Liquor Industry News 5-29-13

www.franklinliquors.com

Franklin Liquors

 

Wednesday May 29th 2013

Today Is A Biodynamic ROOT Day

 

TTB Issues Guidelines for Voluntary Serving Facts Statements

 

Source: TTB

May 28th

 

On May 28, 2013, the Alcohol and Tobacco Tax and Trade Bureau (TTB) issued a ruling (Ruling 2013-2) that allows alcohol beverage industry members to provide consumers with nutritional information about their products and provides guidelines to ensure that the information is presented in a consistent and non-misleading manner.

 

The Federal Alcohol Administration Act provides for regulation of the labeling and advertising of distilled spirits, wine, and malt beverages to prevent consumer deception, to provide consumers with adequate information as to the identity and quality of the product, and to prohibit false or misleading statements.

 

The ruling allows “Serving Facts” statements that include the serving size, the number of servings per container, the number of calories, and the number of grams of carbohydrates, protein, and fat per serving. Additionally, Serving Facts statements may include information about the alcohol content of the product as a percentage of alcohol by volume and may also include a statement of the fluid ounces of pure ethyl alcohol per serving.

Industry members will not need to apply for new label approval to add a Serving Facts statement if it conforms to the examples contained in the ruling.

 

TTB is providing this interim guidance on the use of optional Serving Facts statements on labels and in advertisements pending the completion of rulemaking on this matter.

 

The Ruling can be found at http://www.ttb.gov/rulings/2013-2.pdf

 

For more information regarding alcohol beverage labeling requirements, please visit our website at www.ttb.gov.

 

 

——

Drunk in a puff of smoke: Worrying new trend sees diet-conscious drinkers INHALE alcohol to avoid empty calories

 

Source: Daily Mail

By Sadie Whitelocks

28 May 2013

 

Diet-conscious drinkers who want to get drunk without consuming empty calories are turning to a dangerous method that involves pouring alcohol over dry ice so the vapors can be inhaled.

 

Broderic Allen from North Texas, who lost 80 pounds by ‘smoking’ liquor instead of drinking it, explained to Fox5 that he can have his ‘cake and eat it.’

 

However, doctors warn the technique can have potentially fatal consequences as it sends larger and purer doses of alcohol to the brain by bypassing the liver and other organs.

 

Dr Lawrence Pohl, medical director of the Mission Valley Medical Clinic in San Diego, California, describes it as a ‘crazy’ fad that ‘makes no sense’.

 

‘The concern is it can go to the bloodstream quickly, to the brain quickly, to the lungs,’ he said, highlighting the dangers.

 

‘It’s toxic to the lungs and it could be a real concern and potentially have serious side effects.’

 

‘It can have a toxic effect . . . Just imagine pouring alcohol in your lungs, it’s just horrible’

 

Dr Walter Gaman, who practices family medicine in the Texas area, also notes the negative impact on the body.

 

‘The dry ice is so cold, you’re not going to be able to humidify it,’ he told KCTV5.

 

Research shows that inhaling liquor causes rapid intoxication and impairment and is more likely to lead to substance abuse.

 

Addiction expert, Dr Paul Hokemeyer told MailOnline: ‘Such extreme measures strongly suggest the presence of a serious substance abuse disorder.

 

‘In addition to the obvious physical risks this trend presents, it draws into question their judgment and impulse control.’

 

Despite the health warnings, Mr Allen said he has no plans to stop using the dry ice method. He says he can still taste the liquor and wants to maintain his slim physique.

 

‘I feel like anything in excess is going to be bad for you.’ he said. ‘People are going to take it and turn into something it’s not . . . If you lose the weight you want to keep it off.’

 

Backing the trend for ‘smoking’ alcohol, last December a $35 contraption called the Vaportini, which heats alcohol and allows it to be inhaled, hit the market.

 

Invented by Chicago resident Julie Palmer, the simple glass and metal device is offered as a novelty method to consume drinks at the bar she owns in the Windy City, Red Kiva.

 

Dr Thomas Greenfield, center director at the National Alcohol Research Center in Emeryville, California, said he was most concerned about young people who might feel pressured into to experimenting with different methods of alcohol consumption.

 

Read more: http://www.dailymail.co.uk/femail/article-2332111/Drunk-puff-smoke-Worrying-new-trend-sees-diet-conscious-drinkers-INHALE-alcohol-avoid-calories.html#ixzz2UfK0YYmy

 

 

——

Fewer tobacco products, but not alcohol, in movies

 

Source: Reuters

By Genevra Pittman

Tue, May 28 2013

 

Movie characters smoke less since 1998 regulations that stopped tobacco companies from buying on-screen brand placements, according to a new study.

 

But at the same time, researchers found the number of alcohol brand appearances has increased in popular movies rated PG-13 and below, and the amount of time characters spend drinking hasn’t changed.

 

“These results are of great concern,” said David Jernigan, head of the Center on Alcohol Marketing and Youth at the Johns Hopkins Bloomberg School of Public Health in Baltimore.

 

“In movie reality, it seems like every occasion is right for a drink,” said Jernigan, who wasn’t involved in the new study. And that suggests to young viewers that alcohol is much more common than is actually the case, he said.

 

“This whole conversation is about normalization of alcohol use,” Jernigan told Reuters Health. “Young people are particularly vulnerable to the message that drinking is everywhere.”

 

For the new study, researchers watched the top 100 box office releases of each year between 1996 and 2009 and recorded when a movie character was shown using or handling tobacco or alcohol, and when a particular brand was pictured.

 

In all, Elaina Bergamini from the Norris Cotton Cancer Center in Lebanon, New Hampshire, and her colleagues recorded 500 tobacco and 2,433 alcohol brand placements in all films combined.

 

The number of tobacco brand appearances ranged from 54 to 98 per year before 2000, then declined to 22 per year after 2006. The amount of time characters were shown using tobacco also dropped over time in both youth and adult movies.

 

That suggests the 1998 regulation, part of the Master Settlement Agreement between tobacco companies and U.S. states, successfully stopped the tobacco industry from paying for its products to be shown on screen, the study team wrote in JAMA Pediatrics.

 

On the other hand, alcohol brand appearances in youth-rated movies, in particular, increased from 80 to 145 per year during the study period.

 

Budweiser was the most common alcohol brand shown in films. Parent company Anheuser Busch did not comment before press time.

 

Jernigan said that because there’s unlikely to be a similar settlement for the beverage industry, any regulation on product placement would have to come from the companies themselves or from the movie industry.

 

For example, some organizations have suggested movies showing drinking should automatically be rated R.

 

Concern stems from research tying on-screen smoking and drinking to more of that behavior among youth who watch those movies.

 

“Children who see smoking in the movies are more likely to initiate smoking,” Bergamini told Reuters Health. “I think there is some concern that that may hold true for alcohol as well.”

 

“The notorious thing you find in movies and in TV is heavy drinking without consequences,” Jernigan said. “It leaves it up to parents to tell the consequences story.”

 

 

——

U.S. Economic Confidence Holds Steady at High Level

 

Economic Confidence Index score of -6 on par with previous week’s score of -5

 

Source: Gallup

by Alyssa Brown

May 28th

 

Gallup’s U.S. Economic Confidence Index was -6 last week, staying near the five-year weekly high of -5 from the prior week. The recent level is the most upbeat U.S. consumers have been since Gallup began tracking U.S. economic confidence daily in 2008.

 

Gallup’s Economic Confidence Index is based on Americans’ ratings of current economic conditions in the United States as well as their assessments of whether the economy is getting better or worse. The index has not crossed into positive territory since Gallup began Daily tracking of economic confidence in January 2008. Gallup measured Americans’ confidence in the economy on a monthly basis from 2001 to 2007, and on an occasional basis prior to that, though methodological differences between the tracking and nontracking surveys do not allow for precise comparisons of the results from each. Nonetheless, the last time the index was in net positive territory was from late 2006 through early 2007.

 

Looking at the outlook component of the index, Americans’ net rating of the economy’s direction dipped to -1 last week after crossing into positive territory the prior week — which was the first time Americans’ weekly net economic outlook had been positive in more than five years of Daily tracking. Last week, 47% of Americans said the economy was getting better and 48% said it was getting worse.

 

Americans’ net assessments of current economic conditions, at -11 last week, remain in negative territory, but are as positive as they have been since early 2008. The current reading reflects 21% saying current economic conditions are excellent or good and 32% saying they are poor.

 

Implications

 

Gallup’s Economic Confidence Index has been edging closer to positive territory in recent weeks after residing in negative territory for more than six years. There are multiple factors that may have contributed to this recovery in Americans’ confidence in the economy this year, including surging U.S. stock prices, higher housing prices, lower gas prices, and positive employment news. These positive signs apparently were enough to help Americans’ confidence in the economy rebound quickly after the fiscal cliff and budget sequestration debates.

 

While Americans’ confidence in the economy has been stronger so far this year than in prior years, there are political and economic events in the months ahead that will likely test Americans’ higher levels of confidence. More federal agencies are announcing and implementing their plans to furlough employees in response to automatic sequestration budget cuts, which could negatively affect Americans’ views of their personal finances and the overall U.S. economy. The Federal Reserve may cut back its bond buying program or make other policy changes, which could cause U.S. stock prices to slip. There may also be a contentious debate in Washington this summer or fall over raising the debt limit, with Republicans expected to demand spending cuts as part of a deal to raise the debt ceiling.

 

Additionally, business owners may decrease hiring and let more employees go in anticipation of health insurance requirements as part of the Affordable Care Act, which also could negatively affect Americans’ confidence in the economy.

 

Gallup’s Daily tracking of U.S. economic confidence will show whether Americans’ confidence will be shaken as a result of these challenges or whether the positive momentum will continue.

 

 

——

Pernod Plans to Expand in China Despite Government Crackdown

 

Source: WSJ

By LAURIE BURKITT

May 28th

 

Pernod Ricard SA RI.FR -0.90% executives have a plan to battle a slowing Chinese economy in which high-end spirits are taking a beating: expand anyway.

 

China is Pernod’s second-largest market by profit outside the U.S. Above, a Chivas billboard in Shanghai.

 

The French maker of whiskey brands such as Chivas and cognacs including Martell is opening members-only clubs in China, cozying up to wealthy individuals and hosting gatherings of 10 or fewer VIP customers to win more drinkers of Champagne, cognac, wine, whiskey and vodka, executives said Tuesday at an analysts conference in Beijing.

 

“The goal is to boost our profile as an ultraprestige player,” said Con Constandis, Pernod Ricard’s managing director for China. The company took around 70 VIPs to an annual yachting event last month at southern China’s Hainan Island for tastings and fine dining, he said.

 

Expanding the market for pricey spirits comes as China’s government has scaled back government-sponsored banquets and gift giving, which for years had propelled sales of high-end spirits. The crackdown has taken a toll on domestic makers of China’s white spirit baijiu, with sales falling as much as 30%.

 

Foreign companies have taken a hit, too. Rémy Cointreau SA, RCO.FR -0.79% which makes Rémy Martin cognac, last month reported that Asia sales growth was slower during the Lunar New Year period compared with a year earlier, citing reduced corporate gift giving in China.

 

Overall spirit volume in China is expected to rise an average of 16% a year through 2016, down from 21% growth between 2006 and 2011, according to data tracker Euromonitor International.

 

Mr. Constandis said the government’s efforts are challenging the skyrocketing growth and high profits that many spirits companies had fetched in China. Pernod’s sales of high-end scotch fell during the Lunar New Year, he said on the sideline of the conference.

 

Yet Pernod isn’t pulling back on its effort to sell more ultraprestige spirits, such as the $3,000 cognac L’Or de Jean Martell and Ballantine’s 40-year-old whiskey, which sells for more than $300 a bottle.

 

Mr. Constandis likened the Chinese government’s efforts to scolding loud teenagers at a party. “They’ll settle down for a while, but you’re not going to stop them,” he said. Pernod will continue to focus on high-wealth and other affluent individuals, he said.

 

China is an important component of Pernod’s growth strategy and is the company’s second-largest market by profit outside the U.S. Pernod also is targeting Chinese travelers, opening retail outlets in airports and expanding its presence in duty-free shops. Executives also plan to create more in-flight experiences, such as Pernod’s Korean Air 003490.SE +1.37% Absolut bar, which offers cocktails mixed with the company’s Absolut vodka.

 

To revive scotch sales, Pernod plans to expand marketing and sales channels to increase its presence in restaurants and karaoke bars, which are more casual and visited more frequently by female consumers than where Pernod typically sells the spirit. The distiller sees potential in building its female base in China and throughout Asia, Mr. Constandis said.

 

Some analysts have expressed skepticism about the bullish stance of some luxury companies as other competitors pull back. Yet the thirst for luxury products hasn’t dropped significantly and continues to increase within the middle class, said Aaron Fischer, analyst at brokerage CLSA Asia-Pacific Markets.

 

Pernod is expanding rapidly across Asia, particularly in markets such as Vietnam and India. Premium Western-style spirits and wine, the most aspirational segment, represents only 3% of the market in Asia, according to Pernod.

 

 

——

Brown-Forman Corp. (BF__B): 4Q FY13 Preview: Slightly below consensus on higher reinvestment

 

Source: Goldman Sachs

May 28th

 

INVESTMENT LIST MEMBERSHIP: Americas Sell List

COVERAGE VIEW: NEUTRAL

 

What’s changed

BF_B reports 4Q and FY13 earnings before market open on Wednesday June 5. Our EPS estimate stands at $0.43 for 4Q, $0.03 below consensus of $0.46 that has a wide range ($0.41-$0.52). We are generally in line for sales, but below consensus on EPS due mostly to greater spending expectations and FX. We are raising our estimates 1-2% on better gross margins and a lower tax rate assumption.

 

Implications

We continue to believe BFB will be a relative laggard as it is trading at a peak absolute and relative multiple. We believe our 10-11% EPS growth is very achievable for BFB, but we believe this growth does not justify a 16.5X NTM EV/EBITDA multiple, which is a 20-25% premium to its spirits peers.

 

We are below consensus for 4Q, in part due to reinvestment – We are near the high end of BFB guidance for the year ($2.66 vs. guidance of $2.60-$2.68), but believe consensus at $2.69 may not be reached as BFB invests back into advertising more heavily. We still expect very strong sales growth in 4Q of 9% which is well balanced between 5.5% volume and 3.5% price/mix.

 

Forecasting 10-11% EPS growth in FY14 – Our estimates reflect 10.3% EPS growth in FY14 to an EPS of $2.93 vs. consensus expectations of 11.2% growth to $2.98. We expect another solid year of 6% volume growth and 2% price/mix, but do not expect the same level of pricing and margin step up as we had in FY13. We do not anticipate any major new innovations on Jack Daniels as we believe BFB will remain cautious on not diluting brand equity.

 

Valuation

Our 12-mo $67 EV/EBITDA based price target is unchanged.

 

Key risks

Key risks include better volume/pricing, spirit industry acceleration, margin improvement.

 

 

——

Japan’s Suntory Beverage & Food to List on Tokyo Bourse Jul 3

 

Source: WSJ

By Hiroyuki Kachi

May 29th

 

Suntory Beverage & Food Ltd. has received approval to list on the Tokyo Stock Exchange on July 3, in a $4.7-billion initial public offering aimed at raising funds for outbound M&A activity to power its growth.

 

The Tokyo bourse said Wednesday that the beverage giant, which bottles and distributes PepsiCo Inc. products in Japan, will offer 93 million newly issued shares to the public, comprising 33.5 million shares for domestic investors and 59.5 million shares for overseas investors. Suntory Beverage & Food, a key unit of Suntory Holdings Ltd., racks up more than 50% of Suntory Holdings’ group revenue.

 

Suntory Holdings will also offer 26 million shares it currently holds in Suntory Beverage & Food to the public. The holding company currently owns all the shares of its beverage unit. An additional offering of up to 6.2 million existing shares is expected under an over-allotment arrangement in case of stronger-than-expected demand.

 

The indicative price of Y3,800 tentatively set by Suntory brings the value of the IPO to up to Y475.76 billion ($4.7 billion) and the issue’s market capitalization to Y1.174 trillion.

 

Among other companies in the sector, Kirin Holdings Co. (2503.TO) has a market value of Y1.661 trillion and Asahi Group Holdings Ltd. (2502.TO) a market value of Y1.208 trillion.

 

The Osaka-based Suntory Holdings, about 90%-held by its founding family, has garnered fame for its whiskey brands, but has been diversifying into food- and beverage-related fields to expand its sources of revenue.

 

Suntory beverage and food unit also owns European soft-drinks company Orangina and New Zealand-based Frucor Group.

 

 

——

‘Transcendent spirit’ Bacardi risks losing lead in global rum sales

 

Source: Beverage Daily

May 28th

 

Bacardi is in danger of losing its ‘coveted position’ as the world’s bestselling rum to Philippines rum brand Tanduay, according to a new survey of spirits brands sales in 2012.

 

http://www.beveragedaily.com/Markets/Transcendent-spirit-Bacardi-risks-losing-lead-in-global-rum-sales

 

 

——

USL to sell Scottish whiskey distiller Invergordon

 

Source: DBR

29 May 2013

 

United Spirits Limited (USL), an Indian spirits company, is likely to sell its Scottish grain whiskey distillery Invergordon, which it acquired under $1.18bn Whyte & Mackay acquisition in 2007.

 

Invergordon has an annual production capacity of 40 million liters.

 

However, the Office of Fair Trade in UK, after reviewing the recent acquisition of USL by Diageo, raised concerns that the combined grain whiskey distillation would violate competition laws, reported The Times of India.

 

Diageo already owns Cameronbridge, which has an annual capacity of 140 million liters, besides owning a 50% stake in North British Distillery, which has 60 million-liter capacity.

 

Whyte & Mackay owns five distilleries in Scotland, including Dalmore, Old Fettercairn, Isle of Jura, Tamnavulin and Invergordon.

 

Among these distilleries, only Invergordon is a grain whiskey distillery, while others are malt distilleries.

 

According to drinks industry analysts, Diageo might start divesting Whyte & Mackay brands, which are against the long-term interests of the company.

 

 

——

DOJ Shows Flexibility In Structural Fix For InBev, Modelo

 

Source: Law360

Peter Love

May 28, 2013

 

The U.S. Department of Justice has reached a settlement with Anheuser-Busch InBev and Grupo Modelo SAB de CV, requiring AB InBev to divest Modelo’s entire U.S. business to Constellation Brands Inc. The consent decree provides for a straightforward structural fix. AB InBev has agreed to sell Modelo’s newest Piedras Negras brewery and Modelo’s interest in Crown, its U.S. distribution joint venture with Constellation. AB InBev also will sell to Constellation (or to some other divestiture buyer if the deal with Constellation falls through) perpetual and exclusive licenses to the Modelo brands for distribution and sale in the United States. Coming after the U.S. Department of Justice’s rejection of a softer remedy proposed by AB InBev, the final settlement reflects the DOJ’s continued reliance on structural remedies as the default fix for horizontal mergers that may lessen competition.

 

Background

 

On Jan. 31, the DOJ filed a civil antitrust lawsuit in federal district court in Washington, D.C., challenging AB InBev’s $20 billion proposed acquisition of the remaining 50 percent interest in Modelo, the producer of Corona Extra, the best-selling imported beer in the United States. Shortly after the DOJ filed its lawsuit, AB InBev reached a new $4.75 billion deal that gives Constellation full ownership of Crown, the Piedras Negras brewery in Mexico, and perpetual licenses to Modelo’s brands. The announced settlement is “substantially in line” with this revised agreement.

 

The key elements of the remedy – AB InBev agreeing to sell to Constellation the Piedras Negras brewery, its interest in Crown, and perpetual and exclusive licenses to the Modelo brands in the United States – clearly are both more substantial and more “structural” than the original supply agreement fix that AB InBev proposed.

 

When AB InBev announced the Modelo acquisition back in June 2012, AB InBev simultaneously offered a fix to address U.S. competitive overlaps. But in that remedy, AB InBev planned only to sell Crown to Constellation and to brew Modelo brands for Constellation under a long-term supply agreement, while retaining all of Modelo’s brewing assets. AB InBev also would have had the ability to reacquire Modelo’s U.S. business after 10 years. The settlement filed on April 19 shows that AB InBev’s original fix greatly underestimated the extent to which the DOJ would require a more complete and permanent remedy.

 

In addition to the DOJ’s insistence on a core structural remedy, the settlement is noteworthy in that it includes many elements of a conduct fix that were necessary to make the structural elements work. Constellation is pledging to expand the Piedras Negras brewery over the next three years to at least 20 million hectoliters and must “use its best efforts” to meet specific interim deadlines and targets, such as executing contracts with design and engineering firms within six months and completing construction of the brewhouse within 30 months. Because Constellation needs this time to achieve brewing independence, even under the DOJ settlement ABI will provide transition services to Constellation, including brewing, for a period up to three years.

 

In further recognition that there will need to be some ongoing collaboration between Constellation and ABI, the consent decree also imposes some conduct obligations on ABI with respect to the distribution of Modelo brands over the next three years. Where Modelo brands in the United States are distributed through ABI majority-owned houses, Constellation can direct those distributors to sell their distribution rights for Modelo brands to another distributor. Where Modelo brands go through ABI affiliated (but not owned) houses, ABI cannot change its distributor incentive program to penalize ABI distributors for carrying Modelo brands. These provisions also show that the DOJ is aware of the importance of effective distribution to ensuring the competitiveness of the Modelo brands.

 

The proposed settlement still needs court approval, before which there is a 60-day public comment period. After the public comment period, the settlement will become final if the court determines (as expected) that it serves the public interest.

 

Implications

 

An obvious lesson from the settlement is that the DOJ will require true structural relief to address substantial potential competitive harms. Perhaps more noteworthy is the extent to which the DOJ may be flexible about behavioral provisions in the context of a structural fix. In ABI/Modelo, the DOJ not only accepted pledges by the divestiture buyer to become more competitive, but also a relatively long (three-year) interim supply relationship between competitors. Merging parties therefore should anticipate that remedy proposals should include structural relief, but also that behavioral elements may be acceptable to complement the underlying structural fix.

 

The settlement also illustrates that the DOJ is sensitive to the importance of efficient distribution for any acquirer of new assets. Constellation is protected from unfavorable ABI-owned distributor contracts for the three years, during which it would be reliant on ABI for brewing. Presumably, Constellation can use this time to ensure the long-term competitive distribution of its brands. This is consistent with the DOJ’s more general requirement that any divestiture acquirer be an effective, independent competitor in the market.

 

 

——

LAURENT-PERRIER (=)  FY13 results

 

Source: Exane BNP

May 28th

 

TP: EUR69 . Upside: 8%

Beverages (-) . France . Price (28 May. 13): EUR63.8

 

FY13 sales 3% below ambitious consensus, in line with our forecast

Organic growth of 0.6% resulted from a weaker than expected -0.8% volume effect but price/mix of 1.6% was better than feared. The FY13 results illustrated once again that Laurent-Perrier is outperforming its competitors due to its higher exposure to non-European countries (c.17% of sales) but also that industry fundamentals remain weak.

 

Muted price/mix in non-European markets

With reported sales growth of 2% in non-European markets and volume growth of 8% in FY13 (ahead of the industry at +4.4%), we stress that price/mix outside Europe is likely to have been negative since the group mentioned a positive FX effect.

 

EPS only 9% below ambitious consensus, saved by lower net interest and tax

EBIT came in 8% below consensus. The only reason that the miss vs. consensus at the net income level (9%) was not much more acute was because the group benefited from lower tax and financial charges than anticipated.

 

FY14: more of the same

Overall, the group expects a continuation of the trends seen in FY13 (difficult Europe, weak France), as do we. Despite the slowdown we have noticed outside Europe over the last few months (3-month rolling growth of 1% for champagne houses as of March vs. mid to high single digit previously) management felt ‘rather confident’ in demand from outside Europe. We now expect 6% volume growth for non-Europe in FY14 as investment in the Laurent Perrier brand is likely to result in further market share gains.

 

Estimates fine-tuned, consensus likely to come down by low to mid single-digit

Our FY14 is cut by 1% as lower EBIT is offset by a lower tax rate and financial expenses. However, the miss on FY 13 is likely to result in more pronounced consensus downgrades by low to mid single-digits depending on tax rate and net interest assumptions.

 

 

——

A vineyard’s ambitions for a bouquet from Brazil

 

Source: FT

By Joe Leahy

May 28th

 

When Morgana Miolo started doing business in China two years ago, the Brazilian was struck by the cultural differences of operating in the world’s second-largest economy.

 

“The Chinese close a deal with the most important person at the table raising a glass in toast higher than the others,” says the gaúcha, as people from Brazil’s southern state of Rio Grande do Sul are known. “My first time there, I didn’t know this stuff.”

 

More unusual than the vagaries of doing business in China, however, was the product Ms Miolo was selling. Hailing from a country best known in China for its savvy on the football field, this fourth-generation scion of a family of Brazilian viticulturists was in Shanghai to establish a market for her Miolo wine brands.

 

Now Miolo is achieving a feat many Brazilian companies can only dream of: selling something to the Chinese that is not soyabeans or iron ore. It is part of a wine industry that has been forging new paths into overseas markets in spite of Brazil’s high costs, and with a product not normally associated with Latin America’s largest economy.

 

The push is part of a wider campaign to promote exports of value-added products to try to offset the country’s dependence on unprocessed raw materials and commodities, particularly in commerce with China, its biggest trading partner. “We see analysis come out that there is a complementarity between the Brazilian and Chinese economies, but we want to go beyond complementarity, we don’t just want to sell commodities and import manufactured goods exclusively,” foreign minister Antonio Patriota recently told the Financial Times.

 

The story of Miolo tracks that of Brazil’s wider wine industry. Ms Miolo’s great grandfather, Giuseppe, arrived in Brazil in 1897 like thousands of other Italian immigrants at that time. He went to Bento Gonçalves in the Serra Gaúcha, a mountain range in Rio Grande do Sul, and bought “Lote 43”, some land in what became known as the Vale dos Vinhedos, or Valley of the Vineyards.

 

The family produced grapes for sale to vineyards until the 1980s, when prices collapsed, and Guiseppe’s three grandsons, Antônio, Darcy and Paulo, switched to making wine themselves. They produced their first, the Reserva Miolo Merlot, in 1992. “The family had to make a decision for its survival, so it started producing wine as an alternative source of income.”

 

Today the company claims to have 40 per cent of the fine-wines market in Brazil – wines using the vinifera grape varieties of Europe – and 15 per cent of Brazil’s spumante market. It produces 12m litres of wine from 1,150 hectares of vineyards across Brazil. These include those in Vale do Sao Francisco in tropical Bahia state, which produces three harvests every two years rather than the normal one per year. Miolo exports to 20 countries and revenue has grown from R$1m in 2000 to R$100m by 2010.

 

In the early 2000s, as the eight great-grandchildren of Guiseppe, comprising the fourth generation, assumed day-to-day management of the business, they began to see the limitations of Brazil’s still immature domestic market for fine wines.

 

Among the newer generation, Adriano Miolo, now chief executive, and his brother Fabio, had studied oenology, the science of winemaking, and knew that to be properly recognised inside and outside Brazil, Miolo would have to establish its brand overseas. “The inspiration to export came from our desire to make Miolo an international brand, the reference for Brazilian wine abroad,” says Ms Miolo.

 

The transformation started in 2003, when they contracted Frenchman Michel Rolland – one of the “flying winemakers”, a group of elite international travelling wine consultants who have transformed the industry globally – for 10 years to work on quality at Miolo.

 

Realising, too, that it did not have the financial muscle to create an international brand, Miolo teamed up with other local vineyards and a state industry group to form in 2002 what would become Wines of Brazil.

Learning about Chinese tastes for Brazil’s wines

 

As with Latin American exports in general, there is a temptation to lump Brazilian wines in with their counterparts in Spanish-speaking America. But, as with Latin America in general, this would be wrong. Brazilian wines are generally lighter and less alcoholic than their New World peers and are more like those of the Old World.

 

Now, they seem to be finding a ready audience in that oldest of markets, China. Morgana Miolo says the Chinese are exacting customers. The country’s nouveau riche drink partly as a sign of status, which means they buy wine in restaurants rather than at the supermarket. “What we learnt in Europe had no application, we had to start from zero,” says Ms Miolo, who first visited the country as part of a trade delegation in 2011.

 

Miolo concentrated on building a strong brand, which included opening a store in Shanghai and emphasising its family history, which is a plus point for the Chinese.

 

For advertising, it bought a large outdoor site in Shanghai that featured the puffy white clouds and pure blue sky that are common at Miolo’s vineyards in southern Brazil – again, a plus point for the Shanghainese, who are accustomed to more polluted skies.

 

For years, Brazilian wines had depended on the exotic idea that the country of samba and beaches could produce wine. However, to build a sustainable ex­port industry, the wine producers needed to convince consumers that the wines were not just exotic but also good. The organisation set about creating a more serious image by attending fairs, inviting foreign wine writers to Brazil, and matchmaking Brazilian producers with importers. “We wanted to show that we have quality wines,” says Andreia Gentilini Milan, promotions director of Wines of Brazil.

 

The trade body is now staging international events around Brazil’s hosting of the World Cup next year and the Olympics in 2016, such as the Wine Cup, a series of wine tasting competitions culminating in a final in Brazil next year.

 

Despite the export drives, Brazil and Miolo alike still sell a fraction of their production overseas. The UK is Miolo’s biggest market followed by China, where it sells only 7,000 cases a year (up from almost nothing two years ago).

 

Meanwhile, Brazilian producers struggle with high costs. They pay as much to ship a bottle of wine to the nearest port less than 500km away from Miolo’s vineyard in the Vale dos Vinhedos as to ship it to China. In the domestic market, they pay half the price of a bottle in tax, handing the advantage to producers in neighbouring Chile and Argentina, which can enter Brazil duty-free. Perhaps for this reason, foreign products constitute 80 per cent of the Brazilian wine market.

 

Indeed, the real prize for Brazilian and foreign producers alike is this domestic market. Brazilians consume only 2 litres of wine per capita per year compared with 23 litres for neighbouring Argentina, leaving room for enormous potential growth.

 

This is where being an exporter can help a Brazilian producer’s fortunes at home, Ms Miolo argues. Brazilians value imported products above domestic ones, but they are willing to grant an exception for Brazilian companies that have succeeded abroad.

 

“When consumers see that a Brazilian vineyard exports, they assign their products the status of an imported wine,” says Ms Miolo.

 

Overall, Brazilian wines may not be the cheapest but the fact they are not French or Italian or Chilean or Argentine continues to be their strength because they attract wine connoisseurs who are ever keen to experience something new.

 

Ms Miolo says “we have turned lemons into lemonade”, using the Portuguese expression for creating something good out of something bad, or in this case turning a disadvantage into an advantage.

 

 

——

BLACKHEATH BEVERAGE GROUP TO REPRESENT SLOVENIA VODKA

 

Source: BLACKHEATH BEVERAGE GROUP

May 28th

 

Blackheath Beverage Group is pleased to announce that they will be representing and launching Slovenia Vodka beginning in June in the New York and Connecticut markets.  Slovenia is the brainchild of celebrity chef and ‘Iron Chef’ winner, Peter Xaviar Kelly.  

 

Blackheath will utilize its proprietary sales and marketing platform to introduce Slovenia in key markets throughout the US and coordinate all on-the-ground sales and marketing efforts.

 

 

——

Don Sebastiani & Sons Names Tom Hawkins CFO and General Manager

 

Source: Balzac

May 28th

 

Don Sebastiani & Sons, a family-owned wine company based in Sonoma, California, has promoted 32-year wine and spirits industry veteran Tom Hawkins to Chief Financial Officer (CFO) and General Manager. In his new position, he will oversee the Operations, Winemaking and Human Resources functions of the company.

 

Hawkins has been Chief Financial Officer at Don Sebastiani & Sons since June 2010. He joined the company in July 2009.

 

 

——

Dron leaves William Grant

 

Source: Drinks International

By Christian Davis

28 May, 2013

 

William Grant & Sons has announced that Gordon Dron, its managing director for Europe, Middle East and Africa (EMEA) has decided to leave the company.

 

A company statement says: “Following a restructure of the branded business unit within William Grant & Sons the company is disappointed to announce that Gordon Dron, managing director, EMEA has made the decision to leave the business.”

 

Dron joined Grants in April 2006 as MD, Southern Europe and was soon promoted to the role of MD, Europe and became a member of the executive committee.  He was then promoted to MD, EMEA in November 2010.

 

The company says he was “highly successful in developing a strategy for the region which ‘ignited a new wave of growth’ for WG&S Europe”.

 

He was responsible for establishing and implementing the route to market strategy which Grants says has been essential to its success in recent years and has resulted in a transformation in its strategic partnerships.

 

His leadership is said to have resulted in increased profitability in all core brands including Hendricks in Spain and Grants in France. He also led the integration of Tullamore Dew into all the key routes to market across EMEA.

 

In addition, Grants says Dron built a high performing team that enabled the delivery of the vision and strategy for this key region.

 

 

——

Jacksonville-based Bi-Lo to buy 165 new stores

 

Source: Times Union

By Drew Dixon 

May 28, 2013

 

Bi-Lo Holdings LLC, the parent company of Jacksonville-based Bi-Lo and Winn-Dixie grocery stores, will buy an additional 165 stores.

 

Bi-Lo is paying $265 million in cash to purchase owns all the Sweetbay, Harveys and Reid’s stores throughout the Southeastern United States from the Delhaize Group, the company said in a news release Tuesday. The stores employ about 10,000 workers.

 

The acquisition likely won’t be complete until the fourth quarter of this year, the company said.

 

“We are pleased to announce this transaction, which will build on the strength of our Bi-Lo and Winn-Dixie stores… .” Randall Onstead, Bi-Lo president and CEO said in the news release. “We look forward to welcoming the outstanding associates of all three chains to the Bi-Lo, Winn-Dixie family.

 

Bi-Lo and Winn-Dixie spokesman Brian Wright said the acquisition involves purchasing only the three chains. The Delhaize Group, a company based in Brussels, Belgium is not being acquired and will still operate chains such as Food Lion, Bottom Dollar Food and Hannaford stores.

 

“The scope of this transaction is around the stores,” Wright said. “Our corporate headquarters will remain in Jacksonville.”

 

The stores Bi-Lo is buying from Delhaize are in Florida, Georgia and South Carolina, Wright said. Harveys has several stores in South Georgia. Sweetbay is located more in South Florida with no stores in North Florida our South Georgia. Reids is located mainly in South Carolina. That adds more stores to areas where Bi-Lo and Winn-Dixie already exist in Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina and Tennessee.

 

“This [acquisition] does allows us to go into different areas of the Southeast,” Wright said. “It’s going to allow us to extend our products to more customers . . There’s a lot of positives for our company.”

 

Since the acquisition is still pending, Wright said it’s not clear if any of the stores being acquired would be eliminated.

 

“We have a lot more to work through before we get into that information. We’ve just announced this agreement,” he said.

 

The acquisition adds to an already substantial chain of stores under Bi-Lo ownership. After the company, which was originally based in Greenville, S.C., bought out Winn-Dixie over a year ago, it had 686 grocery stores.

 

The company employs about 60,000 workers.

 

 

——

Cerberus or Bain Capital might buy Harris Teeter

 

Source: NewsObserver

May 23, 2013

 

Cerberus Capital Management and Bain Capital are possibly interested in buying Matthews-based Harris Teeter, as the grocer continues to explore a sale, The Wall Street Journal reported Thursday.

 

The possible sale of Harris Teeter has been rumored for more than three months, since the company disclosed two hedge funds had inquired about buying the company.

 

Harris Teeter declined to comment on Thursday’s report. A spokeswoman referred questions to the company’s earlier statements, which only confirmed that the company had hired JPMorgan to look into a sale.

 

Earlier this year, Cerberus led an investment group that acquired 850 Albertsons, Jewel-Osco and Shaw’s grocery stores from Supervalu. The investors paid $100 million worth of equity and assumed $3.2 billion of debt to acquire the stores.

 

Bain Capital, which gained prominence last year as Republican presidential candidate Mitt Romney’s old firm, led a $2.4-billion buyout of Dunkin’ Brands, owner of Dunkin’ Donuts, in 2005. That company went public again last year.

 

The Wall Street Journal cited unnamed sources, who cautioned that neither Bain nor Cerberus had yet decided to pursue a serious bid for Harris Teeter.

 

Harris Teeter operates more than 200 grocery stores, about two-thirds of them in North Carolina. The company has a market capitalization of more than $2.2 billion.

 

Analysts have also mentioned rival grocers, such as Publix and Ahold (which operates the Giant supermarkets), as possible acquirers of Harris Teeter.

 

 

——

Affordable Care Act looks affordable for Retail/Restaurants, with a few exceptions

 

Source: Goldman Sachs

May 28th

 

Health reform: Costs likely manageable

Our detailed analysis of the impact of healthcare reform (PPACA) on Retail/Restaurant companies suggests incremental costs will be manageable for the vast majority of firms – despite some headlines to the contrary. The magnitude of the cost increases appears modest and is in fact spread over several years. We assume few households will sign up for newly offered health insurance in 2014 when the penalties to the employee for not taking insurance are nominal ($206 per average household). We expect increased adoption by 2016 when these consumer penalties ramp to a more meaningful level ($1,505 per average household).

 

Three groups of companies more exposed

We highlight three groups of companies that may be more exposed than average: (1) Restaurants which operate company-owned as opposed to franchised business models, (2) Grocers which have relatively low operating margins and may have limited pricing power, and (3) Secularly challenged businesses with depressed margins which will have a hard time absorbing yet another cost of doing business.

 

(1) Restaurants affected, pricing an offset

In the absence of offsetting strategies, restaurants would be highly affected due to low sales per employee and a large number of full-time workers not offered insurance today. The greatest impact will be for company-owned systems including CMG, DRI and CAKE, in our view, whereas franchisors appear to be mostly insulated. Despite some risk, we believe price increases may ultimately serve as an offset for the group.

 

(2) Grocers: low margin, less pricing-power

We highlight SVU and SWY within food retailing as being at risk, as the cost of complying with PPACA amounts to 8-10% of current profits. Price increases could help offset some of the impact, though we believe pricing power is limited for traditional grocers.

 

(3) Secularly challenged businesses at risk

We highlight RSH, BKS, ODP, and OMX where EBIT margins are 2% or less. Given low profitability, the proportional impact as a percent of profits is high for this group. Further, the ability to absorb and/or pass on incremental costs may be limited for these companies.

 

 

——

Turkey: Anti-alcohol bill leaves many Turks dispirited

 

Source: USA Today

Jacob Resneck

May 29, 2013

 

Turkey is about to enact the strictest alcohol laws in the republic’s 89-year history in a move that some Turks complain is part of a creeping Islamist agenda.

 

The bill supported by Prime Minister Recep Tayyip Erdogan would prohibit the sale of alcohol from 10 p.m. to 6 a.m. and forbid the depiction of alcohol consumption on television, billboards, newspapers, storefronts and at festivals.

 

Liquor sales within 100 yards of a school or mosque would be banned.

 

Erdogan insists the measure is intended to protect public health and not an attempt to legislate morals or force Islamic strictures on a state that has been largely secular for decades until the rise of the dominant Justice and Development Party.

 

“The regulation does not interfere with anyone’s lifestyle,” Erdogan said in a televised address Tuesday. “If you are going to drink, then get your drink and drink at home. We are not against it.”

 

Some Muslims believe alcohol, which has been enjoyed in Turkey and especially in Istanbul for centuries, is a violation of the Islamic faith. Though Turkey has a Muslim majority, its constitution enshrines secular values.

 

Since coming to power a decade ago, Erdogan’s government has increased alcohol taxes more than threefold, removed alcoholic drinks on domestic flights of Turkey’s flagship carrier Turkish Airlines and removed a ban on head scarves.

 

Erdogan lashed out at “tipsy youth” as the reason for some prohibitions. He has said he wants to build a “devout” generation in Turkey.

 

Along that line, more than 17,000 mosques have been built in Turkey at state direction in the past decade that Erdogan has been in power. In many cities, that means the ban on serving alcohol near a mosque may shut down liquor sales in many restaurants, bars and markets in city centers.

 

Even before the parliament has passed the bill, some restaurants had withdrawn alcohol in preparation for the ban.

 

Beer and wine were taken off the menu two weeks ago at a restaurant frequented by tourists between two mosques across from Istanbul’s iconic Galata Tower. The owners of the establishment measured the distance and found it would violate the new boundaries.

Business leaders warn that the rules will damage Turkey’s tourism industry, a major source of revenue for a significant segment of the population. The industry brings in as much as $50 billion in annual revenue.

 

Turkey’s Association of Tourism, Restaurant Investors and Managers released a statement warning of “irreversible damage” to the country’s image. It noted that per capita alcohol consumption is about 1.5 liters a year – a mere fraction of the European average.

 

The government, the association said, has been “conjuring up a fear of alcoholism that does not exist.”

 

The public debate began last month when Erdogan made a speech pronouncing Ayran – a salty mixture of yogurt and water – and not Raki, an aniseed-based liquor similar to Ouzo, as Turkey’s national drink. Weeks later, the sweeping bill against alcohol was introduced into parliament.

 

Debate was limited to two days, and the ruling party forced an early vote, prompting many opposition lawmakers to walk out in protest after a 17-hour debate that stretched into the early morning hours.

turkey alcohol

 

Turkish Prime Minister Recep Tayyip Erdogan defends legislation that would restrict alcohol in Ankara, Turkey, on Friday.(Photo: AP)

 

Yusuf Alatas, a prominent human rights lawyer, says the ruling party has been steamrolling critics and forcing sweeping changes with little debate on issues that split the country and alter its modern history of non-religious rule. He says the passage of the alcohol restrictions is part of an Islamist agenda to establish religious law.

 

“The (ruling party) has more than 51% of the vote – in a democracy, that’s a lot of power,” Alatas told USA TODAY. “They should be respecting minority opinion a lot more than they are right now.”

 

He says there’s a worrying trend of lawmakers attempting to legislate morals.

 

“The state should not decide on how people live their lives,” he said.

 

Erdogan has lashed out at critics and for the first time invoked the Islamic prohibition of alcohol as justification for the measure.

 

“When two drunkards make a law, you respect it. But when we make a law for something that faith orders, you reject it. Why?” he said Tuesday in an address to fellow party members. “If religion orders something, will you object anyway?”

 

 

——

Turkey: Creeping Islamization or pre-emptive politics: what’s behind Turkey’s ‘booze ban’?

 

Source: Albawaba

May 28th, 2013

 

With the new law, alcohol advertising campaigns such as promotions, sponsored activities, festivals and free giveaways have been prohibited. Retailers will no longer be allowed to sell alcoholic beverages between 10 p.m. and 6 a.m. In addition all liquor bottles sold will have to display warning signs that indicate the harms of alcohol, similar to those found on cigarette packages.

 

In TV series, films and music videos, images that glorify the consumption of alcohol will not be allowed. Images of alcohol will be blurred, in the same way as cigarettes are being blurred already.

 

Student dormitories, health institutions, sports clubs, all sorts of education institutions and gas stations will be banned from selling alcohol. Already acquired licenses to sell alcohol will remain intact. For new facilities to get a license, they must to be located outside the perimeter of 100 meters of educational and religious centers.

 

The new bill received mixed reactions throughout the country and internationally. The opposition in Turkey argues that these regulations aim to make Turkish society more “Islamist”.

 

Osman Coskunoglu, a former lawmaker from the main opposition Republican People’s Party (CHP), tweeted:

 

“Step by step toward fundamentalist Islamization by the ruling party: Turkey’s new booze law”

 

“This is not a struggle against the ills of alcohol but an attempt to re-design the society according to their beliefs and lifestyle,” Musa Çam, a deputy from the CHP said.

 

The criticism is constructed in a way that discusses the regulations as being an attempt of Islamization of Turkey. This kind of labeling creates the notion that the regulations are affiliated with so-called Islamist extremism rather than a conservative ideology of a government that is religiously motivated. When a certain government in the west or the US promotes a law that is religiously motivated about abortion, alcohol or gay marriage, the words used are conservative rather than “religious” or “Christian.”

 

There is nothing wrong with a government that has a conservative ideology and that is in fact elected by the people of the country. Turkey is not Saudi Arabia where the government consists of a royal family and a king, who has never been elected and who introduce certain laws that they see fit without paying the least attention to the population’s needs or preferences.

 

Also, these restrictions, as the opposition suggests, do not actually limit people’s freedom of choice. This is not a ban on alcohol; it is a regulation for the sales and advertising of alcohol. People can still buy alcohol from retailers at anytime between 6 a.m. and 10 p.m., and it is readily available in bars, nightclubs, hotels and restaurants without any time restriction. The biggest loser in all of this is the alcohol producer who will no longer be able to promote or sell their products as easy in Turkey.

 

Government officials argued that the regulations they have proposed are already being implemented in the west, in countries like Sweden, Norway and Finland. A number of US states also have similar regulations. The opposition, on the other hand, argues that the problems that the west suffers from are nonexistent in Turkey and thus such restrictions are irrelevant. Does this mean that a government should wait until the problems appear and then act on it? Whether the problem exists or not should not be a factor in implementing a law.

 

In addition, Turkey is moving towards a lifestyle that resembles the western culture, actually that was the whole point of the secular movement; to get Turkey to become more “western.” That means the country might at some point have to deal with the problems the west is facing now.

 

Foreign companies that might have never considered Turkey for investment 10 years ago are now rushing to acquire successful Turkish companies. Representatives of Diageo, one of the world’s leading spirits company, which acquired Mey Içki for $2.1 billion in 2011, owns the country’s leading raki brand said on May 25:

 

“The alcohol restrictions adopted by the Turkish Parliament May 24 will damage Turkey’s image as a progressive and commercial country.”

 

This is a company that has made a huge investment in Turkey and is planning to recover their $2.1 billion and make double that in profit.The fact that the annual alcohol consumption in Turkey was 1.5 liters per capita in 2010 means that there is a vast potential consumer base in Turkey that a company like Diageo could target and benefit from.

 

A company of such financial capability does not make such an investment without believing that the “Muslim culture” in Turkey will not stand between them and their profits.

 

What does that mean for Turkey?

 

It means that Turkey is as interesting for those companies as the western countries once were. In those countries, societies did not remain stagnant in the face of powerful corporations, who came to increase their profits, but were actually transformed because of them. Those companies target the young emerging generation in a certain market in order to increase sales and profits. And the priority of billion-dollar companies is profit and not the well being of society. Therefore, in a fast growing country like Turkey, the young generation who strives to be modern and western and who is quite familiar with the west through the media will ultimately be affected by those companies’ effective advertising strategies.

 

Turkey is not immune to the problems that have emerged in the west, as a matter of fact it is closer to them than ever. The west and the US started out as conservative societies that opposed gay marriage and abortion and believed firmly in the Church. But a transformation took place; yet these modern and developed entities continue to suffer from social problems. That is the path Turkey is taking. Thus, the Turkish government should be pro-active and act responsibly and not wait for the problems – others have already experienced – to actually arise.

 

 

——

United Kingdom: UK considers cutting amount of TV alcohol adverts

 

Source: The Spirits Business

by Becky Paskin

28th May, 2013

 

British broadcasting watchdog Ofcom has ordered a review into whether to cut the amount of alcohol advertising permitted on UK TV, after a report found children are watching more adult programmes.

 

British TV shows like The X-Factor, which are popular with young children, are allowed to carry alcohol adverts under current rules

 

Television shows including Britain’s got Talent and the X Factor are attracting a large number of underage viewers, but under current rules aren’t exempt from carrying alcohol advertisements.

 

Under the rules, shows that particularly appeal to under-18s are prohibited from airing alcohol advertisements.

 

But since a recent report found that the number of alcohol adverts seen by children rose almost 19% between 2007-2011 to 3.2 per week, Ofcom has ordered a review of current practices.

 

Research conducted by the regulator found that the most popular TV shows for four to nine-year-olds are X Factor and Britain’s Got Talent, but while both may currently carry alcohol ads, neither does.

 

Ofcom has asked the Advertising Standards Authority and the Broadcasting Committee of Advertising Practice to “assess whether the limits placed on children’s exposure to alcohol advertising on TV are effective”.

 

 

——

Ireland: Ireland plans to adopt plain packaging of cigarettes

 

Source: FT

By Jamie Smyth in Dublin

May 28th

 

Ireland plans to become the second country in the world to ban all branding on cigarette packets following a decision on Tuesday to introduce a law forcing tobacco companies to use plain packaging.

 

Health chiefs lauded the move as a vital tool to combat youth smoking, while tobacco companies warned removing all logos, trademarks and colours from packs would benefit criminals involved in illegal smuggling.

 

“While many arguments will be made against such an introduction, I am confident that this legislation will be justified and supported purely by the fact that it will save lives,” said James Reilly, Ireland’s health minister.

 

He said he expected the legislation to be enacted by the Irish parliament early next year.

 

Australia introduced the world’s first plain packaging law in December when it replaced corporate logos on packs with drab olive green coverings decorated with gruesome pictures depicting the health risks of smoking. Earlier this year New Zealand and Scotland also announced plans to phase out branding on cigarette packages, although neither country has set a definitive timeframe for introducing plain packaging yet.

 

The move by Dublin follows an intensification of a global battle between Big Tobacco and health campaigners over several tough new measures designed to curb smoking.

 

British American Tobacco, Britain’s Imperial Tobacco, Philip Morris and Japan Tobacco lost a legal bid to block the introduction of plain packaging legislation in Australia last year.

 

However, a challenge was recently lodged at the World Trade Organisation by four tobacco producing countries – Ukraine, Honduras, Cuba and the Dominican Republic – which allege Canberra’s ban on branding breaches trade rules on international property rights.

 

“Destroying the fabric of trademarks, high-quality brands, and geographical indications, the reputations of which took decades to develop, is not an effective way to reduce smoking,” said the Dominican Republic in a statement this month.

 

Ireland, where almost one in three people smoke, was the first EU state to introduce a ban on smoking in the workplace in 2004. Dublin followed up with bans on packets of 10 cigarettes, in-store tobacco advertising and displays of tobacco products at retail outlets in 2009. Mr Reilly is also considering introducing a ban on smoking in cars which have children as passengers.

 

Tobacco companies said there was no credible evidence to suggest plain packaging would reduce youth smoking rates.

 

“Any proposals to unjustifiably take away our intellectual property will only serve the interests of criminal gangs and counterfeiters,” said John Freda, general manager of JTI, the owner of Benson and Hedges.

 

“Plain packaging will make it easier for the underworld to manufacture fakes, putting money in the pockets of criminals and taking money out of the tills of shopkeepers across Ireland,” he said.

 

Tobacco smuggling is a growing industry in Ireland, with almost one in five cigarettes smoked illegally smuggled into the country.

 

A political controversy erupted in Ireland earlier this month when it was revealed that tobacco company executives met the Irish prime minister, minister for finance and justice minister to lobby privately against the proposed law.

 

Earlier this month the UK abandoned plans to introduce plain packaging law, with the coalition instead deciding to focus on core policies when it outlined its legislative agenda. The decision prompted questions about the role of Conservative party adviser Lynton Crosby, whose consultancy had advised the tobacco industry in Australia on ways to fight off similar regulations.

Our Website

http://www.franklinliquors.com

Like Us On Facebook

http://www.facebook.com/FranklinliquorsMA

Follow Us On Twitter

http://www.twitter.com/franklinliquors

 

 

Advertisements

Tags: , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: