Liquor Industry News 4-22-13

www.franklinliquors.com

Franklin Liquors

Monday April 22nd 2013

 

Beer Merger Advances

 

Source: WSJ

By BRENT KENDALL

Apr 19th

 

Anheuser-Busch InBev NV BUD +1.69% and Mexico’s Grupo Modelo GMODELO.MX +0.04% SAB completed a settlement resolving the Justice Department’s challenge to the beer makers’ planned merger.

 

Under the proposed arrangement submitted Friday for federal court approval, the companies would sell Modelo’s entire U.S. business to Constellation Brands Inc. STZ +2.49% In turn, AB InBev would get the green light to acquire the 50% of Modelo it doesn’t already own.

 

The companies issued statements confirming the settlement and said they expect their $20.1 billion merger to close in June. The deal will give AB InBev, brewer of Bud Light and Budweiser, a dominant position in Mexico, the world’s sixth-largest beer market, and one where sales are expanding more quickly than in the U.S.

 

AB InBev, which already brews nearly a fifth of the world’s beer, plans to make Modelo’s Corona brand its second global flagship brand behind Budweiser.

 

AB InBev and Grupo Modelo said the settlement was largely in line with the revised merger terms they unveiled after U.S. antitrust officials sued in January to block the original transaction.

 

Under the deal, the companies will sell Modelo’s state-of-the-art Piedras Negras brewery in Mexico to Constellation, which also will secure perpetual U.S. licensing rights to seven Modelo brands currently sold in the country. They include Corona and Modelo Especial, the No. 1 and No. 3 imports in the U.S. In addition, Constellation will gain rights to three Modelo brands that aren’t offered in the U.S. yet.

 

The Justice Department said Constellation, which is paying about $4.75 billion for the Modelo assets, has committed to expand the Piedras Negras brewery in order to brew and package “sufficient quantities” of Modelo beers to meet growing U.S. demand.

 

Bill Baer, the Justice Department’s antitrust chief, said the agreement was a good deal for American consumers and ensures that Constellation will be a “totally independent competitor” using the Modelo brands.

 

“If this settlement makes just a 1% difference in prices, U.S. consumers will save almost $1 billion a year,” Mr. Baer said.

 

Constellation Chief Executive Rob Sands said the deal would nearly double the sales of his company and “solidify our place in the U.S. beer market for the long term.”

 

The Justice Department had argued that the originally proposed AB InBev-Modelo merger threatened to lead to higher beer prices by eliminating Modelo as an important independent competitor in an already concentrated beer market.

 

The department’s antitrust enforcers said Modelo had increased its market share by keeping its beer prices only slightly higher than those of Bud Light and MillerCoors LLC’s Coors Light, encouraging some drinkers “trade up” to Modelo beers.

 

 

——

DOJ deal on Modelo will affect A-B distributors

 

Source: St. Louis Today

April 19, 2013

 

The recent focus on antitrust negotiations between the U.S. government and Anheuser-Busch InBev has been on the divestiture of Grupo Modelo’s U.S. business and the sale of a Mexican brewery on the border. Both were key to getting the Justice Department to stop its attempt to block A-B InBev’s proposed acquisition of control of Modelo, the maker of Corona beer.

 

However, the deal also imposes some interesting conditions on Anheuser-Busch’s relationship with beer distributors, both the businesses that the brewer owns directly and those operated by independent franchises.

 

Today’s proposed settlement allows Constellation Brands, the proposed buyer of Modelo’s U.S. business, to end Corona distribution rights to Anheuser-Busch-owned distributors. For a period of two years starting in April 2014, Constellation can request A-B to sell those rights to another party. And if A-B buys a distributor that sells Corona during that period, Constellation also can force the brewer to sell those distribution rights.

 

For independent Anheuser-Busch distributors, the settlement prevents the brewer from tweaking its marketing incentive programs to put at a disadvantage those distributors that sell Modelo products. The brewer currently provides extra money for distributors that are considered exclusive sellers of A-B products.

 

Once the Modelo acquisition is completed, the deal says the brewer also can’t hold Modelo distribution against a distributor when determining exclusivity. It also can’t make any changes to incentive program that would affect how Modelo is treated when it doling out incentives.

 

 

——

With InBev-Modelo Deal, DOJ Antitrust Chief Sends Message

 

Source: Law 360

By Melissa Lipman

April 19, 2013

 

In forcing Anheuser-Busch InBev NV to sell Grupo Modelo SAB de CV’s entire U.S. business to win clearance to buy the $20 billion Mexican brewer, new antitrust chief Bill Baer on Friday demonstrated a willingness to flex his agency’s litigation muscle to extract costly remedies in merger cases.

 

When AB InBev originally took its $20.1 billion Modelo deal to the agency, it offered a far more limited fix that would have given Constellation Brands Inc. full control over the joint venture that distributes Modelo’s popular imports in the U.S. and a 10-year supply agreement with the Belgian-American beer giant.

 

But to resolve the DOJ’s antitrust suit, the companies finally agreed to fixes that went far beyond that, requiring AB InBev to give Constellation a state-of-the-art Modelo brewery in Mexico, a perpetual exclusive license to sell Modelo brands in the U.S. and a much more limited three-year transition supply deal. The measure even takes the unusual step of requiring Constellation to commit to expanding the brewery’s capacity, after the DOJ voiced concerns about the alcohol importer’s incentives to compete with the Budweiser maker on price.

 

Attorneys say that result should serve as a word of warning for other companies hoping to use “fix-it first” remedies – solutions companies agree to before consummating a merger, with the goal of speeding the clearance process.

 

“Under Bill Baer, going in with a fix-it-first remedy and thinking that that proposed remedy is not going to get scrutinized up and down is a poor strategy,” said Baker Botts LLP partner Stephen Weissman. “If you’re a merging party and you come in with a fix-it-first to preemptively address antitrust issues, you’ve got to believe that you’re still going to be in for a full regulatory review and that your remedy at the end of the day may need to be sweetened.”

 

In the original merger announced in June, AB InBev already had planned to sell off Grupo Modelo’s 50 percent stake in Crown Imports – its U.S. distribution joint venture with Constellation – to the third company for $1.85 billion.

 

But in late January, the DOJ sued to block the combination, which would have given the new entity a 46 percent share of the U.S. beer market. At the time, Baer warned that removing Modelo from the competitive landscape would make it even easier for AB InBev and the other “remaining beer companies to engage in coordinated leader-follower pricing strategies in the future.”

 

In an effort to win the DOJ’s approval, in February, AB InBev upped the assets it would sell to Constellation. It agreed to divest a total of $4.75 billion, including all of Modelo’s U.S. operations, perpetual licenses of Modelo’s brands, and ownership of the Piedras Negras brewery in Mexico.

 

And, because the brewery near the Texas border currently meets only 60 percent of the U.S. import demand for Corona and Modelo’s other brands, the revised deal also included a three-year transition services agreement to give Constellation time to build up the plant.

 

The proposed settlement sent to the district court for approval Friday largely follows the outlines of the second offer, though it imposes some additional commitments on the parties during the transition period, including detailed milestones for Constellation to hit to make sure Piedras Negras can fully supply U.S. demand for Modelo’s beer within three years.

 

“The remedy itself has some unusual features, for sure: a 36-month supply arrangement is unusual, of course this requirement that Constellation expand the capacity of the plant is unusual,” WilmerHale partner Molly Boast said. “What they’ve done is … made it as ironclad as possible. And you have Constellation added as a defendant so the court can have oversight of the build-out.”

 

Those features and others – including a broad licensing provision and a mandate that the companies set up a firewall during the transition period to protect sensitive information – offer a “full panoply of protections” to safeguard competition during the three years it is expected to take to bring the Piedras Negras brewery up to full capacity, Boast said.

 

“What they’re doing here is creating a new freestanding competitor where one didn’t exist even prior to merger,” Boast said. “They were given the opportunity to fix a problem, and they really tried to fix it.”

 

Friday’s settlement also underscores Baer’s preference for “clean structural remedies” in merger cases, attorneys said, which should be familiar from his previous stint as head of the Bureau of Competition at the Federal Trade Commission.

 

“That’s what he looked for at the FTC. That’s what he will require,” Boast said. “It’s consistent with what his practice has been in enforcement positions.”

 

The DOJ is also fresh off a series of litigation wins in high-profile merger challenges like the H&R Block Inc. case and AT&T Inc.’s bid for T-Mobile USA Inc. And the decision to challenge the AB InBev deal points to the agency’s newfound confidence in its litigation skills.

 

“[It shows] that he knows he has a strong litigation shop and looks for consents that really address anti-competitive harm,” said O’Melveny & Myers LLP’s Haidee Schwartz. “He’s not afraid to litigate, [and] this shows that they’re going to make sure that they get what they need in meaningful remedies.”

 

For companies taking deals to the agency for antitrust review amid the recent growth in merger activity, the case shows the need to be prepared to face the threat of litigation and the demand for stronger remedies.

 

“In light of DOJ’s recent litigation successes, DOJ is understandably emboldened in terms of the leverage it has over merging parties and the remedies it’s able to extract to get them to avoid litigation,” Weissman said. “You’re seeing the fruits of the DOJ’s recent litigation successes at work, and this is Exhibit A.”

 

That means that in cases like the AB InBev-Modelo deal, in which the agency has a “reasonably good case,” it may be willing to use the threat of holding up a deal in litigation for months in order to get the kind of remedies it wants, according to Weissman, who has represented companies in the beer industry in the past.

 

“The message with this entire sequence of events is very clear,” Boast said. “Mr. Baer is saying, ‘Don’t bring me half a loaf when you’re presenting a merger remedy.'”

 

 

——

ANHEUSER-BUSCH INBEV (-) Q1 13 Results on 30 April

 

Source: Exane BNP

Apr 22nd

 

TP: EUR67 . Downside: 11%

Beverages (-) . Belgium . Price (19 Apr. 13): EUR75.6

 

A slow quarter in Brazil

We expect no material y/y volume growth in Q1 in LatAm North, due to the early timing of Carnival. Note that the implementation of stricter drink-driving laws is also likely to have affected consumption. This was confirmed by Diageo recently at their IMS as one of the reasons growth in Brazil slowed down in Q1.

 

US: New launches likely to have helped volume growth

We expect ABInBev to have outperformed MillerCoors in Q1, with volumes down 1.5% versus sales to retailers down 3.3% at Miller Coors. New launches like Budweiser Black Crown are likely to have boosted volumes.

 

Modelo finally a done deal

On Friday 19 April, ABInBev announced they had reached a final agreement with the DoJ to acquire the remaining stake in Modelo. The closing of the deal is expected in June. As our forecasts already incorporate a contribution to earnings by Grupo Modelo from late Q2, we expect changes to our forecasts from the new timing of the integration to be limited.

 

 

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Budweiser’s New Pitch: Less Beer, Pay More

 

Source: Time

By Brad Tuttle

April 21, 2013

 

How’s this for a sales pitch: With Budweiser’s new can design, you’ll get less beer, and you’ll get to pay more per ounce. You’ll also get to support the aluminum industry.

 

Anheuser-Busch is messing with the classic 12-ounce can. Starting in May, Bud will be available in a new “bowtie”-shaped can, which is angled inward in the center, mimicking the vertical Budweiser logo created in 2011. Each of the new cans contains 137 calories of beer, 8.5 fewer calories than the usual can of Bud. And how is Anheuser-Busch lowering the per-beer calorie count? Easy! It is putting less beer inside each can. Bowtie cans, which will be sold in addition to regular cans rather than replacing them, will hold 11.3 ounces of beer.

 

The “shrink ray,” as the advocacy site Consumerist.com calls it, has been applied to all sorts of products over the years. Cereal boxes, bags of chips, orange juice containers, plastic soda bottles, ice cream cartons-these and countless other goods have been carefully redesigned so that manufacturers can create the illusion consumers are getting the same amount of product, even as the packages hold less than the previous models. It’s a way for manufacturers to boost revenues without appearing – to the average consumer, at least – to raise prices.

 

Now Anheuser-Busch InBev, the world’s biggest beermaker, is pointing the shrink ray at the iconic can of Bud. The company isn’t marketing the new can design this way, of course. Here’s the spin presented to the St. Louis Post-Dispatch:

 

“We know there are a large number of consumers out there looking for new things, the trend-seekers,” Anheuser-Busch’s vice president of innovation Pat McGauley told the Post-Dispatch. “We expect both our core beer drinkers and new customers to try it.”

 

It seems like A-B doesn’t expect beer drinkers to do math, however. The new cans will be sold in 8-packs rather than the standard 6-pack; this will make it more difficult for shoppers to make quick apples-to-apples price comparisons in stores. The new can will also be made of nearly double the amount of aluminum as the usual can, so that it will feel a little heavier in one’s hand. Yes, in a tricky bit of packaging ingenuity, the can with 11.3 ounces of beer won’t feel any lighter than the can holding 12 ounces of beer.

 

To Anheuser-Busch, this qualifies as “innovation.” “We’ve done a lot of innovation in products and we’ve been lagging in packaging,” McGauley told the Post-Dispatch. “We’re consciously working to bring innovation to the packaging side.”

 

This is hardly the first time beermakers have put the focus on new cans or bottles, rather than the product inside. Coors Light, Miller Lite, and others have come in all sorts of aluminum beer bottles, and some designs feature a “grip can,” with raised ink designed to resemble the feel of a football.

 

Two newish Anheuser-Busch products-Bud Light Platinum and Beck’s Sapphire-were purposefully created to come in atypical, eye-catching bottles that stand apart from the pack. When the packaging matters more than the beer, that doesn’t say a lot about the beer, of course.

 

But the beermaker seems game for trying almost anything to boost sales-especially among young people, and especially for its signature brew, Budweiser. Bud sales have been plummeting for years, as younger drinkers especially have increasingly demonstrated a preference for wine, craft brews, and hip vodkas and other spirits.

 

Given that many younger drinkers seem disinclined to chose Budweiser, maybe they’ll like the new bowtie cans. After all, there’s less Bud to drink inside each one.

 

 

——

Exane BNP Paribas equity research : REMY COINTREAU (=): Q4 13 sales: Better than feared

 

Source: Exane BNP

Apr 19th

 

REMY COINTREAU (=)

 

TP cut by 9% to EUR82 . Downside: 5%

Beverages (-) . France . Price (17 Apr. 13): EUR86.0

 

Q4 FY13 organic growth better than feared.

Q4 FY12/13 organic sales growth of 12.5% was better than feared (we believe consensus was expecting +9%) given increasing reports of a soft Chinese New Year.

 

China has slowed down from record growth in 2012, but still growing attractively

Rémy Cointreau confirmed gifting and banquet activity to have slowed down vs 2012. Cognac organic growth of 13.9% in Q4 is in line with expectations but compares with +55% in Q3 12 (when last Chinese New Year took place).

 

Expect slight destocking for cognac in China in the coming quarter

A consequence of the more ‘quiet’ trading in China over the recent Chinese New Year is that inventories are higher than average at distributors. As a result, some degree of destocking could be expected in the coming months.

 

Rémy targets 10% organic growth in profit

Rémy Cointreau now targets growth in operating profit of 10%/15% on an organic/reported basis. While this is a very respectful growth rate, it is materially lower than the group’s 20% organic growth rate in operating profit achieved in FY11/12.

 

We move our forecasts to reflect guidance and more modest pricing in FY13/14e

While we have upgraded slightly (+2%) our forecasts for FY12/13e to reflect the new operating profit guidance, we have downgraded our FY13/14e Cognac organic sales growth forecast to +13% (vs +21% previously). Behind our downgrade is a more modest growth rate in Cognac volumes, but also price/mix (+7% vs 13% before) Note that competitor Hennessy indicated price increases of +4.5% for FY13/14e. Our new FY13/14e operating profit forecast is now 4% below consensus and we remain concerned market expectations may need to correct further. Our new TP based on 12m EPS to mid-2015 is EUR82.

 

 

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GuestMetrics: Cider shows strong growth in 1Q13 driven by Sam Adams Angry Orchard

 

Source: GuestMetrics

Apr 22nd

 

According to GuestMetrics, based on its POS database of over $8 billion in annual sales, cider continued to display strong growth in full service restaurants and bars in the first quarter of 2013, driven primarily by Sam Adams Angry Orchard.

 

“While cider still has a small share of the broad beer category, hard ciders volume sold in on-premise grew 40% in 2012 compared to the prior year, and picked up further momentum during the first quarter of 2013, growing 70%,” said Bill Pecoriello, CEO of GuestMetrics LLC. “This is generally similar to the growth in off-premise, namely 80% in 2012 and around 100% during the first quarter of this year, according to IRI, though cider was growing off of a smaller base in off-premise than in on-premise.”  According to data from GuestMetrics, cider accounted for 0.35% of the broadly-defined beer category (which includes cider in this analysis) in 2011, then grew share to 0.50% in 2012, and further expanded to 0.70% during the first quarter of 2013, roughly double cider’s share of the broad beer category in off-premise, per data from IRI.

 

“In order to get a better understanding of what drove the cider growth, we analyzed the specific brands within the category.  Based on our data, Sam Adams Angry Orchard had a 27-share of ciders sold during 2012 in on-premise, and grew that share to a 44-share by the first quarter of 2013,” said Peter Reidhead, VP of Strategy and Insights at GuestMetrics. “These figures are generally quite similar to Angry Orchard’s share of ciders sold in off-premise, which had a 23-share of cider during 2012, and a 39-share during the first quarter of this year, according to IRI.”

 

“As restaurant operators consider how to optimize their menu offerings, having up-to-date knowledge of the fastest growing categories and brands in the alcohol space is critical,”   said Brian Barrett, President of GuestMetrics.

 

 

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Tales of the Cocktail – 2013 Sponsor Letter & Statement of Etiquette

 

Source: Tales of the Cocktail

Apr 22nd

 

After over seven years of involvement with, and co-ownership of, Tales of the Cocktail, I have finally been given the honor of writing this year’s Sponsor Letter and Statement of Etiquette.  While I am sure that most of you are unfamiliar with me, my participation in Tales of the Cocktail, and my background, I can assure you that I am very aware of the support each of you have provided over the years to Tales of the Cocktail, making it by far the most unique and successful Event of its kind, throughout the World.

 

Almost from the inception of my involvement in 2006, it became clear to me that in order for Tales of the Cocktail to be a sustainable success, we needed to ensure that at every opportunity, we involved Representatives from throughout the Industry.  That is why since then we have maintained a select group of Committees made up of Bartenders, Spirit Manufacturers, Suppliers, and Media, to assist us with everything from the selection of Seminars, planning of After-Hour Events, and the election of Spirited Award Winners, to the selection of each year’s Cocktail Apprenticeship Class, and so on.  Tales of the Cocktail is, without dispute, the Industry’s Event, programmed by the Industry; Ann, our Staff, the numerous Interns and Volunteers, and I, are merely responsible for executing the Event, to the best of our ability.

 

I grew up in the Restaurant Industry and for the last five years have been a Senior Executive and Partner in one of the fastest growing Restaurant Companies in the Country.  We hope to finish 2013 with 180 Restaurants in 18 States, and begin focusing on International Development by the fourth quarter.  My role and responsibilities with Tales of the Cocktail center more around Financial Management, Legal, the development of, and compliance with, our Mission, Vision and Values, and most exciting, working with Ann on how we can best give back to the Industry, that has given us so much support, over the years.  Truly, we would not be celebrating our Eleventh Year, without each of you; thank you.

 

During my travels I am fortunate that on occasion I can slip into my role as “Mr. Cocktail” so I can converse with Bartenders from around the World, your Brand Ambassadors, and when appropriate, sample a few Cocktails.  When ordering a libation I always make it a point to call for those Brands that have done so much for us, over the years.

 

The success and continuation of what is arguably the Best Global Cocktail Event is dependent upon the continued support and cooperation of you, our Sponsors.  Ann and I make it a point to ensure that you maximize the return on your investment in Tales of the Cocktail, year after year.

 

With Annual Attendance of between 20,000 and 25,000, most of who are Bartenders, Spirit Manufacturers, Suppliers, Media, and admittedly a few Hardcore Cocktail Enthusiasts, we hope that you would agree that Tales of the Cocktail is the best value, for the monies spent.

 

Our Average Seminar Sponsorship is $3,500, with an Average Attendance of 150 Guests.

 

Our Average Tasting Room Fee is $2,200, with Average Participation of 300 Guests.

 

In 2012, we had over 2,554,423,603 Media Impressions, in which most of our Sponsors were recognized. (Yes, nearly 2.6 Billion)

 

So given what it costs to maintain a single Brand Ambassador with Salary, Product, and Travel & Entertainment, I would like to think that Dollar for Dollar, we give you tremendous exposure, access to some of the most influential Bartenders and Decision Makers in the Industry, from around the World, and a terrific return on your Investment.

 

With the monies we generate through Tales of the Cocktail we support such programs as the Cocktail Apprenticeship Program, which is in its sixth year.  As a Cocktail Apprentice, for perpetuity, you can apply for Scholarships to further your education, seek support from the Medical Assistance Fund, or request funding for a special Project that would benefit the Industry as a whole.  In 2015 we hope to establish a Program providing development and funding support for Bar Concepts, through yet again, another Committee who will be responsible for the evaluation of Business Plans and recommendations for Funding.

 

In 2013 we began funding Tuition for an Advanced Level B.A.R. Program and for the third year in a row, we will be providing Scholarships to the Crescent City School of Bartending through the Flo Woodard Scholarship Fund.

 

So as you can see, we do a lot for the Industry but as I said before, none of this would be possible without your support, which is why we vehemently protect those Brands that provide Sponsorship Dollars to Tales of the Cocktail, and why we are so aggressive when it comes to shutting down, rogue and unsanctioned Events.

 

Throughout the years, with 2013 being no exception, we have had various Brands attempt to take advantage of everyone’s generosity by circumventing the processes that are in place to protect our Sponsors and the Industry, by holding unsanctioned Events.  As we have done in the past, we will do our best to shut these down.  In the past, we’ve successfully closed “Pop-Up” Bars in which rogue Brands have spent tens of thousands of dollars, only to find themselves entertaining less than a dozen Participants and nearly twice as many NOPD Officers and a Fire Marshall.  We’ve made sure that those Brand Ambassadors who feel that their Expense Accounts are best spent buying Illicit Drugs for a dozen of their Friends, renting a Bus and visiting a Local Strip Club for “Special Favors,” understand how inappropriate we feel these actions are and how inconsistent we think they are, with their Brand’s Image.  While we want everyone to have a good time and enjoy him or herself, we do expect them to behave.  Brands that fund these rogue and unsanctioned Events are not only minimizing the return on their investment, but they are ripping off the very Industry, they claim to be supporting.  If it is not on the Official Tales of the Cocktail Schedule, chances are it is an unsanctioned, rogue Event.

 

While at the moment, you may not always agree with our suggestions and the directions that we try to point you towards, know that we always act with the best of intentions to ensure that you maximize your return on your investment in your Brand, and that the Industry as a whole, benefits from your support.  We do this to ensure the continued success of Tales of the Cocktail, and the benefit to those who so graciously support us through Sponsorships.  All we ask is that you give us the opportunity to help you be as successful as possible.

 

I want to once again thank you for your support and encourage you to feel comfortable enough to contact me directly at (504) 402-0208 with any questions, comments, or concerns,

 

Sincerely,

 

Paul G. Tuennerman

Chief Bar Back & Co-Owner

Tales of the Cocktail

 

 

——

South Africa: Black middle class fuels whisky sales

 

Source: BD Live

by Adele Shevel

April 21 2013

 

Whisky is the fastest-growing liquor in South Africa, outpacing cider and beer. Nielsen research shows the top sellers to be Bell’s, Johnnie Walker, Firstwatch, Black & White and J&B.

 

Imports to South Africa have grown in double digits since 2009 as the black middle class switches from brandy to whisky.

 

South Africa is now the sixth-largest market for whisky by volume, and seventh by value, according to South African Wine Industry & Information Systems -and was worth R6.6bn for the 12 months to June .

 

Premium and super-premium whiskies made up 87% of sales – far above levels seen in other international markets, said a 2011 report by DNA Economics.

 

Gerald Mahinda, MD of Brandhouse, said last year the company sold about 2-million cases of Scotch whisky in South Africa, led by Johnnie Walker and Bell’s.

 

Globally, whisky exports hit a record £4.3bn in 2012, up 87% over 10 years, the Scotch Whisky Association said this month.

 

Whisky producers are investing heavily in emerging markets. Europe used to be the big market for whisky, but the future is likely to be in Africa, Latin America and Asia.

 

Diageo makes 40% of its sales in emerging regions. It plans to invest £1bn in scotch production over the next few years to meet growing global demand, a large part of it from developing countries. At the half year, Diageo grew net sales by 15% in South Africa, driven mainly by Johnnie Walker (up 33%).

 

Emerging markets account for about 40% of sales of Pernod Ricard, the world’s second-largest spirits maker (which owns brands such as Chivas Regal). South Africa had been Pernod’s only foothold on Africa, but last year it opened commercial units in Morocco, Ghana, Nigeria, Namibia, Angola and Kenya to promote its whisky, cognac, vodka and champagne brands.

 

Jason Duganzich, whisky expert and collector, credits much of Johnnie Walker’s success in South Africa to Mickey Baloyi, nicknamed “the African Scot” because he knew whisky so well.

 

“He was Mr Johnnie Walker. He was probably the first person to expose the older black gentlemen in the townships to what it was that makes a whisky, and what goes with it.”

 

Consumption levels in Africa are still relatively low. While Africa drinks four million cases of blended Scotch a year, Latin America drinks 14-million cases and western Europe 33-million cases, according to Euromonitor.

 

South Africa’s home-grown brands are giving the established whisky countries like Scotland and Ireland a run for their money.

 

The Three Ships five-year-old Premium Select was named the world’s best blended whisky of 2012 at the annual World Whiskies Awards. Its first single-grain whisky, Bain’s Cape Mountain, launched in 2009, won three gold awards at the international Wine and Spirits Competition. Both brands are owned by Distell, South Africa’s biggest spirits and wines business.

 

This week Distell bought Burn Stewart Distillers Limited for more than R2.2bn from Trinidad and Tobago-based CL Financial, in a deal that allows Distell to capitalise on the global growth in whisky consumption.

 

 

——

Washington: Jeff Call, Washington Bar Owner Allowing Pot Use, Faces Crackdown

 

Source: Huff Post

By GENE JOHNSON

04/19/13

 

Jeff Call knew he was pushing the envelope when he started letting people use marijuana at his rum-and-pizza joint in Tacoma.

 

But he didn’t quite know the extent of what he was in for: the governor’s office demanding state regulators do something about it, local authorities revoking his business license, and his insurance company dropping his liability policy – developments that threaten to sink his 3-year-old establishment even as he vows to fight them.

 

“The screws are coming down from all over,” says Call, owner of Stonegate Pizza. “But we’re open. Everything is still the same.”

 

Washington and Colorado last fall became the first states to legalize marijuana for adults over 21. Both ban the public use of marijuana – which typically would include bars and restaurants – and most bars are steering clear of allowing pot use at least until officials come up with rules for the new weed industry.

 

But the Stonegate and a few others have been testing the boundaries in hopes of drumming up business and making a political statement.

 

Call, 48, allows a medical marijuana dispensary to use space on the second floor of his brick, two-story establishment as a “vape bar,” where people can use devices that “vaporize” marijuana, or heat it without burning it. That’s a way to get around the state smoking ban.

 

The upstairs bar is set up as a private club, with a nominal fee for membership – an attempt to get around the ban on public use of pot.

 

Medical marijuana patients can buy hits of potent marijuana oil, but everyone else has to bring their own pot and then rent a vaporizer – an effort to evade the ban on non-licensed marijuana sales to recreational users.

 

Soon after an Associated Press story featured Call’s bar last month, Gov. Jay Inslee’s staff instructed the state’s Liquor Control Board, which is devising rules for the new marijuana industry, to do something about it. The board responded by announcing that it would draft rules to require establishments with liquor licenses to ban marijuana use on site. Officials are concerned about people mixing marijuana and alcohol, especially if they’re going to be driving home.

 

Inslee spokesman David Postman also said it’s important to crack down on such establishments to demonstrate to other states, as well as the U.S. Justice Department, that Washington is implementing its new law responsibly. Marijuana remains illegal under federal law, and the DOJ hasn’t decided whether to sue in an effort to prevent the legal pot sales from ever happening.

 

“The law is clear on the prohibition on the consumption of marijuana in public,” Postman said. “From what the Liquor Control Board tells us, that’s exactly what this is.”

 

The governor wasn’t the only one concerned.

 

Tacoma officials sent a letter on April 9 revoking Call’s business license for violating the city’s nuisance ordinance, which bans marijuana gardens, dispensaries and “any place other than a private residence where cannabis is smoked or ingested.”

 

Call filed an appeal Thursday, a day before he had been ordered to close his doors. He can continue to operate during the appeal.

 

His attorneys, Douglas Hiatt and Aaron Pelley, say they plan to challenge the city’s nuisance ordinance. They say such local laws are barred by the state and federal Controlled Substances Acts, and cannot ban activity that is legal under state law, as they argue Call’s business is.

 

Call is also in the market for new liability insurance, after Western Heritage Insurance Co. notified him it was canceling his policy effective May 14.

 

Frankie Schnarr, the owner of Frankie’s Sports Bar and Grill in Olympia, another bar that allows marijuana use in a private room, is in the same boat after Western canceled his policy, too.

 

Call, who says his wife died of cancer 14 years ago and who lost his home to foreclosure as he tried to keep the Stonegate afloat, doesn’t know how he’ll pay for his legal representation. He plans some fundraisers at the bar.

 

“I have no idea what the road looks like for me,” he said. “But it’s not going to be a short road.”

 

 

——

Four Loko Maker Clamors For Personal Injury Suit Coverage

 

Source: Law 360

By Sean McLernon

April 19, 2013

 

The manufacturer of the controversial fruit-flavored alcoholic beverage Four Loko lodged a complaint against a pair of insurance companies in Illinois state court Wednesday demanding coverage for four underlying lawsuits linking the drink to severe bodily injuries.

 

Phusion Projects Inc. claims that insurance broker A.F. Crissie & Co. Ltd. breached its contract with the company when it failed to secure sufficient insurance coverage for Phusion’s distinct business needs, and must be held liable for the drink maker’s rising legal fees as it fights the underlying litigation and battles its insurance providers for coverage.

 

The beverage manufacturer also included Selective Insurance Co. of South Carolina as a defendant in the suit, claiming that the insurer is obligated defend and indemnify the company against the underlying actions alleging Four Loko consumption resulted in physical injuries.

 

Two other insurance providers have already escaped coverage of the underlying suits, as an Illinois federal judge ruled in January that Netherlands Insurance Co. and Indiana Insurance Co. have no duty to defend Phusion because of their policies’ liquor liability exclusions.

 

Phusion is blaming A.F. Crissie and the company’s owner Frank A. Crissie for allowing the provisions to be included in the policies.

 

“The communications and discussions between A.F. Crissie and Phusion formed a contract whereby A.F. Crissie agreed to provide insurance brokering services so as to obtain for Phusion commercial general liability insurance tailored to Phusion’s business niche and its unique business needs at a competitive premium cost,” the complaint says.

 

According to the suit, Phusion approached Crissie in early 2009 to help find a replacement for its existing liability coverage with Safeco Insurance Co., seeking a policy that sufficiently protected Phusion from liability risks from its “particular business operations.”

 

Crissie asked Phusion if the company needed “dram shop” coverage, which he said was only necessary if the beverage maker sells directly to consumers, the suit says. When Phusion told Crissie that it only sells to distributors, the broker advised the beverage maker to avoid the liquor liability coverage.

 

Now that Phusion is paying the price for not obtaining the extra coverage, the manufacturer is accusing Crissie of breach of contract, negligence and negligent misrepresentation.

 

Phusion is facing several wrongful death suits linking the drink to fatal automobile deaths and shootings, among other incidents. One suit alleges that a California man became paranoid after drinking two cans of Four Loko and began firing a shotgun in his yard until responding police officers were forced to shoot him eight times, resulting in his death.

 

The Federal Trade Commission tightened label requirements for the drink in February, requiring new disclosures about its alcohol content. Four Loko’s 23.5-ounce cans contain the same amount of alcohol as four to five 12-ounce cans of beer, which means drinking it in one sitting constitutes unsafe binge drinking, according to the FTC.

 

A Selective spokeswoman declined to comment on the suit. A representative from A.F. Crissie was not immediately available for comment Friday.

 

Phusion is represented by John S. Vishneski III, Stanley C. Nardoni and Noel C. Paul of Reed Smith LLP.

 

Attorney information for the defendants was not immediately available.

 

The case is Phusion Projects Inc. et al. v. Frank A. Crissie et al., case number 2013CH10322, in the Circuit Court of Cook County, Illinois.

 

 

——

Alcohol consumption can have sobering consequences for women

 

Source: Reporter-Herald

By Joyce Davis

04/20/2013

 

Women’s bodies don t handle alcohol like men’s do, and research now shows alcohol can affect their brains, their sleep and their immune systems.

 

It’s happy hour at your favorite watering hole and an equal opportunity occasion for women when the drinks are being poured.

 

But some sobering research shows that while women often can match men drink for drink, the effects on their bodies are dramatically more dangerous. Neurologically, alcohol affects women more quickly and severely than men, compromising self-control, judgment and emotions.

 

The Centers for Disease Control and Prevention defines heavy drinking as consuming an average of more than one drink daily. For women who drink heavily, the disruption in the brain’s neurotransmitters compromises everything from breathing, movement and the ability to think clearly in less time than it takes to affect a man.

 

In research from the University of Gothenburg in Sweden, published last year in the journal “Alcoholism: Clinical & Experimental Research,” a significant decrease in the function of the serotonin system in a women’s brain — 50 percent — appeared after four years of heavy drinking, while a corresponding decrease in men took 12 years to appear. The serotonin system regulates mood and impulse control, among other functions.

 

The CDC also says female binge drinkers — those consuming four or more drinks within two hours — can experience anxiety, depression and memory loss as the brain cells shrink. They also have a 39 percent higher risk for stroke as heart muscles are weakened.

 

Dr. Jennifer Lentz, family practice physician with Banner Health Center in Loveland, says excess amounts of alcohol can definitely have adverse effects. “Women’s bodies are usually smaller than a man’s, so they weigh less and the alcohol can be more toxic,” she says. “When you’ve had too much to drink, everything comes down — your inhibitions, your ability to make decisions, your immune system.”

 

Societal changes show that more working women are partaking in “happy hour” gatherings during which they may drink too much. Even women who go straight home after work are more frequently having a cocktail or two before dinner or a nightcap before bed.

 

Having that cocktail to “unwind” or to help you sleep may have an opposite result, Lentz says. “Alcohol blocks the receptors in your brain that allow sleep. It actually worsens your sleep patterns because there is no REM period necessary for quality sleep.”

 

No matter where or when the drinking occurs, the bottom line is that a woman’s body doesn’t handle alcohol like a man’s, so matching drink for drink can have serious effects. According to the National Institute on Alcohol Abuse and Alcoholism, women have less water in their bodies as well as less of the enzyme dehydrogenase in the stomach lining, thus preventing the dilution of alcohol before it enters the bloodstream. As a result, higher amounts of alcohol remain in the organs for longer lengths of time.

 

Women may also tend to drink more wine, glass after glass, believing it’s a healthier choice.

 

“Yes, red wine has properties that are good for you, but it’s still alcohol,” says Lentz. “It’s recommended you limit yourself to 5 ounces of wine a day.”

 

Women also should understand how their immune system and liver can be affected by too much alcohol. “There are definitely risks that can creep up, especially with your liver,” says Lentz. “You may not realize it until years later, but by then the damage is done.”

 

Women who drink are encouraged to talk with their doctors about their alcohol consumption and any risks that may apply to them — even though studies show that most patients aren’t truthful about just how much and how often they drink.

 

“I always ask my patients how much they drink at one time,” Lentz says. “In general, if it’s three to five drinks per week, I’m not that concerned, but if it’s more than that — one, two, three a day — I need to give that talk about potential serious problems.”

 

Women’s drinking patterns

 

Alcohol consumption — a July 2012 Gallup poll shows 44 percent of Americans drink alcohol regularly, and 22 percent admit they sometimes imbibe more than they should.

 

Moderate drinking — the U.S. Dietary Guidelines for Americans defines moderation as up to 1 drink a day for women or up to 2 drinks a day for men.

 

Binge drinking — a dangerous drinking pattern defined as the consumption of 4 or more alcohol drinks for women (5 or more drinks for men) on an occasion — generally considered to be about 2-3 hours. Binge drinking usually leads to acute impairment (intoxication), but most binge drinkers are not alcoholics or dependent on alcohol.

 

About 12.5 percent of adult American women binge drink, about 5.7 drinks on each occasion and 3.2 episodes a month. About one in eight U.S. adult women and one in five high school girls binge drink.

 

Binge drinking is most prevalent among women 18-24 (24.2 percent) and 25-34 years (19.9 percent), in households with annual incomes of about $75,000.

 

Among women binge drinkers, women 18-24 had the highest frequency (3.6 episodes) and intensity (6.4 drinks).

 

Among high school girls, the prevalence of current alcohol use was 37.9 percent, the prevalence of binge drinking was 19.8 percent and the prevalence of binge drinking among girls who reported current alcohol use was 54.6 percent.

 

Source: Centers for Disease Control (cdc.org). Data from the 2011 Behavior Risk Factor Surveillance System and the Youth Risk Behavior Survey (U.S. high school girls in grades 9-12).

 

Alcohol and cancer

 

Women at the greatest risk for breast cancer are those with a family history; for those women, drinking alcohol significantly increases that risk.

 

A Mayo Clinic study of 9,032 women found that women who had close relatives with breast cancer and were daily drinkers had double the risk of breast cancer, compared to those who never drank. Even moderate drinkers had an increased risk for breast cancer, according to a Harvard Medical School study of 105,986 women.

 

Women who drank only 3 to 6 drinks a week had a 15 percent increased risk, according to the study, while women who drank an average of two drinks per day increased their risk by 51 percent. Another study found that binge drinking — more than four drinks during one drinking session for women — increased the risk of breast cancer whether those sessions were frequent or not.

 

The same study found that it didn’t matter if the women began drinking at an early age or waited until after age 40 — if they consumed alcohol, their risk increased.

 

Source: U.S. Department of Health and Human Services’ “9th Report on Carcinogens — Review of Substances for Listing/Delisting”

 

 

——

United Kingdom: Wine could become ‘only for the elite’ if Government bans drinks offers in supermarkets

 

Source: Daily Mail

By Helen Lawson

20 April 2013

 

Wine could become too expensive for anyone but the wealthy thanks to Government restrictions and taxes, says one major retailer.

 

A potential ban on multi-buy offers in supermarkets and the recent 10p rise in wine duty could be responsible for drinkers turning to beer instead, according to Stephen Lewis, the chief executive of Majestic Wine.

 

This could reverse the ‘revolution’ of people enjoying a glass of wine with a meal, he said.

 

‘Having established this culture of food and wine, you know, which is a sea change from where we were 30 years ago, why would we want to stop that?’ Mr Lewis, whose chain has nearly 200 stores in the UK. told the Daily Telegraph.

 

He said that banning drinks offers in supermarkets would not solve the problem of anti-social behaviour.

 

‘The Majestic consumer is not the person who’s smashing up things, they’re not the problem drinkers’, he told the newspaper.

 

Yesterday, the minister for public health indicated a decision over introducing minimum alcohol pricing may never be taken, despite it being backed at first by David Cameron.

 

Anna Soubry said the policy could seem like ‘big bossy government cracking down on people who don’t have a problem’, in an interview with BBC Radio 4’s Today programme.

 

She said the Government was yet to decide if it would introduce a 45p minimum unit price and possibly never would.

 

Reports emerged last month that the controversial plans had been ditched amid claims David Cameron had run into fierce opposition from Cabinet colleagues, including Home Secretary Theresa May.

 

The Prime Minister insists the Government is considering the outcome of a consultation and wants to act to curb cheap drink.

 

Ms Soubry told BBC Radio 4’s Today programme: ‘On alcohol, I don’t think we have actually made a decision yet and there are good arguments both in favour of it and against it.

 

‘I was not convinced. I have been convinced because I met a whole load of liver specialists and doctors and they persuaded me it was a good idea.’

 

Asked if she had convinced Mr Cameron, she replied: ‘Oh yeah.’

 

Asked when there would be a decision on alcohol pricing: ‘I don’t know.’

 

When presenter John Humphrys said: ‘In other words we may not?’, she replied: ‘We may not.’

 

 

——

10 best craft brew states in America

 

Source: USA Today

Apr 21st

 

The craft beer movement continues to boom across the USA. 10Best editors have compiled this state-by-state guide so you can plan your next beer pilgrimage.

 

1. California, 268 craft breweries

 

Wine isn’t the only libation California is known for. With 268 craft breweries and counting — more than any other state in the USA — there’s bound to be a brew for every taste. While labels like Stone, Sierra Nevada and Anchor have become household names across the country, smaller breweries with more limited distribution are holding their own.

 

2. Washington, 136 craft breweries

 

Coming in at a respectable second, Washington state has 136 craft breweries, including the well-known Pyramid Brewery, headquartered in Seattle. It’s no surprise that this evergreen state has such a passion for beer, as the first American microbrewery — Yakima Brewing & Malting Co — was based here.

 

3. Colorado, 130 craft breweries

 

Left Hand in Longmont, New Belgium in Fort Collins, Avery in Boulder…Colorado’s craft brewery list reads more like a roundup of the best breweries in the country. If that’s not enough, Denver hosts the Great American Beer Festival where you can sample 2,200 beers from 500 of the country’s best breweries.

 

4. Oregon, 124 craft breweries

 

Oregon certainly does its part in carrying on the beer heritage of the Pacific Northwest. When you land in Portland, you’ll find a Rogue Brewery right in the airport, and you can easily take a beer tour of the state just as easily as a wine tour. Don’t miss Deschutes in Bend, Ninkasi in Eugene, Full Sail in Hood River and the original McMenamins in Portland.

 

5. Michigan, 102 craft breweries

 

Michigan is quickly moving up the ladder in the world of craft beers with over 100 breweries in the state. You may not find the big name craft brews of other states, but what you will find is some hidden gems — and maybe your new favorite — at local institutions like Bells Brewery and Founders Brewery.

 

6. Pennsylvania, 93 craft breweries

 

German immigrants to Pennsylvania brought with them a love of good beer, and the state already had six breweries pre-Prohibition, more than any other state in the country. Beer lovers will probably be familiar with Pennsylvania’s Golden Monkey and Hopdevil from the Victory Brewing Company, but the state has a lot more than just these heavy hitters.

 

7. Wisconsin, 75 craft breweries

 

With a Major League Baseball team called the Brewers, it’s a safe bet you’ll find a good beer to drink in Wisconsin. Sure, Wisconsin’s home to the likes of Pabst Blue Ribbon — hardly a craft beer — but you’ll find a slice of microbrew heaven at Ale Asylum in Madison, Lakefront Brewery in Milwaukee and plenty more.

 

8. New York, 72 craft breweries

 

Whether you’re cooling off in the summer or warming up in the winter, New York’s hoppy libations have you covered. With 72 breweries, you probably don’t have to go far to find one. Some of the best include Brooklyn Brewery, Southern Tier Brewing Company and Ithaca Beer Company.

 

9. Texas, 59 craft breweries

 

From St. Arnold, the oldest brewery in Texas, to the new microbreweries popping up in Austin every other day, Texas is quickly becoming a beer heaven. It’s also one of the fastest growing states when it comes to craft beer, so expect the Lone Star State to be moving up the list in years to come.

 

10. Illinois, 54 craft breweries

 

Illinois is starting to make a name for itself in the microbrewing world, and you’ll find many of its 54 breweries in the Chicago area. If you want to sample what’s available, plan to attend the Chicago Craft Beer Week in May.

 

10Best provides its users with original, unbiased, and experiential travel content on top attractions, things to do, and restaurants for top destinations in the U.S. and around the world.

 

 

——

News From TTB

 

Source: TTB

Apr 19th

 

Jill Murphy selected as Director, Office of Strategic Planning and Program Evaluation

We are pleased to announce the selection of Jill Murphy for the position of Director, Office of Strategic Planning and Program Evaluation. The director reports to the Deputy Administrator and the Administrator and manages the Bureau’s strategic planning process, oversees the Bureau’s performance management framework, coordinates the Bureau’s program review process, and serves as the primary Bureau representative to higher Departmental strategic planning offices and executives.

 

“Other” Uses of Alcohol

 

While many people may associate the word “alcohol” with beverages, alcohol has many other scientific, medical, and industrial uses. The TTB.gov Other Alcohol homepage provides information and resources on all of the other uses of alcohol regulated by TTB.

 

Denatured Alcohol

Specially Denatured Alcohol (SDA) is alcohol to which denaturing materials have been added. Manufacturers may use SDA in the manufacture of any product that is not intended for consumption. Generally, SDA is used in cosmetic products but its use extends to pharmaceuticals, chemical manufacturing, and products where SDA is the solvent or reactant.

 

Completely Denatured Alcohol (CDA) is alcohol that has been so thoroughly denatured that the product is utterly unfit for beverage use, and the denaturants used are very nearly inseparable from the alcohol. The use of CDA is authorized without permit restrictions because of the reduced risk that the pure alcohol can be extracted and diverted to beverage use.

 

Nonbeverage Alcohol Products

Nonbeverage drawback alcohol is pure alcohol, the same as that used for beverages. However, when manufacturers use that alcohol in the production of a food, flavor, medicine, or perfume, and the Nonbeverage Products Laboratory approves the product as unfit for beverage purposes, they can claim a return of most of the distilled spirits excise tax paid.

 

Alcohol Fuel

The law states that alcohol produced at an Alcohol Fuel Plant (AFP) is restricted to be “exclusively for fuel use.” The law, however, does not contain a definition of “fuel use.” TTB interprets the term to mean only the use of alcohol in motor fuel products that decrease the U.S. reliance on petroleum.

 

 

——

Bordeaux 2012: cautious optimism as Lynch Bages released

 

Source: Decanter

by Jane Anson in Bordeaux

Friday 19 April 2013

 

Five days in to the 2012 campaign and there seems to be cautious optimism that the Bordeaux chateaux are listening to the market and are prepared to lower their prices.

 

Following Mouton Rothschild’s successful price release yesterday morning, Pauillac fifth growth Lynch Bages came out yesterday afternoon at ?60 ex-Bordeaux, a drop of 13.5% from last year, but still a long way above its 2008 price of ?32.

 

The second wine, Echo de Lynch Bages, was released at ?21.60, a drop of 5%.

 

The renowned Moulis former Cru Bourgeois Chateau Chasse Spleen has released at ?16.80 (-5%) and Chateau Pibran at ?16.80 (-7%). Chateau Lamothe Bergeron, AOC Haut-Medoc, has remained unchanged at ?8.30.

 

Négociants have bought Lynch Bages, but they are reporting slightly slower selling to wine merchants, even for such a strong brand.

 

‘Of the major releases this week, the reaction to Lynch Bages has been lukewarm,’ said Paolo Pong of Altaya Wines in Hong Kong.

 

‘Some customers are fine, and we have bought a little for stock, but if they had come out 10-15% below, we could have sold thousands of cases.

 

‘Rauzan-Ségla has gone well, it has done exactly what everyone wanted, and gone with a similar price to 2008, and we should all applaud them for being fair.

 

‘Gazin for us was not so successful, because there are plenty of available vintages at the price or below, while Mouton also did the right thing, with a price similar to cheapest vintage available. It’s moving but not flying out the door.’

 

‘If more can go in the direction of Rauzan-Ségla we will end up selling some wine, and get a real campaign for first time since 2010,’ said Pong. ‘Let’s hope the message is getting though.’

 

 

——

Parker praises Pomerol in 2012 overview

 

Source: the drinks business

by Rupert Millar

19th April, 2013

 

Critic Robert Parker has praised Pomerol in his latest overview of the 2012 vintage.

 

He described the vintage and resulting wines as “complex” but only because of the difficult weather.

 

However, Parker explained that the earlier ripening Merlot meant that the Right Bank was not subject to the agonies of the Left, where the length of the season meant that most of the Cabernet Sauvignon crop was still on the vine when rains came in October, leading to rot.

 

He said that the quality of Pomerol “unquestionably” made it the top appellation, with the quality “not far off the blockbuster years of 2009 and 2010.”

 

Saint Emilion he also praised and the whites of Graves, which he thought had the potential to be better than the 2010s.

 

The reds too he thought excellent, although it is probably no coincidence that the problems he described with the Cabernet has led Haut-Brion to declare that it is adding “record” amounts of Merlot to this year’s wines.

 

The Médoc he described as the most complicated to navigate though there were good wines to bee had “but pick extremely selectively”. He ended by stressing that prices had to come down, ideally to 2008 levels but he conceded he could not see that latter wish coming to fruition in most cases.

 

 

——

Churchill’s declares its 2011 vintage

 

Source: the drinks business

by Andy Young

19th April, 2013

 

Churchill’s Port has followed Symington Family Estates and Sogrape in declaring its 2011 vintage.

 

The house’s 2011 Vintage Port has been blended from a variety of its old vineyards, with “the backbone of the blend” being sourced from a field blend of 50-year-old-and-over vines at Quinta da Gricha.

 

Owner Johnny Graham said that he was “particularly proud to present this stunning vintage”, adding that it is “what I call a classic vintage Port.”

 

Johnny Graham said that the 2011 vintage “may lack the instant appeal of more precocious wines at an early age; it tends to be closed on the nose, tannic on the palate and tight in structure, but, after a decade in bottle it will begin to open-up and reveal its true identity; that fabulous combination of distinctive but individually different component wines, which make up its well balanced and complex character.”

 

He added: “The Churchill’s 2011 is a wine that has the concentration, complexity, quality and finesse, as well as the natural acidity and tannic structure to age well for at least 50 years.”

 

The Churchill’s declaration comes after Symington’s declared an “exceptional” 2011 vintage earlier this week. Sogrape Vinhos was the first major Port company to make an official declaration, at the end of March. The Fladgate Partnership, traditionally waits until St George’s Day on 23 April before confirming any declaration.

 

 

——

Diageo names new president

 

Source: Drinks International

By Lucy Britner

19 April, 2013

 

Diageo is to appoint a new president for its Latin America and Caribbean arm.

 

Alberto Gavazzi, managing director, Diageo West Latin America and Caribbean (WestLAC), will take on the role of president, Diageo Latin America and Caribbean with effect from 1 July 2013. He is to report to Ivan Menezes, chief operating officer and will replace current president Randy Millian, who is to retire by June 30, 2014. Gavazzi will also replace Millian on the Diageo executive committee.

 

From 1 July 2013, Millian will take on a new non-executive role as chairman, Diageo LAC reporting to Menezes. He will continue to represent Diageo on the Zacapa board and the OAS (Organization of American States) trust board until his retirement.

 

Paul S Walsh, chief executive of Diageo, said: “Alberto brings a wealth of global and regional experience to his new role. Over the past 19 years he has succeeded in a variety of marketing and general management positions, including general manager, Brazil; global category director whisky, gin and Reserve Brands, and VP consumer marketing North America. I believe he will be equally successful in his new role and I congratulate him on his appointment.

 

“Randy leaves a strong business for Alberto to build upon.

 

“It has been a pleasure to work with Randy and I am very grateful to him for his commitment to our brands, values and our people over his long and successful career with Diageo.”

 

 

——

V2 WINE GROUP APPOINTS DIRECTOR OF NATIONAL RETAIL ACCOUNTS; LOOKS TO CONTINUE GROWTH AND EXPANSION OF BUSINESS

 

Source: Cronin Communications

Apr 21st

 

V2 Wine Group is pleased to announce the appointment of wine industry veteran Ken Meyerson as the company’s Director of National Retail Accounts. Meyerson, whose 17-year industry background includes top sales roles with blue chip wine companies, will oversee all sales in the National Retail Account arena for V2 Wine Group’s expanding portfolio which includes Dry Creek Vineyard, Qupé Wine Cellars, Steelhead Vineyards, Valley of the Moon and Toad Hollow Vineyards among other luxury brands. He will report to Scott Ericson, V2 Wine Company’s Vice President, National Sales Manager.

 

“V2 Wine Group continues in a rapid growth phase and our outlook for continued expansion is nothing but optimistic,” said Dan Leese, President of V2 Wine Group. “As our portfolio of world-class wineries and brands continues to increase in size and scope, bringing on a retail professional of Ken’s caliber is an obvious next step. Our on-premise business continues to be the backbone of our business, however, expanding our retail presence is our next big opportunity.”

 

“I am excited to join this entrepreneurial group of sales and marketing folks in expanding their portfolio and presence in the retail marketplace,” commented Meyerson.

 

Meyerson has held important sales positions with Ascentia Wine Estates, Diageo Chateau & Estates, Terlato Wines, and E & J Gallo during his impressive 17 year career.

 

“Ken’s depth of experience and industry knowledge is a key to our continued growth and strength in the national market,” stated Katy Leese, General Manager of V2 Wine Group.

 

V2 Wine Group is a wine production, marketing and sales organization dedicated to building strong wine brands in the North American marketplace. Based in Sonoma, California, the company is a partnership between wine industry veterans Dan and Katy Leese and entrepreneur Pete Kight.

 

 

——

Walmart could benefit from Tesco’s exit

 

Source: RT

April 18, 2013

 

With 6,700 stores in 12 markets, Tesco is a formidable competitor globally, but Walmart won’t have to worry about competing with the company on its home turf.

 

Tesco this week confirmed earlier indications that it would indeed exit the U.S. market following disappointing results from its 199 unit Fresh & Easy concept that was introduced in Western U.S. markets in 2007. The company also indicated it has received interest from third parties for Fresh & Easy assets and would treat the business as a discontinued operation, resulting in a roughly $1.8 billion after tax negative impact on profits.

 

The $1.8 billion writedown associated with U.S. operations was only half the bad news for Tesco which also took other writedowns related to its operations in the United Kingdom and Eastern Europe that brought the total to negative profit impact to $3.5 billion. The big charge on its home turf where the company competes with Walmart’s Asda division was related to a decision to not develop 100 locations that had been acquired five to 10 years ago.

 

“All the writedowns relate to strategic decisions that I’ve taken since being CEO and are logical extensions of those – calling an end of the (UK) space race, deciding to exit the U.S.,” according to a Reuters report. “My job’s not to look back, my job is only to look forward.”

 

As for what’s next for the Fresh & Easy real estate, Walmart could conceivably be a bidder as it is keen on expanding it smaller format stores and Tesco has already done much of the heavy lifting in markets such as California where Walmart hasn’t exactly been embraced. Tesco indicated it had received a lot of interest from a range of buyers but doesn’t expect to complete the divestiture process for three months.

 

 

——

Chipotle Mexican Grill, Inc. (CMG): Solid quarter, but 20%+ growth likely in the rearview mirror

 

Source: Goldman Sachs

Apr 19th

 

INVESTMENT LIST MEMBERSHIP: Neutral

COVERAGE VIEW: NEUTRAL

 

What’s changed

CMG reported adjusted 1Q13 EPS of $2.35, ahead of the $2.13 consensus and our $2.03 estimate. We tweak our 2013-2015 EPS estimates to $10.27/$12.44/$14.77 to reflect a lower run rate of food costs, higher ad spending for the rest of the year, and a delay of price increases until 4Q.

 

Implications

We retain our Neutral rating on CMG shares as we see more reasonably priced growth stocks elsewhere in our coverage universe:

 

(1) We believe that CMG’s revenue growth has decelerated to a rate under 20%, likely from this point forward. SSS have settled into a more modest low-mid single digit trajectory, unit growth is being impacted by the law of large numbers and new unit productivity has fallen to below 90%.

 

(2) In light of the lower steady state SSS, we believe CMG’s restaurant level margins, corporate EBITDA margins and return on invested capital may stagnate from here. Management has acknowledged that CMG needs mid-single digit SSS in order to leverage its fixed cost base. Given this, we believe annual EPS growth may stabilize in the 15-20% range.

 

(3) While we appreciate that a sustained 15-20% EPS growth rate in out-years is robust, it is only inline with other Restaurant growth stories such as PNRA and SBUX. We do not believe inline growth is likely to support a superior multiple, as was the case in CMG’s hyper-growth heyday. As such, multiple contraction may serve to offset the compounding EPS base, limiting shareholder returns over the next few years.

 

Valuation

We raise our P/E and DCF based 12-month price target by $10 to $320, 25X our forward 24 month EPS estimate, roughly inline with PNRA and SBUX.

 

Key risks

Primary upside/downside risk is incremental SSS upside/downside.

 

 

——

Texas: Texas distilleries in high spirits

 

Source: My SA

By Jennifer McInnis, Staff Writer

Saturday, April 20, 2013

 

Texas was late to the craft distilling party, but it’s quickly catching up to other states.

 

Sixteen years ago, Tito’s Handmade Vodka paved the way as the first legal Texas distillery. Now, there are 45 distilling permits registered with the Texas Alcoholic Beverage Commission, although not all of them are producing. The market has grown rapidly, and some have risen above the rest. Not only has the number of distilleries increased, but the variety of products they are making continues to expand. Here is a roundup, in alphabetical order, of updates and trend-setting distillers and some of their new products.

 

Balcones Distilling Any discussion about the future of Texas distilling should start with Chip Tate’s Balcones Distilling in Waco. It opened five years ago with Balcones Rumble distilled from honey, mission figs and turbinado sugar; and Baby Blue, a whiskey made from Hopi blue corn meal. The expanded lineup includes Balcones Single Malt Whiskey, Balcones True Blue Cask Strength, Balcones Brimstone, True Blue 100 Proof and Rumble Cask Reserve. Among its more than 40 awards, the distillery was named 2012 Craft Whiskey Distillery of the Year among Whisky Magazine’s Icons of Whisky, and 2012 Global Distillery of the Year and U.S. Craft Distillery of the Year at the Wizards of Whisky International Competition.

 

Banner Distilling Co. in New Sweden was granted its permit on April 4. Co-founders Logan Simpson and Tony Jimenez have spent years in the tech industry but wanted a change of pace. “I really have this need, desire to make a product that people can hold and touch and enjoy,” Simpson says. He plans to use local ingredients, including grains grown by farmers within the county. Simpson wouldn’t reveal much more but says there are more details to come about other unique ingredients.

 

Deep Eddy Vodka in Austin is known for its successful Sweet Tea Vodka that launched in 2010. Last year, the company started using 9-year-old San Antonian Bo DeWees’ Bo’s Bees Honey in the bottles sold here. Deep Eddy expanded into 16 markets last year, and its newest product is an instant success. The grapefruit-flavored Deep Eddy Ruby Red launched earlier this month, and Brandon Cason, vice president of marketing, says they’ve had to increase production to keep it on shelves.

 

Dorcol Distilling Co. (pronounced door-chole) is under construction at 1902 S. Flores St. Co-founders Boyan Kalusevic and Chris Mobley plan to open the distillery this summer. It will produce unaged and aged spirits, as well as small-batch seasonal expressions.

 

Dripping Springs Vodka has come a long way since opening in 2007 and a setback with a fire in 2009 that destroyed the original distillery. The company introduced Dripping Springs Texas Orange about two years ago and 1876 Well Vodka last year. The distillery is unveiling a new label, and it has increased production by 20 percent in the past year to expand distribution into the Midwest.

 

Garrison Brothers Distillery Owner and distiller Dan Garrison only makes one spirit – bourbon – but he wants it to be the best. Garrison Brothers Texas Straight Bourbon Whiskey is produced in Hye, and it’s one of the state’s most sought-after spirits. Batches are released in vintages, and they quickly sell out. Garrison also released Texas Opus, a white dog whiskey, and has plans for a high-proof bourbon, Hye Rye and small releases of five, seven and 10-year reserves.

 

Ranger Creek Brewing & Distilling The local distiller recently released Rimfire in its small-caliber series. It’s made from the same recipe as the Mesquite Smoked Porter minus the hops. The first release in the series was Ranger Creek .36 Texas Bourbon Whiskey, which earned 86 points from Whisky Advocate and a bronze medal from the American Distilling Institute’s Craft American Spirits. The distillery plans to release in July Belgian White Whiskey as an evil twin to its La Bestia Belgian Ale.

 

Treaty Oak Distilling launched in 2007 in Austin with a Platinum Rum. Last year, it released Starlite Vodka, an aged rum, and Waterloo Gin, which has wonderful Texas botanical notes of lavender, grapefruit and lemon. Newer to the lineup are a Two-Year Barrel Reserve and plans for Waterloo Gin Antique, which is also aged.

 

 

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Utah: Nothing silly about Utah’s liquor laws

 

Source: Deseret News

by Matthew Hartvigsen

April 20 2013

 

Utah is known nationwide for its strict liquor laws, and these policies drive a lot of debate. A recent article by Sutherland Institute’s Paul Mero titled, “Nothing silly of embarrassing about Utah’s liquor laws,” states five reasons why Utah’s liquor policy should stay:

 

1. “Liquor is a personal and societal negative. Pertaining to character, liquor never has made any human being a better person. Never. And a free society requires that we become our better selves.”

 

2. “Liquor makes human beings less free, if being truly free requires full mental faculties.”

 

3. “Liquor consumption impairs cognitive judgment and mechanical skills.”

 

4. “Liquor consumed by children is harmful to the child, especially in brain development. To dismiss the ill effects on children of the outward culture of drinking as an isolated matter for parents not only displays a naiveté about the real world, it also displays a sad ignorance of the proper role of law and government in the maintenance of a free society.”

 

5. “In an aggregate, a culture of drinking can exist – such as in a bar setting. In these circumstances, most policy-makers feel fully justified in regulating a culture of drinking.”

 

 

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Washington: Wash. brewers protest proposed beer tax

 

Brewers gathered at the Capitol on Friday to protest a House budget proposal that makes permanent a beer tax on large breweries and extends the tax to small brewers.

 

Source: The Associated Press

Apr 21st

 

Several state brewers spoke against the proposal at a public hearing in the morning before heading out to the Capitol steps, where about 100 people held a rally, carrying signs including “Give me beer or give me death” and “WA Beer (equals) WA Jobs.”

 

The House wants to permanently extend a beer tax on large brewers selling more than 60,000 gallons that was set to expire in June, but looks to lower it from 50-cents-per-gallon to 25-cents-per-gallon. The tax would be extended to small brewers at 15-cent-per-gallon. Combined, the tax would bring in $58 million to the state.

 

The Senate’s budget proposal does not include the tax.

 

Lawmakers are nearing the end of the 105-day legislative session where they’re tasked with patching a projected budget deficit of more than $1.2 billion while also putting more money into the state’s basic education system. The House and Senate will have to work out their budget differences before the April 28 end of the regular session if they want to avoid going into special session.

 

Brewers say the tax will hurt their business, especially that of smaller brewers.

 

“This is just a crushing proposal,” said Dick Cantwell, co-founder and head brewer of Elysian Brewing Company in Seattle. He said his brewery will likely end up having to pay an additional $600,000 a year if the proposal stands.

 

 

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South Carolina: SC minibottles switch hasn’t had results

 

Source: WISTV 10

Apr 22nd

South Carolina’s switch from minibottles to regular-sized liquor bottles hasn’t led to a decrease in drunken driving.

 

An analysis published Sunday by The Post and Courier of Charleston also notes that the change hasn’t led to any increase in funding for alcohol treatment.

 

Instead, South Carolina has been tapping its general revenue fund for more than $1 million yearly since free-pour liquor drinks became legal in 2006. The paper says that move has made up for lost taxes to support a network of alcohol and drug treatment agencies.

 

And the average number of drunk drivers involved in fatal South Carolina accidents has gone up in the years after free-pour became legal.

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One Response to “Liquor Industry News 4-22-13”

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