Liquor Industry News 3-19-13

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Franklin Liquors

 

Tuesday March 19th

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Great To Taste Or Drink Wine!

US Spirits Nielsen Data Sales growth remains solid in February

 

Source: UBS

Mar 18th  

 

US spirits Nielsen data shows sales up +5.1% in four weeks to 2 March

 

Lapping a challenging +3.7% comp, US spirits volumes (ex Washington) grew 2.1% y/y (above the +1.9% last 12 week trend y/y). Price/mix grew +3.0% y/y (in line with the last 12 week trend), implying +5.1% sales growth y/y (similar to 12 and 52 weeks y/y). The % of volume sold on promo is down -280bps y/y in the last month (-230bps last 12 weeks), led by Pernod (-530bps) and Diageo (-480bps).

 

US Spirits trend remains solid, but offers limited upside to our forecasts

 

US Spirits recovery remains solid, but we see limited scope for growth upgrades relative to our forecasts. Diageo and Pernod have stronger price/mix than the market, with both cutting back significantly on promotions. We estimate 2013 US spirits volume and value growth of 2.0% and 4.5% y/y.

 

 

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Brewers Association: Craft Beer is Now a $10 Billion Category

 

Source: Brewbound

by Chris Furnari

March 18th

 

Craft beer is now a $10 billion category.

 

As part of its annual report on the state of the U.S. craft beer industry, the Brewers Association (BA) – a trade group representing small and independent brewers – indicated that U.S. craft beer volumes reached an all-time high last year.

 

With 2012 production swelling past 13.2 million barrels – a 15 percent increase from 2011 – craft sales grew by 17 percent, taking total retail revenues for the category up to an estimated $10.2 billion.

 

“Beer is a $99 billion industry to which craft brewers are making a significant contribution, with retail sales share hitting double-digits for the first time in 2012,” BA director Paul Gatza said in a press release.

 

Craft beer sales have been steadily increasing since 2005, when 1,394 breweries made just 6.3 million barrels. Fast forward eight years, and nearly 1,000 new breweries have opened their doors, helping to more than double the industry’s total production of craft beer. In the last two years alone, 684 new breweries have launched, while only 80 have shut their doors, according to the BA.

 

“On average, we are seeing slightly more than one craft brewery per day opening somewhere in the U.S. and we anticipate even more in the coming year,” Gatza said.

 

But the BA definition of “craft ” only includes those brewers who produce less than 6 million barrels annually and are less than 25 percent owned by another non-craft brewer. That means production from Craft Brew Alliance (which markets the Kona, Redhook and Widmer Brothers brands), Goose Island, Magic Hat and Pyramid goes unaccounted for. The BA definition also excludes production from the independently-owned D.G. Yuengling & Son, which produced over 2.5 million barrels in 2012, and so-called “crafty” brews like Shock Top (owned by Anheuser-Busch InBev) and Blue Moon (owned by MillerCoors). Collectively, more than 6 million barrels of what many believe is better quality beer than most domestic premium offerings is left unaccounted for.

 

Nonetheless, the new BA figures confirm craft’s upward surge across multiple retail channels, which Symphony IRI’s senior vice president of beverage alcohol services, Dan Wandel, reported during last month’s “Power Hour” seminar. The research company said craft dollar sales increased 18.5 percent in food, drug, club, dollar, military, multi-outlet and convenience channels.

 

Included below is the complete BA press release which further details the growth of craft beer in 2012.

 

Boulder, CO – The Brewers Association (BA), the trade association representing small and independent American brewers, today released 2012 data on U.S. craft brewing1 growth. In a year when the total U.S. beer market grew by one percent, craft brewers saw a 15 percent rise in volume2 and a 17 percent increase in dollar growth, representing a total barrel increase of almost 1.8 million.

 

With production at 13,235,917 barrels in 2012, craft brewers reached 6.5 percent volume of the total U.S. beer market, up from 5.7 percent the previous year. Additionally, craft dollar share of the total U.S. beer market reached 10.2 percent in 2012, as retail dollar value from craft brewers was estimated at $10.2 billion, up from $8.7 billion in 2011

 

“Beer is a $99 billion industry to which craft brewers are making a significant contribution, with retail sales share hitting double digits for the first time in 2012,” said Paul Gatza, director, Brewers Association. “Small and independent brewers are consistently innovating and producing high quality, flavor-forward craft brewed beer. Americans are not only responding to greater access to these products, but also to the stories and people behind them.”

 

In 2012, there was an 18 percent increase in the number of U.S. operating breweries, with the total count reaching 2,403. This count includes 409 new brewery openings and only 43 closings. Small breweries created an estimated 4,857 more jobs during the year, employing 108,440 workers, compared to 103,583 the year prior.

 

“On average, we are seeing slightly more than one craft brewery per day opening somewhere in the U.S. and we anticipate even more in the coming year. There is clearly a thirst in the marketplace for craft brewed beer, as indicated by the continued growth year after year,” added Gatza. “These small breweries are doing great things for their local communities, the greater community of craft brewers, our food arts culture and the overall economy.”

 

http://www.brewbound.com/news/2013/brewers-association-craft-beer-is-now-a-10-billion-category

 

 

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Yucaipa Taps Into U.S. Craft Beers

 

Burkle’s Firm Invests in Startup That Will Spend Over $100 Million to Help Brewers Boost Capacity

 

Source: WSJ

By MIKE ESTERL

Mar 18th

 

Ron Burkle’s Yucaipa Cos. is the latest investment firm to tap the small but fast-growing craft beer industry, taking a majority stake in a startup company that plans to spend more than $100 million to build five new breweries.

 

Instead of brewing its own beer, Brew Hub LLC of St. Louis, Mo. hopes to fill each facility with at least half a dozen small brewers who want to expand production but face capacity constraints. The new venture will also offer brewers other fee-based services, including distributing and marketing support.

 

Roughly three of four beers sold in the U.S. are brewed by two multinational giants: Belgium’s Anheuser-Busch InBev NV, BUD +0.20% which makes Budweiser and Bud Light, and MillerCoors LLC, a joint venture between the U.K.’s SABMiller SAB.LN -1.21% PLC and Denver-based Molson Coors Brewing Co. TAP -0.95% which makes Coors Light and Miller Lite.

 

But most of the industry’s expansion is being fueled by hundreds of small and independent brewers, or so-called craft brewers, whose shipments have grown by a double-digit percentage three straight years as more Americans branch out from mainstream lagers.

 

Craft volumes surged 15% to 13.2 million barrels in 2012, compared with 1% growth for the U.S. beer industry as a whole, the Brewers Association estimated Monday. Retail sales of craft beer also topped $10 billion for the first time last year, or about one-tenth of U.S. beer sales, as the number of breweries climbed 18% to 2,403, according to the industry group.

 

Outside money increasingly is looking for a way in. Last year Fireman Capital Partners bought a majority stake in Utah Brewers Cooperative, maker of Squatters and Wasatch beers, while Sage Capital acquired a 60% stake in Saint Louis Brewery Inc., maker of Schlafly beer.

 

Equity deals still have been few and far between, though, because many craft brewers are reluctant to surrender control. Many are seeking bank loans to expand their own facilities, renting space from so-called contract brewers or joining with other small brewers to keep up with demand. Up to five million barrels in new brewing capacity are in planning stages across the country.

 

“We’re helping them scale but allowing them to stay in control of their destiny,” said Frank Quintero, a principal at Las Vegas-based Yucaipa.

 

California-born Ron Burkle’s investment arm has completed more than $30 billion in mergers and acquisitions since 1986. Yucaipa’s holdings include stakes in A&P supermarkets, cold-storage company Americold, movie studio Relativity Media and Morgans Hotel Group MHGC +10.74% .

 

Brew Hub plans to break ground by May on a 75,000-barrel brewery in Lakeland, Fla., a state where brewing capacity is particularly tight. Over the next five years, it plans to build at least four other breweries in other parts of the country, including Texas and a mid-Atlantic state. Tim Schoen, a former Anheuser-Busch executive, will run the company.

 

Jim Gorczyca, owner of O’Fallon Brewery in the St. Louis area, says he’s weighing whether to build a new brewery or partner with a company such as Brew Hub after shipments at his brewery soared 21% last year to 10,500 barrels. He’d also like to expand into more states.

 

“Brew Hub becomes a solution outside your home market,” said Mr. Gorczyca, whose brewery’s top-selling beers include O’Fallon 5-Day IPA and O’Fallon Wheach, a peach-flavored wheat beer.

 

 

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Pennsylvania: Pa. House liquor committee approves sale of state store system

 

Gov. Corbett’s bill is amended, but measure moves to full House for vote Thursday.

 

Source: The Morning Call

By Steve Esack

March 18, 2013

 

David Moyer has a plan to help his family.

 

“He said, ‘Mom, I’m going to get a job,’ ” Billie Moyer said.

 

He’s 6.

 

In his Clark, Mercer County, home, that’s old enough to understand the anguish his parents have faced over whether Billie will lose her hourly $21.48 salary and family health benefits as an assistant manager of a state liquor store if the Legislature agrees to privatize the sale of wine and spirits stores as Gov. Tom Corbett wants.

 

His mom is now one step closer to losing her job.

 

After a four-hour hearing Monday, the House Liquor Control Committee voted 14-10 along party lines to end the state’s 80-year-old monopoly on the sale of booze as the Republican governor proposed as part of his $28.4 billion spending plan for 2013-14. The full House is scheduled to vote on the bill Thursday, and, if approved, the bill would move to the Senate for consideration before going to Corbett.

 

The bill the committee adopted is not as grand as Corbett had wanted and its projected proceeds of a sale would be $200 million lower than the governor’s $1 billion estimate. Corbett would spend the money on public education.

 

Despite those differences, Corbett said he was pleased with the bill and sale proceeds would still go to public schools.

 

“We believe this bill will allow us to make a significant investment in schools and it also increases penalties and fines, both of which are important parts of my plan,” Corbett said in a statement.

 

After the hearing, Rep. Paul Costa, D-Allegheny, the committee’s minority chairman, said the committee vote was a foregone conclusion. House Majority Leader Mike Turzai, a longtime privatization proponent, stacked the committee with like-minded Republicans to win the measure, he said.

 

“If he couldn’t get this out of committee, that would have been a huge embarrassment,” Costa said.

 

John Taylor, R-Philadelphia, chairman of the House Liquor Control Committee, said he expects the committee’s bill to be amended, but he predicted the governor will have a bill to sign later this year.

 

Corbett’s original plan was outlined in House Bill 790, which Turzai, R-Allegheny, began advertising in January. Under that plan the state’s 600 state stores would have been phased out over four years in place of 1,200 wine and liquor retailers.

 

Some of those retailers would have included beer distributors who would have had to pay upward of $150,000 to sell wine and also six-packs. At the same time, the bill also would have expanded beer and wine sales into supermarkets, convenience stores and retailers such as Target, Walmart and Costco.

 

But that plan had no chance.

 

For weeks, Taylor said he had his own plan to scale back privatization in large part to protect 1,138 beer distributors who feared they could not compete against big-box stores like Walmart.

 

On Friday, Taylor did just that with an amended bill, 375, introduced by Rep. Mark Mustio, R-Allegheny. On Monday, the committee approved the amended bill.

 

It calls for beer distributors to get first dibs on licenses to sell wine, liquor or both for between $7,500 and $60,000. Beer distributors would be able to pay the licensing fees in monthly installments over two years.

 

In theory, that would leave 62 retail licenses, ranging from $97,500 to $262,500, that would go to the independent stores or corporate chains like Walmart.

 

Large chains like Walmart, however, could only sell liquor or wine at five locations in the state.

 

The bill would allow 820 grocery stores – or one per every 15,000 residents per county – to sell beer and wine. In addition, the prohibition against gas stations selling beer would be voided. Restaurants would be permitted to sell up to six bottles of wine or up to 24 beers to go, and taverns could sell liquor by the bottle.

 

More private licenses could be issued at a future date while state stores gradually would be shuttered until there were 100 left and the entire system would be shut down.

 

The state employees who would lose their jobs would get between $1,000 and $2,000 education grants, which is double what Corbett had proposed. The amended bill also gives preferential treatment for other state jobs that do not require a civil service exam and employers who hire displaced state workers would get a $2,000 tax credit.

 

While Republicans were united behind the amended proposal, Democrats were united against it and got the committee to postpone a vote three times.

 

Rep. Tina Davis, D-Bucks, said the committee needs more time to review the amended bill before voting.

 

“It’s getting shoved down our throats in three days,” she said.

 

“It’s been 80 years,” Taylor replied.

 

The vote won praise from conservative groups, such as the Commonwealth Foundation, which said it is a way to increase jobs and bring change.

 

After the hearing, Wendell Young IV, president of the union that represents more than 4,000 state liquor store employees, said his members will fight to try to defeat the bill in the House and Senate.

 

Jay Wiederhold, president of the Pennsylvania Beer Alliance, said the amended proposal is a little better than Corbett’s plan, but it is far from acceptable. It is unnecessarily complex and creates too much competition with grocery stores, he said.

 

Moyer, the western Pennsylvania assistant state store manager, left Harrisburg confused and unsure of her future.

 

“I really don’t think any of them made any sense,” she said. “I don’t know what I’m going to do.”

 

 

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New 3-ounce alcohol drink sparks concerns

 

Source: NC Capitol

By Mark Binker

March 18th

 

A company hoping to sell 3-ounce vials of high-alcohol malt beverages in flavors like Screw Driver and Apple Pie is asking the state Alcoholic Beverage Control Commission to approve its packaging.

 

Staff members with the ABC Commission rejected Stout Brewing’s packaging for its Stout 21 malt beverage product last month.The formal letter from the commission said the rejection was based on the state’s authority to “prohibit or regulate any advertising of alcoholic beverages which is contrary to the public interest.”  This doesn’t reject the drink itself, but rather the way in which it would be sold.

 

Advocates outside the ABC Commission say there is a particular concern that the product would lure underage drinkers.

 

Cody Sommer, chief executive of Stout Brewing, did not immediately return phone calls seeking comment. His company is asking the appointed three-member ABC Commission to overturn their staff’s ruling. The group will meet at 10 a.m. Wednesday.

 

The Stout 21 case is the first policy decision to be taken by Gov. Pat McCrory’s appointees to the ABC Commission, including former Republican Lt. Gov. Jim Gardner.

 

A malt beverage is any product that is brewed in a process similar to beer. While beers use grains like malted barley as their base and spices like hops to provide flavor, some cheaper malt beverages use the equivalent of sugar water to feed the yeast to produce alcohol as part of the brewing process. Flavors are then added much like they might be to a soda drink.

 

Such beverages are already commonplace in grocery and convenience stores, such as Bacardi Silver, which is sold in beer-like bottles and has 5 percent alcohol by volume.

 

Applications filed with the ABC Commission show that the Stout 21 beverages would be 15 percent alcohol by volume, the equivalent of 30 proof alcohol.

 

“It would be the same as any other malt beverage,” Larry Dooley, vice president of Fox Distributing in Shelby, one of two distributors listed by Stout 21.

 

Dooley said that, while some bars might choose to sell the Stout 21 product, he anticipated that most sales would be through convenience stores.

 

Stout Brewing describes the Stout 21 products as a “Flavored Alcoholic Shooter.” The packaging features a twist off top and a rounded bottom. Flavors, according to the company’s website, include Royal Flush, Margarita, Screwdriver, Apple Pie and J-Cola. They would be sold in single servings and four-packs.

 

Stout Brewing announced plans to open a brewery in Kings Mountain last year. Coverage of the announcement included notes that the company received economic development incentives from the county.

 

It’s unclear whether the company has started brewing beer. It has a separate website for its Stout 21 product.

 

The proposed product has raised concerns among advocates who argue for tighter controls on alcohol and work against underage drinking.

 

“It is the packaging that is of concern,” said Wanda Boone, of Durham TRY, a nonprofit that works to curb substance abuse among teenagers.

 

In her mind, she said, the packaging and flavors are “targeted toward underage consumers, which is really what the issue is.”

 

The Rev. Mark Creech, executive director of the Christian Action League, said this is a downside of the a 2005 law that lifted the cap on the amount of alcohol allowed in malt beverage, which had previously been set at 6 percent alcohol by volume. The law, he said, not only cleared the way for boutique beers and craft brewers.

 

“We’re putting something on the convenience store shelves that’s akin to the same alcohol beverage content you can find at the ABC liquor stores,” Creech said. “That cannot be safe.”

 

Although there are some liquors in the 30 proof range sold in ABC stores, most are 70 proof or above, according to a commission product listing.

 

 

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Trade body hits out after absinthe plans rejected (Excerpt)

 

Source: Just-Drinks

By James Wilmore

18 March 2013

 

Trade group spiritsEUROPE has voiced its disppointment after a bid by the European Commission to define and standardise absinthe was rejected.  

 

The bid was blocked in a vote by the European Parliament in Strasbourg last Wednesday (13 March). The EC had proposed that any product labelled absinthe must contain set minimum levels of anethole and thujone.

 

The Commission is concerned that some manufacturers are not including these ingredients, or enough of them, and yet still selling their products as ‘absinthe’.

 

 

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St. Paddy’s Weekend shows healthy growth from last year

 

Source: GuestMetrics

March 18, 2013

 

According to GuestMetrics, based on its database of POS sales, food & beverage sales over the St. Patrick’s 3-day Weekend posted solid sales growth of +2.5% compared to the prior year benefitting from the holiday falling on a Sunday this year vs. Saturday year ago.

 

“Comparing the rolled up period of Friday, Saturday and Sunday this year against the same period from last year, St. Patrick’s Weekend posted healthy sales growth of 2.5%, the net result of traffic being about 1% below last year’s level but pricing up 4%.  So even though traffic was a little soft, the strong pricing more than made up for that, which should be a positive for the operators,” said Bill Pecoriello, CEO of GuestMetrics LLC.  “In terms of the specific segments within on-premise, bars benefitted more from the holiday falling on Sunday with 3-day sales up 6%, the net result of traffic up 2% and pricing up 4%, while restaurants’ performance was a bit weaker, with sales up 2%, traffic down 2%, and pricing also up 4%.  On the whole, given the general weakness in on-premise during the final quarter of 2012 and the beginning of 2013, the weekend turned out to show healthier results. Looking specifically at the alcoholic beverage category for the St. Patrick’s Weekend this year versus the prior year, sales of total alcoholic beverages were up 3.2% while the number of total alcoholic drinks ordered was down 0.8%.”

 

“Digging deeper the dollar sales growth was largely driven by the spirits and wine categories, which both posted sales growth at around 6%, while food and cocktails sales grew about 2%, and beer and non-alcoholic beverage dollar sales were both flattish compared to the prior year,” said Peter Reidhead, VP of Strategy and Insights at GuestMetrics.  “In terms of the actual number of drinks ordered, which is the more relevant metric for the alcohol suppliers, wine was up 6%, spirits was up 2%, cocktails were down 2%, and beer was down 4%, so while we usually think of St. Patrick’s Day as a heavy beer occasion, consumer preferences appear to have shifted to spirits and wine this year.”

 

“In terms of comparing the actual date of March 17th from last year, which fell on a Saturday, against St. Patrick’s Day this year, which fell on a Sunday, Food and Beverage sales this year are about 33% below last year, which is why we believe it is more meaningful to compare the rolled up weekends against each other,” said Brian Barrett, President of GuestMetrics.  “In terms of the specific days we analyzed, Friday Alcohol Beverage sales this year were up 2.5%, Saturday Alcohol Beverage sales were down 4.9%, and Sunday Alcohol Beverage sales were up 24% driving the 3-day period up 3.2%.”  

 

 

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C&C GROUP PLC (=) to (+): How much good can Woodchuck chuck?  

 

Source: Exane BNP

Mar 18th

 

TP raised by 39% to EUR5.7 . Upside: 18%

Beverages (-) . Ireland . Price (14 Mar. 13): EUR4.83

 

C&C is becoming a US cider play just as the US market is lighting up…

Once the preferred drink of Americans, cider was until recently on the verge of extinction in the US. But over the last couple of years, its long-predicted return has at last materialized and volume growth is now rocketing. With cider possibly replicating the success of craft beer, we expect a 58% volume CAGR in the next five years for the US cider market. C&C’s integration of Vermont Hard Cider means it now controls almost half of the US cider market with production facilities on both the East and West Coasts. Within the next two years, the USA should generate two thirds of C&C’s organic growth, which will rise from -5% in the year to Feb.13e to +8% in FY15e. Instrumental to this will be the expansion of Woodchuck, a brand whose penetration among retailers could quickly increase by as much as 60% through geographic expansion and its integration with Hornsby’s.

 

…but is still seen as an Irish consumer stock

The 0.85 correlation coefficient between C&C’s P/E and Irish consumer confidence suggests the stock is still seen through the prism of Ireland. Whilst we are cautious on cider volumes both in that country and in the UK, we stress that the acquisition of Irish beverage distributor Gleeson’s provides a formidable platform from which Tennent’s – C&C’s main beer brand – can triple its distribution reach, bringing Ireland back to organic growth as early as this fiscal year.

 

US opportunity not yet discounted, 18% upside even without further re-rating. Outperform

C&C lagged the sector by 7% over the last month, after some worried that the 30% rise in the shares over the last year already discounts the US opportunity. However, this rerating has been in line with the sector, with C&C still at a 19% discount to brewers on consensus P/E (14.8x). Our EUR5.7 TP is based on a 15x cal. 14e P/E multiple, which given the 20% EPS CAGR 12-14e seems reasonable relative to the sector and compared to the average 13x multiple since 2006, a period without EPS growth. Our higher expectations for the US put us 6% above FY14e consensus EPS (11% for FY15e). Convinced that our 36% revenue CAGR 13-16e in the US can be achieved without major investments other than the new plant in Vermont, and with 760bp margin expansion despite A&P, transport and raw materials inflation, we rate the stock Outperform.

 

 

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China: Liquor shares slump on Li’s austerity promise, Moutai down by 4.25%

 

Source: Peoples Daily

By Fang Yunyu

March 19, 2013

 

Chinese high-end liquor producers saw their shares slump Monday after newly elected premier Li Keqiang vowed Sunday to put the government on a tight budget “to win the trust of the people.”

 

High-end liquor maker Kweichow Moutai Co dived by 4.25 percent to hit its one-year low at 169.45 yuan ($27) a share Monday, while the benchmark Shanghai Composite Index closed down by 1.68 percent.

 

Wuliangye Yibin Co, another top Chinese liquor firm, saw its shares fall by 4.54 percent; Jiugui Liquor Co lost 4.1 percent and Anhui Gujing Distillery Company shed 7.88 percent. Calls to the companies went unanswered Monday.

 

Market analysts said the sudden stock plunge was triggered by China’s new premier Li Keqiang declaring his determination to fight corruption and curb government expenditures.

 

“Within the term of my government . spending on official hospitality, overseas trips for official business and the purchase of official vehicles will decrease, not increase,” Li said Sunday when he met the press for the first time as China’s premier.

 

“What the premier said certainly has a direct negative impact on liquor stocks, especially for high-end companies,” Yang Qingshan, an independent liquor analyst, told the Global Times Monday, noting that high-end liquor is usually viewed as a necessity for official hospitality, so any rules to limit government spending will reduce sales.

 

It is not the first time that liquor makers’ stocks have dipped suddenly.

 

In December last year, the Central Military Commission of the Communist Party of China ruled that receptions for high-ranking officials would no longer feature liquor or luxury banquets.

 

The news dragged down shares of liquor makers over the following days.

 

“The military is considered a big consumer of high-end liquor in China. The rule hit the country’s liquor makers, but also presented a push for them to change their targeted customers from governments to ordinary consumers,” said Yang, noting that he personally is still very optimistic toward long-term development of the Chinese liquor industry, which has already become a cultural tradition in China.

 

 

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South Africa: Fears that Cape Town liquor laws will ‘fuel illegal trade’

 

Source: BD LIve

by Bekezela Phakathi

19 March 2013

 

CAPE Town’s contentious by-law banning liquor sales on Sundays and after 6pm on weekdays will come into effect at the end of this month amid concerns that the ban will do little to curb alcohol abuse, but will fuel the illegal trade in liquor and hurt small-scale traders.

 

The move by Cape Town to shorten trading hours is an attempt by city authorities to lessen liquor abuse, hooliganism and violent crime, as well as to expose establishments selling liquor illegally.

 

The South African Police Service 2010-11 crime statistics found that nationally, half of patients who die in transport-related incidents have elevated blood-alcohol content and 77% of all deaths caused by sharp objects involved positive alcohol levels.

 

The Democratic Alliance-run Western Cape has gained a reputation for its strict liquor regulations in recent years, with some labelling it a “nanny state”. Western Cape Premier Helen Zille has said alcohol abuse is the main cause of violent crime.

 

Gauteng is also moving to ban the sale of liquor on Sundays. The draft Gauteng Liquor Act was introduced in the legislature on Friday. The bill calls for amendments to the 2003 Liquor Act.

 

If promulgated, Sunday liquor sales at all establishments would be banned. These include bottle stores, restaurants and bars.

 

But KwaZulu-Natal seems set to relax its liquor laws. The KwaZulu-Natal Liquor Act is awaiting final amendments before it is passed, and under the new law, liquor stores will be allowed to open on Sundays. The KwaZulu-Natal liquor authority says allowing outlets to trade on Sundays would be in line with the constitution which recognises the country as a secular state, and that the existing Sunday ban is a remnant of the previous regime.

 

“I think banning will not solve the problem. Traders will just go underground . an alternative would be investing in educational campaigns,” South African Liquor Traders Association president Saint Madlala said.

 

He said while the association was cognisant of the effects of alcohol abuse and the need for regulation, banning liquor sales on Sundays would hit traders hard and force some to retrench their staff. Mr Madlala said liquor traders made between 20% and 30% of their profits on Sundays.

 

In terms of Cape Town’s Liquor Trading Days and Hours by-law, liquor stores will no longer be allowed to sell alcohol on Sundays, or after 6pm from Monday to Saturday – while clubs, hotels and casinos, among others, can extend their cut-off time to sell liquor from 2am to 4am, on condition they apply for an exemption. Traders in liquor for off-premises consumption also have to stop trading at 6pm.

 

City authorities said traders will have to abide by new trading hours, regardless of the liquor licence they hold. This follows a 12-month implementation period for the Western Cape Liquor Act, which ends on March 31.

 

 

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Beer battle of bad taste: Carlsberg out shocks Heineken

 

Source: Beverage Daily

Mar 18th

 

Carlsberg UK has bent the bad taste envelope further still with an ‘edgy’ new online video that sees the drink’s fans phone their friends in the early hours and persuade them to visit a gambling den staffed by sinister characters or ‘actors’ to pay off their debts.

 

http://www.beveragedaily.com/Markets/Beer-battle-of-bad-taste-Carlsberg-out-shocks-Heineken

 

 

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‘No chance of a glut’ say NZ winemakers as they celebrate bumper crop

 

Source: Decanter

by Chris Mercer

Monday 18 March 2013

Many New Zealand winemakers, excited at the prospect of an outstanding 2013 vintage and a chance to replenish stocks after the low grape haul in 2012, are playing down talk of a glut.

 

‘Stunning’ summer weather and a dry autumn may be causing drought issues in some sections of New Zealand agriculture, but it has led to ‘fantastic’ growing and ripening conditions for the country’s wine industry, generic body New Zealand Winegrowers said this week.

 

‘We are expecting a very high quality harvest in all our regions,’ NZ Winegrowers’ CEO, Philip Gregan, told Decanter.com.

 

‘Quality is looking outstanding, with extended long, warm ripening conditions and no disease pressure,’ added Yealands Estate owner Peter Yealands, based in Awatere Valley, Marlborough.

 

Most forecasts are for a bigger harvest than the record low in 2012, although there is not yet a more accurate prediction. Initial signs show a lot of variation between vineyards in expected grape hauls.

 

New Zealand remains sensitive to signs it could return to the dark days of a wine glut that threatened to cause financial havoc in some regions in recent years. Fresh concerns have been raised in national media in the past week.

 

‘There’s no chance of a glut,’ said Alastair Maling MW, of Villa Maria, which has vineyards across Marlborough, Hawkes Bay, Gisborne and Auckland. He said the best bet is for a moderate-sized harvest.

 

Gregan said that ‘increased volumes will allow re-build in inventory levels, which are desperately low following the small 2012 harvest and are needed to support packaged export sales which are now 6% above last year’.

 

Yealands largely agreed. ‘Given the rapid growth in sales across all markets, the low stock levels of 2012 wine available, and the promise of an outstanding quality vintage, we anticipate any upside in volume will be promptly sold,’ he told Decanter.com.

 

 

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Jim Barrett of Chateau Montelena dies

 

Source: Decanter

by Courtney Humiston in Sonoma

Monday 18 March 2013

 

James L Barrett, founder of Napa Valley’s Chateau Montelena, has died at the age of 86 – ‘of a life well lived’, as his son Bo said.

 

Jim Barrett, who died on 14 March, founded the Calistoga winery in 1972, and shot almost immediately to world renown when critics famously favoured his 1973 Chardonnay over four white Burgundies at the 1976 Paris Tasting.

 

Chateau Montelena -along with the Cabernet Sauvignon of Stag’s Leap Wine Cellars, which out-scored top Bordeaux producers at the same tasting-is often credited with elevating the status of Napa Valley wines in the international marketplace and laying the foundation for the commercial success they are today.

In 2010 one of the last bottles of ex-cellar 1973 Chardonnay was sold at a London auction for US$11,325 (£7,419).

 

In a statement Barrett’s son Bo paid tribute to a ‘tough and loving’ man.

 

‘I join with my family to announce the sad news that my father, Jim Barrett, passed away today at the age of 86. He was a tough and loving man who will be greatly missed at home, at the winery and throughout the Napa Valley. My father bought Chateau Montelena in 1972 and has worked hard every day since to grow the best grapes and produce the best wines. My dad died of a life well lived.

 

‘He, along with the entire family, has prepared a succession plan for Chateau Montelena which will ensure the winery stays in our family for as many decades going forward as we have enjoyed during his life. There will be no changes to the current plan, Chateau Montelena has a wonderful future, for which we have been working toward over the past 40 years with improvements and upgrades to maintain the calibre of wines we produce.’

 

Barrett, a former attorney and veteran of the Korean war, rescued the historic winery, which was originally completed in 1888, from neglect and dilapidation. The building was recently placed on the National Register of Historic Places thanks, in part, to Barrett’s careful restoration and the significance of his contribution to the California wine industry.

 

Chateau Montelena will remain in the family – as it always has – with Bo Barrett, who has been the director of winemaking since 1982, assuming the role of CEO.

 

In addition to its Chardonnay, Chateau Montelena makes Cabernet Sauvignon from the Calistoga estate (as it has since 1978) as well as Zinfandel and Riesling. The wine has a reputation for maintaining the elegance of an ‘old world’ style that was Barrett’s original vision.

 

 

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Paul Hobbs Imports becomes sole US importer for Chilean producer Viña Perez Cruz

 

Source: Paul Hobbs Imports

March 18, 2013

 

Viña Perez Cruz, a familyowned producer of 100% estate-bottled red wines from the Maipo Alto Valley region of Chile, has appointed Paul Hobbs Imports as its United States importer.

 

“We are excited to have Paul Hobbs Imports as our importer and partner for the complex US marketplace. They are the perfect team to focus on developing national distribution and adding value to our brand,” says Felipe Valenzuela, export director for Viña Perez Cruz.

 

Viña Perez Cruz was founded by Mrs. Mariana Cruz-Costa and her 11 sons and daughters in memory of Mr. Pablo Perez-Zañartu, who in 1963 acquired the Liguai de Huelquén Estate, located approximately 28 miles southeast of Santiago, Chile. In 1994, red grape varieties were planted, and in 2001, a state-of-theart winery was built. The first Viña Perez Cruz wines were made in 2002. Current releases include Cabernet Sauvignon, Carmenère, Cot, Syrah and three blends: Quelen (Petite Verdot, Carmenère, Cot); Liguai (Syrah, Carmenère, Cabernet Sauvignon); and Chaski (Petit Verdot, Carmenère, Cabernet Sauvignon).

 

 

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Maine: Legislators push for details on Maine liquor contract options

 

Source: Maine Sun Journal

Matthew Stone, Bangor Daily news

Tuesday, March 19, 2013

 

Lawmakers on the panel charged with determining a path forward for Maine’s wholesale liquor business quizzed the state’s alcoholic beverages director Monday, asking him how soon the state could strike a new deal, whether it could periodically revisit the terms and how the state could crack down on marketing alcoholic beverages to children.

 

But the Legislature’s Veterans and Legal Affairs Committee didn’t appear to move closer to a particular approach for renegotiating the state’s wholesale liquor contract during the first session held to work out the details of two bills proposed to rework the liquor contract and use the increased proceeds to pay back Maine’s $484 million hospital debt.

 

“I’m not going to spend 10 years of my life looking back, like some people, thinking we should have done this differently,” said Rep. Diane Russell, D-Portland. “I’d like to know at the end of the day that we explored every option, that every option was on the table and that we really did fight for the people to get the best deal.”

 

The committee is considering two approaches to striking a more profitable deal for the state on its wholesale liquor business and using the proceeds to repay Maine’s hospitals for a Medicaid debt that stretches back to 2009.

 

Gov. Paul LePage, who has made the issue the cornerstone of his legislative agenda this winter, unveiled his plan in January to pay down the state’s hospital debt using a revenue bond backed by the state’s future liquor profits. Gerry Reid, who directs the state Bureau of Alcoholic Beverages and Lottery Operations, has said the plan involves realizing more value from its wholesale liquor business by negotiating more favorable contract terms for the state, lowering retail prices to make them more competitive with neighboring New Hampshire’s, and allowing agency liquor stores higher margins on liquor sales.

 

A competing proposal from Sen. Seth Goodall of Richmond, the Senate Democratic leader, requires an upfront payment – $200 million by June 30, 2015 – from the contractor who wins the 10-year bid to operate the state’s wholesale liquor business. Under the plan, Goodall says the state can rely on the upfront payment revenue to pay off the hospital debt by Sept. 30 of this year. Maine’s share of the hospital debt is $186 million, which would trigger a $298 million matching payment from the federal government.

 

The Veterans and Legal Affairs Committee held a daylong hearing on the two bills last week and plans to resume work on them Friday.

 

The state’s liquor business has grown and improved its operations since it was leased out to the current contract holder, Maine Beverage Co., in 2004, said Rep. John Schneck, D-Bangor. Given the data available on the business’ performance, the state should easily be able to define what it wants from a vendor in a request for bids and almost be assured of favorable returns, he said.

 

“It could almost run on autopilot,” said Schneck. “It’s a long-range deal, and because we know how the market’s operating, we can forecast this thing very easily and whatever targets we set with the contract should be easily obtainable for both parties.”

 

Reid said there’s little risk that the state’s liquor business will underperform his conservative expectations for growth. It would take natural disasters, new taxes on alcohol or major limits on advertising alcoholic beverages to make a dent in consumer demand, he said.

 

“The consumer is relatively inelastic. You really have to be dumb to mess up this business,” he said. “That’s not to say someone can’t do it. It’s a low-risk business.”

 

But it could still be advantageous for the state to be able to revisit the terms of the 10-year contract periodically, every two years, for example, to make sure Maine is still getting the best deal possible, Schneck said.

 

“I don’t see any reason why there couldn’t be some period for adjustment, so every two years, the parties look at where we are and negotiate going forward,” he said. “In terms of the last contract, it would have been very, very beneficial to the taxpayers.”

 

The state in 2004 leased out the wholesale liquor business in exchange for a $125 million upfront payment and an annual cut of profits that has amounted to about $8.5 million in recent years. Democrats and Republicans have agreed the state could have struck a better deal a decade ago.

 

As state officials look ahead to a new liquor deal, lawmakers Monday recommended investing in enforcement of the state’s liquor laws, substance abuse programs and education efforts to prevent alcohol abuse. Russell, the Portland Democrat, suggested writing language into a contract with a new liquor operator to crack down on the marketing of alcoholic beverages to those younger than 21.

 

“We need some sort of leverage to address terrible marketing practices and to address pulling stuff off the shelves that has no business being on the shelves,” she said.

 

 

——

Tennessee: House Speaker – Tennessee wine in grocery store bill in limbo

 

Source: Commercial Appeal

By Richard Locker

March 19, 2013

 

State House Speaker Beth Harwell said Monday she’s disappointed with last week’s committee vote that dealt the wine-in-grocery-stores bill a potentially fatal blow for this year, but she likely won’t ask the committee chairman to reconsider his vote against the bill.

 

Along with lobbyists and other lawmakers, Harwell left a glimmer of hope Monday for supporters of the bill, which would allow local referendums in towns and cities with liquor stores and liquor by the drink on whether local grocery stores can sell wine.

 

It failed by one vote last week in the House Local Government Committee. Its chairman, Rep. Matthew Hill, R-Jonesborough, cast a surprising vote against the bill – after voting for it a week earlier in a subcommittee. Harwell, a Nashville Republican who supports the bill, appointed Hill as chairman of the committee in January.

 

The Speaker said she had not talked with Hill since the committee’s vote last week. The legislature recessed on Thursday for the weekend and Harwell was in Pennsylvania for funeral services for her mother.

 

Lawmakers began returning to the Capitol on Monday afternoon to find the wine bill – which is opposed by liquor retailers and wholesalers and backed by grocery chains – still in limbo. Despite its defeat in the House committee, a Senate committee held a hearing on it later in the week and its Senate sponsor said he was going to see if the House might reconsider.

 

When reporters asked Harwell if she would ask Hill to reconsider his vote, she said: “I’m probably not going to; that’s not the way I function. He’s made his vote. I was disappointed … That was not my understanding of how his vote was going to be in committee.

 

“If he had some concerns and they were valid concerns, I had talked to him about having an opportunity to work on those. We were all going to have to come to the table (for negotiations toward a compromise). But the bill needed to make movement that day. So again, I was disappointed but I haven’t had a chance to talk to Matthew yet.”

 

Does that mean the bill is dead for the 2013 legislative session?

 

“I don’t know. I’ve talked briefly to Lt. Gov. (Ron) Ramsey about it, but I’ve been out of pocket and just really got back into town but we’ll talk about it this week.”

 

Lobbyists working for the bill said Monday there are other bills that could be used in place of the one defeated last week.

 

 

——

New York: Bloomberg takes aim at cigarette displays

 

Source: FT

By Shannon Bond in New York

March 18th

 

New York City stores would have to keep cigarettes out of sight under new legislation proposed by Michael Bloomberg, in the mayor’s latest effort to curb smoking.

 

Under the proposed law, tobacco products would have to be kept in cabinets, drawers, under the counter or behind a curtain. They would be allowed to be visible only during a purchase by an adult customer or during restocking.

 

The measure aims to reduce smoking among young people, Mr Bloomberg said on Monday.

 

“Young people are targets of marketing and the availability of cigarettes, and this legislation will help prevent another generation from the ill health and shorter life expectancy that comes with smoking,” he said.

 

The city banned smoking in restaurants and bars in 2002, and expanded that restriction in 2011 to public parks and beaches.

 

While initially controversial, that measure has been widely imitated in the US and around the world. It has shown results in New York, where the smoking rate among adults fell from 21.5 per cent in 2002 to 14.8 per cent in 2011.

 

But youth smoking has been flat at 8.5 per cent since 2007, said Thomas Farley, health commissioner, and smoking remains the leading preventable cause of death in the city.

 

The proposal did not sit well with tobacco companies, which said the existing federal ban on sales to cigarettes to people under 18 was sufficient.

 

“To the extent that this proposed law would ban the display of products to adult tobacco consumers, we believe it goes too far,” said Altria, whose brands include Marlboro, Parliament and Virginia Slims.

 

Antismoking advocates applauded the measure. “[The legislation would] prohibit massive store displays of tobacco products that tell kids tobacco use is normal and acceptable, while tempting smokers trying to quit into buying more cigarettes,” said Matthew Myers, president of the Campaign for Tobacco-Free Kids.

 

Mr Bloomberg’s latest initiative follows a setback last week to another pillar of his mission to improve public health: his fight against obesity. The day before a ban on large sugary drinks was to take effect, a judge blocked it, ruling that the city’s board of health had overstepped its authority. Unlike the soda ban, however, the proposed tobacco law will go before the city council for consideration.

 

Stores would still be able to advertise tobacco products, the mayor said. But owners of convenience stores, where cigarettes are usually displayed prominently behind the cash register, are likely to oppose any measures to curb sales.

 

“We think it’s absurd,” said Jim Calvin, president of the New York Association of Convenience Stores, an industry group. “We have a fundamental right to communicate with customers about the products that we sell on our premises.”

 

He added: “In order to accept [the city’s rationale] you would have to believe that the mere sight of packs of cigarettes on a wall behind the counter in a store compels kids to start smoking. Does seeing beer in a cooler in a store compel them to start drinking?”

 

Another industry group, the National Association of Tobacco Outlets, said the proposal “infringes on a retailer’s free-speech rights” in violation of the first amendment.

 

Countries including Iceland, Canada, Australia, England, Ireland and Norway have restricted tobacco displays. While Mr Bloomberg said on Monday that the law would make New York the first US city to keep tobacco products out of sight, a similar measure was enacted briefly last year by the town of Haverstraw, New York.

 

That ordinance banned public displays of tobacco products, advertising and signage in convenience stores and replaced them with a menu of products available by request. It was rescinded three months later after a lawsuit brought by several tobacco companies and the convenience store association, who argued the ban violated the first amendment.

 

“We all had the same concern about absurd regulations that would attempt to force us to hide the products that we’ve been licensed by the state and the city to sell to adult customers,” Mr Calvin said.

 

Cigarettes make up a much smaller proportion of sales at New York City convenience stores than nationally, Mr Calvin said – about 10 per cent, compared with 30 or 35 per cent (excluding petrol sales) across the country.

 

He said the low rate was due to illegal sales of untaxed cigarettes, spurred by high city and state excise taxes in New York.

 

Mr Bloomberg announced a second bill on Monday that would target such illegal sales and smuggling by strengthening enforcement and increasing penalties on retailers who evade taxes or sell tobacco without a licence.

 

 

——

UK: wine, spirits sales fall as consumers cut costs: WSTA

 

Source: DBR

18 March 2013

 

Alcohol volume sales in the UK have fallen by 3% in the off-trade and 4% in the on-trade in 2012 driven by year-on-year alcohol duty rises, according to a market report by UK-based organization for the wine and spirit industry Wine & Spirit Trade Association (WSTA).

 

If the Alcohol Duty Escalator carries on at the current rate till 2015, duty on wine and spirits will have increased by 50% and 44%, respectively, since 2008. This rise in alcohol duty has forced consumers to cut back their spending on alcohol in the country.

 

Though the alcohol volume sales have dropped, the prices have gone up by 2% in the off-trade and 3% in the on-trade, primarily helped by tax increase of over 5% in 2012.

 

In the off-trade markets, sparkling wine reported highest volume growth of 8% over the last 12 months, mainly due to fall in Champagne sales and consumers looking for cheap wines, whereas in the on-trade markets, liqueurs reported highest volume growth of 13% in 2012.

 

WSTA chief executive Miles Beale said the latest market report shows that consumers are continuing to cut their spending on alcohol, which resulted in sales falling in both the on- and off-trade.

 

“While it had been hoped that Christmas would provide a small boost for the industry these figures show that there was subdued festive cheer over the Christmas period,” Beale added.

 

“This is a further sign that the Government needs to think again before increasing prices through the unpopular duty escalator, which risks damaging jobs and growth.”

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