the three firms were precluded from Reed Smith’s third-party claims under Hercules Chem. Co. v. North Star Reigns. The holdings in the Hercules case cannot be applied to Reed Smith’s third-party claims because they don’t duplicate the firm’s comparative negligence defenses asserted in the underlying dispute, the ruling said.

 

“Where several law firms allegedly participated in giving the advice that led to the plaintiff’s damages, the sole law firm named as a defendant must be entitled to bring the other law firms in as parties to the action to ensure that it has the ability to fully protect its rights,” the appeals court said.

 

In the 2007 complaint, Millennium said it imports and distributes Polish Belvedere brand vodka. In the United States, it had a long-term licensing agreement with the California winery Hambrecht Wine Group LP for the Belvedere trademark. Millennium is owned by the French luxury goods conglomerate LVMH Moet Hennessy Louis Vuitton SA.

 

The winery later tried to pressure Millennium into buying the trademark, the importer said, by indicating that it would license the trademark to a gin distiller. In an attempt to resolve the dispute, Reed Smith instead allegedly spurred the winery to find grounds to cancel the trademark licensing agreement, forcing Millennium to spend tens of millions of dollars to settle the ensuing litigation and buy the trademark, Millennium said.

 

Reed Smith and James H. Berry Jr. of Berry & Perkins declined to comment on the case. Representatives of Fross Zelnick Lehrman & Zissu and Barack Ferrazzano Kirschbaum & Nagelberg could not immediately be reached for comment.

 

Justices Karla Moskowitz, Richard T. Andrias, Peter Tom, David B. Saxe and Rolando T. Acosta sat on the state appeals court panel.

 

Reed Smith is represented by Robert M. Abrahams of Schulte Roth & Zabel LLP.

 

James H. Berry J. and Berry & Perkins are represented by Andrew R. Jones of Furman Kornfeld & Brennan LLP. Fross Zelnick Lehrman & Zissu PC is represented by Robert Churchill of Eaton & Van Winkle LLP. Barack Ferrazzano Kirschbaum & Nagelberg LLP is represented by Daniel F. Markham of Coughlin Duffy LLP.

 

The case is Millennium Import LLC v. Reed Smith LLP et al., case number 603350/2007, in the Appellate Division of the Supreme Court of the State of New York, First Judicial Department.

 

 

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Three men used industrial alcohol and methanol found in antifreeze to make deadly ‘Arctic Ice’ fake vodka

 

Source: Daily Mail

By Mark Duell

24 January 2013

 

A trio of men who used industrial alcohol to make deadly ‘Arctic Ice’ fake vodka which had the same liquid used in antifreeze and cleaning fluids were sentenced today – but two of them avoided jail.

 

The illegal alcohol manufacturing and bottling plant in the city centre of Birmingham, West Midlands, was uncovered by HM Revenue and Customs officers, who raided an industrial unit in July 2011.

 

Forensic analysis of the fake vodka showed it contained dangerous levels of methanol – which if drunk can cause abdominal pain, dizziness, blindness, kidney problems, comas or even death.

 

Investigators seized over 2,500 litres of counterfeit vodka labelled ‘Arctic Ice’ and 13 1,000-litre plastic industrial bulk containers – three of which contained industrial alcohol of 96 per cent.

 

Michael Woodlock, 53, was today jailed for one year. Gavin Berrow, 43, was sentenced to four months in prison, suspended for 12 months, and ordered to carry out 200 hours of unpaid work.

 

Alex Dean Rollason, 21, was jailed for four months, suspended for 12 months, and ordered to carry out 200 hours of unpaid work. The three men were sentenced at Birmingham Crown Court.

 

Adrian Farley, HMRC’s assistant director of criminal investigations, said 8,400 empty 70cl glass bottles were also seized. He added: ‘This was a substantial bottling, production and distribution plant.

 

‘It was capable of making and distributing large quantities of counterfeit vodka throughout the country, with the potential of costing the UK taxpayer nearly £500,000 in lost revenue.’

 

‘The crime gang took no precautions to make the environment safe creating a high risk of an explosion and loss of life in their city centre unit.

 

‘They were fully aware that the counterfeit vodka, which contained dangerous levels of methanol, was unfit to drink.

 

‘They duped the public into buying what they believed were legitimate goods when in fact the counterfeit vodka could have killed them.’

 

All three men are from the West Midlands and pleaded guilty to charges of Fraudulent Evasion of Excise Duty Contrary to the Customs and Excise Management Act 1979.

 

Joint investigations with local authorities across the West Midlands led to the discovery that Arctic Ice was already in circulation at a number of independent stores.

 

Seizures were made in Birmingham, Hereford, Shropshire, Staffordshire and Worcester by Trading Standards units – some of which are pursuing separate prosecutions.

 

The raid took place six days after five Lithuanian men were killed in an explosion at an illicit vodka distillery in Boston, Lincolnshire, believed to have been caused by the lighting of a cigarette.

 

 

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Arnault says Belgian move can shield LVMH

 

Source: FT

By Scheherazade Daneshkhu in Paris

Jan 24th

 

Bernard Arnault, Europe’s richest man, is determined to become a Belgian national as part of a succession plan aimed at preventing a break-up of LVMH, the luxury goods group he has built single-handedly into the world’s largest by sales.

 

The head of LVMH has been accused by the media in his homeland of wanting Belgian nationality to escape President François Hollande’s higher French taxes but he has repeatedly insisted that he “is and will remain fiscally domiciled in France”.

 

The French billionaire, who controls LVMH through a cascade of companies including Groupe Arnault, his private family holding company, has set up a private foundation in Belgium, called Protectinvest, which will prevent his five children from selling LVMH shares if the 63-year-old were to die within the next 10 years.

 

Mr Arnault, who has used family splits to his advantage in his own takeovers, appears keen to prevent the sprawling empire he has constructed over 30 years, and whose 60 brands include Christian Dior, Dom Pérignon champagne and Louis Vuitton bags, from being put at risk of disunity.

 

A spokesman for LVMH said: “Bernard Arnault’s main wish is to protect LVMH as the world’s leading luxury goods group because it sells French products throughout the world, which is important for France. The aim of this foundation is to protect the integrity of the LVMH group until 2023.”

 

Belgium was chosen because “France does not have in its legal framework the concept of a private foundation, which is why it cannot be established in France”, the spokesman said.

 

Protectinvest was set up in December 2008 – well before France’s Socialist government came to power in May 2012.

 

The foundation would lock up the Arnault children’s ability to sell shares until 2023, by which time Mr Arnault’s youngest child will be 25, an age deemed old enough to assume responsibility for LVMH, along with his older siblings.

 

The children are also barred from sitting on the board of Protectinvest through a stipulation in the foundation’s statutes that “assuming the death of Mr Bernard Arnault, the administrators can only be people over the age of 50″. Delphine, the oldest child and only daughter, will be 48 in 2023.

 

Instead, Protectinvest – which will only become operational if Mr Arnault were to die – will be run by a committee of three people.

 

It emerged on Thursday that the committee would be headed by Thierry Breton, a trusted friend of Mr Arnault and chief executive of Atos Origin, the information technology services company.

 

Mr Breton is a former French finance minister and used to head France Telecom. He also sits on the board of Carrefour – listed as an independent director – the retailer in which Groupe Arnault holds a 16 per cent stake jointly with Colony Capital of the US.

 

Mr Arnault’s two oldest children, Delphine and Antoine – both LVMH directors – are from a first marriage, while he has three sons from his second marriage to Hélène Mercier, the Canadian pianist, the youngest of whom is 14.

 

According to its statutes, Protectinvest “has as its disinterested aim, assuming the death of Mr Bernard Arnault and until October 23 2023, of protecting directly the financial and family interests of the Pilinvest company”. Pilinvest is another Brussels-based company owned 99.99 per cent by Mr Arnault.

 

Family-controlled Hermès, which has called LVMH’s moves to build a 22 per cent stake in the silk scarves and Birkin bags group an “attack”, itself set up a holding company a year ago giving family members first right of refusal on share sales to protect itself against LVMH stakebuilding. It is in a legal dispute with LVMH over the latter’s controversial and sudden acquisition of 17 per cent of its shares in 2010.

 

News of Mr Arnault’s application for Belgian citizenship caused a furore in France when it emerged last September. Mr Arnault has said he wants Belgian nationality because Groupe Arnault “has numerous investments in Belgium”, which he “intends to develop”.

 

People close to Mr Arnault say his main motivation is to anticipate a potential legal challenge to Protectinvest emanating from France, which would be averted were he to become a Belgian national.

 

Mr Arnault’s application has been turned down by the Belgian immigration department and the prosecutor’s office on the basis that he has not lived in Belgium for the customary three years.

 

However, he is awaiting a final decision on his case by a parliamentary committee.

 

Although Mr Arnault has been keen to stress his business links to Belgium, some believe his motives may be mixed.

 

Lawyers in Brussels say that if he were to change his mind and renounce his French passport at a future date, Belgian nationality would enable him to seek residency in Monaco. Currently French nationals cannot benefit from the tax breaks in the princely state. Second, he would protect himself if the French government decided to tax all its nationals’ assets regardless of their residency, as is the case for US citizens.

 

 

——

Brewing Controversy Over Proposal to Make Water Cheaper Than Beer

 

In Czech Republic, Idea Taps Strong Feelings; Birthplace of Pilsner

 

Source: WSJ

By SEAN CARNEY

Jan 24th

 

In most restaurants and taverns across the Czech Republic, a mug of beer is, literally, cheaper than water. The country’s health minister wants to change that as he tries to put Czechs on a lower-hops diet.

 

It won’t be easy. Here in the birthplace of pilsner, beer is known as “liquid bread.” Czechs drink an average of 37 gallons of the stuff per person per year, the highest per capita consumption in the world and more than double U.S. levels.

 

Pub patrons go through the sudsy amber liquid so fast that the nation’s largest brewer, SABMiller SAB.LN -0.15% unit Plzensky Prazdroj, maker of famed Pilsner Urquell, delivers beer with the kind of tank trucks used to haul gasoline, and pumps it into bars’ storage vats.

 

“Beer is like mother’s milk for adults,” said Marek Gollner, a 36-year-old computer programmer and regular customer at the U Zelenku pub in the Prague suburb of Zbraslav. “For a Czech, it’s like wine for a Frenchman or vodka for a Russian.”

 

Faced with such attitudes, Health Minister Leos Heger’s campaign to make Bohemia a bit less bohemian is starting with baby steps.

 

He wants to require restaurants and bars to offer at least one nonalcoholic beverage at a price lower than that of the same amount of beer, primarily to offer teens, who can legally drink at 18, an alternative. The easiest thing to do, Dr. Heger said, would be to offer patrons pitchers of tap water.

 

Even that has some tavern keepers foaming.

 

“It ticks me off,” said Eleni Atanasopulosova, 34, the manager at U Zelenku. “There are more pressing issues. People are struggling to find work. The government should do something more important.”

 

Dr. Heger, a 64-year-old radiologist who likes to toss back a few himself, attributes such resistance to a general Czech dislike of government regulation, a legacy of the country’s decades under repressive communist rule.

 

“It’s important to speak against social engineering,” Dr. Heger said. “We don’t want to suppress smoking and drinking among adults. It’s their right.” He added: “I’m not against alcohol consumption. It just has to be reasonable.”

 

The minister’s relatively modest proposals, which also include raising the penalties for serving alcohol to minors and measures to limit indoor smoking, haven’t even been approved by the cabinet yet, let alone been considered by Parliament. He hopes his latest push will spark a national conversation on the place beer holds in Czech society.

 

“Beer is really widespread, with very deep roots.It’s a well-anchored, important part of everyday life,” said Jiri Vinopal, director of the Czech Academy of Sciences’ Public Opinion Research Center. “It’s always been that way. Since the Middle Ages people here have made beer their primary drink.”

 

For that reason, Mr. Vinopal said, any change in regulations affecting beer “is a very sensitive subject.”

 

For at least a thousand years, beer has been a staple in the Czech lands, and the country’s native hops are renowned for being aromatic and bitter. St. Wenceslas, a martyred 10th-century Czech nobleman, is a patron saint of brewing and malting, in addition to being the patron saint of the nation.

 

When the city of Plzen, about 60 miles southwest of Prague, got its charter in 1295, its people were given the right to brew beer, helping ensure the settlement’s prosperity. (In the 19th century, the city gave its name to the bottom-fermented lager made there and now known as pilsner.)

 

The country’s oldest brewery still in operation, Prague’s U Fleku, was founded in 1499. Beer was so important to the Czech political economy at that time that knights and nobles fought for and won the right to brew beer under a landmark royal decree in 1517.

 

Nearly half a millennium later, beer remains at the center of Czech social life. It is common for people to head to a pub after work to relax and socialize with friends. Barkeeps often don’t ask customers what they would like to drink. Instead, they just plop down a glass of lager and start a tab.

 

At a typical local pub, a pint-500 milliliters, actually, in this metric-measuring country-costs about $1. A similar portion of water, juice or soda generally costs twice as much. Offering free tap water as at U.S. eateries is extremely rare.

 

At U Zelenku, a neighborhood institution for more than a century, for instance, a pint of the cheapest beer goes for 99 cents. The same size of soda water is $1.30. At the fancier Kolkovna restaurant in touristy Old Town, a pint is $2.50, while mineral water is $2.29, for a bottle less than half the size.

 

The Czech Hotel and Restaurant Association has criticized Dr. Heger’s proposals, calling them unacceptable and saying it will fight them in court, if it comes to that. Vaclav Starek, the association’s president, said the government risks over-regulating a struggling industry at the most inopportune time, with the country in the midst of a recession. “The wave of new regulations is suffocating,” Mr. Starek said.

 

Public-health officials and economists say the Czech Republic’s relatively low beer prices encourage consumption and contribute to underage drinking, since it makes beer more affordable for youngsters.

 

Czechs have the highest rate of alcohol consumption among children aged 13 to 15 in Europe, a rate that is also higher than that in the U.S. and Canada, according to the World Health Organization.

 

Dr. Heger said that regulations should be aimed at kids. “We’d like to prevent kids from smoking and drinking. It’s the major task,” he said. But that will require changing adults’ attitudes as well, since now many ignore laws prohibiting alcohol sales to those under 18 and look the other way when teenagers are drinking.

 

The minister said that raising excise taxes on beer and spirits would help but said it isn’t within his power to propose. And he said he has realistic expectations about the measures he is pushing for Parliament to adopt. “I can imagine the law we offer may not be successful this year,” he said. “But, then, maybe next time.”

 

 

——

Irish county passes motion to let certain rural drivers drive while legally drunk

 

Source: The Star

January 23, 2013

 

Where else but in Ireland, where the pub life is woven into the country’s cultural fabric, would this happen?

 

Kerry County Council passed a motion Monday night for a permit system that would allow isolated rural people to drink over the legal limit and drive home.

 

County Mayor Terry O’Brien, however, stands opposed, charging that the ones who voted for the motion own pubs and have a vested interest in seeing relaxed standards.

 

The legal limit for fully licensed drivers is 0.05 (50 milligrams of alcohol per 100ml of blood).

 

The motion, tabled by Councillor Danny Healy-Rae, passed by a vote of 5-3.

 

Usually, there are 27 councillors in the chamber but it was a long day and the debate dragged into the night. In the end, there were only 12 or 13 councillors remaining and a handful abstained, the mayor said.

 

“The councillor who actually moved this owns a pub,” O’Brien told the Star. “And people who voted with him also own pubs.”

 

Before becoming law, the motion has to be approved by the Department of Justice – O’Brien doesn’t think the government will pass it.

 

O’Brien told the Star he fought hard against the motion because he’s worried about more carnage on the roads of Ireland and in County Kerry, which has a population of about 145,000 in the southwest part of the country.

 

In tabling the motion, Healy-Rae said that people living in rural areas cannot take public transit and have limited access to taxis.

 

He said he wants those with permits to be able to have two or three drinks (no more than that) and be exempt from the drinking laws.

 

Healy-Rae told the Star that he brought the motion because his constituents wanted it because they feel “trapped in their homes.”

 

He referred to some of these “lonely” people who developed depression and committed suicide.

 

Healy-Rae owns Jackie Healy-Rae’s pub on Main St., in Kilgarvin.

 

The controversial motion suggested that the police would have the discretion to issue these permits to allow certain people to drink up to three pints and drive home along a rural road at no more than 30 km/h.

 

“How would you begin to justify who had one pint and who had two?” the mayor told the Star.

 

O’Brien thinks the motion could have deadly consequences.

 

“I cannot imagine any person having the authority or experience to be able to judge a person after two or three pints,” O’Brien told the Star. “I think it’s absolute madness.”

 

National statistics show that Ireland’s road deaths have been falling annually as well as the number of people who are charged with driving while intoxicated.

 

The County Kerry mayor said he is sympathetic to isolated people in the rural areas.

 

“There’s an elderly population out there who are living alone. Unfortunately, I couldn’t support giving people this licence,” he said. “What happens when the first person is killed with this?”

 

 

——

ABL Economic Impact Study Expanded to Include State Legislative Districts

 

New study quantifies economic importance of beverage alcohol retailers and hospitality industry

 

Source: ABL
Jan 24th

 

With state legislative sessions gaveling in throughout the country, American Beverage Licensees (ABL) is pleased to announce that it has expanded its 2012 Economic Impact Study of America’s Beer, Wine and Spirits Retailers to include the economic contributions of beverage licensees in state house and state senate districts across the country.

 

With so much alcohol policy being debated and discussed at the state level thanks to the 21st amendment, ABL has been working on a way for beverage licensees to quantify the significant contribution they to their communities make when it comes to jobs, taxes and economic impact.  By utilizing this economic study data, America’s beer, wine and spirits retailers now have the ability to tell their overwhelmingly positive story to their State Senators and Representatives as they advocate under state capitol domes from Hartford to Austin to Cheyenne.

 

“We know that our members face challenges at every level and when not running their businesses, are engaged in legislative fights every day,” said John Bodnovich, ABL’s Executive Director.  “ABL feels strongly about dedicating resources that will help its members preserve commonsense state alcohol laws and oppose policy proposals that would have an adverse effect on small independent business.”

 

Through the ABL website, www.ablusa.org, ABL members can create reports and download data that detail the number of jobs and amount of taxes that they provide to their communities, as well as more in-depth economic impact information at the state legislative district level.

 

“ABL remains keenly focused on alcohol issues on the federal level, but we recognize that strong retailers make strong advocates to Congress.  Fighting to keep them in business is at the core of ABL’s mission and ultimately beneficial for anyone who desires a diverse and vibrant alcohol marketplace full of entrepreneurs and locally-owned family businesses,” said Bodnovich.

 

Access to state Senate and House district data is free to ABL members and requires additional log-in information which can be obtained by contacting the ABL office.  The 2012 Economic Impact Study of America’s Beer, Wine and Spirits Retailers, which was prepared by John Dunham & Associates, can be sorted nationally, by state and by congressional district, and is also available at www.ablusa.org.

 

 

——

The Other Guys reports 25% increase in wine and spirits sales in fiscal 2012

 

Source: DBR

24 January 2013

 

US-based wine and spirits company The Other Guys (TOG) has shipped over 300,000 cases of wine and spirits in fiscal 2012, compared with 239,000 cases in 2011, registering a 25% rise.

 

TOG sold approximately 8,000 cases of premium spirits in fiscal 2012. The company’s 35 Maple Street spirits division launched two brands – Uncle Val’s Botanical Gin and Kirk & Sweeney Dominican Rum – during the year.

 

TOG’s Leese-Fitch wine brands including Chardonnay, Cabernet Sauvignon, Pinot Noir, Sauvignon Blanc, Zinfandel and Merlot had shown sales of more than 150,000 cases.

 

TOG president Sebastiani said, “We strive to offer a portfolio of high quality wine and spirits that are uniquely positioned in the marketplace, and we pride ourselves on the ability to appeal to a wide array of consumers.”

 

Sebastiani said the company is planning to introduce small-batch bourbon later this year as part of its efforts to extend its reach into the burgeoning craft spirits market.

 

 

——

Consumers’ Willingness to Trade Up in Wine Is Weaker than in Beer or Spirits, Study Shows

 

Source: Consumer Edge Insight

Jan 24th

 

A recent survey  of alcohol consumer behaviors in the United States among people who consume any type of alcoholic beverage at least once a week showed that the wine category suffers from weaker willingness to trade-up to premium brands than the beer category or various segments of the spirits category.

 

Only 30% of wine drinkers say they like to treat themselves to higher-quality brands, compared to 38% of beer drinkers who like to treat themselves.  Willingness to trade-up is much higher among spirits drinkers, with 80% of vodka drinkers saying they like to treat themselves and 87% of whiskey drinkers saying this.  Wine and beer drinkers are not as convinced that higher-priced brands are higher-quality: only 28% of wine drinkers think that higher-priced brands of wine are usually better and 26% of beer drinkers believe this about beer. This belief that higher prices signify higher quality is much stronger among spirits drinkers, as 82% of vodka drinkers believe this about vodka and 87% of whiskey drinkers believe this about whiskey.

 

Even more affluent wine drinkers aren’t a great deal more disposed to trade up.  Only 33% of wine drinkers with household income of $100K+ say they like to treat themselves to higher-quality brands, compared to 43% of beer drinkers with $100K+ income, 94% of vodka drinkers with $100K+ income, and 93% of whiskey drinkers with $100K+ income.

 

What wine drinkers do like is trying new brands-41% say they love trying new brands of wine and 31% of them are open to trying new brands that are less expensive.

 

“Wine drinkers are more skeptical that higher prices are a harbinger of higher-quality and are not as pre-disposed to trading up as spirits drinkers or beer drinkers,” said David Decker, President, Consumer Edge Insight.  

 

“This will make it more difficult for the wine industry to take price increases and to follow the spirits companies’ strategy of migrating consumers to more premium-priced brands.  Premium wine brands need to do a better job making the case to wine drinkers why they cost more.”

 

ABOUT ALCOHOLIC BEVERAGE DEMANDTRACKER

Alcoholic Beverage DemandTracker provides an in-depth analysis of the key economic and attitudinal factors impacting alcoholic beverage demand. Data for the most recent wave of Alcoholic Beverage DemandTracker was collected in November via an online survey of over 2,000 US consumers, age 21 and over, designed and weighted to be representative of the US adult alcohol-drinking population.  Some of the topics addressed include drivers of change in alcohol category consumption, the impact of economic factors and secular trends on overall alcohol consumption and by category, channel behaviors, ways to increase category consumption, and numerous brand metrics.  The research covers the beer, spirits, wine, cider, and flavored-malt beverage categories including the largest brands in each category.

To learn more, call David Decker at (203) 504-7558 or send an email to ddecker@consumeredgeinsight.com

 

ABOUT CONSUMER EDGE INSIGHT

Consumer Edge Insight LLC is a market research and consulting firm that helps investors and companies that want to have deeper insight into how consumer behavior is changing around the world and how to profit from those changes. We help companies monitor key trends and develop strategies to enhance shareholder value. We help investors understand key trends and identify which companies are most likely to succeed.  For further information, contact David Decker, ddecker@consumeredgeinsight.com, or visit www.consumeredgeinsight.com

 

 

——

National Rifle Association starts wine club

 

Source: Decanter

by Richard Woodard

Thursday 24 January 2013

 

Wine enthusiasts can now indulge their passion and back the right to bear arms at the same time by joining the National Rifle Association of America’s Wine Club.

 

‘Now you can support the 2nd Amendment with every wine you buy’ runs the strapline on the homepage of the club, nrawineclub.com, which also offers new members a ‘nine-piece custom NRA engraved wine box’ when they join.

 

The club is administered by wine club specialist Vinesse, and non-members of the National Rifle Association are welcome to buy wine (although they can get a rebate off NRA membership if they spend a certain amount).

 

A proportion of the profits goes into NRA coffers at a time when the organisation is gearing up to battle President Obama’s plans for enhanced gun control following the mass shooting at Sandy Hook.

 

Hundreds of wines are available through the site, from a Campo de Borja Garnacha at US$6.99 right up to Joseph Phelps Napa Valley Insignia 2008 at $159.99.

 

Champagne lovers can pick up Louis Roederer Cristal 2005 at $199.95 a bottle, or Dom Perignon 2003 for $139.99, and weapons enthusiasts might like to pop the cork in traditional style using a Laguiole Champagne sabre ($149.95).

 

In a welcome letter on the NRA Wine Club website, controversial NRA executive vice president Wayne La Pierre highlights the benefits of membership: supporting 2nd Amendment rights and ‘the convenience of home delivery on the finest wines that vineyards all over the world have to offer’.

 

He adds: ‘Your purchase will directly benefit the NRA’s continuing support of America’s Right to Keep and Bear Arms and the other basic freedoms of the American Culture.

 

‘The NRA Wine Club has been founded on these principals (sic) and is bringing you the finest wines that are available.’

 

 

——

US consumers ‘confused’ by multiple Sonoma AVAs

 

Source: Decanter

by Courtney Humiston in Sonoma

Thursday 24 January 2013

 

Sonoma Valley has announced the launch of a new campaign to differentiate the region from the larger Sonoma Coast and even larger Sonoma County AVA.

 

There is confusion in the marketplace regarding the differences between the many appellations that include the name ‘Sonoma’, the Sonoma Valley Vintners and Growers Alliance reckons.

 

‘We know that Sonoma Valley has very distinct appellations, but there is confusion with the title. Is it a coast? Is it a valley? Is it a town? A county? Or all?’ executive director Maureen Cottingham said.

 

The 400,000ha Sonoma County appellation includes 15 sub-regions, 60 miles of coastline and more than 25,000ha of vineyards.

 

A recent survey of 1,000 US consumers shows that, when purchasing wine, few differentiate between Sonoma County and Sonoma Valley and that using both on a label may even be a disadvantage.

 

‘The presence of an AVA with “Sonoma” already in the name (e.g. Sonoma Mountain) may complicate understanding of conjunctive labeling,’ the survey by research company Wine Opinions says.

 

‘While a substantial number of consumers (42%) can comprehend that a “Sonoma-named” AVA can reside within Sonoma County, over one-quarter are confused by combinations like ‘Sonoma Mountain, Sonoma County” and 22% believe that this indicates a blend of Sonoma Mountain and Sonoma County fruit.’

 

Additionally problematic is the name Sonoma Valley, which includes three sub-AVAS (Bennett Valley, Carneros and Sonoma Mountain) and one proposed sub-AVA (Moon Mountain), two of which are high altitude, mountainous regions.

 

The SVVGA’s ‘Roots Run Deep’ campaign is separate but complementary to the ‘We are Sonoma’ campaign launched by the Sonoma County Vintners and Sonoma County Tourism earlier this month, Cottingham said.

 

 

——

The Joyful Restraint of 2011 Burgundy

 

Source: WSJ

By WILL LYONS

Jan 24th

 

In many ways, today’s fine-wine lovers have never had it so good. Such has been the improvement in modern winemaking techniques, the adoption of measures to eliminate cork taint and the opening up of vast swaths of unexplored viticultural land, that we have been blessed with better-quality and more interesting wines than ever before. Yes, prices have risen and, in some cases, moved our favorites beyond reach, but more often than not, these have been replaced by new wines coming onto the market.

 

It was a point I suggested to an old friend, who worked briefly in the wine trade after studying viticulture at the University of California, Davis. No longer involved in wine, he says he is consistently surprised at the quality on offer compared with a decade ago: “It’s actually very hard to buy a bad bottle these days,” he says.

 

The trick is finding an interesting one, which brings us to perhaps the most interesting wine region of them all: Burgundy. Its 2011 vintage has just been previewed in a plethora of tastings held in London and is on sale now. I can’t think of any other fine-wine region in the world that continues to mesmerize and fascinate quite like Burgundy.

 

Its two principal grape varieties, Pinot Noir for red and Chardonnay for white-and the smattering of plantings of Gamay and Aligote-find an expression when planted in its network of villages in the Côte d’Or, inspiring not just the palate but the intellect, too.

 

In Burgundy, it is still possible to overpay for mediocre wine. Such is the complexity of the region that navigating its myriad villages and vineyards is akin to solving a cryptic crossword. Consumers often complain that its wines are inconsistent and too complex. Burgundians believe a wine’s character is derived principally from the plot of land the vine is planted on, which is graded by a classification system based on the vineyard, village and subdistrict. But a highly classified wine can be expensive and not very good. To compound the problem, Burgundy’s unpredictable weather means every year tastes slightly different. A good short cut is to pick your producer wisely.

 

It may be too much of a leap to say there are no bad vintages anymore, but certainly in Europe’s classic regions, modern winemaking has made a huge difference. British importer Caspar Bowes explains that many of today’s vintages are better described in terms of style rather than quality, arguing that those vintages that have been rated “great” in the past, such as 2009 and ’10, are merely those that have had the ripest fruit and the most power.

 

The 2011 vintage is a case in point. It may not have the power of the 2010 but what it lacks in density and weight, it certainly makes up for in charm.

 

Flowering was early in the spring of 2011, which meant that although the harvest date was early-in some vineyards the earliest since the end of the 19th century-the grapes enjoyed a long hang time on the vine. This allowed them to mature more slowly, helping ripen the tannins and fruit evenly.

 

The result is red wines that are strongly aromatic, possessing an attractive perfumed fruit and a delicate floral character. This is matched by a lacy elegance, smooth tannins and a bright acidity that gives them power and zing. In short, at this young stage, judging from the dozens of cask samples I sniffed and slurped my way through in London, the wines are a joy to taste.

 

The good news is that both the 2011 reds and whites have restrained alcohol, which gives the wines a unique freshness. Quality is even in both the Côte de Nuits and Côte de Beaune. For reds, the standout villages were Nuits-St.-Georges and Volnay. For whites, Pernand-Vergelesses continues to produce scintillating Chardonnay.

 

The bad news is that, as in 2010, the crop was very small; and it comes before 2012, which, due to uneven weather, was even tinier. Coupled with demand from European and U.S. collectors and increased interest from Asia, this will mean real pressure on prices.

 

As Louis-Michel Liger-Belair, proprietor of Domaine du Comte Liger-Belair, says: “Fill your cellars, as there will not be much wine in 2012.” To which I would add: don’t forget to stock up on 2010, a vintage where quality, particularly among the lesser village wines, is even throughout. Stock up before prices rise even further.

 

 

——

Chateau de Sours hits US through Old Bridge Cellars tie-up (Excerpt)

 

Source: Just-Drinks

By Olly Wehring

24 January 2013

 

Chateau de Sours has lined up a nation-wide roll-out in the US through a partnership with California’s Old Bridge Cellars.

 

The two companies confirmed earlier this week that Old Bridge Cellars will handle the US sales and marketing for the Bordeaux wine producer. California-based Old Bridge assumed the position at the beginning of this month.

 

The move marks Chateau de Sours’ entry into the country, a spokesperson for Old Bridge told just-drinks late yesterday (23 January). “I don’t know if the winery has had limited presence in the US in years past, but I can say that the wines have never been nationally distributed in the US before now,” the spokesperson said.

 

 

——

Fine Bordeaux tender opens

 

Source: Harpers

Written by Elinor Zuke   

24 January 2013

 

Cases of fine Bordeaux wine worth £140,000 have been put on the market by asset disposal group Winterhill Largo to repay the creditors of Wine Traders International.

 

Winterhill Largo is selling a total of 97 cases, including 2003 and 2004 vintage Chateau Lafite and Chateau Latour from 1996 and 2004 by tender. It said it would supply condition reports on request and has asked for forms to be submitted to kevinc@winterhilllargo.com by 2pm on February 1.

 

Wine Traders International was placed in administration in 2010. “Wine trading is an unregulated industry and sadly for investors, the collapse of organisations such as Wine Traders International is becoming something of a regular occurrence,” said Winterhill Largo associate director Kevin Counihan.

 

“The proceeds of this sale, which includes some cases that are highly prized and currently worth around £6,000 each, will be used to repay the investors and other creditors of Wine Traders International

 

“There are some very exclusive wines up for grabs and we’re already experiencing a great deal of interest from wine aficionado, especially in iconic wines such as the Chateau Lafite 2004, which at the moment is changing hands for close to £700 a bottle,” he added.

 

 

——

Luis Felipe Edwards buys 700ha in Colchagua

 

Source: Decanter

by Richard Woodard

Thursday 24 January 2013

 

Chilean winery Luis Felipe Edwards has acquired 700 hectares of vineyard bordering the Nilahue estuary in the coastal Colchagua Valley.

 

The cool-climate vineyard, planted mainly to Sauvignon Blanc, Chardonnay, Cabernet Sauvignon and Cabernet Franc, lies 56km from the Pacific Ocean at Pumanque, 45km from Santa Cruz.

 

Soils are largely granite- and clay loam-based, with Malbec, Syrah, Riesling and Pinot Grigio planted in lower altitude areas.

 

Eugenio Cox, head viticulturist at Luis Felipe Edwards, described Pumanque as ‘unique’, thanks to its combination of complex, poor soils, a strong coastal influence and low summer temperatures, allowing slow grape maturation.

 

This led, he added, to a ‘remarkable’ concentration of fruit, colour, aroma and flavour, as well as excellent natural acidity for a number of grape varieties.

 

Luis Felipe Edwards consulted international experts in a detailed study of the area, taking into account the vineyards’ orientation to the sun, wind direction and strength, and hours of sunshine.

 

‘Our vineyard investment here is remarkable for both its size and its unique location within Chile,’ the company said.

 

‘It demonstrates our commitment to discovering more quality regions so that we can develop an even wider range of styles in our various brands.’

 

Luis Felipe Edwards plans to double the current size of its vineyard holdings, continuing a growth plan that has already seen the planting of 150ha of vineyards at an altitude of 900m elsewhere in the Colchagua Valley, plus 160ha in Leyda Valley and 400ha in the Retiro area of Maule Valley.

 

 

——

Forecast: Business conditions in 2012 were tough, but operators game for 2013

 

Source: NRA

January 24, 2013

 

Operators of full-service restaurants throughout the United States say business conditions were challenging in 2012, but 2013 should herald increased sales, the National Restaurant Association reported.

 

NRA research indicates that full-service sales in 2013 are expected to total $208.1 billion, a 2.9-percent increase over sales of $202.2 billion in 2012.

 

Nevertheless, the NRA’s 2013 Restaurant Industry Forecast, reports less than 1 percent of full-service operators said business conditions for the overall industry in 2012 were “excellent”, while one out of five said they were good and three out of four claimed they were “fair” or “poor”.

 

Regarding their own businesses, those operators were only somewhat more bullish. About 7 percent of respondents of the NRA’s Restaurant Trends Survey said business conditions for their own restaurants last year were “excellent”, while more than a third described their operations as “good”.

 

The research also found that fine-dining restaurateurs were more likely than casual-dining or family-dining operators to offer positive assessments of business conditions at their own restaurants.

 

Maintaining profitability was difficult, they said, largely because of elevated food and energy costs. Among family-dining operators, 82 percent indicated it was more challenging to control costs in 2012 than it was a year earlier. Among casual- and fine-dining operators, three out of four agreed with that assessment.

 

According to the survey, operators said they expect managing costs in 2013 would continue to be a struggle and that profitability would either decline slightly or remain at 2012 levels.

 

While they expect to face many of the same challenges as they did last year, operators said they are more optimistic about sales in 2013. More than nine out of 10 surveyed said they expect their sales to either improve or stay the same compared with a year ago. Fifty-seven percent of fine-dining and 48 percent of casual-dining operators said they anticipate stronger sales, while 43 percent of family-dining operators think sales will improve.

 

 

——

Blow to Punch as chief goes to Greggs

 

Source: FT

By Adam Jones and Christopher Thompson

Jan 24th

 

The chief executive of Punch Taverns has been poached to run the Greggs bakery chain, dealing a blow to the embattled pub owner amid crucial talks to restructure its heavy debt burden.

 

Roger Whiteside will take the helm of Greggs on February 4, it was announced on Thursday.

 

A former head of the food arm of Marks and Spencer, Mr Whiteside was appointed in August 2011 to turn round Punch at the time of its demeger. He had previously been a director of the group’s leased and tenanted pub arm since late 2008.

 

Since then Punch’s 4,600 mostly drink-led tenanted pubs have struggled with declining like-for-like income, and £2.4bn of securitised net debt which the company wants to restructure.

 

Stephen Billingham, Punch’s chairman, said he was confident equity holders would not be wiped out in the process.

 

“Without a doubt there will be a pub business at the end of this [restructuring]…our view is that there is still value in the equity,” he said.

 

“This business is not rudderless … Roger has done a very good job but once someone sees another opportunit,y a quick change is the best thing for everybody.”

 

Last October Punch said it was squaring up for talks with bondholders about a debt restructuring. The company said it was already in discussions with shareholders about two securitised debt vehicles that require regular cash injections from the parent company to keep them from breaching banking covenants. Mr Whiteside said funding for the debt vehicles was “heading for the buffers”.

 

Instead of appointing a replacement chief executive immediately, Punch has made Mr Billingham executive chairman. It also promoted Neil Griffiths, previously property and turnround director, to the new role of chief operating officer.

 

The group said this arrangement would “ensure continuity in the leadership of Punch, particularly during the ongoing capital structure discussions”.

 

Trading remained in line with board expectations, it added. In the lastest trading statement, for the 16 weeks to December 8, Punch reported that net income in its 3,000-strong estate of “core” pubs had fallen by 5 per cent on a like-for-like basis. The company is looking to sell about 1,600 pubs.

 

Mr Billingham said Mr Whiteside’s departure “won’t affect the negotiations at all”, saying he and Steve Dando, finance director, had been taking the lead in the talks.

 

The group wanted to get the restructuring talks out of the way before recruiting a new chief executive, he said, adding that this was likely to take months rather than weeks.

 

At Greggs, where he has been a non-executive director for almost five years, Mr Whiteside will succeed Ken McMeikan, who is leaving the group to join Brakes, a food supplier.

 

Shares in Punch closed down 3.3 per cent at 10.9p. Greggs shares rose just over 1 per cent to 480p.

 

 

——

Colorado: Bill To Set Limit For Driving While Stoned Has A Good Chance

 

Source: CBS 4

January 22, 2013

 

A plan is in the works to set a limit for people driving while under the influence of marijuana, and this time lawmakers say they’ll get it done.

 

There’s a lot of pressure on lawmakers after legalizing pot. As the number of users grows, there is growing concern the number of people driving under the influence will as well. In 2011, the most recent data available, 13 percent of deadly crashes in Colorado involved pot.

 

This is the third year lawmakers have tried to pass the bill, and they watered it down this time to make sure it gets through.

 

When it comes to alcohol, the law is clear. At .08 a person is too drunk to drive. But when it comes to marijuana, proving a person is too high to drive may be tougher.

 

“So we’re saying you’re presumed to be under influence of marijuana at five nanograms,” said Rep. Mark Waller, R-Colorado Springs.

 

Under a bill by Waller the DUI limit will be five nanograms of THC, the psychoactive ingredient in pot. But even if a driver reaches that limit, he or she could get off.

 

“You can put on evidence that says you’re not under the influence when over the five nanograms,” Waller said.

 

Waller, a former prosecutor, admits the burden of proof will be higher for police and prosecutors. They can’t just point to the test as proof of impairment, but will need evidence like dangerous driving or slurred speech.

 

The bill is meant to address the concerns of medical marijuana users – people who are chronically above five nanograms, but function as sober.

 

“I think that’s what’s going to help it pass this year,” Waller said.

 

Democrats and Republicans, defense attorneys and prosecutors are on board. While marijuana advocates insist five nanograms is an arbitrary limit, Waller says it could be lower.

 

“It is time to act. We need to do something to protect the citizens of Colorado, and that’s exactly what this driving under influence of marijuana does,” Waller said.

 

Critics say it will also lead to a lot of drivers who simply smell like pot being hauled in and given blood tests unnecessarily. Unlike alcohol, there’s no breath test for THC. Waller says police will still need probable cause, and like DUI laws involving alcohol, this one too will evolve over time.

 

 

——

Texas: Irving relaxes limits on restaurants’ alcohol sales

 

Source: Dallas Morning News

BY AVI SELK

24 January 2013

 

After three decades as one of the driest cities in North Texas, Irving relaxed its alcohol laws Thursday.

 

The City Council voted to raise the amount of alcohol restaurants citywide can sell from 40 percent of annual sales to 50 percent. And it significantly raised the alcohol limit to 70 percent for restaurants in the Urban Center of Las Colinas – opening the possibility for other areas to follow.

 

Council members called the new law a compromise to appease south Irving residents who since last year have opposed changing the 31-year-old alcohol limit. They have expressed concern that a higher alcohol sales limit would flood the city with bars, prostitutes, drunken drivers and murders.

 

On the city’s north side, business owners had said the city’s ordinance was crippling Irving’s economy.

 

After the council failed to make a decision following hours of public debate between residents and business owners at a meeting two weeks ago, the developer for Water Street – a planned retail development that officials hope will revitalize Las Colinas – warned the council that the project could collapse if the city didn’t relax the ordinance by Thursday.

 

Only two council members, Gerald Farris and Joe Putnam, opposed the new measure. Putnam warned his colleagues before the vote that establishing different alcohol restrictions in different areas could be illegal.

 

“It doesn’t help [Water Street developer] Gables at all if this council adopts an ordinance that ends up in the courthouse,” he said.

 

But City Attorney Charles Anderson assured council members that the new ordinance could withstand a lawsuit. And many council members seemed convinced that different alcohol limits were the only workable solution for a divided city.

 

“We’re never going to be able to please everybody” council member Dennis Webb said before the vote.

 

Since officials began considering a change to the alcohol ordinance late last year, competing proposals have multiplied through City Hall – everything from leaving the old cap untouched to drastically raising the alcohol sales limit across the city.

 

When council members sat down Thursday afternoon, several were unclear about which plan they would vote on six hours later.

 

“If we’re confused about what plan we have before us, think about our poor citizens,” Putnam said.

 

Indeed, many residents said they were confused as they rose one by one to speak before the vote. Of those who understood the proposal, some worried about the implications of establishing different limits for various parts of the city.

 

“I am in favor of 30-70 [letting alcohol be 70 percent of sales],” said south Irving resident Janet Wall. “But I am not in favor of splitting the town.”

 

More debates are nearly certain. Mayor Beth Van Duyne said a subcommittee will spend the next two months studying whether areas of the city besides the Las Colinas Urban Center should get an alcohol sales limit above 50 percent.

 

“It’s a good first step,” said Chris Wallace, president of the Greater Irving-Las Colinas Chamber of Commerce, which wants a 70 percent limit across the city.

 

 

——

United Kingdom: Beer Sales Fall For Eighth Year In Row Amid Calls For Scrapping Of Beer Duty Escalator

 

Source: Huff Post

25/01/2013

 

Beer sales have fallen for the eighth year in a row, with 381 million fewer pints being drunk in 2012, according to a new study.

 

The British Beer and Pub Association (BBPA) said the figures showed how the government’s “damaging” tax policy was hitting the pub trade.

The association has joined campaign groups in calling for a review of the beer duty escalator, introduced in 2008, which sees tax on beer increase by 2% above inflation each year.

 

More than 100,000 people have signed a petition in protest at the extra tax, urging the chancellor to announce in the March Budget that it will be scrapped.

 

Pub beer sales slumped by 4.8% in the final quarter of 2012 compared with a year earlier, with total beer sales down by 4.7% over the year.

 

Around 138m fewer pints of beer were drunk in the final quarter of 2012. Sales of beer in supermarkets and shops fell by 7.5% in the final three months of 2012 compared to the previous year, while sales in pubs, bars and restaurants were down by 4.8%.

 

Beer sales have fallen every year since 2005.

 

Brigid Simmonds, chief executive of the BBPA, said: “These figures show that the government needs to stop its full-on tax assault on our vital beer and pub industry.

 

“We’ve had tax hikes of 42% since March 2008, which is hugely damaging and completely unacceptable for such an important manufacturing sector.

 

“Instead, we could be protecting and creating jobs at a time when the country most needs it.”

 

Beer sales support around a million jobs and generate almost £8 billion in tax revenues, said the association.

 

Analysts have predicted that another rise in beer tax in the next Budget could lead to thousands of job losses in the industry.

 

A Treasury spokesman said: “Getting the deficit under control has meant tough choices. The government recognises the value of the beer and pub industry, and the important contribution it makes to local communities and the wider economy.

 

“Although we have not made any changes to the alcohol duty plans we inherited from the previous government, pubs are benefiting from action we’ve taken to support businesses, including a cut in employers’ national insurance contributions, the business rates holiday and reductions in corporation tax.”

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