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Liquor Industry News 4-2-13

April 2, 2013
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Tuesday April 2nd 2013

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Scotch sales hit by eurozone debt crisis

 

Source: The Scotsman

By PETER RANSCOMBE

Tuesday 2 April 2013 09:38

 

Scotch whisky exports edged up by just 1 per cent last year as changes to the rate of duty in France and the eurozone debt crisis continued to take their toll.

 

Overseas sales hit £4.3 billion, a new record, but failed to match the 23 per cent rise reported in 2011 when French retailers stocked but ahead of a tax change or the 10 per cent notched up in 2010.

 

The volume of Scotch exports fell by 5 per cent to just under 1.2 billion 70cl bottles.

 

Yet Scotch still brought in an average of £135 a second for the UK’s balance of trade, despite the eurozone debt crisis forcing consumers in Mediterranean countries to cut back on their spending.

 

Highlights in the latest set of figures – released today by the Scotch Whisky Association (SWA) trade body – included sales in the United States breaking through the £700 million barrier for the first time to hit £758m, cementing America’s position as whisky’s largest export market.

 

Globally, single malt exports have risen by 190 per cent over the past decade from £268m to £778m as consumers develop a taste for more-expensive whiskies.

 

Gavin Hewitt, the SWA’s chief executive, said: “Scotch whisky continues to lead the way for UK food and drink exports.

 

“A combination of successful trade negotiations, excellent marketing by producers, growing demand from mature markets, particularly the US, and the growing middle class in emerging economies helped exports hit a record £4.3bn last year. We are contributing massively to the government’s wish for an export-led recovery.

 

“There is confidence in the future of the industry, illustrated by the £2bn capital investment that Scotch whisky producers have committed over the next three to four years. New distilleries have opened and older ones brought back to use to meet rising demand.”

 

The trends highlighted in the full-year figures reflect those flagged-up in the interim data from the SWA back in October.

 

Exports to Singapore, which acts as a distribution hub for many Asian countries, were up 7 per cent to £339m, with Taiwan 7 per cent higher at £165m and direct shipments to China growing by 8 per cent to £72m.

 

Indian imports jumped by 17 per cent to £62m despite an “onerous” 150 per cent import tariff and local taxes.

 

The SWA said: “A successful outcome to on-going negotiations between the European Union (EU) and India on the free trade agreement (FTA) would reduce the onerous 150 per cent import tariff.”

 

Whisky is one of the UK’s fastest-growing exports to Mexico, increasing by 14 per cent to £92m.

 

Imports in other South American countries have also benefited from a FTA with the EU.

 

 

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Molson Coors Brewing Co. (TAP): “TAP” into NA employment recovery and new products; Buy

 

Source: Goldman Sachs

April 1st

 

INVESTMENT LIST MEMBERSHIP: Americas Buy List

COVERAGE VIEW: NEUTRAL

 

Source of opportunity

We upgrade shares of Molson Coors (TAP) to Buy from Neutral and raise our 12-month price target to $63 (from $47) implying 29% upside. We believe TAP is a compelling risk/reward proposition as the US employment recovery and a new product cycle drive upward earnings revisions and multiple re-rating for this deep value asset. This is an out-of-consensus call as TAP is one of the most under-loved stocks in Consumer Staples with valuation in the bottom decile of the group. We are above consensus in each of the next three years and are forecasting a 17% multiple expansion to 14X P/E as improving volume erodes the negative sentiment.

 

Catalyst

Improving volume in NA – The key catalyst driving our upside expectations is the rising tide of a recovery in N. American beer volumes in response to an improving employment environment.

New products driving better market share and improved mix – 2013 points to a promising new product pipeline, with brands such as Third Shift and Redd Ale going after a ‘whitespace’ opportunity at a higher price point. We estimate new products could add ~4% to MillerCoors’ volume.

 

Cost savings announcement in June – We see margin upside potential on a new cost savings program likely to be announced at the June Investor Day and Europe synergies from the Starbev acquisition.

 

Capital deployment potential should begin to come into view – We expect the share buyback to be resumed in 2014.

 

Valuation

Our 12-month P/E based price target is $63, up from $47, on a higher P/E (14X from 11X) and higher EPS due to an improved fundamental outlook.

 

Key risks

Lower NA beer volumes, reduced pricing power and M&A.

 

 

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Chinese liquor maker’s net profit jumps 61 pct

 

Source: Xinhua

April 02, 2013

 

Wuliangye Yibin Co., Ltd., one of China’s top liquor brands, announced Monday that its 2012 net profit surged 61.35 percent year on year to 9.94 billion yuan (1.6 billion U.S. dollars).

 

However, the alcohol drinks maker warned in its annual report to the Shenzhen Stock Exchange that such rapid growth might not be repeated this year due to “changes in macro policy and economic environment,” predicting a “slowdown” in revenue.

 

In December, the Chinese government launched a national campaign prohibiting officials and military officers from extravagance.

 

Many analysts fear the frugality push will have a sizeable impact on liquor makers, which have been relying heavily on government receptions and business banquets for revenues.

 

Business revenues of Wuliangye rose 33.66 percent to 27.2 billion yuan, said the liquor distiller, which is based in the city of Yibin of southwestern Sichuan Province.

 

The board proposed a pre-tax cash dividend of 8 yuan for every 10 shares, which could cost the firm 3.04 billion yuan. The proposal is still subject to the approval of shareholders.

 

The producer said in its annual report that it booked a combined gain of 772,066 yuan in equity investment, with an investment profit of 1.95 million yuan in China Merchants Bank, a 1.11 million yuan loss in China Unicom shares and a 54,000 yuan loss in China Cosco shares.

 

In February, China’s top price regulator — the National Development and Reform Commission — ordered Wuliangye to pay 202 million yuan in fines for price-fixing, while Kweichow Moutai Co. , the biggest spirits producer by market value, was also penalized for 247 million yuan.

 

Moutai’s net profit increased 51.86 percent year on year to 13.31 billion yuan last year.

 

The share price of Wuliangye dropped 1.84 percent to 21.93 yuan in Shenzhen on Monday.

 

 

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Anheuser-Busch releases statement about class-action lawsuit

 

Source: KSDK

Apr 1, 2013   

 

Anheuser-Busch has released a statement regarding a class-action lawsuit against the company.

 

Peter Kraemer, vice president of brewing and supply, says former employee Jim Clark “improperly used and misrepresented” confidential information for personal gain.

 

Kraemer says there was never a complaint filed regarding accusations of the company cutting the stated alcohol content by 3 to 8 percent.

 

NewsChannel 5′s I-Team hired St. Louis Testing Labs to test the alcohol content of Budweiser and Coors beers in February.

 

The tests showed both beers contained their stated alcohol content of five percent.

 

Here is Kraemer’s full statement:

 

“Jim Clark is a former employee, now a California lawyer, who is working with the lawyers who brought several class-action lawsuits against Anheuser-Busch. We believe Clark improperly used and misrepresented our confidential information to instigate these lawsuits, all for his personal gain. We will take all legal means to stop him.

 

“Our company has a formal process for employees to make complaints confidentially through a third-party, yet none was ever filed on this matter. We believe this was an orchestrated effort by Clark to misrepresent our processes and smear our company and brands, yet knowing fully that the company complies with all alcohol labeling laws and adheres to the highest standards in brewing.

 

“We don’t disclose our recipes, intellectual property or other key competitive information, which are vital to our operation and competitiveness. Our employees understand this and sign agreements to protect information like this, which is standard in most companies.

 

“We would never compromise the quality or the taste of any of our beers for any reason. Producing the highest-quality beer is the basis for everything we do.

 

“The class-action lawsuits are groundless and the claims against Anheuser-Busch are completely false.”

 

 

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AB InBev Accused Of Retaliation Over Watered-Down Beer Suit

 

Source: Law 360

By Kurt Orzeck

April 01, 2013

 

An ex-Anheuser-Busch InBev NV employee-turned-lawyer on Friday urged a California federal judge to dismiss the company’s trade secrets suit against him, accusing AB InBev of retaliation over his role in a class action alleging the company watered down its beer.

 

In a memorandum, former director of operations support James Alan Clark said AB InBev had broken federal law by filing a breach of contract suit against him because the “vague and winnable” complaint was a transparent effort to trample on his free speech rights. The company’s suit also violates California law barring strategic lawsuits against public participation, he said.

 

“To allow AB [InBev] to proceed with this vindictive litigation would empower all employers to punish former employees like Mr. Clark for reporting misconduct and for speaking out on behalf of consumers,” the memorandum said. “If this motion is not granted, additional employee witnesses would be dissuaded from speaking out about the true nature of AB [InBev]‘s products and of the company’s widespread deception.”

 

Clark worked for AB InBev from November 1998 until June 2012, when he resigned to begin practicing law, according to the memo. He claims that, during that time frame, he complained to roughly 20 senior managers that the company watered down its beers – including Budweiser, Bud Ice and Michelob – in order to churn out more units of beer from the same starting batch of ingredients.

 

One of Clark’s first forays into law was a planned class action related to his allegations, the memo says. He says he turned to the Mills Law Firm and Bramson Plutzik Mahler & Birkhaeuser LLP for help in prosecuting the case.

 

In December, the Mills Law Firm sent AB InBev a notice for corrective action over the alleged manufacture of watered-down beer. Clark alleges the company knew of his involvement in the planned suit because it contacted him about it, even though Clark’s name didn’t appear on the notice.

 

In February, Clark refused AB InBev’s demand that he testify under oath that he had not misappropriated any confidential information in the lead-up to the lawsuit filing, according to the memo. Two beer drinkers filed the class action in California federal court on Feb. 22, and three days later, other beer drinkers submitted similar class actions in New Jersey and Pennsylvania federal courts.

 

AB InBev filed its suit on March 1, accusing him of breaching confidentiality agreements and misappropriating trade secrets, then told Clark it would settle if he revealed the alleged trade secrets he gave to the California class action plaintiff’s attorneys and named any AB InBev employees who were assisting them, he claims.

 

“AB’s settlement offer … denotes clearly and unmistakably that the instant SLAPP action arises out of Mr. Clark’s constitutional rights of petition and free speech exercised in connection with the class action,” the memo said.

 

Clark claims he did not take any AB InBev documents with him when he resigned and that he hasn’t disclosed company trade secrets to any competitor, proceeding or investigation. He added that AB InBev’s suit doesn’t allege specific instances of trade secrets misappropriation or breach of contract.

 

Clark cited California’s anti-SLAPP statute – which seeks to reduce meritless federal complaints involving diversity and protect whistleblowers from legal retribution – in asking the judge to dismiss AB InBev’s suit. He noted that information involved in the California class action was protected by attorney-client privilege.

 

AB InBev, for its part, says Clark’s allegations against the company are meritless.

 

“Clark improperly used and misrepresented our confidential information to instigate [the class action lawsuits,] all for his personal gain,” AB InBev vice president of brewing and supply Peter Kraemer said Monday. “We believe this was an orchestrated effort by Clark to misrepresent our processes and smear our company and brands, yet knowing fully that the company complies with all alcohol labeling laws and adheres to the highest standards in brewing.”

 

Attorneys for the defendant did not immediately respond to requests for comment Monday.

 

The plaintiffs are represented by Marcus S. Topel of Kasowitz Benson Torres & Friedman LLP.

 

The defendant is represented by Robert A. Carichoff of the Law Office of Robert A. Carichoff.

 

The case is Anheuser-Busch Cos. LLC et al. v. James Alan Clark, case number 2:13-cv-00415, in the U.S. District Court for the Eastern District of California.

 

–Additional reporting by Megan Stride. Editing by Elizabeth Bowen.

 

 

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America’s Beer Distributors Recognize National Alcohol Awareness Month

 

Highlight Effective Role of State-Based Alcohol Regulation

 

Source: NBWA

April 1st

 

During the month of April, the National Beer Wholesalers Association (NBWA) will be recognizing Alcohol Awareness Month, as designated by the U.S. Health and Human Services Substance Abuse and Mental Health Services Administration (SAMHSA), to raise awareness about the problem of alcohol abuse.

 

“Alcohol is a unique product that is not for everyone,” said NBWA President Craig Purser. “National Alcohol Awareness Month is a great time to recognize that alcoholic beverages need to be effectively regulated so they are not abused and do not end up in the hands of those under the legal drinking age. Responsibility begins with effective regulation, and the U.S. has been fortunate to have a time-tested system of alcohol regulation in place for eight decades – a system that allows the states to decide how best to regulate and track alcohol.”

 

The 130,000 men and women of the American beer distribution industry play a critical role in the effort to encourage responsible consumption and eliminate alcohol abuse of all types, including drunk driving and the underage purchase and consumption of alcohol.  Alcohol is not like other consumer products and can have consequences if abused. That’s why beer distributors are regulated and work to take steps to ensure the safe and legal sale of alcohol, fight efforts to weaken regulations that provide a safe and orderly marketplace and participate in programs that promote alcohol education and responsible consumption only by adults of legal drinking age.

 

NBWA encourages parents, educators and community leaders to utilize SAMHSA resources that can help educate young people about the dangers of underage drinking and the importance of making smart decisions. More information about these resources can be found at www.stopalcoholabuse.gov.

 

To read about responsibility initiatives America’s beer distributors have launched in their local communities, visit www.distributorresponsibility.com.

 

 

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Which drinker is most at risk of getting liver disease? The results of our scientific test will astonish you (Excerpt)

 

Source: Daily Mail

By Angela Epstein

1 April 2013

 

Liver disease is now the fifth biggest killer in the UK – with the number of people dying from it rising by 20 per cent over the past decade. However, there are often no warning signs until it is far advanced, so many of us could have the potentially fatal condition without even realising it.

 

Indeed, when the British Liver Trust recently offered members of the public on-the-spot screening, one in four people tested showed signs of early scarring.

 

‘Most people die of liver disease after just their first or second admission to hospital for it, as they have not realised they were suffering with it – and their condition will be so far advanced. By the time they are seen, it is too late,’ says Dr Martin Prince, consultant hepatologist at the Manchester Royal Infirmary.

 

http://www.dailymail.co.uk/health/article-2302486/Which-drinkers-risk-getting-liver-disease-The-results-scientific-test-astonish-you.html

 

 

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Iowa: Prolific tiny liquor stores blamed for Des Moines crime

 

Source: Des Moines Register

Mar 31, 2013

 

Tom Duax pulls no punches when he talks about his competitor across Second Avenue in Des Moines – or others that have sprouted up in his scrappy neighborhood.

 

The owner of Central City Liquors and his employees say the competitor, Nat’s Food Mart, opens at 6 a.m. to a steady stream of ne’er-do-wells who are looking to buy cheap booze and, they suspect, those synthetic products people smoke.

 

“Here’s my proof: Every morning I sweep my parking lot … I find remnants of packages that say, ‘Not for human consumption,’ ” he said.

 

Nat’s, attached to a Star gas station at 1443 Second Ave., is one of numerous stores in the neighborhood busted recently for selling alcohol to minors.

 

Database: Class E liquor licenses

 

Duax’s questions to The Des Moines Register Reader’s Watchdog: Why are the state and city allowing so many of these mom-and-pop liquor stores to proliferate, and why don’t they more effectively enforce laws on such businesses?

 

“This is not about competition,” insists Duax, a veteran in the business who owns one of the largest liquor stores in the state. “It’s about safety. Do we really need 67 places in Des Moines selling liquor? That is that many more that can sell liquor to minors and whatever else comes along.”

 

Jasjit “Ben” and Geet Singh, owners of Nat’s, say it’s absolutely about competition.

 

The couple said they do not sell synthetic drugs or anything else related to drugs, and their neighbor is hell-bent on running them out of business.

 

Duax, they say, has made trouble for them with the city, the state and in the neighborhood.

 

“We’re business rivals,” Ben Singh said. “I understand he thinks there are too many liquor licenses now, but we’re not the only ones.”

 

When I visited Nat’s for the first time in February, chains covered the beer coolers, the price of a 30-day suspended license after workers twice sold alcohol to underage customers. There were cheap cigars and regular incense, but no products in sight that looked like synthetic drugs.

 

Many of the stores Duax gripes about popped up after the Legislature changed a years-old state law in 2011, and allowed gas-selling convenience stores to sell hard liquor, including whiskey and vodka, in their aisles.

 

Today, there are 15 such stores within a couple of miles of Duax’s business, according to a map I obtained from the Iowa Alcoholic Beverages Division. Most of them received licenses before new regulations were put in place by the city that attempt to reign in new business near old liquor stores, and they are not subject to newer rules prohibiting sales near schools and other places where families dwell.

 

Nat’s Food Mart was the only one of those stores in Des Moines with a suspended Class E liquor license last month. The suspension ended March 6, city officials said.

 

The Singhs say they fired the employees who sold to underage customers and provided state-led training for everyone else who works for them to assure such sales don’t happen again.

 

“But it hasn’t mattered,” Geet Singh told me. “From the day we got our license suspension, this is what we have had to go through.”

 

Duax is correct that other competitors in the area have gotten in trouble for selling to minors. One of them, the Kum & Go at 2211 University Ave., had its license suspended for 60 days Feb. 28 for selling to minors, according to officials.

 

A Kum & Go at Southeast 14th Street and Park Avenue was fined last spring for the same. And the Shop N Save at 1829 Sixth Ave. has been in trouble in 2011 and 2012 for selling to minors, state records show. Also dinged: the Downtown Pantry at 204 Fourth St. and Smokin’ Joe’s Tobacco and Liquor at 2914 E. University Ave.

 

On Monday, Des Moines City Council members doled out $500 fines for sales to minors to University Groceries at 21st Street and University Avenue, Last Stop Beverage Shop at 2839 E. University Ave., Git-N-Go at 3274 E. University Ave. and Kum & Go at 3104 University Ave. A public hearing is set for April 8.

 

The Des Moines council spent a great deal of time last year trying to reign the expansion of businesses with Class E liquor licenses, imposing a moratorium on new ones until new regulations were developed.

 

At the time, Khalid Khan’s Fast Mart, located on Buchanan Street near East High School, was one of several small liquor stores in trouble with the city. His store was accused in February of selling synthetic marijuana responsible for the hospitalization of three Des Moines students.

 

Like the Singhs, Khan said at the time that he has taken steps to deny improper sales to minors. And like the Singhs, he said preventing liquor sales at his business would significantly affect his ability to provide for his family.

 

After the Legislature expanded liquor sales in 2011, the city prohibited new Class E liquor licenses near churches, schools, day cares and parks, and it required any small store to be at least a quarter of a mile from any similar business already selling liquor. That slowed requests for new licenses, according to City Attorney Jeff Lester.

 

City Councilman Brian Meyer said he has resisted drafting any new rules that would discriminate among different businesses based on size or location.

 

But in answer to Duax’s questions, state and city officials are beginning to crack down.

 

Des Moines city officials have been mulling new rules that would attempt to reign in so-called nuisance liquor stores like nuisance properties or bars.

 

City Councilwoman Christine Hensley said the proliferation of new licenses in urban areas is also a huge concern for the Iowa Alcoholic Beverage Division. She met last week with officials from Kum & Go and others to explore a state law change that would allow competition while giving cities more authority to revoke the licenses of problem businesses.

 

Synthetic drugs? Duax also will be glad to know the state and city are working to go after any business suspected of selling them.

 

In February, the state attorney general’s office obtained a court order to seize products suspected of being synthetic drugs from a store owned by Sarbreet Singh and Sandeep Kaur under Iowa’s Consumer Fraud Act. The two own a Shop N Save at 4685 N.W. Second St. The move came after an undercover officer purchased a product called “7H” and a glass smoking pipe on Nov. 28, 2012, followed by an ongoing investigation by the police and U.S. Postal Service.

 

“There will be more – absolutely,” said Bill Brauch, who heads the office’s Consumer Protection Division. “This was not the only matter under investigation.”

 

The Governor’s Office of Drug Control Policy this year upped the ante yet again in its pursuit of businesses that sell those products.

 

A bill before the House Ways and Means Committee would make carrying amounts of the drug-like substances as small as 1 gram a Class D felony, punishable by up to five years in prison and a $7,500 fine. Another bill that aimed to reign in new types of imitation drugs, including “fake pot,” died after failing to advance in either chamber.

 

“Legislators expressed some frustration that there is already some blanket language in the code that is not being extensively used,” said Steve Lukan, director of the Drug Control Policy office. “But prosecutors would say they don’t know if that blanket language is strong enough to take into court. And unless the crime is a felony, it’s not as high on their to-do list.”

 

Lukan did say, however, that his office is working with the state Alcoholic Beverages Division to train investigators to notify the Division of Narcotics Enforcement when a business is suspected of selling synthetic drugs.

 

The Legislature’s move in 2011 clearly opened up new business, but a lot of resources are now being spent to curb criminal activity, especially in urban areas like Des Moines.

 

We all have to ask: What will be the price that we ultimately pay?

 

 

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Pennsylvania: The downside of privatized liquor sales

 

Source: Lancaster Online

By DAVID BENDER, Special to the Sunday News

Mar 31, 2013

 

Want to know what drinking looks like in Pennsylvania? Put 100 adults in a room with 100 bottles of liquor. Come back later and you’ll find 7 of them drinking half the bottles. The other 93 are cleaning up the mess. Throw in adolescents and it gets uglier. Toss the latest plan for privatization into the room and you start writing hefty tax checks, especially if you’re one of the 93.

 

Privatization is not bad, but it’s not free. Despite claims of revenue neutrality, it’s not even close. The mostly unread 200-page bill that hit the House floor completely changed the sources of budget revenue. But not one person voting on it reviewed an analysis of longterm financial impact. That’s because no such analysis was prepared. What business owner would sell an asset without that information?

 

You own this asset. It’s up to you to demand the accounting. Legislative leadership failed to check the state pension numbers in 2001 and created the multibillion dollar crisis you’re paying for today. They’ll do it again unless you insist otherwise.

 

Don’t like math? Let’s have fun. Say you own a machine pumping out $550 in cash this year. A guy in a nice suit says he’ll give you $800 for the machine and you’ll get $500 plus small increases every year. Not a bad deal if you invest the money in another machine. But you’re broke. So you spend the $800. It’s gone.

 

You’re happy until you recall how the machine increased your payout every year. By year 10 it’s cranking $900 to the new owner; by year 20 it’s up to $1,500. The small increases promised by the guy in the nice suit don’t come near that, so the gap is at least $300 in year 10 and $700 in year 20. Add six zeros to those numbers and you get the current version of privatization. You, the taxpayer, will be called on to fill a $700 million hole. All for someone else’s cheap vodka.

 

I’m a free market guy and understand why you’re being asked to give up your share of ownership in the stores. But anyone making that argument needs to acknowledge the cost. The only way to balance the books with privatization is to raise the liquor tax from 18% to at least 30% depending on which bill is passed.

 

Being one of the 93 percent who don’t pound down bottles, I’d be fine with that increase. The 7 percent who drink the most ought to pay the most. But the latest proposal doesn’t do that. It picks up one end of a table holding treasure that currently belongs to all of the citizens and sends that money sliding into the pockets of licensees and the controlling distilleries in France, Britain, India, South Africa and China. It hits up 93 percent of hard-working Pennsylvanians for what was lost. Those who drink the least will pay the most.

 

Just ask yourself these questions: Will easily accessed alcohol lead Pennsylvania to global excellence? Will a greater selection of alcohol improve the health of our citizens? Will it raise workforce readiness? Will it enhance technological innovation? Will it improve academic performance? Will it foster the development of new cutting edge industries?

 

You know the answers. Privatize or don’t, but give us an accounting.

 

David Bender is executive director and CEO of Compass Mark, a nonprofit organization dedicated to reducing the incidence, prevalence and consequences of the abuse of and addiction to alcohol and other drugs.

 

 

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NABCA Legislative Update: March 16, 2013-March 29, 2013

 

Source: NABCA

April 1st

 

http://www.nabca.org/News/Files/130329%20Legislation%20and%20Regulation%20State%20Update.pdf

 

http://www.nabca.org/News/Files/130329%20Legislation%20and%20Regulation%20Category%20Update.pdf

 

http://www.nabca.org/News/Files/130329%20Regulatory%20Update.pdf

 

 

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Washington Wines Pack High Alcohol Wallop, Little Else

 

Source: Bloomberg

By John Mariani

Apr 1, 2013

 

On a recent trip to Seattle I had the chance to revisit the wines of Washington state, the nation’s second largest premium wine producer after California.

 

I’ve always had high regard for a few estates like the pioneering Chateau Ste. Michelle and Columbia Crest.

 

Washington has had wine grape plantings since 1825, and today the state has 750 wineries and 13 approved appellations selling $3 billion a year.

 

Yet, it only became a modern viticultural region during the 1970s, when strides were made in producing consistently good vinifera like chardonnay, cabernet sauvignon and merlot in the Yakima and Columbia River valleys.

 

Since then, there has been a good deal of experimentation with other varietals like riesling, semillon and syrah, and some of the state’s very best wines are late harvest dessert wines. Rieslings in particular have compared variably with those in Alsace and New York state for their balance of fruit and acidity.

 

Washington has always prided itself on intense, highly tannic, high-alcohol wines that show well in their youth but often lose brightness and complexity with age. This, I’m sorry to say, was even more prevalent among the wines I sampled then I can recall from previous tastings.

 

One Dimensional

 

The most salient example was a Woodward Canyon Old Vines Dedication Series #28 Cabernet Sauvignon 2008 ($75) from Walla Walla. With a whopping 16.5 percent alcohol, it was all full- tilt tannin and new oak, and after just half a glass, I found nothing distinctive about it except for its one-dimensional character. After five years this monster should have loosened up but hasn’t.

 

The same winery’s Artist Series #18 ($45) was only 15.8 percent alcohol, but still felt like a blow to the palate rather than a pleasurable wine, despite a Bordeaux-like blend of cabernet franc, merlot, petit verdot and syrah in with the cabernet sauvignon.

 

Columbia Valley Cabernet Sauvignon 2003, is a much- ballyhooed cult favorite that sells in stores for between $300 and $400. At 14.9 percent alcohol and a decade old it was a blockbuster, but once it exploded in the mouth, there was no finish of any kind.

Veal Chop

 

I found relief from the brash alcohol levels with a well- fruited Seven Hills Merlot 2007 ($22) whose softness was due to the varietal, while an inexpensive cabernet sauvignon from Chaz Point 2010 ($18) showed round levels of fruit and a pleasing lushness that went very well with a veal chop over dinner.

 

There was also a good mix of strawberry-like fruit and cherry flavors in JM Cellars Tre Fanciulli 2007 ($35). It’s a judicious blend of 67 percent cabernet sauvignon, 19 percent merlot and 14 percent syrah which boosted the elegance of the wine. At only 14.4 percent alcohol, it shows how the terroir of the Columbia Valley, whose south-facing slopes get a great deal of solar radiation, can produce power within a velvet glove.

 

Among the rieslings I drank in Seattle, I very much enjoyed a citrus-bright Efeste Evergreen Vineyard 2011 ($17) that was an ideal match with cold shellfish.

 

Boom Boom

 

Washington vintners have a knack for quirky names for their wines, like Boom Boom, Livewire and Jigsaw. Kung Fu Girl, a riesling by Charles Smith, is a crowd pleaser at about $10; it makes no pretensions other than to show off good apple, melon flavors and a little sweetness that makes it a fine aperitif.

 

Smith says that he “focuses on the way people generally consume wine today: immediately. The intent was (and still is) to create wines to be enjoyed now, but with true ‘typicity’ of both the varietal and the vineyard.” His motto? “It’s just wine, drink it.”

 

Wine is a lot more, certainly, but Washington vintners should step away from thinking that a bigger wine is a better wine.

 

(John Mariani writes about wine for Muse, the arts and culture section of Bloomberg News. The opinions expressed are his own.)

 

 

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Brown Brothers puts White Hills Vineyard for sale

 

Source: DBR

02 April 2013

 

Brown Brothers, an Australia-based family-owned wine company, has placed its White Hills Vineyard in Tasmania for sale, as part of plans to restructure its business due to decline of sales in Europe.

 

White Hills Vineyard was purchased from a timber company Gunns in 2010.

 

Located in the Tamar Valley in the north of Tasmania, the 83ha vineyard is planted with varieties such as Pinot Noir, Chardonnay, Riesling, Sauvignon Blanc, Pinot Gris and Gewurztraminer.

 

Brown Brothers chief executive Ronald Wahlquist was quoted by themercury.com as saying that the sale was part of the company’s broader restructure program.

 

“We have asked the permanent employees to stay on and run the vineyard until it sells,” Wahlquist added.

 

“We are still selling grapes from that operation and the vineyard market is sound.”

 

The winery also owns The Hazards Vineyard and Kayena Vineyard in Tasmania region, which it plans to retain.

 

Brown Brothers also plans to sell its Whitlands Vineyard in Victoria.

 

 

——

Indian wine market to experience slow performance in coming years: Report

 

Source: DBR

01 April 2013

 

The performance of Indian wine market in the next five years may not be as good as what it was between 2006 and 2011, finds a new survey by UK-based research firm Canadean – Wines & Spirits.

 

According to the report ‘The Future of the Wine Market in India, to 2016′, the compound annual growth rate (CAGR) of India’s wine industry during 2011-16 period is expected to be 5%, compared to 7.56% posted in the review period.

 

India’s experience has been more or less same even from the consumption point of view, noted Canadean.

 

The wine consumption in 2011 rose by 44% over 2006 figures, while the survey estimates for 2016 is pegged at about 27.4% over 2011.

 

The slow-down in growth rate has reflected similarly among the industry’s segments, including still wine and sparkling wine. Fortified wine, however, is yet to penetrate in the Indian market.

 

According to the survey, still wine retains the monopoly in the country’s vast wine market with a consistent share from 2006 through 2016.

 

With little more than 70% share in 2006 and 2011, the still wine market is likely to continue the momentum until 2016 with a steady performance. Sparkling wine has accounted for the remaining share of the Indian wine market in both review and forecast periods.

 

 

——

Oldenburg owner hits out at Pinotage

 

Source: the drinks business

by Lucy Shaw

28th March, 2013

 

Adrian Vanderspuy of Oldenburg Vineyards in Stellenbosch has blasted South Africa’s flasgship red grape Pinotage, stating he has no interest in the variety.

 

Speaking to the drinks business at a wine dinner at High Timber in London last night, Vanderspuy said: “Pinotage? I’ll leave the banana wines to other people.

 

“I don’t like the grape variety and have no interest in planting it. There is so much more South Africa can do to a higher level.”

 

South African-born, Switzerland-based Vanderspuy, who owns the boutique, 30-hectare Oldenburg estate in the Banghoek Valley in Stellenbosch, is instead putting his energies into Cabernet Sauvignon, Merlot, Cabernet Franc and Syrah.

 

For his soon-to-be-released top wine, red blend Rhodium 2010, he decided to give Merlot a starring role in place of Cabernet Sauvignon.

 

“I wanted to lead with Merlot because everyone is leading with Cabernet Sauvignon, and as a relatively new estate owner, I wanted to be different,” he told db.

 

“I started with 50% Cabernet in the blend but whittled it out completely in the end as the Merlot and Cabernet Franc worked so well together with a dash of Malbec.

 

“If you tasted the Malbec on its own you’d want to drink it by the gallon. It’s the most beautiful inky purple colour and has wonderful perfume,” he added.

 

Despite currently leading with Merlot, Vanderspuy, whose biggest export markets are Germany, Switzerland and the UK, hasn’t ruled out the idea of a Bordeaux-based red blend.

 

“I’m new to the game so am still working out which varieties are working best for us. It’s hard to single one out as having the best potential in South Africa.

 

“For us it would probably be Cabernet Sauvignon, but I think South Africa might end up having the most success with red blends that are more than the sum of their parts,” he said.

 

Rather than plough millions into building a winery, Vanderspuy currently rents the winemaking facilities at Glenelly, the Stellenbosch estate owned by former Château Pichon-Longueville owner May Elaine de Lencquesaing.

 

As for the whites, Vanderspuy believes passionately in the potential of Chenin Blanc, particularly when paired with a small percentage of Chardonnay and aged in 50% new French oak.

 

“Chenin has such a strong link to South Africa and it’s such a versatile grape.

 

“When I bought the estate in 2003 I had the chance to make Sauvignon Blanc but thought that in a few years there would be a glut and the thirst for it would die down,” Vanderspuy admitted.

 

“The world doesn’t need any more Sauvignon Blanc but it does need more Chenin,” he added.

 

Vanderspuy’s Chenin has caught the eye of Chenin pioneer Ken Forrester, who buys the grapes Oldenburg doesn’t use to vinify at his own estate and sell on.

 

 

——

Carrefour eyes Brazil and China for growth

 

Source: FT

By Scheherazade Daneshkhu in Paris

April 1st

 

Carrefour is working on a plan to expand its operations in Brazil and China, the details of which the French retailer is set to reveal at the start of next year, according to the group’s chairman and chief executive.

 

“Our rate of growth in these regions is probably insufficient. We are working on a strategy; these are big countries and there are lots of possibilities but I hope the plan will be ready by the beginning of next year,” says Georges Plassat in his first English-language newspaper interview since his arrival last year at Carrefour’s headquarters in Boulogne-Billancourt, west Paris.

 

Brazil and China are Carrefour’s second- and fifth-largest markets by sales respectively. While sales in Latin America – including Argentina – increased 14 per cent last year, they fell 10 per cent in Asia, which includes Taiwan and a small business in India.

 

Mr Plassat attributes much of that decline to China’s slowing economy and leadership change. “The Chinese economy is now focusing more on its interior and that’s where our future lies,” he says.

 

Since joining Carrefour a year ago, the veteran retailer has conducted a merciless diagnosis of the group’s problems. It was a “headless chicken” in which many executives had been “sedated” by the heavy hand of centralisation imposed on them by his predecessor, Lars Olofsson.

 

Mr Plassat’s rapid implementation of a new strategy, his confident, no-nonsense manner and successful record at Vivarte – the French retail conglomerate he turned to profit before joining Carrefour – have fired hopes that the world’s second-largest retailer by sales after Walmart is finally being turned round.

 

Those recovery hopes, after a 25 per cent slide in operating profits in three years, and earnings upgrades have lifted the shares 60 per cent since their 18-year low in July.

 

How sustainable that recovery will be remains to be seen.

 

Mr Plassat, who turned 64 last week, says he will do everything he can to create real value for the company “but it won’t be in two minutes”.

 

Critics say Carrefour is too dependent on hypermarkets, a format the retailer claims to have invented in 1963 but which is seen as out of date.

 

Mr Plassat says the hypermarket is not dead, but simply having a midlife crisis and he rejects an oft-proposed solution that reducing space is the answer. “You can often lose more in sales than the proportion of space shut,” he says.

 

Attention has also focused on how Carrefour will turn round non-food sales, which fell 25 per cent between 2004 and 2011.

 

Mr Plassat points out that electrical goods have been falling everywhere and says “the idea that hypermarkets have been worse hit than others by falling non-food sales is nonsense”.

 

But he admits the retailer had previously tried too hard to be fashionable and was “over-geared” towards seasonal stock that took up space. “People don’t go to a hypermarket to buy fashion but to buy things that are simple, basic and practical.”

 

So far, his strategy, which includes giving store managers more autonomy and a low-price pledge on 500 basics, has yielded an encouraging improvement in French operating profit margins to 2.6 per cent – still half those of Walmart and Tesco.

 

“Margins improved because we reduced significant losses caused by poor management – mainly linked to an oversupply of stock that was mind-blowing – that’s been stopped,” he says.

 

Most important is the implementation of a supply chain, integrating the hypermarkets, supermarkets and proximity stores with an IT system that will be the “spine” of the organisation.

 

Analysts at Credit Suisse estimate that poor IT systems led to waste of ?350m last year and that halving waste in France “represents a minimum of 50 basis points opportunity on margin”.

 

Another structural problem is Carrefour’s weighty exposure to slow-growing western markets – including austerity-hit Spain and Italy, which together with France account for 70 per cent of last year’s ?77bn of group sales.

 

Mr Plassat is characteristically blunt about exhortations to rebalance in favour of emerging markets which he thinks is both unrealistic and undesirable, other than in core markets, such as Brazil and China.

 

“We will see for how long the emerging markets maintain high growth,” he says gruffly. “I am thinking beyond the short term.”

 

He has withdrawn from Colombia, Indonesia, Malaysia – arguing that Carrefour was too small in those countries – and lossmaking Greece, raising a better than expected ?2.8bn that has been used to reduce debt and reinvest, mainly in Europe.

 

Eric Knight, chief executive of Knight Vinke, the US activist shareholder that has a 1.5 per cent stake, says approvingly: “The Colombia disposal, and others, has helped demonstrate that the value of a number of Carrefour’s international assets is substantially higher than is implied by the whole group’s current valuation.”

 

But others see a downside. “Recent disposals have helped the balance sheet but they have also increased Carrefour’s exposure to mature markets for which capex is also set to rise,” Justin Scarborough, analyst at Bank of America Merrill Lynch, said in a note.

 

For Mr Plassat southern Europe, with 160m people, represents among the highest per capital income in the world. “It would be completely stupid to abandon our market position [20 per cent] just because it is going through an economic crisis at the moment.”

He gives prevailing financial fashion short shrift, saying he has “no plans” to put Atacadão, the successful Brazilian cash and carry business, on the market nor for a partial listing of the Chinese business.

 

He intends to demonstrate the value of Carrefour’s property assets – estimated by analysts at ?18bn – through development, potentially including housing projects, rather than through a market listing or sales.

 

In Turkey, Carrefour is in talks with disgruntled joint venture partner Sabanci on options, including combining operations with Migros, a retailer controlled by BC Partners, the London-based private equity group. He says “it is probable” that the situation “will be clarified in several weeks”.

 

What of relations with Carrefour’s powerful 16 per cent shareholder Blue Capital – the joint venture between private equity funds Colony Capital of the US and Groupe Arnault, the investment vehicle of tycoon Bernard Arnault – to whom Mr Olofsson admitted giving fortnightly reports?

 

“I’m left to do my work, there is no interference,” says Mr Plassat. It would be entertaining to see them try.

 

 

——

Washington: Bills would loosen state liquor laws

 

Source: The Spokesman-Review

Jim Camden

April 2nd

 

For all the attention being paid to legal marijuana this session, it’s the more traditional legal intoxicant – alcohol – providing Washington legislators with a greater array of possible changes to state law.

 

More than a dozen bills working their way through the legislative process would increase a person’s ability to consume some form of alcohol at some new setting.

 

A glass of beer or wine in the theater? Several proposals for that.

 

How about a shot of something stronger with that movie? Separate bill for that.

 

Taste a bit of that expensive scotch before buying it at the store? The stores would like to oblige.

 

Free glass of wine with that massage and pedicure? Could be legal later this year.

 

Let college students who are 18 to 21 taste wine if they are in viticulture classes? Prospects look good, although the students won’t be allowed to swallow.

 

Buy a growler of cider at the local microbrewery? Maybe not; could be a problem under federal law.

 

Some say the Legislature has more ideas to loosen up liquor laws because voters in 2011 got the state out of the liquor business. Others say there aren’t more ideas, they’re just being doled out piecemeal rather than wrapped in a single piece of legislation, called an omnibus bill.

 

Last year’s omnibus bill died, and with it, all the work on liquor revisions, said Sen. Janea Holmquist Newbry, R-Moses Lake. This year, the strategy is to push them individually.

 

Derek Franklin of the Washington Association for Substance Abuse and Violence Prevention testified last Friday against many efforts to loosen alcohol consumption rules. Drinking in theaters and stores would push “the normalization of alcohol,” he said, sending teens a message it’s OK to drink, as well as get in a car to drive after imbibing. Each proposal “may seem small by comparison, but it puts incremental chips in the wall that protects our kids,” he said.

 

Franklin believes the Legislature saw a sharp increase in efforts to expand access to alcohol as a consequence of Initiative 1183, which got the state out of the wholesale and retail alcohol business last year, turning the sale of distilled spirits over to private license holders. Businesses look for additional ways to make money, and the state looks for new revenue from a heavily taxed product, he said.

 

Rick Garza of the Liquor Control Board said the Legislature always has some bills to address the state’s liquor laws, but it faces few new ideas this year. Many tweak existing laws, such as House Bill 1149, which was among the bills approved Monday by the Senate Commerce and Labor Committee. Current law says a craft distillery can only sell two liters of its products to one customer in a day; the bill would raise that to three liters.

 

Two other bills would change the rules for the kinds of stores that can offer samples of alcohol: One would allow big-box stores like Target to offer beer and wine samples by removing the current rule that half of a store’s sales must be for groceries in order to offer samples. Another would let liquor stores, wineries and craft distilleries offer samples of spirits, but no more than a half-ounce per sample, and only three samples per customer.

 

Some fail one year and come back the next, Garza said, like a proposal to allow day spas to buy a license to offer a free glass of wine or beer to a customer. The Senate passed a bill to make that legal last month on a 42-7 vote, but it has some resistance in the House, where there are questions whether it’s so broad it would allow free drinks at every nail salon in the state.

 

Another recurring request would loosen restrictions on selling alcohol in theaters. Some venues already offer alcohol on a limited basis by buying a tavern or restaurant license, then selling drinks away from the main concession stand in an area closed to minors. Two proposals would set up a special license for beer and wine sales in movie theaters, and another would add distilled spirits to the options.

 

Allowing more latitude in the sale of alcoholic beverages may be a key to keeping some of the state’s restored movie houses open, several owners told the Commerce Committee last week. Some big multiplexes already do it by restricting one of their many screens for adults. The one- and two-screen theaters need alcohol sales to compete, said Rand Thornsley, owner of the 1927 Liberty Theater in Camas.

 

“Unless we can find some new means of revenue, we’re not going to be able to continue beyond this year,” he said.

 

New this year are proposals to allow college students who are at least 18 but not yet 21 to sample wine as part of a course in culinary arts or viticulture. With the state’s burgeoning wine industry, some universities and community colleges offer courses in the science of making wine, and students should at least be allowed to sample their product and spit it out, said Rep. Larry Haler, R-Richland, sponsor of House Bill 1459.

 

“It’s similar to taking a cooking class and not being able to taste the food you made,” Holmquist Newbry said.

 

Also new is a proposal to allow patrons to refill a growler – a large personal container – with hard cider. State law already allows customers to buy a growler of beer or ale at a bar or tavern and drink it at home, but not hard cider.

 

Rep. Sam Hunt, D-Olympia, said the idea for House Bill 1008 was suggested by his daughter, who was told at a local microbrewery they couldn’t fill her growler with hard cider. The reason: Cider is considered a wine, not a beer, by the federal government for tax purposes. And growler sales of wine aren’t allowed.

 

Hard cider is making a comeback among consumers, and Washington, with its plentiful orchards, is leading the way in resurrecting the industry, Holmquist Newbry said.

 

But Hunt’s bill may need more time to ferment. Garza said the federal agency that collects alcohol taxes isn’t set up to collect revenue on growlers of cider. “This could be a violation of federal law,” he said.

 

 

——

Florida: Florida brewers push to legalize 64-ounce beer ‘growlers’

 

Source: AP

Published April 01, 2013

 

David Wescott has two 32-ounce growlers he brings into Proof Brewing Company to fill up and take home.

 

Why two? Because Florida is one of only three states where it’s illegal to fill one 64-ounce beer container, known as a growler. He can get as many of the 32-ounce containers filled as he wants, and Florida breweries can also fill unlimited 128-ounce growlers for customers to take home. But the size preferred by most beer enthusiasts is banned.

 

“If you’re bringing some beer home for you and the wife, that’s two beers,” Wescott, whose wife calls him a beer snob, said of the quart-sized growlers. “It makes no sense to me. It’s just not logical — 128s are probably too much, 32 is too small. I’d love to get a 64.”

 

Two lawmakers have filed bills to legalize the half-gallon jugs, but a group of beer distributors is fighting both measures and appears to have helped effectively kill both for the year.

 

“It’s really silly. I have in my office a 32-ounce, a gallon and a 64 to show people. And I ask them, `Which one do you think is currently illegal?”‘ said Rep. Katie Edwards, D-Plantation. “They all think the gallon is illegal. They say, `Oh, you’re trying to legalize the big one!’ and I say, `No, it’s the one in the middle,’ and it’s like, `Why is it not legal?’ They don’t get it.”

 

And Edwards doesn’t even drink beer. She said her only motive in sponsoring her bill is economic development. The half-gallon size growlers are an industry standard and are sold at breweries around the country, helping to expand the small businesses.

 

Amherst Brewing Company in Massachusetts, which locals call ABC, has gone through three expansions since the pub opened in 1997. Chloe Drew, ABC’s bar manager, said that growth has been helped by selling the 64-ounce growlers that fill two refrigerated cases at the front of the restaurant.

 

“It’s really good for small towns because they become a destination and people can bring stuff home from that destination. It’s probably only going to bring people back,” Drew said, adding that the Florida law is strange because anyone who wants 64 ounces could simply buy two 32-ounce growlers.

 

The Florida Beer Wholesalers Association, which represents all the state’s Anheuser-Busch distributors, is opposing the bill. Its lobbyist, Mitch Rubin, was able to convince Rep. Debbie Mayfield, R-Vero Beach, not to give it a hearing at the House Business and Professional Regulation Subcommittee she chairs. Without a House hearing, the bill is essentially dead.

 

Rubin said he is trying to protect the three-tier system of alcohol distribution the federal government set up after Prohibition. It basically ensures that alcoholic products are passed through a distributor to get to retailers. Exceptions have been made, however, for purchases where products are produced, such as buying bottles of wine at a winery.

 

State law does allow take-home sales at breweries, though Rubin argues that language was meant only to allow sales at Busch Gardens in Tampa when Anheuser-Busch brewed beer at what is now a major theme park. He said it was never intended to allow breweries to sell directly to consumers.

 

“It’s definitely operating in the gray,” said Rubin, who said he is not fighting the bill to boost distributers’ profits. “There’s a little to that, but the larger point is about the three-tier system, and that is our larger concern.”

 

At his urging, Sen. Maria Sachs, D-Delray Beach, tried to add a nearly 12-page amendment to Sen. Jack Latvala’s two-line bill. The amendment would have allowed 64-ounce growlers to be sold, but it also would have restricted take-home sales to only the smallest of startup breweries. The Senate Regulated Industries Committee refused to consider the amendment before approving the bill, though Rubin has likely succeeded in halting that measure as well.

 

Latvala noted that it’s hard for beverage laws to be changed because of the powerful lobbying of distributors. He pointed out that it took years for Florida to change a law that only allowed beer cans and bottles in sizes of 8, 12, 16 or 32 ounces. The law, until changed in 2001, kept many imported beers out of Florida because bottles were based on the metric system. Also banned at the time were 22-ounce bottles popular with microbreweries.

 

“It’s the same thing still going on. Those that have the sizes and those that have the distributorships are protecting that,” said Latvala, R-Palm Harbor.

 

Brewers say growlers and tasting rooms are an important part of growing business, especially when certain beers aren’t readily available in stores. A tasting room at Cigar City Brewing in Tampa, for instance, has helped the business grow from two employees in 2009 to more than 50 now, said owner Joey Redner.

 

The larger profit margins on beer sold at Florida breweries helps them reinvest the money to produce more beer, which creates more jobs. Unlike beer giants such as Anheuser-Busch and MillerCoors, which have automated systems that allow a few people to brew massive amounts of beer, craft brewing is labor intensive. In order to brew more, small breweries have to hire more people.

 

Redner said he believes the wholesalers association is opposing the growler bill to protect its profits, as growlers and brewery tasting rooms help craft brewers expand their market presence.

 

“Ninety-nine percent of their business is a large, foreign-owned company that makes 100 million barrels of beer. That’s where their bread and butter is. These craft breweries, that’s not what’s keeping the lights on for them,” Redner said. “If they can shut the tasting rooms down, they can get rid of some the competition.”

 

The Beer Industry of Florida, which counts MillerCoors distributors among its members, supports allowing the 64-ounce growlers because the industry group doesn’t see the jugs as a threat to the three-tier system, said BIF president Eric Criss.

 

The current rules can be frustrating for out-of-state tourists accustomed to the 64-ounce growlers. Luke Kemper, the owner of Swamp Head Brewery in Gainesville, said more and more often people visiting from other states are told their 64-ounce growlers can’t be filled. Likewise, if they buy a 32- or 128-ounce growler, they probably can’t fill them when they get home.

 

Chris Lashway of Fredericksburg, Va., recently stopped at Proof Brewing in Tallahassee while on his way to South Florida. He likes visiting microbreweries and said he would have liked to buy a 64-ounce container so there would be more to share with his hosts. Instead, he ordered a quart of red ale.

 

“It is very bizarre,” he said of the rules.

 

 

——

Michigan: Editorial: Liquor control updates progressing

 

Need to modernize regulations is key

 

Source: LSJ

Apr. 1, 2013

 

When considering examples of government bureaucracy run amok for its own purposes – rather than for the good of citizens – Michigan’s liquor regulatory process would be Exhibit A.

 

From archaic laws to the puzzling fact that regulations were managed differently in different parts of the state, Michigan’s liquor control process has earned justifiable criticism.

 

So a recent report that cites efforts to apply reason and conformity to Liquor Control Commission operations is most welcome indeed.

 

Gongwer News Service reported key changes last week:

 

. The wait time for permits has dropped nearly 45 percent, from 290 days to 162 days.

 

. More than 40 forms have been eliminated.

 

. The state’s four regional liquor control offices are no longer allowed to create local practices for how they will handle various applications. Instead, officials decided a 35-day review process used in the Grand Rapids office should also be used by offices in Lansing, Escanaba and Southfield.

 

The commission also is reviewing why some procedures meant to be fairly simple and straight forward were instead resulting in added investigations. Liquor Control Commission Chair Andy Deloney told Gongwer that one example involved the law that allowed current licensees to apply for Sunday morning sales. Regulators, he said, had created an additional investigation process that was not part of the legislation.

 

Meanwhile, a selection of bills continues through the legislature looking to modernize and improve existing liquor regulations. Among those changes are some meant to encourage entrepreneurial activity such as allowing small wineries to offer tastings at farmers’ markets or allowing some retailers to refill “growlers,” large containers intended to hold less than a gallon of beer. Other bills deal with allowing conditional licenses and numerous other details meant to update the law.

 

Some of those measures are drawing objections; doubtless the legislative process will help iron out various concerns.

 

But every one involved should keep in mind the paramount issue: Michigan’s outdated liquor control laws hinder small business owners, make it difficult for restaurant companies interested in coming into the state and, in some cases, do a disservice to the state’s burgeoning tourism industry. Liquor regulations should be sensible and evenly enforced.

 

Gov. Rick Snyder’s approach of reviewing both laws and enforcement with an eye toward efficiency and without sacrificing the overall need to regulate and tax alcoholic beverages is the right approach. Citizens will benefit as progress is made.

 

An LSJ editorial

 

 

——

New York: New York City Council Set to Impose Mandatory Paid Sick Leave on New York Restaurants, Bars, Wine and Liquor Stores

 

Source: MPSA

by The Law Offices of David A. Gabay, PC

Apr 1st

 

New York City small business owners are going to be required to provide paid sick leave and/or unpaid sick leave with mandatory job protection, starting April 1, 2014, according to a deal reached in the New York City Council late last week.

 

Here are the key provisions of the bill, according to the City Council press release, a Wall Street Journal article, a New York Times piece, and a story in the New York Post:

 

1. As of April 1, 2014, city employers with 20 or more employees must provide up to 5 paid sick days per year. Employers with less than 20 employees must provide up to 5 unpaid sick days per year, with job protection.

2. As of October 1, 2015, the employee headcount trigger drops to 15 employees.

3. Full time and part time employees are covered, seasonal employees are not.

4. Eligible employees must be on the job for at least 4 months.

5. Enforcement is done through Consumer Affairs (original proposal gave enforcement

to the lovely folks at the Health Department).

6. Fines range from $500-$2,500.00.

7. Employees cannot sue employers directly for non-compliance.

 

If you have questions or need more information on this issue or any other liquor license issue, please call or email David Gabay.

Liquor Industry News 4-1-2013

April 1, 2013
www.franklinliquors.com

Franklin Liquors

 

Monday April 1st

Pernod Ricard Looks to Acquisitions in US, Emerging Markets – Report

 

Source: Dow Jones Newswires

March 29, 2013

 

The world’s second-largest alcoholic beverage group Pernod Ricard SA (RI.FR) is looking for possible acquisition targets in the U.S. and in emerging markets, Les Echos newspaper reports Friday.

 

“The two areas we are looking at the most is the U.S. and the emerging markets,” said Alexandre Ricard, the company’s deputy chief executive, who will take the top job in early 2015, is quoted as saying. The U.S. is “by far” the most profitable market in the world, he adds.

 

Mr. Ricard, who belongs to the company’s founding family, which still controls 20% of the company, also sees wine sales, which represents only 5% of the company’s revenue, as an area for future growth.

 

 

——

AB InBev moving jobs to Argentina

 

Source: KSDK

Mar 29, 2013

 

A spokesperson for Anheuser-Busch InBev says they are reorganizing some departments in the U.S. business services area, and that fewer than 30 people will lose their jobs.

 

A statement from Vice President of People Jim Brickey says the reductions were minimized by using unfilled positions.

 

The company will not disclose how many employees have lost their jobs since the merger with InBev.

 

Employees in eliminated positions are allowed to apply for other positions that are open within the company.

 

Some of the work that has been eliminated in the United States will be performed at an AB InBev global center in Argentina.

 

The company did not specify if the positions cut are local.

 

Here is the full statement from Brickey:

 

“We recently announced to some departments within our U.S. business services area we are reorganizing work that will displace a small number of workers. These reductions were minimized as much as possible by using unfilled positions. We communicated this news to impacted employees recently. They are able to apply for other open positions in the company they are qualified to perform.

 

“Additionally, other areas of that division will be expanding, which we expect to result in new jobs in the near future. This is an excellent workforce, and when we can expand the work and resulting positions, we will.

 

“These are always difficult decisions, but are important in evolving our business and improving our competitiveness. We will always be challenging ourselves to find better ways to run our business. As on ongoing practice, we assess our resources to assure they reflect our current business strategies and needs that will drive long-term growth.

 

“There is certain work that will now be performed in one of our global centers in Argentina, where the company has operated a business service functions for many years and there is a high level of experience, technology and expertise in performing this function. As a global company, we organize work how and where it can be most effectively performed, using the expertise of our talent in any location. We bring people with the right knowledge and experience together where the work is ideally suited. Doing so optimizes our operations and carries excellence companywide.

 

“Based on the small number of reductions, notices are not required under the federal WARN act.”

 

 

——

Sazerac Company to Launch 22 flavors line under the Benchmark Bourbon brand

 

Source: Sazerac Company

March 31st

 

Sazerac Company announces the national launch of a 22 flavor line of bourbons under the Benchmark brand.

 

Marketing Director for North American Whiskeys – Kevin Richards commented on the launch “Having studied the success of other spirit brands in the flavor space we decided that a complete launch of the entire line of flavors all at once was by far the best approach as opposed to the drip, drip of one or two flavors at a time.  Clearly bourbon is a hot category, flavored spirit products remain hot and flavored whiskeys are gaining traction so the logic of a full line launch at this time makes perfect sense.  Further, it will give customers the opportunity to find their favorite flavor more quickly.

 

We have been slow to market in this fast growing segment because of the amount of R&D work that has been required to develop the full line but we are pleased with the final result.  The flavors are just spectacular owing to our use of eight year old whiskey which we also believe creates a sustainable competitive advantage.

 

Flavors in the line up include Honey, cherry, apple, lime, peach, spiced, caramel, coconut, berry, grape, peppermint, orange, butterscotch, blackberry, peanut, chocolate, coffee, apricot, root beer, ginger and two flavors designed for specific international markets – Maj-kat and Gowk, Denmark and Scotland respectively.

 

The launch will be taking place over the next several months and will be supported by a $5.0 million multi-media campaign.  In addition, the company will also be providing groundbreaking mobile floor display units utilizing the same technology that is employed by Honda’s “Asimo” robot (http://asimo.honda.com/ )  The Automated Floor Displays or AFDs are motion activated by the consumer and then provide an interactive product knowledge discussion.  The display units will be capable of answering slightly more than 1,000 product knowledge questions when asked.   The units are programmed with a Kentucky accent to provide complete authenticity when answering consumer questions.  The display units are also capable of stocking shelves and building floor displays which will add value at the store level.

 

The whiskeys are being bottled at the company’s Barton 1792 Distillery in Bardstown.  Available sizes include 1.75L, Liter, 750ml and 50ml.

 

 

——

Forbes Billionaires 2013: Notable Drop-Offs (Excerpt)

 

Source: Forbes India

by Caleb Mel|

Mar 31st

 

Only 68 billionaires fell from the list this year, and eight of those died. That pales in comparison with the 210 newcomers to the list. Here are 10 notable drop-offs

 

Vijay Mallya, India

Mallya’s Kingfisher Airlines is on the verge of closure. Planes grounded, salaries unpaid for months. The wife of a Kingfisher engineer committed suicide due to financial worries. Mallya is trying to sell his stake in United Spirits to Diageo to pay off Kingfisher’s debts-estimated at over $2 billion.

 

 

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Fight looms over United Spirits cash

 

Source: FT

By Louise Lucas, Amy Kazmin and Victor Mallet

Mar 31st

 

A legal dogfight looms over part of the £1.3bn cash Diageo is paying for United Spirits, the Indian drinks group owned by mercurial liquor baron Vijay Mallya.

 

The acquisition will give the world’s biggest distiller control of India’s biggest drinks company and also hands some much-needed cash to the debt-burdened Mr Mallya, whose grounded Kingfisher Airlines is estimated to owe at least $2.5bn to creditors, mainly Indian state-banks.

 

Lawyers are working round the clock to see who will be able to access the cash – Mr Mallya or his creditors, some of whom are holding United Spirits shares as collateral for loans to Kingfisher.

 

Diageo, maker of Johnnie Walker whisky and Smirnoff vodka, is understood to have structured its part of the deal in a way that enables it to “pay unfettered cash for unfettered shares,” according to people familiar with the matter.

 

However, the dispute in India centres on the fate of the balance of cash paid by Diageo after the shares pledged as collateral to banks against loans are released.

 

While part of the cash will be used to pay off loans to release the shares, the rise in the value of the shares means there will be cash left over, sparking a spat among creditors over who can access it.

 

The shares were pledged for loans when they were trading at about Rp400-600, sharply below the Rp1,440 being paid by Diageo for each United Spirits share.

 

Crucially, India lacks a bankruptcy law and, unlike in the US, loans are not automatically clubbed together. Thus Mr Mallya can claim that he will have paid off the specific loans attached to the United Spirits shares being released and – as the law stands – try to retain the rest of the money.

 

However, regulators are understood to be pushing to ensure the money cannot be siphoned off and instead is used to repay further debts.

 

“I’m sure there are enough legal brains working on it to figure out the loopholes,” said another person familiar with the Indian situation.

 

A corporate lawyer said banks would likely approach the courts to try to give them the first right to the additional funds from Diageo. He said banks’ attorneys would try to “pierce the corporate veil” and argued that United Spirits and Kingfisher were in fact “alter-egos” of Mr Mallya, and therefore liable for repayments to Kingfisher’s creditors.

 

UB Group, the parent company for United Spirits, United Breweries and Kingfisher, said lenders to the airline could not make “any claim whatsoever” on the funds being invested by Diageo into United Spirits.

 

However, it added that United Breweries Holdings, the company from which Diageo is buying a portion of the United Spirits shares, has pledged 2.6m shares, or 2 per cent of United Spirits’ share capital, with a consortium of banks as collateral over loans to Kingfisher Airlines.

 

UB Group said: “Whilst no notice of loan recall has been received, a procedure has to be followed before any pledge can be enforced and shares sold. United Breweries (Holdings) also have a legal right of redemption over any collateral that has been provided pursuant to the guarantees given.”

 

The spat is not expected to scupper Diageo’s deal, with one person pointing out that Diageo had a potent weapon in its ability to walk away, taking all the money off the table. Sebi, India’s financial regulator, is understood to have approved the deal. Diageo declined to comment.

 

Kingfisher’s debts have been the source of bitter fights already. International aircraft leasing companies have complained that planes they leased to Kingfisher have been stuck in India, as airports, and other Kingfisher creditors, attempt to use the planes as leverage to collect on the airlines unpaid parking fees, and other dues.

 

 

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Wine and Beer: Nielsen Data Analysis: Beer Category Sales Growth Decelerates; Wine Remains Healthy

 

Source: CITI

Mar 28th

 

Wine Category Dollar Sales Increase HSD – In the four-week period ended Mar. 16, 2013, wine category dollar sales increased 7.8% YoY (and +8.6% in the past 12 weeks), while volume sales were up 4.0% YoY (and +4.3% in the last 12 weeks). Also of note, in the period we saw a category-wide decline in promotional spending (-0.6 pts YoY) as well as category-wide pricing increases (+3.6% YoY).

 

STZ Wine Sales Increase 8% YoY – STZ’s dollar sales grew 8.4% in the period (and are up 8.5% over the last 12 weeks), while volume sales increased 9.2% (and +8.9% over the last 12 weeks). STZ’s portfolio-wide pricing was down 0.7% in the period (and down 0.4% over the last 12 weeks), while promotional spending was down for the fifth consecutive period (-2.0 pts YoY).

 

Beer Category Dollar Sales Increase LSD – Beer category dollar sales increased 1.0% YoY (and +3.5% over the last 12 weeks), with ABI’s new Budweiser Black Crown offering accounting for 88% of the growth. Volume sales were down 1.6% YoY (vs. and +0.6% over the last 12 weeks). As detailed by ABI on its recent earnings call, it is likely that trends in the period were negatively affected by a tough weather comp, the U.S. payroll tax increase and by higher gas prices. Beer category promotional spending was down in the period (-3.5 pts YoY, vs. -2.7 pts over the last 12 weeks), while category-wide pricing was up (+2.6%, vs. +3.0% over the last 12 weeks).

 

MillerCoors Trends Remain Challenged – TAP’s MillerCoors JV dollar sales were down 0.7% YoY (but +1.2% over the last 12 weeks), as the continued growth of Coors Light (+2.9%) was offset by declines for a number of other key brands, including Miller Lite (-3.9%), Miller High Life (-4.5%) and Keystone Light (-4.8%). Promotional spending was down 3.8 pts YoY while pricing was up 0.9%.

 

Crown Imports Dollar Sales Increase Ahead of the Category – Dollar sales for STZ’s Crown Imports JV were up 5.1% YoY in the period (and +5.9% over the last 12 weeks). Meanwhile, volumes increased 5.8% YoY (vs. +6.2% over the last 12 weeks), as the company’s pricing was down 0.7% YoY. Declining dollar sales for Corona Light were offset by double-digit growth for Modelo Especial and low-single-digit growth for Corona Extra.

 

SAM Underperforms – SAM’s dollar sales increased 0.5% in the period (vs. +4.9% over the last 12 weeks) despite a relatively easy comp (sales were down 1.0% in the year-ago period). The results were primarily driven by Sam Adams Light (-24.2% YoY) and by the company’s seasonal offerings (-17.9% YoY). Promotional spending was down 4.7 pts in the period while pricing was up a modest 0.6% YoY.

 

BREW Posts Solid Growth – BREW grew dollar sales 6.6% YoY (vs. +6.5% over the last 12 weeks), driven by strong results for Redhook and Kona. While promo was down a notable 7.9 pts, pricing once lagged the category, up 0.9 pts.

 

 

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Wells Fargo’s Weekly Economic & Financial Commentary

 

Source: Wells Fargo

March 29th

 

U.S.

.         4Q12 GDP was revised higher (0.4%) as investment in nonresidential construction was stronger than previously reported.

.         However, personal consumption expenditures were a bit weaker than prior estimates.

.         1Q13 should produce a sizeable bounce in economic activity as the housing and labor markets continue to improve and the manufacturing sector strengthens.

.         Home prices have risen 8% year-over-year as homeowners benefit from tight supply and a declining portion of distressed sales.

.         Driven by stronger aircraft orders and, surprisingly, defense spending, durable goods orders surged 5.7% in February.

.         Consumer confidence has retreated recently, partly resulting from higher gasoline prices and fiscal uncertainty.

.         However, consumer spending has held up fairly well as households have limited savings to compensate for lost income resulting from higher energy prices and higher payroll taxes.

 

International

.         While Cyprus is too small to significantly impact the global economy, contagion effects could cause issues in other struggling Eurozone countries.

.         The precedent set by Cyprus has bondholders and depositors concerned that similar policies may be adopted in Greece, Spain, Portugal, and Italy.

.         The overall Eurozone economy likely contracted for the sixth consecutive quarter in 1Q13.

.         Spain’s economy continues to struggle, with GDP contractions in each of the last six quarters.

.         With French unemployment above 10% and rising, consumer confidence continues to weaken.

.         German economic activity is expanding, but the Ifo index of business sentiment edged lower for the first time in four months.

 

Point of View

.         Interest Rate Watch

.         The ECB will likely hold its main policy rate at 0.75%, as uncertainty of what a rate cut could actually accomplish persists.

.         Instead, more unconventional policies may be required to encourage bank lending.

.         Credit Market Insights

.         Homeownership rates have steadily declined since 2007, and even today more households are choosing to rent instead of buy.

.         Despite the record low mortgage rates, stiff lending requirements are limiting the number of potential borrowers.

.         As a result, investors are buying up single-family homes for rental purposes, pushing median home prices higher.

 

Topic of the Week

.         Changing Trends?

.         Over the next few years, we are likely to see GDP and Industrial Production growth revert back to the long-run average of 2.75% and 2.29%, respectively.

.         However, the labor market may not be as fortunate, with unemployment stabilizing around 6.3%.

.         Furthermore, a structural shift with growing demand for part-time workers instead of full-time employees appears to be unfolding.

 

 

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Restaurant sales improve in March; On-premise Alcohol Beverage Sales also Improve

 

Source: GuestMetrics

March 29th

 

According to GuestMetrics, based on its POS database of over $8 billion in annual sales, table service restaurants and bars had sales break into positive territory with a gain of 0.7% for the 4 weeks ending March 24th, an improvement vs. the 0.6% decline during the 4-week period ending February 24th and also better than the 1.4% decline during the 8-week period ending January 27th (we looked at the 8-week view of Dec/Jan due to the shift of New Year’s Eve).  All three on-premise segments are showing improvement in the latest 4 weeks: casual dining was still in negative territory with a (2.7)% decline but this was an improvement versus the (4.8)% decline in the 4 weeks ending February 24th and the (5.7)% decline for Dec/Jan period. Fine dining sales remained solidly in positive territory in March at +3.1%, similar to the +4.0% in February, and sales at bars and nightclubs were up +3.4% in March, a healthy improvement from the (4.1)% decline they posted during February. The casual dining segment still had a (2.7)% sales decline in March but that was still better than the (4.8)% decline in February.

 

“While on-premise was generally quite weak during the holiday season and January, and then continued down during February, our data indicates that during March sales moved into positive territory” said Bill Pecoriello, CEO of GuestMetrics LLC. “Based on our data, on-premise alcohol volumes were down (1.6)% in the 4 weeks ending March 24th compared to a decline of (2.1)% for the 4 weeks ending February 24th and the (3.6)% decline for the 8 weeks ending January 27.  Alcohol dollar sales were up 1.2% for the latest 4 weeks, similar to the 1.3% for the prior 4 weeks, as pricing was up 2.9%, a moderation from the 3.3% increase during the prior 4 weeks.”

 

“Looking at the specific alcohol categories, while March beer volumes were still negative with a (3.0)% decline, this was a slight improvement from the (3.2)% decline in the previous 4 weeks, and quite a bit better than the down (5.1)% in the 8-week period for December and January,” said Peter Reidhead, VP of Strategy and Insights at GuestMetrics. “Beer trends improved in bars and nightclubs but remained weak in the casual dining channel. Spirits volume was down (2.0)%, a slight improvement from down (2.8)% through February 24th and the down (3.0)% for the 8 weeks through January 27th.  Spirits remained quite weak in the casual dining channel but improved in bars and nightclubs and remained positive in fine dining. Lastly, wine volume was up 4.2% vs. up 3.0% through February 24th, both an improvement compared to the down (0.7)% for the 8-week period through January 27th.  Relative to February, in March wine volume growth improved in Bars and Nightclubs, remained very strong in fine dining and was flattish in casual dining but outperformed beer and spirits. Given the general moderation in alcohol pricing across the board, however, sales for the alcohol categories were similar to the prior 4-week period.  Beer dollar sales were up 0.6% vs. up 0.7% for the prior 4 weeks, wine sales were up 2.5% vs. 2.7%, and spirits sales were up 0.9% vs. up 0.7%.”

 

“After seeing signs of alcohol pricing moderating during the last 4 week period, the trend continued this past month with alcohol prices up 2.9% through March 24th versus up 3.3% through February 24th,” said Brian Barrett, President of GuestMetrics. “However, offsetting this was some re-inflation in food prices.  Food prices were up 2.6% for March compared to a 1.9% increase during February.  Given food represents 65% of all sales in table service restaurants, it will be important to monitor whether this is a temporary uptick or whether prices will become a renewed headwind for volumes and traffic over the next few months.”

About GuestMetrics LLC

GuestMetrics, LLC is revolutionizing how the hospitality industry operates.  Despite the dawn of the Digital Age having begun more than three decades ago, the hospitality industry essentially functions the same way it did centuries before.  GuestMetrics has cracked the code by collecting $8 billion dollars in sales from over 250 million checks from tens of thousands of restaurants, and turning billions of raw transactions into intelligible data that is fundamentally transforming the business operations of everyone from the independently-owned bar/restaurant on the corner, to multi-national chains, to the food & beverage companies that supply them.  Please visit www.GuestMetrics.com for more information and to arrange for a free demonstration.

 

 

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Restaurant industry sales, traffic soften in February

 

The National Restaurant Association’s Restaurant Performance Index fell to 99.9

 

Source: NRN

Paul Frumkin

Mar. 29, 2013

 

Foodservice operators appeared more downbeat as they reported softer same-store sales and customer traffic for the month of February, according to the National Restaurant Association’s Restaurant Performance Index.

 

The RPI, a monthly composite that tracks the health of and outlook for the restaurant industry, slipped to 99.9 in February, a decline of 0.8 percent from January’s 100.6, which reflected a five-month high in the index.

 

February marks the fourth time in the last five months that the index was below 100, which signifies a contraction in the NRA’s index of key industry indicators.

 

“The Restaurant Performance Index decline was due largely to softer sales and traffic results, which fell in February amid higher gas prices and the impact of the payroll tax hike,” said Hudson Riehle, senior vice president of the research and knowledge group for the NRA. “In addition, sales and traffic comparisons were more difficult due to the extra day in February 2012 as a result of Leap Year.

 

“Despite the sales and traffic declines in February, restaurant operators remain generally optimistic about business conditions in the months ahead, which suggests they feel the setbacks will be temporary,” Riehle added.

 

The RPI consists of two components: the Current Situation Index, which measures current trends in same-store sales, traffic, labor and capital expenditures; and the Expectations Index, which gauges restaurant operators’ six-month outlook for same-store sales, employees, capital expenditures and business conditions.

 

The Current Situation Index fell to 98.3 in February, a decline of 1.4 percent from January’s level and the sixth consecutive month it languished below the 100 mark. The NRA said sales comparisons were more difficult in February because of the 2012 Leap Year, which contributed to the first same-store sales decline in 21 months.

 

According to the NRA, 33 percent of operators reported a same-store sales gain between February 2012 and February 2013, while 48 percent tallied lower sales. In the month of January, 44 percent of operators said same-store sales were trending higher, while 37 percent said they experienced a sales decline.

 

Most operators also said customer traffic levels fell in February. Twenty-four percent reported higher customer traffic levels between February 2012 and February 2013, while 53 percent said traffic had fallen off. In January, 33 percent of restaurateurs reported higher customer traffic, while 40 percent said traffic levels had decreased.

 

The RPI’s Expectations Index was 101.4 in February, down from 101.6 in January. However, the NRA said each of the four expectations indicators remained around the 100 mark for the second consecutive month, suggesting that operators are upbeat about future business conditions.

 

While foodservice operators are generally positive about future sales growth, they are less upbeat compared with last month. The NRA said 41 percent of restaurateurs anticipate having higher sales in six months compared with the same period in the previous year – down from 46 percent last month. Fourteen percent say their sales volume in six months will be lower than it was in the same period of the previous year, compared with 17 percent last month.

 

Meanwhile, 25 percent of operators expect economic conditions to improve in six months, a decline from the 30 percent who reported similarly last month. Twenty percent of operators said they believe that economic conditions will deteriorate in the next six months.

 

The RPI is based on the responses to the NRA’s monthly tracking survey.

 

 

——

News From TTB

 

Source: TTB

March 29th

 

ANTHONY GLEDHILL SELECTED AS TTB CHIEF COUNSEL

Anthony has been serving as Assistant Chief Counsel (Field Operations) in Cincinnati, Ohio since January 2008. He started his career with the Bureau of Alcohol Tobacco and Firearms (ATF) within the Department of Treasury in 1989 as a staff attorney in the Office of Assistant Chief Counsel in Philadelphia and then subsequently in the Office of Assistant Chief Counsel in Cincinnati.  From September 1998 until September 2003, Anthony was the Division Counsel for the ATF Detroit Field Division. This included an eight month period when ATF transitioned to the Department of Justice in 2003. In September 2003, Anthony rejoined Treasury as TTB’s Senior Counsel, Firearms and Ammunition Excise Tax (FAET) and served in that capacity until his selection as Assistant Chief Counsel, Field Operations.

 

Anthony has extensive experience in the regulation and enforcement of the laws under TTB’s jurisdiction. His principal area of practice has been Firearms and Ammunition Excise Tax and he is considered a national expert in this area of the law, particularly on the subject of the constructive sale price provisions of 26 U.S.C. Section 4216(b).

 

Anthony holds a B.A. from Temple University, and a J.D. from Capital University Law School, Columbus, Ohio, cum laude. He is a member of the Commonwealth of Pennsylvania bar.

 

 

ELISABETH C. KANN SELECTED AS TTB CHIEF OF STAFF

Elisabeth is a graduate of Dartmouth College, where she received a B.A. in English Literature.  She obtained her Juris Doctor from Yeshiva University in 2000 and a Masters in Public Administration from the Harvard Kennedy School of Government in 2010.  Following an extensive litigation history as an associate in the litigation department of the law firm of Kaye Scholer from 2000-2010, Lis was selected as a Presidential Management Fellow and joined TTB in the Regulations and Rulings Division, where she served from 2010 to 2012.  Immediately preceding her appointment as Chief of Staff, Lis served as Special Assistant, Office of the Administrator, where she advised and assisted the Bureau on a broad variety of sensitive and complex matters spanning TTB’s authority.

 

The Chief of Staff reports to the Deputy Administrator and the Administrator and coordinates an array of special policy, regulatory, and legislative matters concerning the Bureau’s operations, and advises in areas of policy development, resource utilization, and the coordination of internal review investigations.

 

 

REGISTER NOW FOR THE NEXT WEBINAR IN THE PREVENTING UNDERAGE DRINKING SERIES

This webinar series is sponsored by the Interagency Coordinating Committee on the Prevention of Underage Drinking (ICCPUD).  ICCPUD member agencies presenting this webinar are the National Institute on Alcohol Abuse and Alcoholism, the National Institute on Drug Abuse, the Office of National Drug Control Policy, and the Substance Abuse and Mental Health Services Administration.

 

When:  April 17, 2013, 2:00 to 3:15 p.m. EDT

 

Who:  A panel of national experts on underage drinking prevention:

.         Frances M. Harding, Director of the Center for Substance Abuse Prevention, SAMHSA;

.         Kelli A. Komro, Ph.D., M.P.H., Professor in the Department of Health Outcomes and Policy within the College of Medicine and the Associate Director of the Institute for Child Health Policy at the University of Florida;

.         Robert F. Saltz, Ph.D., Senior Scientist for the Prevention Research Center in Berkeley, California; and

.         Richard Spoth, Ph.D., F. Wendell Miller Senior Prevention Scientist and Director of the Partnerships in Prevention Science Institute, Iowa State University.

Why:  Nearly 10 million 12- to 20-year-olds in the United States are underage drinkers.  Underage drinking poses serious negative consequences for individuals, families, and communities.  This webinar series features national leaders and experts discussing the extent and nature of the problem, lessons from recent research, and evidence-based strategies for addressing underage drinking.

What:  In this webinar, national experts will expand on the “shape of the solution” to underage drinking introduced by Ms. Harding during the first webinar in the series.  The discussion will focus on evidence-based strategies for preventing underage drinking that are age and culturally appropriate and address both individual and environmental factors.  Following their presentations, panelists will engage with participants in a live question-and-answer period.

 

Where:  To find more information and to register, please visit www.stopalcoholabuse.gov.

 

 

——

How Laithwaites turns wine into gold

 

Charles Vallance and David Hopper meet a man who has made his fortune, and a company employing over 1,000 people, from his lifelong passion.

 

Source: Daily Telegraph

By Charles Vallance and David Hopper

29 Mar 2013

 

Were you to bump into Tony Laithwaite at the post office or at an airport check-in you would probably guess that he is a wine maker; put him in a vineyard and he looks like he belongs there – in the way that French existential philosophers look like they belong in street cafes on the Boulevard Saint-Germain.

 

The UK’s biggest wine company is eponymously named after Laithwaite and his wife, Barbara. In fact, according to some calculations, they are the biggest wine merchants in the world, excluding supermarket retailers.

 

Trading under his own name and several other subsidiaries, Laithwaite and his wife have built up a company with turnover in excess of £350m annually – which works out at around 50m bottles – with usually at least 2,500 wines in stock, and directly employing more than 1,000 people worldwide.

 

The Laithwaites make wine too, owning a collection of vineyards and wineries in Bordeaux and Australia.

 

“They say that the only way to make a small fortune in wine is to start with a large fortune,” Laithwaite laughs. “People don’t usually make money out of wine. You go into wine because you like it. And that was my attitude. My plan was to have a lovely life, just swanning around in vineyards.

 

“A lot of people I know have wanted to build up businesses so that they could just sell them on. That was never my idea and it wasn’t Barbara’s. It’s the wine itself that gives you the reward”.

 

In 2010, world wine consumption was the equivalent of nearly 32bn bottles, and global sales are currently showing year-on-year growth. The UK is the world’s biggest importer and sixth-largest consumer and, although consumption is declining, we are drinking more expensive wine.

 

Neither of Laithwaite’s parents were entrepreneurial, but he grew up with a passion for all things French: “It just seemed so sexy. France was cool.” A three-month trip after he had left school ignited the love affair. On a second trip he worked in the vineyards of Bordeaux. “It was great . exotic, fabulous food, and there were the girls as well . .”

 

At Durham University he wrote his geography dissertation on the wines of Saint-Emilion, “I showed it to my director of studies and told him I wanted to get into the wine trade, but he tossed it back at me, and said, ‘The best thing you can hope for, laddie, is running an off-licence in Carlisle’.”

 

He returned to France and got a job at a winery; the owner, Monsieur Cassin, became his mentor, suggesting Laithwaite sell his wine in the UK. “My grandmother gave me £700 and then gave me another £7,000 through my mother. You needed a bit of funding and the banks would certainly not have given any money to someone like me.”

 

It was a joint venture, with Barbara, his invaluable partner who became his wife. “She is the business head. She kept saying I was selling too cheaply. She was a statistician. So one day I just said, ‘Well, if you think you’re so bloody clever, why don’t you come and do it?’ So she did. She chucked in an amazing job doing audience research. They said she was mad to go from that to working for me in a caravan under a railway line.

 

“But she sorted me out. She discovered I hadn’t kept any accounts for two years. Barbara took one look and saw that it didn’t make financial sense, so she made me put the price up. At first, we didn’t really try to make profits. At that time, the top rate of tax, if we made good profits, was going to be 98 per cent super tax. What was the point?”

 

But it was a good time to start in the wine business. Retail Price Maintenance was abolished and, in France, Monsieur Cassin was creating a mini-revolution of his own, becoming the first co-operative to sell directly to a supermarket in Bordeaux.

 

“All of a sudden, there were these small entrepreneurial growers who weren’t happy just to sit there and wait for their stuff to be bought in bulk; they wanted to put it in a bottle and sell it themselves. That was perfect for me. Roll-on-roll-off ferries had just started, so I was able to drive over directly to them. I called myself ‘Bordeaux Direct’, just to emphasise that I only bought estate-bottled wines.

 

“Customers would now see that, with me, when they got my Saint-Emilion, it tasted very different from the disgusting stuff mass-bottled in the UK.”

 

In those early years the Laithwaites developed the simple modus operandi of reinvesting profits when they came in. But the absence of a proper management structure, coupled with relentless expansion, meant that, by the early Eighties, with turnover at tens of millions, logistics were becoming troublesome. Laithwaite, by then a father of three, suffered a heart attack. He was told by his specialist: ‘You can’t carry on. You’ve got to stop or you’ll die.’

 

“I did pull right back,” he admits. “Barbara carried on running it and for the first time made a decent profit, because I wasn’t interfering”.

 

In 1991, a board was recruited, including a managing director, wine director, marketing director, finance director, and head of IT. The effect was spectacular.

 

“We went to something like £50m by 1994, then £100m and more. But it was just perfecting what was there.”

 

The Laithwaites became non-execs, but after two decades running the company the relationship with new managing director, Greg Hodder, was not easy. “There was conflict, I’ll tell you. We were like two cocks. I can’t complain: he was good and he did his stuff. I felt that it was his job to run it, yet it was still my business, and I found it hard to let go.

 

“But the business wasn’t in good nick. We hadn’t kept up with the market. When we started up, supermarkets didn’t do wine; then they started but with poor wine and they didn’t know how to sell it. But then, all of a sudden, the supermarkets became really good. And there were other merchants starting up as well. So it was a call for us to change too.”

 

He says it was like a marriage; both had to compromise. He even brought in a mediation expert from the London Business School to manage the relationship.

 

The company was rebranded ‘Laithwaite’s Wines’ – though he was embarrassed it bore his name. “I’m of a generation and an upbringing where you don’t brag. I kept thinking that all my mates will be saying, ‘Look at that show-off Laithwaite’.”

 

He hates wine snobbery. “Socially, I don’t appear to take wine all that seriously. I’m fond of saying, ‘It all tastes the same to me.’ Because, when I’m working, I’m intense, so when I’m not working I just want to drink without thinking too hard. I have a terrible cellar at home. When I’m relaxing, I want someone else to choose a fantastic wine.”

 

These days, Laithwaite’s personal wealth runs to many millions; the 2012 Sunday Times Rich List put the family at 410th in its UK rankings. Back where they started, in Windsor, the Laithwaites have become the tenant farmers of a four-hectare plot on the Queen’s estate. After planting 10,000 vines there in 2011, their first harvest is due soon.

 

They dislike the industrialisation of the wine industry. “I want the little guys to carry on because they’re doing things of character. People may want a bottle of Chardonnay for a Friday night at £5, but I want to say, ‘Yes, but try this at £15, and appreciate the difference’.”

 

Laithwaite has relinquished aspects of the firm’s management yet his ambitions remain as strong as ever. There are now more than a dozen shops, and international growth is a key element of the plan. Almost a quarter of the company’s business is now in the United States where turnover has reached some $100m (£65m).

 

The US may be a tricky market, but its wine consumption has grown every year for almost two decades.

 

Direct retailing involves a significant degree of customer churn, but a company recruiting around 200,000 new customers each year has to be doing something right.

 

 

——

Wine in reusable growlers? Ore. Senate says cheers

 

Source: AP

Jonathan J. Cooper

March 29, 2013

 

Fans of Oregon craft beer can bring a reusable container known as a “growler” to their local brewery and fill up, and the Oregon wine industry wants in on that kind of trade.

 

The state Senate raised a glass to the idea Thursday, voting unanimously to let wineries, restaurants, grocery stores and wine shops dispense wine in consumer-supplied growlers of up to two gallons. The measure now goes to Gov. John Kitzhaber.

 

Winemakers say they’re always looking for new ways to market the products of a growing Oregon business, adding that growlers save a lot of glass and cork.

 

“It is really environmentally friendly, and it’s also promoting wine as a daily commodity that can be enjoyed with meals and shouldn’t be thought of as something extraordinarily special every time,” said Wynne Peterson-Nedry, the second-generation winemaker at Chehalem Winery in Newberg.

 

Chehalem already offers growler fills at its tasting room. The legislation will allow its customers to fill their growlers at restaurants and grocery stores, Peterson-Nedry said.

 

Oregon has about 900 vineyards, according to the Oregon Winegrowers Association. Many are small operations that have trouble competing for limited space on store shelves, said Sen. Lee Beyer, D-Springfield. The measure would give the small local businesses another way to get their wine in front of consumers.

 

“It allows the small wineries to get equal standing with some of their larger brethren from outside the state,” Beyer said.

 

Some wineries already distribute wine in kegs, which restaurants use to sell by the glass.

 

The legislation would require the wine to be dispensed by someone with a valid service license from the Oregon Liquor Control Commission. As with beer growlers, the wine container will have to be securely covered before it’s returned to the customer.

 

A spokeswoman for Kitzhaber, Amy Wojcicki, said the governor will sign the bill, and it will take effect immediately. That will happen in time for winemakers to promote growlers during Oregon Wine Month in May, said Dan Jarman, a lobbyist for the Oregon Winegrowers Association, in testimony submitted to legislative committees.

 

 

——

Auction of record-breaking HK$590,400 wine helps revive flagging market

 

Source: SCMP

30 March, 2013

 

Three double magnums of 1990 Petrus sold for HK$590,400.

 

The wine market revived a little this month at an Acker Merrall & Condit auction in Hong Kong, but it still has a long way to go before revisiting its peak of two years ago.

 

The sale by the American auction house, on March 22 and 23, set 97 records, including four for Chateau Petrus, a leading Bordeaux estate. The auction fetched a total of HK$38.3 million, with 94 per cent of lots sold.

 

A case of three double magnums of 1990 Petrus sold for a record price of HK$590,400, while one bottle of 1947 Petrus set another record at HK$118,080.

 

A 12-bottle lot of Chateau Lafite-Rothschild 1982 sold for HK$442,800, about 8 per cent more than the £34,500 (HK$405,860) a similar lot fetched at Christie’s London auction last month.

 

An original wooden case of 12 bottles of Romanée Conti 1988 fetched HK$984,000 – up from the HK$907,500 paid for each of two similar 12-bottle lots at Christie’s in June, according to Bloomberg. While the Burgundy gem set many records last year, the prices of some of its vintages have been dipping recently.

 

Three bottles of the 1999 vintage sold for HK$295,200 – or US$12,615 per bottle, down from US$13,685 at a January sale by the Zachy’s auction house.

 

Three bottles of the 1990 vintage sold for HK$344,400 – 7 per cent lower per bottle than at Zachy’s December auction.

 

Liv-Ex’s Fine Wine 100 Index, which tracks the price of sought-after wines, dropped 29 per cent from its peak in June 2011 to rock bottom in November last year.

 

Acker’s January and March auctions this year set 212 record prices, well up from the 95 recorded the previous year.

 

 

——

Five Wine Blogs I Really Click With

 

Source: WSJ

By LETTIE TEAGUE

March 29th

 

I SPENT THE BETTER part of last week doing something that relatively few wine drinkers probably do: reading wine blogs. Not just a handful of blogs here and there but hundreds and hundreds of wine blogs from all over the world. I read until I was absolutely blog-bleary; I probably totaled 10,000 page views.

 

I did this partly out of curiosity. I don’t read many wine blogs, and I wondered what I might be missing. What was being discussed? What wines, wineries and topics were hot? After all, people in the wine trade have called bloggers a powerful force, capable of challenging-perhaps even eclipsing-traditional media and conventional wine critics. I’m not sure if that’s true, but the numbers are certainly impressive. There are about 1,450 wine blogs today, of which about 1,000 are nonprofessional endeavors (the rest are “industry” blogs), according to Allan Wright of the Zephyr Adventures tour operator, who has organized Wine Bloggers Conferences in North America for the past five years. But most bloggers haven’t been doing it very long: “Only 18% of [wine] bloggers today have been blogging for more than six years,” he said.

 

Most of the bloggers were doing it just for “personal satisfaction,” Mr. Wright said, since the possibility of making money was quite small. Alder Yarrow, who writes a much-talked-about blog, Vinography, told me that he earns $12,000 to $16,000 from it annually, most of which comes from banner ads. Said Mr. Yarrow, who began his blog in 2004 and has a day job: “Monetizing a blog is very hard if you don’t want to sell products, sell advertising to wineries and therefore look like a shill.”

 

Most bloggers are more like Alice Feiring, a traditional wine journalist and blogger who has never made “a cent” from her blog, the Feiring Line, which she started in 2004. (It’s one of the few that I read on a regular basis.) But unlike most other bloggers, Ms. Feiring has a newsletter; she has 450 subscribers paying $65 a year for 10 issues. “The blog was a soapbox; the newsletter is a mini-magazine,” Ms. Feiring explained.

 

A lack of profit potential isn’t necessarily the biggest blogger obstacle; time is in even shorter supply. Judging from the number of bloggers who allow weeks, months, even years to go by without posting a thought, it’s clearly hard to maintain momentum. Or inspiration. More than one blogger explained his or her absence with a post that began something like: “I didn’t drink anything worth writing about.”

 

The perceived need to pile up tasting notes in a quest for legitimacy is a problem in wine blogging. Many of the amateur blogs that I read were bloated with tasting notes, enlivened only occasionally by a bit of prose or a photo of the family dog (Rosie the dog’s winery visits in California’s Sonoma County, on the blog CorkPopper, were a bright spot). On the other hand, tasting notes are one way that a blog can be monetized. For example, bloggers who recommend wines are paid a small referral fee if they direct readers to sites like Wine-Searcher, said Mr. Yarrow, who makes some money this way as well.

 

A blog full of tasting notes helps to ensure the author receives plenty of free wine; wineries are more likely to send samples to bloggers who post notes. And yet, wineries do this less and less often, according to Lisa Mattson, communications director at Jordan Winery in Sonoma. Ms. Mattson said she sends fewer samples than ever, and the vetting process is intense. “We’re working with a much smaller set of wine bloggers who have remained credible,” she wrote in an email. What makes a blogger credible? “Reputation and awards. Design and writing style,” she said. And a blogger would do well to get rid of an AOL email address, which Ms. Mattson called a “credibility killer.” Most of all, a blog had to “be about something” she said.

 

I knew what Ms. Mattson meant (and not just about the AOL email addresses). I was looking for meaningful bloggers as well. I was hoping to find a few impassioned amateurs with no connection to wine other than a genuine curiosity and an interesting point of view (ones who kept their blogs current, too). Wine Bloggers Conference polled wine bloggers and found that a full 83% cited “passion” as a reason for keeping a blog. That’s an impressive number. It’s even more impressive when passion and talent happen to coincide-as it does with the following five bloggers, whose work I particularly admired.

 

Brooklynguy’s Wine and Food Blog

 

brooklynguyloveswine.blogspot.com

 

Brooklynguy is an education consultant who has been blogging from the most fashionable borough of New York since 2006. Brooklynguy posts about wine and food-often with recipes-but he writes brief vignettes about his life, too. For example, a March 10 post on the inadequacy of language culminates in a few notes about a Cheverney Rouge (a wine from the Loire). He seems like a thoughtful, even philosophical, fellow-and his palate is clearly refined (he loves white Burgundy)-but he’s no snob. He’s a Brooklyn guy, after all.

 

Cellar-Book

 

cellarbook.wordpress.com

 

Keith Levenberg may not post very often (there were four long months between his post of March 2 and his post last November), but his topics are truly stimulating. His post last August on why “buy what you like” is “absolutely terrible advice” was positively inspired. (Among Mr. Levenberg’s provocative statements: Taste is not as important as you think.) It’s a long post-in fact, most of Mr. Levenberg’s posts are more like essays than notes-but he raises, and argues, a number of excellent points. That’s not surprising, as in the real world Mr. Levenberg is an attorney in Washington, D.C.

 

Odd Bacchus

 

oddbacchus.com

 

This blog has an unusual premise: It’s devoted to odd wines and spirits. Why odd? According to its author, Chicago-based Rob Frisch, who works for Andrew Harper Travel, he was originally inspired by the wines that he liked-and that he could afford. “I didn’t start writing this blog until I walked into a wine shop and asked for their most obscure wine under $15,” he wrote in an email. The wine was from Serbia-and the blogging began. Notes are posted on both wine and cocktails-and occasionally beer-and Mr. Frisch points out that he buys almost all of his wines. That’s why they tend to be cheap.

 

The Cellar-Fella

 

cellarfella.com

 

Did the subhead of this blog-”wine, and words composed under its influence”-mean that its author, Simon Burnton, never posted when he was sober? Not really, replied Mr. Burnton, who explained that he hadn’t meant it literally. “I think it’s possible to be under the influence of wine while not actually drunk,” he said.

 

Mr. Burnton is a London-based sportswriter for the Guardian who took to writing about wine because he “needed a hobby that could be pursued despite a sudden inability to go out” after his first child was born. I found Mr. Burnton’s post on the Codorníu winery and its Cavas to be particularly interesting. Brits like their Cava cheap, Mr. Burnton wrote, and Codorníu actually wrapped bottles in pink and blue to give the wines a “premium” sheen for the U.K. market. (The accompanying picture of pink and blue bottles was decidedly alarming.)

 

Benito’s Wine Reviews

 

wine-by-benito.blogspot.com

 

The Memphis, Tenn.-based Benito, aka Benjamin Carter, spends his workday in quality assurance for a large corporation-and his nights blogging about wine. He has been blogging since 2005, when he was still “under 30″ and just learning about wine. He blogged in part to keep track of his own tasting notes.

 

Mr. Carter accepts samples but discloses when the wine he’s reviewing was free. He writes tasting notes-but they’re preceded by a long “pretasting” note. For example, for Francis Ford Coppola’s Director’s Cabernet Sauvignon, he begins with a digression on Roman Coppola’s nomination for an Oscar alongside “the great Wes Anderson” for the film “Moonrise Kingdom.” And yes, if you read to the tasting note, it turns out Mr. Carter did like the wine, too. He recommends drinking it with a steak sandwich.

 

 

——

Charles Banks acquires 50% stake in Wind Gap winery

 

Source: DBR

March 31st

 

Investment group Terroir Selection owner Charles Banks has purchased 50% stake in California-based fine wine producer Wind Gap Wines for an undisclosed amount.

 

The purchase also includes a brand called Agharta, a separate wine label that focuses on small-production wines from Bordeaux and Rhone varieties.

 

Founded in 2006, the Wind Gap winery produces wines from a variety of grapes grown at cool-climate vineyards.

 

Wing Gap Wines founder Pax Mahle will continue to produce wines at both Wind Gap and Agharta, whereas Terroir Selection will look after the sales and marketing aspects of the winery, reported Wine Spectator.

 

Banks was quoted by the website as saying that the group wants Mahle to focus on wines, while they will search for additional vineyards to add to their lineup.

 

“It’s not so much about growing volume as it is about continuing to pursue quality,” Banks added.

 

Mahle, who previously owned Pax Wine Cellars with co-owner Joe Donelan, now plans to re-launch Pax Wine Cellars in 2013 after a dispute with Donelan. Mahle also plans to use Pax Wine Cellars’ original vineyards such as Alder Springs and Castelli-Knight Ranch for producing wines.

 

 

——

Provocative billboard touting marijuana as being safer than alcohol is vandalized in Portland, Ore., days before Spring Beer & Wine Festival

 

Source: NEW YORK DAILY NEWS

By David Knowles

Friday, March 29, 2013

 

A controversial pro-marijuana billboard in Oregon features a photo of a glass of beer, a glass of wine, and a marijuana leaf with the words: “Beer,” “Wine,” and “Safer has been vandalized.

 

A controversial pro-marijuana billboard in Portland, Ore. was put up to coincide with the city’s Spring Beer & Wine Festival.

 

Not everyone on the West Coast is happy about marijuana taking its place alongside wine and beer.

 

Vandals destroyed a billboard in Portland, Ore. Thursday night, that promoted marijuana as being “safer” than alcohol.

 

Paid for by the Marijuana Policy Project, an advocacy group that helped pass Colorado’s initiative legalizing recreational use of the drug, the billboard featured a picture of a pint of beer, a glass of wine, and a marijuana leaf with the words “beer,” “wine” and “safer” positioned correspondingly above each image.

 

Mason Tvert, the director of communications for the Marijuana Policy Project, said the billboard was meant to coincide with Portland’s Beer & Wine Festival, which takes place the weekend of March 30 and 31, and draws thousands of people to the city’s downtown.

 

“Portland is a city where a strong majority of people realize that prohibition of marijuana has failed,” Tvert told the Daily News. “More voters are acknowledging the fact that marijuana is less harmful than alcohol, so this is an important message to keep pushing.”

 

Pointing to data from the Centers for Disease Control and Prevention, Tvert argues that, unlike alcohol, no one has ever died because of smoking too much pot.

 

“Marijuana is far less toxic than alcohol. It’s far less addictive, and far less harmful to the body in general,” Tvert said.

 

Unlike in Colorado and Washington, voters in Oregon failed to pass a ballot measure that would have legalized marijuana in the state in the 2012 election, but Tvert says that pro-pot forces will try again in 2016.

 

While the billboard attracted a fair share of media attention over the past few days, it will not be repaired in time for this weekend’s festivities. To hear the event’s organizers tell it, marijuana may not be an outcast at the festival for too much longer.

 

“We are a tourist industry and if it gets legalized and we can sell it as one of our fine products, all the better,” Steve Woolard of the Spring Beer & Wine Fest told KOIN News.

 

If so, Woolard said, the organizers could simply rename the event “The Spring Beer, Wine & Weed Festival.”

 

 

——

New York: NEWS FROM THE NYS LIQUOR AUTHORITY TRADE PRACTICES MEETING – April 8, 2013

 

Source: NYSLA

March 29th

 

Chairman Rosen will be hosting a meeting to discuss trade practices and other issues of concern between wholesalers and retailers. This meeting will be held on April 8, 2013, 11 a.m. at the Authority’s New York City Office. Anyone who would like to participate may also do so via videoconference at the Authority’s offices in Albany and Buffalo. The meeting is open to the public. Given the limited space available at each location, anyone wishing to attend is requested to rsvp to the Chairman’s Office by email at Kimberly.Ciccone@sla.ny.gov. or Debra.Maloney@sla.ny.gov on or before April 4, 2013.

 

 

——

Maryland: End Baltimore’s glut of non-conforming liquor stores

 

Source: Baltimore Sun

March 30, 2013

 

Next week, the Baltimore City Council will consider the changes to the zoning code that will affect about 100 of the city’s 1,300 existing liquor outlets. These outlets have been non-conforming for more than 40 years, and it’s time for them to be closed.

 

During the Planning Commission’s hearings, two students from Patterson High School testified on why the number of liquor outlets needs to be reduced. One of the commissioners said their testimony moved him more than any of the others. Inspired by these young ladies, we solicited the opinions of several more teens. Some of their comments:

 

“In my neighborhood, there are [many] liquor stores and taverns. There is a lot of trash that drunken people throw. People also sell drugs outside the liquor outlets and it spills into the neighborhoods.”

 

“There are a high number of young adults around the ages of 15, 16 and 17 that are being sold alcohol. It is easy to purchase or at least have someone hanging around the outside of the liquor stores buy it for us. We have more liquor stores and taverns than we have recreation centers.”

 

“There are multiple liquor outlets in the 21218 zip code and all of them are in the wrong spots. They sell tobacco products and liquor and [these] are sold to students from my school without asking for ID. They bring negative activity into our neighborhoods such as loitering, drug dealing and drug abuse, theft and other violence.”

 

While we hope that the City Council will assist the owners of these non-conforming stores in finding other ways to make a living, we urge members to approve the Planning Commission’s proposal to begin reducing the number of liquor outlets as soon as possible for the health, safety and cleanliness of Baltimore.

 

Helene Luce, Baltimore

 

The writer is senior director for educational programs and opportunities at Community Law In Action Inc.

 

 

——

Tennessee: TN House GOP leader opposes reviving wine bill

 

Source: The Tennessean

Mar 30, 2013

 

House Majority Leader Gerald McCormick says he favors a bill to allow wine to be sold in Tennessee supermarkets and convenience stores, but he opposes efforts to hold a revote in a committee where it narrowly failed.

 

The Chattanooga Republican told reporters on Thursday that reconsidering the vote in the House Local Government Committee would set a bad precedent.

 

McCormick and House Speaker Beth Harwell said they would prefer starting afresh next legislative session in hopes of changing laws that restrict the sale of anything stronger than beer to liquor stores.

 

The Senate is moving ahead with its bill, though leaders have said it won’t come to a full floor vote.

 

 

——

New Jersey: Possibility of liquor privatization in Pennsylvania has New Jersey businesses concerned

 

Source: South Jersey Times

By Jason Laday

March 30, 2013

 

Liquor bottles The bill passed by the Pennsylvania House in March would allow grocery stores to sell wine, and beer distributors to sell wine and liquor, before selling licenses to other private businesses.

 

At any given time, on any given day, the parking lot of Liquor Mart, located in Logan Township just a few miles from the Commodore Barry Bridge, can be inundated with Pennsylvania license plates.

 

However, if state senators in Pennsylvania follow their counterparts in the House and approve legislation to privatize wine and spirits sales, those vehicles could be staying in-state when their owners decide to go for liquor runs.

 

“It would definitely affect business here – no question about it,” said Raminder Sehgal, who along with co-owner Rayt Singh has operated Liquor Mart for the past six years. “We get Pennsylvania customers because of variety and cost, and if those issues are taken care of in Pennsylvania, then customers may stay there.”

 

According to Paul Santelle, president of the New Jersey Liquor Store Alliance and state director for the American Beverage Licensees (ABL), as much as 50 percent of liquor store sales from Trenton and points south occur inside businesses along the Pennsylvania border. Much of that business, Santelle added, hails from across the Delaware.

 

There is much concern among New Jersey liquor store owners with prime real estate along the Delaware River that the closing of Pennsylvania’s state stores could eat into their revenues, he said.

 

“They could lose a substantial amount of business, and there’s also the fact that we’re also talking about tens of millions of dollars in sales and excise taxes that New Jersey collects that could diminish,” said Santelle, who operates his own liquor store in Perth Amboy. “We’re very much in tune with the situation – we’re monitoring what’s going on.”

 

As the situation stands now, the issue of privatizing state stores is in the hands of the Pennsylvania Senate, following the House’s March 21 vote to get out of the wine and liquor business.

 

The plan approved by the House allows beer distributors and grocery stores to sell wine. Beer distributors would also be permitted to sell liquor. After two years, the state would begin selling liquor licenses to other private businesses, including big-box stores.

 

The state stores would be gradually phased out as more licenses are sold.

 

However, leaders in the Senate seem to be in no rush to take up the issue, and some have been quoted favoring a plan that would tweak the state store system rather than abolish it.

 

New Jersey’s border liquor stores already compete with Delaware for Pennsylvania residents’ business.

 

According to the Liquor Mart’s co-owners, New Jersey law prohibits stores from charging less than cost – a regulation that is absent in the First State.

 

“They can sell lower than cost, and we’re already at the lowest price in the area here,” said Singh. “Some in Delaware are more expensive than us, but they can have lower prices.”

 

Ridley Park, Pa., resident Frank Taddie can attest to that fact. On Thursday, standing in Liquor Mart’s parking lot, he said he was only buying in New Jersey because of a special request from his wife.

 

“I would normally frequent the stores in Delaware, because it’s cheaper with the taxes,” he said. “But this place has the type of wine my wife asked for, and it wasn’t available in either Pennsylvania or Delaware.”

 

Bob Bauer, from Ambler, Pa., was traveling to meet with family for Easter on Friday and stopped at the Logan liquor store on the way.

 

“I do buy in Pennsylvania, but I will go to New Jersey and Delaware for a better deal,” said Bauer. “If it turns out to be competitive, I could buy more in Pennsylvania.”

 

As for trying to protect their own interests, Santelle said there is little the New Jersey Liquor Store Association or the ABL can do while legislators debate in Harrisburg.

 

“Pennsylvania is a closed state, the ABL actually has no presence there,” he said. “We can only watch closely.”

 

Sehgal and Singh were similarly resigned to the situation.

 

“What can you do?” said Singh. “We’re from New Jersey – we can’t go out to the capitol and stand out there with signs.”

 

 

——

Michigan: MICHIGAN SPIRITS ASSOCIATION ANNOUNCES 2013-2014 BOARD OF DIRECTORS

 

Source: MLC

Mar 29th

 

Ryan Koehneke of Lake Orion, MI has been elected President of the Michigan Spirits Association (MSA) at its recent board meeting in Lansing. Ryan Koehneke is currently the State Manager of Michigan for Brown Forman and has served the MSA in various capacities including Vice-President and Director.

 

Other officers elected to serve on the MSA Board of Directors for 2013-14 include:

 

William Kalin of Commerce will serve as Vice-President. He is the Region Manager-MI for Pernod Ricard USA

Brian Pizzuti of Howell will serve as Secretary/Treasurer. He is the Vice President of Sales for National Wine & Spirits (NWS) which is located in Brownstown, MI

Marsha Keenoy of Okemos will serve as Immediate Past-President. She is the Michigan Market Director for DIAGEO

George Zrinyi of Commerce will serve as Director. He is the Michigan State Manager for Beam, Inc.

Sam Awdish of Novi will serve as Director. He is General Manager for Veritas Distributors, Inc.

Keith Keeler of Northville will serve as Director. He is Great Lakes Regional Director for Bacardi USA

Established in 1967, the MSA represents the vendors, suppliers and distributors of distilled spirit products in Michigan.

 

The MSA partners with the Michigan Liquor Control Commission to ensure that quality products are available to meet consumer demand across the state.

 

MSA members provide thousands of jobs for Michigan residents and generate nearly $300 million annually to the state. The MSA members represent more than 90 percent of the more than 7.1 million cases of spirits sold to the state each year.

 

For decades, the MSA and its members have been on the forefront of promoting the responsible consumption of distilled spirits. In addition, the MSA advocates for the prevention of underage drinking through vigilant enforcement of state law and strict penalties for violations.

 

 

——

Canada: Ontario C-Stores Launch Petition Campaign for Alcohol Sales

 

Retailers are collecting customer signatures in support of a petition to allow beer and wine sales at convenience stores.

 

Source: NACS

March 29

 

The Ontario Convenience Store Association is upping its game in the fight to sell beer and wine at convenience stores, the Hamilton Spectator. The Free Our Beer campaign has brought petitions to each member store, urging each location to get 300 to 500 signatures.

 

CEO Dave Bryans said a retailer in the small town of Kingsville gathered 500 signatures in only two days. “We don’t want to replace the LCBO [Liquor Control Board of Ontario-run stores] but people want more access. We can’t replace the shopping experience at the LCBO,” he said, adding that in rural areas, the need for access to alcohol later and on holidays is greater. “If you can buy beer or wine in a convenience store in Newfoundland, why can’t you in Ontario?”

 

Two years ago, a poll discovered 60% of Ontario residents were in favor of corner stores selling alcohol. Michelle Park, who co-owns the Copetown General Store, wants to serve customers who prefer not driving to another town for beer or wine. “It’s not like it’s going to make us rich,” she said. “At least we try. If we don’t try, they’ll never change.”

 

While the freeourbeer.ca website has collected 112,500 signatures, the association is now tasking 3,000 to 4,000 stores with onsite petitions. Rami Reda, director of the Big Bee chain, said he is giving incentives to operators who gather signatures.

 

“Our industry is very challenged,” said Reda. “This is an opportunity for small business owners to grow their business. No matter the banner, most of these stores are family run.”

 

For Bryans, the target is 1 million signatures, which he hopes will make the government consider allowing wine and beer sales in convenience stores.

 

 

——

South Carolina: SC liquor store owners in spirited fight

 

Source: The State

By NOELLE PHILLIPS

March 30, 2013

 

When he retired, Ed Andino invested his savings from his Army career into a small liquor store at a shopping center along Forest Drive.

 

Andino and his wife put a lot of thought into what type of business they wanted to own, and when they finally chose to open a liquor store in 2011, they picked East Forest Plaza because it appeared insulated from competition.

 

“Sam’s can’t open another liquor store,” Andino said. “There’s no place for Costco to build here. There’s no way for Total Wine to come over here and build.”

 

Now, Andino believes his livelihood is threatened by a bill that would allow businesses to hold seven retail liquor permits in the state instead of three, the maximum currently allowed under South Carolina law. The bill, sponsored by Sen. Chauncey Gregory, R-Lancaster, and Sen. Brad Hutto, D-Orangeburg, is working its way through the Senate Judiciary Committee.

 

It has created a spirited debate about marketplace competition between mom-and-pop liquor store owners and Total Wine, a major retailer with three stores in South Carolina. A representative of Costco, a discount membership chain, has said his company also supports the bill.

 

The bill’s critics say that if Total Wine were allowed to open more liquor stores, it would drive the little stores out of business.

 

“It would be what Home Depot did to the neighborhood hardware store,” said John Kelsey, president of the ABC Stores of South Carolina, a trade group that represents the state’s liquor stores.

 

But David Trone, president of the Potomac, Md.-based Total Wine, said the bill would benefit consumers by providing a larger selection, lower prices and great customer service to people who buy whiskey, vodka, tequila and other liquor products.

 

“Frankly, the limit is protectionism, and protectionism is bad,” Trone said. “Competition is good.”

 

Liquor retailers filled a Senate subcommittee hearing two weeks ago, leaving more than a dozen people to stand in the hallway because the meeting room was at capacity. The audience cheered and jeered as the bill’s merits were debated during public testimony. At least once, a security officer had to order the crowd to be quiet.

 

Andino told his story during the hearing.

 

He retired from the Army in 2009 after 20 years of service. He held a real estate license and planned to do that in his second career, but the economy had tanked. So, he and his wife decided to invest their savings to open Rico’s Liquor Store in East Forest Plaza.

 

The small, brightly lit store is stocked with all sorts of spirits. They have mini-bottles, pints and even gallons. They even sell a tequila that comes in a bottle shaped like a rifle. On Friday, they did a brisk business as customers came in for weekend party supplies.

 

“It’s always been a dream of mine to open my own business,” Andino said.

 

He does not plan to sell beer, and his wine selection is limited because the store stands in the shadow of Sam’s and Wal-Mart and can’t compete with their prices.

 

For now, those retailers do not sell liquor. If the bill passes, Sam’s, which already has three liquor stores in South Carolina, could open one across the parking lot and crush Rico’s Liquor Store, Andino said.

 

“Even though Total Wine submitted the bill, it’s not just them that would benefit,” he said. “This bill would cost me everything.”

 

Total Wine’s Trone said it is unfair for the state to limit competition in one industry. Groceries, clothing stores and other types of retailers don’t have state laws that aim to protect one business from another, he said.

 

Total Wine is pushing the bill, Trone said.

 

The company has a South Carolina lobbyist, and Trone and Total Wine are regular contributors to political campaigns in the state. In 2012, Trone donated $1,000 each to Gregory and Hutto, the bill’s sponsors.

 

If the bill passes, Trone said Total Wine would open second stores in Columbia and Greenville, one in Mount Pleasant and one in Myrtle Beach.

 

“The competition doesn’t want to compete with me and other people who want to offer lower prices and great selection,” he said.

 

Trone, a Furman University graduate, started Total Wine in 1991 when he opened his first liquor store in Delaware. He said he saved money and opened a second store that his brother managed. Together, they built the company into a retail giant that has 90 stores in 15 states.

 

“They can’t say the bigger company puts them at a competitive disadvantage,” Trone said. “I was that mom-and-pop outfit that built a better mousetrap.”

 

But Andino said there is no way he could compete. In the liquor business, everything revolves around volume. The more you buy, the bigger the discount. And there’s no way he could buy the same amount as Total Wine and in turn receive the same discounts.

 

“They have the budget to invest in one product what I have invested in my entire inventory,” Andino said.

 

He cited the pricing on a 750 ml bottle of Crown Royal as an example. He can buy 15 cases of the popular Canadian whiskey for $270 each, so he pays $22.50 per bottle. His distributor recommends at least a 20 percent markup, which means he would sell a bottle for $27.

 

On Friday, he checked Total Wine’s website and found the same 750 ml bottle of Crown Royal for $17.99.

 

“How can they sell it for $4.50 below cost?” Andino said. “The Senate doesn’t see that.”

 

Kelsey, of the ABC Stores association, said legislators need to pay attention to the small businesses that make up the backbone of the state’s economy.

 

“If Total Wine comes in, the profits will go to Maryland,” he said. “What’s the benefit to the people of South Carolina? They can buy liquor cheaper at a big store or they can buy liquor from a locally owned store.”

 

About retail liquor licenses

 

. Issued by S.C. Department of Revenue

 

. About 1,000 exist now

 

. Businesses only allowed three S.C. licenses

 

. Law prevents loopholes such as a husband owning three and a wife owning three.

 

. Application fee is $200; licenses cost $1,400 every two years.

 

 

——

Wyoming: Sobering reality – Wyo’s beer tax too low

 

Source: Trib.com

March 31, 2013

 

Ninety-nine bottles of beer on the wall amount to 18.56 cents in state tax revenue.

 

It’s safe to say the cost of substance abuse impact and treatment is higher.

 

Add it up: Crime. Abuse of all sorts. Drunken driving. Incarceration. Broken homes. Job loss. Public assistance. Rising health care and vehicle insurance rates. Counseling.

 

Take one down, pass it around, 99 problems still to be resolved.

 

Fremont County officials and residents and a handful of legislators are again leading an effort to raise the state beer tax to generate more funding for substance abuse treatment. It’s an ongoing, decade-old battle.

 

Wyoming’s 2-cents-per-gallon beer tax is the lowest in the nation. It has remained unchanged since it was first passed in 1935 – slightly more than a year after Prohibition was repealed.

 

The current tax generates about $265,000 per year for the state’s general fund, according to the Wyoming Liquor Divison. The agency says a 5-cent tax would generate $668,000 per year. That’s less than a penny on every 20 ounces of beer.

 

Interestingly, a 3-cent hike would still leave Wyoming with the nation’s lowest beer tax. Missouri and Wisconsin are tied for second-lowest at 6 cents.

 

According to a recent story by Star-Tribune capital bureau reporter Joan Barron, legislative leaders have assigned a beer tax study to the Joint Interim Revenue Committee. State Rep. Patrick Goggles, D-Ethete, is a member of the revenue committee. He said the beer tax hike “is on our radar but it’s not a priority.”

 

Make no mistake. Goggles lives on the Wind River Indian Reservation in Fremont County and is a longtime supporter of substance abuse treatment programs and funding. He is also fully aware of the fact that the majority of clients of the Alcohol Crisis Center in Riverton are from the reservation.

 

He’s also a political realist.

 

Goggles has sponsored bills to allow a local optional tax on alcohol but says they haven’t gotten through the Legislature because of opposition from the Wyoming Liquor Association and the Wyoming Lodging and Restaurant Association.

 

“It’s a bill that needs to have lots of work done to pass,” Goggles told Barron. “It needs advocates in the House and Senate.”

 

Let’s also be clear about one other fact: Alcohol-related problems aren’t exclusive to the Wind River Reservation.

 

According to the “2012 Community Epidemiological Profile” issued by the Wyoming State Epidemiological Outcomes Workgroup under the auspices of the Wyoming Department of Health, the state’s alcohol-related problems are shared.

 

Campbell County was tops in alcohol-related arrests per 100,000 people.

 

Washakie County led the state in both drunkenness and DUI arrests.

 

Sublette County ranked No. 1 in alcohol-related combined fatal, injury and property crashes.

 

Natrona County led in liquor law violations.

 

Take one down, pass it around …

 

Opponents of a higher tax on beer say it would generate little revenue compared to the ill will it would provoke among beer drinkers. They also claim the tax should be kept low because beer is the working man’s beverage.

 

Those are disturbingly thin arguments.

 

A 3-cents-per-gallon hike would be so marginal, it virtually wouldn’t affect consumers. Conversely, it would more than double the amount of funding available for substance abuse treatment.

 

Goggles was only half right. The bill doesn’t need a lot of work; it simply needs to say: “Hike the state beer tax by 3 cents per gallon for substance abuse treatment.” It does, though, need advocates in the House and Senate – the same people who were quick to jump the state tax on gasoline and diesel from 14 to 24 cents per gallon in the last session to fund roadways.

 

 

——

Australia: Cider industry hostile to ‘pre-mix tax’

 

Source: The Age

Eli Greenblat

April 1st

 

Cider Australia, a coalition of cider growers, producers and manufacturers is pushing back against lobbying efforts in Canberra by the spirits industry to overhaul the way alcohol is taxed that would see the tax on a glass of cider quadruple.

 

Supported by Foster’s, currently the largest producer of cider in Australia with brands like Bulmer’s and Strongbow, Cider Australia has written to all members of parliament in the lead up to the May budget arguing a new tax proposal by the spirits industry to tax cider at the same level as pre-mixed spirits would destroy a local industry that is creating jobs in the agricultural and manufacturing sector.

 

A spokesman for Cider Australia has labelled a budget proposal paper produced by the Distilled Spirits Industry Council of Australia, which calls for in part a tax hike on cider, as “misleading, disingenuous and deceptive”.

 

“Cider Australia has significant concerns in relation to the push for change to cider taxation, which is being heavily lobbied by the DSICA,” a letter to all members of Parliament reads.

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“This body [the DSICA] is made up almost exclusively of multinational companies who rely on primary industry in their home countries, but are lobbying the Australian government to impose a killer tax on the Australian cider industry.

 

“Further, the DSICA lobby paper is purposefully misleading and deceptive in its “reform of cider taxation” content.”

 

The DSICA which represents big liquor companies like Diageo, Bacardi and Remy Cointreau, proposes a rationalised alcohol tax system based on a volumetric tax across all alcohol products that taxes drinks based on their alcohol content.

 

The distilled spirits industry has argued traditional ciders are robbing its market on the back of the massive price advantage they enjoy. It argues that to consumers, ciders and pre-mixed spirits are the same, contain the same level of alcohol and should therefore be treated the same by the Tax Office.

 

Its budget submission would see traditional cider, currently taxed under the WET system, have its tax rate lifted from roughly 23¢ per standard drink to the level paid by ready-to-drink spirits which is around 95¢ tax per drink. The DSICA believes this would raise $496 million in additional revenue over the forward estimates.

 

In response Cider Australia is calling for no overall increase in total revenue from the cider sector as well as a reform of the WET rebate to remove unintended recipients and alleviate unintended consequences of the system that are distorting supply decisions.

 

“Further, Cider Australia proposes that if any changes are made to the current WET scheme, then Australian produced cider should be taxed in line with Australian produced wine. This is the logical position for an industry that mirrors the wine industry from growers, producers and manufacturers through to sales and distribution.

 

“All Australian apple and pear growers and cider producers are calling on your support to reject the lobbying by the DSICA and to support the growing Australian cider industry and its local benefiters, the Australian orcharding communities and families across the nation.”

 

Foster’s is also lobbying hard on the issue.

 

“We are concerned that the imported spirits industry is again aggressively lobbying for reform to the taxation of traditional ciders,” a Foster’s government relations manager said in a letter to Cider Australia.

 

“The arguments raised…fail to reflect the current situation relating to traditional cider and ignore the devastating impact an excise change would have on the traditional cider industry, as well as apple and pear producers.

 

“If traditional cider was moved from the WET regime into the spirits, the tax rate would increase by over 140 per cent. It would have an immediate impact upon the Australian cider industry and local apple and pear growers. It is estimated sales would decline by up to 30 per cent.”

Liquor Industry News 3-27,28th,29th 2013

March 30, 2013
www.franklinliquors.com

Franklin Liquors

From Our Family To Our
Have A Happy Easter!

3-27-2013 News

Vodka Maker Not Ready To Toast A1′s Restructuring Deal

 

Source: Law360

By Matt Chiappardi

March 26, 2013

 

Polish vodka producer Central European Distribution Corp. on Tuesday rebuffed a prepackaged restructuring deal offer from the Russian investment group A1, despite the alcohol firm having missed a $258 million debt payment March 15.

 

CEDC on Tuesday seemed unimpressed with a $280 million cash offer floated by a consortium of A1, SPI Group – which owns Stolichnaya vodka – and Mark Kaufman of Monaco, saying the offer doesn’t address 2013 bondholders whose notes matured last week, and upon which the company missed payment, according to SEC filings. CEDC produces Royal, Parliament and Absowent brand vodkas.

 

In a letter to CEDC’s board of directors made public Monday, A1, a trading company of Alfa Group, offered the Polish company $280 million cash under its bankruptcy plan – $230 million of which would go to 2016 bondholders – and $630 million in new notes, according to filings with the U.S. Securities and Exchange Commission. In return, A1 would get all of the reorganized equity, the letter states.

 

“We are surprised to see that after being provided detailed comments on a range of significant points related to your proposal, the consortium has resubmitted an almost identical proposal, with marginally improved economic terms, that fails to address any of the concerns previously raised,” CEDC’s letter states. “These points are not trivial and go to the heart of whether the consortium is prepared to offer a real and viable alternative to the restructuring transaction presently supported by CEDC.”

 

The Polish company, which is incorporated in Delaware and has an office in Mount Laurel, N.J., is also fielding a restructuring offer from Russian spirits importer Roust Inc., which owns $102 million of those 2013 notes, according to SEC filings.

 

That plan, proposed in February, would see Roust offer CEDC $172 million in cash. A vote is scheduled for April 4.

 

Roust’s owner, billionaire Roustam Tariko, is also chairman of CEDC, a company that has been beleaguered since 2011.

 

In March of that year, CEDC announced that results for fiscal year 2010 fell significantly below management projections.

 

That downturn was attributed to the revelation that the company’s important Polish vodka brands had suffered a $131 million impairment from its newly launched Zubrowka Biala line, according to a lawsuit filed against the company by a shareholder in December.

 

That suit, brought in Delaware Chancery Court, demanded access to CEDC’s books by shareholder Joseph Z. Khakshour, who alleged the company had been mismanaged.

 

It claimed that CEDC did not appropriately pay Russian excise taxes, which wound up shuttering the main production plant in Russia for two weeks.

 

That closing not only led to a drop in supply, but also forced the company to offer significant rebates to customers, the suit alleged.

 

CEDC since had announced the resignation of its chief executive and financial officers while an audit committee’s accounting investigation, completed in October, revealed that net sales for 2010 and 2011 were overstated by $57.4 million and accounts receivable were inflated by $100.7 million, according to the suit.

 

Representatives from CEDC did not return a request for comment Tuesday.

 

The company is one of Eastern Europe’s leading vodka producers and liquor importer, with most of its business taking place in Hungary, Poland and Russia.

 

 

——

Diageo set for United Spirits open offer after RBI nod

 

The acquisition of stakes by Diageo would enable funds to flow into United Spirits as well as to its promoter, Vijay Mallya, whose aviation business is in trouble.

 

Source: Times of India

B PRADEEP NAIR

Mar 27, 2013

 

India’s central bank has cleared the acquisition of United Spirits by British drinks giant Diageo, removing a major hurdle for the $2.1 billion deal announced about four months ago.

 

The Reserve Bank of India’s nod was the last regulatory approval required for the deal to go through.

 

A few weeks ago, the deal had received approvals from Competition Commission of India and market regulator, the Securities and Exchange Board of India.

 

In November, Diageo announced to buy 27.4% stake in United Spirits through a combination of share purchase from existing promoters (19%) and preferential allotment of shares (8%).

 

The latest development would enable funds to flow into United Spirits as well as to its promoter, Vijay Mallya, whose aviation business is in trouble. It also paves the way for Diageo to launch an open offer to increase its stake to 53.5% in India’s largest whisky maker.

 

The offer, expected to open in the next 10 days, is priced at Rs 1,440 a share, which is quite lower to its Tuesday market price of Rs 1885 on BSE. Though minority investors have expressed unhappiness over the open offer price, Diageo, is said to be not interested in upping its offer.

 

 

——

Diageo to Sell China White Liquor in Spain, Middle East

 

Source: Bloomberg News

March 27, 2013

 

Diageo Plc (DGE), the world’s largest liquor company, will expand sales of the Shuijingfang white spirit to Italy, Spain and the Middle East this year to reduce reliance on the liquor’s home market by tapping Chinese abroad.

 

Overseas sales may rise to 40 percent of the company’s total as early as 2016, from about 10 percent now, said James Rice, general manager at Sichuan Swellfun Co. (600779), the Diageo unit making the white spirit, or baijiu. Chinese travelers and overseas Chinese will be the core foreign buyers of the sorghum- based liquor in the short to medium term, he said from Chengdu, western China, without giving a more specific timeframe.

 

“Westerners can acquire a taste for baijiu” in the longer term, Rice said in a phone interview on March 22. “Baijiu is the best drink to go with Chinese food. It’s a perfect match.”

 

The international expansion by the maker of Smirnoff vodka and Johnnie Walker Scotch whisky comes amid Chinese President Xi Jinping’s curbs on extravagant spending by government officials. The crackdown has hurt sales of high-end goods including baijiu from Swellfun and Kweichow Moutai (600519) Co.

 

“Swellfun should target the Chinese population overseas as a starting point,” said Jessie Guo, head of Asia consumer research at Jefferies Hong Kong Ltd. “Non-Chinese may find it hard to accept the taste, so the market potential for white liquor overseas may be limited.”

 

About 50 million people of Chinese origin live outside China, Li Haifeng, former director of the State Council’s overseas Chinese affairs office, said March 12.

 

Worldwide Network

 

Diageo will leverage its global network to expand marketing of Shuijingfang outside China, with sales starting in Italy, Qatar, Spain and the United Arab Emirates this year, Rice said. The liquor, originating from a 600-year-old distillery, is already sold in 42 airports and as well as stores in markets such as South Korea.

 

Swellfun is about 40 percent owned by Sichuan Chengdu Quanxing Group Co., which is 53 percent controlled by Diageo. The London-based distiller has said it would like to increase its stake at some point, Lisa Crane, a spokeswoman, said in an e-mail on March 25.

 

Diageo has risen 13 percent this year in London trading, outperforming the benchmark FTSE 100 Index, which has gained 8.5 percent. Swellfun dropped 2.9 percent to 16.16 yuan as of 1:36 p.m. in Shanghai trading and has fallen 17 percent this year.

 

Kweichow Liquor

 

In Chinese tradition, baijiu is synonymous with lavish banquets and is favored by the wealthy and government officials as holiday gifts. A one-liter bottle of Shuijingfang with 54 percent alcohol content in a gift box sells for 2,899 yuan ($467) on Amazon’s China website.

 

A same-sized bottle of 106-proof alcohol from Kweichow Moutai, China’s largest baijiu producer by market value, is priced at 799 yuan, according to amazon.cn. Kweichow Moutai sells its white liquor overseas through a distribution partnership with French cognac maker Camus.

 

Sales of baijiu are forecast to rise 4.9 percent in 2013, unchanged from the past two years, according to Euromonitor International. An estimated 98 percent of China’s sales of spirits, which include vodka and whisky, were made up of baijiu last year, according to the market researcher.

 

Baijiu Cocktails

 

Diageo plans to hold baijiu-tasting sessions at top restaurants overseas, and introduce chefs from Chengdu who will show diners how to pair the liquor with food, Rice said. The company also plans to host a baijiu cocktail-making competition this year to expand consumption of the spirit beyond the dining table, he said.

 

President Xi’s austerity drive among government officials helped push down prices on some high-end spirits by about 30 percent over the Lunar New Year holiday in February, according to Ministry of Commerce figures.

 

Rice said he expects the impact on the baijiu industry to be limited to the short term. With longer term growth in mind, Diageo is looking to create other premium white-spirit brands, he said.

 

“Baijiu’s not going to leave the Chinese dining table,” Rice said. “It’s just going to be sold through different channels and different consumers.”

 

 

——

Carlsberg, Anheuser Bush being probed over price fixing by German regulators

 

Source: Domain-b

26 March 2013                                      

 

Danish brewer Carlsberg today said that the German Federal Cartel Office has launched an investigation into alleged price fixing.

 

The Copenhagen-based company acknowledged that it was under a probe after German weekly magazine Focus last week reported that Carlsberg, along with Anheuser Bush Inbev SA and some local companies had formed a cartel and could be slapped with millions of euros in fines.

 

According to Focus, apart from Carlsberg and Anheuser Bush Inbev, others being investigated are German brewers Warsteiner, Krombacher, Erdinger and Bitburger, and retailer Oetker Group.

 

The magazine said these companies control nearly half of Germany’s beer market and the regulator is probing whether they artificially inflated the price of about 24 brands of beer including Beck’s, Holsten, Jever and Warsteiner.

 

Carlsberg, Warsteiner and Bitburger have confirmed that they were under investigation, but refused to comment any further.

 

A spokesperson for the German Federal Cartel Office said that the probe was launched in September 2012 and is currently in its final stages.

 

 

——

STOCK SPIRITS GROUP 2012 FULL YEAR RESULTS

 

Continued strong performance in a challenging market

 

Source: FTI Consulting

March 26th

 

Stock Spirits Group (SSG or the Group), Central Europe’s leading branded spirits and liqueurs business, is pleased to announce its full year results for the twelve months ended 31st December 2012.

 

Highlights:

 

Profit growth against tough market backdrop 

.         Record EBITDA, with growth of 6.8% to ?68.8m on a like-for-like basis (2011: ?64.3m)

.         Revenue of ?292.4m, just slightly down on a like-for-like basis (2011: ?295.1m)

.         EBITDA margin per litre has grown by 11.3%

.         Strong cash flow generated

.         This strong performance against the backdrop of the Czech illegal alcohol crisis in September 2012

 

Margins improved in Poland and market leading positions maintained in key markets

.         Further strengthened spirits market leadership in Poland with increased overall vodka market share of 36%, substantially benefiting from the market recovery in 2012

.         Strengthened market leadership position in the Czech Republic, growing overall spirits share in the off trade from 38.0 to 39.6%

.         Consolidated market share in Italy within a very challenging market, growing share in the brandy and vodka categories

 

Continued to successfully grow business footprint in the region through targeted acquisitions and the sale of non-core assets

.         In December 2012, SSG announced the acquisition of leading Slovakian spirits company Imperator

.         In December 2012, SSG announced the acquisition of the assets of Novel Ferm, a high quality ethanol manufacturing business located near Rostock in North Eastern Germany

.         In October 2012, SSG announced the sale of Stock USA and the Gran Gala brand to Sazerac Company

 

Significant brand & NPD investment during the year to continue portfolio expansion

.         Met consumer demand for new flavoured vodkas through strong growth in Lubelska, for example launch of lime and mint variant

.         Strengthened the Keglevich brand franchise amongst younger consumers with the innovative and successful launch of vodka, ginseng and guarana based Keglevich K-Guar in Italy

.         Led development of the flavoured vodka market in the Czech Republic and Slovakia, introducing Amundsen Peach and Amundsen Lime and Mint. Achieved significant growth despite the Czech methanol crisis

.         Expanded usage of the popular Bozkov brand in the Czech Republic through new coffee flavoured range extension Bozkov Special

.         Entered the cream liqueurs market with Stock Crema

 

Future Outlook

.         Market conditions slowly improving across central Europe, particularly Poland

.         With leading brands in key spirits categories, the SSG Board is confident that the Group is well positioned to take full advantage of future growth

 

Chris Heath, Chief Executive Officer of Stock Spirits Group said:

 

“I am delighted that we have been able to deliver another very strong set of results in 2012, continuing an unbroken record of profit growth each year since the formation of the Group. Faced with on-going difficult economic conditions, significant input cost increases, and the temporary spirits ban in the Czech Republic, we were well positioned in 2012 to capitalise on the strength of our brands and distribution platform to deliver superior results by taking the lead on market pricing and managing our product and marketing mix to deliver strong margin growth.”

 

“We are particularly pleased to have extended the leading positions for most of our core brands in our key markets, and to have continued with our successful track record of launching new products across the region.”

 

“We remain confident that the Group is well placed to take advantage of opportunities to grow the business further in 2013 and beyond”

 

 

——

Beer and Africa: A Recipe for Profit?

 

Source: CNBC

By: Matt Clinch 

25 Mar 2013

 

Africa maybe the world’s poorest and most undeveloped continent, but its abundance of natural resources and a surging population makes it an attractive prospect for investors.

 

One sector that is yet to be truly tapped is the brewing industry, according to research firm Bernstein Research, which believes Africa is probably the most attractive region for long-term profit growth for global brewers.

 

Spirit and beer maker Diageo agrees, telling CNBC.com that they are “long term investors” in Africa. Despite a long list of challenges, the continent offers tremendous opportunities to work with local governments and grow local communities, the firm says.

 

Logistics, a lack of infrastructure, water and energy and a limited skilled workforce are just some of the hurdles Diageo highlights. Additionally, illicit consumption of home-brewed alcohol is prevalent in Africa. Diageo’s own research suggests that around 50 percent of consumption in Kenya is either informal (not recorded) or unlisted (i.e. illicit).

 

Despite this, the continent’s huge population, over 1 billion according to the United Nations, with a 26 percent increase over the last decade, means Africa (along with emerging Asia) offers the highest long-term upside to investment in beer consumption, Bernstein Research said.

 

“African [profit] margins have more headroom and better (very) long-term growth prospects,” it said in a research note.

 

“We note countries such as Nigeria, DRC (Democratic Republic of the Congo) and Ethiopia have very large populations and low per capita consumption. Therefore, we believe there is little doubt that Africa will be one of the engines of growth for the beer category in the next decades.”

 

But it may not be good news for all brewers waiting to venture into the emerging market. Bernstein says incumbents are likely to benefit from any potential upside as operational challenges make it very difficult for new entrants.

 

And according to Bernstein’s data those incumbents are SABMiller, which controls 38 percent of regional Beer EBIT (earnings before interest and taxes) on an equity-adjusted basis, Castel (25 percent), Heineken (18 percent) and Diageo.

 

“As the region is likely to continue to grow fast, so will its relative importance to those brewers’ earnings,” it said.

 

SABMiller announced a $40 million investment this month in a new brewery in Namibia as part of its strategy to expand its operations across Africa. Eight days later the company announced the launch of a new beer called Eagle in Ghana, made from the cassava plant, to complement its Impala beer, unveiled in Mozambique 18 months ago.

 

“Part of our strategy across Africa is to make high quality beer which is affordable for low-income consumers while simultaneously creating opportunities for smallholder farmers in our markets. The launch of Eagle in Ghana ticks both these boxes,” Mark Bowman, managing director of SABMiller Africa, said in the press release.

 

Diageo has also made big announcements. Ghana’s first cassava beer, Ruut Extra Premium Beer, was announced at the start of the year and a Diageo spokesperson James Crampton told CNBC.com that the firm likes to “innovate” in the affordable sector.

 

“We have a brand for every motivation or occasion,” Crampton said, and detailed that policy making in the region has also led to taxes being waived by governments who are keen for brewers to work with local farmers and communities.

 

 

——

The profitable side of creativity (Excerpt)

 

Source: Insigniam Quarterly

March 26th

 

Highly creative companies like Disney, Apple, Nike, Chrysler and consumer-goods upstart Method all reported increases in profitability in 2012. Their mutual strong performance and growth were all complemented by enigmatic leaders, the expected unexpected new ideas, great decisions, product design-and, highly creative, customer-tuned cultures.

 

Over the last decade, companies once known as highly creative industry leaders have waded into the waters of poor performance or irrelevance, some slipping away entirely. Among these are Kmart, Kodak, Digital Equipment to name a few and narrowly escaping, possibly, JC Penney and HP.

 

So, what is the difference? Creativity as a shared attribute across leadership teams is a critical missing ingredient. If you don’t value or foster creativity as a C-suite executive, the warning signs of irrelevance can develop slowly. You risk leaving a legacy of unintentional outcomes – a stalled balance sheet, battered egos, disenchanted customers, late- to-market products and eroding brand equity.

 

Glazer’s Distributors

 

Expanding EBITDA, 12% year-over-year growth

 

In the consumer goods distribution business, Glazer’s Distributors, a $3.8 billion (U.S.) company, hired maverick President and CEO Sheldon “Shelly” Stein in 2010 to make big changes.

 

This former investment banker’s challenge was to tackle opportunities from a new perspective to differentiate the brand amongst many old-line, family-owned dominant distributors. Glazer’s is now the fourth largest in its category.

 

“If I were starting from scratch, how would I do this . what is the best way to run this business?” was Stein’s first application of creative thinking. He stepped back, asked questions and moved away from the typical systems in this market, adding that many executives aren’t willing to “not know the answer,” quoting a former mentor of his as saying that a bad executive is one “who thinks his or her own body odor smells like perfume.” The point being you have to be willing to be wrong or naïve and entertain alternatives to your beliefs to harness creativity.

 

“Creativity is thinking outside the norm, knowing what really matters in making your company win, and finding a better way to do it,” Stein says.

 

Glazer’s growth has been astounding. The company has seen 12 percent year-over-year growth since 2010 and, going into 2013, expects more.This growth is underscored by expanding EBITDA.

 

However, you can’t drive creative solutions by just starting at the balance sheet. Stein attributes some of his success to:

 

    His belief in his team

    An open-door policy

    Staying aware that asking the most senior people their opinions means junior employees will never give you the real answer.

 

From ‘no’ to ‘yes’

 

You have to drop the attitude, get out there, and talk to employees and customers in a meaningful way.

 

Stein was asked for an example of alternative thinking and creative problem solving to overcome a “no” to get to a “yes.” His answer was, “I have about 20 of them.” He went on to describe how a leader had said the current sales and account management process could not be redesigned to save money and make customers happy at the same time (it had been that way for 50 years).

 

His employees and leaders, who are free to express their feelings and make mistakes, quickly went to work and designed a new approach. Since that change, profits have doubled.

 

When you hear Stein speak, you immediately hear the spark, the energy, and the passion. He creates comfort without losing a very aggressive edge. On the topic of assertion versus aggression in pushing creative ideas, Stein says that creativity and being aggressive go hand in hand. Otherwise taking “no” for an answer and dealing with basic, safe assertions will rule.

 

When asked if a COO and a CFO can be creative, he says, “I wouldn’t hire one who wasn’t, so I do not see why they can’t be.” Whether it is working on the front lines, in the distribution center, or fostering employee opinion, Glazer’s executives think differently about how to lead and the results are showing.

 

 

——

Oregon: Wine growler bill heads to Oregon Senate floor for final vote

 

Source: The Oregonian

By Harry Esteve

March 26, 2013

 

A proposal to sell wine in refillable “growlers,” much like brewpubs have been doing for years, continued its march through the Legislature on Tuesday.

 

A Senate panel approved House Bill 2443, sending it to the Senate for a final vote. Passage is likely. Within weeks, it’s possible that Oregon wine lovers will be able to bring refillable containers to stores and restaurants and bring home up to two gallons of their favorite vintage.

 

“I bet it will catch on like wild fire,” said Wynne Peterson-Nedry, winemaker at Chehalem winery in Newberg, after the Senate Business and Transportation Committee gave the bill unanimous support. “Sales will be spurred along by this.”

 

The House already passed the bill.

 

Wineries already can sell wine in refillable containers. The bill would allow the practice at grocery stores and restaurants, and would apply to beer and cider as well.

 

Peterson-Nedry said the practice is as common in France and Europe as buying “a baguette of bread and carrying it home from the market.”

 

Kara Olmo, owner of Wooldridge Creek Vineyard and Winery in Grants Pass, told the committee that growler sales are less expensive and more environmentally friendly. Instead of filling bottles, the winery fills an airtight keg with the wine, which is then tapped to dispense into the refillable containers.

 

Olmo said a single keg saves 39 bottles. She said a bottle of her wine that retails at $26 sold for $18 when it is put in a growler.

 

“It’s a lot cheaper to sell from the keg,” and it can help ensure quality, she said. She said her wineries keg sales to restaurants have been doubling every year.

 

 

——

New Zealand hails ‘vintage of a lifetime’

 

Source: the drinks business

by Gabriel Savage

26th March, 2013

 

With New Zealand’s 2013 grape harvest now well advanced, many producers are speaking about one of the best vintages in the country’s history.

 

While the warm, dry summer has caused problems for the country’s sheep farmers, New Zealand Winegrowers’ CEO Philip Gregan described conditions as “absolutely perfect for growing and ripening grapes.”

 

With NZWG having shaken off earlier concerns about a potential grape glut, Gregan continued: “As we move into autumn, still with warm days and now slightly cooler nights prevailing, the prospect is for an outstanding vintage in all our grape growing regions.”

 

This optimism is being echoed by an increasing number of winemakers. Predicting that 2013 looks set to be remembered as the “vintage of a lifetime,” Esk Valley winemaker Gordon Russell pointed to an ideal combination of weather conditions.

 

“Not only are our grapes ripening perfectly under constantly blue skies, but cooler nights are helping retain acidity and ultimately enrich the wines with a vitality not normally seen in drought seasons,” he reported.

 

Craggy Range chief winemaker Matt Stafford offered a similarly positive outlook, saying: “Best? Greatest? It is difficult to put a statement on the quality we have in the vineyards with many weather fronts still to pass but there is a great sense of excitement of what is in store and we may need to come up with some new superlatives following this one.”

 

These upbeat predictions for 2013 came as wine writers Matthew Jukes and Tyson Stelzer unveiled their sixth edition of The Great New Zealand Pinot Noir Classification.

 

Featuring “a record number” of 120 estates from among the country’s 484 Pinot Noir producers, the classification includes 23 estates for the first time, with Rippon Vineyard joining Ata Rangi, Bell Hill, Felton Road and Mount Difficulty in the highest five star classification.

 

“We have never witnessed a jump in the standard of New Zealand Pinot Noir across all price points as dramatic as that of the past 12 months,” remarked Jukes and Stelzer, who base the annual classification on an average assessment of producers’ previous five vintages.

 

Attributing this in part to maturing vines, they added: “growers and makers are embracing a new sensitivity in drawing out the unique personality of their region. New Zealand Pinot Noir has never spoken more articulately of the character of its place.”

 

For more on New Zealand, look out for April’s issue of the drinks business.

 

 

——

Bulk versus bottle dilemma for South African wine

 

Source: Reuters

By Tosin Sulaiman

Tue, Mar 26 2013

 

At South Africa’s Rostberg and Co., green bottles filled with a ruby liquid clink as they march along a conveyor belt, destined for wine-lovers from Paris to Shanghai.

 

But if a trend toward bulk shipping continues, the music of the Rostberg bottling plant may be about to stop.

 

Set in lush vineyards in Stellenbosch, one of South Africa’s most famous wine communities, Rostberg has been operating below capacity for the past two years due to a shift to shipping wine in 24,000-litre polypropylene “flexitanks”.

 

The trend has spread through other “New World” wine-producing countries like Chile, Argentina, Australia and New Zealand, which all have distant markets and, in the latter two cases at least, relatively strong currencies that are forcing them to cut costs to stay competitive.

 

Bottlers in South Africa are frantic about the likely loss of jobs. But another concern for some industry experts and government officials is the potential impact on South Africa’s brand: when wine is bottled outside the country, winemakers lose control of a key part of the production process.

 

These are big concerns for South Africa, where the wine industry plays an outsized role in reshaping the country’s image after years under apartheid, which ended in 1994.

 

“Wine has a tremendously important role to play in the development of Brand South Africa,” said Anthony Budd, managing director of Cape Town-based wine exporter Diverse Flavours. “Wine is that much more romantic and seen as premium and coming from a beautiful location.”

 

The number of people working directly or indirectly in South Africa’s wine industry has risen to more than 275,000 people from just under 160,000 in 2000, and now represents 1.5 percent of the workforce in an economy dominated by natural resources.

 

The industry has made huge inroads as a producer of high-quality wines since overseas markets opened up after apartheid, said Michael Fridjhon, visiting professor of wine business at the University of Cape Town’s business school.

 

“In 1994, we were the darling of the world,” he said. “Everybody wanted to do something for the ‘Rainbow Nation’… Since then, we’ve been on a steep learning curve.”

 

Exports have soared more than 700 percent to a record 409 million liters in 2012. Now the country’s biggest agricultural export earner, wine sets South Africa apart from other sub-Saharan African countries known for exporting predominantly raw materials.

 

Seventy percent of the 26 billion rand ($2.8 billion) it contributes to the national economy is focused on the Western Cape province, which boasts ideal conditions for wine-making with its Mediterranean climate, mountain slopes and valleys, and sea breezes from the Atlantic and Indian Oceans. The Western Cape is also where the majority of bottlers are located.

 

JOBS

 

Nearly half of all wine from South Africa, Australia, New Zealand, Chile and Argentina is shipped in bulk, up from around a fifth a decade before, according to a report published last year by Dutch bank Rabobank entitled ‘The Incredible Bulk. The Rise in the Global Bulk Wine Trade’.

 

As recently as 2009, just over 61 percent of South African wine exports were bottled domestically but that share dropped to 40 percent last year, according to industry export and promotion group Wines of South Africa (WOSA).

 

Bulk exports overtook bottled shipments in Australia for the first time in January 2011, industry group Wine Australia said. Major Australian producers like Jacob’s Creek are now bottling in Britain, the world’s largest wine import market.

 

Bevan Newton Johnson, managing director at First Cape, the largest South African wine brand in Britain, said the company mothballed its own bottling facility nearly two years ago, laying off around 40 people.

 

“Our products were not profitable in the overseas markets,” he said.

 

The South African government is concerned about the effect on employment. Close to 1,000 jobs were lost due to the shift to bulk as of the end of 2011, according to the Department of Trade and Industry, and industry representatives said the trend suggests that more cuts are coming.

 

In South Africa, where the unemployment rate has remained at 25 percent for years, that has a multiplier effect – the country has one of the highest “dependency ratios” in the world at an average of three non-working people supported by every worker, according to a January 2013 report by the South African Institute of Race Relations.

 

Two bottling plants in Stellenbosch have closed since 2010. Consol Glass, South Africa’s biggest glass manufacturer, is preparing to cut production this year because of the sharp fall in demand for wine bottles. Its wine sector business, which accounts for a quarter of revenues, has declined by more than 20 percent over the last three years.

 

Rostberg, located on the Rust en Vrede wine estate which produced the wine served at former President Nelson Mandela’s Nobel Peace Prize dinner, had to shut down one bottling line in 2010, and was forced to lay off 35 staff, half its workforce.

 

“The only way we can create more jobs is if we could bottle our wine locally,” said Leo Burger, Rostberg’s managing director.

 

The government has threatened to retaliate against the UK, the world’s biggest market for imported wine, by importing bulk whisky from Britain for bottling in South Africa.

 

“The big winners in this trend are the bottlers who operate in the UK and the EU,” said Stephen Hanival, director of agro-processing at the Department of Trade and Industry. “Jobs and capacity have been lost in developing countries like South Africa.”

 

Bottlers and the wine industry are trying to counter the growth in bulk exports by diversifying to China, Japan and other parts of Africa, where the demand for premium wine is growing.

 

South Africa exported 5.5 million liters of packaged wine to China in the year to February 2013, a 24 percent increase from the previous year.

 

SUPERMARKET LABELS

 

A big factor in the shift to bulk is the growing influence of supermarkets.

 

Retailers in Europe have been able to squeeze pricing from their suppliers to attract customers recovering from the recession, said Stephen Rannekleiv, Rabobank’s executive director of food and agribusiness research.

 

Some have created competing private label wine brands using foreign-sourced bulk wine.

 

Fraser Thompson, head of the IPL Wine subsidiary at Asda, the British arm of U.S. retailer Walmart, said countries like South Africa have had no choice but to shift to bulk to stay competitive. Asda has increased its sourcing from South Africa in recent years, partly thanks to UK bottling, he said.

 

“South Africa is competing on a global stage with every other wine-producing nation,” he said. “Without shipping in bulk there’s a danger that South Africa would lose considerable export trade to the UK and across the world.”

 

Around a third of the wine imported by Asda is now bottled in the UK, where it set up its own bottling plant in December 2011 in Snetterton, Norfolk.

 

South African industry and government officials have expressed concern about what happens to the wine after it leaves the polypropylene tanks.

 

Hanival was particularly worried about the potential for South African wine to be blended with a lower quality wine and marketed as South African, which could have consequences for its hard-won reputation for high quality at the right price.

 

“In the past the UK consumer saw South African wine as moderate-to-low quality but at a very low price point,” he said. “These days South African wine is seen as of moderate-to-good quality, still at a good price point … I think we have managed to lose that label of cheap and cheerful, relatively low-quality wine.”

 

A spokeswoman at Asda strongly denied any trans-national blending took place at Asda. Tesco and Sainsbury’s, the two other big supermarket chains in Britain, did not respond to requests for comment on this story.

 

Bottling in South Africa includes a trackable certification seal, with various guarantees for the consumer, Rostberg said.

 

“Our wine certification system ensures the origin, cultivar (grape variety) and vintage only up to the harbor when it is exported in bulk, but no further,” he said.

 

The reputational risk around the possibility of blending is uncomfortably high, some in the industry say.

 

“Odds are that it will adversely affect the reputation (of South African wine),” said Fridjhon. “Effectively what you’re doing is turning wine into a commodity.”

 

 

——

REPUBLIC NATIONAL DISTRIBUTING COMPANY APPOINTS BILL CAMPION EXECUTIVE VICE PRESIDENT OF RNDC SOUTH CAROLINA

 

Source: RNDC

Mar 26th

 

Republic National Distributing Company (RNDC), the nation’s second largest premium wine and spirits distributor, today announced the appointment of Bill Campion as executive vice president of RNDC South Carolina. In his role, Campion will have responsibility for leading all sales and operations for the business unit. 

 

“We are very fortunate to have Bill’s leadership in this important role,” said Bob Hendrickson, executive vice president, Republic National Distributing Company. “He possesses a strong track record of success delivering best-in-industry service to our customers and suppliers while ensuring our business practices are executed to the highest standards. The South Carolina market will benefit greatly from his appointment.”

 

Campion brings more than 20 years of industry experience to his role. Most recently, Campion served as executive vice president of RNDC Pensacola where he made a tremendous impact positioning RNDC as a formidable and profitable distributor of choice in the Northwest Florida market. He also played an instrumental role in leading the RNDC Pensacola team through the RNDC purchase of the N. Goldring Company and its subsequent transition.

 

In 2008, Campion joined the leadership team at RNDC Pensacola as vice president of Sales. Prior to that, he served as vice president of Sales and Marketing for N. Goldring Company in Pensacola. He also previously held the position of On-Premise District Manager for the company.

 

Campion will report directly to Tom White, region president, and will be based in Columbia, S.C.

 

 

——

Virginia: ABC Adds a New Member to their Executive Leadership Team

 

Source: VABC

March 26th

 

Virginia ABC has hired John L. Shiffer as Director of Marketing for the agency’s newly created marketing division.  

 

The decision to create a marketing division is one step toward an effective business strategy aimed at helping the agency realize best practices in their product placement and marketing efforts. As marketing director, Shiffer will oversee the development and management of the agency’s marketing and promotions functions in areas that include promotions planning and analysis, store branding, and product planning and performance.  The marketing division will also provide vital support for the agency’s revenue growth objectives as well as to its service improvement strategies.

 

“By recognizing and responding to the business needs of the agency, Virginia ABC will continue to operate as a competitive retailer, which aligns with our mission of control, service and revenue,” said Chairman Neal Insley.   “We’re pleased to welcome John as a member of our management team.”

 

Shiffer earned an M.B.A. in marketing and finance from the University of Chicago and has more than 20 years experience in strategic marketing and new product development. His professional experience includes employment with Virginia Lottery and Reynolds Consumer Products. 

 

“I am excited to serve ABC in my new position,” said Shiffer. “And I look forward to building relationships with industry partners and better serving our retail customers with innovative marketing strategies.”  

 

 

——

Tennessee: On its last leg, TN wine bill adds Sunday liquor sales

 

Source: The Tennessean

Mar. 27, 2013

 

Liquor stores could open on Sundays, and they would be allowed to sell items other than alcohol under a wine-in-grocery-stores bill now being weighed in the state Senate.

 

The Senate Finance Committee approved amendments Tuesday that would loosen restrictions on liquor stores in a bid to break the impasse over new alcohol legislation.

 

But the committee put off a final vote on the bill for a week amid signs that the changes still were not enough to get the measure to the Senate floor.

 

“People are thinking we’re up here talking about putting wine in a grocery store,” said Sen. Jim Kyle, D-Memphis. “This bill today changes the entire distribution system of alcoholic beverages in this state, and I think we’ve moved awfully quickly.”

 

Still, the question of whether any such legislation has a glimmer of hope for this year rests largely on the other side of the Capitol.

 

The senators’ counterparts in the state House earlier this month appeared to drop the issue for the year, but senators have pressed ahead with Senate Bill 837, which would let voters at the county level decide through referendums whether to allow wine sales in local grocery stores.

 

Pushing ahead

 

Lt. Gov. Ron Ramsey, R-Blountville, has said he would like to get the bill through the Finance Committee, a move that might pressure the House to reconsider or could set the framework for a final deal next year.

 

The Senate Finance Committee attached about half a dozen amendments to the bill, in some cases by one-vote margins. The changes appeared to be intended to win liquor stores and distributors – or at least some of their supporters in the legislature – over to the measure.

 

Nonetheless, the bill’s sponsor, state Sen. Bill Ketron, asked committee members to put off a vote on the bill itself. The Murfreesboro Republican told reporters later that he wanted to secure a couple of more votes on the 11-member panel before pressing ahead.

 

“Next Tuesday we’re running the bill,” he said.

 

 

——

Indiana: Indiana might soon blaze its own bourbon trail

 

Legislation that could foster creation of craft micro-distilleries in state will head to governor

 

Source: IndyStar

Mar 26, 2013  

 

The Indiana Senate passed legislation Tuesday on a 38-9 vote that advocates believe could lead to the creation of the state’s own bourbon trail.

 

Senate Bill 1296 would allow craft micro-distilleries to operate in Indiana. Businesses could sell hard alcohol on-site or serve samples. Few distilleries exist in Indiana, and they can produce hard alcohol only for wholesale distribution to retailers.

 

Like the ban on the sale of alcohol in stores on Sundays, the restriction on distilleries is a blue law throwback to Prohibition. Michigan, Ohio and Illinois already allow distilleries to sell alcohol on-site. Kentucky is home to the world-famous bourbon trail.

 

Indiana businesses see the change in law as a potential boon for tourism. Popular local brewery Sun King, Munster beer brewer Three Floyds Brewing and Huber’s Orchard, Vineyard and Winery in Starlight, near Louisville, Ky., all plan to open micro-distilleries. They plan a mix of homemade bourbons, vodkas and whiskeys.

 

Other entrepreneurs who want to start distilleries had complained the bill picked favorites after it passed the House. The bill would have allowed permits to be issued only if applicants had been operating a winery or brewery for at least three years – a way to ensure businesses had responsible records. Start-ups would have been forced to apply for a distillery permit and then begin a three-year waiting period.

 

The Senate changed the bill to give start-ups time to avoid the three-year waiting period. The start-ups, however, would face stricter regulations on serving alcohol for their first three years.

 

The Senate approved the bill 38-9. The author, Rep. Ed Clere, R-New Albany, will not protest the changes made in the Senate. That means the bill will head to Gov. Mike Pence’s desk.

 

The federal government already enforces tighter restrictions on distilleries than on breweries and wineries, including FBI background checks on applicants.

 

 

——

Kentucky: Bill to allow alcohol sales on Election Day passed by Kentucky legislature (Excerpt)

 

Source: Courier Journal

Mar 26, 2013 

 

Kentucky’s longstanding ban on alcohol sales while polls are open could be coming to an end.

 

The House in the final hours of the 2013 session approved Senate Bill 13, sponsored by Sen. John Schickel, R-Union, that would allow alcohol sales during elections in places where alcohol sales are allowed otherwise. If signed by Gov. Steve Beshear, only South Carolina would prohibit sales when polls are open.

 

Local governments could still pass restrictions on Election Day sales.

 

The House vote was 50-46.

 

Senate Bill 13 also included language from other liquor bills, including House Bill 300, the legislation filed by Rep. Dennis Keene, D-Wilder, that included the recommendations of Beshear’s alcohol regulation task force.

 

The Senate also approved the bill to send it to Beshear. A comment on whether Beshear would sign the bill or veto any part of it was not immediately available.

 

 

——

Pennsylvania: Redesigned liquor stores offered as alternative to privatizing Pennsylvania alcohol sales

 

Source: Pittsburgh Tribune-Review

By Kari Andren

Wednesday, March 27, 2013

 

A redesigned wine and spirits store could offer lawmakers and others who favor modernizing stores, rather than privatizing them, more ammunition as they debate how and where Pennsylvanians can buy wine and liquor.

 

The 10,000-square-foot Fine Wine & Good Spirits store, which opened Tuesday in the Village at Pine shopping center in Pine, is the first in the Pittsburgh region to feature the new shelving, frosted glass signs and pendant lights.

 

A center island houses cash registers, educational information and a tasting bar. Bob Tirk, a full-time retail wine specialist, said he will be in the store most days to help customers.

 

Still, not all consumers are won over by the concept.

 

Patty Walker of Gibsonia praised the store as “beautiful and user-friendly” as she browsed a wall of wines with her sister.

 

“However, as nice as this is, there would be many more like this if there were privatization,” Walker said. “In other states, a lot of stores are like this and have been for years.”

 

“We designed this store with the consumer in mind,” said board member Bob Marcus of Indiana. “Rebranded” stores throughout the state have had sales increase 20 percent to 35 percent because the new layout and design encourages shoppers to browse longer, he said.

 

“That will ultimately benefit the taxpayers of Pennsylvania through the agency’s transfer to the General Fund,” Marcus said.

 

The new look and higher sales figures could bolster the position of lawmakers, particularly in the Senate, who have said they want to modernize the state’s system, not dismantle it.

 

“It wouldn’t shock me if you hear this in a speech on the floor of the Senate or a speech in the Law and Justice Committee,” said G. Terry Madonna, a political scientist at Franklin & Marshall College in Lancaster. But for privatization supporters, “this is a philosophic question. … It doesn’t matter what you modernize. It’s whether (selling alcohol) is a core function of government.”

 

The state House approved a privatization plan last week that would phase out 600 state stores and allow wine sales in grocery stores, along with beer, if the store has a restaurant license. It would give beer distributors the first chance to purchase 1,200 licenses that would allow them to sell beer, wine and liquor.

 

Shoppers browsing the revamped store, roughly double the size of the one it replaces in the Wexford Plaza Shopping Center, praised the new look.

 

“This is the nicest selection of wine anywhere. You could never find this in a grocery store,” said Linda Fitterer of McCandless. “Please, governor, think about what you’re doing with the wine stores. It would be a great loss for everyone who loves wine to lose this.”

 

The LCB spent about $150,000 on new fixtures, such as shelves and the center island. Other upgrade costs were built into the store lease agreement, said Stacy Kriedeman, an LCB spokeswoman.

 

The redesigned stores are “a paradigm shift,” said John Eld, a member of the American Wine Society’s Pittsburgh chapter. He said he remembers when customers chose products from a catalog at the state store and a man behind the counter brought it out.

 

“It’s like going from a crank telephone to an iPad,” Eld said of the new design.

 

About 21 stores have been revamped, Kriedeman said. One more redesigned store is set to open in Monroeville at the end of April, and the agency is working to finalize a lease agreement for a new store to be built on Blue Spruce Way in Murrysville, replacing the store on William Penn Highway.

 

3-28-2013 News

Anheuser-Busch News Stirs Talk of Sweep

 

Source: WSJ

By Christopher M. Matthews

Mar 27th

 

The news Tuesday that Anheuser-Busch InBev NV is being investigated by the SEC had some Foreign Corrupt Practices Act aficionados muttering a popular FCPA catch phrase: “Industry-wide sweep.” Are booze makers the latest industry to draw the gaze of law enforcement?

 

AB InBev is now the second alcoholic beverage company to come under FCPA scrutiny in India. Bourbon maker Beam Inc. disclosed in October it was reviewing its business in India for compliance with the FCPA, which prohibits bribes to foreign officials. Meanwhile, vodka maker Central European Distribution Corp. disclosed in October that it had violated the FCPA, and Diageo PLC paid $16 million in 2011 to settle an FCPA case.

 

The SEC has previously canvassed entire industries for their compliance with the FCPA. For example, the SEC sent letters to a handful of banks and asset managers about their dealings with sovereign-wealth funds in 2011 after regulators became suspicious that financial institutions’ FCPA compliance wasn’t up to snuff. The recipients of the letters were not accused of any crime, and the probe, one of several industry wide sweeps, hasn’t resulted in any charges thus far.

 

If the alcohol industry is facing a sweep, it could be painful. Critics of the approach call it a fishing expedition, in which regulators ask companies to undergo costly internal investigations on sometimes flimsy evidence. Kara Brockmeyer, who heads the SEC’s FCPA unit, bristles at that characterization. At a recent conference, she said sweeps require high-level approval and are only granted when they see pervasive wrongdoing. “It’s not something we undertake lightly,” Brockmeyer said.

 

Nathaniel Edmonds, a former official on the DOJ FCPA squad, said “problematic third parties” used across an industry often spark a sweep. But Edmonds, now a partner at Paul Hastings LLP, said it was too early to say the liquor industry is facing a sweep. “Rather, the public disclosures indicate that many companies in the industry are facing similar challenges,” he said. The SEC didn’t respond to a request for comment.

 

 

——

Crown Royal Maker Sues Over ‘Crown Club’ Whiskey

 

Source: Law 360

By Bill Donahue

March 27, 2013

 

The makers of Crown Royal whiskey claim a smaller rival is selling liquor that illegally copies the name and distinctive velvet bag packaging of the well-known Canadian whiskey, according to a lawsuit filed Tuesday in Texas federal court.

 

The U.S. subsidiary of global beverage giant Diageo PLC says Texas liquor distributor Mexcor Inc. is misleading consumers by selling “Crown Club” whiskey in small bags that are similar to the purple drawstring sacks used to package Crown Royal.

 

Mexcor is reportedly selling its whiskey with Southern state names – Texas Crown Club, South Carolina Crown Club and so on – and in drawstring bags based on the design of each state’s flag. As a result, consumers are going to be duped into thinking the rival whiskeys are state-themed versions of Crown Royal, Diageo says.

 

“When exposed to defendants’ whiskies in the marketplace, consumers are likely to mistakenly believe that defendants’ whiskies are affiliated with, sponsored by, approved by, or associated with Crown Royal … or [that they] are regional variations or novelty line extensions of Crown Royal,” the complaint says.

 

Further, Diageo claims that Mexcor is purposefully sowing the alleged confusion – also using similar label fonts and emphasizing the term “Crown” – to leech off the success of Crown Royal.

 

“Defendants have deliberately and in bad faith embarked on a nationwide scheme to trade on the enormous popularity, goodwill and consumer recognition of plaintiff’s Crown Royal brand and the … purple bag trademarks for their own commercial benefit,” the suit says.

 

Diageo – a multibillion-dollar global drink company that also sells Johnnie Walker brand Scotch whisky and Smirnoff vodka – lists seven separate claims against, including federal, state and common law infringement, dilution and unfair competition. The company wants a preliminary injunction barring Crown Club from store shelves, punitive damages and a ruling that cancels Mexcor’s own trademarks for the whiskey.

 

Mexcor didn’t immediately return a request for comment on Wednesday.

 

Wednesday’s complaint came just over a month after Diageo hit Mexcor with a separate lawsuit in New York federal court for airing attack advertisements against Crown Royal.

 

That suit said Mexcor was running a series of unauthorized commercials that describe an unnamed competing whiskey – adorned in packaging that resembles Crown Royal’s trademarked purple bag – as “poison” that it is unfit for Texans.

 

“Defendant’s commercial intentionally and unambiguously misleads, confuses, necessarily implies and deceives consumers … into believing that Crown Royal whiskey is a harmful, unsafe or substandard product,” the Feb. 11 complaint said.

 

The advertisement allegedly feature a barmaid in an Old West saloon ordering a round of Mexcor’s Texas Crown Club whiskey for a group of grizzled cowboys. When a “strange cowboy” ambles into the bar brandishing an unmarked bottle in a purple, drawstring pouch, the woman jeers, “We don’t drink that poison in this neck of the woods,” the suit said.

 

After the cowboy is tossed out of the saloon, the camera pans to a bottle of Texas Crown Club and shows a second bottle, in a pouch that resembles the Texas state flag, slammed down on the bar next to the first bottle, according to the complaint.

 

The first case is still pending.

 

Diageo is represented by Linda L. Addison of Fulbright & Jaworski LLP.

 

Counsel information wasn’t immediately available for Mexcor and holding company EJMV Investments LLC, which was also named as a defendant.

 

The case is Diageo North America Inc. v. Mexcor Inc. et al., case number 4:13-cv-00856, in the U.S. District Court for the Southern District of Texas.

 

 

——

AB InBev admits new Grupo Modelo suit could derail $20.1bn deal

 

Source: Beverage Daily

By Ben Bouckley

27-Mar-2013

 

ABInBev says it will ‘vigorously defend’ itself against a new consumer class action seeking to prevent its full $20.1bn buyout of Mexican brewer Grupo Modelo, but admits the suit could halt the deal.

 

An earlier January 31 action filed in Washington D.C by the US Department of Justice to halt the deal has been delayed until April 9. Reports suggest the two sides are nearing an agreement.

 

But in its annual report filed with the US Security and Exchange Commission (SEC) the world’s biggest brewer Anheuser-Busch InBev revealed that a new private complaint was filed on March 22 in the US District court,

Northern District of California, against AB InBev and Grupo Modelo.

 

BeverageDaily.com has seen a copy of the complaint, whereby nine disgruntled consumers bring a class action on behalf of all US beer consumers that seeks to stop AB InBev acquiring the Grupo Modelo shares it does not already own.

 

Edstrom et al. argue that the $20.1bn deal, inked on June 28 2012, would end aggressive competition that had led to lower US beer prices and innovation, enhance AB’s market power and “facilitate coordinated pricing between AB InBev and the next largest brewer, MillerCoors”.

 

New action could ‘enjoin or delay’ buyout

AB InBev said in its Monday SEC filing: “Even if we, Grupo Modelo, Constellation and Crown Imports resolve the litigation with the DOJ, the court in this private action could enjoin the parties from completing the combination with Grupo Modelo, or could further delay it. We intend to defend against it vigorously.” AB InBev said.

 

The action claims that the proposed deal violates Section 7 of the Clayton Antitrust Act, since it “may, and most probably will, substantially lessen competition, and/or tend to create a monopoly in the production, distribution and sale of beer in the United States”.

 

As the world’s most profitable beer market, the US was dominated by two firms (AB InBev and MillerCoors) accounting for circa. 80% of sales, the claim states, adding that any merger could damage consumers via higher

prices, lower product quality, less innovation, destruction of choice.

 

The suit claims that the US beer market was “substantially more” than simply ‘highly concentrated’ under the Herfindahl Hersch Index (HHI) where 1800 points earns this appellation. The index grades market concentration by

adding up squared market share percentages of each market competitor.

 

An additional 100 points caused antitrust enforcers great concern, the plaintiffs add, stating that the post-transaction US beer market HHI would be 2800, “plainly a market ripe for probable if not collusion and a galloping tendency towards monopoly”.

 

For the sake of (pricing) ‘momentum’.

 

Edstrom et al. said that AB and Miller Coors found it more profitable to follow each other’s prices – typically initiated by AB in the expectation Miller would follow – than to cut prices in order to win share, but that Modelo had provided a competitive brake on both firms.

 

Modelo had narrowed the price gap with AB’s premium domestic brands such as Bud and Bud Light under its post-2008 ‘Momentum Plan’, the suit claims, and thus put pressure on AB InBev and MillerCoors to lower prices to dissuade consumers from ‘trading up’ to Modelo brands.

 

AB InBev’s further move, subject to approval of its Modelo purchase, to sell 50% of the latter’s interest in Crown Imports to joint owner Constellation Brands, is also targeted by the suit.

 

The plaintiffs state this would create a “façade of competition” between AB and its importer (Constellation) but that Constellation would acquire no Modelo brands or brewing facilities under this arrangement, and would depend on AB for its Modelo-branded beer supply.

 

However, this seems to overlook a further deal agreed by AB InBev and Constellation in mid-February seeking to head off US Department of Justice legal action aimed at halting the deal upon this basis.

 

 

——

Beer fight brewing over taxes

 

Source: The Hill

By Kevin Bogardus

03/27/13

 

There’s a tax fight brewing between large beer companies and their smaller craft brethren on Capitol Hill.

 

The Beer Institute, which includes member companies such as Anheuser-Busch and MillerCoors, plans to “actively oppose” the Small Brewer Reinvestment and Expanding Workforce, or Small BREW Act, this year.

 

The Brewers Association – essentially the trade group for craft brewers – is lobbying for the bill, which would reduce the federal excise tax on beer from small producers.

 

Chris Thorne, vice president of communications for the Beer Institute, says his trade group has dropped its neutral stance on the legislation because it divides the industry.

 

“We are going to actively oppose this legislation,” Thorne said. “If the entire industry is unified and has one ask, we stand a far better chance of succeeding than when we have multiple bills to push.”

 

Thorne said his group opposes any tax increase on beer, but that all of the industry should unite behind one bill: the Brewer’s Employment and Excise Relief (BEER) Act, which is expected to be introduced later this year and would reduce excise taxes on beer produced by brewers large and small.

 

Bob Pease, chief operating officer for the Brewers Association, said the Beer Institute has been uncomfortable with his group’s preferred legislation in the past.

 

“That’s disappointing but not altogether unexpected,” Pease said. “They expressed discomfort in the past about various components in the bill so that’s why it doesn’t come as a total shock.”

 

If enacted, the Small BREW Act would cut the federal excise tax on beer from $7 a barrel to $3.50, which is placed on a small brewer’s first 60,000 barrels produced per year. After that initial 60,000 barrels, small brewers must pay $18 per barrel, which would be lowered to $16 under the bill.

 

In addition, the bill would expand the tax code definition for a small brewer. Right now, brewers who produce up to 2 million barrels of beer per year are considered small brewers. The legislation would raise the limit to 6 million barrels per year.

 

The Beer Institute said the bill amounts to a “giveaway” for a handful of profitable brewers.

 

“We can’t support a policy that amounts to a giveaway to a handful of brewers that each are worth more than a billion dollars,” Thorne said. “If this bill was a pathway to market, why would you need this for a business that sells millions of cases a year?”

 

The Brewers Association has microbreweries among its roughly 1,750 members, including well-known national brands like Brooklyn Brewery and The Boston Beer Co., which makes Samuel Adams. Those two companies are also part of the Beer Institute, reflecting the overlapping membership lists of the two groups.

 

Small brewers argue that adjusting the excise tax would lead to another $60 million per year for a quintessentially American industry.

 

“Our industry is an example of small, main-street American businesses creating jobs – manufacturing jobs in the United States, making an American product, putting Americans to work for the product that is by and large consumed in the United States,” Pease said.

 

The Small BREW Act was introduced last month by Rep. Jim Gerlach (R-Pa.) and already has 61 co-sponsors from both parties, according to congressional records.

 

The BEER Act would create a bigger tax cut for the industry at large. Thorne said past versions of the bill would have reduced the beer excise tax from $18 per barrel to $9 for large brewers while also cutting the tax for small brewers from $7 per barrel to $3.50.

 

The legislation has yet to be introduced this Congress, but Thorne said his group would be working to have the bill offered again this year.

 

“Our intent is to seed introduction of the BEER Act at some point,” Thorne said. “We expect that members of Congress that have historically been there for us in the past will be there for us again.”

 

Pease said he saw that bill as “a defensive measure” meant to “forestall an excise tax increase.”

 

“We certainly do not oppose it. We would favor that bill, but we support our bill, and we are actively working for passage of our legislation,” Pease said.

 

The industry feuding comes as lawmakers are working on comprehensive tax reform. Trade associations for beer and other alcoholic beverages are worried that Capitol Hill will hike the excise tax to raise revenue to help ease budget problems.

 

“There’s not a big appetite on Capitol Hill to give a tax break to a wildly successful industry that already gets a tax break. There’s a risk because they are drawing attention to themselves when Congress is looking for revenue-raisers,” Thorne said about the small brewers.

 

Others expressed concerns about the Small BREW Act as well.

 

“While we oppose any increase in taxes on beer because they are regressive and are paid primarily by working men and women, we have concerns about any legislation that would seek a tax cut in the current fiscal environment,” said Mike Johnson, chief lobbyist for the National Beer Wholesalers Association, in a statement.

 

Lobbyists for spirits-makers said it’s the wrong time to push Congress on the excise tax.

 

“Given the budgetary circumstances, we didn’t think it was worth going to the Hill to talk about rolling back federal alcohol excise taxes,” said Mark Gorman, senior vice president for government relations for the Distilled Spirits Council of the United States.

 

But others are seeing opportunity. Pease said he met with House Ways and Means Committee Chairman Dave Camp (R-Mich.) last year at a small Michigan brewery and they talked comprehensive tax reform.

 

“He mentioned that comprehensive tax reform was certainly his priority. He thought that could be one way for our issue to get addressed,” Pease said. “What we have been told for the last two or three years is that we need a vehicle to attach our provision to. If that’s comprehensive tax reform, that would be great.”

 

Pease said he has met with other panel members and the trade group plans to submit comments to the committee on tax reform.

 

Small brewers are also actively lobbying during their annual craft brewer conference, which is in Washington this year. On Tuesday, Pease helped lead what he called his trade group’s biggest-ever lobby day on Capitol Hill – 250 brewery owners from 45 states were scheduled to meet with staff in 90 Senate offices and about 250 House offices.

 

Pease said brewers would be working to build relationships with their representatives, perhaps even strong enough to have a beer back home together.

 

“Even more importantly, get the lawmaker to go to the brewery,” Pease said. “When they get into a brewery, they get the manufacturing angle. You can see it.”

 

 

——

Anheuser Busch-Inbev brews up De Master’s bid

 

Source: This Is Money

By Geoff Foster

27 March 2013

 

Thirsty punters woke up and smelt the coffee as rumours of a multi-billion euro drinks deal did the rounds. Shares of De Master Blenders, the Amsterdam-based international coffee and tea company, which was spun out of US food conglomerate Sara Lee last summer, frothed ?0.03 higher to ?9.55 amid speculation that Anheuser Busch-Inbev, the world’s largest brewer, wants to add the Douwe Egberts-to-Saseo branded company to its burgeoning portfolio.

 

Dealers heard that Inbev has approached two of De Master Blenders major shareholders to name a price for their stakes, prior to launching a full-scale takeover bid in the region of ?12.50 a share.

 

Joh.A.Benckiser, an investment firm run by former Reckitt Benckiser boss Burt Becht, owns 15 per cent, while investment group JAB, majority owner of US cosmetics group Coty Inc, holds 12.9 per cent. Both coincidentally also have interests in Inbev.

 

Since its flotation last June, De Master Blenders has had a difficult time. In August, its shares plummeted after the coffee maker said it would restate earnings because of accounting irregularities in Brazil. After fourth-quarter results in October, analysts downgraded forecasts as the figures failed to match expectations.

 

Michiel Herkemij, a former Heineken executive, brought in to run the newly standalone company, quit in December over a clash of opinion after only 12 months in charge.

 

Jan Bennink, interim chief executive, is now trying to revive its fortunes. As an independent coffee company De Master Blenders wants to take on its bigger rivals such as Nestle and Kraft, by expanding into new countries. With giant Inbev lurking, it probably will not get the chance.

 

 

——

Cognac exports stay strong despite slower volumes growth – figures (Excerpt)

 

Source: Just-Drinks

By Andy Morton

27 March 2013

 

Cognac export volumes slowed last year but raced ahead in value, new figures have shown.

 

In 2012, Cognac exports increased by 3.2% in volume to a record 168m bottles, and by 16.7% in value, according to Bureau National Interprofessionnel du Cognac (BNIC) data released this week. “These figures reflect the strength of the Cognac category particularly in the export markets of Europe, Asia and North America,” the trade body said.

 

 

——

‘Le binge-drinking’ takes hold of France as alcohol-related hospital admissions rise by 30%

 

Source: Daily Mail

By Ian Sparks

Mar 27th

 

    Short term admissions for binge drinking symptoms up 80%

    Latest figures show drinking killed 49,000 people in France in 2009

    40% of the deaths were people under the age of 65

    Many blame the UK for the rise of binge drinking among young French

 

France has seen a sharp rise in the number of people being hospitalised for alcohol-related conditions.

 

Around 400,000 people out of a population of 65 million are admitted to French hospitals every year for conditions like comas, hepatitis and liver cirrhosis, a rise of 30 per cent compared with three years ago. 

 

In addition, short term hospital admissions for binge drinking symptoms are up by a staggering 80per cent.

 

Despite being one of the world’s key producers of wine and spirits, the French are often perceived to have a healthy attitude towards alcohol with most drinking done at mealtimes and rarely to excess.

 

According to the French Society for Alcohol abuse hospital admissions for drink related diseases , particularly amongst young people, are now twice as numerous as those for common complains like diabetes or cardio vascular disease.
‘We are seeing more and more young people arriving at accident and emergency clinics in drunken states who remain in hospital for one or two days to be sobered up.

 

We are also seeing young patients whose health is already seriously affected due to pancreas or liver diseases like cirrhosis which previously did not show  until much later in life’, said Dr Damien Labarrière, a specialist based in Orleans in a radio interview.

 

Professor Michel Reynaud, addiction specialist in the Paris area, co author of the report, added that young French women are turning more and more to binge drinking in order to show off to their friends.

 

‘It is particularly worrying that large numbers of young girls see getting drunk as a form of glory’ he said.

 

‘This is a health emergency. We have no longer government money to cope with this problem. When one considers the rising scale of it it is hard to see how it can be stopped’, he said.

 

Professor Reynaud blamed the ‘banalisation ‘of alcohol for the Gallic rise of binge-drinking and legalisation of Internet advertising for drink.

 

‘Social networks have democratised consumption of alcohol and proclaimed drunkeness as a status symbol’, he said.

 

‘Le Binge-drinking’ has now become a familiar expression in the French language and many blame the UK for its rise in France.

 

Hortense Dormoy a journalist for women’s magazine Marie-Claire described binge-drinking as consuming alcohol ‘over a short period of time to reach a drunken state and complete loss of control’ and ‘drinking six glasses or more for men and five or more for women’.

 

She claimed the phenomenon ‘originated from England where young people take advantage of “happy hours” to drink as much as possible in as short a time’.

 

The magazine revealed that 2.3 per cent of French  17-year-olds had recourse to bingeing at least ten times a month.

 

Paradoxically  alcohol consumption over the past 50 years has actually declined by 50 per cent  in the country which is the world’s number one tourist destination and produces champagne, cognac and some of the finest wines on the planet, alcohol in  France still remains a prolific serial killer due to ‘le binge-drinking’.

 

Figures for 2009 revealed this month  that drinking killed 49,000 people in France of whom 40 per cent were under the age of 65.

 

36,500 of the French victims were men with alcohol accounting for 13 per cent of total male deaths and 12,500 were women representing 5 per cent of female deaths.

 

The 13 per cent of total male deaths  due to alcohol abuse compares with 5 per cent in Switzerland , 3 per cent in Italy and 1 per cent in Denmark.

 

The 5per cent French female deaths due to drinking  are  also higher than Italy (2per cent) and Denmark (1per cent).

 

‘Alcohol is a major cause of premature death being responsible for 22 per cent of deaths in the 15 to 34 age group, 18 per cent between 35 and 64 and 7 per cent of people over 65. Deaths due alcohol are caused mainly by cancer and heart disease ‘, statistics  revealed.

 

In France scientific tests on rats revealed that young rodents fed large doses of alcohol became twice as likely to become dependent on drink when they reached maturity.

 

Leading researcher Mickael Naassila revealed that ‘We noticed that the animals literally lost control of their alcohol intake and were able to consume between 5 and 6 grammes perkilo of their weight, which is a huge amount’.

 

 

——

Bompas & Parr create drinkable ‘whisky tornado’

 

Source: The Spirits Business

by Becky Paskin

27th March, 2013

 

A group of artists and scientists have created the world’s first “whisky tornado” – a swirling mist of whisky vapour that can be breathed in through a straw.

 

The art installation, which has been showcased at King’s College London’s Festival of Food and Ideas last week, uses industrial-size humidifiers to generate a vapour of Talisker single malt, which swirls within a giant bell jar.

 

Scotch drinkers looking for a new way to enjoy their favourite tipple are invited to dip a straw into the mist and breathe the whisky in, resulting in a new taste experience and hit of alcohol directly to the lungs.

 

Rather than simply a new way to consume a dram, the artwork is designed as a metaphor for the “impact the Scottish weather has on flavour formation in whisky”.

 

“Many things go into creating the flavours of a whisky,” said Sam Bompas. “We thought it would be interesting to look at the meteorological elements. Sunlight, temperature, rainfall and humidity all contributed to the distinctive aromatics.”

 

Developed in conjunction with scientists at King’s College, the tornado  is now being transferred to Leeds Gallery.

 

Dr Mark Freeman, senior lecturer in economic and social history at the University of Glasgow, added: “Whisky is shaped by the landscape in which it is distilled and matured, and part of Scotland’s distinctiveness in this respect is its weather.

 

“The weather affects the type of barley that can be grown, the amount and quality of water for making whisky, and the environment in which whisky barrels spend their many years of maturation. Some highland whiskies are made largely from snow-melt water, and some say that this has a pronounced effect.

 

“Sometimes the water can be in danger of drying up, and some distilleries have even employed water diviners to help them to find new sources of pure water for making their whisky.

 

“Some whisky writers argue that whiskies in the casks take flavour from the atmosphere around them, and it is easy to believe this when watching the windswept seas battering the coastlines of the islands on which many single malts are distilled and matured. Battling the elements is part of the romance of the whisky-making story.”

 

 

——

Brazil Government Officially Recognizes Bourbon and Tennessee Whiskey  As “Distinctive Products” of the United States

 

Source: DISCUS

Mar 27th

 

The Distilled Spirits Council said today Brazil has officially recognized Bourbon and Tennessee Whiskey as distinctive products of the United States.  This action by Brazil follows the U.S. announcement of the recognition of Cachaça as a distinctive product of Brazil last month. 

 

“Today’s announcement by the Brazilian government ensures that only Bourbon and Tennessee Whiskey produced in the U.S. according to official U.S. standards may be sold in Brazil,” said Distilled Spirits Council of the United States President Peter H. Cressy. “Our whiskey exports to Brazil are growing rapidly, and this will ensure the integrity of our products in this expanding market.”

 

U.S. Bourbon and Tennessee Whiskey exports to Brazil shot up 519% from 2001 to 2011, and increased a further 17.9% to reach nearly $3.8 million in 2012.  The new recognition is expected to help U.S. Bourbon and Tennessee Whiskey exports continue to expand in this dynamic and growing market.

 

The United States and Brazil reached an agreement to recognize one another’s distinctive spirits in April 2012, and today’s announcement is the culmination of that agreement.

 

“We wish to thank the Office of the United States Trade Representative and the Tax and Trade Bureau for their tireless efforts to secure Brazil’s recognition of America’s distinctive spirits — Bourbon and Tennessee Whiskey,” Cressy concluded.

 

 

——

Concha y Toro Falls in Chile as Profit Trails Estimates

 

Source: Bloomberg

By Eduardo Thomson

Mar 27, 2013

 

Vina Concha y Toro SA, Chile’s largest wine exporter, fell to its lowest level in two months after reporting profits that trailed analyst estimates.

 

Concha y Toro declined 0.2 percent to 963.4 pesos at 1:51 p.m. in Santiago and earlier slid to 936.8 pesos, its lowest intraday price since Jan. 30. The Ipsa (IPSA) benchmark index retreated 0.4 percent.

 

The company reported annual profit of 30 billion pesos ($64 million), below an average estimate of 35.6 billion pesos, according to a Bloomberg survey of four analysts. It said earnings before interest, tax, depreciation and amortization, or Ebitda, reached 53.4 billion pesos, versus an estimate of 58.8 billion pesos.

 

Concha y Toro’s margins contracted in the period as the peso strengthened versus the Brazilian real and the euro and as bulk grape prices rose, Banchile Inversiones said in an e-mailed note today.

 

“Administrative costs also rose, as the company opened new commercial offices,” Banchile said. “We can’t rule out downward pressure on the stock.”

 

 

——

Fine whine? Billionaire cries foul in vintage sale

 

Source: AP

Mar 27th

 

As experts can testify, super sleuths in the wine business must study the cork, glass, sediment, wrapping, labels and how full a bottle of wine is to ascertain whether it’s the real deal. And as two uber-wealthy wine collectors can tell you as they square off in federal court over some questionable bottles, even that sometimes is not enough.

 

Testimony began Wednesday in a civil trial six years after Florida energy maven William Koch, a yachtsman and collector, sued onetime-billionaire California businessman Eric Greenberg in U.S. District Court in Manhattan over $320,000 he spent in 2005 on two dozen bottles of wine that turned out to be duds.

 

The trial threatens to pop the cork on the dirty secrets of the wine auction world, which like the art market has been stung in recent years by a proliferation of fakes.

 

At the opening, there was plenty of talk of how difficult it is to be sure a bottle is real and how good a fake can be. It’s heartbreaking for a true collector to learn that wine is inauthentic because it’s more than just a bottle and a flavor, Koch’s attorney John Hueston said.

 

“Koch will say these are links to history,” he said, adding that great wines transport people to another era. “It’s not just the juice in the package.”

 

Greenberg – a former billionaire who built two Internet consulting companies before the 2000 collapse of those stocks reportedly reduced his net worth by as much as 90 percent – asserted his innocence as he took the stand as one of the trial’s first witnesses.

 

“I wouldn’t sell a fake wine,” he said. “I’ve never intentionally sold fake wine in my life.”

 

Koch, the brother of famous industrialists and conservative political supporters David and Charles Koch, is seeking compensation for the $320,000, along with unspecified damages. The trial may yet end in a settlement.

 

Greenberg years ago capitalized on the growing interest in the sale of alcohol for investment purposes, becoming one of the world’s top owners of vintage wine, with a collection of more than 70,000 bottles.

 

According to court documents, Greenberg earned about $9 million when he sold 17,000 bottles of wine at the sale where Koch made his purchases, reducing his collection by about a quarter.

 

Koch was duped by an auction brochure that promised buyers the “greatest wines of all time” and “extremely rare” bottles dating to the early 1800s, Hueston said.

 

Koch paid as much as $30,000 for some bottles, including several purported to be from the 1800s. Those included a $22,542 bottle of Chateau Lafite Rothschild from 1805, a $29,172 bottle of Chateau Lafite Rothschild from 1811 and a $33,150 magnum of Chateau Lafite Rothschild from 1870. The oldest bottles are no longer part of the court case.

 

Unscrupulous wine dealers have been known to put fine-vintage labels on cheaper bottles and try to pass them off as the real thing. Greenberg is not alleged to have done that himself, but Koch’s lawyers say he should have known something was amiss.

 

An investigation revealed that Greenberg had been warned by experts that bottles in his collection were not authentic and decided to push them on unwitting buyers at his auction rather than toss them, Hueston said.

 

Greenberg is not to blame for any bad bottles of wine Koch bought, said Arthur Shartsis, one of the defendant’s lawyers.

 

A catalog for the sale warned buyers that the wine was being sold “as is” without any promises as to its authenticity.

 

Further, Greenberg tried to remove bogus bottles himself before the sale and he exposed the corks on bottles so buyers could examine them prior to the sale, Shartsis said. He also used an established auction house with a good reputation that inspected the bottles to aid the pursuit of authenticity, the lawyer said.

 

On the stand, Greenberg explained how he quickly refunded money to a buyer once who claimed he had sold fake wine.

 

“I stood behind my wine as I always do and gave them a refund,” Greenberg said. “I have nothing to hide.”

 

Greenberg maintains through his lawyers that the ultimate test is to taste the wine itself, a luxury that also can devalue bottles that can cost thousands of dollars.

 

“The only way to know … is to taste what’s inside the bottle,” Shartsis said.

 

Shartsis was not permitted to tell jurors that Koch is a billionaire, but he dropped some hints.

 

He noted that Koch spent $3.7 million buying 2,600 bottles of wine from Greenberg and paid a man more than $75,000 daily for two days to make his bids for him at the auction. He criticized Koch for failing to hire people to inspect the bottles he intended to purchase before the auction.

 

The dangers of trading in rare wines was already apparent to Koch, who learned in 2005 that four bottles of French wine he believed had been once owned by Thomas Jefferson were fake.

 

Since then, he’s been on a bit of a crusade against wine fakery, having sued wine companies, auction houses and Greenberg, saying in court papers that counterfeiters for years “have duped wine collectors into paying millions of dollars for near worthless bottles of wine.”

 

 

——

Climate change rewrites world wine list

 

Source: Channel News Asia

28 March 2013

 

It’s circa 2050 and shoppers are stopping off at Ikea to buy fine wine made in Sweden.

 

A Nordic fantasy? Not according to climate experts who say the Earth’s warming phase is already driving a wave of change through the world of wine.

 

As new frontiers for grape growing open up, the viability of some traditional production areas is under threat from scorching temperatures and prolonged droughts.

 

And in between the two extremes, some long-established styles are being transformed. Some whites once renowned for being light and crisp are getting fatter and more floral while medium-bodied reds are morphing into heavyweight bruisers.

 

“Some people are alarmists, I prefer to be an optimist,” says Fernando Zamora, oenology researcher and professor at Rovira i Virgili University in Tarragona, Spain.

 

“I have no doubt that we will still have vineyards in traditional regions, but we have to think of new strategies. And we will also have new zones for vineyards. That’s for sure.

 

“Already in Germany they are making fine red wine where it used to be very difficult. And in Denmark, now they’ve started making wine.”

 

Climatologists working with the wine industry around the planet predict temperatures will rise by one to two degrees Celsius from now until 2050, a trend that is expected to be accompanied by an increase in the incidence of extreme weather events.

 

“Can any region continue to grow the exact same varieties and make the exact same style of wines? If what we know today is correct, that is highly unlikely,” said Gregory Jones, oenology professor at Southern Oregon University.

 

New vineyard projects in northern Europe will be risky given the increased unpredictability of the weather and the potential for one cold snap to destroy an entire crop.

 

So it may be that the biggest change will come in the range of wines produced in areas that, until recently, have struggled to ripen some varieties.

 

Tasmania, parts of New Zealand, southern Chile, Ontario and other parts of Canada, England and the Mosel and Rhine areas in Germany are among the regions that could benefit.

 

“You can look anywhere in the world where there are relatively cool climate regions that today are much more suitable than they were 30, 40, 50 years ago, because the climates were too cold then. People couldn’t ripen fruit,” added Jones.

 

Like Zamora, Jones forms part of an international committee for the agriculture and forestry climate change programme (ACCAF) run by France’s research institute INRA.

 

They are tasked with formulating strategies for helping everything from the plant to legislators cope with climate change.

 

While wine grapes might not be necessary to feed the Earth’s population, the grape vine is more sensitive to climate than plants like rice, corn and soyabeans, which could provide valuable insight for essential future food supplies.

 

Vitis vinifera, the plant that gives us fine wine grape varieties, is a prolific wanderer that has a fine-tuned sense of the right place to take root and grow perfect grapes.

 

Water stress, temperature change, inopportune downpours and frosts are just a few of the variables that have profound effects on the balance of sugar and acidity, the ripeness of tannins, and the palette of aromas.

 

“In Alsace (northeastern France), climate change is already a problem, because it’s changing the aromatic profile, the balance of sugar and acidity. If the consumers accept the changes, it’s not a problem. If they don’t, it is,” said Jean-Marc Touzard, a co-coordinator of ACCAF.

 

Producers of Beaujolais meanwhile see warmer weather improving the quality of their product in a region where winemakers have sometimes had to add sugar to bolster alcohol levels in their quaffable reds.

 

“In 2003 (when France suffered a severe summer heatwave), our wines tasted more like Cote du Rhone,” said Jean Bourjade of the growers group Inter Beaujolais.

 

“Beaujolais has seen that they can make better wine in a warmer climate, so there is a benefit. But is there a limit to that benefit? Does it go on forever?” said Jones.

 

“For ten years, they’ll be happy. Then they’ll have problems,” predicted Touzard.

 

The Languedoc region around the Mediterranean already faces these problems. Hotter, dryer weather is making the area’s already-robust wines more full-bodied and more alcoholic, at the expense, some say, of finesse.

 

But all is far from lost.

 

“In the Languedoc, the growers have already begun adapting — planting at a higher altitude and on different soils,” said Touzard.

 

Another solution is to change the grape varieties legally allowed under Europe’s strict appellation laws, sourcing the indigenous varieties from hot weather climes like Sicily, Greece, Spain and Portugal.

 

Researchers also say that once these grapes have been genetically decoded, they could be used for plant breeding.

 

Portugal alone has between 100 to 150 indigenous varieties that we know virtually nothing about, according to Jones.

 

“Some of the more southern, really warm places that have genetic material could be a real hotbed for dealing with heat tolerance in the future,” said Jones.

 

 

——

Record numbers from around the world visited ProWein 2013

 

Source: Harpers

Written by Elinor Zuke  

27 March 2013

 

More international visitors than ever before visited the largest ever ProWein this week. The three day fair hosted 4,783 exhibitors from 48 countries and more than 44,000 trade visitors, up from 40,667 last year.

 

Organisers said the proportion of international visitors to the show rose by 6% to account for 40%, with particularly strong increases in visitor numbers from the UK, Scandinavia, Benelux, France, Spain and Italy.

 

Retailers, wholesalers and those in specialist trades accounted for almost half of the visitors, followed by members of the restaurant and hotel trade. 70% of visitors held management positions.

 

“In combination with the large number of decision-makers coming to Düsseldorf this development confirms ProWein’s leading position as an international meeting point and central orders platform for the world’s wine and spirits sector,” said Hans Werner Reinhard, deputy managing director at show organiser Messe Düsseldorf.

 

Over 300 events including lectures and food and wine matchings were held at the fair, while almost 400 exhibitors presented specialities from the spirits sector.

 

Some 96% of visitors polled on the final day said they had achieved their goals and were satisfied or very satisfied with their visit to ProWein.

 

Messe Düsseldorf said its first ProWine China show, which will be held in Shanghai from 13 to 15 November, has generated a lot of interest with the majority of exhibition space already sold. The 20th ProWein will be held 23 to 25 March 2014.

 

 

——

ProWein seals reputation as show to do business

 

Source: Drinks International

By Hamish Smith

27 March, 2013

 

As ProWein closes the doors on its 2013 show, exhibitors championed the event as the “place to do business”, ahead of its rivals, Vinexpo, LIWF and Vinitaly.

 

Roque Cunha Ferreira, export manager of JP Ramos, said the show was “the biggest event of the year” and said its March-timing and central European location offered “a great opportunity to present the latest vintages”.

 

Joel Masoliver of Beveland Distillers said 70% of his appointments were with established partners and 30% new business, but that there was a good opportunity to meet new visitors, especially from Eastern Europe.

 

Markus Eser, premium wine manager at Accolade Wines said he had seen many English retailers at the show and that big companies are eschewing LIWF, despite London being a traditional wine-buying maket.

 

Bruno Castro-Almeida, product manager of the Vinho Verde Commision described the show as “the most international” and “very well organised” yet “less expensive to exhibit than Vinexpo” and “three-to-four times less expensive than LIWF”. “It’s a fair price for this fair,” he said.

 

General manager and chief winemaker of Cono Sur, Adolfo Hurtado, said the show was important for his company but its one drawback was the number of Asian visitors, compared to Vinexpo.

 

 

——

Domaine Jacques Selosse burgled

 

Source: the drinks business

by Rupert Millar

27th March, 2013

 

Champagne house Jacques Selosse was burgled last week with thieves making off with thousands of bottles.

 

In what has been described as a “professional” job, a team of burglars broke into the cellars of Anselme Selosse’s winery in the early hours of Friday morning last week and made off with 3,700 bottles.

 

According to local paper l’Union, the gang even used alcoholic sprays to eliminate any traces of DNA.

 

A total of eight pallets, seven of which were wrapped and destined for the US and Japan were stolen.

 

Speaking to the drinks business, Selosse said that the cuvées stolen were: the brut “Initial”; the single vineyard blanc de blancs “Substance”; another blanc de blancs “Version Originale”; the rosé and the demi-sec “Exquise”.

 

He stressed however that the theft had not made a dent in his stocks, “in business terms its nothing,” he said.

 

He added too that the wines bound for the US had the necessary back label and those for the US and Japan bore the name of the intended importer to both countries.

 

Selling the bottles on will therefore prove difficult.

 

Of greater concern is the fact that the thieves also made off with 16,000 labels and 12,000 neck collars.

 

“We suspect that they wish to make fakes,” he added.

 

However, here too the thieves may find passing off fake Champagne a problem.

 

“We are the only producer that uses black glass,” said Selosse. “If anyone sees our labels used on the usual green bottles then they are fakes.”

 

Selosse is not the only high profile winery to be targeted by thieves recently. Château Palmer was recently broken into and had 300 bottles stolen.

 

However, the thieves were petty local criminals and were soon arrested and the wine recovered.

 

 

——

ALLIANCE BEVERAGE OF ALABAMA AND MISSISSIPPI ANNOUNCES JEFFREY ANDERSON APPOINTED SENIOR VICE PRESIDENT SALES

 

Source: Glazer’s

Mar 27th

 

Alliance Beverage of Mississippi and Alliance Beverage of Alabama, today announce that Jeffrey Anderson has been promoted to Senior Vice President Sales, effective April 1, 2013. Anderson will be responsible for the performance of the Alliance Sales organization in both states.  Anderson will report to Scott Rawlings, Glazer’s Regional President for Alabama, Arkansas, Mississippi, Oklahoma and Tennessee.  

 

Alliance Beverage is the joint venture between Glazer’s, who owns 50%, and The Charmer Sunbelt Group and General Wholesale in the two states.

 

Jeffrey Anderson started his career with Glazer’s in 1986 and accepted a position with Strauss Distributors in 1987.  Anderson advanced through the sales organization with Strauss and, when Glazer’s acquired Strauss in 1995, he moved into a District Manager role.  He has held the positions of Director of Sales, General Sales Manager and Branch Manager in Louisiana.  Anderson attended Louisiana State University at Shreveport. 

 

Scott Rawlings said, “We are excited that Jeff is assuming a leadership role in Mississippi and Alabama.  We have growth opportunities in both of these states and look forward to Jeff driving our sales initiatives.” 

 

 

——

Supervalu planning major job cuts

 

Source: RT

By Marianne Wilson

March 26, 2013

 

Supervalu announced plans to eliminate about 1,100 positions nationwide, or about 3% of its national workforce. The reductions include both current positions and open jobs that will not be filled.

 

The news comes less than a week after Supervalu completed the sale of five of its grocery banners, including Albertson’s and Shaws/Star Markets. The company said the sale of the five chains means that the remaining business will need “significantly fewer” corporate and store support roles and functions.

 

“The decision to reduce our workforce, although difficult because of the impacts to our people, is the necessary next step in the rebuilding of our business,” said Sam Duncan, Supervalu’s president and chief executive officer. “This move is an important part of our strategy to be more focused and efficient in our operations, including how we staff and support our three business units going forward.”

 

 

——

West Virginia: Legislation leaves old liquor laws in the past

 

Source: Daily Mail

by Jared Hunt

Mar 27th

 

One of West Virginia’s so-called “blue laws” would come off the books under a bill advancing in the House of Delegates.

 

The House Judiciary Committee on Monday advanced a bill that would repeal the state’s longstanding prohibition on Sunday retail liquor sales. The measure also would roll back the time retailers can begin selling alcohol on Sunday from the current 1 p.m. to 10 a.m.

 

That start time would apply to retailers, restaurants, bars and private clubs.

 

Bridget Lambert, president of the West Virginia Retailers Association, said several business groups in the state were pushing for the change.

 

“It was actually a bill that we worked with several different groups to pursue,” Lambert said.

 

She said her group has been working with the West Virginia Hospitality and Travel Association – which represents food service, lodging and convention and visitors bureaus – as well as several small, in-state wineries and distilleries to lobby for the change.

 

The bill was originally intended to simply roll back the Sunday sales start time.

 

Lambert said the local groups in particular were interested in moving back the 1 p.m. Sunday sales limit to accommodate golf course and brunch events whose organizers wished to offer alcohol.

 

But when the bill came before the House Judiciary Committee Monday, lawmakers decided to expand it to allow for Sunday liquor sales.

 

While lawmakers preserved the state’s ban on liquor sales on Christmas, the change repeals a Sunday sales ban that has been on the books since the state’s founding.

 

Lawmakers have discussed allowing Sunday liquor sales for many years, but it never has received serious attention.

 

While the bill still has a long way to go before passage, Lambert hopes lawmakers will continue to push for the change.

 

“We just view it as an antiquated law,” she said.

 

West Virginia is one of just 12 states to ban Sunday retail liquor sales.

 

It’s a part of the state’s so-called “blue laws,” which limit alcohol purchases. Until 2011, the state was one of a handful that still barred retail liquor sales on election days.

 

Most of these laws are relics of a bygone era.

 

 

——

Louisiana: Help Save Tujaugue’s!

 

Source: Tales of the Cocktail

Mar 27th

 

Dear Mr. Latter,
Let me start by saying how sorry I am about the recent loss of your brother, Steve. In the time I got to know him through my work with Tales of the Cocktail and the New Orleans Cocktail Tour two things always stood out– his dry wit and his love for New Orleans. He clearly had a deep respect for the history and culture of our great city with the way he ran Tujague’s for more than 30 years.
Now, I don’t claim to be a real estate expert so I can’t speak to getting the most out of your investment. But as the founder of New Orleans Culinary and Cocktail Preservation Society, I do know about our city’s rich history of dining and drinks. Tujaque’s is the place that continued the legacy of Madame Begue’s legendary brunches and where the Grasshopper cocktail was invented. It’s the home of brisket and horseradish and the beautiful long standup bar that takes you back in time when you order a drink. It breaks my heart to picture the doorway of this landmark littered with Drunk 1 and Drunk 2 t-shirts.
This city is in the midst of a renaissance– one that’s met with both excitement and fear. Every day brings progress that New Orleans hasn’t seen in decades. But the great fear, one that’s generations old, is that with progress comes a cleansing of the culture that makes this place not a just a great place to visit but, more importantly, a great place to live. Culture doesn’t just disappear in a day. Here one day, gone tomorrow. It erodes slowly as people put the bottom line ahead of everything else. But it doesn’t have to be that way. With what you choose to do with the Tujague’s building, you can stand for the peaceful coexistence between progress and culture.
I know business is business. But sometimes selling to the highest bidder comes with costs that can’t be counted in dollars and cents. Like losing yet another of our beloved restaurants and a piece of the living history that makes New Orleans so special. If you sell the Tujague’s building to the wrong person, the rest of us will be the ones paying for it. So please, Mr. Latter, respect our history, respect our culture and respect the legacy your brother worked his life to build.
Sincerely,
Ann Tuennerman, Founder of Tales of the Cocktail

 

 

——

Maine: Committee members want new draft of liquor bill

 

Source: Portland Press Herald

By Jessica Hall

Mar 27th

 

Throw out competing proposals for awarding the next state liquor contract and draft a new bill that draws on the best features of both measures.

 

That’s the latest thinking of members of the Legislature’s Veterans and Legal Affairs Committee who agreed Wednesday that a so-called committee bill would be the best way to resolve the partisan dispute.

 

“That’s what I’m leaning towards,” Sen. John Tuttle, D-Sanford, co-chairman of the committee, said at the conclusion of a work session.

 

Rep. Robert Saucier, D-Presque Isle, echoed the sentiment, saying “I’m really, really ready now. I’m willing to do one bill.”

 

The committee will meet again Friday.

 

Both of the competing bills tie the state liquor contract to repayment of debt to the state’s 39 hospitals, which are owed $484 million in overdue Medicaid reimbursements. The state owes about one-third of the amount but must pay its share before the federal government will release matching funds.

 

Several lawmakers on Wednesday appeared to support aspects of Gov. Paul LePage’s proposal, L.D. 239. It would award a 10-year contract for managing the state’s liquor operations, leaving the state to use annual profits to repay a revenue bond that would be used to retire the hospital debt.

 

The competing bill, L.D. 644, proposed by Senate Majority Leader Seth Goodall, D-Richmond, would collect an upfront payment of $200 million from the chosen vendor, allowing the state to repay hospitals without borrowing money. Under the proposal, the state also would share a portion of annual profits that exceed a reasonable return for the vendor.

 

Sen. Garrett Mason, R-Lisbon Falls, said he believed the state could borrow money through a revenue bond at a lower rate than a vendor would charge to finance the upfront $200 million payment.

 

“There is a cost to borrowing money. That cost is going to be factored into an upfront payment. My money is on the fact that it will be more expensive than what the state can borrow at,” Mason said.

 

Rep. Louis Luchini, D-Ellsworth, co-chairman of the committee, said “a lot of the hesitance of the upfront payment is the cost of money.”

 

Goodall said there were many similarities in the competing bills, such as revenue-sharing with the state, having one vendor operate the liquor business and giving incentives for the vendor to boost the business.

 

“It really appears this is boiling down to one central issue — the risk,” Goodall said. “Getting the money upfront is worth more to you than getting it over time.”

 

He said the LePage proposal forces the state to take a risk in getting money over 10 years, while his measure would collect the money upfront.

 

Despite continuing disagreement over the best approach for collecting liquor revenues, Goodall sounded upbeat about Wednesday’s session. “We are much closer to resolving this than we were a few weeks ago,” he told the committee.

3-29-2013 News

GS Research – Americas: Beverages: Nielsen Notables: Softer trends in beverages as we lap warm 1Q12

 

Source: Goldman Sachs

Mar 28th

 

LRB category slightly softer in March with flat volume

For the four weeks ending March 16th, 2013, LRB sales in AOC (excludes c-store) declined -1.4%, on flat volume and -1.5% price/mix decline. KO sales declined -1.8%, a sequential and YoY deceleration, driven by -1.6% volume and -0.2% price/mix. PEP sales were down -2.0% this period, in-line with last period but with softer volume (-5.9% vs. -4.4%) and greater price/mix (+2.6% vs. +4.1%). DPS sales declined -3.2%, slightly below last period (-2.8%) and year-ago (+0.6%). Beverage trends remain broadly tepid as we lap more favorable 1Q12 weather.

 

CSD category decelerates to -3.4% on weaker volume

CSD sales declined -3.4% driven by -5.2% volume and +1.9% price/mix, a sequential and year-over-year deceleration and below 52-wk trends. Smoothing out calendar noise, it appears that CSD category has seen volume decline remain steady at around -4%, which is somewhat discouraging given more modest pricing. KO sales/volume/price was weaker at -2.5%/-2.9%/+0.5. DPS CSD trends roughly mirrored KO, with sales and volume down -2.4%/-2.9% respectively. Both are below recent trends. PEP CSD sales were disappointing, down -4.0% on -7.4% volume, despite easy volume compares.

 

Energy category slower +0.5%; MNST leads and Red Bull flat

Energy category sales grew only +0.5% against a tough +16.4% year-ago comp. MNST sales grew +2.9% on +4.4% volume against particularly tough year-ago comps (sales/volume up +26.7%/+29.4%). MNST gained 80bp of share this period as the category remains softer than recent trends.

 

Beer industry slower at +0.8%; St. Patty timing adds some noise

Beer industry sales grew +0.8% this period, on -0.7% volume and +1.6% price/mix, below last period’s rate and 52-wk trends. SAM beer sales grew only +0.5% on -0.1% volume decline. Weakness in the seasonal offerings (down -17.9%) was the key driver of softer sales. TAP sales were slightly below trend, with sales/volume down -1.4%/-2.1%. We note that this period ends March 16th, while St. Patrick’s Day, a large beer-drinking occasion, is March 17th. STZ led the beer category with +4.7% sales growth, driven by +5.4% volume change. STZ wine sales were also strong, up +8.4% (on +9.2% volume and -0.7% price/mix)

 

 

——

US All-Channel Scanner Data: Sequential Slowdown

 

Source: Morgan Stanley

Mar 28th

 

Nielsen data covers all outlets ex. gas/convenience (includes FDM channels and enhanced coverage of dollar/club/military/Wal-Mart).

 

Conclusion: The key takeaways from US scanner data for the 3/16 period were: (1) branded CSD volume decelerated sequentially; (2) KO gained share in CSDs; (3) beer trends decelerated sequentially, and share losses to wine/spirits persist; and (4) STZ’s wine market share increased on lower pricing.

 

Key Trends:

 

CSDs – Sales Growth Still Tepid: KO’s sales (all categories) decreased -1.6% y-o-y (+0.2% 2-yr avg.) vs. +1.1% in the prior 12-weeks, PEP was +0.4% (flat 2-yr avg.) vs. +1.0% in the prior 12 weeks, and DPS was -1.9% (-1.0% 2-yr avg.) vs. -0.7% in the prior 12 weeks. CSD category volume was muted at -5.2% (vs. -2.7% YoY comp), with KO -2.9% (vs. +0.6% comp), PEP -7.4% (vs. -8.0% comp), and DPS -2.8% (vs. +0.1% comp). CSD price/mix increased +1.9%, driven by strong +3.7% PEP pricing, vs. +1.6% in the prior 12-weeks. Elsewhere, bottled water, isotonics, energy drinks, and RTD teas all decelerated vs. the previous twelve-week trend (see summary table).

 

Beer – Sequential Deceleration: Beer category sales increased +1.0% y-o-y (2-yr. avg. of +2.5%), down from +2.8% in the prior 12-weeks (2-yr. avg of +3.6%), on price/mix up +2.6% and volumes down -1.6%. ABI and TAP’s dollar share decreased 90 and 45 bps, respectively, while Crown gained 30 bps.

 

Wine – STZ Share Gains on Lower Price/Mix. Wine category sales increased +7.8% (+7.0% on a 2-yr avg. basis), above +5.0% in the prior 12-weeks (+5.3% on a 2-yr avg. basis). STZ gained ~10 bps of $ share on +8.4% sales growth, partially owed to lower price/mix of -0.7% vs. +3.6% for the category.

 

 

——

China’s anti-corruption drive is really hitting Scottish Whisky

 

Xi Jinping makes problems for luxury goods.

 

Source: New Statesman

By Emily Neil

28 March 2013

 

A more unusual, but strong, market force is at work in China: an anti-corruption drive led by the new president, Xi Jinping. The giving of expensive luxury items to government officials has been a standard part of bureaucratic and business life in China, and has contributed in part to the dramatic growth in revenues and profits for multinational luxury goods companies operating in the country. Mr Xi however has swept in with a determination to stamp out showy bureaucracy and waste, and high end restaurants have suffered as official banquets have been cancelled and luxury local liquor makers have seen demand drop significantly.

 

All this will send a shiver through Scotch whisky makers, as well as other luxury goods companies in the UK and Europe. The most recent evidence comes from Pernod Ricard, owner of the Chivas Regal brand, which has seen sales of its Scotch whisky fall by a double digit rate over the critical Chinese New Year period.

 

Canadean’s local team are also reporting a slowdown in the sales value of red wine, as China’s wine drinkers switch to mid-range brands and the extraordinary growth in demand for top level labels such as Lafite, is finally checked.

 

Is this a short term blip or a sign of things to come? This partly depends on the strength of will of Mr Xi, and how long his commitment to the anti-corruption campaign lasts. For now, the luxury goods makers who have enjoyed this source of almost unfettered demand, will need to look to the rising income of the average Chinese consumer to drive growth – thus aligning with the government’s aim of middle class enrichment as the next phase of China’s economic growth.

 

 

——

Consortium Withdraws $280M Bid For Vodka Maker CEDC

 

Source: Law360

By Matt Chiappardi

March 28, 2013

 

A consortium led by one of the largest private investment firms in Russia and the makers of Stolichnaya vodka on Thursday withdrew its proposal to woo Polish vodka producer Central European Distribution Corp. into a prepackaged restructuring deal, according to the CEDC.

 

The move follows an exchange of letters between the boards of directors for CEDC and A1, a trading company of the Russian Alfa Group, earlier this week, in which the struggling Polish company rebuffed the deal, which would have offered $280 million in cash, according to filings with the U.S. Securities and Exchange Commission.

 

That deal, floated by a consortium of A1, SPI Group and Mark Kaufman of Monaco, was proposed as an alternative to another offer on the table from Russian spirits importer Roust Inc., owned by CEDC Chairman Roustam Tariko.

 

Now, the Polish company says it wants to move ahead with the Roust bargain.

 

“CEDC notes the withdrawal of the consortium proposal and confirms that it has not received any further alternative proposals from third parties.” the company said in a statement released late Thursday. “CEDC reaffirms its support of the (Roust) proposal.”

 

The Roust plan, proposed in February, offers the Polish vodka maker $173 million in cash.

 

Roust’s owner already owns $102 million in CEDC bonds scheduled to mature this year. CEDC missed $258 million in payments on those bonds March 15, according to SEC filings.

 

CEDC says the Roust plan already has the support of the committee of holders of the 2013 bonds and the committee of bondholders of notes scheduled to mature in 2016.

 

A vote is scheduled for April 4.

 

“CEDC continues to believe that a successful restructuring will improve its financial strength and flexibility and enable it to focus on maximizing the value of its strong brands and market position,” the company said in a statement. “The restructuring is expected to have no effect on CEDC’s operations in Poland, Russia, Hungary or Ukraine, all of which will continue doing business as usual.”

 

On Tuesday, CEDC balked at the consortium’s package in a letter to the board of directors of A1, saying it was surprised the offer did not address 2013 bondholders, according to SEC filings.

 

The plan did offer $230 million of the total $280 million cash to the 2016 bondholders, as well as $630 million in new notes, according to SEC filings.

 

Members of the consortium could not be reached Thursday for comment.

 

CEDC is incorporated in the United States in Delaware and has an office in Mount Laurel, N.J.

 

It produces Royal, Parliament and Absowent brand vodkas, but has been facing troubles since 2011.

 

In March of that year, CEDC announced that results for fiscal year 2010 fell significantly below management projections. That downturn was attributed to the revelation that the company’s important Polish vodka brands had suffered a $131 million impairment from its newly launched Zubrowka Biala line, according to a lawsuit filed against the company by a shareholder in December.

 

The suit, brought in Delaware Chancery Court, demanded access to CEDC’s books by shareholder Joseph Z. Khakshour, who alleged the company had been mismanaged.

 

It claimed that CEDC did not appropriately pay Russian excise taxes, which wound up shuttering the main production plant in Russia for two weeks.

 

That closing not only led to a drop in supply, but also forced the company to offer significant rebates to customers, the suit alleged.

 

CEDC since had announced the resignation of its chief executive and financial officers while an audit committee’s accounting investigation, completed in October, revealed that net sales for 2010 and 2011 were overstated by $57.4 million and accounts receivable were inflated by $100.7 million, according to the suit.

 

 

——

Jinro world’s top spirit, Emperador now 2nd

 

Source: Drinks International

By Hamish Smith

28 March, 2013

 

Hite-Jinro’s soju brand, Jinro, remains the world’s best selling spirit after growing sales 6% to 65.3 9-litre cases last year, according to DI’s soon-to-be-published The Millionaires’ Club 2013.

 

After announcing itself as the world’s biggest brandy brand in last year’s list, the Philippines’ Emperador has jumped from fourth to second place in the overall ranking, following growth of 54%.

 

The brandy climbed from sales of 20.1m cases in 2011 to 31m cases in 2012.

 

Diageo’s Smirnoff drops to third place despite 4% year-on-year growth to 25.8m cases.

 

The word’s fourth largest spirit is the soju Lotte Liquor, which grew 6% to 25.4m cases and in fifth place, usurping Bacardi, is the Phillipines-based gin Ginebra San Miguel which sold an estimated 23m cases.

 

The Millionaires’ Club magazine – the data from which was supplied by spirits research agency Intellima – will launch alongside the May issue of Drinks International and will be available to download on Drinksint.com in May.

 

 

——

China’s Tsingtao 2012 net profit up 1.2 pct, lags estimates

 

Source: Reuters

Wed, Mar 27

 

Tsingtao Brewery Co Ltd , China’s second-biggest brewer by volume, on Wednesday said its 2012 net profit rose 1.2 percent in its slowest growth since 1999, as higher production costs offset a rise in beer sales.

 

Tsingtao, in which Japan’s Asahi Breweries Ltd holds a stake of about 19 percent, said net profit rose to a record 1.76 billion yuan in the year ended December, up from 1.74 billion yuan profit in 2011.

 

The result lagged an estimate of 1.8 billion yuan, according to Thomson Reuters I/B/E/S.

 

Revenues increased 11.3 percent to 25.78 billion yuan from 23.16 billion yuan in 2011.

 

A slowdown in China’s economy and cold and wet weather had hit the beer industry production, while rising raw material and labour costs further squeezed margins, analysts said.

 

The Chinese brewer posted fourth-quarter profit of 80 million yuan in the three months ended December, compared with 73.8 million yuan profit in the year earlier period, Tsingtao said. That lags a forecast of 120 million yuan.

 

Sales growth was hampered by rising costs of labour, packaging and raw materials including barley, analysts said.

 

Tsingtao’s Hong Kong-listed shares have risen 5 percent so far this year, outpacing a 0.8 percent fall in the benchmark Hang Seng Index.

 

 

——

Idaho: House scuttles bill to restrict beer brewer ownership

 

Source: Idaho Reporter

by Austin Hill    

March 28, 2013

 

The Idaho House on Thursday scuttled a bill that would have prohibited beer brewers from having an ownership or financial interest in a beer dealer or wholesaler’s business. The action came after the House State Affairs Committee agreed to advance the bill to the House floor for amendments.

 

“Above all, please keep in mind at all times we are talking about alcohol policy,” noted Jeremy Pisca, of the Risch Pisca Law Firm, as he spoke before the committee about Senate Bill 1118. “The opponents to this legislation are two multinational, the two biggest multinational, brewing companies in the world. They are no longer American brewers, they are multinational corporations.”

 

Senate Bill 1118 sought to forbid a “brewer, directly or indirectly, or through an affiliate, subsidiary, officer, director, agent or employee to have any financial interest in any licensed wholesaler’s or dealer’s business, or to own or control any real property upon which a licensed dealer or wholesaler conducts business.”

 

Arguing in favor of the bill, which passed unanimously in the Senate, Pisca described those who support it, saying “you have the Idaho Beer and Wine Distributors Association. These are business people that live in Idaho, work in Idaho, who are the fabric of the community in Idaho. We are in every single corner of the state of Idaho.”

 

Rep. Gayle Batt, R-Wilder, commented to Pisca: “You had made a comment that right now there are no brewery-owned retail branches in Idaho. But I’ve been told that in the history of the state, that actually Coors Miller brewing did at one time own a distributorship and the world didn’t end.”

 

Pisca responded, “We are not dealing with the same companies that we dealt with many years ago. Coors was an independent brewery, it did not have very many distributorships, Miller and Coors merged, and it is now a Canadian company. It was not part of Miller’s business plan to have brewery-owned branches, so they divested of those. That is an absolutely factual statement, Coors distributing did operate in the Boise area, probably 10 year ago before they divested. But again, to underscore, there are no brewery-owned branches today.”

 

Another lobbyist, Ken McClure, representing Anheuser-Busch, spoke in opposition to the legislation. “This is a solution searching for a problem,” he said. “This legislation takes away a right that we very seldom use, but when we need it it’s important, and we cannot willingly have this right taken away from us. So they have instructed me to speak to you in opposition to the legislation.”

 

“I actually don’t really drink beer, so I’m just here representing the free market,” testified Wayne Hoffman, executive director of the Idaho Freedom Foundation. “Regulations that prohibit the free market drive up the costs of products, which result in the creation of indirect taxes that are paid by your constituents. With regard to this particular bill, it is a restriction on business and it is not a new thing for this Legislature. As businesses evolve in the new economy, the Legislature is asked to step in and maintain the status quo. This is to the detriment of businesses and employees and consumers.”

 

Despite the overwhelming support of the bill in the Senate, the House State Affairs Committee voted to send the bill to the House amending order, where the full House can consider amendments. But once the measure landed in the House, the chamber agreed unanimously to send the measure back to the House State Affairs Committee, most likely killing it for the remainder of the session.

 

 

——

Pennsylvania: LCB poll – 45% of Pa. liquor buyers are ‘bootleggers’

 

Source: Philly.com

Melissa Daniels, PA INDEPENDENT

March 27, 2013

 

The Keystone State’s Prohibition-era liquor laws encourage some residents to buy alcohol from other states and bring it back to Pennsylvania.

 

It used to be called bootlegging, which refers to the illegal manufacture, sale or distribution of alcohol.  Yet Pennsylvania has a criminal statute that still prohibits the practice.

 

The past few weeks have featured rampant discussion on the pros and cons of the state’s alcoholic beverage control system as the state House passed House Bill 790, which would sell off the state system and create a private liquor business.

 

Peppering the discussion was talk of  “border bleed”- Pennsylvanians who drive to other states to buy alcohol.

 

Those who get caught are hit with fines of $10 per container of beer or malt beverage, and $25 for other types of alcohol. The goods are also confiscated.

 

But the likelihood of getting hit with these fines is slim. Major John Lutz, who runs the State Police Bureau of Liquor Control Enforcement, said enforcing the out-of-state-purchase laws is less of a priority than it was several years ago.

 

The main reason, Lutz said, is the bureau underwent staffing cuts and had to re-prioritize its details. Essentially, the bureau doesn’t enforce the law for individuals – Pennsylvanians-as-bootleggers are generally left alone.

 

“We’re not looking for people buying two bottles on the way to the shore,” he said.

 

If there is a crackdown, the bureau is more concerned with “a loaded pickup truck stacked with wine and spirits,” or a licensee who should be buying wholesale out of the state system.

 

But if the state system was sold and licensees could buy products from the private sector, that issue would no longer be a concern. HB 790 removes the criminal penalties for out-of-state purchases.

 

Lutz said the most obvious form of border bleed happens in Delaware, which has no sales tax.

 

“People are going down there to be lots of things,” he said. “I don’t think (border bleed) is being done for the purpose of selection, I think it’s being down for the pure economics of it, if people can save money.”

 

A 2011 online survey from the Pennsylvania Liquor Control Board examined where Pennsylvanians buy their booze.

 

While 55 percent of respondents exclusively bought alcohol in-state, 32 percent were “opportunistic buyers,” who might buy alcohol out-of-state, if convenient. An additional 8 percent were “destination buyers,” or people who make specific trips out-of-state to buy alcohol but also shop at state stores. The remaining 5 percent exclusively purchased alcohol out-of-state.

 

Privatization supporters often point to border bleed as evidence that consumers are dissatisfied with the state store system, and they argue a private system would recapture lost sales tax. The state levies a total 24 percent tax on alcohol, 18 percent from the Johnstown flood tax and a 6 percent sales tax.

 

During a meeting on the bill, House Appropriations Committee analyst Ritchie LaFaver said the state could see as much as $17 million from these taxes if the state system was fully divested.

 

“Assuming that those sales are going to be brought back into the commonwealth, you’re actually going to see an increase in sales taxes because there’s more sales,” he told lawmakers.

 

The Public Finance Management report from 2011 commissioned by the Corbett administration suggests bootlegging behavior would end with privatization. It says PLCB’s lost sales to other states could be anywhere from 10 percent to 30 percent of total sales.

“If the private system is able to recapture a portion of these sales it should improve system profitability and create jobs to replace some of those displaced by PLCB store closures,” reads the report.

 

Wendell Young IV, president of the United Food and Commercial Workers Local 1776 representing the state store employees, testified before lawmakers, saying the reasons Pennsylvanians cross the border won’t change after privatization.

 

“People drive to Delaware to shop for everything. Clothing, furniture, food and, yes, alcohol. Why? Because there are no state taxes. That will not change,” Young told lawmakers in 2011. “Some people might drive to Maryland, but that’s because Maryland has a very modest excise tax on liquor. That will not change.”

 

But if lawmakers eliminated the criminal statute one way or the other, these border-crossing Pennsylvanians wouldn’t be bootleggers. They would simply be consumers.

 

 

——

Oregon Billboard: Pot safer than alcohol

 

Source: KOIN 6

3/28

 

Hundreds of people in Oregon and Washington die each year from alcohol and related diseases. It’s hard to find out whether anyone has died from too much marijuana.

 

That’s the argument behind a billboard on Southwest 13th Avenue and Alder Street in downtown Portland.

 

The billboard shows a glass of beer, a glass of wine and a marijuana leaf. The text reads: “Beer. Wine. Safer. Don’t just drink. Think.”

 

The Marijuana Policy Project, a national group that works on changing state laws to legalize pot, paid thousands of dollars for the billboard. It’s designed to spark a conversation in Oregon about legalization.

 

“If you are in a situation where you can choose between alcohol and pot, society wants you to choose alcohol, even if it’s bad for you and makes you violent in some cases,”  said Roy Kaufman with the Marijuana Policy Project. “If we are going to encourage and promote the use of alcohol by adults, at a minimum we need to be making sure that adults are aware pot is demonstrably safer than alcohol. It is less harmful to the individual, the community, public costs and safety.”

 

The billboard is across the street from a treatment clinic that helps people with addictions with alcohol and drugs, including marijuana.

 

Opponents of legalizing pot say one reason alcohol might be considered more dangerous is that it’s more available and consumed more often. Some doctors disagree marijuana is a safer choice.

 

“I would have to say marijuana is not safe, alcohol is not safe. They all have significant health risks,” Dr. Kelli Westcott of the Portland Adventist Medical Center told KOIN 6 News. “I see dozens of patients come in each week severely ill from using alcohol and pot. Plenty of both.”

 

The billboard went up just before the Spring Beer & Wine Fest at the Oregon Convention Center begins Friday. The founder of the festival, Steve Woolard, supports the sign.

 

“We are a tourist industry and if it gets legalized and we can sell it as one of our fine products, all the better,” he said.

 

Oregon pot supporters tried but failed to get marijuana legalized in the November election, though Washington did legalize it. This billboard is part of a campaign to put another legalization measure on the ballot in 2016.

 

http://www.koinlocal6.com/news/local/story/Billboard-Pot-safer-than-alcohol/hL9JElm3t0uXR1c3sGdUjQ.cspx

 

 

——

Australia: Health groups warn of harm

 

Source: The West Australian

Cathy O’Leary Medical Editor

March 28, 2013

 

Health groups have warned that any relaxation of WA’s liquor laws, including allowing restaurants to serve drinks without a meal, would lead to more alcohol-fuelled harm.

 

Many have argued in submissions to a review of the Liquor Control Act that health concerns need to be considered above industry demands for wider availability of alcohol.

 

WA’s public health executive director Tarun Weeramanthri warned against allowing restaurant patrons to routinely drink without having a meal.

 

He said current restrictions helped stop people getting drunk because food slowed alcohol absorption and reduced the risk of intoxication.

 

During the State election campaign, the Liberal Party pledged to legislate to allow seated patrons to buy alcohol without a meal at restaurants that held fewer than 120 people.

 

But Dr Weeramanthri said current restrictions should still apply, with venues having to apply individually for a permit to serve alcohol without a meal.

 

He said alcohol-related conditions cost WA hospitals more than $100 million a year.

 

The National Drug Research Institute said in its submission that new liquor licences should have to be considered in the light of the number of existing outlets.

 

It also called for a rethink of the legal drinking age, arguing that while it would be unpalatable to some people, research showed that having a drinking age of 21 reduced road traffic injuries and deaths.

 

The Foundation for Alcohol Research and Education said in its submission that WA laws were outdated and failed to protect people from alcohol-related harm.

 

The foundation’s chief executive Michael Thorn also criticised what he said was the review’s narrow and selective focus.

 

“What’s required now is not tinkering around the edges but bold policy reforms that address price, availability and promotion based on the best evidence available,” he said.

 

His group called for the introduction of “saturation zones” in areas that had many liquor licences and a risk-based licensing fee structure based on the likelihood of a venue causing harm from alcohol.

 

Researcher Kyp Kypri from the University of Newcastle, who was in Perth this week, said many people felt laws that liberalised access to alcohol had swung too far in the way of industry.

 

“This review seems to be about creating more access rather than less, and allowing more smaller venues, not to replace the bigger ones but to be in addition to them,” Professor Kypri, a specialist in alcohol-related injury, said.

 

 

——

TTB Announcement: TTB Ruling 2013 – 1 Malt Beverages Sold Exclusively in Interstate Commerce

 

Source: TTB

3/28/2013

 

TTB Issues Ruling 2013 – 1 Malt Beverages Sold Exclusively in Intrastate Commerce

 

On March 27, 2013, TTB issued Ruling 2013-1 Malt Beverages Sold Exclusively in Intrastate Commerce TTB Ruling 2013-1 provides that the regulations implementing the Federal Alcohol Administration Act (FAA Act) do not require brewers to obtain a certificate of label approval in order to bottle or pack malt beverages that will not be shipped or delivered for sale or shipment into an other State.

 

The regulations do not require a brewer to obtain either a certificate of label approval or a certificate of exemption for a domestically bottled malt beverage that will be sold exclusively in the State in which it was bottled.

 

The ruling al so holds that regardless of whether a domestically bottled malt beverage will be sold in intrastate commerce, brewers must comply with all applicable marking, branding, and labeling requirements under regulations implementing the Internal Revenue Code of 1986 for all beer removed from the premises, and must comply with the health warning statement requirements imposed by the Alcoholic Beverage Labeling Act with regard to alcoholic beverages manufactured or bottled for sale or distribution in the United States.

 

 

——

Businessman accused of selling fake vintage wine lashes out at foe’s legal team

 

Source: NEW YORK DAILY NEWS

By Rich Schapiro

Thursday, March 28, 2013

 

The court battle over the sale of bogus Bordeaux turned bitter Thursday when the broad-shouldered businessman accused of peddling phony wine ripped into his foe’s legal team.

 

A combative Eric Greenberg attacked lawyers representing his rival, Florida energy magnate William Koch, on the second day of the Manhattan Federal Court trial.

 

“Your firm has been found by the courts to have falsified data and have destroyed data,” Greenberg blurted out while under questioning by Koch’s lawyer, John Hueston.

 

Hueston ignored the outburst, but at a break, he asked Judge Paul Oetken to “sanction” Greenberg “if it happens again.”

 

Greenberg, a dot-com millionaire from California, later needled Hueston over what he described as vague questioning.

 

“This reminds me of ‘My Cousin Vinny’ right now,” Greenberg said, referencing the hit 1992 film comedy.

 

Koch sued Greenberg over $320,000 worth of vintage wine he purchased at auction in 2004 and 2005.

 

Koch says that Greenberg put the rare wines on the chopping block even though some experts had declared them counterfeit.

 

 

——

Major port houses set to declare 2011

 

Source: Decanter

by Chris Mercer

Thursday 28 March 2013

Most major port houses are expected to declare the highly-anticipated 2011 vintage over the coming weeks, with Sogrape Vinhos the first to show its hand.

 

Sogrape has declared 2011 for Ferreira, Offley and Sandeman Ports. It has not declared a vintage since that of 2007 and its announcement, which comes several weeks early by historical standards, reflects strong optimism in the Douro for 2011.

 

’2011 has allowed us to create vintage wines with never-before-seen levels of colour, structure and complexity,’ said Luís Sottomayor, winemaker responsible for Ferreira, Offley and Sandeman.

 

The wines ‘have a greater potential for aging than any vintage we have ever seen’, he said.

 

Anticipation around the 2011 vintage has been building since almost the first days of harvest.

 

Symington Family Estates, owner of Cockburn’s, Graham’s, Warre’s and Dow’s among others, have yet to declare 2011, but were impressed enough to bring still-fermenting samples to a port tasting in October of the same year.

 

Sarah Ahmed, of The Wine Detective blog, a Decanter contributor and Portugal expert, said she ‘absolutely’ expects more declarations for 2011.

 

‘This is a long-haul vintage with clout and finesse,’ she said of a Sogrape and Ramos Pinto 2011 preview tasting held in November last year. ‘The colour, aroma, tannin structure and freshness of the wines was flawless.’

 

’2011 is looking very exciting for a broad and outstanding-quality Port declaration,’ added Danny Cameron, MD of the annual Big Fortified Tasting. ‘So much so, that the BFT [London, April 24] will have a Port Wine Institute-sponsored, separate free-pour room for cask samples from this vintage.’

 

He said that he also expects 2011 to produce a ‘halo effect’ for other premium ports.

 

 

——

Liv-ex releases its latest 1855 Classification

 

Source: Decanter

by Adam Lechmere

Thursday 28 March 2013

Fine wine exchange Liv-ex has recalculated the 1855 Classification with its price-based ranking of the Bordeaux classed growths, an exercise it last did in 2011.

 

Under the new listing Chateau Latour and Chateau Lafite take the top two spots, a reversal from the 2011 listing, with an average case price of £7,060 and £6.760 respectively.

 

Chateau Margaux (£4,777), Mouton Rothschild (£4,465) and Haut Brion (£4.370) retain their third, fourth and fifth places.

 

La Mission Haut Brion holds its 2011 position of first growth, while Leoville Poyferre and Smith-Haut-Lafitte have climbed from third growth status to second growth.

 

Duhart Milon and Beychevelle have dropped from second to third growth.

 

Chateau Palmer (average price £1,787) remains at the top of the second growth table while Pontet Canet jumps from its 1855 rank of fifth growth to second growth, with an average case price of £987.

 

Just as the classification was calculated in 1855, Liv-ex bases its rankings wholly on price. Wines have to be from the left bank, and must be produced in quantities of more than 2000 cases.

 

Qualifying wines are assessed on average wholesale case prices for the vintages 2007-2011, and, as in 1855, split according to price band, with first growths requiring a price of £2,600 a case and above, second growths £700-£2,599, third growths £450-£699 and so on.

 

Liv-ex has also put the second wines, none of which existed in 1855, through the same system.

 

Thirteen would be included in the new classification. For the first time Petit Lion de las Cases, introduced by Leoville Las Cases in 2007, features – as a fourth growth.

 

Carruades de Lafite has dropped from first growth to a second, and Petit Mouton and Pavillon Rouge have switched places: in 2011 Pavillon had a higher average price.

 

Reserve de la Comtesse,the second wine of Pichon Comtesse, has fallen to the bottom of the table – in 2011 it was the 9th most expensive of the second wines, now it is the 13th.

 

When it comes to right bank wines, there are few surprises. Ausone, Cheval Blanc, Lafleur, Le Pin and Petrus are all first growths, while Angelus, Clos Fourtet, Conseillante, Eglise Clinet, Evangile, Figeac, Fleur Petrus, Pavie, Troplong Mondot and Vieux Chateau Certan are seconds.

 

Chateau Pavie is at the most expensive end of the spectrum with an average price of £2,002.

 

 

——

Sheila Stanziale Leaving DGUSA

 

Source: Beer Business Daily

Mar 28th

 

Diageo-Guinness USA (DGUSA) has just announced that president Sheila Stanziale is leaving the company to pursue other opportunities. Tom Looney, who is currently chief commercial officer at Diageo, will fill her role, effective April 1. 

 

Sheila oversaw the launch of a number of new products at DGUSA, including Parrot Bay and Smirnoff pouches, Guinness Black Lager, Smirnoff Screwdriver and most recently the market test of Guinness slim keg.

 

“I wish Sheila the best in her future endeavors,” said Larry Schwartz, president, Diageo North America. Guinness is a great global brand and I know Tom will be focused on helping us get the brand where we need it to be in the US.” Currently DGUSA is re-launching Smirnoff Ice with Peach Bellini.

 

In his role as chief commercial officer, Tom oversaw the pricing strategy, business analytics and commercial marketing functions across spirits, beer and wine for North America.  Previously, he held roles in sales, finance, strategy and customer marketing.

 

Jeff Ivey, currently svp of route to market strategy, will take Tom’s place as chief commercial officer. Jeff will continue to lead the route to market team as well as Diageo’s business analytics, pricing and commercial marketing activities in North America. Jeff has overseen the implementation of Diageo’s distributor realignment in North America over the past three years, and previously served as svp of commercial strategy.

 

 

——

Tesco explores options for Fresh & Easy exit

 

Tesco chief executive Philip Clarke will travel to the US after the Easter weekend to try to strike a deal to allow the supermarket group to exit its loss-making Fresh & Easy business.

 

Source: Daily Telegraph

By Graham Ruddick

28 Mar 2013

 

The retailer is understood to have held talks with rivals Aldi and Trader Joe’s about selling Fresh & Easy, however a break-up of the business is considered the most likely option.

 

Tesco, the world’s third-largest retailer, opened Fresh & Easy in 2007 but it has been dogged by the financial crisis and criticism over its offering.

 

Mr Clarke effectively put the business up for sale in December when he initiated a strategic review of Fresh & Easy and hired Greenhill to advise Tesco.

 

Mr Clarke has pledged to update the market on the progress of the strategic review on April 17, when the retailer posts its full-year results.

 

Tesco has invested more than £1bn into the California-based chain and faces a loss of hundreds of millions of pounds upon leaving the US business.

 

The options for Tesco include selling Fresh & Easy to a rival, selling off a stake in the business, or closing the business and disposing of the assets piecemeal. Tesco has already started to sell Fresh & Easy refrigeration units, and the retailer’s 220 East Coast stores and distribution centre could be attractive to property developers.

 

A spokesman for Tesco said: “We don’t comment on speculation. We’re carrying out a strategic review, as announced in December, and will update in April.”

 

Tesco’s arrival in the US was the most ambitious part of Sir Terry Leahy’s international expansion drive while chief executive. In his book, Management in 10 Words, Sir Terry said he would accept responsibility if Fresh & Easy failed.

 

“If they [the critics of Fresh & Easy] are proved right, it will have been my responsibility as CEO and a clear example that goals are easy to set, incredibly difficult to achieve and must carry a clear accountability,” he wrote.

 

Shares in Tesco have rise by almost 15pc since Mr Clarke announced the review of Fresh & Easy.

 

The shares have been supported by an improvement in Tesco’s UK performance, with the company reporting a 1.8pc increase in like-for-like sales over the vital Christmas trading period.

 

Analysts at Deutsche Bank have forecast that Tesco will report a fall in annual profits from £3.84bn to £3.43bn for the year to the end of February.

 

The shares rose 3.4 to 381.1p.

 

 

——

Is the New Supervalu a Stronger Supervalu?

 

Source: Retail Wire

By George Anderson

March 28, 2013

 

Now that Supervalu has completed the sale of Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market stores – and related Osco and Sav-on in-store pharmacies – to AB Acquisition, the question is: what comes next?

 

The company, which had shifted most of its focus to retail operations in recent years, has now returned to its roots in grocery wholesaling.

 

“As we move forward, Supervalu will continue as one of the largest wholesale grocery providers in America serving nearly 2,000 independent retailers in 43 states; we plan to continue growing our hard discount Save-A-Lot format that includes over 1,300 stores nationwide; and we will operate five, strong regional retail banners,” said Sam Duncan, Supervalu’s president and chief executive officer, in a statement last week. “I am pleased to be leading Supervalu during this time of change and strongly believe there is an exciting future ahead for us.”

 

In keeping with its focus on wholesale operations, Supervalu plans to form an advisory council of retailers it supplies to meet three or four times a year, reports Supermarket News.

 

Among the changes already taking place at Supervalu are job reductions. The company announced it would eliminate roughly 1,100 positions, affecting nearly all its offices and spreading across most departments. Store-level workers and employees at Save-A-Lot, Supervalu’s limited assortment grocery format, will not be affected.

 

“The decision to reduce our workforce, although difficult because of the impacts to our people, is the necessary next step in the rebuilding of our business,” Mr. Duncan said. “This move is an important part of our strategy to be more focused and efficient in our operations, including how we staff and support our three business units going forward.”

 

 

——

Texas: Craft beer bills pass out of the Senate

 

Source: Houston Chronicle

Thursday, March 28, 2013

 

The Texas Senate voted Monday to give craft brewers and brewpubs new opportunities to sell their beer.

 

“To see that happen was amazing,” said Scott Metzger, a San Antonio brewpub owner who worked with other brewers, legislators and wholesalers in negotiating a compromise.

 

Brock Wagner, owner of Houston’s Saint Arnold Brewing, called it a critical step toward passage of the state’s most significant beer-related legislation in 20 years.

 

“We still have a path to follow,” he said.

 

Metzger watched via his office computer at Freetail Brewing as the Senate voted 31-0 to approve two bills promoted by the Texas Craft Brewers Guild. An economic impact study Metzger prepared for the guild predicts the measures will spark even stronger growth for the state’s burgeoning craft beer industry.

 

Rick Donley, president of the Beer Alliance of Texas distributors group, which supported SB 515 and 518 from the beginning, called it “a good day for the craft-brewing industry,” including manufacturers and wholesalers.

 

As Metzger noted, SBs 516 and 517 were not taken up because the Senate can only vote on so many bills on a single day at this point in the session. They were subsequently passed unanimously on Wednesday. SB639, the Carona bill, was also approved after some modifications were made that settled most of the objections to it. All bills now await hearings in the House, and signs look good for passage. Put some beer in the fridge in anticipation of it finally happening.

 

 

——

New Jersey: Free N.J.’s market for liquor: Opinion

 

Source: Star-Ledger

By AJ Sabath

March 28, 2013

 

Lack of competition and egregious monopolies have plagued the liquor industry in New Jersey for far too long. In his March 10 column (“Competition’s not on the menu for restaurant group”), Paul Mulshine’s comparison to Cuba’s open liquor market is a sad, and unfortunately true, contrast to what is occurring here in New Jersey.

 

While Mulshine exposes the Restaurant Association, other special interest liquor lobbies – such as liquor retailers and alcohol beverage wholesalers – have also maintained a tight grip around the neck of the alcoholic beverage industry. This grip has suffocated other New Jersey businesses and has perpetuated inequality within the industry.

 

New Jersey’s liquor laws have not been updated since John Kennedy was in the White House – 1962. So while over the past 50 years man has walked on the moon, the Berlin Wall has fallen, the internet has invaded every facet of our lives and the United States has elected its first African-American president, New Jersey still has not modernized its outdated and monopolistic liquor laws.

 

Because monopolies are better suited for board games, New Jersey supermarket and convenience stores have formed a coalition, Retailers for Responsible Liquor Licensing, which advocates for greater consumer choice in the purchasing of beer, wine and spirits.

 

Current law prevents a company from owning more than two retail liquor licenses. RRLL is pushing legislation that would increase the number of retail liquor licenses to 10.

This change would occur gradually over 10 years. Under this legislation, the total number of state licenses would remain the same.

 

Special interest liquor lobbies have vehemently opposed change to New Jersey liquor laws for years, whining that such a move would open up the market and put small stores out of business. This is simply false, and the evidence is clear.

 

According to a 2011 study of New Jersey’s liquor marketplace, there are many independent liquor stores where food retailers also sell liquor. The study found that no independent liquor stores closed because of food retailers selling liquor. In Paramus, there are more than 25 independent liquor stores within a 3-mile radius of two supermarkets that also sell alcohol.

 

These special interest liquor lobbies have prevented other retail stores from owning more than two licenses by lobbying to protect the status quo. Yet while local Joe cannot own a third license, liquor giants have spent decades perfecting ways to play the system so that Joe Canals and Buy-Rites can hold dozens of licenses.

 

Even if supermarkets were able to obtain 10 licenses under this proposal, the retailers represented by the liquor lobbies would still have far more licenses throughout New Jersey – Joe Canal’s (15 stores), Bottle King (15 stores), Spirits Unlimited (25 stores) and Buy-Rite (47 stores).

 

These modern-day robber barons and tycoons hold dozens of licenses by working the system to their advantage. Meanwhile, consumers are inconvenienced and subjected to high prices due to the lack of competition.

 

Forty-six states offer customers freedom, choice and ease to buy a bottle of wine or a six-pack when stopping at the local market for eggs and a gallon of milk. But the New Jersey special interest liquor lobbies have fought to keep New Jersey out of that count because, as Mulshine stated, “as for the consumer, no one gives a heck about him.”

 

It’s time to “give a heck” about New Jersey consumers by providing good old-fashioned American competition. If Rockefeller and Carnegie were able to survive the dissolution of their monopolies, I think the liquor lobbies will do just fine in the American open market.

 

Special interest liquor lobbies need to wake up and smell the millennium. It’s time the Garden State moved into the 21st century and changed its liquor laws to reflect the times in which we live.

 

Liquor Industry News 3-26-13

March 26, 2013
www.franklinliquors.com

Franklin Liquors

 

Tuesday March 26th

Biodynamic FRUIT Day And ROOT Night.

Taste Early!

Anheuser-Busch Discloses India Foreign Corruption Probe by SEC

 

Source: Bloomberg

By Duane D. Stanford

Mar 25, 2013

 

Anheuser-Busch InBev NV (ABI)’s India joint venture is being investigated by the U.S. Securities and Exchange Commission for possible violations of the Foreign Corrupt Practices Act.

 

“We have been informed by the SEC that it is conducting an investigation into our affiliates in India, including our non- consolidated Indian joint venture, InBev Indian Int’l Private Ltd., and whether certain relationships of agents and employees were compliant with the FCPA,” the company said today in a regulatory filing. “We are investigating the conduct in question and cooperating with the SEC.”

 

John Nester, an SEC spokesman, declined to comment.

 

The investigation is at an early stage and no claims have been asserted by regulators, Marianne Amssoms, an AB InBev spokeswoman, said today in an e-mail. AB InBev’s market share in India is about 2 percent, she said. Operations are run by an Indian subsidiary, Crown Beers India, and a joint venture with RKJ Group for local production, in which AB InBev holds a minority stake.

 

“We have an extensive compliance program which includes robust policies, training, and an employee hotline,” Amssoms also wrote. “We do not tolerate any violations and are fully cooperating with this investigation.”

 

Beam Inc. (BEAM), the distiller of Jim Beam, Maker’s Mark and Canadian Club liquors, said in October that it was investigating its operations in India after a report of possible FCPA violations.

 

AB InBev rose 0.6 percent to 75.43 euros today in Brussels trading. The shares have climbed 15 percent this year.

 

 

——

SABMiller Sees No Profit-margin Wall in Latin America

 

Source: Dow Jones

By Simon Zekaria

Mar 25th

 

SABMiller PLC (SAB.LN) Monday said it isn’t hitting a profit-margin wall in Latin America, even after the world’s second-biggest brewer by sales narrowed forecasts for its largest and most lucrative region.

 

The maker of Miller Genuine Draft and Peroni Nastro Azzuro targets its earnings before interest, tax and amortization margin in Latin America to grow by between 0.6 to 0.8 of a percentage point in the three to five years from fiscal year 2013. It previously set a medium-term growth forecast of between 0.6 and 1 of a percentage point in 2011.

 

“We are not saying we are hitting a wall. [We are not being] more pessimistic, we are being more precise,” said Karl Lippert, president of the brewer’s operations in Latin America, who was speaking at an investor conference.

 

SABMiller also targets 4% to 6% beer volume growth in the medium term, with revenue per hectoliter on a constant currency basis seen growing 3% to 5%. In 2011 it saw volumes growing 5% to 8%, with revenue per hectoliter on the same basis rising 2% to 4%.

 

“We believe we can continue to deliver mid-single-digit volume growth and upper-single-digit revenue growth for the foreseeable future,” Mr. Lippert said ahead of the meeting.

 

Latin America has accounted for over 40% of the group’s earnings growth before interest, tax and amortization since the fiscal year 2007, due to the brewer’s dominant market position in northern countries like Colombia, Ecuador and Peru. It is also strong in central American nations Honduras, El Salvador and Panama. Still, it cedes ground to rivals in the region’s biggest economies of Brazil, Argentina and Mexico.

 

While the brewer is driving revenue on higher prices thanks to an emphasis on premium beers, it is also targeting demand at the economy end of the market with larger bottles of mainstream lager brands like Aguila and Poker.

 

SABMiller says beer is still an expensive and aspirational product for many consumers, with around 80% of the population in SABMiller’s Latin American markets considered low-income consumers. A key part of SABMiller’s strategy in the region is to attract these consumers away from low-quality local spirits, often produced and sold illegally, by providing affordable alternatives in its portfolio.

 

At the end of January, the London-listed company said global beer volumes for the third quarter rose 2% before acquisitions and disposals, representing a slowdown from the 3% growth rate recorded a year earlier and 4% posted in the first half. Beer-volume growth in Latin America recovered to 6%, up from 4% in the first-half, but down from 8% in the same period last year.

 

 

——

SABMiller seeks to convert illegal alcohol drinkers

 

Lager giant SABMiller is hoping to boost sales in its biggest market, Latin America, by targeting drinkers who buy illegal beer and spirits on the black market.

 

Source: Daily Telegraph

By Nathalie Thomas

25 Mar 2013

 

The world’s second biggest brewer has been trying to make beer more affordable for drinkers on low incomes in the region, through initiatives such as selling bigger bottles which can be shared among several people.

 

SAB, best known in Europe for brands such as Peroni and Grolsch, told investors yesterday that illegal alcohol accounts for more than a fifth of the market in the Latin American countries where it operates, offering opportunity for further significant growth in the region.

 

Problems around counterfeit and contraband alcohol are particularly acute in Colombia, Peru and Ecuador, where the black market can be controlled by powerful criminal gangs.

 

SAB is hoping that initiatives such as selling 750ml bottles of popular brands including Aguila and Poker, which work out cheaper when shared among several people, will help move more drinkers into the mainstream beer market.

 

It estimates that if all illegal alcohol buyers were converted into beer drinkers, the market would expand by 15m-19m hectolitres.

 

In Colombia, drinkers have to work for an average of 66 minutes to earn enough money to buy half a litre of beer, compared to just 12 minutes in Europe.

 

Although many Latin American economies are expanding at a rapid rate, many drinkers are still tempted to buy cheap bootleg alcohol.

 

“A lot of the illegal market is extremely inexpensive stuff,” said Randy Ransom, a senior vice president in SAB’s Latin American business. “Beer is aspirational, these people want to drink beer, they can’t afford it.”

 

SAB, which generated a third of its operating profits in Latin America last year, has been pursuing a similar strategy in Africa . The group expects to continue growing beer volumes at 4pc-6pc in Latin America, but admitted that it had come to a “stand still” in the fast-growth but highly competitive Brazilian market.

 

 

——

Device checks for poisonous alcohol

 

Source: Stuff NZ

LIZZIE WADE

25/03/2013

There’s nothing like suddenly going blind to spoil a good happy hour. Alcoholic beverages tainted with poisonous methanol are a scourge of the developing world, causing blindness and even death.

 

The dangerous drinks can come from botched batches of home-distilled liquor, but they often have a more sinister origin; criminal gangs will cut standard alcohols with methanol and sell the resulting concoctions to unassuming customers for inflated profits.

 

Because adding methanol doesn’t change the drink’s flavour, colour, or smell, there’s no easy way to tell if the brew you’re about to imbibe could poison you – until now.

 

Scientists in Colombia have developed a reusable wireless chip that can analyse a drink’s proportion of methanol to ethanol (the good kind of alcohol) and warn consumers of any danger, they have reported at the meeting here of the American Physical Society.

 

This first generation device costs about $5 and still requires an antenna, but within two years they hope to have a commercial product that sends easy-to-interpret results directly to a user’s cell phone. Until then, you might want to lay off the hooch.

 

 

——

Irish Town Legalizes Drinking and Driving

 

Law allows people to “to drive home from their nearest pub after having two or three drinks on little-used roads driving at very low speeds.”

 

Source: Daily Telegraph

By Patrick Hickey Jr.

Monday, Mar 25, 2013  

 

The Irish town of Kilgarvan passed a law this winter that allows members of its community to drink and drive.

 

Proposed by local pub owner and politician Danny Healy-Rae, the motion allows people who live in country areas to have a few beers before they drive home. Healy-Rae told The New York Times he thinks the measure will help preserve pub culture, lower the risk of suicide and attack isolation in the small town.

 

Amid governmental and local backlash, Healy-Rae says the law isn’t supposed to apply to everyone, mainly “elderly people who live in very remote places.”

 

“What is the alternative for them where no public or other transport is available? Staying at home lonely, staring at the four walls?” Healy-Rae told The Times.

 

Some local politicians are still shocked that the motion was passed, including one Kerry County council member who was absent when the measure passed because her child was sick, according to the Times.

 

 

——

Don’t stick taxpayers with huge drinking tab

 

Source: Wisconsin State Journal

Editorial

March 24, 2013

 

We knew it was bad.

 

But now researchers at the University of Wisconsin Population Health Institute specifically have quantified Wisconsin’s horrible hangover from excessive alcohol use in a single year:

 

. 1,529 premature deaths.

. 48,578 hospitalizations.

. 60,221 arrests.

. 5,721 motor vehicle crashes.

 

Throw in lost productivity at work, higher insurance rates, greater health care costs, substance abuse treatment, law enforcement, incarceration and other expenses, and the tab is staggering: $6.8 billion annually – with nearly $3 billion of that total being picked up by local, state and federal governments in Wisconsin.

 

There’s no easy or single answer to changing our state’s heavy drinking culture. But one simple act would help curb that cost and discourage destructive behavior.

 

Wisconsin should raise its tiny tax on beer, booze and wine.

 

Current state liquor taxes bring in a total of $69 million a year, which is less than 1 percent of the total economic cost of abusive drinking in Wisconsin, according to the UW study released this month by Health First Wisconsin.

 

Wisconsin’s beer tax is the second lowest in the nation and hasn’t been raised in more than four decades – not since man walked on the moon.

 

Wisconsin’s beer tax is less than a penny per pint, and the liquor tax here is less than $1 per liter.

 

Raising the tax would bring in more revenue to combat the causes and effects of alcohol abuse. It also would reduce access to alcohol for teenagers, just as higher taxes on cigarettes reduced teen smoking.

 

Wisconsin ranks worst in the nation for binge drinking, defined as four or more drinks in a row for a woman, and five or more drinks for a man. The intensity of Wisconsin’s drinking also ranks worst, with adult binge drinkers here averaging nine drinks in a row, the UW study suggests, based on surveys.

 

Such excessive drinking doesn’t just affect the people getting blitzed. It hurts others by leading to drunken driving and related injuries and death, property damage, domestic abuse and other violence.

 

That means even responsible drinkers will benefit from paying a higher tax on beer, wine and booze. They’ll get more protection from the damage caused by excessive drinkers who get behind the wheel or otherwise risk injury and higher cost to taxpayers.

 

And the higher tax could potentially save drinkers more than it costs if the revenue is dedicated to treatment and enforcement.

 

Most of the politicians at the state Capitol will say they oppose higher taxes, especially on beer. Yet these are the same politicians who hiked the state tax on cigarettes to $2.52 a pack, which is one of the highest rates in the nation.

 

The high state tax on cigarettes was justified to deter teens and recoup some of the public health costs. For the same reasons, Wisconsin should jack up its tiny beer tax.

 

 

——

Rebate Coupon Fraud

 

IN THE UNITED STATES DISTRICT COURT OR THE WESTERN DISTRICT OF WISCONSIN UNITED STATES OF AMERICA v. FAYE MITTELSTEADT, Defendant (Excerpt)

 

Source: Pacer

2012 DEC 13

 

THE UNITED STATES ATTORNEY CHARGES:

 

COUNT 1

 

Background

1. At all times material to this indictment:

 

a. Defendant FAYE MITTELSTEADT lived at N 847 Hilly Road, Merrill, Wisconsin.

 

b. Faye’s Flowers and More Garden Center operated as a floral and garden center at 361 N. Bradenburg Ave., Merrill, Wisconsin. The business was owned and operated by FAYE MITTELSTEADT and other family members. The business operated in the spring and summer months and was closed from the end of September through the winter months.

 

c. Certain liquor companies allowed consumers to obtain a refund on part of their purchase price by mailing a rebate form along with an original receipt showing the product purchased, price paid and date of purchase. In order to receive a refund check, the consumer was required to write down on the rebate form the 12 digit UPC bar code number located on the liquor bottle. The consumer was also required to list their name, date of birth, and address on the rebate form. The rebate forms listed certain rules for obtaining a refund. These rules included: (1) only one refund per household name and/or address per offer code; (2) only originals of the rebate form and the original cash register receipt would be accepted; (3) rebate checks would only be mailed to the name of the requestor and only if the requestor lived in the same state where the product was purchased. The rebate form also gave notice that any fraudulent submissions could result in federal prosecution under the mail fraud statute.

 

Scheme To Defraud

2. During the period beginning in or about January 2008, and continuing to on or about November 10, 2010, in the Western District of Wisconsin and elsewhere, the defendant, FAYE MITTELSTEADT, knowingly and with the intent to defraud, devised and participated in a scheme to defraud liquor companies and rebate processing centers, and to obtain money and property by means of false and fraudulent pretenses, representations and promises.

 

3. It was part of the scheme that the defendant submitted fake cash register receipts purportedly from Nick’s County Market to support non-existent liquor purchases which she claimed on liquor rebate forms that were mailed to rebate centers.

 

4. It was further part of the scheme that the defendant used the names and addresses of family members as nominees on some of the rebate forms to obtain refund checks in an effort to circumvent the rule prohibiting one rebate per household.

 

5. It was further part of the scheme that the defendant intentionally misspelled her name, and those of family members, on the fraudulently submitted rebate forms, in an effort to conceal and disguise the scheme.

 

6. It was further part of the scheme that the defendant deposited the fraudulently obtained refund checks into a Park City Credit Union joint savings account.

 

7. It was further part of the scheme that the defendant used a Royal cash register from her business — Faye’s Flowers and More Garden Center. This register did not work properly and the defendant moved it to her home. The defendant programmed the cash register to issue fake cash register receipts.

 

8. It was further part of the scheme that the defendant received over $13,867 in refund checks from these false submissions.

 

Mailing

9. On or about the dates listed below, in the Western District of Wisconsin, the defendant, FAYE MITTELSTEADT, for the purpose of executing this scheme, knowingly caused to be delivered by mail according to the directions thereon, the following item: 1 2-16-10 Rebate form in the name Merrill, Wisconsin Salvador’s Refund of Ron Mittelsteadt, with Dept. 10 cash register receipt from P.O. Box 6037 Nick’s County Market Douglas, AZ 85655-6037 showing purchase of liquor on 1-30-10

 

 

——

Stoli owner places bid for CEDC

 

Source: The Spirits Business

by Becky Paskin

26th March, 2013

 

SPI Group, along with a consortium of other investors, has made a bid for embattled Russian vodka group Central European Distribution Corp (CEDC).

 

The consortium, which also includes A1 – a division of Russia’s Alfa bank – and CEDC shareholder Mark Kaufman, made an offer for the Poland-based drinks group for US$280 million cash and $650m in new debt to restructure the group.

 

In exchange the consortium would receive 100% of reorganised equity in CEDC.

 

The bid comes after CEDC, which owns the Zubrowka, Green Mark, Absolwent and Parliament brands, defaulted on the exchange of $257bn worth of notes that were due to mature on 15 March.

 

“SPI has a fantastic ability to help those brands develop an export business,” said Val Mendeleev, CEO of SPI Group. “Our products are currently distributed in 167 markets worldwide and we can certainly add CEDC brands with high potential – particularly in the USA where we’ll have our own distribution company from 1 January”

 

CEDC currently holds just under 6% of the entire vodka category, but crippled by debt, its shares have floundered and hit 44 cents in March in New York, down 80% on the start of the year.

 

A letter to the CEDC board, written on behalf of the consortium: “The Consortium is confident that this new proposal constitutes the most attractive offer available for the Company and 2016 note holders and substantially improves our previous term sheet.

 

“This is true not only in immediate and evident monetary terms but also from the point of view of CEDC’s financial position and liquidity as well as future development.”

 

Roust Trading owner Roustam Tariko, already a major shareholder in CEDC and holder of around $102.6m of the 2013 notes, has also made a bid for the company. He offered to buy the notes he doesn’t own – approximately $155.3m – for $25m in cash and $30m in secured notes issued by Roust.

 

“CEDC continues to believe that a successful restructuring will improve its financial strength and flexibility, and enable it to focus on maximizing the value of its strong brands and market position,” the group stated. “The restructuring is expected to have no effect on CEDC’s operations in Poland, Russia, Hungary or Ukraine, all of which will continue doing business as usual.”

 

 

——

Why Beer Marketers Don’t Spend Much on Joe Six-Pack Anymore

 

Subpremium Suds Like Busch, Keystone Light Yield ‘Fast Nickels,’ But Advertising More-Expensive Brews Brings in “Slow Dimes’

 

Source: Ad Age

E.J. Schultz

March 25, 2013

 

With the beer market inundated by fruity flavored brews, pricey craft brands and Justin Timberlake ads, what ever happened to Joe Six-Pack?

 

He’s still there, chugging cheap beers after work, but brewers are dedicating fewer dollars to reach him as the “subpremium” segment declines. Instead, beer marketers, on a quest for fatter profit margins, are encouraging drinkers to trade up to pricier line extensions such as Bud Light Platinum or new concoctions like Redd’s Apple Ale.

 

Brewers are advertising economy brands less: Measured-media spending on the five largest low-end brews — Natural Light, Busch Light, Busch, Miller High Life and Keystone Light — fell to $6.9 million last year from $22.4 million in 2011, according to Kantar Media. That compares with the $32 million that Anheuser-Busch InBev spent last year launching Bud Light Platinum. Redd’s Apple Ale, introduced by MillerCoors this year, is getting a similarly hefty push, while the brewer last week launched the first national TV ads for Leinenkugel’s that spotlight its lemonade-flavored Summer Shandy offering, whose sales soared 90% last year, according to the brewer.

 

Add in the fact that the economic downturn hurt blue-collar drinkers the most and the result is that the sub-premium segment has been on a long-term slide, falling to 13.5% in 2012 from 15.7% of beer sales at supermarkets in 2009, according to SymphonyIRI. During the same period, craft-beer sales grew to 11.9% from 8.3%, while so-called superpremium beers, like Blue Moon and Shock Top, jumped to 10.7% from 9.1%.

 

How has beer been able to get consumers to trade up in a sluggish economy? “It comes down to emotional engagement,” Trevor Stirling, a beverages analyst at Sanford C. Bernstein, said. “Consumers are much more likely to “brand’ themselves by what they drink, be it a quirky, heavily hopped IPA, or a “sophisticated’ Stella; whereas Natty Light and Beast Light have, if anything, negative brand badging.”

 

New drinkers — think Joe College — are a lot more experimental than they used to be, sampling craft beers, cocktails and flavored malt beverages, rather than relying on the same old Keystone or Natural Light. Younger drinkers “grew up with so many different flavors that it’s not unusual for them to want to try different things,” said Dan Wandel, SymphonyIRI’s senior VP-beverage alcohol client insights.

 

Marketers have also spurred the shifts by hiking prices on subpremium brands. A-B InBev for the past few years has been closing price gaps between mainstream beers like Bud Light and its value brands in an effort to rebalance its portfolio — and the American beer market at large — toward premium beers. “Our strategic intent is to grow our share of the value segment, but without growing the segment itself,” said Edison Yu, VP-value brands at A-B InBev.

 

Still, big brewers cannot risk alienating economy drinkers for fear of losing them to cheap liquor or smaller beer brands like Pabst Brewing Co.’s Pabst and Old Milwaukee, whose locally targeted, quirky Will Ferrell ads have gotten a ton of free media attention.

 

There are signs that A-B InBev and MillerCoors this year are paying a bit more attention to their low-end brands, rolling out new packaging, campaigns and promotions. The goal is to protect share in a segment that still accounts for 18.4% of dollar sales, according to SymphonyIRI. Although declining, the segment is still larger than imports (14.4%) and crafts (5.4%).

 

“When you are a big mega-brewer like [A-B InBev] or MillerCoors, you are looking to be all things to all people,” said Benj Steinman, president of Beer Marketer’s Insights. “And if subpremiums are 20% of the business, you damn well want to play there.” Economy brands are more about “fast nickels” than a “slow dime,” said Ashley Selman, marketing director-economy brands at MillerCoors. “We make less per barrel, but we sell a lot of volume.”

 

As they narrow their focus, value brands are zeroing in on core drinkers. Keystone Light is replacing its “Keith Stone” ads that targeted younger drinkers with a partnership with tournament-fishing organization FLW. Its mostly in-store campaign targets Walmart-shopping, middle-age drinkers.

 

Busch is seeking to hook more anglers with a limited-time promo this spring in which 50,000 special “fishing-lure” cans will be randomly inserted into cases. Fans who upload pictures of the cans to the Busch Facebook page can win prizes, including a fishing trip with star angler Kevin VanDam.

 

Miller High Life is launching a campaign that plugs the beer’s role in “everyday celebrations,” teaming with Harley Davidson for in-store promotions that tout the fact that both brands are turning 110 years old this year.

 

Despite the competition from crafts, economy brands are not giving up on younger drinkers. A-B InBev’s Natural Light, which targets college-age consumers, is seeking to stand out with new “stubby” bottles, dubbed “Fatty Natty,” rolling out nationally. MillerCoors is targeting hipsters with its Hamm’s brand via grassroots marketing.

 

The brew is part of the marketer’s “classic” economy-brand lineup, which is meant to compete with crafts. “These guys are still challenged by the economy,” Ms. Selman said. “And they don’t have the money to buy crafts all night long.”

 

 

——

Wine fraud lawsuit is a test of bottle for billionaire Bill Koch

 

Court case due to begin in New York brings to light claims of widespread counterfeiting in the world of fine and rare wines

 

Source: The Guardian

Matt Williams in New York         

24 March 2013

 

It has aged for six years, but the uncorking of a wine-fraud lawsuit in a Manhattan court on Monday looks set to leave a rather nasty – and potentially costly – aftertaste.

 

Brought by one of America’s richest men, Bill Koch, against Eric Greenberg, a businessman who himself was once reportedly worth $1bn, the case will also put a spotlight on what some experts have claimed has been a scourge of the wine market for years: counterfeits. At the heart of the matter are a couple of dozen bottles that were purchased for up to $30,000 each, but may have turned out to be less than vintage. In the process of testimony that could last up to four weeks, the court is expected to hear of alleged underhand tactics used by some retailers and auction houses to offload suspect plonk.

 

It is a lawsuit with a heady body: nuclear scientists, dodgy wine labs and allegations of a culture of fraud all feature in the civil action brought by a man whose single-minded trail of those he deems responsible for flooding the wine market with fakes has seen him likened to Captain Ahab, the pursuer of Moby Dick.

 

Certainly the money pumped into the case is of whale-like proportions. Greenberg’s lawyers say Koch – who is worth an estimated $4bn – has ploughed “seven or eight million” dollars into the case. The total worth of the wines in question runs into hundreds of thousands of dollars. Koch, who is an avid collector of many things – including ‘wild west’ memorabilia and nautical instruments – launched his lawsuit in 2007, against both Greenberg and the New York auctioneers Zachys. It followed the discovery, during an inspection, that a number of bottles gathering dust in his impressive cellars were counterfeit.

 

Some of the suspect bottles are alleged to have come into the possession of Koch through a single-seller auction at Zachys in October 2005. That sale saw Greenberg offload nearly $10m worth of wine in one go. It is claimed that in an effort to offset his shrinking fortune, the founder of the internet companies Scient and Viant sold some $50m of his cellar’s contents.

 

The fine print in at the Zachys’ sale catalogue warned of buyer beware, stating “prospective bidders are invited to inspect the property before bidding”. Lawyers for Koch say that is an unreasonable demand on a would-be buyer. “It would have taken Koch’s expert, Michael Egan, at his current rate of 36 bottles per 15 hours, more than 7,000 hours, at a cost of nearly $1m, to inspect all 17,000 bottles,” the billionaire’s legal representatives argued in pretrial memorandum of law.

 

Moreover, they claim that the seller already knew that many of the bottles – some of which were allegedly bought from Royal Wine Merchants, a New York-based specialist in French Bordeaux and Burgundy – were fake. Greenberg was allegedly tipped off by international auctioneer Sotheby’s that some of the bottles were not authentic, when it declined to sell the collection. Sotheby’s suspicions were later confirmed by a team of nuclear scientists and chemists brought in by Greenberg to analyse the bottles and labels.

Allegations of fraud

 

But it was not just Greenberg’s cellars that had been infected by fakes. The civil action lifts a veil on just how rife allegations of fraud were in the fine wine market in the mid-2000s.

 

On learning that Royal was behind the sale to Greenberg, Sotheby’s head of wine, Serena Sutcliffe, allegedly claimed the wine collector that “the guys at Royal are crooks”, and that anything the company sold was likely to be fake, according to a filing by Koch’s lawyers. Greenberg subsequently threatened legal action against Royal Wine Merchants and around February 2004 he returned $362,941 worth of wine to the seller, according to court documents filed by Koch’s team. In a statement to the Guardian over the weekend, Royal Wine Merchants said it was “incredulous” over the allegation included in Koch’s legal filings, adding that it was “the stuff of fantasy”.

 

Sam Israel, Royal’s legal counsel, added: “Royal has enjoyed a reputation as a top-tier distributor of authentic fine wines.”

 

Koch says Greenberg concealed what he knew about some of his wines. Koch’s lawyers claim he told a house manager: “What they did to me, I’m going to do to somebody else,” adding that the comment was taken to mean he intended to offload counterfeit wines. It is alleged that Greenberg first tried to sell magnums of purported 1945 Château Lafite and 1921 Cheval Blanc through Acker Merrall & Condit.

 

But the auction house’s president, John Kapon, expressed concerns. According to documents filed by Koch’s legal representatives, Greenberg was “fucking pissed” and wrote to Kapon stating: “If my [magnums] are good enough for Zachys, they are good enough for anyone else.”

 

The allegedly rejected 1945 Lafite was amongst those bought by Koch. Other bottles purchased at the 2005 Zachys auction included an 1811 Lafite, for $29,172, and a 1870 bottle described in auction as “one of the all-time greats”. All were found to be among the fakes, Koch’s lawyers claim.

 

The apparently counterfeit bottles were identified by William Edgerton, a noted wine expert employed in 2007 by Koch. Lawyers for the billionaire claim that while Edgerton was examining Koch’s cellars, he stumbled across bottles that he had marked as potentially counterfeit during an earlier inspection of Greenberg’s collection.

 

‘He’s like Ahab’

 

The lawsuit against Greenberg is part of a campaign by Koch to tighten up practices at wine sales and to pursue those he believes to be responsible for fraud through the courts.

 

The brother of fellow billionaires David and Charles – who are noted funders of conservative causes in the US – Bill has been allegedly stung in the rare wine market before. He alleges that wine he brought through Christie’s, which is purportedly from the estate of third US president Thomas Jefferson, is inauthentic. Last year, a court in the US ruled that he had left it too long to bring a lawsuit against the auction house. A lawyer for Christie’s told Bloomberg that the court ruling was “clearly correct”.

 

The decision has seemingly emboldened his drive to pursue the latest court action.

 

“He’s like Ahab,” Greenberg’s spokesman, Bill Cunningham, told the Guardian on Friday. “Eric offered to him a refund and offered to have a charity event in which experts tasted the wines. Koch turned down the refund and the charity offer.” Koch’s lawyers confirmed that an offer was made, but that the billionaire returned Greenberg’s cheque.

 

Zachys was dismissed from the complaint last year, with the two sides reaching a undisclosed settlement, but Cunningham said on Friday that Greenberg’s legal team expected the case against their client to go to trial as scheduled. “I do not think anybody is confident. We are up against a billionaire with massive resources who has spent the last seven years pursuing this,” he said.

 

Greenberg’s lawyers maintain that their client is not responsible for Koch’s wine woes. They note that Greenberg was not mentioned in the Zachys sale catalogue and that the auction house inspected and selected the bottles to be sold. “They were not selected by Eric Greenberg,” Cunningham said. In any event, Greenberg’s lawyers have stated in court documents, “Koch cannot establish his claims.”

 

What doesn’t appear to be in question is that fake wines were present in both men’s collections. “There is no question that anybody with an extensive collection of wines and who buys from auctions may have inauthentic wines. Every collector has fake bottles in his collection,” said Cunningham.

 

“No one doubts that there were counterfeit or inauthentic wines in [Greenberg's] collection. But what we are concerned with is firstly that Eric Greenberg did not select the wines for auction and did not knowingly sell inauthentic wines. Secondly, even the experts do not agree [about what wines are fake].”

 

Cunningham said that of the 24 bottles in question, even Koch’s experts cannot agree which ones are fake.

The Kurniawan connection

 

The civil trial is being paired with a criminal one slated for later this year as having the potential to blow the lid off fraud in the fine wine sector. Last year, one of the most prominent wine dealers in America, Rudy Kurniawan, was arrested and charged as the alleged head of a counterfeit wine laboratory that had fooled the wine world for eight years. It is claimed that from his Californian home, Kurniawan – who also goes by the names of Dr Conti and Mr 47 – mixed low-priced wines to mimic the tastes of far more expensive ones.

 

According to his indictment, he would then pour the creations into empty bottles of rare wines procured from a restaurant in New York City, and complete the fraud by fitting the bottles with fake labels that he created using stencils and rubber stamps. The finished counterfeits would then be sold for up to $50,000 a bottle, prosecutors say.

 

Kurniawan’s trial is expected later this year. But his name is likely crop up in the civil case that is due to commence on Monday. In legal documents, Koch’s lawyers allege that in late 2003, Greenberg bought wines from the alleged counterfeiter. Greenberg’s representatives accept that their client bought from Kurniawan, but say “so did many other people” and add that he did not know the purchased bottles were fake.

 

It has been claimed that actions like those alleged to have been conducted by Kurniawan have caused the fine wine market to be flooded with fakes in recent years. Maureen Downey, a rare-wine expert who is set to give evidence as part of the Koch civil action, said: “The media has only been aware of this in the last couple of years, but the most blatant fraud was going on in 2004 to 2009. At that point there was industry pressure to clean up. It is my belief that when the pressure ratcheted up, there was some wholesale dumping in Asia.”

 

She added that the majority of fakes are still around, with their true price unknown to the collector. “Absolutely – most of it is still out there. I find them all the time, everywhere.”

 

 

——

China as a Vast Wine Market

 

Australian Vintner Plans to Open Outlets in Country to Create a Taste for Luxury Brands

 

Source: WSJ

By LAURIE BURKITT And JASON CHOW

March 24th

 

Australia’s Treasury Wine Estates Ltd. TWE.AU -3.38% is planning to open wine bars or restaurant and entertainment outlets in China in a bid to get the country’s consumers drinking luxury wines-not just giving them as gifts.

 

The winemaker intends to unveil its own wine outlets in the next three to five years, said David Dearie, Treasury’s chief executive. The goal is to help consumers learn more about wine and drink more of it, said Mr. Dearie, noting that it is too early to disclose details. Currently it sells in China only through distributors.

 

China’s appetite for wine is growing, with consumption in 2012 up 20% from the year before. Jennie Mack of Asia Wine and Services Education Center tells the WSJ’s Jake Lee what kinds of wine the Chinese are drinking today.

 

“If you’re going to make great wine and be a leading brand in China, you also have to be consumer-oriented,” Mr. Dearie said.

 

China’s wine market has exploded in recent years, spurring major competition among winemakers who have flooded the market and are now looking to differentiate themselves. Sales of wine reached 257 billion yuan, roughly $41 billion, in 2012, up 20% from a year earlier, according to research firm Euromonitor International.

 

But wine consumption per capita in China is still a fraction of that in other countries. Chinese drinkers consumed only 1.4 liters of wine per person in 2011, far below the French average of 53.2 liters per person, according to the most recent data from London-based research company International Wine & Spirit Research. It predicts China’s per capita consumption will increase to 2.1 liters per person over the next three years.

 

Mr. Dearie said higher-quality import wines are often given as gifts between businessmen to be stashed away rather than swilled. And while Treasury is rolling out some of its priciest wines to be used as gifts, the company hopes that with wine bars or restaurants it will encourage actual consumption of the wine.

 

Mr. Dearie said the move toward entertaining hasn’t been influenced by China’s recent austerity campaign, in which catering and wine companies have been hurt by a ban on government banquets.

 

Local vineyards and wine retailers have already started opening bars, restaurants, clubs and shops with the option to drink on premises, like state-owned Cofco Corp.’s Chateau Junding wine-club chain. Aussino World Wines, a Chinese wine retailer with shops in more than 100 cities in China, runs lounges in China’s southern city of Guangzhou.

 

Executives of liquor giant Diageo DGE.LN -0.71% PLC, which recently launched its second flagship bar in China, say its Johnnie Walker Houses have been successful in helping Diageo identify its VIP consumers and to sell exclusive products that can boost the brand and its profit.

 

Fongyee Walker, a Beijing-based wine consultant, said winemakers have to be creative in China, adapting to local habits. “People in the West buy to consume at home; in China, they buy to consume with friends when they’re out,” Ms. Walker said.

 

Mr. Dearie said Treasury-which sells in China wines such as a high-end Penfolds Grange for around 7,594 yuan, or about $1,222, and a low-end Rosemount Diamond Label for 160 yuan-is working with one of its distributors toward opening a 6,000-square-meter wine gallery, for tasting events, in Shanghai.

 

He said he has no plans to develop special blends to suit China’s flavorful food, which doesn’t adhere well to the traditional pairings dictating, for example, that red wine goes with beef.

 

Treasury, spun off from Foster’s Group Ltd. in 2011, is investing 15 million Australian dollars (US$15.7 million) in its Australian-based winery Magill Estate, in part to attract Asian visitors, Mr. Dearie said. He said they are working with tourism boards and are boosting infrastructure so that Asian tourists can store wine there or ship wine from the Magill Estate.

 

The company is also increasing its presence at duty-free shops around the world and holding tastings there so Asian tourists can learn more about premium brands like its 1,874 yuan Wolf Blass Platinum Label, he said.

 

Treasury’s sales by volume to China and Hong Kong rose 31% in the fiscal year ended June 30, 2012 from a year earlier.

 

Mr. Dearie said Treasury’s business in China is profitable. He declined to offer further details.

 

Treasury’s net profit increased 31% to A$52.3 million in its fiscal first half ended Dec. 31 on a reported-currency basis.

 

 

——

Single-Serving Wine for Sipping Small

 

Source: New York Times

By FLORENCE FABRICANT

Mar 25th

 

Buy me some pinot and Cracker Jack! Pinot grigio, California merlot, cabernet sauvignon and chardonnay are now sold in sealed single-serve plastic goblets. Next month, Zipz, the company behind this new format, will introduce them at baseball stadiums, including Citi Field (hear that, Mets fans?), and at wine shops.

 

A couple of entrepreneurs in Miami have also entered the single-serve fray with the Vini, which sells California wines in 187-milliliter (quarter-bottle or quartino) glass vials with screw caps. Bottled in Sonoma, they are far more elegant than the plastic goblets, though you need a straw or a glass for drinking. Zipz claims its varietal wines are “premium,” though “ordinary” is more like it. The Vini calls its blends, mostly zinfandel from Napa and chardonnay from Sonoma, “exceptional,” which is another overstatement: Zipz wines, about $4 each or $14 for a four-pack, will be sold starting in mid-April at Yorkshire Wines and Spirits and zipzwine.com. They will also be sold at Citi Field and other sports venues. The Vini, $35 to $40 for a four-pack, is sold at thevini.com.

 

 

——

German wine exports continue downward trend

 

Source: Decanter    

by Panos Kakaviatos in Düsseldorf

Monday 25 March 2013

 

German wine exports slid by 15.2% in 2012 compared to 2011, continuing a declining trend from the previous year, according to statistics released by the German Wine Institute.

 

The drop in the volume of exports in 2012, to 1.3m hectolitres, follows an 11.8% drop in exports in 2011.

 

While exports in 2012 to some smaller markets showed gains, a ‘significant decline’ in exports to high-volume sales markets like the US, Great Britain and Russia led to the decline, according to a press release issued on the eve of Prowein, Germany’s largest international wine fair, held in Düsseldorf.

 

The German Wine Institute said the decline was due in part to a smaller 2010 crop and ‘fiercer competition’ for lower priced wine segments. Import regulation changes in the Russian market also led to lower exports there.

 

The value of wines exported also dropped by 7.8% in 2012. This figure is less striking because the average price per litre of wines sold increased, indicating ‘a trend towards selling higher quality wines,’ German Wine Institute managing director Monika Reule said.

 

But given the declines overall, Reule called for ‘intensive and continuous public relations work in foreign markets to regain lost market shares.’

 

 

——

Brunello vandal gets four years in jail

 

Source: the drinks business

by Lucy Shaw

25th March, 2013

 

The vandal who destroyed six vintages of Case Basse Brunello di Montalcino from his former employer has been sentenced to four years in prison.

 

Andrea Di Gisi, 39, from Rome, was sentenced in a Siena court last Friday, and received two years fewer in prison than the prosecutor requested.

 

According to Montalcinonews.com, Di Gisi, who has been dubbed “The Brunello Killer” in the Italian press, is planning to appeal the sentence.

 

On announcing the jail term, Case Basse owner Gianfranco Soldera also said in a statement that he was resigning from the Brunello di Montalcino consorzio.

 

On 2 December last year, 62,600 litres of Brunello were lost after the taps to the barrels were opened by Di Gisi, who entered the cellar by breaking a window.

 

Once inside, he opened the valves of 10 barrels, allowing wine from the last six vintages: 2007, 2008, 2009, 2010, 2011 and 2012 to flow down the drain.

 

The act of vandalism resulted in a commercial loss in the region of ?10m.

 

Di Gisi allegedly carried out the attack out of revenge, and was said to have been angry that he hadn’t been given accommodation on the estate while working there.

 

Located in the south-west of Montalcino, the 23-hectare Case Basse estate was bought and restored by Soldera, a former insurance broker from Treviso, in 1972. It produces around 10,000 bottles each year.

 

The vintages of Case Basse Brunello that have been destroyed will now become a rarity, with only a few small barrels of each vintage remaining.

 

Having halted the sale of Case Basse Brunello after the attack in December in an attempt to prevent price speculation, Soldera will begin selling the wine again at the end of this month.

 

 

——

Ontario’s wine industry worth $7B: Study

 

Source: Canoe Money

By Patrick Gallagher, QMI Agency  

Mar 25th

 

Every bottle of wine produced in Ontario creates spinoff benefits worth $40, an economic impact study found, adding up to a national economic impact of almost $7 billion and more than 31,000 jobs.

 

The report was commissioned by the Canadian Vintners Association and other provincial wine associations.

 

Ontario residents alone drank 84 million bottles of wine last year, while almost two million people visited a winery in the province, the report found.

 

Nationally, Canadians enjoy more than 220 million bottles of wine produced by the domestic wine industry each year.

 

“The impacts are both direct and indirect, from job creation and tourism to tax generation and agricultural growth, the wine industry benefits multiple business sectors across the entire Canadian economy,” said Dan Paszkowski, president of the Canadian Vintners Association.

 

Wineries in B.C. are second to those in Ontario in terms of economic output, with a spinoff at about $2 billion.

 

 

——

TY KU Premium Sake & Spirits Announces Expanded Partnership with Southern Wine & Spirits of America

 

Source: SWS

March 25, 2013

 

Mel Dick, President-Wine Division & Senior Vice President, Southern Wine & Spirits of America, Inc. (Southern)-the country’s leading wine and spirits distributor-announced today that TY KU Premium Sake & Spirits-a leading supplier of premium sakeand the fastest-growing sake brand in 2011 and 2012 as rated by Nielson-has extended its distribution agreement with Southern across the country. This brings the two companies’ alignment for TY KU’s entire portfolio of premium products to 25 U.S. markets where Southern is present-and another 9 markets for TY KU’s spirits portfolio.  The TY KU/Southern alliance is effective immediately.

 

Regarding the expanded relationship, Dick said, “Southern Wine & Spirits is proud to have TY KU Premium Sake & Spirits across a majority of our markets.  We are excited about the dynamic sake category and impressed with TY KU’s growth since its launch just a few short years ago. We see great promise for the category, the TY KU brand, and the positive message of friendship and respect embedded within the TY KU ‘Share On’ campaign.”

 

 

——

Paul Draper crowned the 2013 Winemakers’ Winemaker by IMW and db

 

Source: the drinks business

by Andy Young

25th March, 2013

 

Californian legend Paul Draper has been named the 2013 Winemakers’ Winemaker by the Institute of Masters of Wine and the drinks business.

 

The award was presented at a ceremony at ProWein in Düsseldorf by Jean-Michel Valette MW, chairman of the Institute of Masters of Wine.

 

Recognising outstanding achievement in the field of winemaking, the award is now in its third year, with previous winners being Peter Sisseck of Dominio de Pingus and Peter Gago of Penfolds.

 

As chief winemaker at Ridge Vineyards in California since 1969, Paul was chosen as the recipient of this year’s award by a panel that comprised Master of Wine winemakers from all over the world and the previous winners of the award.

 

Paul said: “This honour means so much to me because of my respect for the Masters of Wine – and most especially for the winemakers among them, who have such a breadth of knowledge of wine as well as expertise in my chosen vocation.”

 

In particular the judging panel recognised Paul for an approach that has been characterised by an emphasis on traditional winemaking practices, sustainable agriculture and a sense of place. He has been a pioneer in the popularising of single estate winemaking in California, and was instrumental in the growing recognition of Zinfandel as an important regional grape variety.

 

Ridge Monte Bello 1971 achieved international renown when it was included in the famous Judgement of Paris tasting in 1976, in which Cabernet Sauvignon wines from California were shown to compare very favourably with top French wines from Bordeaux when tasted blind. In the 30th Anniversary tasting of the same wines in 2006, Ridge Monte Bello 1971 emerged as the winner.

 

Mr Valette said: “It’s a delight for me, as a fellow countryman, to be presenting this award to Paul Draper. Paul has done so much for winemaking in the United States, and, in his quiet way, has been a beacon of winemaking excellence and inquiry to so many. It’s a privilege to have this opportunity to show the respect in which he is held by his peers worldwide.”

 

 

——

‘Kentucky Bourbon History’ author sees story of US in evolution of whiskey

 

Source: Courier Journal

Written by Matt Frassica

Mar. 25

If you’ve spent any time reading the back labels of bourbon bottles, you’ve heard about them – the pioneering farmer-distillers, swashbuckling moonshiners and crooked tax agents who lent their names or family recipes to each brand.

 

Judging by the number and variety of these origin stories, there are enough colorful characters in the history of America’s native spirit to populate a whole aisle at one of the big-box liquor stores.

 

These figures constitute what historian Michael Veach calls “marketing history.” “Salesmen have been the same for thousands of years, and if they can stretch the truth or make up a truth that fits their needs to sell more product, they will do so,” Veach said. “That’s been around for the whole history of the bourbon industry.”

 

Veach should know. For the past 20 years, Veach has studied the history of bourbon distilling, earning a place in the Kentucky Distillers Association Bourbon Hall of Fame. His new book, “Kentucky Bourbon Whiskey,” published by the University of Kentucky Press, came out earlier this month.

 

“Kentucky Bourbon Whiskey” is one of the only histories of the industry written for a general reader available from a mainstream publisher. With reviews in places like The Wall Street Journal and a recent interview with Veach on the public radio show “Marketplace,” the book seems destined to become an important source for anyone looking to learn more about the history of Kentucky’s famous juice.

 

“I am the luckiest student to come out of the University of Louisville history department,” Veach said on a recent afternoon in the living room of the Filson Historical Society’s Third Street mansion, where he is associate curator of special collections and regularly holds classes on the history and appreciation of bourbon.

 

As a graduate student at the university in the early 1990s, Veach studied medieval history. He heard that United Distillers wanted a graduate student to build an archive of its historical materials. It offered $9 an hour, 35 hours a week, for six weeks. “As a grad student who hadn’t worked full time in a while, that sounded very good to me,” Veach said.

 

What started as a six-week project turned into a full-time job after he graduated, and Veach held it until the company sold its bourbon brands and closed the archives in 1996. The Filson then offered Veach a job, where he has continued his work on the history of the industry.

 

“The more I got to studying it, I realized the history of the distilling industry really is the history of the United States,” he said. “The first constitutional crisis is the Whiskey Rebellion,” caused by the whiskey tax that the federal government levied to pay off the debt of the Revolutionary War.

 

“You look at the Industrial Revolution, the evolution of technology through the 19th century – it’s mirrored very well in the distilling industry, going from a cottage industry of farmer-distillers all the way up to the modern column-still distilleries that are huge business ventures worth millions of dollars.”

 

If you can see American history reflected in the history of the bourbon industry, you can see our thirst for a good story in all that marketing copy. “Right after the Civil War in particular is when you start seeing bourbon playing up on the romanticism of the earlier days,” Veach said. Even in 1860, Jack Beam named a whiskey brand Early Times to hark back to the good old days.

 

No story is more hotly contested than the origin of bourbon itself. If you believe what Heaven Hill says on every bottle of Elijah Craig, its namesake invented Kentucky bourbon by aging corn whiskey in charred oak barrels.

 

Veach views such claims with professional skepticism. “Elijah Craig was a distiller, and he was a Baptist minister. There’s no lie in that,” he said. “Was he the inventor of bourbon? Probably not.”

 

In the book, Veach offers his own theory of bourbon’s origin. In Veach’s version of the story, sometime after 1807, John and Louis Tarascon, French immigrants who owned a mill and warehouse in Louisville, may have come up with the idea to age whiskey in charred oak as a way to imitate the taste of French brandy, which was popular among the French population in New Orleans at the time.

 

“The Tarascon brothers were in a great position to buy whiskey cheap, they were in trade with New Orleans, they knew about French brandy, they knew about what people in New Orleans were drinking,” Veach said. “It just makes sense to me.”

 

But, he cautions, it is just a theory. “The fact of the matter is, we are never going to know who invented bourbon,” he said. “Bourbon, I think, is more of an evolution than an invention.”

 

 

——

DG to surpass 11,000 stores in ’13

 

Source: RT

By Mike Troy

March 25, 2013

 

Fourth quarter same store sales increased 3% at Dollar General as the company capped of another record year and indicated it would open 635 stores this year.

 

Total sales for the company’s 13 week fourth quarter ended February 1, increased 0.5%, to $4.21 billion compared to $4.19 billion during the 14 week fourth quarter the prior year. Excluding the extra week from the prior year’s fourth quarter, sales would have increased 8%. The company said its same store sales increase was driven by consumables and a mix of increased transaction size and customer traffic.

 

Net income for the fourth quarter was $317 million and earnings per share totaled 97 cents, compared to net income of $293 million, or earnings per share of 85 cents, which benefitted by six cents because of the extra week.

 

“Dollar General had yet another outstanding year in 2012 including exceptionally strong fourth quarter results,” said chairman and CEO Rick Dreiling. “We grew our market share and invested strategically to continue to win with our customers. These results demonstrate the strength of our business strategy, and we believe we are very well-positioned for future growth.”

 

During 2012, the Dollar General opened 625 new stores and remodeled or relocated 592 other stores to end the year with a total of 10,506 stores. It said it expects to open another 625 new stores this year and remodel or relocate 550 stores. The company has previously indicated the U.S. market is capable of accommodating as many as 20,000 Dollar General stores.

 

In 2013, the expansion of selling space and the upgrade of existing square footage is expected to combine with same store sales growth in the 4% to 6% range to produce total sales growth in the 10% to 12% range. Full year earnings per share are expected to total between $3.15 and $3.30.

 

 

——

Dollar General: when shopping lists

 

Retailer’s customers could be crimped by delays in tax refunds

 

Source: FT

March 25th

 

Higher US payroll taxes and how they will affect retailers is a vexing question for investors this year. Take Dollar General, one of a few “dollar stores” that offer a hodgepodge of low-priced items, everything from packaged food to razors to clothing. On the one hand, there are fears that low income households will be the hardest hit from higher taxes, hurting sales at places such as Dollar General. On the other, most of their sales are from consumables and the company stands to benefit from the prospect of consumers with lower take-home pay “trading down”. A third factor is the improving US economy, which could cause some shoppers to trade up instead.

 

On Monday, Dollar General reported a 3 per cent increase in same-store sales in the three months ended February 1, at the low end of in-house guidance for a 3 to 4 per cent increase. But Dollar General was able to preserve margins, in spite of some concerns late last year about heightened competition and net profit beat analysts’ forecasts.

 

The company expects sales and profit growth in 2013, but warned that they will be stronger in the second half of the year, partly due to the rollout of cigarettes in its stores – a bid to boost traffic. It faces a tough first-quarter comparison – same- store sales rose 6.7 per cent a year ago. Cold spring temperatures versus last year’s warm weather also are not helping. And, in addition to payroll tax changes, Dollar General’s customers could be crimped by delays in tax refunds this year. Just ask Walmart.

 

The uncertainty helps to explain the stock’s performance on Monday: a range of up 6 per cent to down 0.5 per cent. At 16 times forward earnings, it trades in line with its historic multiple. Dollar General is opening new stores, but investors had still better believe that higher taxes are neutral or will lure more dollar shoppers.

 

 

——

Deals not driving restaurant traffic

 

Offers must be revamped to attract younger diners, NPD researchers say

 

Source: NRN

Lisa Jennings   

Mar. 25, 2013

 

Deals and discounts did not drive restaurant traffic in 2012 as much as they did in prior years, and operators need to re-engineer offers to appeal to younger diners, according to research released Monday by The NPD Group.

 

Restaurant visits driven by a deal or discount declined 3 percent for the year ending in December 2012 compared with the prior year, according to Port Washington, N.Y.-based NPD’s foodservice market research.

 

Researchers blamed the decrease in deal traffic on the increased reliance on bundled meals and value menu offerings, tactics that many restaurant chains used last year with the hope of weaning consumers off of straight discounts.

 

“Deals and special offers definitely influence restaurant visits, and if it weren’t for deals during the recession, the industry would have fared much worse, but some of the deals being offered today aren’t resonating with consumers,” said Bonnie Riggs, restaurant industry analyst for NPD.

 

In 2008, when consumers were hit hardest by the recession, restaurant visits based on deals or discounts rose 5 percent, while non-deal traffic fell 1 percent, NPD said. That trend continued into 2009, when deal-related traffic rose 3 percent, while non-deal traffic declined by 4 percent.

 

By 2012, however, those trends were reversed. Deal-related restaurant traffic fell 3 percent last year, and non-deal traffic rose 2 percent.

 

One factor may be that many restaurant deals, such as “two for $20″ lunch deals in casual dining, have been in place for several years now. “After certain deals have been in the marketplace for a while, they become the norm,” Riggs explained. “It becomes no longer a deal to consumers.”

 

In addition, in the quick-service world, in particular, the disparity between deal and non-deal pricing is shrinking, she added. That factor has hurt traffic among younger consumers specifically, an age group that continues to be very price sensitive.

 

Going into 2013, value remains top of mind for all consumers, especially as the payroll tax increase and rising gas prices take a toll on discretionary spending, said Riggs. NPD has projected that overall traffic overall will remain slightly negative in 2013, especially among full-service restaurants.

 

The NPD report, “Planning for Growth in the New Normal Marketplace,” explores how restaurant operators can rethink their value message. “Considering current consumer sentiment and their continuing frugality, the deals that have historically appealed to restaurant customers need to be re-engineered and the next generation of deals introduced,” Riggs said.

 

Restaurant operators are going to have to get more innovative and creative, she noted. “They’re going to have to make deals seem like something new and different.”

 

Coupons – especially those available on restaurant company websites – continue to be traffic drivers, Riggs said, while bundled meals and value menus are not as effective in getting diners through the door.

 

“People tend to want a discount on regular menu items, things they like,” said Riggs, rather than targeted items with low prices. “You can have something that costs $1, but if it’s not decent quality and doesn’t taste good, it’s not worth $1.”

 

 

——

Arizona: Inside the liquor department’s covert underage buyer operation

 

Source: CBS 5

By Lindsey Reiser

Mar 25th

 

We all know bars and restaurants are supposed to be checking identification cards, but we also know not all do. So there are police officers and teenagers out there doing undercover work to keep them on their toes.

 

The Arizona Department of Liquor has a CUB program, in which CUB stands for covert underage buyer. The Arizona Department of Liquor sends in a teenager with their real IDs to try and buy alcohol. If they’re successful, the cops are there to bust the sellers.

 

“You never know what we’re going to run into in the night,” said Sgt. Wes Kuhl with the Arizona Department of Liquor. They go on CUB stings a few times a month. This time, they let us tag along.

 

“We get some sort of complaint that a location is selling to an underage,” Kuhl said. “We can only check those places per state statute.”

 

After they get the complaint, the undercover officers check it out, usually by sending in the CUB.

 

“Not every high schooler gets the opportunity to go and do undercover work,” said one of the CUBs, Zack, who will soon retire because a CUB cannot be older than 19. Zack said he usually gets a buy 50 percent of the time.

 

“I’ve had friends who’ve gotten hurt from drinking alcohol and from other teenagers drinking alcohol in car accidents and whatnot,” Zack said.

 

“In 2012 we had a buy rate of about 38 percent, so approximately four out of 10 places have sold alcohol to our underage buyers,” Kuhl said. He said that number seems a little high, considering all restaurant, bar, and liquor store owners learn about this program when they get their license.

 

“It’s no surprise, we’re not trying to deceive anybody, we’re just checking compliance,” Kuhl said.

 

On this sting, we went to nine different places that sell alcohol. First, one of the liquor department’s undercover cops walks in. Then, the CUB follows a few minutes later.

 

At our first few locations, the bars and restaurants turned the CUB away like they’re supposed to, like Poppy’s Place in Tempe.

 

“I asked for his ID immediately because he looked really young,” said Nicole Vidana, a waitress who refused to serve Zack.

 

If the place is compliant, they’ll get a letter from the liquor department saying they passed the test. But not everyone gets that pat on the back. At Valley Fair Liquor Store in Tempe, we followed close behind and saw the clerk sell a beer to the underage buyer.

 

The clerk that sells the alcohol gets arrested for selling to a minor, which usually leads to a fine. The establishment also gets cited, which can range from a fine to revocation of their liquor license.

 

On our sting, only one other location sold to the CUB – Dave’s Place in Phoenix.

 

And while there’s surely other places the undercover officers would rather be on their Saturday night, they know the CUB program is vital to keeping the peace.

 

“Our job is to protect the public and protect the safety of the underage people and also people on the streets of Arizona,” Kuhl said.

 

We reached out to the managers of both locations that failed the CUB challenge, but we have yet to hear back. In the 10 years the CUB program has been in place, they’ve visited nearly 3,000 bars, restaurants, and liquor stores and about a third of them failed the test.

 

 

——

Egypt: Egypt’s Islamist rulers get tough on alcohol

 

Drinkers say rises in taxes on beer and wine suggest hardliners are gaining more power in Mohamed Morsi’s government

 

Source: The Guardian

Patrick Kingsley

Sunday 24 March 2013

 

In 6 October City, a new sprawl of malls and mansions just west of the capital, locals say there is only one shop that sells alcohol. Its name is Bazaar al-Gamaa, and if you ask its owner, Abu Ramez, nicely, he will fetch you a bottle of vodka from the storeroom. In the fridges opposite the till, there are crates of local lagers: Sakara, Meister, Rex – and Stella, an award-winning Egyptian lager unconnected to its Belgian namesake. “That’s my favourite,” said Ramez, who has been an off-licence owner for 22 years. “Low alcohol percentage. Better for my liver.”

 

But now, Ramez has more to worry about than his beer consumption. Last month, Egyptian authorities announced plans to ban alcohol sales in new developments outside Cairo. Most worryingly for Ramez, they said existing licences would not be renewed in towns beyond the capital – towns such as 6 October City, a satellite development built in 1979 of about 1 million people.

 

To add to the gloom, the government doubled beer tax to 200% this month, with wine tax rising from 100% to 150%. Then last Monday, the civil aviation minister mooted banning alcohol from duty-free shops in airports. For many liberals, this triple blow adds to the impression that Egypt’s Islamist-led government, headed by President Mohamed Morsi, intends to turn the country significantly more conservative.

 

“If this government continues on this same path, we’ll be like Saudi Arabia,” said Akram, assistant manager at Charwood’s – one of a handful of restaurants that sell alcohol in 6 October City – who preferred not to give his surname. The planned licence ban had been discussed at management level, Akram said, and there are concerns that it could affect business. “Most of our guests are foreigners or Egyptians who drink alcohol,” he explained.

 

But other restaurateurs were more relaxed. “It’s not relevant,” argued Rafaat Habib, manager at the nearby Piccolo Mondo, who said his restaurant’s alcohol licence is sourced through its head office in the capital. “Our licence is connected to Cairo.”

 

Habib’s nonchalance may also derive from a wider expectation that the authorities lack the political will to enforce new licensing legislation.”The thing about licences – it’s a thing to scare people,” said Ramez, stocking his fridge with a recent Stella delivery. “When they make these questionable laws, it’s the people who will decide whether to enforce them. It’s not actually going to be implemented. In Port Said, they had a curfew, and no one followed that. They’re a failed government and no one’s going to listen to the things they’re trying to enforce.”

 

In any case, for all the talk about Egypt’s Islamisation, countered one of Ramez’s customers, many Egyptians would not adhere to a licensing ban. “It wouldn’t make a difference,” said Emam Hussein, a logistics manager, popping in to buy vodka. “There are tonnes of people who drink, even the religious. There are tonnes of Copts and tonnes of Muslims who drink underground.”

 

“We will never allow our country to become a fundamentalist country,” Ramez added. “As long as we keep on talking and speaking, no one will be able to change Egypt in this crazy manner.”

 

Even a high-profile Islamist politician sends his driver to pick up a crate of beer every week from Bazaar al Gamaa, Ramez claimed.

 

Yet beneath the bravado, there were hints of a more pressing danger. “On the phone I get a lot of threats saying ‘we will burn down your shop,’” said Ramez. “I responded very aggressively and I said that they should go ahead and do it. We won’t let them get to us. If it comes to violence, so be it.”

 

Others in the alcohol business were reluctant to speak on the record. Many Egyptian drinkers source their alcohol from delivery companies such as Gocheers or Drinkies. But when the Guardian visited Gocheers’ headquarters, no one was available for interview, or willing to say whether remotely located delivery services would be affected by the licensing change. Drinkies was also reluctant to be drawn on the subject, conscious – one employee said – of keeping a low profile.

 

“We are in close contact with stakeholders to remind them that we are an important employer in the country,” a spokesman for Drinkies’ owners – Al Ahram breweries – said in a statement. Al Ahram is owned by Heineken, which therefore controls the vast majority of Egyptian alcohol brands, including Stella and Sakara beers and popular wines such as Omar Khayyam. The spokesman pointed out that Al Ahram employed more than 2,000 people, and was “strategic for the tourism industry, which is a key driver of the Egyptian economy”.

 

In general, claimed Akram at Charwood’s, some Egyptians were wary of being seen as too fond of alcohol. “After the fall of Mubarak, there wasn’t really a government, and people had more freedom – so people drank more,” he said of his customers. “But eventually there reached a point when the customers became a bit more fearful and they didn’t want to be seen downing a whole bottle. They just drank a glass.”

 

This apprehension is derived from the government’s open conservatism, Akram argued. “There’s a much stronger group in power that’s out to implement their laws,” he said. “Before one person might tell them drinking is against religion. Now you have an entire group in government saying this. So people are more afraid in public.”

 

But Ramez had other ideas. “If [the government] wanted to prevent alcohol sales,” he said, “then they would have banned it [completely]. But they just want to raise more taxes.”

Liquor Industry News 3-25-13

March 25, 2013
www.franklinliquors.com

Franklin Liquors

Monday March 25th: Sad News About Jim Barrettt,Absolute Tune Recall And More!

Diageo’s Paul Walsh cracks China

Diageo’s CEO visited China last week to catch up on plans to become a major player in Asia. James Quinn joins him to hear a story about global growth .

Source: Daily Telegraph

By James Quinn, in Beijing

24 Mar 2013

Standing in a cavernous basement bar with more than 10,000 copper pipes jutting above his head, Paul Walsh appears more concerned about the cleaning rota than the array of Scotch whisky laid out before him.

“Can you keep it pristine?” the chief executive of Diageo asks Laurence Law, brand director for Johnnie Walker in China and the man responsible for Beijing’s new Johnnie Walker House. “We need to keep it looking like this all the time, not just when we have visitors,” Walsh continues.

On another floor of the House – a private members’ club designed to showcase the whisky to Beijing society – Law is showing Walsh a series of special edition bottles marking the Chinese year of the snake.

The snake bottle costs RMB8,000 (£847), or RMB37,000 for a set of 12 carrying symbols of the Chinese zodiac. “Too cheap,” says Walsh, smiling.

He may be tongue in cheek, but it is this attention to detail on which Walsh has built his 31-year career with the company. He is in China to check on the progress of plans to cement Johnnie Walker’s place in Chinese society, thereby further strengthening Diageo’s future profitability in the wider Asian region.

As he continues on his tour of the property, flanked by Diageo’s Asia Pacific president, Gilbert Ghostine, Walsh is interested in how the House has been built and its array of Johnnie Walker ephemera.

On the second leg of a three- week visit to Asia which also takes in Singapore, Tokyo and Seoul, Walsh spent most of the evening after touring the new House hosting a private reception. Guests included Sebastian Wood, the UK ambassador to China, as well as high-value clients and advertising and marketing specialists.

“Welcome to the world’s largest embassy for luxury Scotch whisky,” proclaimed Walsh.

The House will “create a halo effect for other brands” he continued, pointing to the potential to “capture an incredible opportunity, much broader than China”.

Having vowed to shareholders in 2012 that 50pc of Diageo’s sales would come from “new high-growth markets” by 2015, China and its environs are as important to him as they are to Diageo.

This could well be his last lengthy visit to the region as group chief executive, as Walsh has announced he intends to stand down by the end of 2014. This month, Diageo’s share price rose above £20 for the first time. Where it goes next is vital to Walsh’s legacy.

In the shadow of Mao Zedong’s mausoleum, part of Beijing’s historic Forbidden City, the second Johnnie Walker House – the first opened in Shanghai in 2011 – is in a fine location.

Fellow residents include luxury brands Hermes and Patek Philippe, as well as bars and restaurants designed to appeal to Beijing’s wealthy elite.

It is exactly this category – the city’s new breed of “super deluxe” consumers – that the House is intent on attracting.

Less than 12 hours after the dinner, Walsh, again flanked by Ghostine, is sitting in a boardroom in the nearby Peninsula Hotel, questioning senior members of his Greater China team about strategy in the region.

Ghostine’s presence to his right is important, as it was following his appointment to the current role in July 2009 that Diageo began to revitalise its performance in the region.

Ghostine’s vision was to focus on the “super deluxe” consumers who would not balk at paying RMB6,000 for a bottle of Johnnie Walker Odyssey or as much as RMB23,000 for The John Walker.

In China, Diageo operates with a joint venture – MHD – with Moët Hennessy, part of Bernard Arnault’s LVMH group. The agreement dates back 22 years and leaves Diageo holding 34pc of Moët Hennessy. The venture allows Diageo to piggyback on MH’s luxury products experience, combining the marketing of Hennessy cognacs and Moët & Chandon Champagnes with Johnnie Walker products and other Diageo brands, such as Guinness.

The relationship has been invaluable, according to Walsh, in planning brand extensions such as the new breed of Johnnie Walker Houses, where members can blend their own Walker flavours or relax in one of its private bars.

The promotion of the Walker brand in China started first with its Black Label product but has moved to centre on its premium Gold Reserve product, as well as its Blue Label and other more exclusive – and therefore expensive – blends.

The marketing attack is not about “tartan and heather”, Walsh says, but building exclusive brands that people talk about and want to take part in.

He says that as the brand developed through its tie-up with Formula One and with golf sponsorship, so the “experiences” – such as the houses – should make the drink more relevant to wealthy Chinese.

Walsh acknowledges that China is one piece of a bigger jigsaw. “I think you have to prioritise how you’re going to allocate your resources. The reality is that if you look at Asia, you basically have three big plays for us: India, greater China, and south east Asia, where you’ve got a collection of brands.

“I would reckon if you put these three blocks together, you’ve got 80pc of the region’s growth.”

Although it is estimated that the Chinese beverage market is worth £45bn to £50bn a year, international spirits account for just 2pc of a total dominated by baijiu (a local clear liquor) which accounts for approximately half. Cognac accounts for 50pc of the international spirits, with Scotch making up slightly more than 40pc.

In February 2011, Walsh signed a deal for a controlling stake in the Sichuan Chengdu Quanxing Group, giving it control of ShuiJingFang, a producer of baijiu.

“International spirits are dwarfed by baijiu, and we’re fortunate to have one of the premium brands,” says Walsh. The deal followed five years of negotiations and discussions with Chinese authorities, with Diageo becoming the first non-Chinese company to be allowed to invest in the spirit. “Our strategy here is twofold. First of all, to continue to establish our majority control on the business – aka get more equity.

“And to look for other acquisitions. One thing that is sometimes not understood [is that] in buying ShuiJingFang, we also got approval to use that as a further acquisition vehicle in China.”

Diageo is boosting ShuiJing-Fang’s operations, introducing a new bottling plant, developing a new bamboo-filtered blend, and increasing duty-free sales at airports and in expatriate communities to increase export revenues – a promise made to the Chinese authorities when signing the deal.

China is not the only market Walsh has recently visited.

Last November, Diageo announced a deal to buy as much as 53.4pc of United Spirits (USL), the Indian drinks conglomerate founded and part-owned by entrepreneur Vijay Mallya, for £1.28bn.

Since then, Walsh and his advisers have ensured the necessary regulatory approvals are received. The deal is structured as Diageo buying an initial 27.4pc stake, and then launching a tender offer for a further 26pc.

“I’m expecting to get the final regulatory approvals sometime this week,” he said at the end of last week. “From a regulatory point of view, we’ll get what we need.

“We’ll then be clear to launch our tender offer. Clearly the stock’s trading above the price we’ve offered. We’ll see what happens when we stick to our number.” Walsh won’t answer whether Diageo will stick to the original terms set out last autumn, but confesses: “There’s a lot of hope [in the USL price] and maybe I’ll disappoint a few people.”

The deal will give Diageo access to USL’s brands such as Whyte & Mackay but more importantly its indigenous distribution network to leverage Diageo’s own brands in to the country.

“The biggest difference between India and China is around familiarity with Scotch,” Walsh said. “The Indian consumer knows what Scotch is, knows how to drink it, how to pronounce it, and by the way, they know Johnnie Walker.”

Like China, it is increasing demand for premium brands which has attracted Walsh to India. But he says that does not mean Diageo will rush to place all its brands into USL.

Diageo has a small distribution system in place in India, and had USL not come on the market – as a result of Mallya’s difficulties linked to his Kingfisher Airlines – he says he would have been happy to grow organically.

One acquisition in which Walsh was less fortunate was Jose Cuervo, the tequila brand owned by Mexico’s Beckmann family. In December, Diageo called time on the talks, also ending its decade-long US distribution deal for the tequila.

Walsh won’t comment on why the talks collapsed – sources suggest the Beckmanns’ increasing demands of “exclusions” to the deal while trying to maintain the price offered wore Diageo’s patience thin – but does not seem to regret them ending.

“The reality is that since then I’ve become more impressed with our ability to really build a brand from scratch,” he said.

He points to the introduction in 2003 and subsequent success of high-end vodka, Cîroc. He says that based on current revenue levels, the drink produces more sales than Grey Goose did when it was sold to Bacardi for $2.4bn in 2004. Diageo also added to its upmarket vodka range by buying a 50pc stake in Ketel One in 2008.

“I’m willing to be patient and what I want to do is what we did in vodka. Both an organic play with a little bit of M&A,” Walsh says.

One business he is not interested in buying – not at current prices in any case, based on his answers – is Beam Inc, home to Jim Beam and Maker’s Mark. The Sunday Telegraph revealed that Diageo had considered making a joint $10bn-plus bid with Japan’s Suntory but had pulled back from the deal.

“If you just look at it with our lens, there are sizeable pieces of that business that we either wouldn’t or couldn’t own,” says Walsh with reference to Courvoisier cognac and Teacher’s whisky, which it would have to dispose of on competition grounds.

“It’s trading at a very full price and that could very well be an asset that just sits in the market place for a very long time. And I come back full circle to what I said: we don’t have to do anything we don’t want to.”

What Beam would bring is further exposure to the US spirits market, although here Diageo already has a 30pc share.

“If you said today Paul, do you want another 10pc out of China or another 1pc out of the US, I’ll take the 1pc out of the US as that just goes straight through to the P&L,” he admits. “Now, the reality is we have to do both. But a third of our business is in North America, the largest spirits market in the world and the most profitable spirits market in the world.”

He acknowledges that the US operations can be a little obscured by the focus on emerging markets. As well as China and India, Diageo has made recent acquisitions in Vietnam and Turkey.

Walsh, though, points to the “very attractive” demographics as to why Diageo is far from turning its back on America.

“The US is approaching one million new consumers reaching the legal drinking age every year,” Walsh said. “Increasingly, people are adopting spirits earlier in their drinking life cycle:it’s a gorgeous market.”

The combination of high- growth markets and more mature markets such as the US are important to a company the scale of Diageo, he says.

“When the financial crisis hit, the US went a little bit off the boil. It’s now coming back on the boil and has been for the past 18 months, two years.”

Correcting that balance between emerging and developed markets has been important to Walsh for some time, but more so as he contemplates stepping down.

Having joined the then Grand Metropolitan in 1982 as a financial planner for brewer Watney, Mann & Truman after a degree in accounting at Manchester Polytechnic, the Lancastrian admits bluntly that he did not think he would get to where he is now. “Of course not, no.”

He rose up swiftly through the ranks, and on becoming chief executive of the newly named Diageo in September 2000 he sold off non-core assets Pillsbury and Burger King, and brokered the acquisition of Seagram in 2001.

As such, he is the architect of the company whose products range from Blossom Hill wines to Johnnie Walker’s premium labels.

He is now responsible for more than 25,000 employees and is also a UK Trade & Investment trade ambassador.

He says that he is not overly focused on his Diageo legacy.

“Bear in mind I’ve been in the business 30-odd years,” he smiles. “I want to make sure that the trajectory that we have created – and I use ‘we’ as it is not only just the executive but all of our employees – is maintained and built upon.

“Therefore when you talk about legacy, I’ve had a fabulous career. And my dedication is to make sure the business is handed on in good shape. And to offer whatever assistance I can to continue the track that we’re on. That’s it.”

Walsh points to his decision to appoint Ivan Menezes – his right-hand man of 12 years – as chief operating officer in February 2012, and his comments a month later that he would remain in post until 2014. “The one thing that Diageo has demonstrated is that it has a pretty good track record on talent development and hand-overs,” he says, recalling the internal support Deirdre Mahlan was given for two years before she became chief financial officer in October 2010.

“By the time it [Mahlan's appointment] happened, everyone just thought ‘That was obvious, wasn’t it?’ And that’s what I hope happens here [with the CEO job].

“Ivan and I have worked together for 12 years, and he knows that when he does take the reins, to be determined by the board, I’ll be there to do whatever he wants me to do.”

Walsh admits for the first time publicly that when he stands down as chief executive he will not be leaving Diageo. “I have massive affection for this company and therefore I’m not sailing off into the sunset,” he said.

“Equally, my role will change – you can’t have two people holding on to the reins of a horse. The reins have to pass. But equally, I can be there in the stable doing what people want me to do.”

As well as his so far undefined future role at the drinks giant, Walsh admits candidly he’d be interested in “some form of chairmanship,” having been often linked to the role at Unilever, where is already a non-executive director.

But whatever the future holds for the 57-year-old, as he himself noted last week in Beijing during his time at the Johnnie Walker House it’s important to follow the Scotch’s moniker -and keep walking.

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Pernod Ricard whisky sales fall in China

Source: FT

By Louise Lucas, Consumer Industries Editor

Mar 24th

Pernod Ricard, the world’s second-biggest distiller, is set to report an annual decline in Scotch whisky sales in China after years of surging growth, suggesting that Chinese frugality is undermining one of the UK’s export successes.

Spirits makers have been touting growth in China in particular and Asia in general as western European sales falter in weak economic conditions.

Pernod Ricard, the Paris-headquartered maker of Chivas Regal whisky, is holding an investor conference in Beijing in May. China contributes 14 per cent of its sales and a far bigger slice of profits.

Yet distillers’ pricey spirits are falling foul of Beijing’s frugality campaign, as officials obey orders from the top to reduce conspicuous consumption – a move already denting sales at high-end restaurants and luxury goods makers.

The new government’s anti corruption drive is also hurting gifting, which makes up around 10-15 per cent of Scotch and cognac sales in China.

Last week, Pernod Ricard said volume sales in China were flat over the Chinese New Year period, when it sold more cognac but saw Scotch sales fall by double-digits in percentage terms year on year.

The company said the weak performance during this key selling period meant a decline was likely in Chinese Scotch sales for its current financial year, which runs until the end of June.

“China’s anti-corruption campaign is having an impact and will continue to have an impact for some time,” said Jamie Isenwater, analyst at Deutsche Bank. “These risks are significantly underestimated by the market.”

Sales at high-end restaurants, where meals range from Rmb300 (£32) to thousands of renminbi per person, dropped 35 per cent in Beijing and 20 per cent in Shanghai during the recent peak banqueting season, according to the Xinhua news agency.

While international spirits account for a tiny proportion of total China sales at about 1-2 per cent, the high price tags and surging growth means they contribute disproportionately to manufacturers’ profits.

Diageo’s Scotch business in China, for which figures are not broken out, is growing rapidly, although analysts reckon it is yet to turn profitable.

The maker of Johnnie Walker is investing £1bn over five years to increase manufacturing capacity in Scotland, largely to service emerging markets such as Asian and Latin America.

Scotch boasts a shorter history in China than cognac and is hence seen as less resilient. However, it also has a business model that relies on structural growth of the market over the long term: whisky laid down today may be bought by consumers five or 10 years out.

Pernod Ricard said the drop in China sales – which has only been witnessed once before, in 2008/9 – was a temporary result of the change in leadership and relative economic slowdown alongside the anti-corruption drive.

“We definitely see this impact as a short-term one and continue to have ambitions for Scotch globally and particularly in China, and continue to see the potential there,” said Jean Touboul, vice-president for investor relations.

Ian Shackleton, analyst at Nomura, said there was still “a little bit of a question mark” over how entrenched the slowdown would be. “It is not a question of the model being totally bust, but the idea of slowdown here is definite,” he said.

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Bourbon Mania! (Excerpt)

A curious cocktail of scarcity, black-market machinations and artisanal cachet has made us woozy for Kentucky’s native spirit. But are these bottles really worth it?

Source: WSJ

By JOSH OZERSKY

Mar 22nd

THERE IT WAS, just a few tantalizing feet away: the legendary Pappy Van Winkle’s Family Reserve 23-Year-Old, the most prized bourbon in the world. It was in Dallas, at a place called the Chesterfield. An eccentric cocktail guru named Eddie “Lucky” Campbell had stood on his bar in the middle of service, reached up to remove a secret wood panel behind a light sconce and brought out a bottle that seemed to emit an inner amber glow. I was getting Lucky’s private stash! It was a daunting moment: Spoken of in whispers, tracked by rumor and gossip, Pappy is a kind of Maltese Falcon for hard drinkers. What if I didn’t like it?

As it happened, I did. A lot. But then, it wasn’t necessarily the deeply wooded, ineffably mellow taste of the whiskey that I had been after; it was the distinction of having bagged the white rhino of American spirits. In this, I was like a whole body of bourbon customers these days, ambitious souls more than willing to pay hundreds of dollars on the black market for the rarest and most prestigious brands of bourbon. On eBay, EBAY +0.66% which doesn’t allow the sale of alcoholic beverages (except for preapproved sales of wine), bottles selling for serious money are advertised as empty (wink, wink). Pappy 23-year-old is only the most sought-after of the lot; other bourbons, like Black Maple Hill and Eagle Rare (not to mention Pappy 20- and 15-year-old) are almost as coveted. Despite being sold for $600 or even $700 on the Internet, the 23-year-old Van Winkle isn’t even the most expensive bourbon to be found on the open market: A Brooklyn, N.Y., whiskey bar and restaurant, Char No. 4, sells 24-year-old Martin Mill at an astounding $100 per ounce.

Drinkers have been willing to pay a premium for high-end spirits such as single-malt scotch and V.O.C. cognac for many years. But I can’t remember anyone hawking “empty” bottles of them online. So what is driving this bourbon frenzy? Part of it is the simple issue of scarcity. “We never know when we are going to get a case of Black Maple Hill,” said Nima Ansari, the spirits buyer for Astor Wines & Spirits, one of New York’s top liquor stores. “We can’t really say we carry it. If we have it, word gets around, and then it’s gone.” The best bourbons generally take more than 15 years to age, and no one saw the current bourbon boom coming in the ’90s; if anything, demand was down at the time. The bourbon producers are doing everything in their power to cope with a demand the simple physics of space-time makes impossible to fill. Some, like Maker’s Mark, have been reduced to the expedient of simply watering down their liquor-a plan it quickly abandoned, though not before a public-relations disaster of New Coke proportions.

Of course, as anybody who ever had a crush on someone unavailable can testify, obstacles have a way of making an objective more attractive. Plus, small-batch production speaks to a particular ideal of quality that is very much in the air: We live in an era of “artisanal” jams and candy bars. The craft cocktail movement, more to the point, put customers in a woozy and expansive frame of mind. “The revitalization of cocktail culture helped make bourbon cool again,” said Eric Gregory, the president of the Kentucky Distillers’ Association. “People are drinking classic cocktails again. They watch ‘Mad Men’ and want to order an Old-Fashioned like Don Draper. It’s part of the culture now.”

Beyond the Mystique: What We’re Actually Drinking

Bourbon is, legally speaking, a whiskey made from at least 51% corn and aged in charred new oak barrels. (There are some complicated proof requirements, but they’re not important.) The original purpose of charring was to make the wood smooth and clean, but the burn imparts its own smoky taste and rich red color, too. As for the requisite newness-barrels are used only once; after that, they’re often shipped off to Scotland for aging that country’s own native spirit-it guarantees that there is plenty of the wood’s natural sugars, vanillas and tannins to impart. Other ingredients, like rye or wheat, affect the taste, as does the water bourbon is made with and, of course, the amount of time it sits in a barrel. Most bourbons are a mix from various barrels the master distiller selects, but some are from a single barrel he or she considers exceptional and are marked as such on the bottle.

If the pump was primed for bourbon generally, the idea of trophy bourbon came in the form of the Pappy-worship expressed by influential chefs like Anthony Bourdain, David Chang and especially Sean Brock, of Husk in Charleston, S.C., who calls it “America’s finest product.” Why not pay for the greatest of all American spirits? “Big bottles” are, after all, a huge part of high-end dining and drinking, a sector of the market that has swollen in recent years. It’s only natural that, as Americans have come to accept our own cuisine as being as good as France’s or Japan’s, we’d do likewise for our native liquor.

Things can start to get weird, though, when a bottle’s cultural value balloons out of pace with its rate of production. The connoisseur who sighs longingly over the memory of a Cheval Blanc ’47 revisits a real and precious experience; a day-trader who guzzles Rémy Martin Louis XIII because it’s the most expensive bottle at the bar is just a punch line. (The latter liquor is so highly valued that thieves once broke into Manhattan’s Osteria del Circo just to steal it, leaving the cash register untouched.) It’s inevitable that, in a seller’s market of the kind the best bourbons now command, a fog of mystery would begin to shroud some of the less well-known brands on the shelves.

For one thing, it’s not always entirely clear to buyers that very few bourbons are actually distilled by the people who sell them. There are basically a handful of big distilleries in Kentucky responsible for nearly every good bourbon you ever heard of. The Buffalo Trace distillery by itself produces not only its namesake bourbon, but also Eagle Rare, Blanton’s, George T. Stagg, Elmer T. Lee and dozens of others, including the Old Rip Van Winkle brands. (Although, just to be clear, those are all made to the Van Winkle family’s minute specifications.)

The fact that so much small-batch spirit is made at a few large distilleries should come as no surprise, given how many independent outfits had to give up their stills during Prohibition and subsequent calamities. But it does take something away from the artisanal mystique to think of many singular bottles coming from the same factory. Likewise, some of the best bourbons, including Black Maple Hill, don’t really exist as a single liquor with a single recipe: They’re mixed from different bourbons acquired from multiple sources, and aged and bottled by the Willett Distilling Co. (which has its own line of superb whiskeys, some of which are labeled Willett, some of which aren’t). There’s nothing shameful about the practice; Johnnie Walker Blue Label is a blended whiskey, too, and better by far to my taste than any single-malt. You can see how a person might get confused, though, what with the hand-numbered bottle and the “limited edition” boast on the label. Still, there’s no doubt these bourbons are worth the cost. “The best of these are incredible values for what they are,” said Astor’s Mr. Ansari.

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February, 2013, Control State Results

Source: NABCA

Mar 22nd

During February, nine-liter spirits case sales in the control states fell 0.4% compared to same month last year sales. Rolling-twelve month volumes were up 3.5% compared with January’s 4.0%. Maine reported a monthly growth rate exceeding its twelve month trend.

Control state spirits shelf dollars were up 2.6% during February while trending at 6.4% during the past twelve months. Maine and Wyoming reported growth rates exceeding their twelve month trends.

Price/Mix for February is 3.0% lagging January’s 3.6%.

Control State spirits sales during February as reported appear to be sluggish. During analysis recall that 2012 was a leap year, and February had an extra day. This year’s February has 3.4% fewer selling days than last year’s.

During February, Irish Whiskey, with 0.8% share of the control states spirits market, was the fastest growing category with 16.4% growth reported and a twelve month growth trend of 19.6%. Vodka, with 35% share, grew during the same periods at -0.8% and 4.7%. During February no category reported a growth rate exceeding its twelve-month trend.

February’s nine-liter wine case sales growth rate was 2.7%. Pennsylvania, New Hampshire, Utah, Mississippi, Montgomery County Maryland, and Wyoming reported 3.4%, 6.7%, 3.8%, -4.7%, -7.2%, and 4.0%, respectively. February’s rolling-twelve month wine volume growth, 4.3%, mirrors January’s.

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Anheuser, Modelo Merger Will Be Tipping Point, Suit Warns

Source: Law 360

By Kurt Orzeck

March 22, 2013

Anheuser-Busch InBev NV, the world’s biggest beer brewer, will have a virtual monopoly on beer sales in the U.S. if federal authorities approve its proposed $20.1 billion acquisition of top-selling importer Grupo Modelo, warns an antitrust suit filed Friday in California federal court.

The plaintiffs – nine beer drinkers who live in Missouri and California – claim the proposed merger violates the Clayton Antitrust Act. With MillerCoors owning a roughly 30 percent share of beer sales in the U.S., the merger would mean that two companies would control between 85 and 95 percent of the market, the complaint alleges.

“If Modelo goes, the dam breaks on prices and quality,” Joseph M. Alioto of Alioto Law Firm, which is representing the plaintiffs, said Friday.

The lawsuit comes one week after AB InBev and the U.S. Department of Justice announced that they had made “substantial progress” in talks to settle the DOJ’s antitrust suit, raising prospects for the approval of the merger.

In June, U.S.-Belgian-based AB InBev and Mexico-based Modelo announced their plans to create a global powerhouse in the ever-consolidating beer world. Together, the companies would hold 46 percent of the U.S. beer market, according to the DOJ said in June.

But in late January, the DOJ sued to block the combination. At the time, Antitrust Division chief Bill Baer warned that removing Modelo from the competitive landscape would make it even easier for AB InBev and the other “remaining beer companies to engage in coordinated leader-follower pricing strategies in the future.”

Just two weeks later, AB InBev agreed to send more of Modelo’s U.S. assets to Constellation in a bid to secure the DOJ’s approval. Now, in addition to getting full ownership of Crown, Constellation will pay another $2.9 billion for Modelo’s Piedras Negras brewery in Mexico, as well as perpetual licenses to Modelo’s brands.

Following the revision of the proposed merger’s terms, AB InBev and the DOJ last week requested an extension of their antitrust battle from Mar. 19 to Apr. 9, saying the stay would likely allow them to resolve the dispute. A D.C. federal judge granted the extension Wednesday.

The extension of the stay prompted the filing of the Friday antitrust suit, according to Alioto.

“When we found out about that, we knew they were going to lay down,” he said.

The customers allege the merger would mean higher prices for lower-quality beer. Modelo provides a check on top beer brewer AB InBev from raising its beer prices, but the check would vanish if AB InBev doubles its 50 percent controlling interest in the third-largest brewer of beer sold in the U.S.

Representatives for AB InBev and Modelo did not immediately respond to requests for comment Friday.

The lawsuit said Modelo has resisted price hikes in the past, providing a competitive constraint on AB InBev and MillerCoors. If the latter companies were to raise the price of their premium beers, consumers would defect to Modelo’s premium plus beers, the suit argued.

“If the Modelo merger goes through, beer prices will go through the roof, and there won’t be any more quality control,” Alioto predicted.

The antitrust lawsuit seeks a declaration that the proposed merger violates the Clayton Antitrust Act, and preliminary and permanent enjoinings from the defendants finalizing the acquisition. The plaintiffs also requested attorneys’ fees, court fees and additional relief if deemed appropriate by the court.

Plaintiffs are represented by Joseph M. Alioto, Theresa D. Moore, Thomas P. Pier and Jamie L. Miller of Alioto Law Firm.

Counsel information for the defendants was not immediately available Friday.

The case is Steven Edstrom et al. v. Anheuser-Busch InBev SA/NV et al. case No. 3:13-cv-01309 in the U.S. District Court for the Northern District of California.

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PERNOD RICARD : USA Issues Allergy Alert on Undeclared Sulfites in New ‘TUNE’ Product

Source: 4-Trader

03/22/2013

Pernod Ricard USA is voluntarily recalling Absolut TUNE, a sparkling fusion of wine and vodka, because its label neglected to disclose that the product contains sulfites.

The sulfites in TUNE are safe for the vast majority of people, and sulfites are present in many other food products and beverages, such as wines. A small portion of the population is allergic or sensitive to sulfites. To date, the company has not received any reports of adverse reactions associated with this product.

TUNE has been distributed in retail stores in 10 U.S. states (Arizona, California, Florida, Hawaii, Illinois, Massachusetts, Nevada, New Jersey, New York and Washington) since being launched in late 2012. Pernod Ricard USA, which markets and distributes TUNE in the U.S., voluntarily initiated the recall today after learning of the labeling error. New corrected labels are being produced, and it is expected that TUNE will be restored to U.S. shelves as quickly as possible.

The company is cooperating with the appropriate authorities, including the U.S. Alcohol & Tobacco Tax & Trade Bureau, on the recall. “This is not a product quality issue. Rather, it is an issue involving the need for labels to inform susceptible sulfite sensitive individuals. Providing correct information for consumers always has been a top priority for Pernod Ricard USA,” said Bryan Fry, the company’s President and Chief Executive Officer.

Consumers who purchased TUNE and wish to obtain a refund should contact the company’s consumer hotline at 1-866-220-8713. That line is answered live Monday – Friday, 8 am to 5 pm (ET).

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Not all craft beers are created equal. The most expensive brands are driving the majority of growth for the craft beer segment

Source: GuestMetrics

March 25, 2013

According to GuestMetrics, based on its database of POS sales in restaurants and bars, the most expensive tier of craft beer brands are responsible for the majority of the growth in the craft beer segment.  “As is widely known, craft beers displayed strong growth last year, taking about 1.3 points of unit share in on-premise at the expense of premium light, import, and premium regular beers. In addition, during the first 2 months of 2013 the craft beer segment continued its momentum, gaining 1.2 points of unit share in on-premise despite a slowdown in the overall beer category due to pressure on low and middle income consumers, which has pressured overall growth in restaurants and bars.  To better understand what drove the strength in craft beers, we identified four broad price tiers across the roughly 3,000 craft brands sold in on-premise,” said Bill Pecoriello, CEO of GuestMetrics LLC.  “Similar to the premiumization taking place in the wine and spirits categories, the most expensive tier of craft brands drove a disproportionate share of the growth in craft beers.”

“The most expensive price tier, which we are calling Tier I, had an average price $6.65, which is 20-50% greater than the other three tiers’ average prices, and accounted for about 19% of all craft beers sold last year,” said Peter Reidhead, VP of Strategy and Insights at GuestMetrics.  “However, despite being significantly more expensive, Tier I grew unit sales by 27% versus the much more modest 3% unit growth among the other three tiers, which accounted for 81% of craft beers sold.”  Based on GuestMetrics’ price segments within the craft beer segment, Tier I accounts for 19% of unit sales, Tier II for 36%, Tier III for 26%, and Tier IV for 20% of unit sales.  “Based on the significant difference in growth rates, of the 1.3 points gained in unit share by craft beers last year, 0.7 points of the gain was due to share gains by Tier I brands.  To put that in perspective, even though Tier I only accounted for 19% of craft units sold, it accounted for 54% of the share gains.”

“It’s important for restaurant and bar operators to understand the specific brand dynamics in their local market in order to maximize revenue and profits,” said Brian Barrett, President of GuestMetrics. “Within Tier I, the three brands that gained the most in share were Lagunitas India Pale Ale, Karl Strauss Red Trolley Ale, and Stone India Pale Ale.  As we progress further into 2013, we will be able to monitor whether this trend of premiumization within the craft segment continues to take place, and which brands lead the charge.  This also has implications for the mainstream brands that have been losing the most share, Bud Light, Miller Lite, and Budweiser.”

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Pennsylvania: Pa. liquor bill likely to be pulled over in Senate

Source: AP

PETER JACKSON

Saturday, March 23, 2013

The confetti has been swept up and the empty champagne bottles cleared away. The hubbub of news releases, tweets and Facebook postings trumpeting the pros and cons of Pennsylvania’s latest liquor privatization bill has culminated in its passage by the House.

In a nearly straight party-line vote, the Republican majority handed Gov. Tom Corbett a victory that he and his allies fought hard for, even though the bill differs radically from his original plan to auction off the 600 state liquor stores.

The compromise plan is designed to phase out the state-run stores county by county, as private operators , beer distributors only for the first year , and others buy at least 1,200 liquor and wine licenses. It also would allow grocery stores to sell wine.

GOP leaders fast-tracked the bill in the House, where privatization efforts collapsed last summer without reaching the floor. The Liquor Control Committee endorsed the compromise Monday and House passage on a 105-90 vote followed three days later , despite warnings from a united Democratic minority that the measure would put thousands of state store employees out of work and fail to generate the revenue that supporters anticipate.

Such speedy action is unlikely in the Senate.

For one thing, the Republican chairman of the Senate Law & Justice Committee, Sen. Charles McIlhinney, and its ranking Democrat, Sen. Jim Ferlo, have competing proposals that would keep the state stores open and preserve thousands of union-represented jobs.

McIlhinney, R-Bucks, has introduced a bill to expand the number of liquor and wine stores by making a license available to each individual or company that currently holds a hotel or restaurant liquor license. It also would establish a process that would make it possible for beer distributors to also be licensed to sell liquor and wine.

Ferlo, D-Allegheny, is seeking co-sponsors for a bill to allow distributors to sell beer in six-packs other quantities smaller than a case and allow direct wine shipments, more liberal state store hours and the opening of additional state stores.

Signaling expectations that the Senate would take a deliberative approach on the issue, Senate Majority Leader Dominic Pileggi said hearings on the House bill would be held within 30 to 60 days. Senate President Pro Tempore Joe Scarnati said he anticipates Senate action sometime before the end of December.

“Clearly there’s going to be a major debate in the Senate,” said Scarnati, R-Jefferson, pointing out that Republican senators hold only a four-seat majority.

“We start in the Senate with 23 `no’ votes from the Senate Democrats on any bill, so it’s going to certainly take us some time to digest what the House sends us,” he said.

Said Pileggi, “The House has been working on this issue for over two years. … It’s not something that’s been an item of active interest and discussion in the Senate.”

Faced with a sagging job-approval rating and more than a half-dozen potential Democratic challengers to his re-election in 2014, Corbett is pursuing an ambitious, three-pronged agenda as he enters the second half of his term.

He says ending the state’s monopoly over the sale of liquor and wine will help pare state government to “core functions” like education and public safety. His legislative trinity also calls for cutting future pension benefits of state and school employees to reduce the cost to taxpayers and increasing gas-tax revenue to accelerate highway and bridge work.

Corbett has plugged the privatization proposal tirelessly, injecting it into speeches other topics. In remarks to a Pennsylvania Farm Bureau luncheon this week in downtown Harrisburg, he likened privatization to the colonial-era Whiskey Rebellion.

“It’s time for another rebellion,” he said.

In the Senate, “the governor will take this one step at a time,” said his spokesman, Kevin Harley.

Pileggi, R-Delaware, said he expects no less.

“The governor has shown … a great deal of flexibility and pragmatism” in negotiating details of the House bill, Pileggi said. “I would expect that he would continue to show that flexibility and pragmatism as the issue is considered in the Senate.”

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Pennsylvania: Local police chiefs worried about expanding booze sales, increasing enforcement duties

Source: CentreDaily.com

By Matt Carroll

March 22, 2013

As the state House on Thursday approved a bill to privatize liquor sales in Pennsylvania, local law enforcement officials were warning of negative impacts the legislation could have locally.

State College Police Chief Tom King cautioned that privatization of beer, wine and spirits sales could also lead to more alcohol-fueled crime and further stretch budgets of police departments tasked with keeping alcohol abuse in check.

And those issues could be exacerbated in a college community with a youthful population, said King.

“It’s a big concern,” he said.

In essence, the bill would create 1,200 wine and spirit licenses that beer distributors would get the first shot at obtaining. It would also give grocery stores the opportunity to sell wines. The state stores would eventually be phased out.

Proponents of the plan said it would generate tens of millions of dollars for the state. It also figures to lead to more stores being able to sell alcohol and for longer hours during the week.

For King, that greater access goes hand-in-hand with increased risk for abuse.

He pointed to a study conducted in 2011 by the U.S. Centers for Disease Control that recommended against further privatization of alcohol sales. The study found “strong evidence privatization results in increased per-capita alcohol consumption, a well-established proxy for excessive consumption.”

“Based on density and increased hours of operation, you also increase alcohol-related crime,” King said. “That’s my experience, but that’s also based on research.”

And if there is an increase in alcohol-related crime, there must be an increase in enforcement. Local police chiefs are worried that responsibility will fall on their already-stretched budgets.

“I believe the enforcement will fall more to local police,” said Ferguson Township Police Chief Diane Conrad. “I’m always concerned about our ability to provide sufficient services, certainly that’s one concern.”

Conrad suggested some money generated by the plan be sent to police departments.

“It’s a drug, and it creates a lot of behavior and health issues” King said. “It’s used in apartment buildings, streets and fraternities. Our local taxpayers pay all the bills for that and get nothing out of the sale of alcohol.”

For King, another potential issue is increased competition between new vendors who have shelled out large sums of money for the right to sell alcohol.

“Most will be responsible, but others might take some chances. They might roll the dice,” King said. “There is more of a motivation to sell illegally if you get the wrong owners, and we know a certain percentage will be.”

Bellefonte Police Chief Shawn Weaver said he is concerned that could lead to more underage drinkers being able to purchase alcohol at stores.

And the local police chiefs are not alone. The 1,200-some members of the state Chiefs of Police Association sent a letter last week to the General Assembly expressing “significant concerns” about the bill.

In the letter, the association said the bill would creates public safety concerns and taxes the resources of local law enforcement without providing funding to address the issues.

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Pennsylvania: Public Opinion of Liquor Privatization

Source: Commonwealth Foundation

Mar 22nd

A strong majority of Pennsylvanians favor ending the government sale of wine and spirits according to a comprehensive poll conducted by nationally-renown pollster Fairbank, Maslin, Maullin, Metz & Associates (FM3).  From January 22-27, 2013, FM3 polled 800 randomly-selected Pennsylvania registered voters.  The margin of error for statewide results is 3.5%.

http://www.commonwealthfoundation.org/research/detail/public-opinion-of-liquor-privatization

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Competition?

Wall Street sees opportunity in marijuana

Hoping to cash in if pot becomes legal nationwide, entrepreneurs pitch their ideas to potential investors.

Source: LA Times

By Andrew Tangel, Los Angeles Times

March 23, 2013

Amid the whir of fans and the glow of soft white light, workers tended to bright green seedlings sprouting in a giant greenhouse.

Located about an hour’s drive from Manhattan in the hills of northwestern New Jersey, the facility produces basil, chives, oregano and other herbs that are sold in grocery stores around New York City.

But if Ken VandeVrede has his way the facility will one day be growing a much more valuable plant: marijuana.

VandeVrede is chief operating officer at Terra Tech, a hydroponic equipment maker based in Irvine. The small company wants to double the five-acre New Jersey greenhouse operation. The aim is one day to supply the exploding U.S. medical marijuana trade and to prepare in the event that recreational marijuana ever becomes legal nationwide.

“We can scale this thing very, very quickly,” said VandeVrede, clad in blue jeans and a pumpkin-colored sweater as he surveyed his indoor fields of produce and flowers. “When hemp and cannabis become legal, we’re ready to rock and roll.”

To do it, Terra Tech needs to raise $2 million. And like a number of small businesses in the burgeoning U.S. cannabis industry, it’s trying to enlist Wall Street’s help. Business owners have been pitching their ideas to potential investors, coming to New York in some cases to meet with would-be financiers.

Wall Street has good reason to smell potential profits.

Washington, D.C., and 18 states, including California, have already legalized medical marijuana; there are formal measures pending in 10 additional states, according to the National Cannabis Industry Assn.

Colorado and Washington legalized recreational marijuana use in November. In addition, a measure allowing “adult use” of pot has been proposed in Maryland, according to the association’s tally. Various bills to legalize marijuana and hemp have been proposed in Congress too.

Although pot remains contraband under federal law, some entrepreneurs see marijuana heading down the same path as Prohibition, which banned the manufacture, transportation and sale of alcohol from 1920 until it was repealed in 1933.

“More and more people see the inevitability,” said Brendan Kennedy, chief executive of the Seattle private equity firm Privateer Holdings, which targets cannabis-focused start-ups. “They see that the Berlin Wall of cannabis prohibition is going to come down.”

Privateer is raising $7 million to acquire small companies that have a hand in the trade but don’t grow or distribute marijuana. Its first acquisition: Leafly, a Yelp-style online rating site in Seattle for dispensaries and varying strains of marijuana.

With pot still federally outlawed, others are making similar bets – funding firms that supply equipment or ancillary services while steering clear of marijuana farming and sales.

Take Lazarus Investment Partners, a $60-million hedge fund in Denver, for example. One of Lazarus’ investments is in AeroGrow International Inc., a maker of hydroponic kitchen appliances geared toward growing herbs, lettuce and tomatoes.

Lazarus, which owns 15% of AeroGrow’s shares, has suggested that the company tweak its products to accommodate taller plants, including marijuana, said Justin Borus, the fund’s managing partner.

“We want to be selling the bluejeans to the gold miners,” Borus said. “We don’t want to take a bet on which state is going to get legalized and which dispensary is going to succeed, or [which] cannabis growers are going to be successful. We want to just make a bet on overall legalization.”

In California, MedBox, a West Hollywood maker of automated dispensing machines for doctors’ offices, pharmacies and pot dispensaries, is on the hunt for funding.

Vincent Mehdizadeh, MedBox’s founder, said the company is actively exploring raising $20 million in equity to boost staffing and fund research and development, acquisitions and marketing.

Mehdizadeh said he’s seen a “major spike” in interest from potential financiers looking to invest in the small company since Colorado and Washington legalized recreational pot use last year.

“Everybody’s loosening up a lot because they realize the momentum has shifted and the financial world is going to have to make room for this industry,” he said. “Wall Street and investment banks are going to have to come along for the ride, eventually.”

Derek Peterson, president and chief executive of Terra Tech, is working to get his company’s shares listed on a stock exchange by the end of the year. The company may try for NYSE MKT, which was formerly known as the American Stock Exchange and is geared toward smaller companies, or perhaps the Nasdaq Stock Market, he said.

“The stodgier Wall Street types are starting to realize there’s money to be made here,” said Peterson, who worked in wealth management at Wachovia Securities and Morgan Stanley Smith Barney.

The company has taken steps to get the word out to investors. It tapped Midtown Partners, a small New York boutique investment bank, to help it explore financing options as it planned the New Jersey greenhouse expansion. Terra Tech is merging with the farm’s owner, NB Plants, and retail gardening center and nursery. Both are owned by VandeVrede’s family.

Initially, the vast majority of Terra Tech’s revenue will come from cultivating fresh herbs and flowers from the New Jersey farm, with the rest coming from equipment sales. The idea is to first feed urban consumers’ growing appetite for pesticide-free produce, then add pot or hemp when the legal climate is right.

“There is this huge demand for organic food,” said Prakash Mandgi, Midtown Partners’ director of investment banking. “Marijuana cultivation, in my opinion, is a potential driver in the future, but it’s so tied to government rule and regulations…. Federally it’s illegal.”

Estimates for the marijuana industry’s size range widely, since much of the trade remains on the black market. Bloomberg Industries recently pegged it at $35billion to $45 billion.

Still, Wall Street is by no means opening the floodgates of capital.

Companies in this space are still quite tiny, not to mention risky, compared with large corporations trading on the New York Stock Exchange or the Nasdaq.

Moreover, Wall Street firms face a significant disincentive to investing in the industry: federal law. Growing and distributing marijuana can still lead to raids by federal agents – not to mention prison time and huge fines.

Major banks have come under intense scrutiny by the federal government in recent years for violating laws aimed at preventing money-laundering. The British banking giant HSBC paid $1.9 billion to end a U.S. investigation into its role processing cash for drug cartels and customers in rogue nations.

Marijuana dispensary owners have complained of difficulty opening bank accounts, forcing them to operate in cash only.

“This is messy,” said Dan Richman, a former federal prosecutor who handled narcotics cases and now teaches at Columbia Law School in New York. “This might be complex politically. It’s not complex as a matter of federal criminal law.”

Investors in businesses involved in growing or distributing cannabis could face civil forfeiture actions to seize their investments or other assets, Richman said.

“I would think the prospectus would have to say: ‘The government might come and take all of your money and possibly go after you,’” Richman said.

Federal law may not deter all investors. After all, the government can choose what laws to strictly enforce, and it’s unclear how the federal government will ultimately treat legalized recreational pot in Colorado and Washington.

Alan Valdes, a floor trader on the New York Stock Exchange, expects some of Wall Street’s more adventurous investors to put up money for a project he’s involved with called Diego Pellicer Inc.

The business idea is to open a dozen Starbucks-like high-end shops for pot in Colorado and Washington. Valdes said he and his partners might begin tapping investors – wealthy individuals, family-run funds – later this year.

“These are more mavericks – these are gunslingers,” he said of potential investors. “The big houses are off the table right now.”

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Kingway Brewery Holdings posts FY loss as sales slump (Excerpt)

Source: Just-Drinks

By Andy Morton

22 March 2013

Kingway Brewery Holdings has posted a marked fall in sales, pushing the Guangdong brewer into the red ahead of its acquisition by SABMiller’s China JV.

Net losses totalled HKD168.5m (US$21.7m) in the 12 months to the end of December compared to a HKD34.8m profit in 2011, Kingway said this week. Net sales fell by 12% to HKD1.55bn over the same period while operating profits dropped by 95% to HKD11.2m.

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Treasury Wine Sees China as World’s Largest Market in 10 Years

Source: Bloomberg

By Kevin Hamlin & David Fickling

Mar 22, 2013

Treasury Wine Estates Ltd. (TWE), the world’s second-largest wine company, expects China to overtake the U.S. by 2023 as the biggest wine market globally.

Chinese wine sales will rise to about 500 million cases a year in a decade, from 150 million cases at present, Chief Executive Officer David Dearie said in an interview in Beijing today, citing company estimates. That will put China ahead of the U.S., which will sell about 450 million cases, he said.

Treasury, whose brands include Penfolds and Rosemount, is hoping to boost sales to about 60 cities in China within five years from less than 16 at present as it tries to capitalize in Asia, its fastest-growing and highest-margin market. Revenue at the Melbourne-based company’s Asian unit rose about 10 percent for the six months ended December from a year earlier, according to data compiled by Bloomberg.

“Where the track record has been in terms of growth for the last two or three years has definitely been in Asia,” Paul Rayner, Treasury’s Chairman, said in the interview. “There’s a huge opportunity for us to take market share with premium wines.”

The Melbourne-based company’s board is visiting China.

Treasury has gained 46 percent in the past 12 months on speculation a long-term global glut in wine will turn to a deficit because of growing demand, bad harvests and as some producers cut output. The stock closed 0.7 percent lower at A$6.05 in Sydney trading today.

Satisfying Demand

Treasury hasn’t been affected by a frugality drive by the government of President Xi Jinping even though about 40 percent of purchases are for business occasions, Dearie said.

“The challenge we have now is we just don’t have enough supply to satisfy demand,” he said.

Treasury’s focus in China is to sell premium mass market wines to consumers between the ages of 20 and 45 with annual disposable income of 150,000 to 200,000 yuan ($24,100 to $32,100) a year, Dearie said.

“We see Asia contributing nearly A$200 million ($208 million)” to Treasury’s earnings before interest and tax by 2016, David Errington, an analyst at Bank of America Corp.’s Merrill Lynch unit, wrote in a note to clients March 19.

2008 Vintage

Treasury’s 2008 Penfolds Grange Shiraz received a “perfect” 100-point score from Robert Parker’s Wine Advocate review. The vintage will also get a boost in sales in Asia because it was the same year as the Beijing Olympics and the number eight is considered lucky in China, Errington wrote.

Asia is Treasury’s smallest market by volumes, with sales of 600,000 12-bottle cases in the six months ended December. Earnings before interest, tax, and adjustments for the value of the company’s vineyards were about A$13.5 million in Asia, compared to A$5.9 million in Europe where the company sold 3.4 million cases.

Treasury added 25 staff in the country in the past year, bringing the total to 40, Dearie said.

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Raising A Glass To Jim Barrett, Who Put American Wine On The Map

Source: NPR

by NPR Staff

March 23, 2013

If you’ve ever had a glass of California chardonnay that was not from a box, you can give a toast of thanks to Jim Barrett. The 86-year-old vintner passed away last week, after an interesting and varied life that left a lasting legacy in American wine production.

“The guy went from being an attorney to being on a submarine in the Korean War to owning one of the best American wineries,” says Scott Wilson, one of the 3 Wine Guys, a podcasting trio of wine experts. “I mean it’s a pretty amazing life.”

When Barrett showed up in Napa Valley in the 1970s, he says, the place was hardly the lush green countryside we see today.

“It definitely was a different world than it is now,” Wilson tells NPR’s Don Gonyea. “I mean you drive down Napa [now] and it’s winery after winery. It was actually real farm country and the Chateau Montelena had been in disarray for decades.”

Barrett bought the chateau and set about transforming it. He had a lot of work ahead of him – not just to revitalize Chateau Montelena, but to defy the stereotype of domestic wines as mass-produced swill, says Wine Guy Stevo Anthony.

“In the ’60s, there was a real bad connotation for wines in general,” Anthony says. “We didn’t think of wines from Napa or Sonoma as having any cache whatsoever.”

Serious wine dealers completely ignored American products, but Barrett changed all that when his Chateau Montelena chardonnay put America on the wine map in a dramatic way.

In 1976, a British wine merchant organized a blind taste test pitting some of the up-and-coming American wines against some of the biggest names in French wines, in what became known as the Judgment of Paris.

“He thought it would be funny in our bicentennial year … to basically put egg on our face,” Anthony says. “And lo and behold we shocked the world.”

Barrett’s American wine took first place among the white wines, and it was a huge controversy.

“One of the judges grabbed her ballot and wanted to tear it up,” Wilson says.

“I mean it was a situation where not only did the little guy beat up the bully, but ended up dating his sister as well,” Anthony says. “It was awesome.”

The story of this huge upset was told in the movie Bottle Shock, starring Bill Pullman as Barrett and Alan Rickman as British wine merchant Steven Spurrier.

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Corton-Charlemagne White Wine on Sale at Hart, Christie’s

Source: Bloomberg

By Guy Collins

Mar 22, 2013

Corton-Charlemagne white wines from the past 20 years are among Burgundies leading auctions by Christie’s International Plc and Hart Davis Hart Wine Co. this month and next, according to their online catalogs.

A 12-bottle lot of Corton-Charlemagne Coche-Dury 2005 carries an upper estimate of $28,000 at Hart’s Chicago sale today, while older vintages of Corton-Charlemagne Bonneau de Martray dating from 1990, 1992 and 1997 feature in mixed lots at a Christie’s auction in Amsterdam next month.

White Burgundies have benefited from increased investor demand for wines from the region in the past four months, as the London-based Liv-ex Fine Wine 50 Index has rallied 11 percent since November. Bordeaux vintages, which were sold off during the 16-month market slump starting in July 2011, have started to recover again this year.

“The fine wine market has entered a period of rising prices,” Chris Smith, investment manager at the Wine Investment Fund in London, said in a market commentary this month. Gains on Liv-ex this year “allay our concerns that the upturn which began in December may have been mostly seasonal,” he said.

The fund, which has about $50 million under management, is focused on Bordeaux, partly because the larger wine production from that region’s estates makes them easier to trade.

Among prominent white Burgundy lots in recent auctions, six bottles of Montrachet 1993 Domaine de la Romanee-Conti Grand Cru Burgundy fetched top price at a Sotheby’s (BID) sale in London last month, selling for 21,150 pounds ($32,060).

Today’s Hart sale also contains 175 lots of Domaine de la Romanee-Conti spanning 33 vintages from 1966 onwards, including three bottles of 1999 Romanee-Conti DRC estimated to fetch as much as $35,000 and another three-bottle lot of the 1991 vintage with a top estimate of $32,000.

Here is a list of global wine auctions scheduled so far this year. Dates may be subject to revision, and links are to auction house sale catalogs and websites.

http://www.bloomberg.com/news/print/2013-03-23/corton-charlemagne-white-wine-on-sale-at-hart-christie-s.html

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How to Out-Bordeaux Bordeaux in Silicon Valley

Source: WSJ

By JAY MCINERNEY

Mar 22nd

LOVERS OF TRADITIONAL Bordeaux sometimes complain that the wines being produced in that region today resemble Napa Cabernets more than they do the clarets that made it famous in the 19th and 20th centuries. Detractors point to global warming, as well as to an infusion of technology and the influence of American taste.

Ironically, Ridge Monte Bello, the Cabernet-based wine that some of us believe resembles old-school Bordeaux more than most of what’s being produced under that name today, comes from a steep ridge in the Santa Cruz Mountains overlooking Silicon Valley. Indeed, a recent issue of the French magazine Vigneron calls Ridge Vineyards’ longtime winemaker, Paul Draper, “le plus ‘Bordelais’ des wine-makers Américains.” Daniel Johnnes, wine director of Daniel Boulud’s restaurant group in New York and host of a dinner for Mr. Draper at the restaurant Daniel this past Tuesday, calls Ridge “the greatest American winery.”

Although it’s located just 8 miles from the headquarters of Apple, AAPL +2.03% Ridge Vineyards feels extremely remote, on a wooded limestone ridge high above the Pacific, reached via a series of switchbacks that climb 2,000 feet in less than 5 miles. It looks much as it must have after a San Francisco physician named Osea Perrone planted the upper vineyard in the 1880s. Monte Bello fell into desuetude during Prohibition, and a portion was replanted in the ’40s by William Short, a Unitarian minister jailed as a conscientious objector throughout World War I.

In 1959, four scientists from the Stanford Research Institute bought the property and made wine, initially for their own consumption, from the surviving vineyards. By 1969, the partners decided they needed a full-time winemaker and turned to Mr. Draper, a 33-year-old Stanford grad who had been making wine in Chile. (Long story.) Although he grew up on a farm in Illinois, Mr. Draper was a multilingual epicurean who’d spent time in the vineyards of France and Italy by the time he arrived at Ridge.

A philosophy major with no training in chemistry, Mr. Draper turned to a 19th-century treatise on winemaking by Raimond Boireau, as well as an 1883 work, “The Wine Press and the Cellar,” by pioneering California winemaker Emmet H. Rixford. In retrospect, Mr. Draper’s isolation and his distance from the North Coast winemakers and their academic advisers at UC Davis seems to have been a blessing. While winemaking in Napa became increasingly reliant on high technology, Mr. Draper was essentially making wine the same way it had been made for centuries, with minimal additions of sulfur as a preservative and not much else.

Starting with the 2011 vintage, Ridge labels will list all the ingredients in its wines, perhaps as a way of showcasing its minimalist approach at a time when ingredients like the grape concentrate Mega Purple and the chemical sterilizer Velcorin are widely used in domestic and foreign wines. (Mr. Draper’s Santa Cruz neighbor Randall Grahm of Bonny Doon started listing ingredients five years ago.) Mr. Draper thinks the practice should be strictly voluntary, but hopes to set an example. “We’d like to see people not use the full toolbox of products available to them,” he told me this week at dinner.

“I tasted those early wines when they offered me the job, and those wines convinced me to join Ridge,” Mr. Draper says. “They were totally low-tech. They picked the grapes, stomped them, put them in barrels. No nothing. I tasted the ’62 and the ’64, and they were comparable in complexity and depth to the great vintages of Bordeaux. These guys were doing nothing to the wine, so I figured it had to be the piece of ground.”

Forty years ago, the French concept of terroir, the idea that wines are an expression of the soil and the unique microclimate of their origin, was regarded in California wine circles as folklore. Today, the skeptics are in the minority. For all its traditional Bordelaise character, Ridge Monte Bello is ultimately a wine of the rugged Santa Cruz Mountains, not quite like anything else in France or California. The Monte Bello vineyard could safely be called precipitous, rising from 1,300 feet to 2,700 feet above the nearby Pacific.

“We have a cooler climate than Napa and we are as cool as Bordeaux,” Mr. Draper told me when I surveyed the vineyard with him a few years ago. “Our nights are cooler and our days are warmer than Bordeaux. Acidity is part of what we have, which makes the wines refreshing.” Mr. Draper also thinks the limestone soils, common in French vineyards but rare in California, may contribute a mineral character to the wines, including the Monte Bello Chardonnay, which is less well-known than the Cabernet-based wine but every bit as exceptional.

The cool Santa Cruz climate helps to keep grape yields very low, less than 2 tons an acre as compared with 4 or 5 tons in some Northern California vineyards, which contributes to an intensity of flavor. But unlike most modern Napa Cabs, with alcohol levels of 15% or more-which tend toward black-currant and blueberry-jam flavors-Monte Bello Cabernet usually clocks in around 13.2%. “At that level of ripeness, you’re going to get red-currant as well as black-currant flavors,” Mr. Draper says. Soaring alcohol levels are a hot-button issue in the wine world, but one thing is certain: The older, long-lived Bordeaux and Napa classics, such as Inglenook, were in the 12% range.

Like those wines of old, Monte Bello is very slow to show its charms but ages brilliantly. At the 30th-anniversary restaging of the famous 1976 Judgment of Paris tasting, judges on two continents picked the 1971 Ridge Monte Bello as the top red wine. (In 1976, it placed fifth.) Among the wines Mr. Draper poured at Daniel this week, the ’84 and the ’78 drew raves from the assembled oenophiles, while the ’95 was judged to be promising; old enough to drive in most states, but still a little young to drink.

For those who don’t have the patience to age their Cabs 30 or 40 years, Ridge makes a range of complex but accessible Zinfandels. The Ridge team started making Zinfandel from old vines at the bottom of the hill in order to improve cash flow while replanting more of the abandoned vineyards, eventually seeking out heritage vineyards all around the state, including Lytton Springs, in Sonoma, which they eventually purchased from the owners. Ridge almost single-handedly rehabilitated the reputation of that grape, creating bold, spicy reds. It turns out they age well, too: The 1997 Geyserville poured at Daniel on Tuesday, from an old vineyard on the western edge of the Alexander Valley, was bursting with primary fruit. The prevailing house style is less jammy and alcoholic than the high-octane fruit bombs that some producers made popular in the ’90s, but Ridge Zins are inevitably exuberant and congenial. Geyserville and Lytton Springs, made from a vineyard in the Dry Creek Valley which was planted in 1904, have become iconic American wines, but they’re also the kind of wines that should probably be enjoyed while wearing jeans, preferably Levi’s.

Happily, the eloquent and erudite Mr. Draper, who celebrated his 77th birthday last week, has no intentions of retiring, though he shares winemaking duties with Eric Baugher and John Olney, both of whom have been with him since the ’90s. I suspect he will still be presiding over blending sessions at the winery when that 1995 Monte Bello is finally ready to drink.

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Australian Shiraz

Source: FT

By Jancis Robinson

Mar 22nd

The verdict after tasting 48 vintages made from some of Australia’s oldest vines? ‘Hill of Grace deserves its pinnacle’

Australian Shiraz is not the most timid of wines. In fact, it’s the sort of wine I would choose to keep me warm on a polar expedition, so an ambient temperature approaching 100F seemed far from ideal for a recent celebration of 50 years of Hill of Grace Shiraz at the Henschke family winery in South Australia.

For various logistical reasons, we 16 tasters first met up in the Hill of Grace vineyard itself and I still have the burn marks on my shoulders to prove it. It was almost too hot to talk, but Stephen and Prue Henschke, who met as science students at Adelaide University in the early 1970s and are now in charge of this celebrated eight-hectare vineyard, were determined that we should see the fat, gnarled “Grandfather” Shiraz vines responsible for Hill of Grace.

The story begins with a mid 19th-century precursor of the boat people, an influx of Lutherans escaping religious persecution in Silesia in what is now southwest Poland. Like dozens of other families, the Henschkes made their way north from Port Adelaide to the Barossa Valley but, crucially, they settled not on the baking hot Barossa Valley floor but a few hundred metres higher up in the rather cooler Eden Valley.

In 1860 the Henschkes and their kin built themselves a pretty little church, called Gnadenberg after a place left far behind. Just in front of the church, in the same year, Nicolaus Stanitzki planted a vineyard. He called it Hill of Grace, the English translation of Gnadenberg. By 1891 the vineyard belonged to a Henschke and Stephen and Prue’s children will be the sixth generation to have custody of some of Australia’s oldest vines, up to 150 years old. Most unusually for Australia, they thrive without any irrigation. Indeed it was the oldest vines that coped best with this year’s punishing drought while others were left looking desiccated and droopy.

In the 1950s, when the Australian wine industry was devoted to producing fortified wines, Stephen’s father Cyril thought that the family’s vineyards, in the not-too-torrid heights of the Eden Valley, would be well suited to producing table wines. So he launched a very unusual wine, one carrying not just the name of the grape but also the name of one of his vineyards, Mount Edelstone Shiraz. It was a huge success, and is still highly regarded, but it was the Hill of Grace Shiraz, launched a few years later with the 1958 vintage, that really established the name Henschke with wine cognoscenti.

We had been summoned to the Eden Valley to taste every vintage of this wine that had ever been released, including the 2008 that will be launched at the beginning of next month. Wilting under the heat in the vineyard, I was worried about how the temperatures of wine and tasters was to be managed, but I’d forgotten that the Henschke winery had been built and designed by astute, hardworking Lutherans. A large, airy stone barn was part burrowed into the hillside. Insulated rafters and a modest evaporative air-conditioning system was enough to keep both us and the wines comfortably cool.

We tasted from old to young and the 48 vintages (three were not made) really did tell the Hill of Grace tale with its quirks of winemaking. The wines from the 1950s and 1960s were remarkable – perhaps not exactly subtle but still wonderfully vigorous and so obviously from the same vineyard. The trademarks were a certain saltiness and dried spice character – five spice, volunteered one seasoned Hill of Grace taster. The grapes had been allowed to get pretty ripe. Perhaps, suggested Stephen, his canny forebears had been in the habit of picking as late as possible for their fortified wines so that they wouldn’t have to pay for too much fortifying spirit.

Then came the 1970s. The fashion was for “elegance” and the grapes were picked much earlier. Stephen recalled how, regrettably, during that era some of the really concentrated pressings were sold off to the Henschkes’ friend Murray Tyrrell in the Hunter Valley, who was prepared to pay for this welcome extra stiffening. Cultured yeasts, rudimentary temperature control and some smaller, newer oak casks were introduced in the 1970s but the wines in general lacked the heart of their predecessors.

Stephen and Prue returned from their postgraduate studies at Geisenheim wine research institute in Germany in 1977 and, when Cyril died two years later, Stephen took over the winemaking. “We young turks thought then we could control everything,” he recalled, admitting that he might have applied a bit too much squeaky clean white winemaking technology to his first few harvests. I found the early years of the 1980s some of the least exciting wines in the line-up but then came 1986, a year Prue described as “nature’s gift to the winemaker”. It inspired her, always particularly interested in viticulture, to try to replicate that perfection by manipulating the vineyard of which she assumed control in 1990 on the death of Cyril’s brother Louis. She realised the dry-grown vines would benefit from mulch that would retain moisture in the soil, and also embarked on a painstaking process of identifying and propagating the best ancient plants.

In the winery, Stephen started to study oak in just as much detail, seasoning it for much longer than had been the norm, and experimenting with small French instead of large American oak. (Today, large French is favoured.) But they always retained the concrete open fermenting tanks that are now the height of fashion.

In our line-up of giant Riedel glasses, the Hill of Grace wines really took off from 1986 and the wines of the 1990s were seriously impressive – savoury with flavours of dried herbs yet much fresher than the Australian Shiraz norm. The wines made this century continue to demonstrate the fine tuning process in both cellar and vineyard but are still very youthful. I was convinced at the end that Hill of Grace deserves its pinnacle, and that it could not be in more appreciative hands.

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Campari picks Italian to head Lascelles

Source: The Gleaner

March 22, 2013

Gruppo Campari, the Italian firm which acquired the spirits and merchandise business of Lascelles deMercado and Company three months ago, has appointed one of its own to replace Fraser Thornton as group managing director.

Stefano Saccardi, an Italian and the general counsel and business development officer for Gruppo Campari, has been appointed the new chairman and managing director of Lascelles.

He replaces Gerald Yetming as chairman. Both Scotsman Thornton, who has headed Lascelles since July 2011, and Trinidadian Yetming were appointees of the former owner, the Trinidad government

Saccardi, who was born in Milan, joined Gruppo Campari in 1985 and has held various positions in the legal, corporate and public affairs departments. He holds a law degree.

Lascelles was taken over by CL Financial of Trinidad in 2008. The Jamaican company fell into the hands of the Trinidad government months later in January 2009 when it mounted a rescue of CL Financial and its insurance subsidiary, CLICO.

Trinidad eventually placed Lascelles on the market. The company was snapped up in December by Campari, the sixth-largest spirits company in the world.

The takeover consists of Lascelles’ spirit business including Appleton Estate, Appleton Special and Appleton White, Wray & Nephew White Overproof and Coruba rums.

Campari said the acquisition added ?220m in mostly rum assets to the group. The most-prized company in the acquisition is the 187-year-old Wray & Nephew Limited.

Davide Campari-Milano SpA, together with its affiliate Gruppo Campari, is a major player in the global beverage sector, trading in more than 190 countries, with leading positions in Europe and the Americas.

Headquartered in Sesto San Giovanni, Italy, Campari owns 14 plants and four wineries worldwide and has its own distribution network in 16 countries.

The group employs more than 4,000 people. The shares of the parent company, Davide Campari-Milano SpA, are listed on the Italian Stock Exchange.

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Five years in, Fresh & Easy markets are a flop

The grocery chain, owned by Britain’s Tesco, has failed to gain American shoppers’ loyalty. Several missteps contributed to its estimated $2-billion loss.

Source: Los Angeles Times

By Shan Li

March 21, 2013

British supermarket giant Tesco thought it had the Yanks all figured out.

Determined to crack the U.S. market, it dispatched executives to live with American families, peek into their refrigerators and trail them on trips to the grocery store. It boasted of revolutionizing how Americans shopped.

But slightly more than five years after it opened its first Fresh & Easy Neighborhood Market in California, Tesco is considering selling the money-losing chain and leaving the United States altogether.

An email sent to shoppers recently acknowledged that the grocer doesn’t know “if Tesco will continue to own the company.” The 200-store operation in California, Arizona and Nevada represents an estimated $2-billion flop: a $1-billion investment on top of about $1 billion in cumulative annual losses.

“Tesco’s failure will rank as one of the biggest among food retailers in modern supermarket history,” said Burt Flickinger III, managing director at retail consulting firm Strategic Resource Group in New York.

With headquarters in El Segundo, Fresh & Easy touted itself as a European version of the Trader Joe’s chain, offering an assortment of groceries with an emphasis on fresh products to go. The plan was to slide into neighborhoods close to busy customers and win them over with convenience and tasty takeout meals. Stores were mobbed in the early days as curious customers rushed to check out the new kid in town.

But problems soon appeared.

Labor organizers targeted the non-union chain aggressively; shoppers often had to cross informational picket lines to get into the stores.

Fresh & Easy’s cost-saving business model of using only self-service checkout aisles was a hard sell with some customers who missed the ease of having checkers ring up their purchases.

Then, in 2011, the California Legislature threw a wrench into the works by requiring grocers to keep at least one aisle manned by a checker if alcohol was being sold. The legislation was designed, supporters said, to keep teens from buying alcohol and to preserve supermarket clerk jobs. But Fresh & Easy contended the law was intended to pressure the company into recognizing a union and signing a labor contract.

Industry watchers say Tesco also dug itself into a hole by sinking millions into an 850,000-square-foot distribution center in Riverside County, which put enormous pressure on the chain to quickly expand.

In addition, Tesco failed to customize merchandise by neighborhood, which is why its British stores are so popular. Fresh & Easy offered a limited variety of packaged goods, didn’t carry some well-known brands, was slow to restock popular items and often charged more for its private-label products than for name-brand counterparts, analysts said.

“They offered a uniform assortment in all their stores, meaning a store in upscale Scottsdale, Ariz., would have the same products as in Compton,” said Jim Prevor, an industry analyst who is editor of the food retailing website Perishable Pundit.

Fresh & Easy spokesman Brendan Wonnacott declined to comment beyond noting that the company was focused on “delivering a great shopping trip for our customers.” Tesco is still reviewing its American chain, he said, and will make an update in April as part of the company’s full-year results.

Many customers say Fresh & Easy promised a lot and delivered little.

“It really felt like aliens that crash-landed here in their Tesco-mobile and didn’t even look around to see what Americans liked,” said Gerry Carr, 51, of Venice.

Carr, a longtime vegetarian, said he was annoyed to find few salad options and little choice in herbal teas. Shoppers can’t inspect vegetables, or buy just one tomato or bell pepper, because produce is packed on trays and wrapped in cellophane. The self-checkout stands, which are common in Britain, also made him miss the human touch found at other supermarkets.

“They are teaching you their system, but you don’t want to learn their system,” said Carr, who shopped at Fresh & Easy several times before giving up on the chain.

Fresh & Easy underscores the pitfalls foreign companies with hefty muscles can face when trying to conquer the American market, analysts say. But it also highlights the folly of trying to capture market share by copying established chains such as the beloved Trader Joe’s.

“The two were clearly similar, and their stores are often located near each other,” Prevor said. “But there are only two concepts in the United States that are successful as small-format stores, and that is Trader Joe’s and its corporate cousin, which is Aldi.”

After checking out the first Fresh & Easy stores in Southern California, Joe Coulombe, the founder of the Trader Joe’s chain, concluded the British newcomer was doomed. Coulombe had heard that Fresh & Easy was trying to mimic the homey warmth of Trader Joe’s. What he saw, he said, was anything but.

“It did not resemble Trader Joe’s in any way,” recalled Coulombe, who in 1988 left the chain he envisioned as part gourmet purveyor and part discounter. The chain has a preternaturally friendly non-union workforce kept that way by generous pay and benefits. “I don’t think their management had any idea of what Trader Joe’s was all about.”

Coulombe said he was puzzled by how badly Tesco misjudged what the market wanted.

“Somehow their research got it all wrong,” said Coulombe, who no longer has any connection with the Trader’s Joe’s chain – it is owned by the Albrecht family in Germany, which also controls the discount grocery chain Aldi.

Tesco “spent two years doing market research, which I thought was admirable,” Coulombe said, “but it wasn’t translated into action.”

Ultimately, Fresh & Easy didn’t inspire much loyalty, although it did provoke some strong emotion in Frank Glaser, 79, of Rancho Palos Verdes.

After Fresh & Easy set up shop half a mile from his home, the retired aerospace executive said he worried that his normal neighborhood supermarkets would be hurt. So he and his friends launched an informal boycott of the new store.

“It’s like a small town, and at Trader Joe’s and also Ralphs, you meet your friends and you decide where to go to dinner together,” Glaser said. “I don’t know anybody that goes to Fresh & Easy.”

——

Darden: Specialty group outperforms flagship brands in 3Q

Source: NRN

Erin Dostal

Mar 22nd

Same-store sales at Olive Garden, Red Lobster and LongHorn decline as forecasted

Darden Restaurant Group Inc. reported on Friday positive third-quarter sales at brands in its specialty restaurant group amid declines at its three largest brands.

In an otherwise bleak quarter for the casual-dining restaurant segment, Darden reported a same-store sales increase of 2.3 percent at its Specialty Restaurant Group, which is composed of Seasons 52, Eddie V’s, Yard House, The Capital Grille and Bahama Breeze. Group revenue for the quarter ending Feb. 24 increased 61.1 percent to $287 million.

“The environment is very positive for the group,” said Eugene Lee, president of Darden’s Specialty Restaurant Group. “We’ve seen strong business travel. We’re seeing luxury growth in other aspects in retail, in hotel. We had a very strong holiday season with private dining.”

Darden’s chief executive officer, Clarence Otis, Jr., noted during a call with analysts that the company plans to expand the Specialty Restaurant Group.

Meanwhile, same-store sales fell 4.6 percent at Olive Garden, Red Lobster, and LongHorn Steakhouse, the company’s three largest brands, just over the 4.5-percent drop that the company estimated in a revised forecast released in late February.

“Certainly some of the external factors we’re all aware of including the payroll tax increase, the spike in gasoline prices and more severe winter weather this year contributed to that [decline],” said Andrew H. Madsen, president and chief operating officer at Darden. “Our priority now is regaining same-restaurant traffic momentum.”

A new era for dining out

Madsen noted that in the current market, Darden would have to appeal to different types of consumers: both those who are financially strained, and those who aren’t.

“For many guests, affordability is a particularly important need,” he said. “These guests want to visit casual-dining restaurants in particular more often than they do today, but they feel they cannot afford it. There are also economically secure guests who are looking for distinctive higher-quality dishes and are willing to pay a little more for them.”

Otis said that as a result, the company would focus on tempering average check growth across the larger brands while expanding its Specialty Restaurant Group. “We think that’s what it takes to support same-restaurant traffic growth,” he noted. “We are, for sure, in a new era for dining out,” he said.

The key, he said, is to evolve guest experiences in a way that keeps Darden’s brands interesting and relevant.

One example of how Darden is attempting to meet guest needs is its new fast-casual lunch test at Red Lobster. Running at two Orlando-area locations, the lunch service offers customers quicker dining at a lower price point.

“The lunch daypart, in particular, is one where we know that for a large number of guests, affordability, speed and convenience are very important,” Madsen said.

Stephen Anderson, senior analyst, restaurants at Miller Tabak + Co., LLC, wrote in a report that the most important take away from today’s earnings call was that although same-stores sales declined in February, March numbers are looking up.

“We think many of the macroeconomic risks affecting the sector may be receding at an accelerated pace,” he wrote. “We anticipate above-peer traffic growth [for Darden] in the next few quarters.”

New units drive revenue

Orlando, Fla.-based Darden reported an 18-percent decrease in net income for the third quarter to $134.4 million, or $1.02 per share, compared to $164.1 million, or $1.25 per share, in the prior-year period.

The company’s revenue increased 4.6 percent year-over-year to $2.26 billion during the third quarter.

The opening of 42 net restaurants each at LongHorn Steakhouse and Olive Garden drove revenue increases during the third quarter for the brands despite decreases in same-store sales, the company said.

Olive Garden reported third-quarter revenue of $962 million, a 0.6-percent increase compared to the prior-year period. Same-store sales at the brand’s U.S. locations dropped 4.1 percent during the quarter.

LongHorn Steakhouse reported a 6.9-percent increase in revenue to $332 million, and same-store sales fell 1.6 percent for the brand during the quarter.

At Red Lobster, revenue fell 6 percent to $669 million and same-store sales decreased 6.6 percent during the quarter.

During the fiscal year 2013, the company said it anticipates overall sales growth of 6 percent to 7 percent. For the year, net earnings per share should be between $3.06 and $3.22, which includes about 9 cents in costs associated with the company’s August acquisition of Yard House.

Darden operates more than 2,000 company-owned restaurants systemwide.

——

DRI: March progress may drive 4Q13 upside, but still see risk to 2014

Source: Goldman Sachs

Mar 22nd

What’s changed

DRI reported adjusted fiscal 3Q13 EPS of $1.04 moderately ahead of its prior preannouncement. In terms of composition, restaurant margins were 100bp worse than expected (-$0.17), but lower SG&A provided a full offset (+$0.19). We adjust our 2013-2015 estimates to $3.30/$3.02/$3.18 with the lower out-years to reflect reduced restaurant level profitability.

Implications

We maintain our Neutral rating on DRI shares:

(1) SSS at DRI’s primary brands remain challenged, and we see a lack of visibility towards a fundamental improvement. DRI referenced improved March industry trends, which we presume also translates to DRI. However, it is unclear if this simply reflects easier weather compares rather than real traction with respect to DRI’s ongoing turnaround efforts.

(2) As per DRI’s P&L dynamics this quarter, we believe profitability will remain under pressure from sales deleverage and value investments to re-stimulate traffic growth. The lower SG&A run-rate provides a partial offset, but a rebound of incentive comp will likely limit this counterbalance going forward.

(3) We are below consensus in 2014 where we take a more conservative approach on a brand turnaround than management’s guidance implies. This said, we do note that our 4Q13 EPS estimate is meaningfully above consensus (GS $1.10 vs. consensus $1.03). This may provide room for near-term upside, but we believe any resulting rally may prove short-lived.

Valuation

We raise our P/E and DCF based 12-month target by $5 to $50. Improved sentiment towards dividend stocks may make a 4% dividend yield a floor.

Key risks

Upside/downside risks relate to industry growth and DRI share shifts.

——

Connecticut: Terrified, inept Republicans, and Malloy intent on secrecy

Source: Darien Times

By Chris Powell

March 24, 2013

Alcoholic beverage price competition, proposed by Governor Malloy, is dead in the current session of the General Assembly. Since Sunday openings of liquor stores were legalized last year, most legislators are said to feel that liquor retailers have sacrificed enough already.

The sacrifice of Connecticut’s public, which pays the highest beer, wine, and liquor prices in the country on account of the state’s minimum-pricing law, is, as usual, taken for granted. The policy here is that government should drive up alcohol prices to subsidize small stores in the name of preserving jobs there, a sort of tax whose proceeds go not to the government itself but to a special interest. Of course no one would dare apply this principle anywhere else in the state’s economy. Just think of the jobs that could be created if Connecticut outlawed price competition in everything – food, gasoline, clothing – jobs created, that is,  in other states.

Maybe the small liquor stores can’t be blamed for defending their historic privilege; most would be out of business otherwise. And maybe Democratic legislators can’t be blamed too much either, their party being the parasitic party, the party of the government and welfare classes and everyone else with his hand out, the party determined to turn every aspect of life into political patronage.

But strangely the most ardent defenders of forbidding liquor price competition seem to be  Republican legislators, making a mockery of their party’s supposed belief in free markets. Here is an issue where 10,000 people are exploited for every person who benefits, an issue of enormous political potential, and still most Republican legislators are terrified of articulating the public interest.

Connecticut is full of issues like that – and full of silent Republicans or Republicans whose contribution to debate is only to complain that state government spends too much before they go silent about exactly where to reduce spending and about identifying the policies that drive up costs to taxpayers only to subsidize special interests that support Democratic campaigns.

This lack of intelligent opposition doesn’t just leave the Republicans as an irrelevant minority in Connecticut. It leaves Connecticut with the impression that there is no alternative to its decline – and thus it makes the Republicans most responsible for that decline.

——

Scotland: Moves to lower Scottish drink-drive limit

Source: The Courier

22 March 2013

Scotland’s drink-drive limit will be reduced after almost three quarters of people surveyed supported the policy.

The analysis also revealed 87% of those who want a lower limit agreed with the Scottish Government’s proposal to drop to 50mg of alcohol in every 100ml of blood from the current 80mg of alcohol in every 100ml of blood.

Just 135 people responded to the survey.

Justice Secretary Kenny MacAskill confirmed the Scottish Government will start the process to cut the drink-driving limit in Scotland.

He said: “Drink-driving can shatter families and communities and we must take action to reduce the risk on our roads.

“On average, 30 families every year have to cope with the loss of a loved one and around 900 people are treated for injuries caused by someone who thought it was acceptable to drink alcohol and get behind the wheel and drive. We cannot let this continue.

“Lowering the drink-drive limit will help make Scotland’s roads safer and save lives. The evidence is clear and the vast majority of those who responded to our consultation support the Scottish Government’s plans for change.”

The Scotland Act 2012 transferred the power to set the level of the drink-drive limit from Westminster to the Scottish Parliament.

Kathleen Braidwood, road safety officer for the Royal Society for the Prevention of Accidents (RoSPA) in Scotland, claimed lowering the limit would make roads safer and have a positive effect on society as a whole.

She said: “Far too many people are being killed on our roads as a result of people who drink and drive, so RoSPA is delighted to see that a clear majority of people are in favour of the Scottish Government’s proposal to reduce the current drink-drive limit.

“People need to realise that any amount of alcohol impairs a driver’s ability to judge speed and distance while behind the wheel.”

——

Scotland: Tennent’s owner takes 50% stake in Wallaces Express

Source: The Scotsman

By DOMINIC JEFF

23 March 2013

TENNENT’S owner C&C Group has taken a 50 per cent stake in wine and spirit wholesaler Wallaces Express.

Irvine-based Wallaces will be run independently, delivering products from other drinks firms as well as C&C, which also brews Bulmers and Magners cider. Brian Calder, who took control of the company in 2002 after a career in the business, continues as managing director. The value of the deal was not disclosed.

He said: “This is a major development for Wallaces Express and represents a great opportunity for all our staff and customers. In terms of strategic aims and culture, the two businesses are well aligned and I am confident that both will continue to move forward to the benefit of the Scottish licensed trade.”

Wallaces was established in Ayr in 1875 as a retailer and evolved in the mid 1980s into a wholesaler to the on-trade.

David McCorquodale at KPMG, who advised Wallaces, said Calder had built up a business with six depots and about 6,000 customers across Scotland and Cumbria by concentrating on customer service.

He said: “From C&C’s point of view, it gets a tie up with a business with a good reputation and I’m sure management hope that some of those customers will start buying more C&C products. Brian gets a partner that’s going to help him grow the business and provides further scale.”

——

Scotland: BenRaich ‘delighted’ to buy Glenglassaugh

Source: the drinks business

by Andy Young

22nd March, 2013

The managing director of the BenRaich Distillery Company has said he is delighted with the company’s acquisition of the Glenglassaugh whisky distillery.

Edinburgh-based BenRaich today completed the purchase of Glenglassaugh for an undisclosed sum from Dutch company Lumiere Holdings. Glenglassaugh produces a range of single malt whiskies and currently has the capacity to produce 1.1 million litres of whisky a year.

Mr Walker said: “We’re really delighted to buy Glenglassaugh, a renowned Highland single malt with a rich and distinguished heritage. It’s an excellent complementary fit with our existing BenRiach and GlenDronach brands. Part of its attraction to us is that it isn’t too large for our portfolio but its potential in contributing to the group certainly is.

“It’s our intention to bring this iconic distillery fully back to life by giving it the investment, commitment and care it deserves. I believe our whisky expertise, proven brand-building ability and strong routes to market will help take Glenglassaugh to the next level.”

Glenglassaugh is one of Scotland’s oldest distilleries, dating back to 1875 and is situated on the Banffshire coast close to the village of Portsoy. Distilling operations stopped in 1986 and re-started in 2008.

Glenglassaugh’s managing director Stuart Nickerson said: “It’s great to be back in Scottish hands. Glenglassaugh is a fantastic brand that was unheard of five years ago and today is exported to over 25 countries worldwide.

“It’s highly regarded as a premium brand and has won numerous top awards. We’ve grown the business significantly and today’s announcement means continued investment and will also allow the business to grow further and more rapidly.”

Mr Walker added: “The timing is good as there is no doubt we are currently in a golden age for scotch whisky. There’s unprecedented demand for high-end brands like ours in places like Taiwan, Scandinavia, USA, China, India, Russia, the Middle East, South Africa and South America, and we now have the fantastic opportunity to re-introduce Glenglassaugh to these markets.”

Liquor Industry News 3-23-13

March 23, 2013
www.franklinliquors.com

Franklin Liquors

 

Pernod Plunges as China Extravagance Crackdown Softens Sales

 

Source: Bloomberg

By Clementine Fletcher

Mar 21, 2013

 

Pernod Ricard SA (RI), France’s biggest distiller, slumped in Paris trading after reporting “softness” in revenue over Chinese New Year, an important festival for sales of high-priced cognacs and whiskies.

 

Pernod shares fell 4.4 percent, the most since Sept. 5, 2011, after Pierre Coppere, who heads the Paris-based company’s Asian unit, said he expected Chinese sales in the nine months through March to show “double-digit growth, albeit at the lower end.” The maker of Martell cognac reported that first-half organic sales gained 18 percent in China.

 

Coppere, speaking today on a webcast with analysts, said the distiller still saw “high single-digit volume growth” over Chinese New Year for Martell cognac, but that demand for whisky was affected by measures implemented by China’s new government to limit excessive gift-giving and banqueting.

 

Distillers including Pernod and Remy Cointreau SA (RCO) have benefited from demand for their higher-priced spirits in China, particularly cognac, as sales growth becomes tougher to achieve in the straitened economies of Europe. Chinese President Xi Jinping has been cracking down on extravagant gift-giving and feasting by businessmen and government officials.

 

Pernod shares declined 4.43 euros to 95.57 euros. Remy, the maker of Remy Martin cognac, declined 2.2 percent. Diageo Plc (DGE), which has an alcohol joint venture in China with LVMH Moet Hennessy Louis Vuitton SA (MC), slid 1 percent in London.

 

‘Great Potential’

 

“Asia offers great mid-term growth potential, but China’s recovery could actually take a little bit more time than the market expects,” Laetitia Delaye, an analyst at Kepler Capital Markets in Paris, wrote today in a note. “We think this could continue to weigh on Pernod’s business trends for a few months before seeing volumes — and more importantly, pricing power — coming back.” Delaye has a hold rating on Pernod.

 

Pernod, which claims it’s the biggest seller of cognac in China, said it can still raise the price of the spirit in the country, even as the decline in gifts and banquets drags on sales of higher-end alcohols. Cognac suffered less than whisky over Chinese New Year as it has a “much deeper, larger penetration” in the country, Coppere said. Whisky sales declined by a “double-digit” percentage, he said.

 

 

——

Pernod-Ricard SA: Chinese New Year: No cause for celebration

 

Source: Barclays

Mar 21st

 

Stock Rating/Industry View: Overweight/Neutral

Price Target: EUR 105.00

Price (20-Mar-2013): EUR 100.00

Potential Upside/Downside: +5%

Tickers: RI FP / PERP.PA

 

Disappointment in Asia: Soft Chinese New Year (CNY) trading leaves Q3 Chinese sales broadly flat vs the high teens reported in H1. Adjusting down our forecasts for this leaves the stock trading on a CY14e PE of 16.4x. Although these weaker trading trends do little to dent our core positive medium-term thesis on brown spirits, with less near-term earnings risk, positive FX tailwinds and trading on a PE multiple of 15.9x, Diageo (Overweight, PT £ 21.50) may see better near-term relative performance.

 

A “softer” Chinese New Year: Reports from local Chinese spirits companies, retailers and restaurateurs in recent weeks had suggested the consumer off-take around CNY was weaker than in 2012. However, the size of the slowdown noted by Pernod in an analyst conference call with Pernod’s Head of Asia, Pierre Coppéré, still came as a surprise. According to the group, depletions were flat over the holiday period, while high-end Cognac brands experienced “strong declines,” as gifting and banqueting occasions were reduced in the face of political pressures. This negative sales mix will offset price increases annualizing in the period and leave Q3 sales broadly flat, vs. +18% in H1. In terms of detail, Cognac sales were up high single digits in Q3, (+27% in H1), while Scotch sales posted further double-digit declines. Moreover, poor trading was not unique to China. CNY celebrations in Taiwan and Vietnam were weaker, suggesting the slowdown was not purely politically motivated.

 

It wasn’t all bad: Encouragingly, Q3 Indian sales growth has continued at H1′s 17% run-rate and Mr Coppéré confirmed regional AMP spend has now reached a very good level. In addition, after years of significant route-to-market investment, structure costs are set to fall as a percentage of sales in the periods ahead, driving improved margin leverage.

 

We downgrade EPS by 3%: With Asia accounting for an estimated 75% of Asia/ROW sales, we have downgraded our 9-month regional sales estimate to 9% from 12% – we estimate Q3 sales +4.5%. Assuming regional growth picks up to 14% in Q4, we reduce our FY13e group organic sales growth rates from 6.3% to 5.4%. After adjusting down our H2 13e gross margin forecasts to reflect the weaker sales mix, we cut group EBIT by ?44m, leaving organic EBIT growth at 6.1%. We downgrade our EPS by 3%.

 

Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could

 

 

——

80 jobs to be axed in latest Diageo shake-up

 

Source: Herald Scotland

Tim Sharp

Friday 22 March 2013

 

A rejig of drinks giant Diageo’s supply chain is to result in the axing of 80 jobs in Scotland, most of them managerial posts.

 

The company, which makes Johnnie Walker whisky and Smirnoff vodka, said the changes would be implemented by the middle of 2014.

 

The company said: “To ensure the business in Scotland remains competitive the review identified opportunities to simplify processes and organisation at local levels which will result in a proposed reduction of around 80 roles across Diageo’s 50 sites in Scotland.

 

Diageo said earlier this month it was seeking to strip £60 million from its annual running costs and warned that jobs in the UK were at risk.

 

Under a new management structure, Diageo’s operations in Scotland will be part of an Edinburgh-based international supply centre, which will bring together management of Diageo’s beer, wine and spirits production operations in Europe.

 

The changes come a year after Diageo closed the doors at its Johnnie Walker bottling plant in Kilmarnock in another cost-cutting move, with more than 500 workers made redundant.

 

Diageo is keen to manage its supply chain in the markets where its products are sold rather than on a regional basis.

 

There is little scope for changes in its whisky portfolio which must be distilled in Scotland.

 

However, its vodka can be made anywhere and Diageo is keen to keep costs down in its Scottish distilling operation.

 

 

——

Diageo backs away from ‘flavoured’ Scotch move (Excerpt)

 

Source: Just-Drinks

By Ian Buxton

21 March 2013

 

Diageo has distanced itself from entering the ‘flavoured’ Scotch whisky arena, as Bacardi readies a honey-”infused” expression of its Dewar’s Scotch brand.

 

However, speaking to just-drinks yesterday (20 March), Diageo’s head of whisky outreach, Dr Nicholas Morgan, said that the company has “no plans for ‘flavoured’ variants of any of its Scotch brands”.

 

“(Scotch) is a global category built over 100 years and based on integrity and authenticity,” said Morgan. “While the consumer views American and Irish whiskies as more ‘relaxed’, that latitude is not extended to the Scotch whisky category.”

 

http://www.just-drinks.com/news/diageo-backs-away-from-flavoured-scotch-move_id109866.aspx

 

 

——

Bruce Willis’s Belvedere Taken Over by Bondholders in Debt Deal

 

Source: Bloomberg

By Julie Miecamp

Mar 20, 2013

 

Belvedere SA (BVD), the French maker of Sobieski vodka part-owned by Bruce Willis, will be taken over by its bond investors after a court approved a restructuring plan today.

 

Holders of its 375 million-euro ($486 million) floating- rate notes due May 2013 will get 87 percent of the French spirits maker, according to a document from the Dijon Commercial Court. Shareholders will take the remaining stake, while investors owning subordinated debt have an option to buy the equity, the court said.

 

“My first decision as chairman was to focus on reducing the group’s debt. This is now done. The war is over,” Krzysztof Trylinski, Belvedere’s chairman and chief executive said in an e-mailed statement. “It’s an important day for Belvedere and its employees after four years of legal battle.”

 

Belvedere, which was 2.6 percent-owned by the Hollywood actor as part of an endorsement deal, filed for protection from creditors in July 2008 and has been in negotiations with lenders since then. In September it agreed to a plan that would see bondholders repaid using funds raised from asset sales as well as taking shares in the business.

 

The company got bids of 155 million euros for the assets being sold, half the targeted figure of 310 million euros, according to the document. The low prices meant the sales didn’t take place and bondholders took a larger stake in the company, the court said. Separately, Belvedere will sell its Danzka drinks brand for about 19 million euros to provide liquidity, it said.

 

Belvedere fell as much as 5 percent to 21.5 euros, and was quoted at 21.8 euros at 5:34 p.m. in Paris.

 

Bruce Willis, star of the Die Hard action movies, received cash and shares in Belvedere as part of a four-year deal signed in December 2009 to market the Sobieski brand. Belvedere’s brands also include William Peel whiskey and Marie Brizard liqueurs.

 

 

——

Economic Sentiment Among Alcohol Drinkers Was Broadly Weaker in February

 

Source: Consumer Edge Insight

March 21, 2013

 

According to Alcoholic Beverage DemandTracker, a periodic survey of US adults age 21+ who consume any type of alcohol at least once a week or more, economic sentiment among alcohol drinkers was broadly weaker in February than in November, and is still at very weak levels. Only 13% of alcohol drinkers reported having more spending money recently in February, compared to 16% in November. This compares to 43% of alcohol drinkers in February who say they have had less spending money recently.

 

Perceptions of, and expectations for, the general economy and job market were weaker in February than November. Only 14% of alcohol drinkers said the current economy was good in February (vs. 17% in November).

 

Only 10% of alcohol drinkers think the current job market is good (vs. 10% in November), and only 23% are expecting the job market to be better in 6 months (down from 27% in November).

 

Alcohol drinkers were also less optimistic about their own personal financial situation in February. Only 23% of alcohol drinkers are expecting their income to rise over the next six months (vs. 26% in November). Only 16% of alcohol drinkers feel very secure in their jobs in February (vs. 20% in November). And more alcohol drinkers saidtheir spending habits are being negatively impacted by gas prices, 50% in February vs. 47% in November.

 

“After showing some improvement at the end of 2012, economic sentiment among alcohol drinkers was noticeably weaker in February across many of the factors tracked by Alcoholic Beverage DemandTracker,” said David Decker, President of Consumer Edge Insight. “Most alcohol consumers continue to face a wide variety of economic headwinds that impact their consumption habits. Clients of Alcoholic Beverage DemandTracker gain a deep understanding of how these economic factors are impacting behaviors across different alcoholic beverage categories, and are able to keep a close eye on trends in sentiment.”

 

 

——

USVI appeals to CARIFORUM in rum dispute

 

Source: Caribbean 360

Mar 22nd

 

The United States Virgin Islands have now turned to moral suasion in an attempt to get fellow rum producing nations in the Caribbean Forum nation to back down from plans to take their ongoing dispute before the World Trade Organisation (WTO).

 

United States Virgin Islands Governor John de Jongh has penned letters to the prime ministers of Antigua and Barbuda, St Vincent and the Grenadines, Grenada, St Kitts and Nevis, Dominica, and St Lucia, asking them for the sake of Caribbean unity to avoid the WTO action that could lead to a prolonged legal case that he thinks could prove divisive and difficult to win.

 

A March 4 letter from de Jongh to Antigua’s prime minister Baldwin Spencer cautions that the WTO filing could “inflict damage on all of our economies”. The letter, which was shared with Caribbean 360 by Greg Romano, a communications consultant with the team working with the USVI rum companies, the USVI government and others hoping to avoid a WTO case, is reportedly similar to letters sent to the other Caribbean leaders.

 

Highlighting the damaging effect that last year’s closure of the USVI-based Venezuelan rum refinery Hovensa had on his nation’s economy, de Jongh told Spencer that the US$580 million decline in economic output and $80 million loss of tax revenues caused by the closure has made holding on to the Rum Cover-Over Program even more critical.

 

“To ensure the economic health, stability and future of our region, we must move forward together. We must support, not undermine, one another’s efforts to be creative and look to new, innovative ways to modernize our economies, bring foreign direct investment to our countries and attract sophisticated jobs to our shores.

 

“That is what we accomplished through our partnerships with Diageo and Beam, seizing the opportunity to do some real good for the people of the Territory, a result that is exactly in line with the US Congress’s intent for this economic development program. Today, those partnerships and this program constitute nearly twenty percent of our Government’s total revenue,” de Jongh told Spencer.

 

This direct leader-to-leader appeal is the latest attempt by the Virgin Islands to protect its public-private rum partnerships, legal agreements that have saved its historic rum industry from extinction. However, the rum-producing countries of the Caribbean Forum (a trade bloc comprising the Caribbean Community and the Dominican Republic) have stridently argued that the concessions provided by the USVI to large European rum manufacturers are equivalent to subsidies, which are not allowed under WTO rules. The Caribbean rum producers under the umbrella of the West Indies Rum and Spirits Producers Association (WIRSPA) have argued that thanks to the USVI’s concessions, European producers such as Diageo are able to get their rum products into the United States at a much cheaper rate than the WIRSPA producers, and therefore are threatening their sales and by extension their island economies.

 

 

——

Pennsylvania: Pennsylvania legislature votes to privatize state liquor sales

 

Source: Reuters

By Dave Warner

Thu, Mar 21 2013

 

Pennsylvania moved a step closer on Thursday toward getting out of the liquor business, with its House of Representatives voting to sell state-run liquor stores into private hands.

 

Passage of the measure, which still faces a vote in the state Senate, would leave Utah as the only U.S. state to control the wholesale and retail sales of liquor and wine.

 

The Republican-controlled Pennsylvania House approved the measure by a vote of 105 to 90.

 

It still must pass the Republican-controlled Senate, where its fate is uncertain.

 

Currently, liquor and wine can only be purchased in Pennsylvania in 600 state-run stores, which have standardized hours and standardized prices.

 

Under this measure, licenses to sell wine and liquor would be open for sale to beer distributors, grocery stores, convenience stores, restaurants and bars, while the state-run stores would be phased out.

 

Advocates of privatization say it would allow for more flexibility in sales and say the sale of licenses could generate as much as $1 billion in revenue for the state.

 

Opponents dispute that figure, saying it is overblown, and say the measure would cost hundreds of jobs. They also say the price of the licenses could well be beyond the means of small retail stores.

 

Republican state Senator Chuck McIlhinney, chairman of the Senate’s Law and Justice committee, said on Thursday there is no timeline yet for consideration of the measure in the committee or full Senate.

 

He also said he was unsure if there are enough votes in the Senate to pass the bill.

 

When the measure cleared a House committee earlier this week, Pennsylvania Governor Tom Corbett called it “a momentous, first step to bring Pennsylvania into the 21st century and provide Pennsylvanians with the convenience and choice that Americans in 48 other states enjoy.”

 

Corbett, like several governors before him dating back to 1974, has been attempting to privatize the state’s liquor business. The system dates back to 1933, at the end of Prohibition.

 

A public opinion survey conducted by Franklin & Marshall College showed last month that state voters are by and large split on whether to sell the state liquor stores.

 

 

——

Washington: Liquor shoplifting: Did initiative create a problem?

 

Officials are worried that the proliferation of private liquor sales has led to more chances for underage theft. But no officials have hard numbers on the scope of the problem.

 

Source: Crosscut

By Tom James

March 20, 2013

 

Did Initiative 1183, the state’s liquor privatization measure, create a liquor shoplifting problem in Washington?

 

So far, our legislators don’t know.

 

A work group convened by the head of the state House’s government accountability committee to address liquor shoplifting left its first meeting Monday with more questions than answers.

 

The group, dubbed the “Post-Privatization Workgroup on Alcohol Diversion, Access and Loss Prevention,” spent much of its time just trying to get a handle on the issue, as representatives from various grocery corporations and associations took turns saying how little information they had about the crime.

 

About halfway through the meeting, after representatives of grocers and grocers’ associations said that they had not brought hard numbers to share with the group, Enumclaw Democratic Rep. Chris Hurst asked: “How do we get to the question of do we have a problem, and if so how big is it?”

 

Typically, workgroups assembled in the Legislature study issues to decide if a change to the law is necessary; if one is, they often will also help prepare the first draft of a bill. Since Hurst’s committee only began meeting halfway through this legislative session, well after several key deadlines, any changes or proposals the committee might decide to recommend likely would not see a larger vote in the Legislature until next year.

 

Hurst said he convened the group in response to a request from House Speaker Rep. Frank Chopp, D-Seattle, and that he and Chopp shared the feeling that the shoplifting question warranted further investigation. Liquor shoplifting, especially by teens, has been covered extensively by newspapers around the state since the 2011 initiative switched liquor sales from state-run stores to private groceries.

 

“I’ve noticed a big change, personally,” Hurst said. “When I went out and saw alcohol being displayed right by the front door, that was a problem.”

 

Another part of the reason for creating the group, Hurst said, was a request earlier in the year from the Washington Association of Police Chiefs and Sherriffs for a change in the rules about how liquor theft is reported. Currently, stores are not required to report thefts of liquor to the police, or any other state agency. Earlier this year the association asked the state Liquor Control Board to change require stores to report their losses due to theft so that police and regulators in the state could see if a problem existed.

 

But the stores resisted the idea, said Mitch Barker, head of the police association after Monday’s meeting.

 

Barker said the original request wasn’t motivated at first by any concrete knowledge of a problem, but rather by wanting to figure out if a problem did exist. “We didn’t think it was a problem, but now we think it is,” Barker said. “The fact that they won’t give us the numbers makes me suspicious.”

 

Representatives of grocery chains, including Fred Meyer and Costco, took a different tack, saying they did not have numbers or even general data about the amount of liquor being shoplifted from their stores, but that they would find the information to present to the workgroup.

 

Despite the lack of hard numbers, Hurst said afterward he wasn’t disappointed with the course the meeting had taken. Rather, he said, he trusted the retailers to make good on their promise to supply the information, and also had expected the group would take some time to gather information.

 

The next meeting will be held within a month, Hurst said. Along with giving retailers time to get their own information together, Hurst said, the delay would also be a time to study the issue as a whole,  including how other states dealt with the privatization process.

 

The Liquor Control Board could create an inventory rule to require tracking without waiting for the Legislature.

 

 

——

California: Craft distillers aim to pour it on

 

Small liquor makers hope to tweak state law to be able to charge for tastings and sell bottles. Big wholesalers are a major hurdle.

 

Source: Los Angeles Times

By Marc Lifsher

March 21, 2013

 

In a 65,000-square-foot structure that once housed Navy fighter jets, Lance Winters of St. George Spirits makes popular Hangar One vodka, along with gin, bourbon, rum, whiskey, liqueurs and even absinthe.

 

Unlike vast distilleries in Kentucky and Tennessee that make and bottle hard liquor by the millions of barrels, Hangar One is produced by one of a growing breed of small-batch, craft distillers. There are already more than 30 of them in California, and – like wineries and microbreweries – they want to charge for tastings and sell bottles for their visitors to take home.

 

But in recent months, the craft distillers have run up against the powerful liquor lobby in Sacramento, led by wholesalers opposed to changing state law. A legislative hearing is set for next month, and the battle is on.

 

Fighting the powerful liquor distributors to tweak alcoholic beverage laws in Sacramento can be daunting, said Phillip Ung of California Common Cause, a watchdog group. “I can’t think of one example where the distributors haven’t gotten their way on alcohol issues.”

 

Offering labels such as Three Sheets Rum, TRU Organic Vodka and Botanivore Gin, these craft distillers are ready to test the odds. To them, spreading the gospel of organic liqueurs and old-time ryes is a matter of economic survival.

 

Opening more tasting rooms and selling their liquor there are crucial to the fledgling industry, said Melkon Khosrovian. He is head of Greenbar Collective in Los Angeles’ downtown arts district, where Greenbar makes organic whiskey, tequila, bitters and other spirits in an old garment sewing shop.

 

“Without these laws, we lose ground each year to more progressive states – like Washington, Colorado and New York – where distilleries can earn much more money from their tasting rooms and on-site sales and spend that money here to gain market share,” he said. “We need our elected officials to bring California’s laws up to par with the rest of the country’s so we can stay competitive, create jobs and support our state’s farmers and manufacturing trades.”

 

For now, artisanal spirit makers are prohibited from operating their tasting rooms for extended hours as do wineries. Instead they offer occasional scheduled tours at either no cost or for nominal fees.

 

After a recent Greenbar tasting of Slow Hand White Whiskey, Darby O’Neill, a film studio marketer from Glendale, was enthusiastic. She supports fixing “hiccups” in the law that ban liquor sales at distilleries. “It would have been neat to take one of the things we tasted home,” she said, “but we couldn’t do that.”

 

Greenbar also makes brands such as Bar Keep Organic Bitters, Crusoe Organic Rum and Fruitlab Organic Liqueurs. In San Diego, for instance, Ballast Point makes a Three Sheets Rum. Charbay Vodka comes from Domaine Charbay in St. Helena; Gin 209 is made by Distiller 209 in San Francisco, and Botanivore Gin is also produced by St. George Spirits. These craft liquors are served in some bars and sold in many liquor stores and supermarkets.

 

Greenbar and other new-breed spirits makers argue that their emphasis on California-grown ingredients, such as wheat, fruit, rye and sugar cane, puts them on the alcohol-laced leading edge of an eat-local and artisanal food movement first popularized by legendary chef Alice Waters at her Chez Panisse restaurant in Berkeley.

 

Using sugar cane from Imperial County, barley from Chico and rye from Shasta “helps benefit California at every stage from farm to glass,” said Winters, the president and master distiller at St. George Spirits in Alameda.

 

California’s craft distillers want to amend strict post-Prohibition laws that separate the three main aspects of the liquor business: production, distribution and retailing. The idea of those laws was to prevent the formation of oligopolies such as the big brewers in Britain that control the entire supply chain, down to the corner pub.

 

Opposition slowed the craft distiller’s push even before their bill, AB 933, was introduced Feb. 22. Distributors signaled through legislative staff and lobbyists that they didn’t want competition from distillers selling from their tasting rooms.

 

Liquor distributors have been major players in the Legislature for decades, particularly in the Assembly and Senate Governmental Organization committees. The panels deal with alcoholic beverages, gambling and horse racing. They’re known as “juice committees” in Capitol parlance because their members often get campaign contributions from industries they regulate.

 

Liquor wholesalers contributed more than $590,000 to lawmakers’ political kitties over the last four years, according to Maplight.org, an independent website that tracks money and politics.

 

“Our lobbyist advised us that he didn’t think direct sales were going to be one of those things that would be available to us this year,” said California Artisanal Distillers Guild President Arthur Hartunian, a Napa vodka maker. “He didn’t think we had a chance because there was too much opposition from the wholesalers.”

 

Historically, California liquor laws treat distilled spirits more strictly than wine, said Terrance Flanigan, a lobbyist for Southern Wine & Spirits of America Inc., one of the state’s two big wholesalers. “My client is comfortable with the current law,” he said.

 

Distributors warn that these new operations could be the equivalent of opening new liquor stores in unsuspecting neighborhoods, said Manuel Espinoza, the state’s former top alcoholic beverage regulator and the executive director of Wine & Spirits Wholesalers of California. Lawmakers should not “whittle down the concept of the three-tiered system” of producers, distributors and retailers, he said.

 

The distillers’ bill may have gotten off to a rough start by being watered down to deal only with tasting events. But its author, Assemblywoman Nancy Skinner (D-Berkeley), said she’s eager “to start the conversation” with distributors to help the small companies create new jobs and economic activity.

 

Artisanal distillers are looking to lawmakers to help spur California versions of “Distillery Row” in Portland, Ore. A handful of spirit makers banded together a few years ago to attract tourists and locals to the gentrifying Southeast neighborhood.

 

“I think there’s a market for that,” said Anne Stericker, a West Los Angeles personal concierge and blogger. “It’s not expensive. It’s something new that’s a little adventurous.”

 

 

——

ULTIMATE SPIRITS CHALLENGE 2013 ANNOUNCES BEST GIN, VODKA, SCOTCH, TEQUILA AND MORE

 

2013 Chairman’s Trophy Winners and Full Results Announced Today, Including USC’s First 100-Point Spirit

 

Source: UBC

March 21st

 

Ultimate Beverage Challenge’s (UBC) fourth annual Ultimate Spirits Challenge was held at state-of-the-art Astor Center in New York City on March 11-15, 2013. Today, Ultimate Spirits Challenge (USC) proudly announces this year’s Chairman’s Trophy winners and Finalists in more than 30 spirits categories, including USC’s first 100-point score that honors Highland Park 25 Years Old Single Malt Scotch Whisky from Orkney.

 

Ultimate Spirits Challenge 2013 had a record number of entries, up 8% from last year, from more than 70 companies and 30 countries around the world. This year’s entries likewise included more craft spirits than ever before and an extraordinarily high standard of spirits across all categories.

 

Led by UBC Founder and Judging Chairman F. Paul Pacult and Judging Co-Chairman Sean Ludford, the judges included many of the world’s most famous distilled spirits authorities, award-winning authors, spirits buyers, journalists, educators, bar owners and consultants.  The judging panels rated the distillates on the 100-point scale, using USC’s innovative multilevel evaluation system, which renders the industry’s most unassailable results. This remarkable super-group of experts named 33 Ultimate Spirits Challenge Chairman’s Trophy winners and 151 Finalists. Judges for USC 2013 were F. Paul Pacult, Sean Ludford, Jacques Bezuidenhout, Tad Carducci, James Conley, Dale DeGroff, Jim Meehan, Dan Nicolaescu, Steve Olson, Julie Reiner, Jack Robertiello, Jennifer Simonetti-Bryan, MW, Katie Stipe and David Wondrich.

 

Says UBC founder F. Paul Pacult, “The increase in entries we’ve had for Ultimate Spirits Challenge each year is a testament to suppliers who appreciate our meticulous attention to rating and scoring their products. They understand that Ultimate Spirits Challenge also provides them with an array of useful tools to help them build and market their brands, from credible scores to insightful tasting notes to useful point-of-sale materials to our summary guide in Beverage Media.”

 

THE 2013 RESULTS

This year, all spirits rated 85 points and higher are featured on their own detailed results page and include relevant award information, downloadable score icon, tasting note, accolade and bottle image. New this year, USC will also provide a summary page for this year’s Award Recipients and Great Values in each category. Because of Ultimate Spirits Challenge’s partnership with Astor Wines & Spirits, all spirits that display a shopping cart icon boast a ‘click and purchase’ option for consumers who can place their order online, with direct delivery to many states in the U.S.

 

For a complete list of results go to www.ultimate-beverage.com/usc2013results/

 

For downloadable images (hi/lo res) go to www.ultimate-beverage.com/2013USCpics

 

2013 ULTIMATE SPIRITS CHALLENGE CHAIRMAN’S TROPHY WINNERS

 

VODKA – UNFLAVORED

Tahoe Blue

 

VODKA – FLAVORED

HOPHEAD Pot Stilled Hop Flavored

 

GIN

Fords Gin

 

AQUAVIT

Linie Aquavit

 

TEQUILA – 100% AGAVE

BLANCO: Milagro Silver

REPOSADO: Siete Leguas Reposado

AÑEJO: IZKALI Añejo

EXTRA AÑEJO: Casa Sauza XA Edición Limitada Extra Añejo

 

MEZCAL

Del Maguey Minero

 

RUM

Brugal Papa Andres

 

RHUM AGRICOLE

Rhum Clement Grande Reserve 6 Years Old

 

WHISK(E)Y – NORTH AMERICA

AMERICAN WHISKEY: Balcones 1 Texas Single Malt

BOURBON: Blanton’s Single Barrel Kentucky Straight Bourbon

RYE: Knob Creek Rye

TENNESSEE WHISKEY: George Dickel No. 12

 

WHISKEY – IRELAND

BLENDED: Jameson 18 Years Old

IRISH POT STILL WHISKEY: Redbreast 15 Years Old

SINGLE MALT: Tullamore Dew 10 Years Old

 

WHISKY – SCOTLAND

BLENDED MALT: Haig Supreme 1627 12 Years Old

BLENDED: Royal Salute 21 Years Old

SINGLE MALT*: Highland Park 25 Years Old (100 points)

 

WHISKY – CANADA

Caribou Crossing Single Barrel

 

BRANDY

ARMAGNAC: Delord 30 Years Old 1981 Bas-Armagnac France

CALVADOS: Boulard XO Calvados France

COGNAC: Hardy XO Cognac France

GRAPPA: Bocchino Riserva Carlo Bocchino Grappa Italy

PISCO: Barsol Supremo Mosto Verde Pisco Peru

FRENCH BRANDY: St-Rémy Réserve Privée

SPANISH BRANDY: Cardenal Mendoza Brandy de Jerez

AMERICAN BRANDY: E & J XO

 

SHOCHU

Iichiko Frasco Barley

 

LIQUEUR

La Muse Verte Absinthe

 

APERITIF

Lillet Jean de Lillet 2009

 

*Signifies Ultimate Spirits Challenge’s first 100 point rated spirit.

 

For the first time, a selection of 24 products from China were submitted as a group for assessment by a special Ultimate Spirits Challenge panel of judges, the results of which can be found here www.ultimate-beverage.com/special-evaluation/

 

Ultimate Spirits Challenge.not like any other competition and doesn’t want to be.

 

Next 2013 Challenge: Ultimate Wine Challenge, June 3-7, 2013. Click here for more information.

 

ABOUT ULTIMATE BEVERAGE CHALLENGE www.ultimate-beverage.com

Ultimate Beverage Challenge (UBC) provides expert evaluation of wines and spirits for producers, importers and marketers through its two innovative annual competitions – Ultimate Spirits Challenge and Ultimate Wine Challenge. Based on exacting standards, expert judges and rigorous methodology, UBC raises the standards of spirits and wine evaluation and supplies ratings and accolades to help companies build their brands with buyers, both industry and consumer. UBC partners are F. Paul Pacult, Sue Woodley, Sean Ludford and David Talbot. Challenge results from 2010, 2011, 2012 and 2013 as well as event photos, videos and press coverage can be found at www.ultimate-beverage.com.

 

 

——

News From TTB

 

Source: TTB

Mar 21st

 

Learn More About the Changes That Can Be Made to Labels Without Getting a New COLA

 

The Advertising, Labeling and Formulation Division will present a one-hour webinar designed especially for those who are interested in gaining a clearer understanding of the changes that can be made to labels without applying for a new COLA. We have significantly expanded the list of allowable changes in order to reduce regulatory burden and to help you get your products to the marketplace faster. During this webinar, we will walk you through of each of the 26 allowable revisions that appear on TTB F 5100.31 and answer any questions you may have about them.

 

See our Labeling page to learn more about allowable revisions.

 

Space is limited, so please register soon to reserve your spot. We will hold additional sessions in April if you can’t make this session.

 

Just click on the “Register for Webinar” link to the right to email your reservation for this session. Simply type “registration” in the subject line and send! Once registered, you will receive email confirmation and instructions for joining the webinar.

 

http://www.ttb.gov/labeling/allowable-changes.shtml

 

 

——

Gin Still Whetting Spanish Appetites

 

Source: WSJ

By SIMON ZEKARIA

Mar 21st

 

As record unemployment worsens in debt-ridden Spain, consumers are seeking solace in a bottle of gin.

 

The country’s recent economic woes hit liquor demand hard. Spain saw a 5.1% drop in consumption between 2006 and 2011, the most recent year for which data are available, according to data group International Wine & Spirit Research.

 

But despite a cutback in premium spirits across southern Europe, gin is proving a surprising tonic for producers.

 

The volume of gin sold rose 3.5% between 2010 and 2011 to 3.2 million nine-liter cases, according to IWSR, making Spain the world’s third-largest gin market by volume. By contrast, whiskey fell 9.5% and rum volume declined 6.7% in the country over the same period.

 

Gin’s resurgent popularity is particular to Spain-world-wide volume fell 2.9% in 2011, and even in the U.S., which is the second-largest gin market by volume after the Philippines, volume fell 1.6%. The juniper-flavored spirit is resistant to evolving trends in Spain, said Ed Pilkington, Diageo DGE.LN +0.20% PLC’s director for vodka, rum and gin. “Whiskey took over from brandy. Then there was the rum boom. [But] gin was always there.”

 

Charles Rolls, co-founder of upscale tonic water and mixers group Fever-Tree, agreed that gin in Spain is taking market share from other categories, notably golden rum and whiskey. This is linked to Spain’s warm climate, he said.

 

“[There is] a decline in the interest for whiskey as a post-lunch or post-dinner drink. It is very heavy. Gin is the perfect spirit because it is a diuretic. It opens up the blood vessels and makes you less full after a big meal,” he said.

 

The spirit is helped in Spain by the popularity of “long-drinks”-alcohol and a soft drink-usually drunk with generous measures. “Gin tonics” served in large balloon glasses with lemon or lime are a staple of the buoyant bar and club scene, while classic gin cocktails are returning, like the Negroni, made with embittered red vermouth, and the French 75.

 

A wave of specialist gin bars, like Del Diego in Madrid and Bobby Gin in Barcelona, are keeping the category fresh. Long gin menus and imaginative garnishes like nutmeg and peppercorns have elevated the spirit to an art form by bartenders and chefs.

 

Fernando del Diego, the 64-year-old proprietor at Del Diego, said he noticed an increase in gin consumption in the past year. He attributed the boom to better brand advertising and a proliferation of gins and gin-mixes that make the drink attractive to a wider clientele.

 

“Gins are evolving toward premium brands infused with botanicals,” he said, standing behind a bar that offers 40 different brands. “As a dry drink, it is a man’s drink. Now there are very nice gins with fruity flavors especially for women,” he said.

 

Mr. del Diego said gin had long been popular in Spain as a digestif after lunch and as an afternoon refreshment. “What’s new is that it is being taken as an after-dinner drink,” Mr. del Diego said.

 

William Grant & Sons’ rose and cucumber-infused gin Hendrick’s, distilled in the Scottish seaside village of Girvan, has made inroads by capturing the consumer zeitgeist of drinking less but better, according to Euromonitor International analyst Spiros Malandrakis. “[It has] a very convincing narrative [by] tying into the eccentricity of the British,” he said.

 

“About the time when Hendrick’s was launching in Spain, we were also launching. Now six years later, there are 120 brands of gin on the Spanish market and 15 tonic waters,” said Fever-Tree head Mr. Rolls.

 

“The category has always been large in Spain. It was a sleeping giant [that] has awoken,” said IWSR analyst Jose Hermoso.

 

Europe’s beverage giants are making the most of the Spanish gin resurgence and plowing marketing money into launches of new flavors and variants. Diageo’s softly spiced Tanqueray Malacca, for example, is only distributed in selected markets, such as Spain and the U.S. Malacca, which was sold briefly in the U.S. more than a decade ago, has now been relaunched, but with 100,000 bottles released world-wide only to hotels, bars and restaurants.

 

Diageo said that the growth of ultra-premium gin is most vibrant, although lower-price brands are also doing well. Spain is the world’s biggest market for premium gin by demand per capita. “For many years, Tanqueray was the priority in gin [in Spain], but we are getting Gordon’s back,” Mr. Pilkington said. The group is launching Gordon’s Crisp Cucumber in May and will also consider twists to its higher-strength yellow label range.

 

Pernod Ricard SA’s RI.FR -0.31% Beefeater gin is also a top-seller in Spain, rivaling Bacardi Ltd.s Bombay Sapphire and Beam Inc’s BEAM -0.76% Larios brands. First-half global sales, excluding acquisitions and disposals, and volume of Beefeater rose 5% and 2%, respectively, outpacing the growth of some the company’s main Scotch whisky marks. Seagram’s gin, popular in the U.S., is also showing strong growth in Spain, the company said.

 

As always with gin, a tonic mixer is never far behind. For Fever-Tree, founded in 2005, Spain’s desire for gin represents a commercial boon in the multibillion-dollar spirit and mixer market. After private investment this month of close to £50 million ($75.5 million), the U.K. company aims to more than double its annual sales in three years to £40 million, with annual revenue in Spain growing 25% on average.

 

Mr. Rolls admits that Fever-Tree’s business in Spain kicked off fortuitously after Ferran Adrià, previously the renowned chef at the El Bulli restaurant in the Catalan town of Roses, recommended its Indian tonics, blended with quinine, spring water and botanicals flavors. A Mediterranean variant launched two years ago, with lemon oils from Sicily, as well as thyme, geranium, rosemary and mandarin, now accounts for 10% of the company’s total tonic sales in Spain.

 

“Gin is the big love that continues to power forward,” he said.

 

 

——

Wine production falls worldwide

 

Source: Chronicle News Services

Thursday, March 21, 2013

 

World wine production dropped 6 percent in 2012 to the lowest level in at least 37 years on smaller grape crops in France, Spain and Argentina, according to the International Organization of Vine and Wine. Output fell to 6.63 billion gallons, a drop of about 6 percent from 2011, the group said.

 

Bulk white-wine prices in France, the world’s largest producer, jumped 45 percent since the start of August, while those for bulk reds advanced 17 percent, data from crop office FranceAgriMer show.

 

Vineyards in France, Spain, Italy and Argentina all suffered weather damage last year, including hail and drought. Last year’s production was the lowest on record going to back to 1975.

 

 

——

Bad weather squeezes global wine production

 

Source: Reuters

March 21, 2013

 

Global wine production fell sharply last year due to bad weather in Europe and a policy to drain its “wine lakes,” while Chile and United States saw a jump in harvests, according to a report on Thursday.

 

The International Organisation of Vine and Wine (OIV) said world production was down around 6 percent in 2012 at 251 million hectolitres (Mhl), a level it described as very low. European Union output fell 10 percent to 141 Mhl, with France suffering a drop of nearly 17 percent after a good harvest in 2011.

 

“We had a difficult year 2012, mainly because of a sharp drop in production, but trade flows mostly held stable,” OIV Director General Federico Castellucci told reporters, referring to total wine exports which were stable at 101 Mhl after a long-term upward trend.

 

The EU policy of digging up vines to end years of surpluses had lead to a reduction of 269,000 hectares between 2008 and 2011, well above the targeted 175,000 hectares, contributing to a recent rise in prices, Castellucci said. Rising consumption also helped push prices up.

 

“This meant tightness on the market and we need to be careful because once a market is lost it is hard to conquer it back,” he said, pointing to higher prices for bulk wines, used to make liquors such as brandy and vermouth or vinegar.

 

Prices for French bulk red wines gained 7 percent between August and February, while bulk white wines rose 30 percent, data by French farm office FranceAgriMer showed.

 

NEW CONFIGURATION

 

French exports rose 6 percent to 15 Mhl, but Italy and Spain, the world’s two largest wine exporters by volume, which also had a poor crop although not as bad, saw their exports fall 7 and 13 percent respectively to 21.5 and 19.1 Mhl.

 

Chile, the largest South American producer which had a record output in 2012, saw a 13-percent rise in exports to 7.5 Mhl. South African exports were up 17 percent to 4.2 Mhl, with sales to Britain jumping 50 percent.

 

This meant that the share of the top five European producers — Italy, Spain, France, Germany and Portugal — in world exports fell to 62 percent, from 65 percent last year, to the benefit of South America as well as the United States whose crop jumped 7 percent last year, the OIV said.

 

Wine consumption increased 0.6 percent last year to 245 Mhl, mainly helped by China and the United States, the OIV said.

 

Chinese consumption rose 9 percent to reach 17.8 Mhl, leading to a total rise in consumption since 2008 of 27 percent, with local output supplying the bulk of the additional demand. Imports only accounted to 0.3 Mhl of the 1.5 Mhl rise recorded in 2012.

 

“There is a slightly new configuration here. The Chinese start either to make the wine themselves or to import wine from countries where they have companies — it’s still a small number but not minimal anymore,” Castellucci added.

 

An increasing number of Chinese wine lovers have bought French chateaux, keen to ship the wine home and turn their new properties into tourist resorts.

 

 

——

Bordeaux 2012: mixed verdict on first look at Right Bank

 

Source: Decanter

by Adam Lechmere

Thursday 21 March 2013

‘Brittle’ and ‘lots of make-up’ were two of the comments from critics as London had its first look at the 2012 vintage from Bordeaux’s Right Bank properties.

 

Tuesday night’s annual London en primeur tasting of the Cercle Rive Droite – a group of some 35 chateaux from St Emilion, Pomerol and their satellite communes – is regarded by critics as unrepresentative and highly selective, but nevertheless an interesting early look at the en primeur vintage.

 

Many of the wines have scarcely finished malolactic fermentation, and almost all have heavy doses of new oak.

 

Critics found the wines highly aromatic, many with fine ripe tannins and good depth of fruit, but it is by no means a homogenous vintage on the right bank, with some wines having thin, insipid fruit and patchy underripe tannins. ‘Brittle’ was one critic’s brief comment.

 

Richard Bampfield MW said, ‘First impressions were that these wines had impressive, very pure aromatics with pronounced black fruit character. They do not seem to have the middle palate of vintages such as 2009 and 2010, but the majority looked flavoursome and well balanced.’

 

He added, ‘There should be some very good wines amongst the Grands Crus Classés. I am not sure there is a strong argument to buy these wines en primeur, but they should make excellent drinking in four to six years.’

 

‘A mixed bunch,’ was the cautious verdict of Corney and Barrow associate director Alison Buchanan. ‘This is very early so I am keeping a completely open mind. I could see freshness, which is positive, but that sometimes leant to greenness.’

 

She agreed the wines showed very fine ‘Merlot-esque’ aromatics with perfume and black cherry fruit, but ‘there was often a disparity between the nose and the palate, which was disconcerting. There was also a lot of make-up – lashings of oak to complement the fruit.’

 

The 2012 growing season is notorious, especially in France and England, for the appalling weather at the beginning of the summer, with hailstorms in April, rain for most of June, followed by a heatwave in the third week of August in which temperatures in Bordeaux reached 42C, causing vines to shut down and fruit to burn, and then more rain at harvest.

 

Winemakers present at the tasting said that it was a vintage that required great attention to detail, in the vineyard and the winery. Grapes tended to have thin skins requiring much more extraction for tannins and colour. Alix Coombes at Chateau Fleur Cardinale, a St Emilion Grand Cru Classé, said that at the beginning of fermentation they were doing pigeage or punching down three to four times a day.

 

Those properties that sit on well-drained limestone soils coped best with the rains and the heatwave, Paul Goldschmidt – who owns Chateau Vray Croix de Gay and Siaurac in Pomerol and St Emilion Grand Cru Classé Chateau Le Prieuré – said, ‘Limestone is very useful. It absorbs the water and holds it, then gives it back during hot weather.’

 

Alain Raynaud, the president of the Cercle Rive Droite, said that the grapes had good polyphenols and anthocyanins, which would imply the wines would age well. He also conceded many vignerons were tempted ‘to extract too much’, thereby unbalancing the wines.

 

‘It’s not an exceptional vintage but it’s a good vintage. It’s not effortless, as in 2009 and 2010, but then you can’t ask vines to produce the top level possible every year.’

 

Critics will taste the entire vintage in Bordeaux during en primeur at the beginning of April.

 

 

——

Drew Bledsoe lobbies to lift wine sale restrictions

 

Source: Boston Herald

Thursday, March 21, 2013

 

Former New England Patriots quarterback Drew Bledsoe, who now runs a boutique winery in Walla Walla, Wash., was on Beacon Hill today lobbying for a new law that would allow direct wine sales via the mail to consumers.

 

“This bill is fair and it’s right,” Bledsoe said.

 

Bledsoe said he’d met with House Speaker Robert A. DeLeo (D-Winthrop) and Rep. Theodore Speliotis (D-Danvers) about HB294, a Speliotis-sponsored bill that lifts restrictions on wine sales. The bill would replace a ban on shipments to homes unless the winery produces less than 30,000 gallons a year. That ban, which excludes almost all out-of-state wineries, was deemed unconstitutional by the 1st Circuit Court of Appeals.

 

Massachusetts is one of only 11 states in the United States to restrict direct mail sales to consumers, and is the largest wine-consuming state left to still have restrictions.

 

“If Massachusetts falls and becomes the 40th, the other states will fall in line,” Bledsoe said.

 

HB294 has been referred to the Joint Committee on Consumer Protection and Professional Licensure, but a hearing date has not yet been set.

 

 

——

Australia: Retailers applaud scrapping of “unworkable” wine label integrity scheme

 

Source: The Shout

By James Atkinson

22/03/2013

 

The Federal Senate has passed amendments to the Wine Australia Act that remove the onerous requirement for liquor retailers and wholesalers to keep detailed records of the Australian wine they sell.

 

Designed by the old Australian Wine & Brandy Corporation (AW&BC), the Label Integrity Program provisions were introduced in September 2010 with the intention of protecting the integrity of Australian wine overseas.

 

By documenting the quantity of a particular grape variety by vintage and geographic origin and requiring liquor retailers and wholesalers to keep records of what they sold, the LIP aimed to take a ‘cradle-to-grave’ approach to ensure a wine’s authenticity.

 

But the proposal was fraught with issues, not least the fact that barcodes on mainstream wines do not currently distinguish between each vintage.

 

Retailers and wholesalers who did not comply with the provisions were in breach of a Federal Act of Parliament and potentially subject to stiff financial penalties and up to two years imprisonment.

 

The Australian Liquor Stores Association (ALSA) coordinated the industry opposition to the provisions and led the negotiations to have an amnesty against prosecution while it lobbied to have the Federal Labor Government accept the need for amendments to the Act.

 

“The original LIP provisions introduced without consultation in September 2010, were unworkable,” said ALSA CEO Terry Mott.

 

“Without millions of dollars of expenditure by winemakers, wholesalers and retailers, plus new systems throughout the entire wine marketing and wholesaling distribution system, the recording provisions were unable to be complied with and nor would they have achieved the targeted objectives they had been designed for.”

 

Mott said the amendments to the Act – which shift the onus of label integrity back on to the manufacturer – were drafted with ALSA and other industry input in 2011.

 

They were introduced and passed by the House of Representatives in the first half of last year, but they had been shelved for a number of months awaiting an opportunity to get passed by the Senate.

 

“After almost 2.5 years, this week we finally saw the LIP retailer recording provisions amended and liquor retailers, pubs, clubs, restaurants and wholesalers able to undertake their normal liquor retailing activities without threat of prosecution under this legislation,” said Mott.

 

 

——

Supervalu sale complete

 

Source: RT

By Michael Johnsen

March 21, 2013

 

Supervalu has completed the sale of its Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market stores and related Osco and Sav-on in-store pharmacies to AB Acquisition LLC, an affiliate of a Cerberus Capital Management-led investor consortium, in a stock deal valued at $3.3 billion, including $100 million in cash and $3.2 billion in debt assumption.

 

“The successful completion of this transaction marks a significant milestone for Supervalu and our shareholders, customers and employees,” stated Sam Duncan, Supervalu president and CEO. “As we move forward, Supervalu will continue as one of the largest wholesale grocery providers in America serving nearly 2,000 independent retailers in 43 states; we plan to continue growing our hard discount Save-A-Lot format that includes over 1,300 stores nationwide; and we will operate five, strong regional retail banners.”

 

Operations for these banners will transfer overnight, and the new Supervalu will open for business on Friday as a more efficient wholesale and retail company with annual sales of approximately $17 billion.

 

As part of the transaction, Supervalu also announced that Symphony Investors, a Cerberus-led investor consortium, completed its tender offer resulting in the acquisition of 11.7 million shares at a purchase price of $4.00 per share in cash. In addition, pursuant to the terms of the transaction, the company issued 42.5 million new shares of common stock (approximately 19.9% of the outstanding shares) to Symphony Investors at a purchase price of $4.00 per share in cash to the company, or approximately $170 million. The tender offer and primary stock issuance establish Symphony Investors as Supervalu’s largest shareholder with 21.2% of total outstanding common shares.

 

With the close of the deal, Robert Miller, president and CEO of Albertsons LLC, becomes Supervalu’s new non-executive chairman replacing Wayne Sales, who has served as executive chairman since August 2012. Supervalu also announced that Sales will remain on the board as a director along with four other current board members – Donald Chappel, Irwin Cohen, Philip Francis and Matthew Rubel. As previously agreed upon by Supervalu and Symphony Investors, five directors voluntarily resigned from the Board effective today, including Ronald Daly, Susan Engel, Edwin “Skip” Gage, Steven Rogers and Kathi Seifert.

 

Lenard Tessler, a designee of Symphony Investors, also was appointed to the Supervalu board of directors today. He currently serves as co-head global private equity and senior managing director of Cerberus Capital Management. Prior to joining Cerberus in 2001, Tessler served as managing partner of TGV Partners from 1990 to 2001, a private equity firm that he founded.

 

The seven-person board resulting from today’s transaction will have four members who are independent directors under the New York Stock Exchange listing standards. This seven-person board will now identify two additional independent directors. Upon the selection and appointment of these two directors, Duncan and Mark Neporent, a designee of Symphony Investors, will join the board increasing its final size to 11 directors.

 

Neporent is the chief operating officer and general counsel for Cerberus Capital Management, positions he has held with the firm since 1998. He is responsible for the day-to-day management of the firm.

 

Supervalu also confirmed that it has closed on a $1 billion asset based revolving credit facility led by Wells Fargo, US Bank and Rabobank and a $1.5 billion term loan secured by a portion of the Company’s real estate, equipment and an equity pledge of Moran Foods (the parent entity of the Save-A-Lot business) led by Goldman Sachs Bank USA, Credit Suisse, Morgan Stanley, Bank of America Merrill Lynch and Barclays. The proceeds of these financings replaced a previous $1.7 billion asset-based revolving credit facility, an existing $834 million term loan and a $200 million receivables financing facility and refinanced $490 million of 7.5% bonds scheduled to mature in November 2014.

 

 

——

Luby’s 2Q sales ‘disappointing’

 

Source: NRN

Ron Ruggless

Mar 21st

 

Officials at Luby’s Inc., the cafeteria and multi-concept burger operator, called second-quarter sales “disappointing,” as the company integrates its recent Cheeseburger in Paradise acquisition into its portfolio.

 

Same-store sales for Cheeseburger in Paradise, which the company purchased for $11 million in a deal closed Dec. 6, fell about 12 percent year over year.

 

Luby’s expected some decline in the brand’s slower fall and winter months, although weather and other circumstances also attributed to the drop, said Luby’s president and chief executive Chris Pappas. “We’re mindful of this development,” Pappas said in a call with investors Thursday. “We attribute a portion of this decline in comp sales for Cheeseburger in Paradise in the quarter to some significant weather events, some prior-year promotions not repeated this year, as well as the overall industry negative trend in traffic in calendar 2013.”

 

Pappas said Luby’s, which also owns the Luby’s cafeteria chain and owns and franchises the Fuddruckers and Koo Koo Roo brands, saw opportunities in Cheeseburger in Paradise’s menu, with an improved burger, a better customer experience and the acquisition of good real estate leases.

 

“Our aim is to emphasize quality and product innovation with the brand and not resort to discounting these truly unique menu items,” Pappas said. He added that Cheeseburger in Paradise’s real estate was well located and had new buildings, and the company plans to invest in décor to help build sales in the slower fall and winter months.

 

K. Scott Gray, Luby’s chief financial officer, said Cheeseburger in Paradise units had generated $7.7 million in sales from the close of the deal on Dec. 6 to the end of Luby’s second quarter on Feb. 13.

 

“We expect this brand to contribute to profitability in the second half of the year,” Gray said.

Consumer spending drop impacts results

 

Among its other brands, Pappas said the company saw challenges in the quarter.

 

“We saw a reduction in consumer discretionary spending,” Pappas said. “We attribute this to escalating gas prices, payroll taxes and [federal government] sequestration concerns.

 

“This soft demand has been reported by other retailers as well,” Pappas added. “As the quarter progressed, it became clear these factors were having a measurable impact on our business, and they were more than the usual week-to-week variability in our business.”

 

For the Feb. 13-ended second quarter, Luby’s reported net income of $203,000, or one cent per share, versus nearly $1.1 million, or four cents per share, in the same period a year ago. Revenue, including Luby’s culinary contract division, was $87.5 million in the second quarter, rising from $79.4 million in the prior-year period.

 

Systemwide same-store sales declined 0.6 percent in the second quarter, the company said, compared to an increase of 2.2 percent in the same period last year.

 

Luby’s adjusted its fiscal year earnings per share guidance down to a range of 21 cents to 25 cents, from 27 cents to 30 cents.

 

Because of the economic headwinds, Pappas said Luby’s is committed to building traffic and not raising prices. “We chose not to raise prices this quarter in light of the current economic environment, as we are more focused on maintaining the frequency of our guest visits,” he said.

 

The company is also continuing its remodeling program, with a target of 14 Luby’s and 14 Fuddruckers remodels by the end of fiscal 2013.

 

“So far this year, we’ve opened one Luby’s cafeteria and six Fuddruckers, including one property with a Luby’s cafeteria and Fuddruckers positioned side-by side,” Pappas said. “We’re quickly coming to the conclusion that this will be one of our vehicles for growth. We have two more of this type slated to break ground this calendar year.”

 

Fuddruckers’ international development will take the brand to Panama and Aruba in 2014, Pappas added.

 

So far this fiscal year, the company has opened one Luby’s Cafeteria and six Fuddruckers. “We continue to build our new unit pipeline of locations,” he said in prepared remarks. “Our current pipeline includes locations for three Luby’s cafeterias and five Fuddruckers. For the remainder of the fiscal year, we plan to substantially complete one Luby’s/Fuddruckers combination location and one Fuddruckers end-cap location for opening in the fall 2013.”

 

The company also recently struck a Fuddruckers franchise deal for up to five units in North Dakota.

 

Luby’s owns and operates 93 cafeterias, 64 Fuddruckers, 23 Cheeseburger in Paradise full-service restaurants and bars, two Koo Koo Roo Chicken Bistros, and one Bob Luby’s Seafood Grill. The company also franchises 119 Fuddruckers across the United States, Puerto Rico, Canada and Mexico. Luby’s Culinary Services manages foodservice at 20 health care, higher education and corporate dining locations.

 

 

——

Buffalo Wild Wings receives responsible alcohol service program award

 

Source: NRA

March 21, 2013

 

The National Restaurant Association congratulated Buffalo Wild Wings on receiving the 2013 VIBE Vista Operator Award for Best Responsible Alcohol Service Program. The restaurant received the award at the VIBE (Very Important Beverage Executives) conference in Las Vegas this week. The award is sponsored by the National Restaurant Association’s ServSafe Alcohol® program.

 

Minneapolis-based Buffalo Wild Wings provides its guests with the ultimate sports fan experience at more than 900 company-owned and franchised restaurants in 49 states and Canada. The company chose the ServSafe Alcohol responsible service training because the program delivers a consistent and holistic message.

 

Alcohol service training starts as soon as a new front-of-house team member is hired, from servers and bartenders to greeters and cashiers. In addition to ServSafe Alcohol training, restaurant managers also discuss alcohol safety at pre-shift meetings to reinforce the importance of safe alcohol service and continually monitor service throughout their shifts.

 

Since adopting ServSafe Alcohol, Buffalo Wild Wings began a tracking and reporting communication that brought awareness to every restaurant’s performance against participation in the SSA program. Currently, Buffalo Wild Wings restaurants are required to maintain a 95 percent compliance rate.

 

The VIBE Vista Operator Award winners are selected by a panel of beverage professionals, including the VIBE Advisory Council members. The award for responsible beverage alcohol service highlights customized server training programs that emphasize ongoing reinforcement of training and a culture of responsible alcohol sales.

 

ServSafe Alcohol offers training solutions to restaurant employees in responsible alcohol service. The training program teaches employees about their personal responsibility, and how to recognize signs of intoxication in guests and manage service accordingly.

Liquor Industry News 3-21-13

March 21, 2013
www.franklinliquors.com

Franklin Liquors

 

Thursday March 21st

Biodynamic FLOWER Day

Great To Taste Wine!

Spirits Giants Toast High-End Clientele

 

Source: WSJ

By SIMON ZEKARIA

Mar 20th

 

Whiskey at $120,000 a bottle might not be everyone’s drink of choice, especially amid a global economic downturn. But that doesn’t matter to drinks giant Diageo DGE.LN -0.49% PLC: The company is offering the exclusive tipple only to a group of 200 VIP patrons, carefully selected and invited to join its Chinese whiskey “embassy” in Beijing.

 

Focusing on aspirational drinkers and wealthy individuals in fast-growth markets is a priority for liquor companies.

 

Diageo’s so-called embassy, partly an exclusive members club to sell luxury Scotch, offers private access to a whiskey vault, as well as a bar, museum, shop and dining from an in-house chef. Once in the vault, a customer can be advised by a master blender who will personalize a signature bottle of whiskey, along with a bespoke decanter.

 

Two such embassies are already up and running and Diageo wants to roll out more, first across Asia and then world-wide as the company seeks to cash in on the top end of the liquor market.

 

Pernod Ricard SA, RI.FR +0.16% meanwhile, is striving to appeal to high-net-worth individuals through its sponsorship of polo, a sport traditionally frequented by multimillionaire enthusiasts. Its Royal Salute whiskey brand is the sponsor of the World Polo Series, with tournaments played across the world. Christian Porta, chairman and chief executive of Chivas Brothers, the company’s whiskey division, said the brand has recorded double-digit sales growth in emerging markets over the past five years.

 

The whiskey embassies aren’t the only way Diageo is wooing its most valuable customers. Its John Walker & Sons Voyager luxury yacht set sail in September on a six-month voyage to nine Asian ports, with top customers invited aboard, including an opening three-day party on the Shanghai Bund.

 

“All the guests were invited to a lavish dinner accompanied by the finest whiskeys available,” said Malaysian entrepreneur William Ng, a guest on the ship. “[The] yacht was an event not to be missed and was the talk of town.”

 

The premium and high-end Champagne and spirits industry-in which bottles cost more than $20 each-has almost tripled in value to $72 billion in the past 10 years, according to data group International Wine & Spirit Research. That is despite the economic downturn, which has prompted customers of lower-price spirits to cut back on consumption and change habits to favor drinking at home rather than in bars, where margins are higher.

 

The exclusive, high-profile marketing events have helped drive consumption of Diageo’s most premium brands. Johnnie Walker Blue Label might not retail for thousands of dollars, but its cost of about $200 a bottle still makes it one of the most expensive blended Scotches available on the general market. The brand’s sales in China have increased 45% since 2011, when Diageo’s first whiskey embassy opened in Shanghai.

 

RI.FR +0.16% In Asia, Latin America and the Caribbean, as well as Africa, Diageo posted a double-digit gain in fiscal first-half operating profit. As Diageo mostly sells premium spirits, this is a sure sign that “premiumization”-an upselling strategy that is the Holy Grail of beverage companies-is gathering pace, analysts say.

 

In economically depressed Western markets, some drinkers are treating themselves, giving premium spirits categories a boost. Pernod Ricard says Havana Club rum posted improved sales for the first six months of the fiscal year, driven by Europe. “If you cannot afford to drink as much as you could, [you] can definitely drink less but better quality,” says Euromonitor International analyst Spiros Malandrakis.

 

In North America, Diageo’s reserve brands-or luxury division-posted double-digit sales growth for the six months ended in December, said Larry Schwartz, Diageo’s president in the region, with strong trading from upscale vodka brand Cîroc, as well as Bulleit Bourbon. Cîroc sales, excluding acquisitions, disposals and currency effects, rose 14%.

 

But while consumption is increasing for the high-end market, supply isn’t necessarily keeping pace. Pernod Ricard Chief Executive Pierre Pringuet says restricting access can be more beneficial than meeting demand, as the drinks giants chase value over volume. “It is up to us to make our brands so desirable,” he says. “We couldn’t envisage doubling the volume of Scotch in the medium term. [It is the] same for cognac. There is an element of scarcity.”

 

Diageo Chief Executive Paul Walsh agrees and says that even an economic crisis can lead to rewards elsewhere. “If there is a silver lining to the cloud of southern Europe, we are not selling as much young Scotch in markets like Spain and Greece as we were. We can hold on to that liquid longer and sell it into Latin America, Asia and Africa, probably as 12-year-old and make a lot more margin.”

 

Still, Diageo is trying to reach high-end drinkers in greater numbers through the launch of a Web portal in February to push direct global sales of the company’s ultra-premium brands. The Alexander & James site will offer drinks such as Zacapa XO-a blend of 25-year-old rums-at £99 ($150) a bottle, and the John Walker, a rare Scotch blend that retails at more than £2,000.

 

Alexander & James Managing Director Philippa Dickson describes it as a “white-glove, end-to-end luxury-brand experience, where people will be able to learn about our spirits and receive expert advice on food pairing and mixology ideas for every occasion.”

 

 

——

Pennsylvania: Liquor privatization - Vote could come tomorrow (Today)

 

Source: Philly.com

Angela Couloumbis,

March 20, 2013

 

The state House debated for less than two hours Wednesday on a bill to privatize wine and liquor sales in Pennsylvania, setting the stage for a historic vote on the issue.

 

House members could vote as soon as Thursday afternoon on a plan backed by Gov. Corbett to turn over the state’s 600-plus liquor stores to the private sector. Utah is the only other state with government-run wholesale and retail liquor operations.

 

It was not clear whether Corbett’s fellow Republicans had the votes to pass the bill. But Wednesday’s 108-91 defeat of a Democratic bid to gut the bill suggested that the GOP may have the 102 votes needed to send it to the Senate.

 

If the House passes the proposal, it would be the farthest a liquor-privatization bill has moved through the legislature since the birth of the State Store system when Prohibition ended in 1933.

 

“Everybody in this chamber recognizes that our current system for selling alcohol in Pennsylvania is an anachronism, it’s old-fashioned, and it needs to be changed,” Rep. Kate Harper (R., Montgomery) said in Wednesday’s debate.

 

The decks were cleared for a Thursday vote when Democrats who oppose the bill withdrew dozens of amendments that had House officials gearing up for a long night.

 

The version awaiting a vote is different from Corbett’s original proposal, which called for an aggressive auctioning of State Store licenses to the private sector, including supermarkets, convenience stores, and big-box stores.

 

Revisions made this week in a committee would slow the transition to the private sector and limit what some retailers could sell. Money raised by auctioning off the stores would still go to public schools, as Corbett had envisioned – but House Republicans say the revised plan would generate $800 million, not the $1 billion his administration projected.

 

The bill calls for 1,200 liquor licenses statewide. Beer distributors would get first crack and could choose between applying just to sell wine or just liquor, in addition to beer if they did not want to sell all three.

 

Also unlike Corbett’s proposal: Grocery stores could sell only wine unless they applied for a special license to sell beer as well. That license would require them to have a restaurant-style seating area.

 

Finally, the revised bill would not immediately shut down State Stores. They would be phased out and some could remain open in rural areas.

 

The union representing State Store retail clerks has warned that passage of the bill would cost 5,000 jobs.

 

 

——

Pennsylvania: Beer world – The distributors get most breaks in liquor reform

 

Source: Pittsburgh Post-Gazette

March 21, 2013

 

The latest version of Pennsylvania liquor reform is a beer distributor’s dream. Want to add wine and spirits to the inventory? Go ahead. Just want wine? That’s OK, too; the license for hard liquor will be held in abeyance in case the beer distributor has a change of heart.

 

Under an amended liquor privatization plan that could come up for a vote as early as today, beer distributors get all sorts of advantages over other private merchants looking to obtain any of the state’s proposed 1,200 retail wine and spirits licenses. And consumers would be left with not as much convenience as they deserve.

 

First, the 1,138 beer distributors get first crack at the licenses. They have 12 months to apply, and only after that would the option open up for others.

 

Second, the rates that distributors would pay for a license are a fraction of what it would cost other businesses. For instance, a beer distributor in Allegheny County would pay $82,500 for a wine and spirits license, but another applicant would be charged $397,500. And only beer distributors would be eligible for four-year financing from the state by paying a 5 percent fee.

 

Third, the beer distributors would continue to be insulated from competition on selling beer. Although grocery stores could get licenses to sell wine, their ability to sell beer would be restricted, as it is now, to separate registers in a cafe section of the market.

 

Lawmakers were wrong to think the bill would be a slam-dunk if they kowtowed to the state’s beer distributors. The trade associations that represent them still don’t like the legislation. Why? The groups want to keep things just as they are, which is why they’ve been among the impediments to reform for a long time.

 

The sad thing about House Bill 790 — amended from the better plan proposed by Gov. Tom Corbett — is that the liquor system it would deliver is an improvement over what Pennsylvania has today. Although the movement away from state-owned, state-operated stores would be too gradual and slow, at least it would eventually get the state out of the wholesale and retail alcohol business. In other words, things would be worse if nothing changes.

 

That may be a weak argument for urging the House to pass the measure, but advancing the legislation would mean the Senate could start making significant repairs to this necessary reform. And Gov. Corbett should put his muscle behind that.

 

 

——

Pennsylvania: Anheuser-Busch, MillerCoors, Pennsylvania breweries oppose liquor privatization bill

 

Source: Penn Live

Ron Southwick

March 20, 2013

 

Even as the state House of Representatives is poised to vote on a bill to put liquor sales in private hands, the beer industry is fighting the legislation.

 

Anheuser-Busch and MillerCoors, the two giants of the American beer market, have put their names on a letter objecting to the bill. The letter states that the bill as it stands now is “detrimental to the beer industry.” Combined, Anheuser-Busch and MillerCoors account for three out of every four beers sold nationwide.

 

The Brewers of Pennsylvania, an advocacy group for Keystone State breweries such as Yuengling, Troegs Brewing Co., and Appalachian Brewing Co., has signed onto the letter and distributed it to lawmakers. The Pennsylvania Beer Alliance, which represents the state’s beer distributors, has also signed the letter.

 

The state House is poised to vote on the privatization bill Thursday and it appears there may be enough votes to pass it. Gov. Tom Corbett has placed his clout behind it, saying it is a top priority. However, the measure still must pass the state Senate, and some senators have problems with the bill.

 

In the letter, the brewers don’t spell out objections to the idea of privatization itself. Rather, they say the bill as it stands would hurt the beer industry.

 

The brewers state that the legislation would hurt beer distributors and tilt sales unfairly to the wine industry. The bill allows for hundreds of additional wine and spirit licenses.

 

In the letter, the beer industry contends that the bill doesn’t provide a level playing field for beer sales in grocery stores.

 

Grocery stores would be able to sell unlimited amounts of wine anywhere in the store, the brewers say. Conversely, the bill spells out that beer sales would remain in a restaurant section of the store, and sales of beer would be limited to the maximum equivalent of a case (24 bottles).

 

The privatization bill “would create approximately 800 new ‘Grocery Store’ licenses authorizing the sale of unlimited amounts of wine anywhere in a grocery store and, thereby, creating a very uneven playing field in the grocery store segment,” the letter states.

 

“And because it pertains only to wine, there will be supermarkets where wine will be the exclusive alcohol beverage option and no beer will be sold.”

Behind the Scenes of a Yuegling Ad Campaign The Brewers of Pennsylvania, which represents Yuengling and other breweries, objects to the privatization bill as it stands now.

 

In addition, the letter states that the bill poses a threat to beer distributors, who may have to devote half their shelf space to wine and spirits. Some distributors say they can’t afford a costly expansion to maintain their current beer selection and add wine and spirits.

 

Beer distributors sell about two-third of all beer sold in Pennsylvania, so the industry is wary of doing anything to hurt distributors.

 

Anheuser-Busch, the makers of Budweiser, Bud Light and Michelob beers, accounts for roughly half of all beer sold in the United States. MillerCoors, which makes Miller Lite, Coors Light and Blue Moon, racks up more than a quarter of American beer sales.

 

D.G. Yuengling & Sons, makers of Yuengling Lager, is the largest American-owned brewery and accounts for about 2 percent of beer sales. Yuengling is just ahead of Boston Beer Co., makers of Samuel Adams beers.

 

In a revamped liquor market, the question of shelf space could be even more important to the state’s smaller breweries, such as Troegs, ABC, Stoudt’s Brewing Co. in Lancaster County and Victory Brewing Co. in Downingtown, All are members of the Brewers of Pennsylvania.

 

The state’s microbreweries rely on distributors to reach customers. If distributors have to clear shelf space for wine and spirits, smaller microbrews could be the casualties.

 

Corbett and Republican lawmakers who have pushed for privatization have insisted that privatization would lead to bigger business. They argue that the private industry would do a better job selling beer and wine and they contend that it’s time to get the state government out of the liquor business.

 

Pennsylvania’s business advocates, including the Pennsylvania Chamber of Business and Industry, strongly support privatization. They argue it will lead to more choices and convenience for customers.

 

Under the bill, beer distributors would get first crack at 1,200 wine and spirit licenses. After a 12-month period, the licenses would go up for grabs to the general public.

 

Beer distributors would also be able to sell beer by the six-pack and in growlers.

 

Here’s the full content of the brewers’ letter opposing the legislation, dubbed House Bill 790. 

 

http://www.pennlive.com/midstate/index.ssf/2013/03/anheuser-busch_millercoors_pen.html

 

 

——

United Kingdom: Distillers rue dual treatment over duty escalator

 

Source: FT

By Louise Lucas and Mure Dickie

March 20th

 

There was a showdown in the pub when George Osborne, chancellor, allowed brewers to step off the duty escalator but kept on raising taxes for distillers – including Scotch whisky, one of the country’s big export success stories.

 

The dual treatment angered distillers and politicians. John Swinney, Scottish finance secretary, said: “There are already concerns that his small beer Budget will cost Scotland’s whisky industry, with warnings over future investment.”

 

Analysts accused the chancellor of pandering to the populist vote: Britain boasts more beer drinkers and Mr Osborne’s “penny off the pint” is aimed at reversing the dwindling ranks of pubs, some 10,000 of which have gone out of business in the past decade.

 

But spirits makers, quick to condone the inequitable treatment, said that even if designed to support pubs, the measure was “misplaced”.

 

According to the Wine and Spirit Trade Association, more than 41 per cent of drinks sold in pubs are wine and spirits, worth £9.4bn a year. “The chancellor’s decision ignores the growing value of the English wine industry and the UK spirits industry, which accounts for 18 per cent of all jobs in the EU spirits industry,” said Miles Beale, WSTA chief executive.

 

The Association of Licensed Multiple Retailers, however, reckons that on average beer makes up 60 per cent of alcohol sales in pubs, to 12 per cent for spirits and 13 per cent for wines. “There is no doubt this is a life saver to some of the traditional pubs and bars,” said Kate Nicholls, strategic affairs director.

 

Michael Laird, a partner at Cognosis, a drinks consultancy, said targeting wine and spirits was more to do with PR. “Osborne is playing politics to a certain extent. Beer is massively taxed here compared with Europe so there is little more he can do on beer taxation anyway,” he said.

 

Producers of Scotch, which contributes £134 a second to the UK trade balance and supports 35,000 jobs across the UK, were also left fuming. The decision is “unfair, incomprehensible and undermines one of Britain’s major industries in its home market”, said the Scotch Whisky Association.

 

It said drinkers of a dram are now paying 48 per cent more duty than a beer drinker, further distorting the alcohol drinks market in the UK.

 

The UK is the third biggest market for Scotch and now boasts the fourth highest taxed market in Europe: of the EU member states, only Ireland, Finland and Sweden are higher.

 

Distillers paid just shy of £3bn on duty last year; assuming constant consumption, that will rise to £3.12bn with the latest rise of 5.26 per cent. The government reckons the tax cut on beer, which generated tax revenues of £3.4bn last year, will cost it £170m next year from the cancellation of the duty escalator and the penny off a pint. Beer sales have been declining at roughly 4 per cent a year since the duty escalator was introduced in 2008.

 

Diageo dubbed the move “disappointing”. The world’s biggest distiller, which has earmarked £1bn for investment in Scotland for Scotch whisky over the next five years, said: “Cutting duty on beer while increasing it on spirits punishes the UK spirits industry for its success in this harsh economic climate. Scotch is the UK’s biggest food and drink export. This move risks that success.”

 

According to the SWA, the 5.3 per cent increase in spirits duty sees a standard 70cl bottle of Scotch whisky jump to £12.89 from £12.42.

 

“The Scotch whisky industry?.?.?.?is a vital part of the Scottish and UK economy and where it supports many other businesses. It penalises responsible drinkers who like a dram rather than a pint. There is no justification for spirits being taxed more heavily than beer,” said Gavin Hewitt, SWA chief executive.

 

“It also damages all the good work done to create fairer tax regimes overseas to provide a fairer playing field for Scotch whisky. It hinders the government’s ambitions for an export-led recovery.”

 

 

——

United Kingdom: Preferential treatment for beer ‘could be illegal’

 

Wine and spirits producers slammed the Chancellor’s decision to reduce duty for beer but raise tax on other alcohol as “unfair and incomprehensible”, claiming the move could be illegal under European law.

 

Source: Daily Telegraph

By Nathalie Thomas

20 Mar 2013

 

From Sunday, 10p will be added to the price of a bottle of wine in the UK while spirits will go up by 53p, after the Chancellor decided to press ahead in the Budget with a 5.3pc rise in alcohol duty.

 

Beer will be the one exception after the Government bowed to pressure from brewers to scrap the controversial “beer duty escalator” and reduce duty on a pint by 1p.

 

The escalator raised duty on beer by 2pc above the retail prices index measure of inflation every year and was blamed for accelerating the decline of traditional community pubs in Britain. However, an escalator will continue to be applied to other categories of alcohol, including wine, spirits and cider,.

 

The Wine and Sprit Trade Association said it made “little sense” to single out beer and claimed there was a legal precedent to suggest the Government could not treat other forms of alcohol differently.

 

Alcohol producers believe a ruling made by the European Court of Justice in 1983 that the UK’s duty regime at the time discriminated against wine in comparison with beer still applies.

 

Miles Beale, chief executive of the WSTA, accused the Chancellor of “riding roughshod” over the legal precedent.

 

He pointed out that more than 41pc of drinks sold in pubs are wine and spirits, generating £9.4bn a year. “If this was designed as a measure to support pubs it seems highly misplaced,” he said.

 

The Scotch Whisky Association (SWA) called the move “unfair” and “incomprehensible” and claimed it undermined one of Britain’s major industries in its home and third most important market.

 

A standard 70cl bottle of Scotch Whisky will rise to £12.89 from £12.42 as a result of the duty increase.

 

“There is no justification for spirits being taxed more heavily than beer,” said Gavin Hewitt, chief executive of the SWA. “It also damages all the good work done to create fairer tax regimes overseas to provide a fairer playing field for Scotch Whisky.”

 

Diageo, the world’s biggest drinks company, said: “Cutting duty on beer while increasing it on spirits punishes the UK spirits industry for its success in this harsh economic climate. Scotch is the UK’s biggest food and drink export. This move risks that success.”

 

However, the British Beer and Pub Association disputed the WSTA’s claims that the move was illegal. It pointed out that since 1983, Ireland and Denmark have enforced different duty regimes for wine and beer.

 

 

——

Mexico: Rivals demand share of Mexican beer market

 

Source: FT

By Adam Thomson in Mexico City

Mar 20th

 

Ask for a beer in almost any bar or restaurant in Mexico, and the waiter will rattle off half a dozen brands with all the ease and familiarity of reciting the alphabet. The problem is that the names will almost certainly belong to just one company.

 

For decades, Grupo Modelo, which produces Corona Extra and is half-owned by Anheuser-Busch InBev, and its main rival Cuauhtémoc-Moctezuma, which Netherlands-based Heineken acquired from Mexico’s Femsa in 2010, have used exclusive contracts with retailers to compete in Mexico’s roughly 70m-hectolitre-a-year market.

 

In the process, the two incumbents have made it nearly impossible for other producers to gain a foothold. Together, they control about 97 per cent of sales – Modelo, of which AB InBev is trying to buy the outstanding equity for $20.1bn, controls about 59 per cent of the market; Heineken has roughly 38 per cent.

 

But an unlikely combination of SABMiller, the world’s second-largest brewer, and a handful of local microbreweries is trying to change things. In the coming days, the companies hope that Mexico’s antitrust authority will support their complaint against exclusivity contracts – a move that they believe could blow open the country’s beer market to genuine competition for the first time.

 

“All we are looking for is market access,” Armando Valenzuela, SABMiller’s director-general in Mexico, told the Financial Times in a recent interview. “We want to make sure that no beer outlet has an exclusive agreement with any one company.”

 

The imminent ruling, which the country’s antitrust authorities say involves one of the biggest cases they have ever handled, coincides with a new administration in Mexico that appears determined to prise open long-protected sectors of the economy – from oil to cement and from bread to paint.

 

In one sign of changing attitudes to competition, Emilio Lozoya, who heads Pemex, the state oil monopoly, told the FT recently that he was optimistic about reform of the energy sector this year that would open up Mexico’s highly protected oil sector to private capital.

 

The new pro-business government headed by centrist President Enrique Peña Nieto has also announced a proposal to increase competition in telecommunications and television – a change that could affect some of the biggest corporate interests in Mexico, including those of América Móvil, the pan-American telecoms company controlled by Carlos Slim, the world’s richest man.

 

Jaime Andreu, owner of Cervecería Primus, a Mexican microbrewery that has joined SABMiller’s cause, says that thanks to Modelo and Heineken’s exclusivity contracts, only about one in 20 businesses – bars, restaurants and shops – that his network of sellers visits in search of business is potentially able to take his beer.

 

“It’s an everyday experience,” he explains. “They all say that they love the product and then they say that they can’t sell it.”

 

For entrepreneurs, particularly small-scale ones, contracts with the dominant market players are near irresistible. In their intense competition to win new business from each other, the two incumbents often offer support for those setting up new bars or restaurants. On offer? Refrigerators, tables, chairs and awnings, as part of commercial deals.

 

One owner of a bar in downtown Mexico City, who asked not to be named, said Modelo offered practically to furnish his entire premises in return for an agreement to sell its products on an exclusive basis.

 

“I would have preferred to offer a wider range of beer,” he says. “But when you are starting out, you need the support.”

 

The two incumbents have defended exclusivity contracts, arguing that they can provide credit to retailers, improve the look of retail outlets for customers, and create jobs and stimulate beer sales. They also say that the vast majority of the contracts do not specifically prohibit retailers from selling competing brands.

 

When asked about the forthcoming antitrust case, both Cuauhtémoc-Moctezuma and Grupo Modelo said they had no comment.

 

Critics insist it is hard to underestimate the effect of the exclusivity deals on competition. Mr Valenzuela of SABMiller, with its 200 brands, a presence in 70 countries and annual revenues in excess of $30bn, says that 20 years of trying to pick Mexico’s lock has resulted in a market share of just 0.7 per cent.

 

“It’s a completely closed market,” he says. “The two companies have created a national duopoly.”

 

The ruling will doubtless rest on a forest of technicalities. Eduardo Pérez Motta, who heads Cofeco, the antitrust authority, said that among other things, the plaintiffs have to prove that the companies carrying out the exclusive contracts were dominant in their market and that they were abusing that dominant position. They also have to prove that the contracts did not increase market efficiency in some way. “It’s not a straightforward thing,” he told the FT.

 

But even if Cofeco closes the case for lack of evidence, SABMiller and the microbreweries have at least two opportunities to appeal. And, if it comes to it, they are sure to use them. As Mr Valenzuela told the FT: “We’re taking this all the way.”

 

 

——

Ireland: Reilly supports minimum pricing for alcohol

 

Source: Irish Examiner

By Cormac O’Keeffe and Evelyn Ring

Thursday, March 21, 2013

 

Health Minister James Reilly says he “absolutely supports” the introduction of minimum pricing for alcohol.

 

His comments came as the Cabinet prepares to consider a long-awaited Government action plan on alcohol which is set to include proposals on minimum pricing, alcohol sponsorship and advertising.

 

Alex White, the junior health minister responsible for the alcohol strategy, publicly conceded yesterday there would be opposition to some of the measures, decisions on which would be made “shortly”.

 

Speaking at the National Alcohol Awareness Week conference, Mr White said the Government was “not going to wait” to see how alcohol measures in other countries fared and would take a lead. This was being interpreted as a possible reference to events in Britain last week where prime minister David Cameron did a U-turn on plans to introduce minimum pricing in England and Wales. Observers have speculated on whether it might affect the decision of the Cabinet here, where four ministers have already expressed opposition to, or concern with, key proposals.

 

There is also uncertainty as to what, if any, effect Downing St’s decision will have on plans by the North’s administration to introduce minimum pricing. The Government here has pushed for an all-island approach to minimum pricing, to avoid cross-border trade developing. It is also keeping an eye on events in Scotland which has passed legislation on minimum pricing but has not yet enforced it.

 

Speaking at a health conference, Mr Reilly said he “absolutely supports” minimum pricing for alcohol and said he had been in talks with his Northern counterpart Edwin Poots to introduce it simultaneously.

 

Mr Reilly said he wanted to see alcohol prices fall in pubs and for prices in off-licences and big supermarkets to go “way up”.

 

Mr White said he had heard arguments against “every single measure” being proposed. He said this included arguments that sports sponsorship doesn’t increase consumption – a claim made by Sports Minister Leo Varadkar.

 

Mr White told the conference, organised by Alcohol Forum, that the Government would announce “actual decisions” on pricing and sponsorship shortly.

 

He said governments across Europe were considering the same solutions.

 

“We won’t be deferring our decision, we’re not commissioning more research or see how other countries get along.”

 

The action plan is based on a Government expert group, which sat for three years before publishing its report a year ago.

 

The plan was initially supposed to go the Cabinet last summer and, again, last September. Since November, Mr White has stated it would be before the Cabinet in a matter of weeks.

 

The latest prediction is for next Tuesday.

 

 

——

North Carolina: Plan for 3-ounce alcohol drink falls flat

 

Source: WRAL

Mar 20th

 

State regulators on Wednesday rejected a brewer’s plans to sell 3-ounce vials of high-alcohol malt beverage in North Carolina, saying they feared it would entice teens to drink.

 

Stout Brewing wanted to sell its Stout 21 malt beverage in grocery and convenience stores in such flavors as Margarita, Screwdriver and Apple Pie. The company bills the product as a “Flavored Alcoholic Shooter.”

 

Mike Herring, administrator for the state Alcoholic Beverage Control Commission, noted that the 3-ounce can with the twist-off cap contains as much alcohol as a 12-ounce beer.

 

“In a matter of minutes, a person can gulp that container down and take one of these (four) packs and gulp it four times and have the equivalent of four, high-proof, 12-ounce beers,” Herring told the ABC board. “You can just keep drinking these and drinking these, and the next thing you know, it’s going to hit you, and you’re not going to realize how much alcohol you’ve had.”

 

Stout 21 would most likely appeal to underage drinkers, he said, because they could conceal the small container in a pocket or backpack. Also, the unusual packaging would make it harder for parents and law enforcement officers to recognize it as an alcoholic beverage, he said.

 

Mike Adams, an attorney for Stout Brewing, said the company wanted to make a safe and responsible product and designed the 3-ounce can to “stand out” so it could be marketed better to 21- to 35-year-olds.

 

There was never any intent to appeal to teens, Adams said, adding that the smaller beverage is for consumers who don’t want “to be filled up.”

 

“It allows the consumer to very appropriately regulate the quantity of alcohol they consume,” he said.

 

Adams complained that ABC regulations don’t spell out rules for the size and shape of containers, adding that Stout Brewing has already purchased the equipment to make the 3-ounce can at its Kings Mountain brewery.

 

The $2.1 million brewery opened last year and employs 32 people in an area with a 10.6 percent unemployment rate.

 

Commissioners weren’t swayed, however, voting unanimously against Stout 21.

 

“This vial you’re trying to approve is less than half the size of anything we’ve ever approved with that content of alcohol,” Commissioner Joel Keith said.

 

ABC Chairman Jim Gardner, a former lieutenant governor, said he worries about his three young granddaughters.

 

“I’m very much concerned about the underage drinking problems in our state,” Gardner said. “We’re going to do everything we can possibly can – in the area of underage drinking, to do what we possibly can – to turn the tide somehow.”

 

Stout Brewing owner Cody Sommer was disappointed with the decision and said his management team would have to reassess the situation.

 

“We still feel correct that our product is not marketed to underage drinkers, and we still feel that way and that’s how we’re going to move forward,” Sommer said.

 

 

——

In a New Aisle, Energy Drinks Sidestep Some Rules

 

Source: New York Times

By BARRY MEIER

Mar 19th

 

Fans of Monster Energy, the popular high-caffeine energy drink, may not notice the change: its ingredients will be the same and its familiar label bearing a green, clawlike monogram will change only slightly. But the drink’s maker has decided after a decade of selling it as a dietary supplement to market it as a beverage, a switch that will bring significant changes in how it is regulated.

 

Among them: Monster Beverage, the nation’s biggest seller of energy drinks, will no longer be required to tell federal regulators about reports potentially linking its products to deaths and injuries.

 

The company’s recent move, which follows a similar regulatory makeover by another brand, Rockstar Energy, comes amid intensifying scrutiny of energy drink safety. On Tuesday, a group of 18 doctors and researchers sent a letter to the Food and Drug Administration urging it to take action to protect adolescents and children from the possible risks of high caffeine consumption. “There is evidence in the published scientific literature that the caffeine levels in energy drinks pose serious potential health risks,” the researchers wrote.

 

Monster Beverage’s new cans will also disclose caffeine content for the first time. A 16-ounce can of Monster’s most popular energy drinks will contain 140 to 160 milligrams of caffeine, compared with about 330 milligrams in a 16-ounce cup of Starbucks coffee.

 

The company is fighting back against critics on several fronts. This month, it held a news conference to dispute accusations in a lawsuit that the death of a 14-year-old girl was linked to high caffeine levels in Monster Energy. Separately, it threatened to sue a nutritionist who publishes a newsletter for elementary schools for statements that it said were defamatory.

 

The changes by Monster and Rockstar demonstrate the degree to which energy drink manufacturers can decide which rules to follow.

 

“We don’t have energy drinks defined by any regulation,” Daniel Fabricant, director of the F.D.A.’s dietary supplement division, acknowledged in an interview in October.

 

For a decade, Monster sold its products as dietary supplements, apparently as part of a strategy to convince consumers that they were different from beverages. But the company, like its competitors, has run into a spate of bad news, including the disclosure in October that the F.D.A. had received reports in recent years that mentioned its drinks in connection with deaths and injuries.

 

Since then, the F.D.A. has received three more death reports and 14 injury reports that cite Monster energy drinks, an F.D.A. spokeswoman, Tamara Ward, said in an e-mail. In recent months, the agency has also received added reports about other energy products; since October, for example, it has received 38 reports that cite the popular energy “shot” 5-Hour Energy, including five involving a death.

 

The mention of a product in an incident report filed with the F.D.A. does not mean the product played a role in a death or injury, and such reports may provide few details. Monster Beverage and the maker of 5-Hour Energy have insisted that their products are safe and unrelated to the reported episodes.

 

A spokesman for Monster, Michael Sitrick, said the company had decided to market its products as beverages for several reasons. One was to stop what he described as “misguided criticism” that the company was selling its energy drinks as dietary supplements because of the belief that such products were more lightly regulated than beverages. Another consideration, he said, was that consumers can use government-subsidized food stamps to buy beverages.

 

“Monster Energy drinks could equally satisfy the regulatory requirements” for either category, Mr. Sitrick said.

 

An executive vice president at Rockstar, Joseph Cannata, said the company had made the change because consumers found food labels easier to read. In January, all production of Rockstar energy drinks switched to those labels, he said.

 

Rockstar had previously disclosed its caffeine content.

 

A lawyer who represents supplement makers, Justin J. Prochnow, said companies like Monster and Rockstar might have had another incentive. Over the last two years, the F.D.A. has intensified its scrutiny of the supplement industry’s manufacturing practices, driving up production costs.

 

As beverage producers, Monster and Rockstar will face some reporting mandates, including some that are stiffer than the mandates for supplement makers. Such companies are required to notify the government when they think a product could cause injury, a rule intended mainly to limit the distribution of tainted food. In addition, they are required to maintain scientific data supporting the safety of any ingredients they use that are not already cleared by the government. They can also voluntarily notify the F.D.A. about adverse events possibly affecting individual consumers, a step Monster Beverage said it planned to take.

 

Mr. Sitrick said Monster’s move to list caffeine content followed its decision to join the American Beverage Association, an industry trade group, which urges member companies to make such disclosures. He estimated that half of the company’s products would list caffeine content by April, and 90 percent by May.

 

In a recent filing with the Securities and Exchange Commission, Monster Beverage, which is based in Corona, Calif., said that negative media reports about energy drinks had created “softness” in demand. Its stock, which traded for $83.96 last spring, closed at $49.72 on Tuesday, a decrease of more than 40 percent. Rockstar is privately held.

 

The energy drink industry also faces several investigations from federal and state officials into claims that its products provide benefits lacking in other caffeine sources, like coffee. Researchers say there is little evidence to support these claims.

 

At a recent news conference, Monster Beverage denied accusations that it was responsible for the 2011 death of a Maryland teenager who had consumed two 24-ounce cans of Monster Energy. The company said that tests were never conducted on the 14-year-old, Anais Fournier, to determine caffeine levels in her blood.

 

A lawyer representing her family, Kevin Goldberg, said a state medical examiner had found that the teenager, who had an underlying heart condition, died of a cardiac arrhythmia caused by caffeine toxicity. A spokesman for the chief medical examiner’s office in Baltimore declined to comment, citing continuing litigation.

 

Monster Beverage also claimed recently that the March issue of a newsletter sent to elementary school students and their parents contained defamatory statements that had “materially damaged Monster and its well-known brand.” It objected to several statements in the newsletter, Build Healthy Kids, including one that said children had died from energy drinks and should “never drink” them.

 

In a letter dated March 4, the company demanded that Deborah Kennedy, a nutritionist who publishes the newsletter, retract and correct the statements within five days or face a lawsuit.

 

Ms. Kennedy, who lives in Connecticut, said in an interview that she was stunned by the threat, in part because the newsletter never mentioned Monster Energy or any other product by name, but focused instead on the need for children to cut down on sugar-laden beverages.

 

In response, she called on one of Connecticut’s United States senators, Richard Blumenthal, who is a critic of the energy drink industry. Mr. Blumenthal’s office contacted Monster, which agreed to withhold legal action pending a meeting with Ms. Kennedy.

 

Ms. Kennedy, who holds a doctorate in nutrition, said she thought the audience for her newsletter, children from kindergarten through fifth grade, should not consume energy drinks. “They are going after me for reaching that segment, and it boggles my mind,” she said.

 

Mr. Sitrick, the Monster spokesman, said that the 7-year-old son of a Monster employee had received the newsletter at his school and was upset by it. The boy showed it to his father, who brought it to the attention of a company lawyer.

 

“No child, much less a 7-year-old, should be falsely informed that his or her father’s employer is a child killer, especially since there are no facts to support the allegation,” Mr. Sitrick said. He added that Ms. Kennedy had yet to meet with a lawyer for Monster.

 

Last week, Senator Blumenthal and two other Democratic lawmakers, Senator Richard J. Durbin of Illinois and Representative Edward J. Markey of Massachusetts, sent a letter to Monster Beverage urging it to apologize for the tone of its letter to Ms. Kennedy and asking whether the company had threatened others with lawsuits.

 

Mr. Sitrick said the company was still reviewing the letter but continued to believe that Ms. Kennedy’s statements were defamatory.

 

 

——

Diageo sues Missouri distributor Major Brands for ‘unacceptable’ performance (Additional Coverage)

 

Source: Beverage Daily

By Ben Bouckley

20-Mar-2013

 

Diageo is suing its principal Missouri wines and spirits distributor Major Brands, alleging ‘unacceptable’ performance, but Major CEO Susan McCollum insists her firm has a long record of ‘outstanding performance’ with the drink’s giant’s brands.

 

Speaking to BeverageDaily.com this afternoon, Major Brands CEO, Susan McCollum, said the firm did not want to comment on the litigation, but said her firm had been “blindsided by the lawsuit, especially given our multigeneration long relationship with Diageo”.

 

“We’ve been carrying the Diageo brands for generations, and we have an equally long record of outstanding performance as their distributor in Missouri. Even after the termination, Diageo has said that Major Brands remains the most respected distributor in the state of Missouri,” she said.

 

In a March 6 complaint filed in the US District Court District of Connecticut, Diageo Americas said it had given Major Brands notice that it planned to end their distribution agreement as of June 30.

 

Diageo said it expected Major Brands to challenge the validity of the termination, as the latter did earlier this year with Pernod Ricard USA, with Major claiming this would violate the Missouri Franchise Act because “suppliers can terminate liquor distribution agreements only with good cause”.

 

Pernod Ricard argues in a January 17 complaint filed in Missouri that it can exit distribution deals with both Major and rival Glazer’s, since neither involved a franchise agreement under the above act.

 

Diageo claims the same thing in relation to its contracts with Major, and seeks a court declaration that it (1) has contractual right to terminate the agreement on June 30, and (2) to ensure Major Brands did not retain rights to

distribute or selling Diageo drinks thereafter.

 

Thirdly, in its complaint signed by law firms Day Pitney and McDermott Will & Emery, Diageo also seeks a declaration that Major breached distribution contracts, and desires further damages upon this basis.

 

“The quality of Major Brand’s performance on behalf of Diageo, and the business relationship between Diageo and Major Brands, are unacceptable,” Diageo says in its complaint.

 

“Major brands profits substantially from selling Diageo’s products, but fails to devote even close to equivalent resources to the promotion and sale of Diageo’s products.

 

“Far from acting in a collaborative way consistent with a community of interest, Major Brands acts solely in its own interest,” the drink’s giant adds.

 

Diageo said that Major Brands distributed around 86% of its Missouri spirits and wine portfolio in by nine-liter case volumes, with Glazer’s Midwest picking-up the balance.

 

The UK-headquartered firm’s spirits and wines represented around 32% of Major Brands’ portfolio in these categories, the court said, but (with beer and non-alcoholic drinks included) under 25% of Major’s total business.

As of July 1 2013 – when Diageo gives up the right to supply Jose Cuervo tequilas, cocktails – these numbers will fall to 27% and 21% respectively.

 

‘Regularly acts adversely to Diageo’s interests’, suit claims.

 

But Diageo claims that Major Brands spends “substantially less” than 25% of employee time, advertising funds and promotion dollars on Diageo products, even using Diageo-derived resources to subsidize its costs and promote products from rival suppliers.

 

Diageo also alleges that Major “regularly ignores or rejects” suggestions on how to best sell Diageo products: Captain Morgan rum, Smirnoff Vodka, Seagram’s 7 whiskey.

 

Major has no incentive to improve performance, Diageo claims, since it also sells rival drinks such as Absolut Vodka (Pernod Ricard) Sailor Jerry Rum (William Grant & Sons) and Jim Beam Whiskey (Beam Inc.)

 

Since Major Brands wanted customers to purchase products of all of its suppliers, the firm did not have predominantly common interests with Diageo, the latter claims.

 

“To the contrary, Major Brands regularly acts adversely to Diageo’s interests,” the firm said, adding that it Major even refused a request made on fairness grounds to better resource Diageo’s portfolio.

 

Major Brands is Missouri’s highest volume alcohol distributor; acting as a distributor for hundreds of producers and suppliers of brands it carries 5000+ products and employs 700+ staff.

 

 

——

Scotch Whisky Association raises concerns over Dewar’s Highlander Honey (Excerpt)

 

Source: Just Drinks

By Olly Wehring

20 March 2013

 

The Scotch Whisky Association has admitted that it has “concerns” over Bacardi’s extension of its Dewar’s Scotch whisky brand in the US.

 

Following the announcement, the SWA said that the product did not breach any laws governing the definition of Scotch whisky. “It’s actually a ‘spirit drink’,” a spokesperson for the trade body told just-drinks. “The regulations only cover Scotch whisky, and it’s not being sold as Scotch whisky.

 

However, late yesterday, the SWA said: “We do have concerns that the labelling and promotion of Dewar’s Highlander Honey could distinguish the product more clearly from Scotch whisky. Under EU law, it has to be sold under the sales description ‘Spirit Drink’ and it would assist if that description was more conspicuous on the labelling to help make it clear it is not Scotch whisky.

http://www.just-drinks.com/news/scotch-whisky-association-raises-concerns-over-dewars-highlander-honey_id109859.aspx

 

 

——

Judge grants delay in Anheuser-Busch InBev, DOJ hearing until April 9

 

The Justice Department and A-B InBev have until April 9 to either settle or create a schedule for the court to hear the antitrust dispute.

 

Source: St. Louis BJ

Mar 20th

 

A judge has agreed to again extend the deadline to hear arguments between the U.S. Justice Department and Anheuser-Busch InBev over A-B’s planned $20.1 billion acquisition of Grupo Modelo, which could be a sign the sides are nearing an agreement.

 

U.S. District Court Judge Richard Roberts gave the Justice Department and A-B InBev until April 9 to either settle or create a schedule for the court to hear the antitrust dispute, Reuters reports. Last week, the brewers and Justice Department had requested an extension of a deadline that already had been extended until March 19, saying they had made “substantial progress” in talks.

 

A-B InBev struck a deal last June to buy the half of Grupo Modelo, brewer of Corona, that it didn’t already own for $20.1 billion. But the Department of Justice filed a lawsuit in January to block the merger, saying it “would substantially lessen competition in the market for beer in the United States.”

 

In requesting the additional extension, the companies said the progress in discussions with the Department of Justice were based on revisions to the merger that A-B InBev had announced in February to satisfy U.S government objections. Last month, A-B InBev agreed to sell Modelo’s Piedras Negras brewery, near the Texas border, to Constellation Brands and grant it perpetual rights for the Corona and Modelo brands distributed by Crown in the U.S. at a cost of $2.9 billion.

 

St. Louis-based Anheuser-Busch is part of Belgium-based Anheuser-Busch InBev. A-B InBev reported revenue of $39.8 billion in 2012, and Grupo Modelo is about a $7 billion company.

 

 

——

In Wine Market, a Bubble Still Bursting

 

Source: Bloomberg

By Mark Gimein  

March 20, 2013

 

In the current issue of Bloomberg Pursuits, Bloomberg wine writer Elin McCoy writes about Domaine de la Romanee-Conti, the ne plus ultra of fine Burgundy. The latest release of DRC’s flagship wine, the 2009 vintage, sells for $15,000 a bottle, older bottles for as much as $2,000 an ounce.

 

Still, as McCoy points out, DRC has been outperforming other wines at auction, largely because of the Burgundy craze among Chinese collectors. All of this raises a question that goes beyond DRC: Do the prices for top wines bespeak a bubble?

 

Take a look at the chart below, which shows the Liv-ex Fine Wine 100 Index of prices for 100 frequently traded high-end wines back to July, 2000. You’ll see that for five years it stayed flat, rising 265 percent through the middle of 2011 before slipping down. Over the last few months the wine market seems to have resumed its ascent.

 

The Liv-ex Fine Wine 100 Index peaked in 2011. There’s still room for it to go down further.

 

Does that mean that it’s now reached its natural level, or that the bubble is still filled with air? The hard thing about bubbles is that there’s no decisive answer to whether you’re in a bubble until after it’s over. In periods of high prices, there’s generally no shortage of folks ready to say that prices have just reached a permanent new plateau. So it is with wine. The growth of the global ultra-rich is one reason prices could gave gone up.

 

That said, I’m skeptical that the number of folks actually drinking wine at $1,000 a sip has exploded. Yes, there’s a new Chinese market, but it seems to be driven largely by people who are more interested in the investment value of their cellar than the liquid in their glass. McCoy has covered that vividly. At the end of 2011, she wrote about Chinese banks funding wine purchases. Let’s assume that the impulse to open a nice wine with dinner dissipates when you’ve financed your cellar with borrowed money.

 

Wine prices are now already about 20 percent below their peak. It’s tempting to assume that now that having leveled off they’re set to rise again. Don’t count on it. Rarely is the first sharp descent the true end of a bubble. On this subject, it’s hard to beat the conclusion of McCoy’s 2011 story, so I won’t even try. She wrote then, “My nickname for the Chinese wine investment market? Duchang. It means ‘casino.’” That was right near the very top of the market. There’s still plenty of room to keep falling.

 

 

——

Wine Advocate sues ex-critic Antonio Galloni for missing tasting notes

 

Source: LA Times

By S. Irene Virbila

March 20, 2013

 

The breakup of the Wine Advocate’s Robert B. Parker with his former lead wine critic Antonio Galloni is getting ugly. You might remember that Parker sold a substantial interest in his influential wine newsletter, the most powerful in the country, to Singapore investors last December. Though Parker isn’t exactly retiring, he is stepping down as editor-in-chief. And that position has been claimed not by Galloni, his heir apparent, but by Lisa Perrotti-Brown, a Master of Wine who was a Singapore-based correspondent for the publication.

 

Fast forward to Feb. 12: Galloni leaves to found his own website. End of story, or so it seemed.

 

But now the Wine Advocate is suing Galloni for breach of contract-and fraud. According to a story up at “the Wine Cellar Insider” by founder Jeff Leve, “the problem is that prior to the sale of The Wine Advocate, Antonio Galloni, who was being paid $300,000 and expenses per year, contracted to write about and review the wines of Sonoma, California and other regions for Robert Parker and The Wine Advocate. Galloni refused to deliver the work product once he ended his business relationship with the company. He claimed that he was unable to finish his report on time as it would not do justice to the region.” Read more of Galloni’s side of the issue at his site.

 

First thought: $300,000 is an astonishingly high salary, especially since  I remember seeing a tweet sent by someone at The Symposium for Professional Wine Writers at Meadowood Napa Valley in February. Only three of the wine writers in the room earned more than $25,000 per year from their writing.

 

Galloni’s proposal for resolving the issue is to publish the Sonoma report when he finishes it early next month on www.antoniogalloni.com and to give readers of the Wine Advocate free access to it.

 

But that seems just a little disingenous, because, of course, doing so would drive Wine Advocate readers and members of the popular erobertparker site to Galloni’s competing site. And why would the Wine Advocate want to do that? Especially since the tasting expenses came out of its budget?

 

Each side has its points, but how will the judge rule?

 

The situation looks even more complicated if you read further.  Evidently, Parker let loose a blast from Bordeaux where he’s tasting the 2012 vintage, explaining to his readers that “we have taken appropriate action to retrieve the report Antonio was paid to produce. It’s a disservice to you and to the vintner associations and winemakers who put in massive efforts coordinating tastings for this report in hopes of getting a Wine Advocate review. At the time of these tastings, Antonio was a reviewer for The Wine Advocate, so it stands to reason the report he was paid to provide should be submitted. We regret having any delay and appreciate your patience as we sort through details via the proper channels.

 

“Our actions are simply a matter of retrieving a service we paid for on your behalf. This is not an attempt to stop Antonio from moving on; we continue to wish him our very best.”

 

For legal buffs, a copy of the lawsuit is posted on the Wine Cellar Insider.  http://www.thewinecellarinsider.com/2013/03/robert-parker-sues-antonio-galloni-for-fraud-breach-of-contract/

 

 

——

Wine business Laithwaite’s toasts 18% rise in US revenues

 

Latest accounts show company now the largest mail-order wine business in North America

 

Source: The Guardian

Juliette Garside

Wednesday 20 March 2013

 

Laithwaite’s, the world’s largest home delivery wine business, is celebrating an 18% rise in revenues from the United States.

 

Thanks to partnerships with the Wall Street Journal, the Zagat restaurant guide and its Virgin Wines brand, the family-run British business has now also become the largest mail-order wine business in North America.

 

Growth abroad has helped increase sales at its Direct Wines holding company by 2.5% to £353m, according to accounts published on Wednesday. With operations in Australia, Hong Kong, mainland Europe and Australia, 30% of income is now from international sales.

 

Investments in software and overseas expansion drained profits, which fell from £11.5m to £6.6m.

 

The founders and co-chairs, Tom and Barbara Laithwaite, began to pass the baton to the next generation by appointing their three sons, Henry, Will and Tom, as directors last summer. The family will share in a £1.37m dividend.

 

The business expanded its winemaking capacity during the year, buying two chateaux in the Bordeaux village of Sainte-Colombe, where the Laithwaites bought their first estate in 1980. The company also tends vines in Buckinghamshire, Berkshire and Windsor Great Park.

 

 

——

Wine Industry Tries to Fix Image in China

 

California Vintners, Led by Bay Area Players, Promote Their Better Offerings in Market Where Cheap Stuff Sells at High Prices

 

Source: WSJ

By BEN WORTHEN

Mar 20th

 

When Mark Bright attends wine events in China, he says, people often complain that California wine is overpriced and of poor quality.

 

The San Francisco-based winemaker and sommelier blames that reputation on vendors who have flooded China with cheap “plunk” wine that they sell at prices normally charged only for better vintages.

 

“It’s horrible for California,” says Mr. Bright, who laments that if this continues, “we’re never going to be able to build a business in China.”

 

California winemakers-in particular those in Bay Area counties like Napa and Sonoma-have spent decades establishing their wines as some of the best in the world. But in China, where drinking wine is a more recent phenomenon, these well-constructed wines compete with bulk wine from the state that is bottled, branded and sold at prices they could never command elsewhere.

 

California’s wine establishment, led by Bay Area vintners, brokers and trade representatives, is now trying to change the image of the state’s wine in China. Mr. Bright is working on a Mandarin-language book about California wines. The Wine Institute, a San Francisco-based advocacy group for California wines, in July 2011 started holding virtual tastings via video conference for Chinese journalists. And earlier this month, Gov. Jerry Brown announced plans to promote California wines on an upcoming trip to China.

 

There is a lot riding on the efforts. While China in 2012 accounted for just under $74 million of the $1.4 billion of U.S. wine exports-about 90% of which comes from California-that is up from $16 million in 2007 and $2.6 million in 2003, according to the Wine Institute.

 

“There’s an amazing opportunity with this emerging middle class [in China] that’s buying cars and watches and wine,” says Linsey Gallagher, international marketing director for the Wine Institute. She adds that about 90% of the calls she gets these days are about China.

 

Some California wine businesses say they have seen firsthand how poor wines from the state have wound up in China. “We’ve had people just show up with bags of cash and say give me the cheapest wine. It was that bad,” says Robert Dahl, chief executive of California Shiners, a Napa-based company that buys bulk wine and then blends it and bottles it for customers, who brand and sell it. The people, who are either from China or have business connections there, are often looking to make a quick buck, he says. He declined to name any of them.

 

Mr. Dahl started his company two years ago and says he is on track to ship one million cases of wine this year, almost all of it to China. He says that he takes steps to ensure that his is a high-quality product, including having the proper facilities to store and filter the wine.

 

“People were just sending junk,” he says. “We’ve been pushing 100% against that. It makes us all look bad.”

 

David Duckhorn, whose family once owned a Napa winery and who now lives in Shanghai, started a business importing wines to China in 2008 and has taken steps to distinguish the wine he sells from the lower-quality stuff. He says he only sells bottles that are branded the same as the ones a customer in the U.S. would get, from the same winemakers and sourced from the same vineyards.

 

Wine imported into China, like that brought to the U.S. from overseas, require a local-language label on the back. California winemakers would leave the back of their bottles blank or ship them with the Chinese-language labels already affixed. To demonstrate his wines are the real deal, Mr. Duckhorn now asks for winemakers he works with to ship bottles with an English-language label on the back and he sticks the Chinese import label over it.

 

“You can peel it off,” he says, which lets buyers confirm the authenticity of the product.

 

Mr. Duckhorn’s company, Via Pacifica U.S. Inc., will soon have eight offices in China, where his staff puts on tastings for Chinese buyers. He encourages them to check online the prices that the same bottles sell for in the U.S. so that they can tell whether it is overpriced.

 

A bottle of wine in China typically costs about two or three times what it would in the U.S. because of taxes, import fees and other costs.

[image]

 

Still, as a middleman Mr. Duckhorn can’t always stop overpricing. One of his customers once bought some Decoy wine, a less-expensive release from the Duckhorn Winery-formally owned by Mr. Duckhorn’s family-that retails in the U.S. for around $20 per bottle, and at a 10-times markup in China.

 

Ms. Gallagher of the Wine Institute says some of the current problems will go away as Chinese wine buyers become better educated. The institute has led trade missions to China with California winemakers to promote the wines and recently launched a Chinese-language website about California wines.

 

Ms. Gallagher says she has lately had some success marketing food-and-wine pairings, with California wines going well with spicy dishes and traditional Chinese food like barbecued meats. The Wine Institute has put on events with sommeliers and chefs to tout this in Beijing and Shanghai.

 

“Journalists [in China] now write about food-and-wine pairings and how good California wines are,” she says.

 

 

——

Kobrand to represent Masi Agricola wines in US

 

Source: DBR

21 March 2013

 

Kobrand, a New York-based family-owned company that imports and markets wine and spirits brands, has entered into a long term sales and marketing agreement with Masi Agricola of Italy to represent its Masi Tupungato wines, and Serego Alighieri and Bossi Fedrigotti estates in the US.

 

Located in Italy’s Veneto region, Masi Agricola is known for making wines using Appassimento winemaking method. The winery produces wines such as Amarone and Campofriorin.

 

Masi Agricola will be put under the wine division of Kobrand Wines and Spirits, and will be handled by Kobrand brand manager Marco Sorio.

 

Commenting on the new partnership, Masi Agricola president Sandro Boscaini said, “Our partnership combines Masi’s high quality wines and pristine vineyards with Kobrand’s professionalism and approach to market.”

 

Kobrand CEO Bob DeRoose said the company looks forward to working with the Boscaini family to continue the brands’ success in the US.

 

“Masi Agricola has had a strong presence in both the on- and off-premise segments of our industry since its introduction to the US in late 1960s,” DeRoose added.

 

 

——

Clos Fourtet family buys three more Saint Emilion estates

 

Source: Decanter

by Jane Anson in Bordeaux

Wednesday 20 March 2013

Mathieu Cuvelier, owner of Chateau Clos Fourtet, is to finalise in the next few weeks the purchase of three further Saint Emilion properties.

 

The properties are Chateau Clos St Martin (1.3 hectares), Les Grands Murailles (1.ha) and Cote de Baleau (14ha).

 

All three are owned by Sophie Fourcade, who was a practicing lawyer before joining the family wine business in 1998.

 

All three are Saint Emilion classified estates; the vines of Les Grands Murailles are next door to those of Clos Fourtet.

 

Fourcade is to continue as director of the properties after the purchase, as is the rest of the technical team, including Michel Rolland as consultant, Decanter.com understands. Stéphane Derenoncourt is consultant at Clos Fourtet.

 

‘We have been in discussions with Sophie since last December,’ Cuvelier told Decanter.com.

 

He said the vines of Les Grands Murailles would not be used to boost production of next-door Clos Fourtet – for now.

 

‘We are keeping all three brands, because all have strong identities, and for now will be trying to understand the terroir and see where we need to invest. Of course there is the possibility for changes in the future, but everything needs to be studied carefully.’

 

‘We were very keen for our properties to go to another family,’ said Fourcade, ‘and not to a faceless insurance company. We are extremely happy that it has gone to our neighbours, to a family that we have known for a long time. We know that the properties will be well treated.’

 

With the Clos Fourtet vines, the Cuvelier family will now have 40ha in St Emilion, and also own Chateau Poujeaux, with 68ha in Moulis en Médoc. The price of the purchase was not revealed, but it is likely to have been several million euros per hectare.

 

 

——

Wal-Mart Wine Selling Is Key to South Africa’s U.S. Push

 

Source: Bloomberg

By Veronica Navarro Espinosa

Mar 20, 2013

 

South Africa, the eighth-biggest wine producer, is seeking to regain a foothold in the U.S. market lost to imports from Australia to Argentina by promoting brands at Wal-Mart (WMT) Stores Inc. and Whole Foods Market Inc. (WFM)

 

“We used to have a quite substantial market presence in the U.S. and it went all the way down,” George Monyemangene, the consul general of South Africa in New York, said in an interview at Bloomberg’s headquarters. “Maybe we were not as responsive as we should have been to newcomers.”

 

Wal-Mart, the world’s largest retailer, started selling South African wines in August 2012 and now has bottles in 1,600 stores, according to Deisha Barnett, a spokeswoman in Bentonville, Arkansas. Whole Foods Market, the largest U.S. natural-foods grocer, is planning a South African wine promotion later this year, said Doug Bell, the company’s national wine and beer buyer.

 

South Africa’s share of the market for wines imported to the U.S. fell to 1.2 percent last year from a peak of “about 8 percent” in the 1990s, according to data from San Francisco- based Wine Institute and Monyemangene. Italian wines have about 29 percent of the import market, followed by France, Australia and Argentina. Imports of South African wine to the U.S. have risen fivefold since 2000, compared with a more than 12-fold jump for Argentina and New Zealand wine imports, according to the South African Consulate.

 

“South African wine has matured,” Bell said in a telephone interview from Blue Ridge, Georgia. “It’s time to showcase them. The quality is there. I don’t think they’re the little brother of the wine world anymore.”

 

Seven Sisters

 

In the U.S., Wal-Mart sells Seven Sisters wines, founded by seven sisters of South Africa’s Brutus family, Barnett said in a telephone interview. Wal-Mart entered Africa’s largest consumer market in 2011 with the acquisition of a majority stake in Johannesburg-based Massmart Holdings Ltd. (MSM)

 

The efforts to boost sales of South African wine in the U.S. are taking place as the rand trades at a four-year low against the U.S. dollar amid labor disputes in the mining industry, a widening budget shortfall and the threat of a downgrade of South Africa’s BBB credit rating, the second-lowest investment grade. The currency has slipped more than 8 percent this year, the most among 25 major emerging-market currencies compiled by Bloomberg.

 

White Wine

 

The weaker currency will boost South Africa’s total wine exports 5.1 percent this year to 430 million liters, a level 23 percent higher than two years earlier, according to a USDA Foreign Agricultural Service report dated March 14. White wine makes up 81 percent of the country’s exports to the U.S., according to the report.

 

South Africa wine production dates back to the 1600s, when the Dutch East India Company established a supply station in the Cape of Good Hope. Exports began booming after countries stopped boycotting South African products in protest over apartheid, the white minority government that ended in 1994.

 

Monyemangene, the consul general, said producers may have lost market share by underpricing “top-end” wine. With the new agreements with U.S. retailers, sales are starting to increase, he said.

 

“We have some intermediate to long-term agreements within the export market,” Monyemangene said in the March 13 interview. “We have seen a rise in terms of volume of wines.”

 

 

——

Ignite Restaurant 4th-Quarter Loss Widens on Restatement, Debt Costs

 

Source: WSJ

By Ben Fox Rubin

Mar 20th

 

Ignite Restaurant Group Inc.’s (IRG) fourth-quarter loss grew from a year ago as the restaurant operator was weighed down by a handful of one-time costs, though same-store sales continued to improve.

 

Ignite, which has about 130 Joe’s Crab Shack restaurants and 15 of its newer Brick House Tavern+Tap chain, launched its initial public offering in May with plans to expand in the dense U.S. market.

 

Connecticut private equity firm J.H. Whitney Capital Partners LLC bought 120 Joe’s locations from Landry’s Restaurants in 2006 in a $192 million deal. It then launched Brick House–a gastropub-styled brand–in 2008 and changed its name from Joe’s Crab Shack Holdings Inc. to Ignite. The company, whose market value is now about $414 million, last month agreed to buy Romano’s Macaroni Grill for $55 million, adding an Italian food chain to its portfolio.

 

While the company’s stock popped when it went public, shares tumbled in July after Ignite said it needed to correct and restate some financial records, after it uncovered non-cash accounting errors that had existed for years.

 

For the latest quarter, Ignite posted a loss of $7.6 million, or 30 cents a share, compared with a year-ago loss of $1 million, or five cents. The company had previously warned that it would post one-time charges in the latest quarter related to restatement costs and debt amortization write-offs. Excluding those costs and other items, the company reported a loss of 15 cents a share. Analysts polled by Thomson Reuters most recently expected a loss of 14 cents a share.

 

Revenue was up 11% at $112.6 million, mostly in-line with the company’s January estimate of $112.5 million. Total costs and expenses rose 13% to $118.6 million.

 

The company in January said same-store sales rose 0.8% during the quarter, excluding a 0.1% impact from Hurricane Sandy.

 

Shares closed Wednesday at $16.23 and were unchanged after hours. The stock is up 16% from its IPO price of $14.

 

 

——

California: Californians drinking less beer, more wine, spirits

 

Source: SacBee

By Phillip Reese

Mar. 19, 2013

 

California adults now drink, on average, less than a gallon of ethanol from beer each year. They’re making up for it by drinking more wine and distilled spirits.

 

California beer consumption per adult fell 12 percent from 1998 to 2010, according to the latest federal statistics.

 

Over that same period California wine consumption per adult grew by 22 percent, while distilled spirits consumption grew by 16 percent.

 

Beer remains the most popular alcoholic beverage, with California adults drinking an average of 0.97 gallons of ethanol from beer a year, compared to three-quarters of a gallon of spirits and half a gallon of wine. Beer is about 4.4% ethanol, so California adults drink, on average, about 22 gallons a year.

 

California alcohol consumption decreased slightly during the recession but has trended upward slightly overall in the last decade. Consumption remains well below levels from the 1980s and 1990s. (About 40 percent of California adults rarely or never drink alcohol.)

 

This chart shows average gallons of ethanol from alcohol consumed per California resident over the age of 14 each year since 1991.

 

http://www.sacbee.com/2013/03/19/5275952/californians-drinking-less-beer.html

 

 

——

Michigan: Michigan House votes to keep 0.08 pct. alcohol law

 

Source: Morning Sun

03/20/13

 

The Michigan House has passed legislation that would prevent a scheduled rise in the state’s blood-alcohol limit for drivers.

 

The bills approved unanimously Wednesday would keep the legal limit for drivers’ blood-alcohol content at 0.08 percent. The limit is set to revert back to 0.10 percent in October because of a sunset provision in current state law.

 

Republican Rep. Klint Kesto of Commerce Township in Oakland County is sponsoring one of the bills. He says the state would lose more than $50 million in federal funding if the limit rises to 0.10 percent.

 

He says since Michigan has implemented a 0.08 percent limit, there has been a significant drop in alcohol-related traffic fatalities.

 

The bills now head to the Senate.

 

 

——

U.S. to revise cigarette warning labels

 

Source: AP

Michael Felberbaum

March 19, 2013

 

The FDA will create labels to replace those that included images of diseased lungs and a corpse.

 

The U.S. government is abandoning a legal battle to require that cigarette packs carry a set of large and often macabre warning labels depicting the dangers of smoking and encouraging smokers to quit.

 

Instead, the Food and Drug Administration will go back to the drawing board and create labels to replace those that included images of diseased lungs and the sewn-up corpse of a smoker, according to a letter from Attorney General Eric Holder obtained by the Associated Press. The government had until Monday to ask the U.S. Supreme Court to review an appeals court decision upholding a ruling that the requirement violated First Amendment free speech protections.

 

“In light of these circumstances, the Solicitor General has determined … not to seek Supreme Court review of the First Amendment issues at the present time,” Holder wrote in a Friday letter to House Speaker John Boehner notifying him of the decision.

 

Some of the nation’s largest tobacco companies, including R.J. Reynolds Tobacco Co., sued to block the mandate to include warnings on cigarette packs as part of the 2009 Family Smoking Prevention and Tobacco Control Act that, for the first time, gave the federal government authority to regulate tobacco. The nine labels originally set to appear on store shelves last year would’ve represented the biggest change in cigarette packs in the U.S. in 25 years.

 

Tobacco companies increasingly rely on their packaging to build brand loyalty and grab consumers – one of the few advertising levers left to them after the government curbed their presence in magazines, billboards and TV. They had argued that the proposed warnings went beyond factual information into anti-smoking advocacy.

 

The government, however, argued the images were factual in conveying the dangers of tobacco, which is responsible for about 443,000 deaths in the U.S. a year.

 

The nine graphic warnings proposed by the FDA included color images of a man exhaling cigarette smoke through a tracheotomy hole in his throat, and a plume of cigarette smoke enveloping an infant receiving a mother’s kiss. These were accompanied by assertions that smoking causes cancer and can harm fetuses. The warnings were to cover the entire top half of cigarette packs, front and back, and include the phone number for a stop-smoking hotline, 1-800-QUIT-NOW.

 

In a statement on Tuesday, the FDA said it would “undertake research to support a new rulemaking consistent with the Tobacco Control Act.” The FDA did not provide a timeline for the revised labels.

 

Warning labels first appeared on U.S. cigarette packs in 1965, and current warning labels that feature a small box with text were put on cigarette packs in the mid-1980s. Changes to more graphic warning labels that feature color images of the negative effects of tobacco use were mandated in a law passed in 2009 that, for the first time, gave the federal government authority to regulate tobacco.

 

The share of Americans who smoke has fallen dramatically since 1970, from nearly 40% to about 19%. But the rate has stalled since about 2004, with about 45 million adults in the U.S. smoking cigarettes. It’s unclear why it hasn’t budged, but some market watchers have cited tobacco company discount coupons on cigarettes and lack of funding for programs to discourage smoking or to help smokers quit.

 

In recent years, more than 40 countries or jurisdictions have introduced labels similar to those created by the FDA. The World Health Organization said in a survey done in countries with graphic labels that a majority of smokers noticed the warnings and more than 25 percent said the warnings led them to consider quitting.

 

Joining North Carolina-based R.J. Reynolds, owned by Reynolds American Inc., and Lorillard Tobacco, owned by Lorillard Inc., in the lawsuit are Commonwealth Brands Inc., Liggett Group LLC and Santa Fe Natural Tobacco Company Inc.

 

Richmond, Va.-based Altria Group Inc., parent company of the nation’s largest cigarette maker, Philip Morris USA, which makes the top-selling Marlboro brand, is not a part of the lawsuit.

 

The case is separate from a lawsuit by several of the same tobacco companies over other marketing restrictions in the 2009 law. Last March, a federal appeals court in Cincinnati ruled that the law was constitutional. The companies in October petitioned the U.S. Supreme Court to review that case.

Liquor Industry News 3-19-13

March 19, 2013
www.franklinliquors.com

Franklin Liquors

 

Tuesday March 19th

Today Is A Biodynamic FLOWER Day

Great To Taste Or Drink Wine!

US Spirits Nielsen Data Sales growth remains solid in February

 

Source: UBS

Mar 18th  

 

US spirits Nielsen data shows sales up +5.1% in four weeks to 2 March

 

Lapping a challenging +3.7% comp, US spirits volumes (ex Washington) grew 2.1% y/y (above the +1.9% last 12 week trend y/y). Price/mix grew +3.0% y/y (in line with the last 12 week trend), implying +5.1% sales growth y/y (similar to 12 and 52 weeks y/y). The % of volume sold on promo is down -280bps y/y in the last month (-230bps last 12 weeks), led by Pernod (-530bps) and Diageo (-480bps).

 

US Spirits trend remains solid, but offers limited upside to our forecasts

 

US Spirits recovery remains solid, but we see limited scope for growth upgrades relative to our forecasts. Diageo and Pernod have stronger price/mix than the market, with both cutting back significantly on promotions. We estimate 2013 US spirits volume and value growth of 2.0% and 4.5% y/y.

 

 

——

Brewers Association: Craft Beer is Now a $10 Billion Category

 

Source: Brewbound

by Chris Furnari

March 18th

 

Craft beer is now a $10 billion category.

 

As part of its annual report on the state of the U.S. craft beer industry, the Brewers Association (BA) – a trade group representing small and independent brewers – indicated that U.S. craft beer volumes reached an all-time high last year.

 

With 2012 production swelling past 13.2 million barrels – a 15 percent increase from 2011 – craft sales grew by 17 percent, taking total retail revenues for the category up to an estimated $10.2 billion.

 

“Beer is a $99 billion industry to which craft brewers are making a significant contribution, with retail sales share hitting double-digits for the first time in 2012,” BA director Paul Gatza said in a press release.

 

Craft beer sales have been steadily increasing since 2005, when 1,394 breweries made just 6.3 million barrels. Fast forward eight years, and nearly 1,000 new breweries have opened their doors, helping to more than double the industry’s total production of craft beer. In the last two years alone, 684 new breweries have launched, while only 80 have shut their doors, according to the BA.

 

“On average, we are seeing slightly more than one craft brewery per day opening somewhere in the U.S. and we anticipate even more in the coming year,” Gatza said.

 

But the BA definition of “craft ” only includes those brewers who produce less than 6 million barrels annually and are less than 25 percent owned by another non-craft brewer. That means production from Craft Brew Alliance (which markets the Kona, Redhook and Widmer Brothers brands), Goose Island, Magic Hat and Pyramid goes unaccounted for. The BA definition also excludes production from the independently-owned D.G. Yuengling & Son, which produced over 2.5 million barrels in 2012, and so-called “crafty” brews like Shock Top (owned by Anheuser-Busch InBev) and Blue Moon (owned by MillerCoors). Collectively, more than 6 million barrels of what many believe is better quality beer than most domestic premium offerings is left unaccounted for.

 

Nonetheless, the new BA figures confirm craft’s upward surge across multiple retail channels, which Symphony IRI’s senior vice president of beverage alcohol services, Dan Wandel, reported during last month’s “Power Hour” seminar. The research company said craft dollar sales increased 18.5 percent in food, drug, club, dollar, military, multi-outlet and convenience channels.

 

Included below is the complete BA press release which further details the growth of craft beer in 2012.

 

Boulder, CO – The Brewers Association (BA), the trade association representing small and independent American brewers, today released 2012 data on U.S. craft brewing1 growth. In a year when the total U.S. beer market grew by one percent, craft brewers saw a 15 percent rise in volume2 and a 17 percent increase in dollar growth, representing a total barrel increase of almost 1.8 million.

 

With production at 13,235,917 barrels in 2012, craft brewers reached 6.5 percent volume of the total U.S. beer market, up from 5.7 percent the previous year. Additionally, craft dollar share of the total U.S. beer market reached 10.2 percent in 2012, as retail dollar value from craft brewers was estimated at $10.2 billion, up from $8.7 billion in 2011

 

“Beer is a $99 billion industry to which craft brewers are making a significant contribution, with retail sales share hitting double digits for the first time in 2012,” said Paul Gatza, director, Brewers Association. “Small and independent brewers are consistently innovating and producing high quality, flavor-forward craft brewed beer. Americans are not only responding to greater access to these products, but also to the stories and people behind them.”

 

In 2012, there was an 18 percent increase in the number of U.S. operating breweries, with the total count reaching 2,403. This count includes 409 new brewery openings and only 43 closings. Small breweries created an estimated 4,857 more jobs during the year, employing 108,440 workers, compared to 103,583 the year prior.

 

“On average, we are seeing slightly more than one craft brewery per day opening somewhere in the U.S. and we anticipate even more in the coming year. There is clearly a thirst in the marketplace for craft brewed beer, as indicated by the continued growth year after year,” added Gatza. “These small breweries are doing great things for their local communities, the greater community of craft brewers, our food arts culture and the overall economy.”

 

http://www.brewbound.com/news/2013/brewers-association-craft-beer-is-now-a-10-billion-category

 

 

——

Yucaipa Taps Into U.S. Craft Beers

 

Burkle’s Firm Invests in Startup That Will Spend Over $100 Million to Help Brewers Boost Capacity

 

Source: WSJ

By MIKE ESTERL

Mar 18th

 

Ron Burkle’s Yucaipa Cos. is the latest investment firm to tap the small but fast-growing craft beer industry, taking a majority stake in a startup company that plans to spend more than $100 million to build five new breweries.

 

Instead of brewing its own beer, Brew Hub LLC of St. Louis, Mo. hopes to fill each facility with at least half a dozen small brewers who want to expand production but face capacity constraints. The new venture will also offer brewers other fee-based services, including distributing and marketing support.

 

Roughly three of four beers sold in the U.S. are brewed by two multinational giants: Belgium’s Anheuser-Busch InBev NV, BUD +0.20% which makes Budweiser and Bud Light, and MillerCoors LLC, a joint venture between the U.K.’s SABMiller SAB.LN -1.21% PLC and Denver-based Molson Coors Brewing Co. TAP -0.95% which makes Coors Light and Miller Lite.

 

But most of the industry’s expansion is being fueled by hundreds of small and independent brewers, or so-called craft brewers, whose shipments have grown by a double-digit percentage three straight years as more Americans branch out from mainstream lagers.

 

Craft volumes surged 15% to 13.2 million barrels in 2012, compared with 1% growth for the U.S. beer industry as a whole, the Brewers Association estimated Monday. Retail sales of craft beer also topped $10 billion for the first time last year, or about one-tenth of U.S. beer sales, as the number of breweries climbed 18% to 2,403, according to the industry group.

 

Outside money increasingly is looking for a way in. Last year Fireman Capital Partners bought a majority stake in Utah Brewers Cooperative, maker of Squatters and Wasatch beers, while Sage Capital acquired a 60% stake in Saint Louis Brewery Inc., maker of Schlafly beer.

 

Equity deals still have been few and far between, though, because many craft brewers are reluctant to surrender control. Many are seeking bank loans to expand their own facilities, renting space from so-called contract brewers or joining with other small brewers to keep up with demand. Up to five million barrels in new brewing capacity are in planning stages across the country.

 

“We’re helping them scale but allowing them to stay in control of their destiny,” said Frank Quintero, a principal at Las Vegas-based Yucaipa.

 

California-born Ron Burkle’s investment arm has completed more than $30 billion in mergers and acquisitions since 1986. Yucaipa’s holdings include stakes in A&P supermarkets, cold-storage company Americold, movie studio Relativity Media and Morgans Hotel Group MHGC +10.74% .

 

Brew Hub plans to break ground by May on a 75,000-barrel brewery in Lakeland, Fla., a state where brewing capacity is particularly tight. Over the next five years, it plans to build at least four other breweries in other parts of the country, including Texas and a mid-Atlantic state. Tim Schoen, a former Anheuser-Busch executive, will run the company.

 

Jim Gorczyca, owner of O’Fallon Brewery in the St. Louis area, says he’s weighing whether to build a new brewery or partner with a company such as Brew Hub after shipments at his brewery soared 21% last year to 10,500 barrels. He’d also like to expand into more states.

 

“Brew Hub becomes a solution outside your home market,” said Mr. Gorczyca, whose brewery’s top-selling beers include O’Fallon 5-Day IPA and O’Fallon Wheach, a peach-flavored wheat beer.

 

 

——

Pennsylvania: Pa. House liquor committee approves sale of state store system

 

Gov. Corbett’s bill is amended, but measure moves to full House for vote Thursday.

 

Source: The Morning Call

By Steve Esack

March 18, 2013

 

David Moyer has a plan to help his family.

 

“He said, ‘Mom, I’m going to get a job,’ ” Billie Moyer said.

 

He’s 6.

 

In his Clark, Mercer County, home, that’s old enough to understand the anguish his parents have faced over whether Billie will lose her hourly $21.48 salary and family health benefits as an assistant manager of a state liquor store if the Legislature agrees to privatize the sale of wine and spirits stores as Gov. Tom Corbett wants.

 

His mom is now one step closer to losing her job.

 

After a four-hour hearing Monday, the House Liquor Control Committee voted 14-10 along party lines to end the state’s 80-year-old monopoly on the sale of booze as the Republican governor proposed as part of his $28.4 billion spending plan for 2013-14. The full House is scheduled to vote on the bill Thursday, and, if approved, the bill would move to the Senate for consideration before going to Corbett.

 

The bill the committee adopted is not as grand as Corbett had wanted and its projected proceeds of a sale would be $200 million lower than the governor’s $1 billion estimate. Corbett would spend the money on public education.

 

Despite those differences, Corbett said he was pleased with the bill and sale proceeds would still go to public schools.

 

“We believe this bill will allow us to make a significant investment in schools and it also increases penalties and fines, both of which are important parts of my plan,” Corbett said in a statement.

 

After the hearing, Rep. Paul Costa, D-Allegheny, the committee’s minority chairman, said the committee vote was a foregone conclusion. House Majority Leader Mike Turzai, a longtime privatization proponent, stacked the committee with like-minded Republicans to win the measure, he said.

 

“If he couldn’t get this out of committee, that would have been a huge embarrassment,” Costa said.

 

John Taylor, R-Philadelphia, chairman of the House Liquor Control Committee, said he expects the committee’s bill to be amended, but he predicted the governor will have a bill to sign later this year.

 

Corbett’s original plan was outlined in House Bill 790, which Turzai, R-Allegheny, began advertising in January. Under that plan the state’s 600 state stores would have been phased out over four years in place of 1,200 wine and liquor retailers.

 

Some of those retailers would have included beer distributors who would have had to pay upward of $150,000 to sell wine and also six-packs. At the same time, the bill also would have expanded beer and wine sales into supermarkets, convenience stores and retailers such as Target, Walmart and Costco.

 

But that plan had no chance.

 

For weeks, Taylor said he had his own plan to scale back privatization in large part to protect 1,138 beer distributors who feared they could not compete against big-box stores like Walmart.

 

On Friday, Taylor did just that with an amended bill, 375, introduced by Rep. Mark Mustio, R-Allegheny. On Monday, the committee approved the amended bill.

 

It calls for beer distributors to get first dibs on licenses to sell wine, liquor or both for between $7,500 and $60,000. Beer distributors would be able to pay the licensing fees in monthly installments over two years.

 

In theory, that would leave 62 retail licenses, ranging from $97,500 to $262,500, that would go to the independent stores or corporate chains like Walmart.

 

Large chains like Walmart, however, could only sell liquor or wine at five locations in the state.

 

The bill would allow 820 grocery stores – or one per every 15,000 residents per county – to sell beer and wine. In addition, the prohibition against gas stations selling beer would be voided. Restaurants would be permitted to sell up to six bottles of wine or up to 24 beers to go, and taverns could sell liquor by the bottle.

 

More private licenses could be issued at a future date while state stores gradually would be shuttered until there were 100 left and the entire system would be shut down.

 

The state employees who would lose their jobs would get between $1,000 and $2,000 education grants, which is double what Corbett had proposed. The amended bill also gives preferential treatment for other state jobs that do not require a civil service exam and employers who hire displaced state workers would get a $2,000 tax credit.

 

While Republicans were united behind the amended proposal, Democrats were united against it and got the committee to postpone a vote three times.

 

Rep. Tina Davis, D-Bucks, said the committee needs more time to review the amended bill before voting.

 

“It’s getting shoved down our throats in three days,” she said.

 

“It’s been 80 years,” Taylor replied.

 

The vote won praise from conservative groups, such as the Commonwealth Foundation, which said it is a way to increase jobs and bring change.

 

After the hearing, Wendell Young IV, president of the union that represents more than 4,000 state liquor store employees, said his members will fight to try to defeat the bill in the House and Senate.

 

Jay Wiederhold, president of the Pennsylvania Beer Alliance, said the amended proposal is a little better than Corbett’s plan, but it is far from acceptable. It is unnecessarily complex and creates too much competition with grocery stores, he said.

 

Moyer, the western Pennsylvania assistant state store manager, left Harrisburg confused and unsure of her future.

 

“I really don’t think any of them made any sense,” she said. “I don’t know what I’m going to do.”

 

 

——

New 3-ounce alcohol drink sparks concerns

 

Source: NC Capitol

By Mark Binker

March 18th

 

A company hoping to sell 3-ounce vials of high-alcohol malt beverages in flavors like Screw Driver and Apple Pie is asking the state Alcoholic Beverage Control Commission to approve its packaging.

 

Staff members with the ABC Commission rejected Stout Brewing’s packaging for its Stout 21 malt beverage product last month.The formal letter from the commission said the rejection was based on the state’s authority to “prohibit or regulate any advertising of alcoholic beverages which is contrary to the public interest.”  This doesn’t reject the drink itself, but rather the way in which it would be sold.

 

Advocates outside the ABC Commission say there is a particular concern that the product would lure underage drinkers.

 

Cody Sommer, chief executive of Stout Brewing, did not immediately return phone calls seeking comment. His company is asking the appointed three-member ABC Commission to overturn their staff’s ruling. The group will meet at 10 a.m. Wednesday.

 

The Stout 21 case is the first policy decision to be taken by Gov. Pat McCrory’s appointees to the ABC Commission, including former Republican Lt. Gov. Jim Gardner.

 

A malt beverage is any product that is brewed in a process similar to beer. While beers use grains like malted barley as their base and spices like hops to provide flavor, some cheaper malt beverages use the equivalent of sugar water to feed the yeast to produce alcohol as part of the brewing process. Flavors are then added much like they might be to a soda drink.

 

Such beverages are already commonplace in grocery and convenience stores, such as Bacardi Silver, which is sold in beer-like bottles and has 5 percent alcohol by volume.

 

Applications filed with the ABC Commission show that the Stout 21 beverages would be 15 percent alcohol by volume, the equivalent of 30 proof alcohol.

 

“It would be the same as any other malt beverage,” Larry Dooley, vice president of Fox Distributing in Shelby, one of two distributors listed by Stout 21.

 

Dooley said that, while some bars might choose to sell the Stout 21 product, he anticipated that most sales would be through convenience stores.

 

Stout Brewing describes the Stout 21 products as a “Flavored Alcoholic Shooter.” The packaging features a twist off top and a rounded bottom. Flavors, according to the company’s website, include Royal Flush, Margarita, Screwdriver, Apple Pie and J-Cola. They would be sold in single servings and four-packs.

 

Stout Brewing announced plans to open a brewery in Kings Mountain last year. Coverage of the announcement included notes that the company received economic development incentives from the county.

 

It’s unclear whether the company has started brewing beer. It has a separate website for its Stout 21 product.

 

The proposed product has raised concerns among advocates who argue for tighter controls on alcohol and work against underage drinking.

 

“It is the packaging that is of concern,” said Wanda Boone, of Durham TRY, a nonprofit that works to curb substance abuse among teenagers.

 

In her mind, she said, the packaging and flavors are “targeted toward underage consumers, which is really what the issue is.”

 

The Rev. Mark Creech, executive director of the Christian Action League, said this is a downside of the a 2005 law that lifted the cap on the amount of alcohol allowed in malt beverage, which had previously been set at 6 percent alcohol by volume. The law, he said, not only cleared the way for boutique beers and craft brewers.

 

“We’re putting something on the convenience store shelves that’s akin to the same alcohol beverage content you can find at the ABC liquor stores,” Creech said. “That cannot be safe.”

 

Although there are some liquors in the 30 proof range sold in ABC stores, most are 70 proof or above, according to a commission product listing.

 

 

——

Trade body hits out after absinthe plans rejected (Excerpt)

 

Source: Just-Drinks

By James Wilmore

18 March 2013

 

Trade group spiritsEUROPE has voiced its disppointment after a bid by the European Commission to define and standardise absinthe was rejected.  

 

The bid was blocked in a vote by the European Parliament in Strasbourg last Wednesday (13 March). The EC had proposed that any product labelled absinthe must contain set minimum levels of anethole and thujone.

 

The Commission is concerned that some manufacturers are not including these ingredients, or enough of them, and yet still selling their products as ‘absinthe’.

 

 

——

St. Paddy’s Weekend shows healthy growth from last year

 

Source: GuestMetrics

March 18, 2013

 

According to GuestMetrics, based on its database of POS sales, food & beverage sales over the St. Patrick’s 3-day Weekend posted solid sales growth of +2.5% compared to the prior year benefitting from the holiday falling on a Sunday this year vs. Saturday year ago.

 

“Comparing the rolled up period of Friday, Saturday and Sunday this year against the same period from last year, St. Patrick’s Weekend posted healthy sales growth of 2.5%, the net result of traffic being about 1% below last year’s level but pricing up 4%.  So even though traffic was a little soft, the strong pricing more than made up for that, which should be a positive for the operators,” said Bill Pecoriello, CEO of GuestMetrics LLC.  “In terms of the specific segments within on-premise, bars benefitted more from the holiday falling on Sunday with 3-day sales up 6%, the net result of traffic up 2% and pricing up 4%, while restaurants’ performance was a bit weaker, with sales up 2%, traffic down 2%, and pricing also up 4%.  On the whole, given the general weakness in on-premise during the final quarter of 2012 and the beginning of 2013, the weekend turned out to show healthier results. Looking specifically at the alcoholic beverage category for the St. Patrick’s Weekend this year versus the prior year, sales of total alcoholic beverages were up 3.2% while the number of total alcoholic drinks ordered was down 0.8%.”

 

“Digging deeper the dollar sales growth was largely driven by the spirits and wine categories, which both posted sales growth at around 6%, while food and cocktails sales grew about 2%, and beer and non-alcoholic beverage dollar sales were both flattish compared to the prior year,” said Peter Reidhead, VP of Strategy and Insights at GuestMetrics.  “In terms of the actual number of drinks ordered, which is the more relevant metric for the alcohol suppliers, wine was up 6%, spirits was up 2%, cocktails were down 2%, and beer was down 4%, so while we usually think of St. Patrick’s Day as a heavy beer occasion, consumer preferences appear to have shifted to spirits and wine this year.”

 

“In terms of comparing the actual date of March 17th from last year, which fell on a Saturday, against St. Patrick’s Day this year, which fell on a Sunday, Food and Beverage sales this year are about 33% below last year, which is why we believe it is more meaningful to compare the rolled up weekends against each other,” said Brian Barrett, President of GuestMetrics.  “In terms of the specific days we analyzed, Friday Alcohol Beverage sales this year were up 2.5%, Saturday Alcohol Beverage sales were down 4.9%, and Sunday Alcohol Beverage sales were up 24% driving the 3-day period up 3.2%.”  

 

 

——

C&C GROUP PLC (=) to (+): How much good can Woodchuck chuck?  

 

Source: Exane BNP

Mar 18th

 

TP raised by 39% to EUR5.7 . Upside: 18%

Beverages (-) . Ireland . Price (14 Mar. 13): EUR4.83

 

C&C is becoming a US cider play just as the US market is lighting up…

Once the preferred drink of Americans, cider was until recently on the verge of extinction in the US. But over the last couple of years, its long-predicted return has at last materialized and volume growth is now rocketing. With cider possibly replicating the success of craft beer, we expect a 58% volume CAGR in the next five years for the US cider market. C&C’s integration of Vermont Hard Cider means it now controls almost half of the US cider market with production facilities on both the East and West Coasts. Within the next two years, the USA should generate two thirds of C&C’s organic growth, which will rise from -5% in the year to Feb.13e to +8% in FY15e. Instrumental to this will be the expansion of Woodchuck, a brand whose penetration among retailers could quickly increase by as much as 60% through geographic expansion and its integration with Hornsby’s.

 

…but is still seen as an Irish consumer stock

The 0.85 correlation coefficient between C&C’s P/E and Irish consumer confidence suggests the stock is still seen through the prism of Ireland. Whilst we are cautious on cider volumes both in that country and in the UK, we stress that the acquisition of Irish beverage distributor Gleeson’s provides a formidable platform from which Tennent’s – C&C’s main beer brand – can triple its distribution reach, bringing Ireland back to organic growth as early as this fiscal year.

 

US opportunity not yet discounted, 18% upside even without further re-rating. Outperform

C&C lagged the sector by 7% over the last month, after some worried that the 30% rise in the shares over the last year already discounts the US opportunity. However, this rerating has been in line with the sector, with C&C still at a 19% discount to brewers on consensus P/E (14.8x). Our EUR5.7 TP is based on a 15x cal. 14e P/E multiple, which given the 20% EPS CAGR 12-14e seems reasonable relative to the sector and compared to the average 13x multiple since 2006, a period without EPS growth. Our higher expectations for the US put us 6% above FY14e consensus EPS (11% for FY15e). Convinced that our 36% revenue CAGR 13-16e in the US can be achieved without major investments other than the new plant in Vermont, and with 760bp margin expansion despite A&P, transport and raw materials inflation, we rate the stock Outperform.

 

 

——

China: Liquor shares slump on Li’s austerity promise, Moutai down by 4.25%

 

Source: Peoples Daily

By Fang Yunyu

March 19, 2013

 

Chinese high-end liquor producers saw their shares slump Monday after newly elected premier Li Keqiang vowed Sunday to put the government on a tight budget “to win the trust of the people.”

 

High-end liquor maker Kweichow Moutai Co dived by 4.25 percent to hit its one-year low at 169.45 yuan ($27) a share Monday, while the benchmark Shanghai Composite Index closed down by 1.68 percent.

 

Wuliangye Yibin Co, another top Chinese liquor firm, saw its shares fall by 4.54 percent; Jiugui Liquor Co lost 4.1 percent and Anhui Gujing Distillery Company shed 7.88 percent. Calls to the companies went unanswered Monday.

 

Market analysts said the sudden stock plunge was triggered by China’s new premier Li Keqiang declaring his determination to fight corruption and curb government expenditures.

 

“Within the term of my government . spending on official hospitality, overseas trips for official business and the purchase of official vehicles will decrease, not increase,” Li said Sunday when he met the press for the first time as China’s premier.

 

“What the premier said certainly has a direct negative impact on liquor stocks, especially for high-end companies,” Yang Qingshan, an independent liquor analyst, told the Global Times Monday, noting that high-end liquor is usually viewed as a necessity for official hospitality, so any rules to limit government spending will reduce sales.

 

It is not the first time that liquor makers’ stocks have dipped suddenly.

 

In December last year, the Central Military Commission of the Communist Party of China ruled that receptions for high-ranking officials would no longer feature liquor or luxury banquets.

 

The news dragged down shares of liquor makers over the following days.

 

“The military is considered a big consumer of high-end liquor in China. The rule hit the country’s liquor makers, but also presented a push for them to change their targeted customers from governments to ordinary consumers,” said Yang, noting that he personally is still very optimistic toward long-term development of the Chinese liquor industry, which has already become a cultural tradition in China.

 

 

——

South Africa: Fears that Cape Town liquor laws will ‘fuel illegal trade’

 

Source: BD LIve

by Bekezela Phakathi

19 March 2013

 

CAPE Town’s contentious by-law banning liquor sales on Sundays and after 6pm on weekdays will come into effect at the end of this month amid concerns that the ban will do little to curb alcohol abuse, but will fuel the illegal trade in liquor and hurt small-scale traders.

 

The move by Cape Town to shorten trading hours is an attempt by city authorities to lessen liquor abuse, hooliganism and violent crime, as well as to expose establishments selling liquor illegally.

 

The South African Police Service 2010-11 crime statistics found that nationally, half of patients who die in transport-related incidents have elevated blood-alcohol content and 77% of all deaths caused by sharp objects involved positive alcohol levels.

 

The Democratic Alliance-run Western Cape has gained a reputation for its strict liquor regulations in recent years, with some labelling it a “nanny state”. Western Cape Premier Helen Zille has said alcohol abuse is the main cause of violent crime.

 

Gauteng is also moving to ban the sale of liquor on Sundays. The draft Gauteng Liquor Act was introduced in the legislature on Friday. The bill calls for amendments to the 2003 Liquor Act.

 

If promulgated, Sunday liquor sales at all establishments would be banned. These include bottle stores, restaurants and bars.

 

But KwaZulu-Natal seems set to relax its liquor laws. The KwaZulu-Natal Liquor Act is awaiting final amendments before it is passed, and under the new law, liquor stores will be allowed to open on Sundays. The KwaZulu-Natal liquor authority says allowing outlets to trade on Sundays would be in line with the constitution which recognises the country as a secular state, and that the existing Sunday ban is a remnant of the previous regime.

 

“I think banning will not solve the problem. Traders will just go underground . an alternative would be investing in educational campaigns,” South African Liquor Traders Association president Saint Madlala said.

 

He said while the association was cognisant of the effects of alcohol abuse and the need for regulation, banning liquor sales on Sundays would hit traders hard and force some to retrench their staff. Mr Madlala said liquor traders made between 20% and 30% of their profits on Sundays.

 

In terms of Cape Town’s Liquor Trading Days and Hours by-law, liquor stores will no longer be allowed to sell alcohol on Sundays, or after 6pm from Monday to Saturday – while clubs, hotels and casinos, among others, can extend their cut-off time to sell liquor from 2am to 4am, on condition they apply for an exemption. Traders in liquor for off-premises consumption also have to stop trading at 6pm.

 

City authorities said traders will have to abide by new trading hours, regardless of the liquor licence they hold. This follows a 12-month implementation period for the Western Cape Liquor Act, which ends on March 31.

 

 

——

Beer battle of bad taste: Carlsberg out shocks Heineken

 

Source: Beverage Daily

Mar 18th

 

Carlsberg UK has bent the bad taste envelope further still with an ‘edgy’ new online video that sees the drink’s fans phone their friends in the early hours and persuade them to visit a gambling den staffed by sinister characters or ‘actors’ to pay off their debts.

 

http://www.beveragedaily.com/Markets/Beer-battle-of-bad-taste-Carlsberg-out-shocks-Heineken

 

 

——

‘No chance of a glut’ say NZ winemakers as they celebrate bumper crop

 

Source: Decanter

by Chris Mercer

Monday 18 March 2013

Many New Zealand winemakers, excited at the prospect of an outstanding 2013 vintage and a chance to replenish stocks after the low grape haul in 2012, are playing down talk of a glut.

 

‘Stunning’ summer weather and a dry autumn may be causing drought issues in some sections of New Zealand agriculture, but it has led to ‘fantastic’ growing and ripening conditions for the country’s wine industry, generic body New Zealand Winegrowers said this week.

 

‘We are expecting a very high quality harvest in all our regions,’ NZ Winegrowers’ CEO, Philip Gregan, told Decanter.com.

 

‘Quality is looking outstanding, with extended long, warm ripening conditions and no disease pressure,’ added Yealands Estate owner Peter Yealands, based in Awatere Valley, Marlborough.

 

Most forecasts are for a bigger harvest than the record low in 2012, although there is not yet a more accurate prediction. Initial signs show a lot of variation between vineyards in expected grape hauls.

 

New Zealand remains sensitive to signs it could return to the dark days of a wine glut that threatened to cause financial havoc in some regions in recent years. Fresh concerns have been raised in national media in the past week.

 

‘There’s no chance of a glut,’ said Alastair Maling MW, of Villa Maria, which has vineyards across Marlborough, Hawkes Bay, Gisborne and Auckland. He said the best bet is for a moderate-sized harvest.

 

Gregan said that ‘increased volumes will allow re-build in inventory levels, which are desperately low following the small 2012 harvest and are needed to support packaged export sales which are now 6% above last year’.

 

Yealands largely agreed. ‘Given the rapid growth in sales across all markets, the low stock levels of 2012 wine available, and the promise of an outstanding quality vintage, we anticipate any upside in volume will be promptly sold,’ he told Decanter.com.

 

 

——

Jim Barrett of Chateau Montelena dies

 

Source: Decanter

by Courtney Humiston in Sonoma

Monday 18 March 2013

 

James L Barrett, founder of Napa Valley’s Chateau Montelena, has died at the age of 86 – ‘of a life well lived’, as his son Bo said.

 

Jim Barrett, who died on 14 March, founded the Calistoga winery in 1972, and shot almost immediately to world renown when critics famously favoured his 1973 Chardonnay over four white Burgundies at the 1976 Paris Tasting.

 

Chateau Montelena -along with the Cabernet Sauvignon of Stag’s Leap Wine Cellars, which out-scored top Bordeaux producers at the same tasting-is often credited with elevating the status of Napa Valley wines in the international marketplace and laying the foundation for the commercial success they are today.

In 2010 one of the last bottles of ex-cellar 1973 Chardonnay was sold at a London auction for US$11,325 (£7,419).

 

In a statement Barrett’s son Bo paid tribute to a ‘tough and loving’ man.

 

‘I join with my family to announce the sad news that my father, Jim Barrett, passed away today at the age of 86. He was a tough and loving man who will be greatly missed at home, at the winery and throughout the Napa Valley. My father bought Chateau Montelena in 1972 and has worked hard every day since to grow the best grapes and produce the best wines. My dad died of a life well lived.

 

‘He, along with the entire family, has prepared a succession plan for Chateau Montelena which will ensure the winery stays in our family for as many decades going forward as we have enjoyed during his life. There will be no changes to the current plan, Chateau Montelena has a wonderful future, for which we have been working toward over the past 40 years with improvements and upgrades to maintain the calibre of wines we produce.’

 

Barrett, a former attorney and veteran of the Korean war, rescued the historic winery, which was originally completed in 1888, from neglect and dilapidation. The building was recently placed on the National Register of Historic Places thanks, in part, to Barrett’s careful restoration and the significance of his contribution to the California wine industry.

 

Chateau Montelena will remain in the family – as it always has – with Bo Barrett, who has been the director of winemaking since 1982, assuming the role of CEO.

 

In addition to its Chardonnay, Chateau Montelena makes Cabernet Sauvignon from the Calistoga estate (as it has since 1978) as well as Zinfandel and Riesling. The wine has a reputation for maintaining the elegance of an ‘old world’ style that was Barrett’s original vision.

 

 

——

Paul Hobbs Imports becomes sole US importer for Chilean producer Viña Perez Cruz

 

Source: Paul Hobbs Imports

March 18, 2013

 

Viña Perez Cruz, a familyowned producer of 100% estate-bottled red wines from the Maipo Alto Valley region of Chile, has appointed Paul Hobbs Imports as its United States importer.

 

“We are excited to have Paul Hobbs Imports as our importer and partner for the complex US marketplace. They are the perfect team to focus on developing national distribution and adding value to our brand,” says Felipe Valenzuela, export director for Viña Perez Cruz.

 

Viña Perez Cruz was founded by Mrs. Mariana Cruz-Costa and her 11 sons and daughters in memory of Mr. Pablo Perez-Zañartu, who in 1963 acquired the Liguai de Huelquén Estate, located approximately 28 miles southeast of Santiago, Chile. In 1994, red grape varieties were planted, and in 2001, a state-of-theart winery was built. The first Viña Perez Cruz wines were made in 2002. Current releases include Cabernet Sauvignon, Carmenère, Cot, Syrah and three blends: Quelen (Petite Verdot, Carmenère, Cot); Liguai (Syrah, Carmenère, Cabernet Sauvignon); and Chaski (Petit Verdot, Carmenère, Cabernet Sauvignon).

 

 

——

Maine: Legislators push for details on Maine liquor contract options

 

Source: Maine Sun Journal

Matthew Stone, Bangor Daily news

Tuesday, March 19, 2013

 

Lawmakers on the panel charged with determining a path forward for Maine’s wholesale liquor business quizzed the state’s alcoholic beverages director Monday, asking him how soon the state could strike a new deal, whether it could periodically revisit the terms and how the state could crack down on marketing alcoholic beverages to children.

 

But the Legislature’s Veterans and Legal Affairs Committee didn’t appear to move closer to a particular approach for renegotiating the state’s wholesale liquor contract during the first session held to work out the details of two bills proposed to rework the liquor contract and use the increased proceeds to pay back Maine’s $484 million hospital debt.

 

“I’m not going to spend 10 years of my life looking back, like some people, thinking we should have done this differently,” said Rep. Diane Russell, D-Portland. “I’d like to know at the end of the day that we explored every option, that every option was on the table and that we really did fight for the people to get the best deal.”

 

The committee is considering two approaches to striking a more profitable deal for the state on its wholesale liquor business and using the proceeds to repay Maine’s hospitals for a Medicaid debt that stretches back to 2009.

 

Gov. Paul LePage, who has made the issue the cornerstone of his legislative agenda this winter, unveiled his plan in January to pay down the state’s hospital debt using a revenue bond backed by the state’s future liquor profits. Gerry Reid, who directs the state Bureau of Alcoholic Beverages and Lottery Operations, has said the plan involves realizing more value from its wholesale liquor business by negotiating more favorable contract terms for the state, lowering retail prices to make them more competitive with neighboring New Hampshire’s, and allowing agency liquor stores higher margins on liquor sales.

 

A competing proposal from Sen. Seth Goodall of Richmond, the Senate Democratic leader, requires an upfront payment – $200 million by June 30, 2015 – from the contractor who wins the 10-year bid to operate the state’s wholesale liquor business. Under the plan, Goodall says the state can rely on the upfront payment revenue to pay off the hospital debt by Sept. 30 of this year. Maine’s share of the hospital debt is $186 million, which would trigger a $298 million matching payment from the federal government.

 

The Veterans and Legal Affairs Committee held a daylong hearing on the two bills last week and plans to resume work on them Friday.

 

The state’s liquor business has grown and improved its operations since it was leased out to the current contract holder, Maine Beverage Co., in 2004, said Rep. John Schneck, D-Bangor. Given the data available on the business’ performance, the state should easily be able to define what it wants from a vendor in a request for bids and almost be assured of favorable returns, he said.

 

“It could almost run on autopilot,” said Schneck. “It’s a long-range deal, and because we know how the market’s operating, we can forecast this thing very easily and whatever targets we set with the contract should be easily obtainable for both parties.”

 

Reid said there’s little risk that the state’s liquor business will underperform his conservative expectations for growth. It would take natural disasters, new taxes on alcohol or major limits on advertising alcoholic beverages to make a dent in consumer demand, he said.

 

“The consumer is relatively inelastic. You really have to be dumb to mess up this business,” he said. “That’s not to say someone can’t do it. It’s a low-risk business.”

 

But it could still be advantageous for the state to be able to revisit the terms of the 10-year contract periodically, every two years, for example, to make sure Maine is still getting the best deal possible, Schneck said.

 

“I don’t see any reason why there couldn’t be some period for adjustment, so every two years, the parties look at where we are and negotiate going forward,” he said. “In terms of the last contract, it would have been very, very beneficial to the taxpayers.”

 

The state in 2004 leased out the wholesale liquor business in exchange for a $125 million upfront payment and an annual cut of profits that has amounted to about $8.5 million in recent years. Democrats and Republicans have agreed the state could have struck a better deal a decade ago.

 

As state officials look ahead to a new liquor deal, lawmakers Monday recommended investing in enforcement of the state’s liquor laws, substance abuse programs and education efforts to prevent alcohol abuse. Russell, the Portland Democrat, suggested writing language into a contract with a new liquor operator to crack down on the marketing of alcoholic beverages to those younger than 21.

 

“We need some sort of leverage to address terrible marketing practices and to address pulling stuff off the shelves that has no business being on the shelves,” she said.

 

 

——

Tennessee: House Speaker – Tennessee wine in grocery store bill in limbo

 

Source: Commercial Appeal

By Richard Locker

March 19, 2013

 

State House Speaker Beth Harwell said Monday she’s disappointed with last week’s committee vote that dealt the wine-in-grocery-stores bill a potentially fatal blow for this year, but she likely won’t ask the committee chairman to reconsider his vote against the bill.

 

Along with lobbyists and other lawmakers, Harwell left a glimmer of hope Monday for supporters of the bill, which would allow local referendums in towns and cities with liquor stores and liquor by the drink on whether local grocery stores can sell wine.

 

It failed by one vote last week in the House Local Government Committee. Its chairman, Rep. Matthew Hill, R-Jonesborough, cast a surprising vote against the bill – after voting for it a week earlier in a subcommittee. Harwell, a Nashville Republican who supports the bill, appointed Hill as chairman of the committee in January.

 

The Speaker said she had not talked with Hill since the committee’s vote last week. The legislature recessed on Thursday for the weekend and Harwell was in Pennsylvania for funeral services for her mother.

 

Lawmakers began returning to the Capitol on Monday afternoon to find the wine bill – which is opposed by liquor retailers and wholesalers and backed by grocery chains – still in limbo. Despite its defeat in the House committee, a Senate committee held a hearing on it later in the week and its Senate sponsor said he was going to see if the House might reconsider.

 

When reporters asked Harwell if she would ask Hill to reconsider his vote, she said: “I’m probably not going to; that’s not the way I function. He’s made his vote. I was disappointed … That was not my understanding of how his vote was going to be in committee.

 

“If he had some concerns and they were valid concerns, I had talked to him about having an opportunity to work on those. We were all going to have to come to the table (for negotiations toward a compromise). But the bill needed to make movement that day. So again, I was disappointed but I haven’t had a chance to talk to Matthew yet.”

 

Does that mean the bill is dead for the 2013 legislative session?

 

“I don’t know. I’ve talked briefly to Lt. Gov. (Ron) Ramsey about it, but I’ve been out of pocket and just really got back into town but we’ll talk about it this week.”

 

Lobbyists working for the bill said Monday there are other bills that could be used in place of the one defeated last week.

 

 

——

New York: Bloomberg takes aim at cigarette displays

 

Source: FT

By Shannon Bond in New York

March 18th

 

New York City stores would have to keep cigarettes out of sight under new legislation proposed by Michael Bloomberg, in the mayor’s latest effort to curb smoking.

 

Under the proposed law, tobacco products would have to be kept in cabinets, drawers, under the counter or behind a curtain. They would be allowed to be visible only during a purchase by an adult customer or during restocking.

 

The measure aims to reduce smoking among young people, Mr Bloomberg said on Monday.

 

“Young people are targets of marketing and the availability of cigarettes, and this legislation will help prevent another generation from the ill health and shorter life expectancy that comes with smoking,” he said.

 

The city banned smoking in restaurants and bars in 2002, and expanded that restriction in 2011 to public parks and beaches.

 

While initially controversial, that measure has been widely imitated in the US and around the world. It has shown results in New York, where the smoking rate among adults fell from 21.5 per cent in 2002 to 14.8 per cent in 2011.

 

But youth smoking has been flat at 8.5 per cent since 2007, said Thomas Farley, health commissioner, and smoking remains the leading preventable cause of death in the city.

 

The proposal did not sit well with tobacco companies, which said the existing federal ban on sales to cigarettes to people under 18 was sufficient.

 

“To the extent that this proposed law would ban the display of products to adult tobacco consumers, we believe it goes too far,” said Altria, whose brands include Marlboro, Parliament and Virginia Slims.

 

Antismoking advocates applauded the measure. “[The legislation would] prohibit massive store displays of tobacco products that tell kids tobacco use is normal and acceptable, while tempting smokers trying to quit into buying more cigarettes,” said Matthew Myers, president of the Campaign for Tobacco-Free Kids.

 

Mr Bloomberg’s latest initiative follows a setback last week to another pillar of his mission to improve public health: his fight against obesity. The day before a ban on large sugary drinks was to take effect, a judge blocked it, ruling that the city’s board of health had overstepped its authority. Unlike the soda ban, however, the proposed tobacco law will go before the city council for consideration.

 

Stores would still be able to advertise tobacco products, the mayor said. But owners of convenience stores, where cigarettes are usually displayed prominently behind the cash register, are likely to oppose any measures to curb sales.

 

“We think it’s absurd,” said Jim Calvin, president of the New York Association of Convenience Stores, an industry group. “We have a fundamental right to communicate with customers about the products that we sell on our premises.”

 

He added: “In order to accept [the city's rationale] you would have to believe that the mere sight of packs of cigarettes on a wall behind the counter in a store compels kids to start smoking. Does seeing beer in a cooler in a store compel them to start drinking?”

 

Another industry group, the National Association of Tobacco Outlets, said the proposal “infringes on a retailer’s free-speech rights” in violation of the first amendment.

 

Countries including Iceland, Canada, Australia, England, Ireland and Norway have restricted tobacco displays. While Mr Bloomberg said on Monday that the law would make New York the first US city to keep tobacco products out of sight, a similar measure was enacted briefly last year by the town of Haverstraw, New York.

 

That ordinance banned public displays of tobacco products, advertising and signage in convenience stores and replaced them with a menu of products available by request. It was rescinded three months later after a lawsuit brought by several tobacco companies and the convenience store association, who argued the ban violated the first amendment.

 

“We all had the same concern about absurd regulations that would attempt to force us to hide the products that we’ve been licensed by the state and the city to sell to adult customers,” Mr Calvin said.

 

Cigarettes make up a much smaller proportion of sales at New York City convenience stores than nationally, Mr Calvin said – about 10 per cent, compared with 30 or 35 per cent (excluding petrol sales) across the country.

 

He said the low rate was due to illegal sales of untaxed cigarettes, spurred by high city and state excise taxes in New York.

 

Mr Bloomberg announced a second bill on Monday that would target such illegal sales and smuggling by strengthening enforcement and increasing penalties on retailers who evade taxes or sell tobacco without a licence.

 

 

——

UK: wine, spirits sales fall as consumers cut costs: WSTA

 

Source: DBR

18 March 2013

 

Alcohol volume sales in the UK have fallen by 3% in the off-trade and 4% in the on-trade in 2012 driven by year-on-year alcohol duty rises, according to a market report by UK-based organization for the wine and spirit industry Wine & Spirit Trade Association (WSTA).

 

If the Alcohol Duty Escalator carries on at the current rate till 2015, duty on wine and spirits will have increased by 50% and 44%, respectively, since 2008. This rise in alcohol duty has forced consumers to cut back their spending on alcohol in the country.

 

Though the alcohol volume sales have dropped, the prices have gone up by 2% in the off-trade and 3% in the on-trade, primarily helped by tax increase of over 5% in 2012.

 

In the off-trade markets, sparkling wine reported highest volume growth of 8% over the last 12 months, mainly due to fall in Champagne sales and consumers looking for cheap wines, whereas in the on-trade markets, liqueurs reported highest volume growth of 13% in 2012.

 

WSTA chief executive Miles Beale said the latest market report shows that consumers are continuing to cut their spending on alcohol, which resulted in sales falling in both the on- and off-trade.

 

“While it had been hoped that Christmas would provide a small boost for the industry these figures show that there was subdued festive cheer over the Christmas period,” Beale added.

 

“This is a further sign that the Government needs to think again before increasing prices through the unpopular duty escalator, which risks damaging jobs and growth.”

Liquor Industry News 3-18-13

March 18, 2013
www.franklinliquors.com

Franklin Liquors

 

Brewers Expect to Resolve Antitrust Issues

 

Source: WSJ

By BRENT KENDALL

Mar 15th

 

Anheuser-Busch InBev NV BUD -0.86% and Mexico’s Grupo Modelo GMODELO.MX -0.33% SAB said Friday they expect to resolve antitrust issues raised by the Justice Department about the two beer makers’ proposed merger.

 

In a joint court filing, the parties said they have made “substantial progress” toward a resolution, based on revised terms of the merger that the companies announced after the Justice Department sued to block the original deal in late January. They asked a Washington, D.C., federal judge to postpone proceedings in the case until April 9, saying the extra time “will likely enable the parties to complete their discussions.”

 

The parties had previously requested a stay of proceedings that was set to expire March 19.

 

AB InBev is seeking to acquire the 50% of Modelo it doesn’t already own. With the revised deal terms, AB InBev offered to sell an additional $2.9 billion of assets to Constellation Brands Inc. STZ +2.33% in a bid to rescue the proposed $20.1 billion Modelo takeover.

 

Under the new terms, AB InBev agreed to sell Modelo’s Piedras Negras brewery in Mexico to Constellation, which would also secure perpetual U.S. licensing rights to five Modelo brands.

 

The beer companies said the revised deal would preserve Modelo as an independent competitor in the U.S. market and address the issues raised by the government. Constellation also is involved in the settlement talks.

 

AB InBev, owner of Bud Light and Budweiser, and MillerCoors, maker of the Coors Light brand, are the two leading players in the U.S. beer market. Modelo, whose Corona is the best-selling imported beer in the U.S., runs a distant third.

 

 

——

AB InBev, DOJ Seek New Stay Amid $20B Merger Deal Talks

 

Source: Law 360

By Melissa Lipman

March 15, 2013

 

Anheuser-Busch InBev NV, Grupo Modelo SAB de CV, Constellation Brands Inc. and the U.S. Department of Justice have made “substantial progress” in their talks to settle their antitrust fight over InBev’s proposed $20.1 billion Modelo buy, the parties said Friday as they pushed to extend the stay of the case.

 

The judge overseeing the case originally stayed the dispute in late February after the DOJ said it needed more time to review a revised proposed antitrust fix that would send Modelo’s U.S. business to Constellation. The original stay is due to expire through March 19, but the parties have now asked the court to extend that to April 9.

 

“The parties . have made substantial progress toward a resolution of this matter based on the terms of the revised transaction,” the motion said. “An extension of the stay will likely enable the parties to complete their discussions regarding the possibility of a resolution.”

 

In June, AB InBev and Modelo announced their plans to create a global powerhouse in the ever-consolidating beer world. Together, the companies would hold 46 percent of the U.S. beer market, according to the DOJ.

 

But in late January, the DOJ sued to block the combination. At the time, Antitrust Division chief Bill Baer warned that removing Modelo from the competitive landscape would make it even easier for AB InBev and the other “remaining beer companies to engage in coordinated leader-follower pricing strategies in the future.”

 

Just two weeks later, AB InBev agreed to send more of Modelo’s U.S. assets to Constellation in a bid to secure the DOJ’s approval.

 

AB InBev had already planned to sell Grupo Modelo’s half of its U.S. distribution joint venture with Constellation, Crown Imports, to the company for $1.85 billion. But the new agreement would completely divest Modelo’s U.S. operations, the companies said at the time.

 

Now, in addition to getting full ownership of Crown, Constellation will pay another $2.9 billion for Modelo’s Piedras Negras brewery in Mexico, as well as perpetual licenses to Modelo’s brands. The original arrangement included only a supply and licensing agreement that AB InBev could buy back in 10 years.

 

Because the brewery near the Texas border currently only meets 60 percent of the U.S. import demand for Corona and Modelo’s other brands, the deal also lays out a three-year transition services agreement to give Constellation time to expand the Piedras Negras plant, the companies said.

 

“We believe this revised agreement addresses all of the concerns raised by the U.S. Department of Justice in its lawsuit, leaving no doubt about Constellation’s Crown beer division’s complete independence and ability to compete,” AB InBev and Constellation said in a joint statement at the time.

 

AB InBev is represented by Steven Sunshine, Greg Craig, James Keyte, Ian John, Jess Biggio, Karen Hoffman Lent, John Seward and Steven Albertson of Skadden Arps Slate Meagher & Flom LLP.

 

Modelo is represented by Richard J. Stark and Yonatan Even of Cravath Swaine & Moore LLP.

 

The proposed intervenors are represented by Margaret H. Warner, Raymond A. Jacobsen Jr. and Jon B. Dubrow of McDermott Will & Emery LLP.

 

The case is U.S. v. Anheuser-Busch InBev SA/NV et al., case number 1:13-cv-00127, in the U.S. District Court for the District of Columbia.

 

 

——

‘Simply unacceptable’: Unite slams Diageo and peers over UK tax loophole

 

Source: Beverage Daily

By Ben Bouckley

15-Mar-2013

 

Unite the Union says the use of a legal loophole that it claims allows large multinationals such as Diageo to reduce tax payments on UK profits ‘simply isn’t acceptable’.

 

In an article on Diageo published in its ‘Tax Gap’ article series in February 2009, The Guardian noted that the giant UK plc. paid £43m/year ($65m) over the previous decade in UK corporation tax.

 

The paper said the 10-year tax bill would be nearer £144m/year if it reflected Diageo’s actual physical UK presence, but that the firm only paid taxing on profits said to arise in the country.

 

Diageo has also, quite legally, cut its UK tax bill by transferring legal ownership of brands such as Johnnie Walker (in 2000) and J&B (2006) to Dutch subsidiary Diageo Brands BV, the paper noted.

 

This Monday Unite national officer for food and drink, Jenny Formby attacked what she claimed was Diageo’s exploitation of a tax loophole.

 

“Diageo is extremely successful, and last year profits jumped by 32% to a colossal £3.1bn, yet the company prefers to pay its tax via Amsterdam, to avoid paying what is due in this country,” she said.

 

Age of huge public cutbacks

 

Formby told BeverageDaily.com today that Unite’s concern over this kind of tax loophole, such practices are glossed in a recent comment piece in The Guardian , was “well-rehearsed, and as can be seen from the recent campaign against Starbucks, widely supported by the public”.

 

Formby added:”We’re not suggesting it isn’t legal, simply that it isn’t acceptable that hugely profitable multinationals can avoid paying tax on profits made in the UK, clearly part of a broader political debate in an age of huge cutbacks in public spending on vital services.”

 

Diageo moved a number of its brands to The Netherlands in 1998, establishing a new marketing center there, and transferred other brands there later to ensure closeness to senior marketing staff.

 

A Diageo spokeswoman told BeverageDaily.com that the drinks giant’s significant commercial operations in The Netherlands encompassed management, marketing and supply of key brands.

 

“Our Amsterdam operations have been fully disclosed to and reviewed by Her Majesty’s Revenue & Customs (HMRC) and we have paid the tax deemed appropriate. This was endorsed by a National Audit Office (NAO) review in 2012,” she said.

 

200 staff worked at the global marketing centre of excellence, the spokeswoman added, while a number of Diageo’s acquired brands were based in Amsterdam, “in order to also benefit from this centre of excellence”.

 

Diageo’s Dutch logistical hub

 

She said: “The Netherlands also represents an important logistical centre for Diageo. The bulk of our product is shipped around the world from Rotterdam.”

 

Discussing Unite’s concerns regarding Diageo’s Monday announcement that it plans to overhaul its global supply and procurement operations – with job losses likely – Formby said her union planned to seek assurances on jobs at a local level across all UK sites.

 

“We’re always concerned about possible impacts on jobs when this kind of restructuring is carried out,” Formby said, “as workers inevitably pay the price with their jobs, although of course we very much hope there will be no impact in the UK”.

 

Diageo did not respond to Formby’s demand that it conduct itself in a “more responsible way” and provide UK workers with assurances on jobs, and simply said discussions with Unite were ongoing.

 

 

——

Tennessee: Bill bans energy drinks wherever alcohol served

 

Source: the Pacer

By Mary Jean Hall

Wednesday, March 13, 2013

 

Jager bombs, Vodka-Red Bulls, Electric Screwdrivers and other energy drink cocktails may soon be illegal for restaurants and bars to serve if House Bill 347 passes through the state legislature.

 

HB 347 by Rep. McManus prohibits the sale of energy drinks at a business with a license or permit to serve or sell liquor by the drink. SB 110 is the companion bill.

 

The bill would designate the offense as a Class A misdemeanor, which is punishable by fine and suspension of an offender’s license or permit to serve or sell liquor by the drink.

 

The legislation considers an “energy drink” as any beverage that contains methylxanthines, and whose main purpose is to boost a person’s energy.

 

Some local business owners, including Johnny Nanney, owner of Cadillac’s, see the bill as detrimental to their business. Cadillac’s is a local bar on the corner of Lindell and Church Streets.

 

“It would definitely hurt our business,” Nanney said. “It’s a significant amount of revenue. Bomb shots with energy drinks are probably our most popular drinks.”

Nanney estimates that Cadillac’s sells about ten cases of energy drinks each week. He also stated that Cadillac’s has never noted any consumer health problems with the alcohol and energy drink combinations.

 

“We’ve never had an energy drink related problem,” he said. “From time to time we will have people over the limit, but we get them home safely. Energy drinks have never been an issue.”

 

Nanney looks for his customers to reach out to their respective representatives and senators.

 

“People should voice their opinions on it,” Nanney continued.

 

Similar bills have been presented through other city and state governments citing sources like the Centers for Disease Control and Prevention, or CDC.

 

According to the CDC, when alcoholic beverages are mixed with energy drinks the caffeine in the drinks can mask the depressant effects of alcohol. The CDC also states that drinkers who consume alcohol mixed with energy drinks are three times more likely to binge drink than drinkers who do not report mixing alcohol with energy drinks.

 

Amelia M. Arria, Ph.D., Associate Director for the Center for Substance Abuse Research at the University of Maryland College Park, with other scientists and professors, compiled a letter that was addressed to some Attorney Generals. In the letter, Arria reported that as many as 28 percent of U.S. college students combine caffeine and alcohol when drinking.

 

“The consumption of caffeinated alcoholic beverages has been associated with increased risk of serious injury to oneself and to others, as the result of driving while intoxicated, sexual assault and other dangerous behaviors,” Arria said.

 

On March 8 the Tennessee General Assembly Fiscal Review Committee studied the potential fiscal impact of HB 347 and estimated that there was not a significant fiscal impact .The act would take effect July 1, 2013 upon passage.

 

UTM students who are registered to vote in District 76, which contains Weakley County and parts of Obion and Carroll Counties, can contact Rep. Andy Holt (R) at

rep.andy.holt@capitol.tn.gov to give their opinions on the bill. Constituents can also call his Nashville office at 615-741-7847.

 

Students who live outside of the Martin area can visit www.capitol.tn.gov/house/members for a list of the other representatives in the state.

 

For more information on HB 347 or other bills currently traveling through the state legislature, visitwww.capitol.tn.gov/legislation.

 

 

——

MADD Announces Opposition To Privatization

 

Source: SacBee

By UFCW PA Wine & Spirits Council

Mar. 13, 2013

 

Mothers Against Drunk Driving has announced its opposition to the privatization of the retail sale of alcohol, a decision that should compel every lawmaker to oppose Gov. Corbett’s reckless scheme to dismantle the state’s Liquor Control Board.

 

MADD, the nation’s largest nonprofit working to protect families from drunk driving and underage drinking, cited an analysis of 17 peer-reviewed studies conducted by the Centers for Disease Control and Prevention in their position statement.

 

MADD stated that, “The CDC concluded that privatization of alcohol sales will result in a reduction in the enforcement of sales regulations including enforcement of the minimum legal drinking age. Therefore, policies or legislation transferring state alcohol control to private control are counter to MADD’s mission of eliminating drunk driving and preventing underage drinking.”

 

Gov. Corbett has proposed dismantling the LCB and adding up to 30,000 retail outlets for the sale of beer, wine and spirits in the Commonwealth. The scheme would jeopardize 5,000 family-sustaining jobs that the LCB provides, along with 1,100 Main Street beer distributors and the 10,000 Pennsylvanians they employ.

 

Despite widespread opposition, Gov. Corbett told The Philadelphia Inquirer that, “I have not had one person . . . tell me this is a mistake.”

 

“Obviously, the governor is not listening. He is just completely out of touch with working Pennsylvanians and he has decided to ignore the experts,” said Wendell W. Young IV, President, UFCW Local 1776, and Chairman of the UFCW PA Wine & Spirits Council.

 

“Privatization is just bad public policy. The CDC says so and now MADD agrees,” continues Young, “The fact is that every single legitimate study of this issue has found that privatization leads to serious health risks. Gov. Corbett would be wise to listen to the experts and pull the plug on this risky scheme.”

 

To read more from MADD’s web site, please visit http://www.madd.org/about-us/position-statements/madds-positions-on-1.html.

 

 

——

Deaths in Libya From Alcohol Poison Reaches 87

 

Source: AP

By ESAM MOHAMED

March 17, 2013

 

Libya’s health minister says the death toll from drinking homemade alcohol that contained poisonous methanol has risen to 87.

 

Minister Nouri Doghman says 1,044 people have been harmed.

 

He said Sunday that 15 people were blinded, and others went into comas or suffered kidney failure. He said some people admitted themselves to the hospital too late, contributing to the increasing toll.

 

The deaths were first reported a week ago.

 

The dead range in age from 19 to 50 years old.

 

The sale and consumption of alcohol is banned in the conservative North African country. Like illegal drugs elsewhere, some Libyans turn to black market dealers to buy alcohol, which is often cooked in homes or deserted farms.

 

 

——

‘Healthy’ alcohol-based beverages tipped as top trend in 2013-2014 (Excerpt)

 

Source: Beverage Daily

By Ben Bouckley

14-Mar-2013

 

Healthy Beverage Expo experts claim that 2013-2014 will see healthy alcoholic drinks emerge, including wines instilled with goji berries and ginseng, and lower calorie and more organic options.

 

The organizers of the forthcoming show in Las Vegas (June 7-9) said that in 2013-2014, US consumers may begin to see alcoholic drinks touted as enhanced/healthy, as more producers add vitamins and all-natural ingredients.

 

Kim Jage, marketing and sales director, Healthy Beverage Expo, gave the example of wine infused with botanicals, which had been manufactured in China for at least the last century.

 

Some people believe that these kinds of alcoholic drink, sometimes instilled with fresh items like goji berries and ginseng, are beneficial to the body.

 

Jage said: “We will see healthier alcohol in all forms with less calories and more organic options, with many announcing their non-GMO (genetically modified organisms) status.

 

 

——

Beverages: Keeping an Eye on CPI

 

Source: CITI

March 15th

 

Prices on CSDs Continue to Decelerate Sequentially – We have analyzed the CPI data for Non-Alcoholic Ready-To-Drink (NARTD) Beverages on a seasonally adjusted basis, and note that for the month of February, the CPI for Non-Alcoholic Beverages and Beverage Products decreased 0.5% (while price increases have decelerated from peak levels in December 2011). The CPI for Carbonated Drinks was down 0.8% this month, vs. -0.4% last month (in line with the general trend of sequentially decelerating prices since the end of 2011). Meanwhile, the CPI for Juices increased 0.9% this month, slightly above the +0.8% change seen last month.

 

Alcoholic Beverage Prices Were Up Again – The CPI for Alcoholic Beverages (Off-Premise) increased 0.8% in February, showing a sequential acceleration compared to the prior month (+0.5%). The CPI for Alcoholic Beverages (On-Premise) increased 2.3% this month, slightly down from the 2.4% increase seen in the previous month. The CPI for Beer (Off-Premise) increased 1.0% this month, down from the 1.2% increase seen in the prior month. The CPI for Spirits (Off-Premise) was up 0.3% this month, above the -0.2% change seen in January. The CPI for Wine (Off-Premise) increased 0.7% in February, above the 0.2% decrease seen in January.

 

Snack Prices Were Up Again, Although Price Increases Have Decelerated Since Mid-2012 – The CPI for Snacks increased 2.6% in February, above the 2.1% increase seen in the prior month (although there is still a general trend of decelerating price increases since June 2012). The CPI for Food (Off-Premise) increased 1.2% this month, up slightly from the 1.1% increase seen in the prior month. The CPI for Food (On-Premise) increased 2.3% this month, in line with the trend of gradually decelerating price increases over the past nine months. The CPI for Food (Vending) increased 2.7% in February, above last month’s 2.2% increase. The CPI for Cereals was down 0.2% in February, and continues to show a general trend of sequential deceleration since 4Q11 (mostly due to the significant commodity inflation observed in 2H11).

 

 

——

BREW: “Redhooked” on Craft; Upgrading BREW to Buy

 

Source: CITI

Mar 17th

 

Rating Change

Target Price Change

Estimate Change

 

Upgrading BREW to Buy with $10 Target Price (37% ETR) – After a rocky 2012, as BREW continued to work through its growing pains as a small, pure-play craft beer story, we believe that management’s learnings and brand investments over the last few years position the company well to deliver accelerating shipment growth in 2013, and margin expansion in 2014 and beyond. Our more constructive view reflects:

 

Achievable outlook for robust volume growth, given: (i) Kona’s strong organic growth and expanded distribution, (ii) the momentum seen for Redhook’s turnaround, (iii) easing declines for Widmer Brothers, (iv) better pricing and demand forecast modeling, and (v) the continued benefits of improved mix.

 

Realistic outlook for higher levels of investment spending, which is reflected in our expectation for modest margin contraction in 2013, given stiff competition in craft beer and the potential need for additional investments to support long-term growth.

 

Limited downside risk given takeout potential by ABI, which has a ~30% stake in the company.

 

Adjusting Our Estimates – Taking into account BREW’s 2012 results and management’s guidance for 2013, as well as the opportunities and challenges noted above, we are updating our EPS estimates as follows: FY13 to $0.15 (from $0.14), FY14 to $0.20 (from $0.16) and FY15 to $0.24 (from $0.18).

 

Raising Our Target Price – We are raising our target price to $10 (from $7.50 previously). Our new valuation reflects a target valuation of 1.0x 2013 sales, which is slightly ahead of the stock’s historic average, which we believe is warranted given our outlook for more consistent sales growth and the future opportunities for margin expansion.

 

 

——

NABCA Legislative Update: March 2, 2013-March 15, 2013

 

Source: NABCA

Mar 15th

 

http://www.nabca.org/News/Files/130315%20Legislation%20and%20Regulation%20State%20Update.pdf

 

http://www.nabca.org/News/Files/130315%20Legislation%20and%20Regulation%20Category%20Update.pdf

 

http://www.nabca.org/News/Files/130315%20Regulatory%20Update.pdf

 

——

In the battle against alcohol abuse, the buck stops at the government

 

The failure to push through plans for minimum alcohol pricing places markets over lives and communities

 

Source: The Guardian

Deborah Orr

Friday 15 March 2013

 

I fail to understand why those on the right of the Conservative party feel so chagrined. It must have escaped their notice that every time David Cameron attempts to do anything other than cut public funding or privatise public services, the attempt ends in ignominy. The latest damp squib is minimum alcohol pricing, which breaks the one rule of the neoliberal club – never intervene in private markets.

 

Having been brought up in a town whose streets were paved with empty Buckfast bottles, I understand the baleful attraction of cheap, strong booze, and what it can do to individuals and their unfortunate families. But more than that, I understand how impervious markets can be to human suffering. The market for Buckfast Tonic Wine is largely concentrated in the part of the country where I grew up. It’s a notorious local tipple. But supplies are sent up to Lanarkshire from Buckfast Abbey in Devon. It’s made by Benedictine monks who have long insisted that they just make the stuff, and have nothing to do with matters of abusive consumption or the misery and suffering that may cause. Monks? For God’s sake.

 

Whatever one thinks of minimum alcohol pricing as an attempt to curb the temptation to buy cheap booze, one ought to be aware that those who stand against it, stand against it in just the way that those Benedictine monks do. They are blankly uninterested in the human cost of their profits. It’s more important to protect the freedom of a market, than it is to protect individuals, families and communities ravaged by alcohol abuse. The right of the Conservative party believe in this and only this. Hell mend them, as a Benedictine might say.

 

 

——

American Amber

 

Dispelling the myths, one part olde apothecary and one part log cabin, that distillers spin around bourbon.

 

Source: WSJ

By MAX WATMAN

Mar 16th

 

The myths that surround America’s native spirit, bourbon, are many and, for the most part, not particularly harmful. It’s entertaining, for instance, to imagine that, in the late 1780s, the Rev. Elijah Craig bought wooden barrels from a fish merchant and cleaned them out by charring the insides of the barrel before he put his whiskey on a boat bound for New Orleans, where the formerly clear whiskey was found to have an appealing amber glow and a taste mellowed by interaction with charred oak: entertaining to imagine, often repeated, and false.

 

In “Kentucky Bourbon Whiskey,” historian Michael Veach handily dismisses the myths. Regarding Elijah Craig, Mr. Veach reminds us that barrels made to store fish wouldn’t have been watertight. Craig already had a successful distilling business: He, and his fellow spirit-sellers, would have known that distillers in France had been aging brandies in charred barrels since the 15th century. At some point, they started doing the same in Kentucky. It’s not as romantic as accidental revelation, but it is the truth.

 

And while bourbon lore is mostly fun, there is an industry-wide misdirection at work that obscures the actual history of the trade. The nation’s distillers market their whiskey as one part olde apothecary (look at the labels) and one part log-cabin folklore. The recipes are supposedly family secrets, closely guarded while generations stirred the same small pot and proudly bottled their whiskey in the family cave. Bourbon labels are works of art, not public record. As the spirits writer Chuck Cowdery once wrote regarding this phenomenon: “There are no actual Keebler Elves.”

 

Let’s call it the Evan Williams effect: The label on every bottle of Evan Williams says “Since 1783″ and “Kentucky’s 1st Distiller,” but Evan Williams is produced by a distillery called Heaven Hill. Heaven Hill, Mr. Veach writes, was a post-Prohibition success story, founded in 1935 by the five Shapira brothers. “The brothers had no prior experience in the distilling industry,” he writes, “but they knew how to run a business-they owned a chain of department stores in Kentucky-and they had a solid business plan, which included hiring first Harry Beam and his son Joe to run the distillery.” Parker Beam holds the job today, the sixth Beam to work at Heaven Hill; he is training his son Craig to take the reins. They make excellent bourbon, but 1783?

 

For those who love brown whiskey, the legends are hardly necessary. The real tales that Mr. Veach recounts bubble with geeky fun.

 

It was James E. Pepper, for instance, who first covered the corks in his bottles with a strip stamp bearing his signature. If the stamp wasn’t intact, the whiskey wasn’t “Genuine Pepper.” The importance of marketing “genuine” whiskey as such was fueled by the prevalence of rectifiers, who took high proof, clear spirit and flavored it to resemble the whiskeys of the day. Mr. Veach quotes from a manual published around 1860 that has recipes for imitating the flavors of not only Irish, Scotch and Old Bourbon Whiskey but also for Tuscaloosa Whiskey (flavored with tea and wintergreen, colored with cochineal and burnt sugar) and Oronoko Rye Whiskey (refined sugar, burnt sugar, tea and oil of pear). These recipes, writes Mr. Veach, are valuable not only as “direct evidence of the way in which cheap whiskey was being produced” but also as “indirect evidence about the products being imitated.”

 

In the 1980s, the American whiskey business watched closely as single malt Scotch boomed. Elmer T. Lee, a master distiller at the time, “remembered that Colonel Albert Blanton, the manager of the distillery . . . in the 1930s and 1940s, would find a very high-quality barrel of bourbon and have its contents bottled, without blending, for use as gifts for dignitaries visiting the distillery. The Blanton’s brand of single-barrel bourbon hit the market in 1984.” This is the stuff that gives a whiskey lover goosebumps.

 

My only complaint is that Mr. Veach might have pointedly controverted myths rather than softly dismissing them with scholarly evidence. As he moves through the claims to the title of “Kentucky’s First Distiller,” it gradually becomes clear that we will never know the answer. One cannot fault Mr. Veach’s account, but every once in a while, I wished he’d taken off the gloves and smacked some of the marketing departments that continue the tradition of Kentucky kitsch.

 

-Mr. Watman is the author of “Chasing the White Dog.”

 

 

——

Wine Revolution: As Drinkers And Growers, U.S. Declares Independence

 

Source: NPR

by Lydia Zuraw

March 16, 2013

 

A curious shift has happened in global wine-drinking trends: Americans have overtaken the French and Italians, Europe’s traditional lovers of the fruits of the vine, as the world’s top wine market.

 

And it’s not just wine drinking that’s taken off stateside: U.S. wine production is also on the rise.

 

Back in the 1970s, there were about 400 wineries in America. Today, there are more than 7,000. And they’re not just in locations like Napa, Calif.; Walla Walla, Wash.; and Willamette Valley, Ore. They’re in places that are less familiar as wine regions: Texas, Ohio, Hawaii and even Alaska.

 

“I’ve had some stunning American wines, and I don’t think anyone should think that American wine is necessarily inferior to, say, French or Italian,” Jancis Robinson, a leading authority on wine, tells Weekend Edition host Scott Simon

 

Robinson is the co-author of American Wine: The Ultimate Companion to the Wines and Wineries of the United States. The book traces what she calls an American “wine revolution” that is kind of amazing, considering it was only 20 years ago that the industry was feeling threatened by Neo-Prohibitionists.

 

“But now, wine seems to be such a popular interest with a whole load of people – particularly young people,” Robinson says.

 

That interest has even led to wineries sprouting up right in the middle of cities. Just ship in grapes from a nearby vineyard, and you’ve got a resource for city-dwellers to see how wine is made.

 

While you may think your local wine can’t possibly be as good as something imported, that’s not necessarily the case, Robinson says.

 

She says she’s especially a fan of some wines produced around the Finger Lakes in New York. She’s also found a very good copy of champagne from the Gruet family in New Mexico.

 

“Pretty much all countries that make wine make some good wine and some bad wine,” says Robinson. “Yes, it’s true that the majority of the very, very, very finest wines I have ever had have been from France, but then, France makes more wine than everyone else most years.”

 

Because winters can be pretty harsh in the American interior, European grapevines are tricky to grow. But new varieties like Traminette were bred to survive the climate. Then there’s the all-American Norton grape, discovered in Virginia and particularly popular in Missouri vineyards.

 

“It makes some really serious red wines,” Robinson says. “So you can have very respectable Missouri Norton that has not an ounce of influence of France or Italy in it.”

 

 

——

California wine giant confirms purchase of prime Oregon vineyard lands

 

Source: The Oregonian

By Dana Tims

March 15, 2013

 

Word of the first large-scale acquisition of Oregon vineyard lands by a California winemaker was made official Friday, when Jackson Family Wines confirmed it has bought vineyard lands in the Willamette Valley.

 

The company, based in Napa, announced it has paid an undisclosed amount of money for a total of 392 acres.

 

Three parcels are involved, the company said. The Zena East and Zena Middle vineyards total 42 acres planted with pinot noir grapes. They are located in the Eola-Amity Hills growing area.

 

Maple Grove, a third, far larger parcel of 350 acres, is farther south in the foothills near Dallas. It is developed and fully trellised, but not yet planted.

 

The company’s confirmation of the transaction comes after weeks of speculation among Oregon wine industry representatives that the first significant acquisition of vineyard land in the state was in the offing.

 

Barbara Banke, chairman of Jackson Family Wines, said the company looks forward to producing high-quality Oregon pinot noir.

 

“When we saw Zena East, Zena Middle and Maple Grove,” she said in a statement, “we were enthused about making world-class pinot noir from these distinctive properties.”

 

The company purchased Willamette Valley pinot noir grapes during the 2012 harvest and was impressed by the quality of the fruit, she said.

 

This is the first domestic vineyard acquisition outside of California for the company, which produces wine under the Kendall Jackson and LaCrema labels, among others.

 

 

——

Former HK politician’s wine collection goes for $6.2 million

      

Source: Globalpost

Mar 17th

 

A former Hong Kong politician sold off part of his rare wine collection for over $6 million, auction house Christie’s said Sunday, after a scandal over a wine cellar at his home was partly blamed for his loss in last year’s leadership race.

 

The city’s former number two Henry Tang was set to become the chief executive in 2012 until a series of gaffes and the discovery of an illegal basement containing the cellar at his luxury home made him deeply unpopular.

 

The two-day auction, which fetched $6.22 million, included a wide selection of Burgundys with vintages ranging from 1949 to 2010, Christie’s said, and dozens of wine aficionados attended with others bidding online.

 

The highlights of the sale were six magnums of Romanée Conti Vintage 1995 which sold for $156,695 and 12 bottles of Montrachet Vintage 1978 which sold for $109,687.

 

Though there were thousands of bottles on offer, they represented just a small portion of Tang’s collection, the auction house said.

 

“He’s at a point where there’s enough wine that he can share them with joy,” Christie’s head of wine in China, Simon Tam, told AFP at the sale.

 

In an interview with Tang last month, the Wall Street Journal reported that none of the bottles in the Christie’s sale were stored in the illegal cellar.

 

Tang is a well-known wine connoisseur who abolished duties on wine imports to Hong Kong in 2008, helping to turn the city into a regional wine centre.

 

Chief secretary until September 2011, Tang was thought to be Beijing’s choice for Hong Kong’s top job in the run-up to the chief executive election in March last year.

 

But his campaign began with a public admission of marital infidelity and suffered another blow with the discovery of the unauthorised basement, which reportedly also included a Japanese-style bath and a workout room.

 

His main rival Leung Chun-ying was subsequently handpicked for the post by a 1,200-strong election committee dominated by pro-Beijing elites, after China apparently switched sides.

 

Since his election, Leung has also apologised for illegal structures built without planning permission at his own luxury Hong Kong home.

 

Hong Kong is one of the most densely populated cities in the world and authorities regularly prosecute residents for making illegal additions to their houses.

 

 

——

Elite Advisers’ Wine Fund Favors Burgundy Over Bordeaux

 

Source: Bloomberg

By Guy Collins

Mar 15, 2013

 

Elite Advisers SA’s wine fund, one of Europe’s largest, is boosting its holdings of Burgundy over Bordeaux and sees value in the region even after price gains.

 

The investment vehicle, branded Nobles Crus, has a five- year track record and had 102 million euros ($135 million) under management at the end of December. Wines held include a Romanee- Conti 1915 Domaine de la Romanee-Conti, harvested during World War I, and Chateau d’Yquem Sauternes dating back to 1811, when Napoleonic troops were fighting in Spain.

 

Historic Burgundies including Domaine de la Romanee-Conti, Henri Jayer and Armand Rousseau are driving prices this year, boosted by Chinese collectors focusing on the region after fueling Bordeaux gains in 2010 and 2011. While Medoc first growths fell last year amid the financial crisis in Europe and the U.S., they have rallied since November, lifting the market and encouraging buying in lesser-known labels.

 

“People are becoming more interested in Burgundy,” Christian Roger, Chief Executive Officer of Gruppo Vino e Finanza, the Milan-based manager for Nobles Crus, said last month. “I don’t think the prices are too high. I think there will be other domaines which will be sought.”

 

The fund aims to keep more than 50 percent of its holdings in Burgundy, and, when appropriate, as much as 55 percent to 60 percent. That fell to 46 percent following purchases of Bordeaux 2009 and 2010 futures, and now managers want to rebalance it.

 

“It’s a strategy that we’ve had since the start, and that I am continuing,” Roger said. The Luxembourg fund, set up by Elite’s founders Miriam Wilson and Michel Tamisier in late 2007, is boosting Burgundy to more than half of managed wine assets.

 

Burgundy Market

 

Auction houses and investment managers have cited demand for Burgundy in the past six months. A 1990 case from Henri Jayer’s Vosne-Romanee Cros Parantoux vineyard sold for $113,525 at Hart Davis Hart in Chicago last month. Jayer, who died in 2006, is one of Burgundy’s most sought-after wine-makers.

 

Wine sold at a Sotheby’s (BID) January sale in London included a case of Chambertin 1999 Armand Rousseau and 12 bottles of the more recent Chambertin Clos de Beze 2005 Armand Rousseau, which each fetched 11,163 pounds ($17,640). Six bottles of Domaine Dujac Echezeaux 1978 made HK$196,800 ($25,380) at Acker Merrall & Condit in Hong Kong the same month.

 

Nobles Crus aims to place 70 percent of its assets in older vintages, 20 percent in wine futures and 10 percent in cash. Wine is bought from private cellars, merchants and restaurants.

 

According to data from Elite Advisers, Nobles Crus returned 7.8 percent in 2012 after gains of 11 percent in 2011, 13 percent in 2010, 9.8 percent in 2009 and 20 percent in 2008.

Track Record

 

That compared with declines for the Bordeaux-dominated Liv- ex 100 Fine Wine Index of 8.9 percent in 2012, 15 percent in 2011 and 14 percent in 2008 and gains of 40 percent in 2010 and 16 percent in 2009.

 

The valuation method used by Nobles Crus was subjected to scrutiny by the Financial Times in September after the newspaper sought a Liv-ex estimate of Bordeaux wine in the collection. Elite Advisers responded by commissioning an external report and writing to investors explaining its procedures.

 

“On average we’re now doing basically a 12 percent return per annum,” Wilson told Bloomberg in an interview during a visit to London in January.

 

“We not only have the Bordeaux wines, which are the most well-known in the U.K. market. We have the Burgundy wines, we have the top wines from Italy and from Spain, and this diversification has given us the performance.”

 

Italian Wines

 

Elite Advisers had 63,000 bottles in its collection in Geneva at the end of 2012, according to Roger. Main holdings include Chateau Latour, Chateau Petrus, Chateau Ausone and Chateau Cheval Blanc in Bordeaux, Romanee-Conti DRC in Burgundy, Barolo from Italy and Vega Sicilia from Spain.

 

Monthly valuations are based on four prices for each wine, two from auction houses and two from European or U.K. merchants. Elite Advisers has 10 auction houses and 60 merchants from whom it draws prices, and the fund is audited by Deloitte.

 

“Every piece of pricing that we get is backed up, documented and controlled by our auditors at the end of each year,” Wilson said.

 

Burgundies held by the fund as of December 2011, the latest date for which detailed information is available, included more than 40 vintages of Romanee-Conti spanning the past century and Jayer Cros Parantoux from 13 separate years back to 1978.

 

 

——

Wine: there’s life in natural wine yet

 

Some in the trade say natural wine has had its day. I wouldn’t be so sure.

 

Source: The Guardian

Fiona Beckett

Friday 15 March 2013

 

Among the forecasts of what was going to be big in the wine world in 2013, and what was going to bomb, there was a great deal of triumphant crowing that we’d seen the last of so-called “natural” wines – that is, those made without chemical additives and little, if any, sulphur.

 

The trouble about such punditry is that it’s often several steps ahead of the public, who haven’t even become aware of a trend before it’s dismissed as passé. And in the case of natural wine, drinkers may have a totally different perspective from the trade, concerning themselves less with conformity or technical correctness than with a desire for as unmucked-about wine as possible.

 

Well, now’s a good chance to make up your own mind. March has been proclaimed Real Wine Month and all sorts of restaurants, bars and retailers will mark it by offering at least a couple of natural wines by the glass. And tomorrow there’s an all-day Real Wine Fair at Tobacco Dock in Wapping, London E1 – for details, go to therealwinefair.com.

 

So where should you start with natural wines? I’d go for reds rather than whites, which are more dependent on sulphur to preserve their purity. A perfect example is Raisins Gaulois, a joyous, quaffable, beaujolais-like red from the Lapierre family, which cries out for a picnic or a plate of charcuterie (£9.99 a bottle or, even better, £56.16 for a five-litre wine box, Les Caves de Pyrène – also available at £11.27 from Wine Bear, or £10.73 if you buy six, and £11.50 from Ellis Wharton; 12.5% abv)

 

Natural sparkling wines are also really attractive, generally having a much lower dosage (sugar addition) than conventional wines, which gives you a stronger sense of the fruit. Try the refreshingly light, almost appley Villiera Brut Natural 2009 (£10.99 in larger branches of Marks & Spencer; 12% abv), from South Africa, which has no dosage at all and is sulphur-free.

Wine: Château la Colombière Fronton 2010

 

A lot of producers, meanwhile, don’t choose to market their wines as organic or natural. The Bristol-based importer Vine Trail, for instance, places more emphasis on the fact that its producers are small artisanal growers than on whatever organic and biodynamic credentials they may have. But you couldn’t find a more natural-tasting wine than the delicious Château la Colombière Fronton 2010 (£10.66), in which you can almost smell the soil and stones of the vineyard, as well as fruit that tastes as if it’s been ripped straight from the vine.

 

Apply the same kind of open-mindedness to wine as you do to a new cuisine or ingredient, say, and you’ll find that natural wines still have a lot to offer, despite what some might say.

 

 

——

New breakaway sparkling wine appellation to rival Cava

 

Source: Decanter

by James Lawrence

Friday 15 March 2013

 

Leading Penedes winemaker Raventos I Blanc – which quit the Cava DO because of ‘poor image and low standards’ – has unveiled the framework for a new sparkling wine appellation.

 

The proposed designation, named Conca Del Riu Anoia, will significantly deviate from the existent Cava DO.

 

‘After 150 years, Cava has become a solely volume-oriented DO with no geographical distinction in terms of climate and soils, it has a poor image; with low viticultural standards. For this reason, we decided to start from the beginning and create a quality orientated designation for our wines,’ owner Pepe Raventos told Decanter.com.

 

Raventos is not alone in criticising the Cava DO: by November last year around nine producers had left.

 

Conca Del Riu Anoia is intended to form a very small geographical area surrounding the Anoia River valley between the Anoia and Foix Rivers in eastern Penedes.

 

A key aspect of the appellation is a severe tightening of the current rules of production, Raventos explained.

 

‘Under our rules, producers must pay growers a minimum of 1?/Kg – the current price averages ?0.20/Kg – the vineyards must be organically certified, at least ten years old and yields will be set at a maximum of 10,000kg/ha,’ Raventos said.

 

‘We are also increasing the minimum period on the lees from 9 to 18 months and only indigenous varieties can be used,’ he added.

 

The Cava DO stipulates that companies can include domestic and international varieties, including Chardonnay and Pinot Noir with no rules as to the composition of the blend.

 

The Raventos family will submit their proposal to the Consejo Regulador this spring.

 

However, some wineries have criticised Raventos’ plans and remain committed to working inside the DO framework.

 

‘It seems quite cowardly to us, as it’s clearly easier to abandon the DO than to fight for change,’ Eva Plazas, senior winemaker at Vilarnua said.

 

Josep Albet, current president of the Penedes consejo regulador, has recommended making significant changes to the appellation rules in response to this move by Raventos and others.

 

In order to combat the growing crisis, Albet has advised making significant changes to the appellation rules, including increasing the minimal time the wine is in contact with the lees from 12 to 15 months.

 

‘We need to emphasise that Cava is a high quality, unique product,’ Albet said.

 

 

——

How Beer Gave Us Civilization

 

Source: New York Times

By JEFFREY P. KAHN

Mar 15th

 

HUMAN beings are social animals. But just as important, we are socially constrained as well.

 

We can probably thank the latter trait for keeping our fledgling species alive at the dawn of man. Five core social instincts, I have argued, gave structure and strength to our primeval herds. They kept us safely codependent with our fellow clan members, assigned us a rank in the pecking order, made sure we all did our chores, discouraged us from offending others, and removed us from this social coil when we became a drag on shared resources.

 

Thus could our ancient forebears cooperate, prosper, multiply – and pass along their DNA to later generations.

 

But then, these same lifesaving social instincts didn’t readily lend themselves to exploration, artistic expression, romance, inventiveness and experimentation – the other human drives that make for a vibrant civilization.

 

To free up those, we needed something that would suppress the rigid social codes that kept our clans safe and alive. We needed something that, on occasion, would let us break free from our biological herd imperative – or at least let us suppress our angst when we did.

 

We needed beer.

 

Luckily, from time to time, our ancestors, like other animals, would run across fermented fruit or grain and sample it. How this accidental discovery evolved into the first keg party, of course, is still unknown. But evolve it did, perhaps as early as 10,000 years ago.

 

Current theory has it that grain was first domesticated for food. But since the 1950s, many scholars have found circumstantial evidence that supports the idea that some early humans grew and stored grain for beer, even before they cultivated it for bread.

 

Brian Hayden and colleagues at Simon Fraser University in Canada provide new support for this theory in an article published this month (and online last year) in the Journal of Archeological Method and Theory. Examining potential beer-brewing tools in archaeological remains from the Natufian culture in the Eastern Mediterranean, the team concludes that “brewing of beer was an important aspect of feasting and society in the Late Epipaleolithic” era.

 

Anthropological studies in Mexico suggest a similar conclusion: there, the ancestral grass of modern maize, teosinte, was well suited for making beer – but was much less so for making corn flour for bread or tortillas. It took generations for Mexican farmers to domesticate this grass into maize, which then became a staple of the local diet.

 

Once the effects of these early brews were discovered, the value of beer (as well as wine and other fermented potions) must have become immediately apparent. With the help of the new psychopharmacological brew, humans could quell the angst of defying those herd instincts. Conversations around the campfire, no doubt, took on a new dimension: the painfully shy, their angst suddenly quelled, could now speak their minds.

 

But the alcohol would have had more far-ranging effects, too, reducing the strong herd instincts to maintain a rigid social structure. In time, humans became more expansive in their thinking, as well as more collaborative and creative. A night of modest tippling may have ushered in these feelings of freedom – though, the morning after, instincts to conform and submit would have kicked back in to restore the social order.

 

Some evidence suggests that these early brews (or wines) were also considered aids in deliberation. In long ago Germany and Persia, collective decisions of state were made after a few warm ones, then double-checked when sober. Elsewhere, they did it the other way around.

 

Beer was thought to be so important in many bygone civilizations that the Code of Urukagina, often cited as the first legal code, even prescribed it as a central unit of payment and penance.

 

Part of beer’s virtue in ancient times was that its alcohol content would have been sharply limited. As far as the research has shown, distillation of alcohol to higher concentrations began only about 2,000 years ago.

 

Today, many people drink too much because they have more than average social anxiety or panic anxiety to quell – disorders that may result, in fact, from those primeval herd instincts kicking into overdrive. But getting drunk, unfortunately, only compounds the problem: it can lead to decivilizing behaviors and encounters, and harm the body over time. For those with anxiety and depressive disorders, indeed, there are much safer and more effective drugs than alcohol – and together with psychotherapy, these newfangled improvements on beer can ease the angst.

 

But beer’s place in the development of civilization deserves at least a raising of the glass. As the ever rational Ben Franklin supposedly said, “Beer is living proof that God loves us and wants us to be happy.”

 

Several thousand years before Franklin, I’m guessing, some Neolithic fellow probably made the same toast.

 

Jeffrey P. Kahn, a clinical associate professor of psychiatry atnNewYork-Presbyterian Hospital, is the author of “Angst: Origins of Anxiety and Depression.”

 

 

——

Penfolds MD leaves Treasury Wine Estates (Excerpt)

 

Source: Just-Drinks

By James Wilmore

15 March 2013

 

The head of Treasury Wine Estates’ Penfolds wine brand has left the company with “immediate effect” after a year in the role, the company has confirmed.

 

Gary Burnand, who became MD of the brand last March, will be replaced by Simon Marton, head of TWE’s Wolf Blass unit, while the group seeks a permanent replacement. Burnand, who joined the company in December 2011, reported in to TWE chief executive David Dearie.

 

 

——

Henry Besant dies aged 40

 

Source: Drinks International

By Hamish Smith

15 March, 2013

 

Leading drinks industry figure Henry Besant died in hospital yesterday following a heart attack.

 

Besant, who passed away aged 40 having been admitted to hospital two weeks ago, was known as one of the UK’s best bartenders and for his work in the global promotion of the tequila category.

 

Alongside fellow bartender and tequila authority, Dre Masso, Besant co-founded Olmeca Altos tequila and the Tahona Society – a global network of bartenders formed in recognition and celebration of tequila.

 

Besant had worked closely with Drinks International magazine both as a judge on the International Spirits Challenge tequila panel and as an academy member of The World’s 50 Best Bars.

 

Respected for his work and passion, and liked as a man, the drinks industry mourns his passing.

 

 

——

Restaurateurs tell Senate minimum wage hike will hurt

 

Source: NRA

March 15, 2013

 

A New Jersey-based restaurateur told a Senate panel that increasing the federal minimum wage would have a negative effect on the restaurant industry.

 

Melvin “Mel” Sickler, a multiunit franchisee of the Auntie Anne’s Pretzels and Cinnabon brands, testified March 14 before the U.S. Senate Health, Education, Labor and Pensions Committee hearing on recently introduced legislation that would increase the federal minimum wage rate by 39 percent, from $7.25 an hour to $10.10 per hour.

 

Sickler told the panel that an increase could force operators to reduce employee hours, postpone plans for new hiring and expansion, and reduce the number of restaurant employees.

 

“The restaurant industry is dominated by small businesses – more than seven in 10 eating and drinking establishments are single-unit operations,” Sickler said. “Food and labor costs are the two most significant line items for a restaurant. With average pre-tax margins of roughly 4 to 6 percent, increases in food and labor costs can have a dramatic impact on a restaurant’s bottom line. Only a small minority of restaurants will be able to handle a 39 percent minimum wage increase without taking actions that will harm workers.”

 

Sickler, who testified on behalf of the National Restaurant Association, also noted the decline of restaurant job opportunities in Oregon after the state began raising its minimum wage above the federal level in 1997. All restaurants in the United States employed an average of 16.9 workers in 2011, unchanged from 1996. Oregon’s restaurants, however, employed an average of only 13.8 workers in 2011, or 2.6 fewer employees per establishment than they did before the state’s minimum wage began rising above the federal level in 1997.

 

In addition, David Rutigliano, co-owner of the six-unit SBC Restaurant Group in Shelton, Conn., testified on behalf of the Connecticut Restaurant Association, saying the combination of an increased minimum wage, the enactment of mandatory paid sick leave legislation in his state and compliance with the health care law – all at a time when the economy and many small businesses are still struggling – would be a tough burden.

 

“At a time when many businesses are struggling to keep their doors open, mandating wage increases will only hurt those employees which this proposal seeks to help,” he said. “In my home state of Connecticut, where we already have the fourth-highest minimum wage at $8.25 and one of the highest tipped wages at $5.69, there is currently a proposal in the state legislature that seeks to increase the minimum wage to $9.75 and the tipped wage to $6.73. That, along with the recently enacted mandatory paid sick leave law, is making an already difficult situation even worse. Add to that the Affordable Care Act, and I ask anyone here to explain how . the restaurant industry, which is labor heavy and runs on extremely low profit margins, will survive let alone prosper?”

 

Sickler told the committee that the restaurant industry, while serving as the gateway for many young people to enter the workforce, also provides great opportunities for advancement.

 

“The National Restaurant Association calls on members of this committee and all of those serving in Congress to focus on policies that encourage more people, not fewer, to enter the workforce,” he said. “Our collective goal should be to get our young people hired and on the path to achieving the American Dream.”

 

 

——

Pennsylvania: Coming this week – Liquor privatization’s first big test

 

Source: Philly.com

March 17, 2013

 

This coming week will be the first test of whether the legislature can finally reach consensus on a plan to privatize the sale of wine and hard liquor in Pennsylvania.

 

The House Liquor Control Committee is scheduled to hold a hearing Monday to consider Gov. Corbett’s privatization plan, which calls for auctioning off the state’s 600-plus wine and spirits shops to the private sector. The proceeds from the sale – about $1 billion – would be given to public schools through a new initiative to help them pay for early childhood education and school security, among other things.

 

If it passes muster in committee, the bill would then be sent to the House floor for debate. Majority Leader Mike Turzai (R., Allegheny), privatization’s most vocal supporter in the legislature, has vowed to bring the measure to a full floor vote by the end of the month. If he achieves that, it would be the furthest a liquor privatization bill has moved through the legislature.

 

“This is really over the goal line,” Turzai told reporters recently. “People recognize that Pennsylvania needs a change.”

 

But as both Turzai and Corbett know well, the road toward privatization is pocked with pitfalls – from both ends of the political spectrum. Democrats and the union representing state store clerks have historically opposed it, arguing that it will cost the state much-needed revenue (the Liquor Control Board kicks in about $80 million in profits annually to the state’s general fund) and thousands of workers good-paying jobs. And a number of conservative Republicans believe the state should continue strict controls over alcohol sales.

 

But Monday’s hearing will feature no debate. There will be no witnesses to provide testimony, just committee members asking questions and voting on the measure. Republicans who control the House said the reason for that format is because privatization has been exhaustively debated for years – and that there is no reason to do so again.

 

Still, Corbett’s privatization proposal is different from ones floated in the past. And it is expected to be amended in committee Monday with even more changes.

 

House Republicans said their amendment would allow for the basics of Corbett’s plan: allowing supermarkets and convenience stores to sell alcohol. But it would also scale back Corbett’s aggressive approach to privatization.

 

The amendment calls for 1,200 wine and spirits licenses, and would allow the state’s beer retailers first crack at them. After that, other retailers, such as grocery stores, could apply for one.

 

But the amendment would not immediately shut down the state stores. According to information provided by House Republicans, their plan would try to phase them out over time – and may not achieve that in certain counties: for instance, under their plan, all state stores in a particular county would have to close, but only if there are twice the number of privately-owned wine and spirits stores, plus grocery stores, in that county.

 

It is a complicated formula, but House Republicans said they believe they have the votes for it.

 

“Our goal is to move this,” said Turzai. “I can tell you that our caucus is very engaged in the discussion and there is significant support for moving Pennsylvania forward.”

 

 

——

Oregon: Oregon bill would ban beer and wine from self-checkout lines

 

The Oregonian

By Jeff Mapes

March 15, 2013

 

Hey you! Forget about taking that six-pack of beer through the self-checkout line.

 

Take it through one of the regular checkout lines instead.

 

That’s what you might hear at your local grocery store if House Bill 2398 becomes law in Oregon.

 

The bill, which has set off a fight between the grocery industry and the United Food and Commercial Workers Union, will be up for a hearing at 8 a.m. Friday in the House Business and Labor Committee.

 

The bill would prohibit sales of alcoholic beverages, tobacco products and over-the-counter and prescription drugs in the self checkout lines.  Since stores already keep tobacco products and prescription drugs away from self-checkout lines, the bill would mostly affect beer, wine and over-the-counter medications.

 

Jeff Anderson, secretary-treasurer of UFCW Local 555 said his union sought the bill because their members face quick termination if they allow an under-age person to buy alcohol or tobacco — and it’s harder for workers to make sure they are stopping those sales if they’re watching several people go through the self-checkout line at one time.

 

“You should see some of these college kids,” said Anderson. “They’re having a field day running through these U-scans.  They’ll scan a six-pack of pop and then bag a six-pack of beer.”

 

Joe Gilliam, who heads the Northwest Grocers Association, said the self-check scanners haven’t caused clerks problems in weeding out underage buyers.  The equipment only allows sales to proceed after a clerk can check an ID or see that the buyer is clearly old enough.

 

One thing is clear, said Gilliam: if the bill became law, “it would limit the convenience for our customers…if you have just a six-pack, (the self-check lines) get you out of there right away.”

 

On Friday, legislators will also consider another bill relating to tobacco. House Bill 2870 would allow counties to levy their own tax on cigarettes and other tobacco products.

 

Multnomah County Chairman Jeff Cogen said the measure is widely supported by financially hard-hit counties looking for another source of income.  He said he’d like to put revenue from a local tobacco tax into improving health care, particularly for mental health.

 

The measure faces opposition from retailers who say it’s cumbersome to have different taxes in different jurisdictions — and who fear it will particularly hurt convenience stores that will lose sales to stores in neighboring counties with lower taxes.

 

House Bill 2870 will be heard at 8 a.m. in the House Revenue Committee.

 

Legislators on the House Higher Education and Workforce Committee will hold a hearing on legislation allowing Portland State University and the University of Oregon to establish their own governing boards.  House Bill 2149 will also be taken up at 8 a.m.

 

There are no floor sessions in either the House or Senate on Friday.

 

 

——

Connecticut: Lawmakers Considering Bill To Allow Beer To Be Sold In ‘Juice’ Pouches

 

Source: CBS

March 16, 2013

 

Connecticut lawmakers are considering a bill that would allow malt beverages and beer to be sold in pliable pouches.

 

The state’s liquor industry is pushing for the legislation, arguing that Connecticut is the only state that bans such packaging for malt-based products. Dwayne Kratt, senior director for government affairs at the North American headquarters of sprits company Diageo in Norwalk, said the same kind of packaging is used for many products such as sauces, juices and laundry detergents.

 

Connecticut’s Department of Energy and Environmental Protection opposes the bill.

 

DEEP argues that such containers cannot be recycled and the legislation runs counter to the state’s efforts to boost the rate of recycling and reuse in Connecticut.

 

The General Assembly’s Environment Committee is scheduled vote Monday on the legislation.

Liquor Industry News 3-12-13

March 12, 2013
www.franklinliquors.com

Franklin Liquors

 

Tuesday March 12th 2013

Today Is A Biodynamic LEAF Day.

Diageo overhauls its supply chain (Additional Information)

 

Source: FT

By Louise Lucas, Consumer Industries Correspondent

Mar 11th

 

Diageo, the world’s biggest distiller, is devolving supply chain operations to country level as emerging markets account for an ever bigger slice of sales.

 

The move will shrink regional operations, making annual savings of £60m after three years, and enable the maker of Johnnie Walker whisky and Smirnoff vodka to respond to the needs of its 21 key markets.

 

As emerging markets account for an ever bigger slice of sales – Diageo is targeting 50 per cent by February 2016 and is already at 43 per cent – multinationals are adapting their global footprints in areas including procurement and marketing.

 

Diageo said that recent acquisitions of local liquors in China, Turkey and Brazil changed the way the supply dynamics worked.

 

“A couple of years ago one big supply chain worked because we were selling mainly our premium brands and had a straightforward portfolio,” said a spokesman for the company.

 

“With the emerging markets getting bigger and acquiring companies with big local footprints, including their own supply basis, it makes more sense to be operated where the demand side is.”

 

Emerging markets sales grew 14 per cent year-on-year in the first half, compared with 5 per cent for the overall group, helping to increase operating profit 21 per cent.

 

Some of the strongest growth came from Latin America and the Caribbean, where sales were up 18 per cent. However, the fast growing Scotch category, in Latin America, Asia and Africa, offers less flexibility on supply – Scotch whisky has to be distilled in Scotland.

 

The shake-up of the supply chain follows a similar refocus of the group’s sales and marketing operations, which resulted in the global operation being broken up into five regional divisions and then into local markets.

 

The annual savings will kick in from financial year 2016 and there will be a £100m restructuring charge. Diageo said it was too early to say how many jobs would be affected.

 

As emerging markets grow in scale more companies are mulling how best to handle corporate services which have in the past decade or so been handled at regional level, with, for example, each country in a region possibly requiring only a couple of marketing executives.

 

Sukand Ramachandran, London head of operations practice at Boston Consulting Group, said: “Now companies are actively growing these markets and volumes have changed, so the question is asked: is my region adding value?”

 

Procurement, logistics and distribution is paramount in the drinks industry – brewers joke that they are in the business of logistics rather than beer.

 

Regulation, geography and infrastructure also play a part. Mr Ramachandran said that in the service sector, where regulations drive the need for controls on local countries, the regional role remains important.

 

In large countries with remote regions companies are being more creative in terms of distribution. In Brazil, both Diageo and AB InBev, the world’s biggest brewer, sell through branded bars. In the US, alcohol has to be sold via third-party distributors.

 

 

——

Scots jobs at risk as Diageo unveil restructure plans

 

Source: The Scotsman

By GARETH MACKIE

11 March 2013

 

DRINKS giant Diageo has unveiled plans to restructure its global supply operations in a shake-up that is expected to lead to job losses among its 4,000 employees in Scotland.

 

The maker of Johnnie Walker whisky and Smirnoff vodka said the overhaul, which is aimed at giving local management more responsibility in balancing supply and demand, is designed to save £60 million a year.

 

Diageo, headed by chief executive Paul Walsh, said the move will lead to one-off costs of about £100m as responsibility for local operations transfers to the group’s 21 “key” markets, and regional supply structures are reduced.

 

While a spokesman acknowledged that some jobs could be at risk as a result of the review, he said it was too early to tell what the impact will be.

 

He added: “Further work will be required to establish the exact nature of the reorganisation but there is likely to be some impact on employees.

 

“Therefore, as decisions are made, these will be shared with our employees and their representatives first and foremost.”

 

Unite’s national officer for the drinks industry, Jennie Formby, said the union noted yesterday’s announcement with “some trepidation” as it follows Diageo’s decision in 2009 to close its Johnnie Walker bottling works in Kilmarnock and the Port Dundas distillery in Glasgow with the loss of about 850 jobs.

 

She said: “Workers and communities are still smarting from the brutal decision to close those sites to cut costs. We will be looking for early assurances from management that our members won’t pay the price for this restructuring.”

 

Diageo said the shake-up of its supply operation, which spans the purchasing of raw materials and services through to production and distribution, follows a review of its entire operating model two years ago and is a result of its “increasing presence” in fast-growing markets across Africa, Asia, eastern Europe and Latin America.

 

These regions accounted for some 42 per cent of Diageo’s net sales during the first half of its financial year, pushing up demand for Scotch brands such as Buchanan’s. However, sales of J&B fell by almost a third as demand eased in France and Spain. To overcome falling sales across western Europe, the group is looking to tap into growing demand from the burgeoning middle classes in emerging economies such as India, where the alcohol sector is predicted to expand by 15 per cent annually over the next five years.

 

Last year, Diageo agreed to pay £1.3 billion for a majority stake in Vijay Mallya’s United Spirits, which owns Whyte & Mackay and has a 41 per cent share of the Indian market. It is also spending £23m to form a joint venture with Mallya to run United National Breweries’ traditional sorghum beer business in South Africa.

 

But the group surprised the market in December by pulling the plug on long-running talks to acquire Jose Cuervo, the world’s best-selling tequila, worth an estimated $3bn (£2bn).

 

It has since unveiled plans to develop its own tequila brand using a similar strategy to Ciroc, the premium vodka launched by the company in 2003 that enjoyed growth of 62 per cent last year.

 

The group did not give any timescales for the completion of its supply chain overhaul, which is expected to see some layers of management removed across its global operations.

 

It said: “An initial review has already established that efficiency-driven cost savings can be delivered which, together with savings from footprint changes and cost reductions in respect of the regional supply organisations, are expected to amount to approximately £60m per annum.”

 

 

——

Diageo PLC: Cost savings in greater supply

 

Source: Barclays

Mar 11th

 

Stock Rating/Industry View: Overweight/Neutral

Price Target: GBP 21.50 (from GBP 20.40)

Price (08-Mar-2013): GBP 19.94

Potential Upside/Downside: +8%

Tickers: DGE LN / DGE.L

 

Self-help underpins a robust top-line: The announcement of an incremental £60m cost savings initiative – worth 30p per share – follows a review of Diageo’s Global Supply and Procurement operations and comes on the heels of the 2011 Operating Model Review. The latter itself underpinned the group’s medium-term growth targets of c.6% sales growth and 200bps of margin expansion by F14e. With the price/mix story in spirits and Diageo’s core markets like the US gathering momentum, top-line enhancement to come from the USL deal, positive FX tailwinds and after underperforming SABMiller and Pernod by 9% and 8% respectively YTD (GBP adj.), there is greater scope for relative upside in Diageo in the near term, in our view. Following the earnings adjustments outlined below, we increase our price target to 2150p.

 

Aligning Global Supply and Key Markets: Diageo is enhancing the alignment between its Global Supply and Procurement operations and its Key 21 operating markets. As a result, local operations will be transferred to in-market subsidiaries and overall regional operating structures will be reduced in scale and reach. The company expects this programme to result in £60m of annualised cost savings by year three (F16e). Diageo expects to incur £100m of exceptional restructuring costs as a result. With the group aiming to continuously offset half of its COGS inflation via savings/efficiencies, and with work on identifying cost saving opportunities ongoing, there is still scope for the £60m savings target to rise further, in our view.

 

Benefits back-end loaded: Given that production savings often take longer to deliver than straightforward headcount reductions, we expect the benefits to be back-end loaded. We estimate incremental savings of £5m in F13e, a cumulative £20m in F14e, £40m in F15e and £60m in F16e. We expect the bulk of these savings to come in Europe and North America. The programme should drive 1.5% earnings enhancement over time – equivalent to a present value per share of c.30p. We expect the associated P&L exceptional costs to be phased £25m in F13e, £45m in F14e and £30m in F15e.

 

Earnings upgraded by 4-5% for saving and FX: We raise our estimates to reflect both the additional cost savings and recent sterling weakness. We increase our F14e group EPS forecast by 4.4%, (0.5% to reflect the new cost savings and 3.9% for FX – USD/GBP 1.49). Our F13e estimates are up by 0.8% to 103.3p.

 

 

——

Great Britain has a drinking problem; U.S. shouldn’t import it

 

Source: Daily Freeman

By Glenn Gilbert / The Oakland Press

March 10, 2013

 

The movie “Field of Dreams” produced a notion that has embedded itself firmly in the American psyche:

 

“If you build it, they will come.”

 

Research has consistently shown that is the case with facilities that sell alcoholic beverages. The more stores there are, the more alcohol that is sold – with its attendant increase in drunken driving, underage consumption, addiction and crime.

 

But a national deregulation movement that some say has been promulgated by the alcohol industry has taken hold in some states and is being pushed in others.

 

Deregulation may make sense in fields like energy, because the resulting competition leads to lower prices. But lower alcohol prices will spawn more alcohol consumption. Is that really what we want?

 

Good grief, we could end up like Britain, according to Pamela S. Erickson, a national leader in the fight against excess access to alcohol.

 

The United Kingdom is an example of what can happen in a totally deregulated environment, she said.

 

“Today alcohol is available in bars, clubs and grocery stores 24 hours a day, seven days a week,” Erickson said. “They have little regulation, poor enforcement and lots of cheap alcohol. The also have an alcohol epidemic on their hands.”

 

Four large grocery chains control 75 percent of the market, Erickson said. Most use alcohol as a loss leader, as they engage in price wars.

 

“Drinking at home has increased,” she said.

 

And there has been a large increase in public disorder crimes around bars – vomiting, urination, fights and vandalism.

 

“England has a drinking problem,” wrote Tim Heffernan in the November-December issue of Washington Monthly.

 

“Since 1990, teenage alcohol consumption has doubled. Since World War II, alcohol intake for the population as a whole has doubled, with a third of that increase occurring since just 1995. The United Kingdom has very high rates of binge and heavy drinking, with the average Brit consuming the equivalent of nearly 10 liters of pure ethanol per year,” Heffernan wrote.

 

The United States is in comparatively better shape.

 

“A third of the country does not drink, and teenage drinking is at a historic low,” Heffernan wrote. “The rate of alcohol use among seniors in high school has fallen 25 percentage points since 1980. Glassing is something that happens in movies, not at the corner bar.

 

“Why has the United States, so similar to Great Britain in everything from language to pop culture trends, managed to avoid the huge spike of alcohol abuse that has gripped the UK? The reasons are many, but one stands out above all: the market in Great Britain is rigged to foster excessive alcohol consumption in ways it is not in the United States – at least not yet.”

 

One state currently considering deregulation, Michigan, has good control of the industry, said Mike Tobias, executive director of Michigan Alcohol Policy Promoting Health and Safety. Michigan’s system of regulations has succeeded in helping reduce problems related to alcohol use.

 

Since 1997, underage drinking has declined significantly as measured by the Michigan Youth Risk Behavior Survey.

 

The number of Michigan teens who had used alcohol was 68.8 percent in 2009, down from 81.9 percent in 1997 and below the national average of 72.5 percent.

 

Alcohol use before the age of 13 was 18.8 percent in 2009, down from 34.9 percent in 1997, and lower than the national average of 21.1 percent.

 

Binge drinking among teens affected 23.2 percent of them in 2009, down from 32.4 percent in 1997 and below the national average of 24.2 percent.

 

With statistics like these, why would Michigan want to change its approach with legislation that would diminish verification requirements for alcohol license applicants, increase the number of resort liquor licenses and allow beer to be shipped directly to consumers? Why would any state?

 

 

——

51 Die in Libya From Homemade Alcohol

 

Source: ABC News

By ESAM MOHAMED

March 11, 2013

 

Libya’s Health Minister says 51 people have died over the past three days from drinking homemade alcohol that contained poisonous methanol.

 

Minister Nouri Doghman says another 330 people were injured from the alcohol since Saturday.

 

He said Monday that some were blinded, while others went into comas or suffered kidney failure.

 

He says the dead range in age from 19 to 50 years old, and that Algerians and Tunisians are among the dead.

 

The sale and consumption of alcohol is banned in the conservative North African country. Like illegal drugs elsewhere, some Libyans turn to black market dealers to buy alcohol, which is often cooked in people’s homes or deserted farms.

 

The ministry says it is investigating the case.

 

 

——

Two years too long? Pernod Ricard’s lengthy CEO succession is a long wait between drinks

 

Source: BRW

Michael Bleby

12 March 2013

 

Two years too long? Pernod Ricard’s lengthy CEO succession is a long wait between drinks

 

Succession planning is a good thing, but sometimes you wonder if it’s overdone. Just ask Alexandre Ricard. Ricard was 40 last year when he was named chief executive-designate of Pernod Ricard, France’s biggest distiller. It was a great gig to land, but he won’t take the job for another two years.

 

It makes things awkward because way in advance of taking the job, people wonder what you’ll do differently when you’re in charge. It’s a question journalists like to ask. It can be more awkward when they ask and you’re sitting next to the current CEO – to whom you report and will do so for the next couple of years.

 

Of course, you don’t become CEO-designate of a company like Pernod Ricard if you’re not someone who can parry a journalist’s questions with ease.

 

“It’s probably a question for another couple of years’ time,” Ricard said without missing a beat. “But in the meantime, and I think the best way of saying it is that the current strategy of Pernod Ricard under Pierre’s leadership is delivering, clearly.”

 

Sitting right next to incumbent CEO Pierre Pringuet in a joint interview last week, Ricard then proceeded to go through the details of that strategy.

 

“I don’t see why this would change,” he said. “These have been the clear drivers of our value creation and our success, our collective success.”

 

Ok, so he’s a team player, and a smooth one at that, speaking American-accented English that he no doubt perfected while earning his MBA at the University of Pennsylvania’s Wharton business school.

 

But you do get a hint that the next man at the top, who will only ascend in June 2015 when Pringuet retires, will be more toned-down in style. If you ask his boss Pringuet how the company’s flagship wine Jacob’s Creek – traditionally seen as a middle-ground drop – can compete in the race to China’s fast-growing premium wine market with rival Penfolds’ wide suite of top-label wines, he gives a blunt response.

 

Pringuet, a former French civil servant, is disdainful of comparisons of his company with Penfolds owner Treasury Wine Estates.

 

“The answer is very simple,” he says. “Look at the P&L and look at the company which is profitable and I think you have the answer to your question.”

 

Hubris is a great tool, but can leave you open to attack. Pernod Ricard last month reported a 5.8 per cent increase in its half-year operating profit to ?1.46 billion ($1.85 billion), while over the same period, TWE’s earnings before interest and tax fell 20 per cent from a year earlier to $73.4 million. Of course, over the past year, the French company’s 26 per cent share-price rise is nearly doubled by TWE’s 48 per cent gain.

 

At this point, Ricard steps into the conversation, dispensing diplomacy

 

“Just to add – one of the key strategic pillars to our strategy is premiumisation,” he says. “We have embarked on a premiumisation strategy a few years ago which is clearly delivering results – if you look at our P&L indeed. Both in terms of driving price by investing behind the brands, Jacob’s Creek being the key one, by driving trade-up into our reserves portfolio – Jacob’s Creek Reserves – by driving up as well into our higher marques such as St Hugo. And this is something that we’re doing across all markets.”

 

Pringuet sees less need to be diplomatic. He goes back to his point.

 

“And making profits.”

 

Ricard’s anointing last year happened a bit hurriedly. He had long been seen as the heir-apparent, but the company behind Absolut Vodka was plunged into crisis in August with the sudden death of chairman Patrick Ricard, Alexandre’s 67-year-old uncle. Patrick Ricard, the chief executive for 30 years until he handed over to Pringuet in 2008, mattered. He was the man who had built up the business started on the kitchen table of his father’s house, into a global giant. In 2006, Fortune magazine named him European businessman of the year. In 2007 he received France’s highest honour, the Legion of Honour.

 

Less than two weeks after his death on August 17 – reportedly from a heart attack – the company stated that Alexandre Ricard would step up from his role of managing director for distribution to that of chief operating officer and deputy CEO. The decision, Pringuet says, had already been made “a couple of years ago” and all that happened after Patrick Ricard’s death was that the announcement was brought forward from the November annual general meeting.

 

Ricard now has a couple of years to polish his style further before restoring family leadership to the company founded by his great uncle in 1932 (Pernod, with which it combined in 1975, was established in 1805).

 

But perhaps he won’t be so different to Pringuet after all, if family history is any guide. In 2002, the New York Times reported that after the company had bought Glasgow’s Chivas Regal, the UK’s Guardian newspaper stated: “The one challenge which Pernod is yet to overcome is to teach the British to enjoy a shot of Ricard (pastis) each evening”. Patrick Ricard’s response was suitably glib: “If one day we find a way to convince you, we will do so. You could always improve your taste.”

 

Maybe Alexandre Ricard is just biding his time – and his tongue. It would certainly make the next two years easier.

 

Disclosure: The writer holds TWE shares.

 

 

——

Strength in craft beers being helped by their higher average on-premise checks

 

Source: GuestMetrics

March 12, 2013

 

According to GuestMetrics, based on its POS database of over $8 billion in sales, the strong performance in craft beers is likely being at least partially driven by the higher average check by patrons who purchase craft beers, making the craft segment more attractive to restaurant operators.

 

“In analyzing the average check amount across the two billion checks in our system for table service restaurants and bars, the average check for craft beers is significantly higher than most of the mainstream beer brands,” said Bill Pecoriello, CEO of GuestMetrics LLC. “Based on our data, when a patron orders a craft beer, the average check is around $80, which is well above that of the largest beer brands.  In contrast, the average check is $63 when a Budweiser is ordered, $62 for Coors Light, $60 for Miller Lite, and $52 for Bud Light.  Perhaps surprisingly, the average check when a Yuengling is ordered is only $55, so while we believe there is still plenty of room left for Yuengling to grow as it expands its distribution footprint, there is risk that restaurant operators don’t push as hard on selling the brand given its lower average check size.”  

 

“At the other end of the spectrum, there are several large brands that actually have average check amounts above that of craft beers.  Heineken came in at the top at $89, followed by Stella Artois at $84, Guinness at $83, and Sam Adams at $81,” said Peter Reidhead, VP of Strategy and Insights at GuestMetrics.  “And to round out the picture of the top dozen brands, Corona Extra, Blue Moon, and Dos Equis all had average check amounts below the average for craft beers at $72, $67, and $65, respectively.”

 

“When we factor in the average time spent at the restaurant or bar for each transaction in minutes, the story does not change materially.  The average check amount per minute spent in the restaurant/bar for craft beers is around $1.00, while that of Heineken remains at the top of the group at $1.25, and Miller Lite, Bud Light, and Yuengling have the lowest average check per minute at $0.76, $0.71, and $0.65, respectively,” said Brian Barrett, President of GuestMetrics. “As restaurant operators become increasingly sophisticated in the age of big data, we believe viewing the total amount of money spent on each check depending on which beer brand is ordered will ultimately help the operators optimize their overall sales and profits.”       

 

About GuestMetrics LLC

GuestMetrics, LLC is revolutionizing how the hospitality industry operates.  Despite the dawn of the Digital Age having begun more than three decades ago, the hospitality industry essentially functions the same way it did centuries before.  GuestMetrics has cracked the code by collecting $8 billion dollars in sales from over 250 million checks from tens of thousands of restaurants, and turning billions of raw transactions into intelligible data that is fundamentally transforming the business operations of everyone from the independently-owned bar/restaurant on the corner, to multi-national chains, to the food & beverage companies that supply them.  Please visit www.GuestMetrics.com for more information and to arrange for a free demonstration.

 

 

——

CEDC Jumps in New York on Debt Swap as Kaufman Cuts Stake

 

Source: Bloomberg

By Halia Pavliva

Mar 11, 2013

 

Central European Distribution Corp. (CEDC), Poland’s second-biggest vodka maker, rose the most since the end of January in New York after a shareholder reduced his stake and the company announced a new debt swap offer.

 

CEDC, as the maker of the Bols, Zubrowka and Zelyonaya Marka brands is known, surged 13 percent to 45 U.S. cents by the close of trading in New York, trimming this year’s tumble to 79 percent. Trading volume was almost four times the average of the past tree months, according to data compiled by Bloomberg.

 

The new offer reflects terms agreed by CEDC’s biggest shareholder Roust Trading Ltd. and a steering committee of holders of 30 percent of the company’s 2016 notes, according to a statement dated March 8. The plan would give Roust 85 percent of CEDC equity and require other holdings to be reduced to 5 percent. Investor Mark Kaufman, who backed another restructuring plan and has criticized CEDC management, sold about 3.5 million shares last week, cutting his stake to below 5 percent, according to data compiled by Bloomberg and a filing.

 

“The company will now have a better chance to survive as Mr. Kaufman is selling shares,” Krzysztof Kuper, an analyst at Ipopema Securities SA (IPE) who rates CEDC’s U.S. stock hold, said by phone from Warsaw. “Chances for a successful debt restructuring are now higher.”

 

CEDC, based in Warsaw, erased about 50 percent of its market value in 2012 amid slumping sales, rising liabilities and management transitions. Revenue fell 8.7 percent in the third quarter to $191.3 million, after shrinking in the previous two quarters, data collated by Bloomberg show. Chief Executive Officer William Carey stepped down in July.

 

The restructuring aims to reduce CEDC’s debt by as much as $635 million. The company’s shares in Warsaw ended the day 5.8 percent higher at 1.65 zloty, or 52 cents.

 

 

——

Bidders circle £1bn bid for Lucozade and Ribena

 

A £1bn bidding war for Lucozade and Ribena is bubbling up with a raft of private equity firms from Blackstone to Permira considering potential offers for the brands.

 

Source: Daily Telegraph

By Helia Ebrahimi, Senior City Correspondent

11 Mar 2013

 

GlaxoSmithKline chief executive Andrew Witty signalled last month that he wanted to offload the brands, which he described as two of Britain’s most iconic home-grown drinks.

 

An auction is not likely to be launched for some months, but buy-out firms have begun running a rule over the division.

 

Sources suggest that one potential scenario could see Blackstone team up with Lion Capital, the firm behind GHD and All Saints, with ex-Barcadi boss Javier Ferrán taking the role of chairman. The two firms worked together on the buy-out of Orangina before selling the company to Japan’s Suntory in a ?2.6bn (£2.3bn) deal. However, Lion is currently restricted in the amount of money it can invest because of the limited amount of capital left in its fund.

 

Permira, KKR, Bain and CVC are also expected to have an interest. However, drinks-maker Britvic, which had been tipped as the most likely bidder, is thought to be constrained by the likely price tag – as well as potential competition issues.

 

Other potential suitors include corporate buyers like Suntory and Nestle, which would be able to leverage significant synergies from their global infrastructure network.

 

GSK has not yet appointed a bank to run the auction but insiders suggest consumer rainmaker Blair Effron at boutique bank Centreview is the most likely choice.

 

In February, Mr Witty said the brands’ combined sales were £750m but that they remained “poles apart” from the core strategy of GSK’s £26bn pharmaceuticals empire.

 

According to research from Nielsen, Lucozade was the second-biggest soft drinks brand in the UK last year, with two thirds of its sales home grown and the rest coming from Nigeria, Singapore and a fledgling business in China.

 

 

——

Kirin Brewery Co ramps up frozen beer launch (Excerpt)

 

Source: Just-Drinks

By Andy Morton

11 March 2013

 

Kirin Brewery Co is to bring its frozen beer innovation, Ichiban Shibori Frozen Nama, to the world.

 

The Japanese brewer said the brand, which uses a machine to cover the beer with an ice-cold foam head, has been well received in tests in Hawaii, Shanghai and Singapore, and a global launch is lined up for this year. Markets will include New York, Los Angeles, Haiwaii, Florida, Shanghai, Hong Kong, Taiwan, South Korea, the UK and France, a Kirin spokesperson told just-drinks today (11 March).

 

 

——

C&C Group completes acquisition of Gleeson Group

 

Source: DBR

11 March 2013

 

Ireland-based C&C Group said that it has completed the acquisition of M & J Gleeson and its subsidiaries.

 

C&C Group is a manufacturer, marketer and distributor of branded cider and beer.

 

The Group manufactures Bulmers, the leading Irish cider brand, Magners, the premium international cider brand, the Gaymer Cider Company range of branded and private label ciders and the Tennent’s beer brand.

 

C&C Group also owns Woodchuck and Hornsby’s, two of the leading craft cider brands in the US.

 

The Group also distributes a number of beer brands in the Scottish, Irish and Northern Irish markets, primarily for Anheuser-Busch InBev.

 

 

——

NABCA 20th Annual Legal Symposium – March 11, 2013 to March 13, 2013

 

Source: NABCA

Mar 11th

 

NABCA’s 20th Annual Legal Symposium begins this evening with registration and networking.

 

On Tuesday, March 12, sessions begin at 8:30 AM with topics that include: The Three-Tier System: It Survive? Should it Survive?; 21st Amendment Litigation 2013: Commerce Clause, Antitrust and More; and Can the First Amendment Save Controversial Packaging. Concurrent sessions will be held in the afternoon. Topics to be discussed are: Alcohol Regulation by Demographics; Using Social Media to “Sell” Regulation; Responsibility Success Stories; Revising State Regulation; Ethics: Cowboy Ethics (for Regulators) and Ethics:  The Organization as Client (for Lawyers).

 

On Wednesday, March 13, there will be three main sessions:  I-1183 + One; Alcohol Server Liability: The State of Play; and The FAA Act and Exclusion. The Legal Symposium will adjourn at 12 PM.

NABCA anticipates having a great symposium and looks forward to seeing all of the participants. Be on the lookout for summaries about some of the sessions via the Daily News Update, which we will send at the end of the day on Tuesday and in the late afternoon on Wednesday.

 

NABCA will also be Tweeting from the sessions and providing some updates via our Facebook page.

 

 

——

BOOKS: Kentucky Bourbon Whiskey, An American Heritage

 

Source: Ace

BY TIM KNITTEL

March 11, 2013

 

I finished reading Kentucky Bourbon Whiskey, An American Heritage in two days and referenced it repeatedly over the next three. I think that qualifies as a ringing endorsement.

 

As a bourbon education professional, my usage of bourbon historian Mike Veach’s new book as a reference might be unusual. Or perhaps not.

 

Veach is generally considered to be the foremost bourbon historian in the world. He is associate curator of Special Collections at the Filson Historical Society in Louisville, Kentucky and an inductee into the Bourbon Hall of Fame. He regularly teaches classes on bourbon history and appreciation to sold-out crowds.

 

One of the special things about Mike Veach is that he leaves a trail of rare, unique and specialty bourbons in his wake.  He opened two ‘very special’ bottles for the recent launch party at the Filson Society – a 1918 Old Crow and a 1955-56 Old Fitzgerald. (It may be no surprise that the history of both brands are covered at least in part in his book.) I was fortunate enough to get to try both. (I stood next to Mike with an empty glass and begged.) Someone asked him how he comes up with the old and rare bourbons. “People give them to me,” he said

 

This book has been in the works since 1991 when Veach was hired to curate the archives of the Stitzel-Weller distillery. Since then he has been fully immersed in bourbon’s history, working with several spirits companies and the Filson Society.

 

Kentucky Bourbon Whiskey is clearly intended to be an academic reference. It is published by the University Press of Kentucky and has citations and references like a thesis. But that’s just one face of it – it’s also a fascinating read.

 

The book traces the path of bourbon’s origin, growth, collapse, growth again, collapse again and final rebirth as the modern spirit now sweeping the world. This is the story of bourbon – how it was influenced by the development of America and how it influenced America back.

 

The story starts with the founding of the United States, weaves through many wars, the Industrial Revolution, Prohibition, the Great Depression, and concludes in the modern era. People may not be aware – and might not even have been aware at the time – but bourbon has been at the heart of many of the major social and government movements including the taxation system, food and drug regulation, marketing conventions, trademarks and more.

 

“The history of the bourbon industry is a rich one that mirrors the history of America. The Whiskey Rebellion reflects the troubles that the newly united states had coalescing under a federal government. The whiskey tax, which sparked the rebellion, was the first federal tax and prefigured all others, especially the federal income tax. The changes wrought by the Industrial Revolution can be seen as the modernization of distilling technology writ large.”

 

Bourbon’s history is as much lore and legend as its fact and fiction, and maybe moreso. Veach does an excellent job incorporating the legends into his history and analyzes each from a historical accuracy perspective as well as the influence legends had on consumers’ embracing or snubbing of bourbon at various times.

 

The book won’t help to settle bourbon legend disputes because, as Veach writes, “the fact is that we may never know the identity of Kentucky’s first distiller.” Veach provides excellent reason as to why it probably wasn’t Evan Williams, Elijah Craig or anyone else whose name we knew today. But that doesn’t diminish the fun of telling those tales!

 

Kentucky Bourbon History is a fascinating exploration for anyone interested in U.S. history, Kentucky history and, obviously, bourbon history. For bourbon professions this is a must-read. For bourbon enthusiasts, it will top the want-to-read list.

 

http://www.amazon.com/dp/0813141656/ref=as_li_ss_til?tag=lipawe-20&camp=213381&creative=390973&linkCode=as4&creativeASIN=0813141656&adid=03TVMJPKVQY0YHMQ8WYJ&&ref-refURL=http%3A%2F%2Fwww.aceweekly.com%2F2013%2F03%2Fbooks-kentucky-bourbon-whiskey-an-american-heritage%2F

 

 

——

Oregon wine industry heats up with talk of ‘significant’ California investment

 

Source: The Oregonian

By Dana Tims

March 08, 2013

 

The wine-grape factory that is the Eola Hills is buzzing with word that a major California wine producer is buying vineyards in the area with an eye toward significant future investments.

 

If it’s true, the infusion of cash and acclaim could represent the biggest bump for Oregon’s $2.7 billion commercial wine industry since Robert Drouhin startled the wine world a quarter century ago by being the first French investor in the state’s viticultural future.

 

Wine writers for the past two weeks have been chasing information that Jackson Family Wines, the Napa-based owner of Kendall Jackson, LaCrema and other prominent brands, has bought, or is in the process of buying, two large vineyards in the Eola-Amity Hills area of Polk County.

 

The two parcels, totaling 460 acres, were developed by Premier Pacific Vineyards in the mid-2000s, before the Napa-based company sold its Oregon holdings.

 

Richard Wollack, Premier Pacific’s managing trustee, said this week the stories are true.

 

“It appears that Kendall Jackson bought two of the properties that we developed,” he said. “And they are really good properties. They were developed with the state of the art.”

 

Wollack said Oregon’s ability to produce pinot noir grapes — a preferred varietal of Jackson Family Wines’ LaCrema label — explains the growing interest in doing business here.

 

“We believe that Oregon is America’s Burgundy,” he said. “Probably the best indication of that is that you can’t go to a decent restaurant anywhere in the country that doesn’t have an Oregon pinot noir on the wine list. Ten years ago, that would have been unheard of.”

 

Aimee Sands, Jackson Family Wines’ senior communications manager, declined Friday to address specifics, saying, “We do not discuss rumors or speculation nor do we share details around grape purchases or wines prior to release.”

 

She added, “However, as specialists in cool-climate varietals we’ve always focused on exploring the finest growing regions for Pinot Noir and Chardonnay, and the Willamette Valley has an excellent reputation.”

 

Dundee winemaker Joe Dobbes, reached Thursday at a trade event in Chicago, said he has signed a contract with LaCrema calling for him to make a “significant” amount of pinot noir for that label from grapes harvested in Oregon last fall.

 

Dobbes said he could not comment, though, on whether the company has bought vineyards in the state.

 

“But if they decide to make a permanent play in Oregon, I think that’s a good thing to have a major serious producer with large distribution working here,” said Dobbes, whose company, Wine By Joe, has received two significant infusions of cash in the past year from Bacchus Capital Management, a San Francisco- and New York-based investment firm. “We’re still a young and fledgling industry, but clearly, the snowball is rolling downhill and it’s getting bigger.”

 

Ted Casteel, a partner in Bethel Heights Vineyard northwest of Salem, said one of the two targeted properties, a vineyard named Zena East, is part of a “necklace” of vineyards ringing the Eola Hills.

 

Casteel added that a close friend, whom he declined to identify, has been approached by Kendall Jackson executives.

 

“Several of them came up on private jets for a day and stated their intention of investing in Oregon,” Casteel said. “It looks to me as if it’s only a matter of time.”

 

Kevin Chambers, past president of the Oregon Wine Board and chief executive of Oregon Vineyard Services, has heard the stories, too. He is convinced something official is bound to break soon.

 

“It’s really the talk of the town,” he said. “There’s too much smoke for there not to be fire pretty close by.”

 

 

——

Celebrities uncork the wine business

 

Source: USA Today

Donna Freydkin

March 10, 2013

 

Fergie, Drew Barrymore and even Brad Pitt and Angelina Jolie are launching their own blends.

 

Star-powered clothing lines are so vintage.

 

There’s a new trend bubbling up: celebrity sommeliers.

 

Fergie just released her Ferguson Crest libations, from the Santa Barbara winery she founded with her father in 2006. Drew Barrymore unveiled her Barrymore Pinot Grigio, which hails from the Triveneto area of Italy. And without question, the most famous oenophiles-to-be are Brad Pitt and Angelina Jolie, who are launching a rosé called Miraval from their French chateau (the wine sold 6,000 bottles via online orders within six hours Thursday) with whites to follow. It’s a passion project in which Pitt and Jolie “are intimately involved,” according to a statement Pitt gave to Bloomberg.

 

So what’s behind the surge in bold-faced oenophiles?

 

“My wines are about having a dream and making it come true,” Fergie says. “It’s something for a father and daughter to share together. It’s coming from the inside out. It’s not about having a huge business.”

 

Same goes for Barrymore. “I love wine, especially Pinot Grigio. It’s what I drink with my girlfriends,” she says. “It feels so right when you’re sitting around a table having food and wine. I really wanted to start with a wine I was familiar with myself. I wanted it to be something that’s really from my family. That’s my grandfather’s crest on the label. I wanted to honor the tradition of family.”

 

Fergie, too, says her potables come straight from the heart and are a reflection of her California-based upbringing. After three decades of teaching, her father retired, left Los Angeles and decided to get into the wine business.

 

“He wanted to retire and move north and grow grapes. It was really special. And we thought, ‘Let’s not only bottle this for ourselves, let’s share it.’ I was always a big wine person. When I was little, my uncle would have these wine-tasting parties at our house. I learned that wines are about the smells and the experience as opposed to just chugging something to get drunk.

 

“It’s a social thing and a way for families to get together. It’s something I learned about and was excited about. Being a musician, wine and a good concert go hand-in-hand. Who doesn’t put on a nice record and have a nice bottle of wine?”

 

Famous names with booze brands are nothing new. Sammy Hagar has had Cabo Wabo tequila since 1996, and Willie Nelson is the proud name behind Old Whiskey River bourbon. But the latest crop of grape purveyors is decidedly A-list, with thriving careers independent of their ventures. And their offerings are equally impressive: Barrymore’s Pinot Grigio is sold at the upscale Eataly wine emporium, for example, where inventory is tightly curated.

 

She plans on launching more wines down the line, maybe one every few years, but she is in no rush.

 

“I want this to be the first in a curation of wines from around the world,” she says. “I get to go and search for them and have these great adventures. I want to pick great, great wines. This was a great way to start. It took me three years to get it off the ground.”

 

If you’re unsure about trying one of the wines, just think about the star responsible for the bottle and what he or she represents.

 

“Looking at the celebrity whose name is behind it would help,” says Gwendolyn Osborn, Wine.com‘s director of education and content. “A reality TV star may not be as focused on quality as they are on brand image, where a serious movie artist may be more likely to invest more into producing something of substance. When you taste and even read about Drew Barrymore’s entry into wine, she had a goal for taste and how it was to represent her. I liked it! I thought it was fun and fruit-forward and lively.”

None

 

Brad Pitt and Angelina are launching a rosé called Miraval from their French chateau. Already, it’s a hot seller online.

 

As for the Jolie-Pitts: “They will probably also make a quality product. They have partnered with the best in the region, they have a tie to the place where they are making the wine, and I think they have a true goal to have this wine reflect its place and its history,” Osborn says. On Thursday, the wine sold for ?105 ($139) for a six-bottle case or a little more than $23 a bottle, the Associated Press reported.

None

 

Miraval Cote de Provence is the first wine to be sold from a vineyard owned by Brad Pitt and Angelina Jolie.

 

When it comes to celebrities and whatever outside brands they launch, there has to be a clear connection between the person and product for a chance at long-term survival, never mind any guarantee of success.

 

“It has to be an authentic fit,” says Jessica Stark, one of the powers behind Pauly D’s brand of REMIX cocktails. “We are not going to hook a celebrity up to a liquor brand or create a liquor brand for a celebrity just because it seems to be the hot item of the moment. There has to be a sustainability factor between the celebrity and the product. If it’s not there, you are sunk.”

 

 

——

Antinori opens to the public for first time

 

Source: the drinks business

by Lucy Shaw

11th March, 2013

 

The wine cellars of renowned Tuscan estate Marchesi Antinori have opened to the public for the first time in the company’s 628-year history.

 

After seven years of planning, the family-owned company has opened the Marchesi Antinori Chianti Classico Cellar – a state-of-the-art facility in the Tuscan village of Bargino.

 

The facility, in Chianti Classico, offers guests the chance to explore the family’s 628-year winemaking history and their centuries-old art collection.

 

In addition, visitors will be given tours around the new cellars, designed by leading Italian architect, Marco Casamonti.

 

Set among olive groves, vineyards and oak trees, Casamonti designed the cellars to blend in harmoniously with the Tuscan landscape.

 

The majority of the expansive site is underground, concealed within a hill. From the outside, only the winery’s restaurant terrace overlooking the vines is visible.

 

The project, including a restaurant, auditorium, museum, book shop and wine shop, was masterminded by the 25th and 26th Antinori generations.

 

Dotted throughout the building are sculptures by contemporary artists specifically commissioned for the space.

 

The entire Antinori portfolio will be available for sample in the tasting room.

 

The ?20 admission cost includes a three-wine tasting, with the more expensive and rare wines like Solaia and Tignanello available to taste at an additional cost.

 

The site is open daily from 10am-4pm, with the restaurant expected to open for business in the next few weeks.

 

Antinori is credited for helping to kick start the “Super Tuscan” revolution in the 1970s with Tignanello, made from Sangiovese, Cabernet Sauvignon and Cabernet Franc.

 

 

——

‘Stupendous’ Vega Sicilia collection goes under the hammer

 

Source: Decanter

by Richard Woodard

Monday 11 March 2013

 

A ‘stupendous’ selection of Vega Sicilia wines shipped direct from the legendary producer’s cellars is to be auctioned by Sotheby’s in Hong Kong early next month.

 

Among the lots in the Sotheby’s sale at the Hong Kong Convention and Exhibition Centre on 4 April is a vertical of 22 magnums of Vega Sicilia Único, including vintages from 1970 to 1999.

 

The lot, which comes from the personal collection of managing director Pablo Álvarez, is expected to fetch HK$95,000-160,000 (US$12,250-20,600).

 

There are 234 Vega Sicilia lots in total, including 42 vintages of Único from 1941 to 2002 in multiple formats – with one lot of six bottles of the 1942 estimated to sell for HK$80,000-120,000 (US$10,000-15,000).

 

The sale also features the winery’s Reserva Especial and Valbuena No. 5 bottlings, as well as group wines Alión from Ribera del Duero, Pintia from Toro and Tokaji Oremus from Hungary.

 

Describing the collection as ‘stupendous’, Serena Sutcliffe MW, international head of Sotheby’s Wine, said: ‘Vega Sicilia is \a wine that has “soul”, with its own personality, honed over the years while, at the same time, it is a true reflection of its region, climate and the area’s oenological traditions.’

 

The sale, comprising 620 lots expected to raise a total of HK$14.8-21.2m (US$1.9-2.7m), also includes fine wines from Bordeaux, Burgundy, the Rhône Valley and California.

 

It comes the day after Sotheby’s stages the Asian leg of its auction of wines and memorabilia from famed Spanish restaurant El Bulli, and the eleventh part of the sale of The Classic Cellar From A Great American Collector.

 

 

——

Pennsylvania: State Lawmakers Tackle Liquor Sales

 

Source: CBS Philly

By Tony Romeo

March 11, 2013

 

State lawmakers return to Harrisburg today after a break for budget hearings, and members of the State House will find the privatization of liquor sales sitting on the front burner.

 

The odds are shrinking that any liquor privatization plan and the complete elimination of state stores may clear the legislature.

 

Last week, the majority leader of the House signaled that he wouldn’t take a hard line on that issue and a few days later, at an event in Gettysburg promoting his liquor plan, Governor Corbett indicated the same.

 

The governor says he still prefers the entire elimination of state stores.

 

Governor Corbett says, “we can’t just do it half way.”

 

Corbett also indicated he would not rule out consideration of an alternative plan sent to him by the legislature.

 

Mr. Corbett says, “I’d be foolish to say ‘no’ at this point in time, wouldn’t I?”

 

The House majority leader, meanwhile, says a committee vote on a liquor bill is expected next week, and a floor vote could come later that week.

 

 

——

Texas: Brewers, distributors said to reach compromise on beer legislation

 

Source: Chron.com

Monday, March 11, 2013

 

A long day of negotiating has yielded a buzzer-beating compromise that could lead to passage of the most significant legislation affecting the beer industry in 20 years, report Scott Metzger and Rick Donley in Austin.

 

“I feel good,” said Metzger, the Freetail Brewing Co. founder who has been negotiating on behalf of the Texas Craft Brewers Guild.  ” . We’ve come a long, long way from the beer bills of the past.”

 

Metzger, whose San Antonio brewpub would be able to expand dramatically with passage of one of the bills, said an agreement in principle was reached after hours of talks among the Brewers Guild, the state’s major distributor groups, major beer companies and Open The Taps consumer organization.

 

Final language is being prepared and Metzger said an announcement could come within 24 to 48 hours.

 

Donley, president of the Beer Alliance of Texas, said the talks – under pressure to meet  a 5 p.m. deadline – created a “framework” for getting the bills passed.

 

“I would say the percentages went dramatically up,” he said.

 

Both men declined to provide details of the agreement, but Metzger said it scales back Senate Bill 639, a late addition to the legislative mix that was supported by the Wholesale Beer Distributors of Texas, and makes only minor tweaks to Senate Bills 515-518, the package favored by the small brewers. The latter bills would, among other things, allow small brewers to sell a limited amount of beer directly to consumers for on-premise consumption and would allow brewpubs like Freetail to package some of their beer for sale in outside retail accounts.

 

“Obviously, everybody gave something,” said Donley, who had spoken out strongly against   SB 639. He said the compromises will be good for the three-tier system in Texas and for the state’s burgeoning number of craft brewers.

 

For more specific background on the bills and the legal wrangling to date, read this, this, this and this.

 

Metzger said the legislation, if passed, would be the most significant for the industry since the bill authorizing brewpubs in 1993.

 

He expressed thanks to state Sen. Leticia Van de Putte, D-San Antonio, who led a year-long series of pre-session talks to iron out differences between stakeholders; state Sen. Kevin Eltife, R-Tyler, who sponsored SB 515-518; and state Sen. John Carona, R-Dallas, who chairs the Business and Commerce Committee and who filed SB 639.

 

Carona last week ordered the various interest groups to come up with a compromise following a committee hearing in which his bill was lambasted by a string of pro-business groups. He gave a 5 p.m. Monday deadline and threatened to delay the legislation if it was not met.

 

 

——

Washington: Privatization of liquor industry hurting small Washington liquor stores

 

Source: statesmanjournal.com

Written by Associated Press

Mar. 10

Bonnie Roulstone’s business thrived when the state controlled the liquor business, and is fighting to survive now that it’s out.

 

She’s watched sales at her Clearview Spirits and Wine store plummet as competitors proliferate and new rules wrought by the voter-ordered privatization of the booze industry take root.

 

“It’s very questionable if I can keep going,” she said of the three-year-old store that operated under contract with the state before the change. “I would have had to (close) if I didn’t have other resources.”

 

She expected the cash register to ring less often when the state stopped selling hard liquor last June, just not this much less.

 

“There’s more competition. That’s what this was all about. I understand,” she said. “Coming out of the gate I knew I would lose 30 percent of my walk-in customers who can go get their liquor at the grocery store. I planned for that.”

 

What she, owners of other contract stores like her and buyers of state-owned stores through auction didn’t expect is a requirement that they charge a 17 percent fee on sales to bars and restaurants.

 

That rule cost her significant business as restaurateurs switched to buy from distributors who are not required by the law to impose the fee. Now she’s joined an alliance of small and large retailers, including Costco, to get lawmakers to erase the fee.

 

“I feel I can compete with anyone if I have a level playing field,” she said. “Right now the field is not level.”

 

She felt confident enough in the months after Initiative 1183 passed in November 2011 to set about opening a second store in Monroe. It is larger and she stocks a greater number and variety of craft distilled spirits, handcrafted beers and wines.

 

She knows it is a risky venture but she’s looking for privatization to pay dividends in much the way a state-run system did before.

 

“I hope that the niche we’re going after will be successful,” she said. “I think it’s going to come down to a few specialty stores and a lot of big-box retailers. I hope that we will be in the business.”

 

Voters overwhelmingly booted the state out of the liquor business when they passed Initiative 1183.

 

At that time, there were 329 stores in Washington — 167 state-owned and 162 contract — where you could buy a pint of vodka, fifth of bourbon or unique distilled spirit. And no matter which one you shopped at, the prices were the same.

 

Today, nine months after the law took effect, there are 1,428 places with licenses to sell spirits, a four-fold increase. Snohomish County had 25 stores before the initiative and, as of last week, 157 licenses to sell hard liquor had been issued, according to the state Liquor Control Board.

 

Yet while customers celebrate more places to shop, they are unhappy prices are mostly higher than when the government ran the industry.

 

“The consumer got shafted,” said state Sen. Mike Hewitt, R-Walla Walla, who is in the middle of talks about changes in the law. “It is very unlikely the prices will ever come back down to where they were.”

 

Backers of the initiative said it’s too soon to draw such conclusions because there is more that can be done to increase competition and lower prices.

 

“We have to see the market fully develop,” said Julia Clark, government affairs director for the Washington Restaurant Association. “It’s starting to work. Anecdotally I do hear prices are falling for some of our members.”

 

Opponents of Initiative 1183, however, are in a bit of an I-told-you-so mood.

 

“The promise of convenience has been borne out,” said John Guadnola, executive director of the Association of Washington Spirits and Wine Distributors. “The promise of lower prices has turned out be completely false.”

 

Not every liquor retailer is cashing in on privatization.

 

Twenty-nine stores have closed since June 1, according to the state. This includes 14 former contract stores and 15 stores auctioned off by the state. The tally includes stores in Everett, Edmonds and Mukilteo.

 

Those closures are providing fodder for a debate in Olympia on whether to do away with the 17 percent fee imposed on sales from retailer to restaurant.

 

Right now, in the battle for the business of restaurants, distributors have an advantage. Under the law, distributors pay a 10 percent fee on liquor sales to retailers, like Roulstone, as well as restaurants. Retailers must charge a 17 percent fee on top of the distributor’s fee. As a result restaurants don’t shop at the stores to avoid that added cost.

 

On one side is an alliance of contract store owners, major grocers and the Washington Restaurant Association pushing for eliminating the fee. Costco, which wrote I-1183 and spent millions of dollars getting it passed, is part of it, too.

 

They contend the state interpreted the law wrong. Eliminating the fee, they say, will help liquor stores compete with distributors and possibly offer lower prices for some types of booze.

 

“That 17 percent fee was never contemplated in the initiative,” Clark said. “We’re not able to realize that competition envisioned in Initiative 1183 because restaurants are constrained to buying from primarily two large distributors that control 95 percent of the market.”

 

On the other side are suppliers and distributors of spirits that contend the plain language of the initiative requires the fee. Young’s Market and Southern Wine and Spirits, the two large distributors referred to by Clark, are in the association led by Guadnola.

 

In the middle is the Liquor Control Board whose staff gave signals early in the rule-making process that the fee might not be required on all retail-to-retail sales. In the end they did require the fee across-the-board.

 

Owners like Roulstone said the state pulled the rug out from under them because they counted on sales to restaurants in their planning and ended up losing that business. Several, including Roulstone, sued the state on the issue.

 

“We are totally noncompetitive now for the restaurant business,” Roulstone said.

 

Agency officials responded publicly last June.

 

“The board’s rulemaking was based on its own interpretation, with advice and counsel of its assigned senior assistant attorney general. It was fully vetted as the soundest legal interpretation,” according to a statement issued in June.

 

“The truth is that the price of liquor is higher because of 10 percent fees at distribution and 17 percent at retail that the plaintiffs themselves drafted and voters approved in 2011. The taxes are the exact same spirits and liter taxes customers have paid for many years,” it read.

 

Bills introduced in the House and Senate deal with the fee in slightly different ways.

 

House Bill 1161 erases the fee immediately on sales to bars and restaurants by any retailer, regardless of size. Senate Bill 5644 would end the fee only for owners of contract stores and former state stores; major grocers and retailers would continue paying it.

 

If the fee is eliminated, the state would collect between $4 million and $5 million less in revenue for the 2013-15 budget. That’s according to fiscal analyses of the bills.

 

Costco prefers the House bill but will not oppose the Senate version, said Costco senior vice president Joel Benoliel.

 

“It is not enough. Politically it’s probably what they can get done,” Benoliel said. “They certainly ought to get that done.”

 

Guadnola said his members are “absolutely OK” with exemptions for the small stores but questioned the need for getting rid of it for every retailer.

 

“Costco really needs a level playing field,” he said sarcastically.

 

Neither bill has come up for a vote. Passage won’t be easy. Under state law, an initiative can only be changed in the first two years after its passage by a supermajority of the Legislature.

 

“I think we will end up somewhere between the House and Senate bills,” said Rep. Cary Condotta, R-East Wenatchee, whose represented his caucus in hours of meetings on the bills.

 

Rep. Cindy Ryu, D-Shoreline, who said she does not drink, sponsored the House bill to help create a “totally open market” for consumers.

 

“They should care about this (debate) because if you are an imbiber you want all the various places to get your poison of choice,” she said.

 

 

——

Maine: LePage pushes for liquor deal

 

Source: Morning Sentinel

BY JESSICA HALL

Mar 12th

 

Gov. Paul LePage delivered the opening testimony Monday during a legislative hearing on bills dealing with the future of the state liquor contract and potential ways to address $184 million in Medicaid debt to the state’s hospitals.

 

“I have a plan to pay back the hospitals and make the liquor business more competitive with New Hampshire,” LePage told the Committee on Veterans and Legal Affairs. “I am very frustrated. … We must make the right decisions and we must pay our bills.”

 

The governor spoke just moments after Democratic leaders introduced an alternative plan to repay hospitals at a State House news conference. The Democrats, who control the Legislature, suggest combining the debt settlement with an expansion of Medicaid and other health-care related measures, in what party leaders called a more comprehensive approach.

 

LePage has offered an emergency bill that would use income from future liquor sales to pay hospital debt. He plans to issue bonds that would be repaid with future liquor sales.

 

LePage has promised to veto every bill that crosses his desk until his proposal passes. Once that happens, he said, he would advance $105 million in voter-approved bonds supporting infrastructure needs such as transportation and clean water.

 

If Maine settles its $184 million debt to the hospitals, the payment would trigger another $300 million in reimbursement to the hospitals from the federal government.

 

Another bill, from Senate Majority Leader Seth Goodall, D-Richmond, sets criteria that bidders on the liquor contract must meet, such as a down payment of up to $200 million.

 

“We may disagree on our approaches, but we agree with the governor. We need to pay back the hospitals. We must get the liquor contract right,” Goodall said in testimony on Monday.

 

The Maine Hospital Association testified in support of LePage’s proposal and said it did not speak in favor of or against Goodall’s new bill.

 

“We’re very happy to see there’s no controversy over using liquor revenue to pay the debt. We shouldn’t have to beg over an overdue bill,” said Jeff Austin, spokesman for the Maine Hospital Association.

 

When asked whether the $200 million upfront payment would squeeze out smaller bidders, Goodall said every publicly known bidder has the financial wherewithal to raise those funds. If a company can’t come up with the funds, it might not have the proper financial resources, he said.

 

“Cash is king in many negotiations,” Goodall said.

 

The hearing room was packed Monday, and so many people were waiting to testify that numbers were handed out, while others waited in overflow rooms. Testimony from about 45 people lasted about seven hours.

 

In 2004, Maine awarded a 10-year contract to operate the state liquor operations in exchange for a $125 million upfront payment that helped close a budget gap. The state also got a portion of revenue sharing, which last year came to $8.5 million. Gerry Reid, the head of the state’s liquor and lottery operations, estimated the state could get as much as $500 million over 10 years if a new contract is negotiated.

 

LePage’s proposal would outsource the management, inventory, warehousing and distribution of the liquor contract. The state also wants to lower the retail price of liquor to make Maine more competitive with New Hampshire, and pay higher commissions to agency liquor stores.

 

Reid said bottles under 750 milliliters and other items wouldn’t see their prices cut, to protect against overconsumption. Reid said small bottles can be tucked into pockets, which encourages consumption.

 

From mid-2004 through 2011, liquor sales totaled $864.7 million under the contract awarded to Maine Beverage Co., according to financial documents filed with the state.

 

Maine Beverage Co. previously said it was unlikely to bid on the new contract under the scenario proposed by LePage. Two potential bidders have emerged, Dirigo Spirit and All Maine Spirits. Reid said two other bidders also might bid, but they haven’t been named publicly.

 

“Nobody at Maine Beverage Co. believes a future contract would look like it did 10 years ago,” said Jim Mitchell, speaking on behalf of Maine Beverage Co. “The business is in a very strong position today. We can’t know how the business will do going forward.”

 

John Menario, vice president of All Maine Spirits, spoke against Goodall’s bill.

 

“Anyone who proposes legislation that delivers less than $450 million to the state is sticking it to the state of Maine,” Menario said. “If it were left to me, I’d let the governor get along with the RFP process.”

 

He objected to the nonrefundable application fee of $25,000 in Goodall’s bill, as well as the requirement for an upfront payment of up to $200 million.

 

Menario said his company could come up with that financing, if needed, but there would be interest costs involved.

 

He said that 10 years ago, Maine Beverage Co. delivered to the state “a pill that was sugar-coated cyanide that bought them control of the state liquor business. More than $330 million in profits left the state of Maine.”

 

Sixty percent of Maine Beverage Co. is owned by a New York private equity company, while the remaining 40 percent is owned by Massachusetts-based Martignetti Cos. All Maine Spirits was formed last year by six Maine residents for the purpose of bidding on the liquor contract.

 

Ford Reiche, president of Dirigo Spirit, said Goodall’s requirement of an upfront payment repeats the mistakes of the past by selling off liquor revenue to a company that writes a big check upfront.

 

 

——

Minnesota: Lawmakers consider tax increase on alcohol

 

Source: Post Bulletin

March 11, 2013

 

Two Rochester Democrats are considering a proposed increase in the state’s liquor taxes as a way to fund a drug court in Olmsted County.

 

A bill sponsored by Rep. Karen Clark, DFL-Minneapolis, would raise the taxes by 3.5 cents a glass on beer, 4 cents a glass on wine and 10 cents a glass on hard liquor. Money generated by the tax would go into an “Alcohol Health and Judicial Impact Fund,” with half the money dedicated to judicial and public safety costs and the other half to chemical dependency treatment. Rep. Tina Liebling, DFL-Rochester, is a co-sponsor of the bill.

 

“Liquor taxes have not been raised in a very long time, and we know that alcohol does a lot of harm in society, and it’s pretty clear that the amount of taxes we collect on alcohol doesn’t pay for the harm,” Liebling said.

 

But the measure faces strong opposition from liquor store owners, who say it would mean much higher costs for consumers. Under the bill, taxes on a 31-gallon barrel of beer would nearly quadruple, from $4.16 to $16.17. Ari Kolas, owner of Apollo Liquor, said those added costs will end up being passed to consumers. It could also hurt sales, with customers opting for cheaper products. He is also bothered by “the unfairness of singling out one or two beverages and a certain percentage of the population that drinks it.”

 

He added that as members of the Minnesota Licensed Beverage Association liquor store owners contribute money to fund education about the dangers of drinking alcohol. If lawmakers are going to boost taxes, he said, “We should have a more broad-based tax, instead of one on a specific industry.”

 

It’s been 26 years since lawmakers raised taxes on alcohol. The Minnesota House Taxes Committee agreed last week to consider including the provision as part of a larger tax bill. While the idea has the backing of some legislative Democrats, Gov. Mark Dayton has said he does not support raising taxes on alcohol.

 

For Olmsted County, the liquor tax could offer a way to pay for creating a drug court. The county has long sought funding for an additional judge to help handle the high volume of caseloads. One way to help make that happen would be to create a drug court that would be funded by the new tax. Rep. Kim Norton, DFL-Rochester, is sponsoring a bill to set up a local drug court and said she supports the alcohol tax as long as the money is dedicated for these kinds of uses.

 

“If I am going to vote for that, I want to see this drug court put in there,” she said.

 

But getting lawmakers to agree that money should be designated for a specific use could prove challenging. Rep. Greg Davids, the ranking Republican on the House Taxes Committee, said he is strongly opposed to the liquor tax and trying to dedicate the money for specific uses.

 

“If (Rep. Clark) wants to carry an increase on the liquor tax, that’s one thing. But we are not going to allow someone to come in with a tax increase for her pet programs,” he said.

 

The proposed tax increase would raise nearly $175 million for the state for fiscal year 2014 and nearly $200 million the year after that.

 

Four Daughters Vineyard & Winery’s winemaker Justin Osborne was deeply concerned when the liquor tax proposal was first announced. But he was relieved that the author has made changes to the bill to exempt small wineries like his in Spring Valley.

 

“This would actually help give us a competitive advantage,” he said. “We would also have an advantage over liquor stores and bars.”

 

Even so, he is generally not a fan of the idea of raising the alcohol tax and said it could lead to proposals to tax other things, like French fries to address obesity.

 

Rep. Tim Kelly, R-Red Wing, shares his opposition to the proposal.

 

“I just don’t understand why we want to dictate people’s behavior legislatively,” he said. “That is a very bad policy. I believe education is a much better form.”

 

 

——

Rhode Island: Editorial: Spirits for a patriotic spirit

 

Source: Brown Daily Herald

By Editorial Page Board

Monday, March 11, 2013

 

Rhode Island House Bill 5603 proposes any person 18 years of age or older currently serving in the United States military may purchase and consume alcoholic beverages in the state.

 

State representatives Thomas Winfield, D-Glocester, Smithfield, Raymond Hull, D-Providence and Raymond Gallison, D-Portsmouth, Bristol introduced the bill in the Rhode Island General Assembly Feb. 27. The rationale behind the bill is that if a person is old enough to volunteer for the military, that person should also be allowed to choose to drink alcohol. While we agree the ages for military service eligibility and legal drinking should be one and the same, this legislation raises concerns about our society’s drinking culture by establishing alcohol consumption as a sign of maturity.

 

The United States has had a national drinking age of 21 since 1984, making it the only western nation with a drinking age above 20. One of the chief concerns that motivated lawmakers to pass the National Minimum Drinking Age Act was the troubling trend of alcohol abuse by college students, with related concerns surrounding motor vehicle accidents and emergency room visits. The law is intended to bolster public safety by relying on a three-year age gap to distinguish between those considered mature enough to be thought of as adults and those who cannot physically or mentally handle alcohol consumption.

 

The problem with the drinking age is more about drinking culture than the age itself, which is somewhat arbitrary. At Brown, it seems easy to get away with underage drinking, with law violators often being allowed to pass freely when caught. But underage binge drinking represents a very real danger across almost all college campuses. This is why more than 100 college presidents are involved in the Amethyst Initiative, a movement launched in 2008 that calls for the reconsideration of the legal drinking age. The movement asserts that the current drinking culture encourages underage individuals to abuse alcohol on campus, rather than to responsibly consume it. Yet the Rhode Island General Assembly is considering enacting legislation that distinguishes between the underage people who serve in the military and those who attend college.

 

Serving in the armed forces is a sacrifice more than 1 million Americans are currently making. Those who serve are required to put their lives at risk in the line of duty. Electing to serve in the armed forces is certainly graver than choosing to drink an alcoholic beverage – and anyone who can volunteer for such a commitment should be allowed to consume such a beverage. But lowering the drinking age solely for those who serve implies a discrepancy in maturity between them and civilians – which in turn encourages young civilians to drink in order to establish their entries into adulthood.

 

Our government has a strong history of trying to give back to service members and veterans, through measures such as subsidized housing and the GI Bill. House Bill 5603 is another gesture from our government to the military – but it is has dangerous implications for our country’s drinking culture.

 

 

——

Utah: Senate moves to beef up fines for underage drinking in Utah

 

Source: The Salt Lake Tribune

By Lee Davidson

Mar 11 2013

 

The Senate moved Monday toward beefing up fines for selling alcohol to underage drinkers, along with numerous other tweaks to liquor laws.

 

It voted 24-1 to pass SB261, and sent it to the House.

 

Its sponsor, Sen. John Valentine, R-Orem, said the state has found that undercover youth who attempt to buy alcohol in Utah bars and restaurants are successful about 30 percent of the time.

 

“This is a failure of the system,” he said. “We have to make sure our restaurants get the message. I think they will get the message very quickly” with the bill.

 

It sets the mandatory minimum fine for selling alcohol to a minor at $2,500 for a first offense; $5,000 and a five-day suspension for the second; and $15,000 and a 14-day suspension for a third offense in an 18-month period.

 

Valentine said his bill tries to seek a balance between several recent moves to improve hospitality and the need to ensure that does not increase underage or other illegal use of alcohol.

 

It would also make several other tweaks to liquor laws, including:

 

. Adds an attorney to the Attorney General’s Office to prosecute alcohol violations.

 

. Allows small cities to permit a new bar on the location of an old one without waiting three years.

 

. Permits liquor and beer “flights,” tastings of multiple drinks, often with a theme. They were already allowed for wine.

 

 

——

New York: Judge strikes down New York City beverage ban

 

Source: NRA

March 11, 2013

 

A judge on Monday ruled that a ban on sugar sweetened beverages served in containers larger than 16 ounces is invalid and cannot be enforced.

 

The ruling by State Supreme Court Justice Milton Tingling in Manhattan came down just one day before the ban was supposed to take effect. Tingling said he found the ban to be arbitrary and capricious.

 

“It is arbitrary and capricious because it applies to some, but not all food establishments in the city,” Tingling wrote in his decision. “It excludes other beverages that have significantly higher concentrations of sugar sweeteners and/or calories on suspect grounds, and the loopholes inherent in the rule including but not limited to no limitations on refills defeat and/or serve to gut the purpose of the rule.”

 

The National Restaurant Association was a lead plaintiff along with the American Beverage Association in filing the lawsuit that challenged the ban. At the time of the filing, the NRA argued that the ban was arbitrary and subjected restaurateurs to a standard many of its competitors, including groceries and c-stores, didn’t have to meet.

After the judge’s ruling, the NRA said his decision to strike down the ban was a huge win.

 

“This is a great victory, particularly for thousands of restaurant operators and industry suppliers serving New York City who would have experienced financial hardships had the ban been enacted,” said Dawn Sweeney, the NRA’s president and CEO. “We are extremely pleased that the judge recognized that the Board of Health exceeded its authority when it initially passed the ban.

 

“We look forward to working with public health officials to engage in a constructive dialogue that will have a positive and sustained impact on the people of New York City,” she added.

 

Had the ban been enacted, it would have prohibited restaurants, delis, stadiums and arenas, concession stands and food carts from selling sugar-sweetened beverages in containers above 16 ounces. Banned beverages would have included soda, sweetened iced tea, some smoothies and coffee drinks and lemonade.

 

The New York City Department of Health & Mental Hygiene enacted the regulation late last year, saying it would help curb the obesity crisis affecting New York City.

 

The city said it plans to appeal the judge’s decision.

 

“We plan to appeal the decision as soon as possible, and we are confident the board of health’s decision will ultimately be upheld,” said Michael A. Cardozo, corporation counsel for the NYC Law Department. “This measure is part of the City’s multipronged effort to combat the growing obesity epidemic, which takes the lives of more than 5,000 New Yorkers every year, and we believe the Board of Health has the legal authority – and responsibility – to tackle its leading causes.”


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