Liquor Industry News 1-14-13

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 Yellow Tail Maker in Talks With Bank After Loss

 

Source: WSJ

By CAROLINE HENSHAW

Jan 14th

 

One of Australia’s biggest wine exporters has been forced into emergency talks with its lender after recording its first loss in more than 20 years.

 

Casella Wines, which makes one in every five bottles of Australian wine sold overseas, said it was looking to shave costs and is confident of reaching a deal with lender National Australia Bank Ltd. NAB.AU +0.66% ahead of an extended Jan. 30 deadline. A failure to secure a new loan could force Australia’s largest family-owned winery to sell off vineyards or other assets, John Casella, the company’s chief executive, told The Wall Street Journal.

 

Best known for its Yellow Tail brand, Casella relies on the U.S. for three quarters of its sales-but the Australian dollar’s rise against the U.S. dollar has made its wine less competitive against both U.S. wines, such as those of California’s Napa Valley, and those of rival export regions such as South America.

 

The bulk of costs for Australia’s winemakers are priced in Australian dollars. These include the cost of the grapes, which Casella sources from 33 of the country’s wine-growing regions, including the Barossa Valley and Coonawarra in South Australia and Victoria’s Mornington Peninsula.

 

The strong currency is the latest headwind to hit Australia’s wine industry. Years of expansion created a supply glut even as demand waned in its largest markets of the U.S. and Europe. Consecutive wet summers that yielded poor vintages, combined with tighter lending standards from the country’s banks, have put many winemakers under severe pressure and forced even the industry’s best-known names, such as the Rathbone Wine Group, to sell off assets.

 

“There’s no volume issue, it’s all about the exchange rate,” said Mr. Casella, whose parents founded the company more than 50 years ago after emigrating from Sicily. “The currency is having serious implications for a lot of Australian manufacturers.”

 

Casella Wines lost 30 million Australian dollars (US$31.6 million) in the fiscal year ended June 30, compared with a profit of A$43.5 million a year earlier. Its debt grew 40%, to A$138.7 million from A$98.9 million.

 

A spokeswoman for NAB declined to comment on talks with the winemaker.

 

Mr. Casella said following rivals by raising prices could be counterproductive, as it might jeopardize Casella Wines’s push into Asian markets, which currently account for 3% of sales. China has been a source of growth for Australian winemakers, with exports rising 15% to 35 million liters last year, according to government data published Monday.

 

Instead, Mr. Casella is looking to introduce a range of premium wines from a new vineyard in the Barossa Valley and through a beer partnership with Coca-Cola Amatil Ltd. CCL.AU +0.29%

 

“When you’ve got a huge volume facility like we have, price plays aren’t just about losing some volume, it’s about the efficiencies of the production line,” he said. “I would hate to remodel the whole business based on a higher exchange rate when it could be different in 18 months.”

 

 

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Merger headache brewing for Busch

 

Source: New York Post

By JOSH KOSMAN

January 13, 2013

 

The Department of Justice is about to check the King of Beers.

 

Regulators will soon ask Anheuser-Busch InBev – the world’s biggest brewer – to make major concessions to complete its $19 billion buyout of Grupo Modelo, a well-placed source said.

 

Critics of the deal believe allowing Busch, with its Budweiser and other brands owning approximately 47 percent of the US beer market, to buy Modelo, whose Corona and 11 other brands control 6 percent, will give it too much pricing power.

 

Busch, sensing regulatory troubles, said in July it would give importer Constellation Brands the right to import all of Modelo’s beers and set distribution and pricing. But the offer appears to be one the DOJ can refuse.

 

There is a meeting of the regulatory cops at Justice this week and, the source said, Busch may be forced to have a third party make all beers imported into the US.

 

“It’s going to come down to how much Busch is willing to give up,” the source said. “They are going to have to create another competitor.”

 

Anheuser-Busch InBev already has 14 brands with sales of at least $1 billion each – and Modelo has three.

 

A banker said he believed Busch was ready to give in if the DOJ were to order Modelo’s US imports to be produced by a third party.

 

Perhaps that’s because ABInBev is not necessarily after Modelo’s US market share – but its 59 percent control of the Mexico beer market. Modelo, according to ABInBev, is also the leading import beer in 38 countries. Conversely, the US beer market is stagnant, with shipments eking out a small gain last year after three straight annual declines.

 

In its presentation to investors, Busch also says the deal will create at least $600 million in annual cost synergies, phased in over four years.

 

The DOJ, with jurisdiction only in the US, cannot place conditions outside the domestic market.

 

A Busch spokeswoman said the company is not commenting on the review and continues to expect the merger to close at the end of the first quarter. The DOJ declined to comment.

 

 

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GuestMetrics reports Q4 and Holiday On Premise Alcohol Beverage Performance

 

Source: GuestMetrics

Jan 13th

 

On-premise alcohol sales close out 2012 with a weak 4Q12 and holiday season, though craft beers and ultra premium wines continue to show strong growth from the prior year.

 

According to GuestMetrics, based on its proprietary database of POS transactions of over $8 billion dollars in transactions and over 250 million checks from restaurants and bars across the United States over the past two years, 2012 closed out the year with a relatively weak 4th quarter and holiday season.  “Comparing the year-over-year trends of the first nine months of the year against those of the final quarter, we see the number of alcoholic beverages sold deteriorated during the final quarter of the year, including the holiday season, which is obviously important for restaurants and their suppliers given December is the second largest month of the year for the on-premise sector.” said Bill Pecoriello, CEO of GuestMetrics LLC.  Based on data from GuestMetrics, total alcoholic beverages units sold in on-premise was flat for the first 9 months in 2012 compared to the same period for 2011, but then decelerated in 4Q12 by approximately 1.5 points. This brought full year 2012 on-premise alcohol units down about 30 basis points versus the prior year.   Looking specifically at December, alcoholic beverages were weaker than the overall 4Q12 trend by about 1 percent, primarily due to there being one less Friday in December 2012 than in December 2011.

 

“Looking at the deceleration in trends of 4Q12 versus the first nine months of the year, we believe this is indicative of a consumer base that likely cut back on discretionary spending in the face of unusually high levels of macro-related uncertainty towards the end of the year,” said Peter Reidhead, VP of Strategy and Insights at GuestMetrics.  According to data from GuestMetrics, the deceleration was seen across all three alcohol categories, with the number of beers sold slowing about 1.5 points (from -0.5% for the first 9 months to -2% for the 4th quarter), spirits volume also slowing about 1.5 points (from flat for the first 9 months to -1.5% for the 4th quarter), and wine volume slowing the most at nearly 3 points (from +2.2% for the first 9 months to -0.6% for the 4th quarter).

 

“Looking specifically at the beer, spirits, and wine categories, we see that the sub-segments within each faired differently,” said Brian Barrett, President of GuestMetrics. “In beer, premium regular suffered the largest slow-down in the final quarter compared to the first 9 months of the year, slowing nearly 5 points, premium light slowed about 2 points, and craft and imports both slowed about 1.5 points, though craft still grew solidly against 2011.  In spirits, the biggest deceleration was seen among premium brands at about 3 points, while super premium, high end premium, and cocktails all slowed about 1.5 points.  And lastly, looking at wine, the slow-downs are inversely related to the price tiers, with economy slowing nearly 4 points, super premium and popular premium both slowing about 2 points, and ultra premium holding up the best with a slight deceleration of about one point, but similar to craft beers, still growing at a healthy clip against 2011.”

 

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 data 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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Lobbyists help smooth the way for Diageo’s jumbo-sized tax breaks (Excerpt)

 

The deal will mean Diageo saves many millions more dollars in rebates

 

Source: The Independent

Jim Armitage

Friday 11 January 2013

 

Global Outlook All that fiscal cliff business had investors reaching for the drinks cabinet over the new year. But when the bill was passed, one British corporate giant had more reason to celebrate than most. For, believe it or not, thanks to the weird world of United States lobbying, the Smirnoff-to-Guinness giant Diageo emerged as one of the biggest beneficiaries.

 

While we naïve observers in the rest of the globe thought the legislation was all about saving the US from economic collapse, in fact, for a small but powerful Washington lobbying elite, it was more about driving through a few jumbo-sized special-interest-group tax breaks.

 

The rest of the world, and US taxpayers, focused on the deep public spending cuts and tax rises for the wealthy presaged by the bill, but President Barack Obama shoehorned in a host of completely unrelated “pork barrel” tax breaks for big business.

 

One of them was a two-year extension to the tax break mainly benefiting Diageo’s Captain Morgan rum distillery in the US Virgin Islands.

 

The deal will mean Diageo saves many millions more dollars in rebates, which rivals argue makes it hard for the company ever to lose money on the liquor.

 

It’s impossible to state exactly how much Diageo will save as the break is based on how much rum the company manages to shift from its shiny new distillery in the US territory. Some reports have put the annual benefit at around $50m (£31m).

 

You could argue that’s not much for a multi-billion dollar operation like Diageo, but it’s a whole lot more than the company paid the Washington lobbyists Trent Lott and John Breaux to push for the change. Data obtainable through the OpenSecrets.org website suggest Diageo paid the pair’s firm only $120,000 last year.

 

Perhaps the duo, a former Republican and Democrat senator, should up their rates. They may need to, since another client, the Lance Armstrong Foundation, may not be paying its $100,000-$250,000 annual lobbying dues for much longer.

 

As a Brit, whose pension is, I presume, partly invested in the world’s biggest drinks company, it’s hard not to have mixed feelings. On the one hand, you have to admire Diageo for its political nous in hiring two of the most effective lobbyists in Washington to do its bidding so well. The way the White House jingoistically abused BP after the Deepwater Horizon disaster highlighted how British firms don’t always play the game with such elan.

 

But this kind of lobbying in foreign climes is reputationally risky. As the US media focused on the Armageddon Averted fiscal cliff story, the tale of Diageo’s nice little earner didn’t cause much of a stink. But think about it: “hard-pressed American taxpayers bail out Limey booze peddlers,” could have played pretty big in other circumstances.

 

Incidentally, Diageo, which did not comment on my queries about this story, managed to get tax incentives worth some $2.7bn when it moved its Captain Morgan distillery from impoverished Puerto Rico to the US Virgin Islands.

 

 

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Drinks industry attacked over Facebook use

 

Source: OLN

By Martin Green

11 January, 2013

 

Alcohol suppliers have been slammed for using Facebook to encourage drinking in a two-pronged attack from the chairman of the Alcohol Health Alliance and a former president of the Royal College of Physicians.

 

Professor Sir Ian Gilmore and Dr Adrian Bonner, now an addiction specialist at the University of Kent, accused the industry of failing in its Responsibility Deal.

 

The deal is designed to “foster a culture of responsible drinking, which will help people to drink within guidelines” but the duo said drinks companies’ Facebook activities undermine the project.

 

They believe Facebook users are encouraged to “celebrate alcohol-fuelled culture” on alcohol companies’ Facebook pages.

 

They reserved their most stinging criticism for Diageo. The British company signed a multi-million dollar deal with Diageo and saw awareness of its main five brands – Smirnoff, Captain Morgan, Baileys, Jose Cuervo and Crown Royal – increase by around 20%, while 950 staff were sent to “Facebook boot camps” to learn how best to exploit the social network.

 

Gilmore and Bonner, writing in medical journal Addiction in a joint statement, said “sophisticated digital marketing engagement” on the Smirnoff NightLife Exchange project, which was fronted by Madonna in late 2012, was a particular cause for concern.

 

They said: “An effective alcohol policy is needed to counterbalance the alcohol-fuelled culture promoted by user-generated activity in Smirnoff Nightlife Exchange.

 

“The concept of [the Responsibility Deal] will be significantly undermined unless corporate social responsibility is consistent in all activities across individual organisations and the whole sector.”

 

They poured further scorn on the Deal, adding that “it remains to be seen whether or not these voluntary ‘pledges’ will be translated into reductions of alcohol related harm”.

 

Henry Ashworth, chief executive of the Portman Group, said: “There are strict rules which apply to alcohol marketing on social networks which are operated by the Advertising Standards Authority and the Portman Group which ensure that alcohol is only marketed to adults and not in a way that could encourage excessive or inappropriate consumption.”

 

A Diageo spokesperson added: “Diageo only ever markets its products to over 18s. Its partnership with Facebook complies with all the codes governing the marketing of alcohol and the brands also use it as a platform to promote responsible drinking to their followers.”

 

 

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Beer: Nielsen C-Store Data Analysis: Beer C-Store Dollar Sales Growth Continues to Decelerate (+1.7% YoY), Driven by Volume Declines (-1.5% YoY)

 

Source: CITI

Jan 11th

 

Beer C-Store Dollar Sales Increase Modestly – In the four-week period ended Dec. 22, 2012, c-store beer dollar sales increased 1.7% YoY (vs. +3.6% last period and +5.0% over the last 52 weeks), the third consecutive month of decelerating growth. The growth was driven by a 3.3 pt contribution from pricing (vs. +3.5 pts last period and +3.5 pts over the last 52 weeks), as volume sales declined 1.5% YoY (vs. +0.1% last period and +1.5% over the last 52 weeks). We highlight that the volume sales decline seen in the period is likely attributable, in part, to Christmas timing (as the year-ago period included sales through December 24), though likely not to the same extent as was seen in the xAOC data released last week.

 

MillerCoors’ Miller Lite Weighs on Results – TAP’s MillerCoors JV also saw its dollar sales growth decelerate for the third consecutive period, to +0.7% YoY (vs. +1.8% last period and +2.8% over the last 52 weeks). While the Coors Light brand continued to post solid dollar sales growth (+4.1% YoY), the company’s results were negatively affected by Miller Lite (-2.1%), Keystone Light (-6.5%) and Miller High Life (-5.0%). MillerCoors’ volume sales were down 1.6% YoY in the period and price/mix contributed 2.4 pts to sales.

 

Crown Imports Continues to Outperform – STZ’s Crown Imports JV continued its relative outperformance, posting dollar sales growth of 6.4% YoY (vs. +15.6% last period and +13.5% over the last 52 weeks). Crown’s solid results were primarily driven by the 27.2% dollar sales growth posted by the Modelo Especial brand, as sales for both the Corona Extra (-1.5%) and Corona Light (-4.8%) brands declined in the period. Total-company volumes grew 4.9% YoY in the period, and price/mix just contributed 1.5 pts. As we recently noted (Constellation Brands (STZ) – Innovation and Investment Spending Drive Solid Results, published Jan. 9, 2013), we’ll continue to monitor the outsized growth being seen for Modelo Especial and the effect on Crown’s margins, given the lower price point of the brand.

 

Boston Beer’s Seasonal Offerings Drive Further Growth – SAM posted dollar sales growth of 10.7% YoY in the four-week period (vs. +21.0% last period and +14.2% over the last 52 weeks). SAM’s seasonal offerings (+25.5% YoY) continued to drive the company’s growth, offsetting declines for the Samuel Adams Boston Lager (-7.9%) and Sam Adams Light (-22.9%) brands. The company’s dollar sales growth in the period was driven by an 8.1% YoY increase in volumes and a 2.6 pt contribution from price/mix.

 

 

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STZ: Minding Our Ks and Qs: Our Read of STZ’s 3Q13 10-Q

 

Source: CITI

Jan 11th

 

Tidbits Worth Noting – In their 3Q13 10-Q, filed Jan. 9, 2013, STZ offered additional details regarding its new accounts receivable securitization facility; the grape supply, f/x and interest rate risk; the company’s derivative exposure and foreign currency contracts; its cash flow hedges and its indemnification liabilities; and the gross margin for the Crown Imports JV, which was 29.2% in 3Q13 (essentially unchanged YoY).

 

FCF Declines Owing to Lower CFO Generation – STZ generated positive free cash flow of $337 million through 3Q13, below the $587 million in free cash flow generated in the year-ago period. The decline can be attributed primarily to lower operating cash flow (resulting from lower net income and higher working capital requirements).

 

Investing Cash Flow Usage Increased – STZ used $200 million on investing activities through 3Q13, while the company used $119 million on investing activities in the year-ago period (a difference we attribute primarily to STZ’s purchase of the Mark West wine brand for $160 million in 2Q13).

 

Financing Cash Flow Usage Decreased – STZ used $72 million on financing activities through 3Q13, below the $475 million used in the year-ago period. The YoY difference is largely attributable to the company having issued $2.0 billion of long-term debt in 1H13.

 

Conclusion – We are encouraged by STZ’s expected acquisition of Crown Imports (detailed in our recent note AB-InBev (ABI.BR) – DoJ Likely to Have Limited Impact – Good Time to Buy , published Jan. 11, 2013) and by the company’s innovation and packaging upgrade initiatives and improving wine share trends. That said, we believe these positives are largely priced into the stock. We maintain our $38 target price on STZ, and as this reflects only ~6% upside from current levels, we reiterate our Neutral (2H) rating on the stock.

 

 

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Belgium resists Arnault citizenship bid

 

Source: FT

By Scheherazade Daneshkhu in Paris and James Fontanella-Khan in Brussels

Jan 11th

 

The French actor Gérard Depardieu may have secured a Russian passport but Bernard Arnault, France’s richest man, is finding it harder to get a Belgian one.

 

The Brussels prosecutor has advised against granting citizenship to the head of LVMH, the world’s biggest luxury goods group, saying he has not resided in the country long enough. Applicants need usually to have lived in the northern European country for at least three years.

 

The prosecutor’s office added: “There is also a preliminary examination of his businesses in Belgium.” It is standard practice in Belgium to scrutinise the companies of a citizenship applicant.

 

It is the second agency to have rebuffed the naturalisation requests made by the owner of brands that include Christian Dior, Dom Pérignon and Louis Vuitton.

 

As a symbol of French savoir faire, Mr Arnault caused a furore in France last September when he was forced to admit that he had applied for a Belgian passport, but insisted he would remain fiscally domiciled in his homeland.

 

Unlike the outspoken Mr Depardieu, who has been openly critical of the high tax policies of François Hollande, the socialist president, Mr Arnault has been verbally circumspect.

 

A spokesman for the billionaire said on Friday: “This is one stage in a process of application for dual nationality and does not prejudice the final decision.”

 

Late last year, the immigration office concluded that Mr Arnault did not fulfil the three-year residency condition to obtain Belgian nationality.

 

A final decision on his case will be made by a parliamentary committee, which will take into account recommendations made by the immigration office, the prosecutor and the state security department.

 

L’Echo, a Belgian daily, reported last month that Mr Arnault’s holdings in Belgium included several companies based in small apartments in the luxurious Avenue Louise, with combined assets of ?7bn.

 

In response to allegations of operating mailbox companies, LVMH and Groupe Arnault, the billionaire’s private investment vehicle, issued a statement saying they “comply fully with fiscal regulations in Belgium as well as international law”.

 

Belgium has become a popular destination for French citizens fleeing the 10-month-old government’s high-tax regime. The number of French people seeking Belgian citizenship doubled last year compared with 2011, according to Belgium’s naturalisation committee.

 

When Jean-Marc Ayrault, France’s prime minister, labelled as “pathetic” Mr Depardieu’s decision to leave France, the actor jetted to Moscow last week where he dined with Vladimir Putin, Russia’s president, and was granted a Russian passport.

 

Mr Hollande’s 75 per cent marginal rate on incomes above ?1m was struck down by the country’s constitutional council on the eve of its introduction on January 1. The government has yet to formulate an alternative, but has reiterated its commitment to higher taxes on the wealthy.

 

Mr Hollande is attempting to negotiate a tricky path between promoting France as an attractive country in which to invest and raising taxes on the wealthy, as a matter of “social justice” to help push through unpopular labour reforms aimed at easing high unemployment and stimulating the economy.

 

 

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GS survey suggests a robust consumer, but tax increases loom

 

Source: Goldman Sachs

Jan 11th

 

Consumer sentiment hit new highs in 4Q12 despite the fiscal cliff

Consumer sentiment reached new post-recession highs in our most recent survey of 2,000 US consumers, which was fielded in December. In fact, the number of consumers reporting optimism about the state of the economy was higher than in the 2005/2006 pre-crisis base period. This comes in spite of the recent fiscal cliff debate, which seems not to have dented consumer optimism (as the debt ceiling crisis implied in our survey in 2H 2011).

 

Cars/electronics are being prioritized over restaurant visits

At the category level, consumers reported an increased propensity to spend in the future on autos and electronics. On the flipside, consumers reported a decreased likelihood to visit restaurants in the coming months. While optimism is generally high, in this environment of only moderate consumer discretionary cash flow increases, and thus forced choices, it appears consumers need to pull back in some areas to support spending.

 

Impending tax increases could derail the positive trends

72% of the consumers that we polled expect their taxes to increase in 2013. This figure is split between 44% who believe they will therefore reduce their household spending as a result versus 28% who do not. From a demographic perspective, the cohorts with the highest self-reported likelihood of a pullback in spending as a result of higher taxes are those with $50-120K of household income and those aged 45-64 years old.

 

Underlying strain for 55+ age cohort and under $50K income HHs

While the data was generally positive, there were two areas of underlying strain that presented themselves in the data:

 

(1) Consumers aged 55+: Consumers aged 18-34 years old showed the greatest improvement in optimism and propensity to spend going forward. On the flipside, those aged 55+ reported an increase in credit card debt over the past six months to support spending patterns, and indicated a moderately reduced likelihood to spend going forward.

 

(2) Households with under $50K of income: Households with $50-90K of income and those at $90K+ both indicated an increase in optimism in 4Q12. Those under $50K, however, reported modestly reduced optimism about the state of the economy and a reduced likelihood to spend in 2013.

 

 

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Wells Fargo’s Weekly Economic & Financial Commentary

 

Source: Wells Fargo

Jan 11th

 

U.S.

.         Economic growth for 2013 is projected to start at just 1.0% in the first quarter.

.         The economy should gain momentum through the remaining three quarters as households and businesses adjust to the new fiscal framework and residential construction activity expands.

.         The sluggish start to the year will likely encourage the Fed to keep its monetary easing policies in place.

.         Federal spending curtailments and budget cuts are expected to limit state and local spending recoveries.

.         While the economy will continue to improve in 2013, the biggest challenge will be living in a slow growth economy that demands prudent spending decisions by both the public and private sectors.

 

International

.         The main ECB rate remains unchanged at 0.75%, despite recent weak economic data from Germany and France.

.         Weakness in German and French industrial production likely means that real GDP growth for the Eurozone was negative in 4Q12 for the fifth consecutive quarter.

.         However, data indicates that the service sector remains somewhat stronger than the industrial sector, suggesting that economic activity may be stabilizing.

.         A gradual recovery in Europe is expected over the course of 2013 as financial conditions have eased and export growth is projected.

 

Point of View

.         Interest Rate Watch

.         Fed purchases will continue increasing liquidity in the marketplace for the foreseeable future.

.         While the debt ceiling debate could create a shortage of floating Treasury debt, Treasury yields will likely rise only modestly this year.

.         Credit Market Insights

.         Non-revolving debt increased at an annual rate of 9.5% in November, with a majority stemming from the federal government and student loans.

.         Growing student loan debts are causing some students to question the benefits of higher education.

 

Topic of the Week

.         Health Spending: Secular Growth, Cyclical Trend

.         Health expenditures as a share of GDP remained high at 17.9%.

.         The growth in health expenditures has slowed recently due to the recession, widespread substitution of generic prescription drugs, and waning hospital price growth and service usage.

.         The government has increased its share of national health expenditures, resulting from the aging of baby boomers; the government’s share will likely rise in coming years as Medicare coverage expands.

 

 

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Cross-country patchwork of happy hour laws bars cut-price cocktails in some states

 

Source: Washington Post

By Associated Press

January 9

 

During “happy hour” at the Summer Winter bar in Burlington, Mass., the bargain is on the bivalves, not the brews.

 

That’s because Massachusetts legislators passed a law in 1984 banning bars from offering cut-price drinks. So James Flaherty, the bar’s director of food and beverage, decided to use shellfish specials to draw customers.

 

“We’ve had to get creative by offering something other than a typical happy hour,” he said. “Having a raw bar at the heart of the restaurant, we launched Oyster Happy Hour to appeal to the after work crowd with fresh, local selections and it’s become a popular draw.”

 

And Massachusetts isn’t alone. The concept of happy hour – when bars offer lower prices or two-for-one specials – may seem like an American tradition, but is in fact illegal or restricted in quite a few places.

 

Laws vary by state, and even districts within states, so it’s hard to get a handle on the national picture, but Ben Jenkins, vice president of government communications for the Distilled Spirits Council of the United States (DISCUS), has noted some recent activity aimed at updating happy hour laws.

 

A few states, including Oklahoma, Massachusetts and Virginia, recently have considered changes to existing restrictions. The bills failed, but are likely to re-emerge.

 

Meanwhile, happy hour became legal in Kansas last year after a 26-year ban. In 2011, Pennsylvania extended happy hour potentials from two to four hours and New Hampshire changed its law to allow establishments to advertise drinks specials.

 

DISCUS does not take a position on happy hour bills, but Jenkins sees the activity in the context of a larger modernization trend. “States across the country are updating their liquor laws to provide better consumer convenience and increased revenue without raising taxes,” he says.

 

The patchwork nature of the laws is a holdover from Prohibition, when states were left to set regulations once the federal ban had been repealed. Some of the laws written then are still on the books, which can strike an anachronistic note today. For instance, it’s still illegal to sell alcohol in South Carolina on Election Day. And it may surprise you to know that Moore County in Tennessee is “dry” and also home to the Jack Daniel Distillery.

 

The reasoning behind happy hour bans or restrictions generally stems from concerns that lowering prices will encourage high consumption and its ensuing problems.

 

“Some communities have issues of morality regarding promoting the drinking of alcohol or concerns regarding the kinds of behavior that can come from drinking too much,” notes Kyle-Beth Hilfer, an advertising and marketing attorney with the New York-based law firm Collen IP.

 

Having so many different rules means bar owners and restaurateurs need to keep up with changes in the laws and read existing statutes carefully, says Hilfer.

 

Some states allow happy hours, but ban advertising them. Oregon, on the other hand, is OK with bars advertising general happy hours but not specific price discounts. Utah outlawed happy hours in 2011.

 

Advertising also can be tricky. A state may OK advertising happy hour specials, but going beyond the simple price and inviting customers to “lose weight at our low-carb beer happy hour,” could be subject to regulation by state alcohol beverage officials, Hilfer explains. She recommends that proprietors of venues that serve alcohol and have happy hours have a lawyer vet advertising copy.

 

Social media has added a new twist to the mix. In Virginia, it’s illegal for bars and restaurants to advertise happy hours in electronic media, radio, TV and the Internet, a law that goes back to 1984, long before Twitter had left the nest. This year, Virginia legislators considered changing the rules, though the bill ultimately was withdrawn, partly due to concerns about underage drinking.

 

This wasn’t Virginia’s first time to update old laws. In 2006, a tapas restaurant was cited for serving sangria because its recipe, a mix of red wine, brandy and fruit, violated a 1934 law prohibiting the mixing of wine or beer and spirits.

 

In 2008, lawmakers passed a bill sanctioning sangria.

 

 

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WASDE report reveals continued tightness in global grain inventories

 

Source: Goldman Sachs

By Adam Samuelson and Evan Stampler, Ph.D

Published 11 Jan 2013

 

USDA released its January WASDE and Grain Stocks reports this afternoon, which was broadly positive for corn, revealing lower-than-expected December 1 inventories as feed demand remains more resilient than previously forecast. While US/global production expectations were modestly increased, this was more than offset by higher feed demand, resulting in USDA’s 2012/13 US corn stocks/use forecast moving to 5.3% from 5.8% and global stocks/use moving to 13.4% from 13.6%. Exceptionally tight US/global inventories reinforce our expectation for crop prices to remain elevated in 2013. We remain Attractive on the Fertilizer sector, with a continuation of elevated crop prices providing a very supportive farmer income backdrop, which we expect to underpin solid fertilizer demand in 2013. Our key takeaways are outlined below.

 

Grain stocks

 

Corn – USDA estimates December 1, 2012, corn inventories of 8.0 mn bu, which compares with consensus expectations of 8.2 bn bu and year-ago inventories of 9.6 bn bu, and the lowest December 1 inventory since 2003/2004. With quarterly use of corn for FSI (1.5 bn bu) and exports (0.2 bn bu) largely known, this implies September-November quarterly feed and residual use of 2.1 bn bu, which is 13% above year-ago levels.

 

Soybeans – USDA estimates December 1, 2012, soybean inventories of 2.0 mn bu, which was in line with consensus expectations of 2.0 bn bu but well below year-ago inventories of 2.4 bn bu, and the lowest December 1 inventory since 2003/04. With quarterly use of soybeans for crush (0.5 bn bu) and exports (0.6 bn bu) largely known, this implies September-November quarterly residual use of 105 mn bu.

 

WASDE

Corn – With this report USDA finalized its estimate of the size of the 2012/13 crop at 10.8 bn bu based on a yield of 123.4 (vs. 122.3 bu/acre prior, consensus expectations of 122.4 bu acre, and 147.2 bu/acre last year). Despite concern over the potential for a significant cut to harvested acreage, USDA made only a modest tweak, lowering harvested by 0.3 mn acres to 87.4 mn acres (vs. 87.7 mn acres prior). This is partly a function of planted acreage being revised higher to 97.2 mn acres, which put the abandonment rate at 10%, which is well below the 14% abandonment rate seen during the last major drought in 1988/1989. On the demand side of the ledger, USDA raised feed and residual use by 300 mn bu, as the quarterly trend tracked above expectations, but this was largely offset by a 200 mn bu reduction in exports to 950 mn bu, the lowest export figure since 1971/1972. Ending inventories were estimated at 602 mn bu. (vs. 646 mn bu prior, consensus expectations of 667 mn bu, and 988 mn bu last year). On the international front, production estimates were changed in Argentina (+0.5 mmt), Brazil (+1 mmt), and FSU (-0.5 mmt), but this was offset by higher feed demand, driving global stocks-to-use lower to 13.4%.

 

Soybeans – With this report USDA also finalized its estimate of the size of 2012/2013 soybean crop at 3.0 bn bu based on a yield of 39.6 bu/acre (vs. 39.3 bu/acre prior, consensus expectations of 39.6 bu/acre, and 41.9 bu/acre last year). In total, production was raised 44 mn bu to 3.0 bn bu, which was largely in-line with consensus expectations (3.0 bn bu). On the demand side of the ledger, USDA raised domestic use by 40 mn bu, based on higher crushings. Ending inventories were estimated at 135 bn bu (vs. 130 mn bu prior, consensus expectations of 135 mn bu, and 169 mn bu last year). On the international front, Latin America production was raised 0.5 mmt, but this was offset by higher global crushing, putting global stocks-to-use at 22.4%.

 

 

——

NABCA Legislative Update: December 15, 2012-January 11, 2013

 

Source: NABCA

Jan 11th

 

Summary of legislation pertaining to the alcohol industry. Reports include bills and regulations active in the month/timeframe below.

 

December 15, 2012-January 11, 2013

 

http://www.nabca.org/News/Files/130111%20Legislation%20and%20Regulation%20State%20Update.pdf

 

http://www.nabca.org/News/Files/130111%20Legislation%20and%20Regulation%20Category%20Update.pdf

 

http://www.nabca.org/News/Files/130111%20Regulatory%20Update.pdf

 

——

News From TTB

 

Source: TTB

Jan 11th

 

ACTING DIRECTORS NAMED FOR THE REGULATIONS AND RULINGS DIVISION (RRD)

Effective January 4, Angela Jeffries and Amy Greenberg will alternate as Regulations and Rulings Division (RRD) acting director, beginning with Jeffries, until the position is filled permanently. They will continue a 45-day rotation cycle until further notice.

 

 

——

Foley expanding wine empire with recent acquisitions

 

Source: THE PRESS DEMOCRAT

By CATHY BUSSEWITZ

January 12, 2013

 

When a winery goes up for sale in Sonoma County, Bill Foley is the first one brokers call.

 

Foley, who made his fortune in the title insurance industry, says he has poured more than $200 million of his own money into the wine business since buying his first winery in 1996. He now presides over a collection of 16 wineries from Alexander Valley to New Zealand, including four acquired in the past year alone, making him one of the most active buyers in Wine Country.

 

“Once I get into something, I go all in,” Foley said. “I just keep on going. I don’t stop with just one little thing. I just keep trying to grow it and make it bigger and to keep on improving.”

 

Wine has become both a lifestyle and a strategic business opportunity for the 68-year-old insurance executive, who moved the base of his wine operations to Sonoma County in 2008. He now spends five months of the year at his home on the grounds of Chalk Hill Winery in the hills east of Windsor.

 

Colleagues and competitors say the former Air Force officer is both disciplined and decisive. He continually searches for wineries with untapped value and acts swiftly when he finds them to unlock their potential, consolidating back-office functions while giving creative license to winemakers and vineyard managers.

 

Foley has openly tried to emulate the late Jess Jackson, who built Jackson Family Wines into one of the world’s largest wine companies before his death in 2011. Both men share similar traits, said Tim Matz, who worked as a senior executive under Jackson and Foley.

 

“They’re very intelligent, visionary, and willing to take a risk,” said Matz, now managing director of Accolade Wines’ North American operations. “And when a mistake is made, they just keep moving forward. They don’t look back.”

 

But the self-described “serial acquirer” comes across as remarkably relaxed, quick to laugh and joke about his dogs, his Texas roots and his music preferences, which range from Italian opera singer Andrea Bocelli to pop star Taylor Swift.

 

On days when the weather is right, Foley enjoys walking along a three-mile path at Chalk Hill with his wife of 42 years, Carol, and their three dogs.

 

A cattle rancher who proudly traces his lineage to the Texas cowboys portrayed by actors Robert Duvall and Tommy Lee Jones in the classic TV miniseries “Lonesome Dove,” Foley clearly prefers Sonoma over Napa.

 

“Napa’s interesting, but it’s too congested,” Foley said recently while driving around the vineyards at Chalk Hill in his silver convertible Mercedes. “This is still country over here.”

 

Foley is viewed as an outsider by many in the wine industry, which he attributes to his busy schedule scouting target acquisitions.

 

“I really don’t have much time,” Foley said. “I like to go out and have some dinner and talk to people, but I just haven’t done it.”

 

During his visits to Sonoma County, he works 70 to 80 hours a week by his estimate. The remaining time is split among properties in Florida, New Zealand and Montana, where he owns high-end resorts and golf courses.

 

He enjoys playing golf and hanging out with wine industry brokers and other business executives who now live in Wine Country. He does make time for his closest friends, classmates from West Point, whom he’s known since he entered the military academy in 1963.

 

“The older we’ve gotten, the closer we’ve gotten,” he said.

 

Foley graduated with an engineering degree from West Point and then served in the U.S. Air Force, where he attained the rank of captain. He planned to spend four days with 16 classmates in Santa Barbara this month.

 

During the Vietnam War, Foley lost 30 of 584 classmates, he recalled, a memory that drives his charitable giving to the Wounded Warrior Project. At Chalk Hill, he recently held a fundraiser for veterans returning from Afghanistan, which was attended by vets who had lost limbs or suffered from mental trauma.

 

“That was a real tear-jerker,” Foley said. “It’s tough.”

 

After completing his military service stateside, Foley earned an MBA from Seattle University and a law degree in 1974 from University of Washington. He spent the next decade practicing corporate and real estate law in Phoenix, where he acquired a small title insurance company in 1984.

 

Over the next two decades, Foley led the company through a series of buyouts that created the largest title insurance company in the United States. Fidelity National Financial, which generates $5 billion in revenues annually, provides insurance that protects landowners from challenges to their ownership of a property.

 

Foley stepped down as CEO in 2007 but continues to serve as chairman of the company, which has an acquisitions arm that owns hundreds of steakhouses and restaurants, an auto parts manufacturer and a minority interest in WineDirect, a wine industry fulfillment, compliance and software business, to name a few.

 

Expanding into wine

 

Foley entered the wine business in 1996 with the acquisition of Lincourt Vineyards in Santa Barbara County, which he named after his daughters Lindsay and Courtney. He later established Foley Estates Vineyard in the Santa Rita Hills, and bought Merus, a cult cabernet sauvignon producer in Napa Valley, among others.

 

He expanded into Sonoma County in 2008, buying historic Sebastiani Vineyards and Winery in Sonoma, and moved management of the wine group to Sonoma County. With that acquisition, his business turned a corner financially, because he was able to consolidate the back-office functions across his wineries and realize more efficiency.

 

As the leader of a Fortune 500 company, Foley was surprised by the lack of business knowledge that he found in the wine industry.

 

“We had metrics we ran the business by, and we were very disciplined,” Foley said. “And when I got into the wine business, I found, a lot of times, it was people that wanted to have a good time. They didn’t really quite understand their cost of goods, how to sell the wine, make a profit, how to establish their direct-to-consumer businesses.”

 

Foley is pleased with his current wine team. But he’s been known to have high turnover among his senior executives.

 

He’s demanding, he says, and needs people who can adjust to his company’s fast growth. If his staff can keep up with him, they’re rewarded. If not, he makes a change.

 

“My theory I’ve always had, in all the companies I’ve ever been involved with, is that if you allow mediocrity to survive in an organization, then increasingly everything becomes mediocre,” Foley said. “So we just don’t allow it.”

 

In the acquisition stage, Foley taps a small, elite team of mergers and acquisitions executives from Fidelity National Financial to perform due diligence before he buys.

 

“They’re a little like Delta Force,” said Mario Zepponi, co-owner and partner at Zepponi & Co., a mergers and acquisitions firm. “You have these special operations units that are so effective that they do the job of four or five people, because they’re so exceptional, so talented.”

 

Once the sale is complete, Foley is quick to transfer responsibility to trusted associates.

 

“They’re not only business associates, but friends,” Foley said.

 

Allure of wine

 

Foley did not enter the wine business until the age of 52, but has found it invigorating.

 

“It’s not really work. I’m just kind of having a good time,” Foley said. “I’m fooling around trying to make decisions, trying to get things organized, trying to work problems out and then have a successful solution at the end of that problem-solving time.”

 

Owning wineries and their land gives him the chance to sit in on blending sessions with world-class vintners and roam the Chalk Hill vineyards with his chief viticulturist, learning what happens at every stage of the grape-growing process.

 

The business of wine, including dealing with distributors and negotiating the patchwork of laws that regulate alcohol sales, is enough of an intellectual challenge to keep him entertained.

 

“I do something for a while and I have to go do something else,” Foley said. “I have to keep the activity going in my life. And wine and vineyards, and buying other wineries and consolidating them, or buying vineyards and consolidating them, that’s a lot of activity. So I’m not bored in this business. It’s exciting every day.”

 

Even with annual revenues of about $100 million, he says his wine holdings are still not profitable from a tax standpoint.

 

That, in part, caused him to double-down on his investment in the wine industry. His acquisition spree – 16 wineries in 16 years – is designed to give Foley more clout with distributors that push wine out into stores and restaurants.

 

Foley aims to produce 2 million cases annually, nearly double his current size. Last year, the network of wineries under Foley Family Wines sold 1.15 million cases worldwide. About 825,000 cases were sold in the United States and the rest in Australia, New Zealand and the United Kingdom.

 

“I thought a million (cases) was enough, but it’s not,” Foley said. “I need more influence with these distributors. … You’ve got to have a lot of brands, and you’ve got to show them how they can make money off your products when they sell them.”

 

The finer things in life

 

Wine is not just a business for Foley. He makes time to enjoy the finer things in life, like an artfully prepared meal, a glass of wine, a good golf course, and friends to share in those pleasures.

 

In Sonoma County, he’s eating and drinking the best the region has to offer, whether in restaurants or in the homes of culinarily gifted friends. At his home in Montana, he gets in a good workout every day.

 

“I go up there, lose weight, come back here, gain 20 pounds,” Foley said with a laugh. “Up 20, down 20.”

 

On the golf course, he displays an intense competitive streak, says longtime friend Ted Simpkins, who sold Lancaster Estate Winery in Healdsburg to Foley last year. He called Foley a “man’s man,” adding “what you see is what you get.”

 

“He hates to lose,” Simpkins said.

 

Looking ahead, Foley still plans to expand his footprint in Napa and Sonoma, and is on the lookout for an Oregon winery and a hotel on Highway 29 in Napa. He’s value-oriented, but “trying not to be cheap,” he said.

 

But he just passed on two wineries he was considering, he said.

 

“I passed on them because my wholesale guys and my infrastructure are ready to break,” Foley said. “We’re slowing down. We have to digest what we’ve taken on here.”

 

To draw people to his network of wineries, resorts and golf courses, he is preparing to launch a membership program, called the Foley Food and Wine Society, which will reward his most loyal customers with discounts and access to exclusive experiences.

 

When the empire building is complete, Foley has a succession plan. Three of his four children, who range in age from 26 to 35, work in the wine industry. Daughter Courtney, 29, works as the Central Coast sales rep for Foley Family Wines and wants to be a winemaker. His son, Rob, 33, works at Chalk Hill and is interested in administrative and finance roles. His youngest son, Pat, 26, is on his way to New Zealand to get a masters degree in viticulture and enology.

 

They’ve logged overnight shifts in the vineyards, early morning distribution runs and stints in the tasting room.

 

“My kids work from the ground up,” Foley said. “They’re not afraid to work, and they’re not afraid to work for kind of slave wages,” he added with a laugh.

 

“Eventually, they will be running the business, which is great,” he said. “And they will know the business inside and out. I am very proud of them.”

 

 

——

Chardonnay Flood Buoys Australian Wine Exports as Prices Decline

 

Source: Bloomberg

By David Fickling

Jan 13, 2013

 

Rising demand for cheaper chardonnay lifted export volumes of Australian wine even as the value of overseas sales declined for a sixth year running.

 

Exports of chardonnay in so-called bulk containers climbed 37 percent to 117 million liters in 2012, Louisa Aherne, a spokeswoman for government-backed industry body Wine Australia, said in an e-mail today. Total export volume rose 3 percent.

 

Australia, the fourth-largest wine exporter, is using cheaper modes of transport and attempting to build higher-value brands in new markets such as China as it struggles with a stronger currency that’s made it harder to compete with U.S. and European vintages. Dry weather in the southern spring means the 2013 vintage should be a good one, Bernard Hickin, chief wine- maker for Pernod-Ricard SA (RI)’s Jacob’s Creek brand, said in an e- mailed statement.

 

“We’ll see some great wines from this year across a number of varietals and regions,” he said. While recent hot weather, which hit 42 Celsius (108 Fahrenheit) in the wine-producing town of Mildura on Jan. 11, presented challenges, a dry winter and spring “will make wines from 2013 show tremendous concentration of flavors and silky textures,” Hickin said.

 

The company will start crushing chardonnay grapes from Mildura in Victoria state and the Riverland region in South Australia today, according to the statement.

Bulk Exports

 

Bulk wine, in which the beverage is packed in giant bladders inside shipping containers and bottled in its end- market rather than at the vineyard, overtook bottled exports last year, Wine Australia said.

 

The growth of lower-priced bulk wine meant the value of Australian wine exports fell 2 percent last year to A$1.85 billion ($1.95 billion) even as total volume rose 3 percent to 721 million liters, according to Wine Australia data.

 

Growing Chinese demand for higher-end Australian wines made it the biggest destination for bottles valued at more than A$7.50 a liter, the body said, putting it ahead of Canada and the U.S. in the segment. The average value of bottled Australian wine exports to China came ahead of those from France.

 

The Australian dollar has advanced 13 percent against its U.S. counterpart in the past three years, the strongest performer among 16 major currencies tracked by Bloomberg.

 

 

——

Sonoma County’s chardonnay a hit; pinot noir doesn’t fare as well

 

Source: THE PRESS DEMOCRAT

By CATHY BUSSEWITZ

January 10, 2013

 

Lovers of high-end pinot noir are more likely to choose a pricey wine from Willamette Valley or Napa Valley than from Sonoma County, according to a new report by Wine-Opinions.

 

But for chardonnay under $20, Sonoma County is king.

 

The research was presented at the annual meeting of the Sonoma County Vintners on Thursday by John Gillespie, founder and CEO of WineOpinions, a market research firm based in St. Helena. He had conducted a national study to determine just how Sonoma County is perceived, compared with other domestic and international wine regions, by those who drink the most wine and buy the priciest bottles most often.

 

“Sonoma County is the only region in the top three of both quality and value,” Gillespie said. “That’s an accomplishment. That is something that can be broadly leveraged in the marketplace, because it’s unique.”

 

The study was commissioned by the Sonoma County Vintners to determine just where the wine region stands in the target consumers’ minds as the group launched its ad campaign in national news media and at international trade shows. That way, the group can track the impact of its work.

 

“One of the things that smart marketers do is to lay down a baseline study so that over time, in a year, in two years . . . you can measure the progress that you’re making in the market,” Gillespie said.

 

In the past year, the Sonoma County Vintners developed and launched a new brand identity and logo, and presented it at numerous food and wine shows in the U.S., China and Canada. The ad campaign hit the pages of Wine Spectator and Food & Wine in December, and the group is planning a two-page spread in the Wall Street Journal in March.

 

“Fabulous harvest, great year, but we have even more ahead of us in 2013,” said Honore Comfort, executive director of the Sonoma County Vintners.

 

“All of you know that diversity is one of our single greatest strengths from the winemaking perspective, but from a marketing perspective that’s one of our biggest challenges,” Comfort said.

 

The group plans to use Gillespie’s study to identify the region’s strengths that can be used to its advantage, and the weaknesses where its image can be improved.

 

For example, about half of frequent, high-end wine drinkers occasionally enjoy a bottle from the Russian River or Alexander valleys, but just as many of those drinkers have never heard of Rockpile, Green Valley or Bennett Valley, the study showed.

 

“We’ve established something here. It’s that Sonoma County obviously has value. And it’s very clear to a relatively sophisticated group of consumers,” Gillespie said. “Could those numbers be better? Sure they can. Everything moves, nothing stays the same.”

 

 

——

Red wine prevents cholesterol build up from meat

 

Drinking a glass of red wine while eating red meat can counteract the build up of cholesterol following a meal, scientists have found.

 

Source: Daily Telegraph

By Richard Gray, Science Correspondent

13 Jan 2013

 

Finally there is an excuse to pick a good red wine with your Sunday roast – it can diminish the unhealthy effects of eating red meat.

 

Scientists have discovered that a glass of red wine can prevent the build up of cholesterol after a meal of dark or red meat.

 

They found that harmful compounds from the meat would build up in the blood stream of volunteers as they digested a meal, helping to form “bad” cholesterol that can damage blood vessels and increase the risk of heart disease.

 

The researchers showed, however, that antioxidants in the wine known as polyphenols stopped these compounds from being absorbed in the gut and so they did not get into the blood stream where they can cause harm.

 

Professor Ron Kohen, from the institute of drug research at the Hebrew University of Jerusalem, said this may help to explain why red wine has frequently been found to reduce the risk of heart disease.

 

He said: “Meat is rich in polyunsaturated fat and cholesterol. Our results could provide an explanation for the association between frequent meat consumption and increased risk in developing cardiovascular diseases. Including polyphenol rich products as an integral part of the meal significantly diminish these harmful effects.”

 

Over four days, the researchers fed a group of 14 healthy volunteers a series of meals of dark turkey cutlets and asked them to avoid other meats and fish.

 

A smaller group of the same individuals then repeated the four day diet, accompanying each cutlet with the equivalent of a glass of red wine.

 

The research showed that when the volunteers ate the meat alone, they had increased levels of a compound known as malondialdehyde in their blood stream after eating.

 

They also showed greater levels of cholesterol that had been modified by malondialdehyde in their blood.

 

After four days of eating the meat, the levels of modified cholesterol had increased by 97 per cent. It is thought that such modified cholesterol is responsible for hardening arteries and creating plaques that lead to heart disease.

 

When they had the cutlets with red wine, however, the levels of modified cholesterol did not change and even fell in some cases.

 

In the study, which is published in the Journal of Functional Foods, the meat cutlets for the second group were marinated in red wine, but Professor Kohen said a similar effect would be seen if they had drunk the red wine with the meal.

 

A separate study from New Zealand has also revealed that eating vegetables like potatoes with red meat can help reduce the harmful by-products produced during digestion.

 

 

——

How to become a wine expert

 

Source: Stuff

DAVE MCINTYRE

14/01/2013

People sometimes ask me how I became a “wine expert.” My answer: I drink a lot more than most folks, and I pay attention.

 

The attention is key, not the drinking. The simplest way to get more enjoyment out of wine – beyond a fruity buzz – is to read the label, then smell and taste the wine and remember what both tell you. If you walk into a wine store or dine in a restaurant, the retailer or sommelier won’t be able to help you much if all you can recall about the wine you enjoyed last week is that it was red.

 

But if you know you like your whites dry and citrusy with a touch of minerality, your retailer or somm might direct you to a gruner veltliner or albarino as an alternative to the familiar pinot grigio. Favour full-bodied, rich and oaky whites? Then try a white Burgundy instead of a California chardonnay. If you like the perfumed floral aromas of viognier, you might enjoy a torrontes from Argentina as a change of pace.

 

Do you like your reds fruity or savoury? Unless, like me, you would answer that question with “yes,” your response could lead you to either the New World or Europe: to zinfandel or to a Rhone Valley syrah.

 

If it sounds like you need a road map to find your way, Madeline Puckette thought so, too. A graphics designer turned sommelier, Puckette, 29, heads the wine programme at Poppy restaurant in Seattle and has reached the certified-sommelier level in the Court of Master Sommeliers.

 

Puckette found herself asking customers a series of questions to lead them to a wine choice that would fit the restaurant’s eclectic list and spicy cuisine. She decided to use her design skills to develop an infographic she calls “The Different Types of Wine,” which she published on her blog, Wine Folly.

 

“People tend to order familiar wines, like merlot,” Puckette said in a phone interview. “I try to refer them to wines similar to what they know, while giving them new experiences. Shiraz and syrah are different even though they are the same grape variety. So this chart looks at wines by their different flavour profiles.

 

“I spent a lot of time thinking about how wines differ: light or full-bodied, lush or smooth. What do you feel like drinking tonight?”

 

Puckette calls her diagram “a geek thing. Not for wine geeks, but for people who like flow charts”.

 

Psychologists might prefer the similar flavour-profile-driven approach of Jennifer Simonetti-Bryan in her new book, “The One Minute Wine Master: Discover 10 Wines You’ll Like in 60 Seconds or Less”. Think of it as a Meyers-Briggs character assessment for wine nerds.

 

Simonetti-Bryan, a master of wine, poses 11 simple questions about our eating and drinking preferences, including which flavour of gum we prefer. Depending on our answers, she assigns us to one of four groups, named for the seasons that reflect our flavor preferences in wine.

 

I’m an autumn guy, apparently, which means I like “wines that are not too delicate, not too fruity or jammy, yet not too strong either”. (It might also mean I can’t make up my mind, but I’m not sure.) Apparently, I like wines with “medium to medium high” concentration, tannins and alcohol (accurate, as far as it goes), whereas if I were, say, spring-loaded I’d prefer light wines with low tannins and lower alcohol levels.

 

Puckette’s flow chart and Simonetti-Bryan’s personality quiz can help us understand our wine preferences and overcome reluctance to try something new. But the key is still simple: Swirl, sniff, sip – and pay attention.

 

 

——

Quinta da Romaneira sold, Seely increases stake

 

Source: Decanter

by Jane Anson in Bordeaux

Friday 11 January 2013

 

Quinta da Romaneira, one of the Douro Valley’s largest estates, covering 400 hectares with 85 hectares planted to vines, has been sold by investment group IDI.

 

The transaction was completed on December 31; the main buyer has not been named but it has been confirmed that AXA Millésimes chief Christian Seely has increased his personal stake, and will continue to run the estate, as he has done since IDI bought the property in 2004. Antonio Agrellos is to continue as consultant winemaker.

 

‘Christian Seely will remain managing director of AXA Millésimes and Quinta do Noval (the Axa Millésimes Portuguese wine estate) as well as managing director of Quinta da Romaneira, a position he already held under the ownership of IDI,’ Wine Bankers, the Paris investment specialist which oversaw the deal, confirmed.

 

The buyer is a private, non-Portuguese investor, and Seely himself remains a part-owner, increasing his personal stake. Seely confirmed that AXA Millésimes is not the purchaser.

 

The other shareholders have now sold along with IDI. The total sale price has not been released.

 

IDI invested ?11.8m in the estate, renovating it and building a hotel which was voted in the world’s top 20 vineyard hotels by the Times newspaper in 2010. Over the past two years, in-bottle sales have tripled.

 

Single quinta ports from Romaneira were auctioned by Christie’s in 1872, the first recorded ports of this kind to be sold at auction. Today, Quinta da Romaneira produces award-winning AOC Douro and Port wines.

 

‘It has been a good deal for all the original investors, and a great deal for Romaneira,’ Seely told Decanter.com. ‘I am delighted to be associated for the long term with my new partner, and to be able to develop the huge potential of Romaneira in the years to come.’

 

 

——

PROWEIN 2013 E-TIX AVAILABLE ONLINE

 

Source: Metro Communications Design

Jan 10th

 

Early registration discounts offered, includes free local transport.

 

Entrance passes for ProWein 2013, International Trade Fair Wines and Spirits, can now be ordered online at www.prowein.com at reduced rates. The event will take place from March 24 – 26, 2013 at the fairgrounds in Düsseldorf, Germany. The online price for a 1-day ticket is Euro 30 instead of Euro 40 on show site and a 3-day ticket is available online for Euro 54 instead of Euro 65 when purchased at the show. Show directories cost Euro 16 onsite and online (plus shipping & handling when ordered online). The eTickets ordered online can be printed at home and will be converted into badges at the turnstiles on show site.

 

The ProWein 2013 entrance passes can be used as a free public transportation ticket on all buses, streetcars, underground trams (U-Bahn), urban railways (S-Bahn) and German rail service within the Rhine-Ruhr regional network (VRR) of Düsseldorf on all days of the trade show.

 

In addition to the entrance passes, www.prowein.com offers many other useful tools for visitors and exhibitors alike such as exhibitor product information and special show updates as well as industry-specific news and hotel and travel tips. Exhibitors can also use the ProWein 2013 portal to process their orders online. All these tools are available in German and English.

 

For further information on visiting or exhibiting at ProWein 2013, contact Messe Düsseldorf North America, 150 North Michigan Avenue, Suite 2920, Chicago, IL 60601. Telephone: (312) 781-5180; Fax: (312) 781-5188; E-mail: info@mdna.com; Visit our web site http://www.mdna.com; Subscribe to our blog at http://blog.mdna.com; Follow us on twitter athttp://twitter.com/FoodBev_MDNA

 

For hotel and travel information, contact TTI Travel, Inc. at (866) 674-3476; Fax: (212) 674-3477; E-mail: info@ttitravel.net;www.traveltradeint.com

 

 

——

Kentucky: Proposed Kentucky liquor law changes sent to legislators

 

Source: The Courier-Journal

Gregory A. Hall

Jan 12, 2013

 

A task force charged with tidying up Kentucky’s alcoholic beverage laws and regulations – including some in effect virtually since Prohibition – finalized its report Friday, sending 34 recommendations to legislators.

 

House Licensing and Occupations Committee Chairman Dennis Keene, a task force member whose committee considers alcohol laws, said he hasn’t talked yet with Gov. Steve Beshear’s staff about a bill, but expects one will be filed during the current 30-day session.

 

Keene, D-Wilder, said he’d like to see something passed quickly.

 

“If it’s a priority for the governor, it’s a priority for us,” he said. “We’re going to expedite it.”

 

The report essentially mirrors suggestions from the task force’s subcommittees, most of which finished their work in November.

 

The report is silent, for example, on state laws that allow more liquor licenses in Louisville than elsewhere; close bars during elections; and prevent liquor and wine sales in groceries while allowing them in drugstores.

 

Public Protection Secretary Bob Vance, whose cabinet includes the Department of Alcoholic Beverage Control, has said previously that the liquor-in-groceries issue was outside the scope of the task force’s work.

 

U.S. District Judge John Heyburn II ruled last summer that a Kentucky law allowing liquor and wine sales at gas stations and drugstores but not groceries is unconstitutional. Enforcement of the ruling is on hold, however, while it is appealed by both the state and a Northern Kentucky liquor store.

 

Task force leaders have said such issues were avoided in hopes of crafting a bill that could successfully change less controversial parts of state law.

 

The task force does recommend repealing a law that requires county liquor stores and bars to close on the day a city or precinct holds a wet-dry vote. It did not address the law that prevents alcohol sales while the polls are open during regularly scheduled elections. Separate bills to do that have been filed in both the House and Senate.

 

The report also calls for a new law giving amnesty from criminal prosecution to those who alert authorities to some emergencies involving alcohol – for example, an adult who provided alcohol to a minor who then needs medical treatment, or a teenager who seeks medical care for another minor with whom the teen was drinking.

 

Without the promise of amnesty, some fear the threat of criminal prosecution would keep such people from seeking help.

 

 

——

New Hampshire: Plan to hike beer tax riles up brewers

 

Source: Seacoast Online

By Elizabeth Dinan

January 13, 2013

 

About 43 million gallons of beer were sold in New Hampshire during the last fiscal year, and it was taxed at a rate of 30 cents a gallon, raising a total of $12.8 million in beer taxes.

 

Boost that beer tax by a dime per gallon and the state would raise another $4.2 million, which could be used for alcohol prevention and treatment programs, suggests state Rep. Charles “Chuck” Weed, D-Keene. With fellow Democrat Richard Eaton of Greenville, Weed is co-sponsoring a bill that proposes a 10-cent-a-gallon increase to the beer tax, with a stipulation that the millions in extra revenue be used by the Department of Health and Human Services for alcohol treatment programs.

 

“Last year we passed a bill to allow nanobreweries to sell at farmers’ markets. New Hampshire is on the verge of becoming kind of a special environment for beer culture.”

 

The beer tax is imposed on licensed wholesalers, manufacturers, brew pubs and nanobreweries, then passed on to consumers.

 

“I would like to see the extra revenue go toward a badly stretched budget,” said Weed, who prefers light thirst-quenching beer over heavy craft brews and says he’s made his own beer.

 

Weed said his bill doesn’t propose a tax increase on wine or hard liquor, both of which are regulated and sold by the state of New Hampshire, because, “I have an unconscious sense that we should start with small steps.”

 

The bill was filed last week and already faces plenty of opposition.

 

Smuttynose Brewery owner Peter Egelston called the proposed beer tax increase “a combination of bad social policy and very bad economic policy.” For starters, he said, the proposal is, “a chicken (expletive) way to raise taxes.”

 

“I would tell whoever in the Legislature is in support of this the same thing,” he said. “Because when the person who goes into the store and sees the price of beer is up by say, $1 a six pack, it’s never going to occur to them that it’s a tax increase. They’ll curse out the brewers and the procurers and the retailers, but we have nothing to do with it.”

 

Egelston added that, “beer is a price-sensitive product” and because of that, any tax increase “would certainly impact our sales.”

 

“There is no doubt in my mind it would go down,” he said.

 

Further, the brewery owner predicted, any beer tax increase set by the state would be passed onto beer drinkers two-fold. Egelston explained that’s because a six-pack sold by a producer for $10 is marked up by the distributor by 30 percent, then marked up another 30 percent by the retailer. Neither are going to reduce their profit margins to absorb a new tax, he said.

 

“The cost of that tax will double by the time it gets to the consumer,” he said. “It hits the consumer twice as hard as a sales tax. Say what you will about a sales tax, but at least you can see it and know what it is. And there are federal and state excise taxes already buried in beer costs.”

 

The federal tax on beer is currently $7 a barrel (there are 31 gallons in a barrel) and there is current legislation to increase the federal tax, as well as opposing legislation proposed to lower the federal tax for small brewers.

 

“The right federal policies will help small brewers compete and thrive and hire more workers,” said Brewers Association CEO Bob Pease in a public statement. “The wrong policies would wreak havoc on this dynamic industry.”

 

Rep. Weed said the original intent of New Hampshire’s beer tax was to use the money for removing trash from along state roads because there’s no bottle or can deposit, but the state has been “raiding it for the general budget.”

 

The New Hampshire Liquor Commission’s enforcement chief, Eddie Edwards, said all money raised by the state through the sale of wine and liquor, as well as taxes on beer, “goes right to the general fund.”

 

Weed reminds that the state’s 30-cent tax on every gallon of beer hasn’t been raised since 1983. And according to Alcohol Justice, a nonprofit organization that advocates using some alcohol profits for alcohol programs, if New Hampshire’s beer tax kept pace with the rate of inflation, the tax would now be 69 cents a gallon.

 

According to Weed’s pending bill, the extra beer revenue raised through the dime-per-gallon increase could pay the salaries of three full-time “prevention and treatment program specialists.” Total pay for those hires would range from $134,258 to $152,742, benefits would cost between $75,069 and $92,639 and there would be a travel budget, according to proposed changes to the beer tax law.

 

The balance would be used for treatment and prevention services, and about 20,000 people would receive treatment, according to the proposed legislation.

 

State Rep. Adam Schroadter, R-Newmarket, who co-owns The Stone Church restaurant in Newmarket, said if the intention of the bill is to help people who have problems with alcohol, then the state should pay the tab.

 

“Given that the state operates the wine and liquor portions of those sales, it seems like that’s where that should come from, instead of from a local growth industry,” he said. “I don’t think that’s the right place for that tax.”

 

Egelston said taxing “a specific group of consumers to support a particular social objective, no matter how worthy that objective may be,” is a “slippery slope.”

 

“People who advocate for higher taxation (on alcoholic beverages), if they’re honest, will say they’re doing it not to raise revenue but to reduce demand,” he said. “These people are on a moral crusade. It needs to be said up front that there are people in our society with terrible alcohol abuse problems. But beer is a legal product that the vast majority of people consume responsibly.”

 

Egelston added there are “lots of things that people abuse,” citing prescription drugs and automobiles as examples. Yet no one is proposing higher taxes on prescription drugs to curb abuse, or on cars for safe-driving programs, he said.

 

“They want to hurt the beer industry,” he said.

 

And don’t compare beer taxes to cigarette taxes, said Egelston. “People who advocate taxing beer often make an analogy to the cigarette tax,” he said. “I will state there’s no legitimate comparison, because there’s no safe consumption of cigarettes. On the other hand, you can’t say that about the person who has a bottle of beer when they get home from work.”

 

Schroadter said he was “taken aback” when he heard “out of the blue” about the proposed beer tax increase last week because he’s been one of a group of legislators who’ve worked on “beer and wine issues.”

 

“It looks like the funds go to a worthy cause,” he said. “I just wonder at what expense?”

 

With Rep. Mark Warden, R-Goffstown, Schroadter said he just formed a “House Beer Coalition” to provide legislators with information about small brewers and wine makers and to advocate on their behalf.

 

“Last year we passed a bill to allow nanobreweries to sell at farmers markets,” he said. “New Hampshire is on the verge of becoming kind of a special environment for beer culture.”

 

Now, Schroadter said, he’s hearing from brewers that the proposed beer tax bump would translate to a 10-cent increase for every 40 cents worth of beer sold, or a 25 percent mark-up on beer.

 

“It makes it very difficult to do business here,” Schroadter said. “We’re just starting to have people come to New Hampshire to sample beer. We have a real opportunity to become that go-to state.”

 

Weed said he expects opposition from lobbyists representing grocers, particularly in border towns, where out-of-state beer buyers represent a good portion of the customer base. But even with a 10-cent tax increase on every gallon of beer, Weed said, “since we don’t charge a deposit, it’s still cheaper.”

 

 

——

Ohio: JobsOhio Beverage System to sell $1.5bn revenue bonds

 

Source: Business Recorder

Friday, 11 January 2013

 

The JobsOhio Beverage System is planning to sell $1.5 billion of statewide senior lien liquor profits tax-exempt and taxable revenue bonds in two parts, during the week of Jan. 21, said a market source on Friday.

 

The sale consists of $423 million of tax-exempt bonds which will be sold through lead manager Bank of America Merrill Lynch and $1.1 billion of taxable bonds to be sold via lead manager Citigroup.

 

 

——

Utah: New DABC boss shows Utah’s liquor wackiness dies hard

 

Source: The Salt Lake Tribune

By PAUL ROLLY

Jan 11 2013

 

In the 1988 movie “Die Hard,” Bruce Willis runs around a high-rise office tower trying to save his wife and dozens of other hostages from a gang of East German terrorists who are also trying to hunt him down as he knocks off one terrorist at a time.

 

His only lifeline outside the building is a police radio contact with Los Angeles Police Department Sgt. Al Powell as city, state and federal officers form a perimeter around the building.

 

But the sergeant and the Willis character keep getting thwarted by an incompetent LAPD deputy chief named Dwayne Robinson. This bumbler’s ego demands he be the one in charge, so he keeps interfering with the sergeant to make the point he is in command and his gaffes almost screw up everything.

 

Utah’s newly appointed Alcoholic Beverage Control director, Salvador Petilos, reminds me of Dwayne.

 

Just in time for the tens of thousands of out-of-staters coming to Utah this month, the DABC has a new interpretation of a 44-year-old law concerning the requirement that alcohol served in restaurants must be accompanied by food orders.

 

For decades, restaurants have used the practice, unmolested by liquor law enforcers, of allowing patrons to have a glass of wine while perusing the menu. But now, restaurants are told no wine can be served until the patron has ordered a meal.

 

That means no areas in restaurants for customers to lounge with an alcoholic drink while waiting for a table.

 

That means the tens of thousands of people in town this month for the Sundance Film Festival and the Outdoor Retailer trade show will have a negative experience at Utah restaurants – unlike just about anywhere else in the country.

 

And this comes at the same time Utah economic development officials are doing everything they can to keep the Outdoor Retailer show from jumping to another city in the future.

 

But, hey, there is a new sheriff in town and he has to show off his moxie.

 

 

——

Missouri: Beer bill brews in Missouri Legislature

 

Source: Post Dispatch

January 12, 2013

 

Homebrewed beers may be allowed to be poured at festivals, competitions and charity events under a bill introduced this week in the Missouri Legislature.

 

Sen. Eric Schmitt, R-Glendale, is the sponsor of Senate Bill 114, which seeks to amend a state statute that says homebrew can only be made for “personal or family use.”

 

Under Schmitt’s bill, homebrewers still would not be allowed to sell their beer, but they could take it out of their homes and pour it at certain “organized affairs, exhibitions or competitions, such as homebrewer contests, tastings or judging.”

 

Such events would include beer festivals that have obtained temporary retail licenses as well as at licensed charity events.

 

The proposed legislation comes after homebrewed beer was unexpectedly banned from last year’s St. Louis Brewers Heritage Festival downtown.

 

The bill, which has not yet been assigned to any Senate committees, would take effect in late August.

 

Saint Louis Brewery CEO Dan Kopman, who also serves as vice president of the Missouri Small Brewers Guild, says he is pushing to get homebrew back at this year’s Heritage Fest, scheduled to take place over Father’s Day weekend.

 

“We hope we can get this thing passed in January, February or March,” Kopman said, adding that the bill has a House companion that will be filed soon.

 

“I don’t know if we’ll be able to get early permission from the state or if something can be done on the city level, but our hope is that home-brewer beer will return to the festival this June.”

 

Besides the state brewers guild and the St. Louis Brewers Guild, Kopman noted that the Missouri Beer Wholesalers Association and Anheuser-Busch InBev also support the proposed legislation.

 

“After what happened last year, I started working with all of the stakeholders in the beer business in the state toward getting the law changed,” Kopman said. “We all wanted to make sure we did it right, and I think we did.

 

“Senator Schmitt said he really wanted to introduce it, and we said great.”

 

Homebrewers, meanwhile, are keeping their fingers crossed that the bill is enacted.

 

“Allowing homebrewers to showcase their beers at public events is important because, ultimately, this is where it all starts,” St. Louis homebrewer Matt McGavic says. “From Anheuser-Busch to any of the new breweries opening around town, they all started somewhere.”

 

 

——

Pennsylvania: Marijuana Legalization Legislation Coming This Month in Pennsylvania Could Hold $1B Economic Impact

 

Source: Keystone Edge

Joe Petrucci

Thursday, January 10, 2013

 

Marijuana will be legal in Pennsylvania. It’s merely a matter of when, says State Senator Daylin Leach (D-17), who is preparing to introduce legislation later this month that would legalize marijuana.

 

“This will be legal in 20 years,” says Leach, who represents parts of Delaware and Montgomery Counties. Last Friday he issued a memorandum broadly outlining the costs of continued marijuana prohibition and a roadmap toward legalization in the more foreseeable future.

 

“I don’t believe this is a fringe issue. It’s a major economic issue and a major moral issue.”

 

While Leach is the first to admit this legislation will face an uphill battle, the economic gains from legalizing pot are potentially enormous and the timing seems as ripe as it has been considering recent successful legalization measures in Washington and Colorado.

 

A $1 Billion Pull

Leach says it’s difficult to estimate an overall statewide economic impact because taxation levels have not been established and it’s unclear how many marijuana users there are in Pennsylvania. However, Leach indicated taxation would come at a high level because of marijuana’s low production costs and was confident in saying he is anticipating an impact that approaches $1 billion. That takes into account some $325 million spent on more than 25,000 arrests in 2006 (an average year) and potential monies from taxes and related industry, as well as harder-to-track savings like when a young person has to drop out of college because of a minor marijuana conviction.

 

“This will create a huge, new industry, from the growers to the distributors to whatever retail outlet we ultimately choose,” says Leach. “It’s sort of a no-brainer in terms of economic benfit.”

 

Drug policy expert Jonathan Caulkins, a Heinz College professor at Carnegie Mellon University in Pittsburgh, urges caution when projecting such numbers, citing factors like bloated arrest costs and potential tax avoidance practices that would make the actual economic impact much more modest.

 

Caulkins also says that marijuana users, socio-economically, are middle-of-the-road when compared to other drug users, and that about 60 percent of marijuana use comes from people with a high school education or less. Alcohol ranks on the higher end of the socio-economic ladder and cocaine ranks on the lower end of the spectrum, according to Caulkins.

 

“The devil can be in the details in how these things are written,” he says. “To think about it from the perspective of how a dynamic, creative, entrepreneurial industry would try to respond to opportunities it creates is a worthwhile thing to do.”

 

Leach’s initial plan is to regulate marijuana like alcohol and plug it into the state’s network of wine and spirit stores, as well as licensed beer distributors. That would be a first, and potentially troublesome, according to Caulkins. He says it would put state employees who work at the distribution centers in the crosshairs of prosecution as long as marijuana is illegal at the federal level. The ambiguity on the issue from Washington D.C. and President Obama also makes any projections dicey.

 

Nonetheless, treating pot like booze was part of the plan in Oregon, already one of 19 states that permit medical marijuana and which saw legalization on the November ballot narrowly defeated largely because of insufficient funding and campaign organization.

 

Caulkins says legalization would radically transform how marijuana is produced and distributed. Economic activity in a legalized scenario would likely center on branding (craft growers like craft brewers) and bundling (selling marijuana alongside coffee and baked goods at a cafe), he says, while large-scale producers would likely reign.

 

The State of the State

Despite the potential economic impact, mainstream media across the state is largely dismissing the legislation as having zero chance of passage.

 

Most initial reports are citing past polls that indicate public support for medical marijuana (80 percent) and outright legalization (only 33 percent) and requisite commentary from Terry Madonna, the well-known political science guru from Franklin & Marshall. One important point about the latter figure on outright legalization — that was from a 2010 poll and an increase from 22 percent two years prior. It’s not hard to imagine that figure might now be hovering around 50 percent, especially with the recent developments in Colorado and Washington.

 

Those states, however, had its residents vote on the issue. Getting politicians to line up around legalization is another story, but Leach believes gaining the support of consistent conservatives who are staunch advocates of personal liberty and law enforcement officials who are increasingly strapped for time and resources could make a difference.

 

Leach points out that in Philadelphia, marijuana is effectively decriminalized when it comes to small amounts. Less than three months on the job, District Attorney Seth Williams announced in April, 2010 that his office would divert marijuana possession cases involving 30 grams or less from the court system to a new program that processes them quicker and spits them out with a clean record. That saved the DA’s office $2 million in its first 12 months.

 

Moving the Arguments Forward

Leach has already been on the losing end on one of two bills for medical marijuana in Pennsylvania that died in committee in the last two years. In his recent memo, Leach cites many standard points of fact for total legalization:

 

– Marijuana is less dangerous then beer, less risky than children’s cough syrup and less addictive than chocolate.

– Marijuana never killed anybody and its prohibition causes far more societal harm than its properties

– The extreme cost of prohibition.

 

“Marijuana was the most prescribed drug in America before 1937,” says Leach. “The anecdotal evidence and literature (for ending its prohibition) are overwhelming.”

 

Caulkins calls Leach’s argument a “classic presentation for marijuana legislation,” but believes Leach’s assertion that marijuana prohibition has created violent turf wars somewhat misrepresents the magnitude of the issue, and that other illegal drugs like cocaine and methamphetamines are the primary contributors to associated violent crime in Pennsylvania.

 

Caulkins makes himself available to state and federal policymakers around the subject of sound drug policy. When asked how he might advise Pennsylvania lawmakers, he says patience is a virtue. He believes waiting to see how things play out in Washington State, Colorado, California and in Washington, D.C. will best position marijuana legalization legislation for success.

 

“There’s a difference between the cutting edge and bleeding edge,” says Caulkins. “Let someone else be on the bleeding edge.”

 

 

——

Pennsylvania: LCB to promote more state wines in stores

 

Source: The Tribune-Review

January 10, 2013

 

The state Liquor Control Board plans to announce a new program today at the Pennsylvania Farm Show that could put more local wines on state store shelves.

 

LCB spokeswoman Stacy Kriedeman said a “PA Preferred” winery could select a number of wines to be placed in local wine and spirits stores.

 

“PA Preferred” products are grown or made in the commonwealth and bear a check-mark logo.

 

Local “PA Preferred” wineries include Greendance Winery at Sand Hill near Mount Pleasant, Christian Klay winery near Farmington and La Casa Narcisi Winery in Gibsonia.

 

Wines from some Pennsylvania wineries already are in state stores, but the program would further the effort to promote the “buy local” initiative, Kriedeman said.

 

“It gives consumers an opportunity to try products they might not otherwise have an opportunity to try,” she said.

 

Board member Robert S. Marcus of Indiana and Agriculture Secretary George Greig will announce the program at 5:30 p.m. Thursday at the Farm Show in Harrisburg.

 

 

——

Washington: Washington liquor stores find business hard

 

Source: Yakima Herald-Republic

By Mai Hoang

Jan 14th

 

Kristen Clark doesn’t sugarcoat her thoughts on business at Liquor and More.

 

“We’re still here,” said Clark, who managed the former state contract liquor store before taking ownership in September. “But alcohol is not a stand-alone product you can have a business on.”

 

So she is selling greeting cards, wine and gift items alongside bottles of Jack Daniels, Bombay Sapphire and other popular liquors at the store in Selah.

 

Clark and others who took over liquor stores when the state got out of the alcohol business last June have had to continually tweak their business strategies to stay competitive with national grocery store chains and even their distributors.

 

“You have to know how to buy, you have to know the business, you have to make it work the best you can,” said Ted Eaton, general manager of Wenatchee-based Good Spirits, which took over four state-run liquor stores, including one in Yakima. Good Spirits spent $153,600 to purchase the license rights for the store from the state Liquor Control Board.

 

The biggest challenge for many of these store owners is a 17 percent fee all retailers are required to pay on gross hard-liquor sales.

 

Large food stores, such as Safeway and Costco, can absorb that cost with margins from other items, said Jas Sangha, president of the Washington Liquor Store Association, a newly formed group of business owners running former state-run and contract stores. The association has about 80 members.

 

With hard liquor making up roughly 80 percent to 90 percent of sales for many small liquor stores, they have little choice but to pass on the fee directly to consumers, who are already paying other taxes and fees on their purchases, Sangha said.

 

The fee has also made it difficult to offer competitive prices to restaurants. Under the state’s new regulations, distributors do not have to pay the fee and can sell directly to restaurants at lower prices, Eaton said.

 

“It makes our price points completely out of whack,” he said.

 

That’s led many liquor store owners to sell other products not only to draw new customers but provide a revenue source that is not taxed with the 17 percent fee.

 

Good Spirits expanded its beer selection and started selling growlers — half-gallon glass beer jugs.

 

Clark, of Liquor and More in Selah, is selling items used in mixed drinks, such as orange juice, soda and half-and-half.

 

She’s also in the process of adding lottery tickets and cigarettes to her offerings. She believes that people will be drawn by the convenience of one-shop shopping at smaller stores such as hers.

 

“After a hard day, you don’t have to run around the grocery store,” she said.

 

But a smaller store doesn’t mean fewer products for Craig Paddock, owner of the Union Gap Liquor Store, a privately owned liquor store that had operated under contract with the state before last June.

 

Paddock’s strategy has been to expand his inventory by including items not sold at grocery stores. He estimates that his 2,000-square-foot store sells 1,000 different products.

 

“We’re having new customers because they heard we got a (wider) variety,” he said.

 

Such products include miniature-size bottles of liquors commonly sold on airline flights.

 

A fifth of Crown Royal, he said, costs about $40. A miniature-size bottle cost just a few dollars.

 

“It’s a great way for people to sample things without being beat to death on the prices” of the full-size bottles, Paddock said.

 

Though many of the former state-run and contract liquor stores remained open under the new owners after liquor privatization, some customers believed they were gone.

 

“I still heard throughout the holidays, ‘I didn’t know the liquor store was still in business,'” Clark said.

 

And while they are competing against each other, these owners are inclined to help each other out.

 

Clark often calls around to the other independent liquor stores if she doesn’t have a certain product, just as she did when it was a contract liquor store.

 

Good Spirits retained all the employees who worked at the state-run stores.

 

The employees are used to providing drink recipes or helping customers understand the different types of spirits, Eaton said.

 

“The customer service is good,” Eaton said. “That’s probably the key thing for any of us to make it.”

 

 

——

Australia: Liquor Wholesaling in Australia Industry Market Research Report Now Updated by IBISWorld

 

Source: PRWeb

Sat, Jan 12, 2013

 

The Liquor Wholesaling industry has had its ups and downs due to generally weak consumer conditions, shifting tastes, falling per capita alcohol consumption and increasing wholesale bypass. For this reason, industry research firm IBISWorld has updated its report on the Liquor Wholesaling industry in Australia.

 

Australians generally enjoy a drink, and with growing sophistication of the Australian palate, an expanding liquor variety has given room for Australians to try new things. Overall, beer consumption has declined in favour of wine and spirits, although the growing popularity of premium, craft and imported beer has increased. Liquor wholesalers have benefited from such trends as most industry players deal mainly in wine, spirits and imported beer, with only a select few being preferred by large retailers, often dealing with high-turnover, low-value products. The Liquor Wholesaling industry is sensitive to factors that affect alcohol consumption. According to IBISWorld Industry analyst Ryan Lin, ‘these factors include alcohol demand, tax changes to alcoholic products, real household disposable income, regulations affecting the consumption of alcohol and changing social attitudes’. In the five years through 2012-13, the industry has had its ups and downs due to generally weak consumer conditions, shifting tastes, falling per capita alcohol consumption and increasing wholesale bypass. IBISWorld estimates that industry revenue growth will be largely flat over the five years through 2012-13, with industry revenue growing at an annualised rate of just 0.3% to reach $6.05 billion. Revenue is expected to increase by 1.7% in 2012-13.

 

The industry is forecast to record moderate revenue growth over the next five years. ‘While some favourable product trends will boost liquor sales, the growing market power of the supermarkets and associated increase in wholesale bypass will continue to hurt industry operators’, says Lin. During this period, liquor wholesalers will be looking to improve on the industry’s reach and performance across the liquor market. Improvements in operating efficiency will be paramount to remaining competitive and retaining clients; as will cost cuts and warehouse efficiency improvements that aim to reduce labour costs. Increasing sophistication of the Australian palate proves a big opportunity to capitalise on future growth.

 

The two largest companies operating in the industry are Metcash and Diageo Australia. The Liquor Wholesaling industry in Australia has a moderate level of market share concentration level. The five years to 2012-13 are expected to be stable in terms of market share consolidation, with industry participant numbers relatively stable. This trend is expected to continue in coming years as enterprise number stay similar, reflecting the low level of changes in consumer alcohol consumption.

 

For more information, visit IBISWorld’s Liquor Wholesaling in Australia industry page.

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