Wednesday June 5th 2013
Today Is A Biodynamic FRUIT Day
Great To Taste Or Drink Wine And Watch The Bruins!
Anheuser-Busch completes $20.1B Grupo Modelo deal
Jun 4, 2013
Anheuser-Busch InBev has completed its $20.1 billion purchase of Mexican brewer Grupo Modelo.
The world’s largest brewer has been trying for almost a year to buy the half of Modelo that it did not already own. The Department of Justice initially blocked the deal, concerned that it would hurt U.S. beer shoppers’ choices, but signed off on the combination after AB InBev agreed to sell Modelo’s entire U.S. business to a wine maker, Constellation Brands Inc.
Constellation will sell Modelo brands including Corona in the U.S., effectively replacing Modelo as a competitor to AB InBev. AB InBev expects that deal to close Friday.
AB InBev, based in Belgium, sells Budweiser, Stella Artois and other beers. The combined company will also sell Corona and other Modelo brands outside the U.S
AB InBev Judge Rejects Bid to Block Modelo Buyout
By Joel Rosenblatt & Karen Gullo
Jun 5, 2013
A group of consumers who claimed Anheuser-Busch InBev NV (ABI)’s $20 billion acquisition of Grupo Modelo SAB (GPMCF) will lead to higher beer prices lost their bid for a court order blocking the deal.
It would be “difficult and awkward at this point to set aside the transaction” completed yesterday morning, U.S. District Judge Maxine Chesney said at a hearing yesterday afternoon in San Francisco. She considered a request for a temporary restraining order by Joseph Alioto, attorney for nine consumers who filed an antitrust lawsuit to block the deal on grounds that it will reduce competition.
Budweiser-maker AB InBev, the world’s largest beer company, agreed as part of the merger to sell Mexico City-based Modelo’s stake in their joint U.S. distribution venture to Constellation Brands Inc. (STZ) for $1.85 billion. Constellation “will be in no position to maintain lower prices in the face of ABI constant pressure to increase prices,” Alioto said in a June 3 court filing.
“The plaintiff would have to show that it is not a legitimate transaction, that it’s a sham,” Chesney said. “I do not find that the plaintiff has made that showing by this time.”
The U.S. said its agreement with Leuven, Belgium-based AB InBev to turn Victor, New York-based Constellation into a competing brewer could save beer drinkers almost $1 billion a year because of lower prices.
Alioto has sued to block other deals, including the one that created United Continental Holdings Inc. and the merger of Southwest Airlines Co. (LUV) and AirTran Holdings Inc.
The case is Edstrom v. Anheuser-Busch InBev NV, 13-cv-01309, U.S. District Court, Northern District of California (San Francisco).
Brands by Value: full results (Excerpt)
Source: Drinks International
04 June, 2013
Brand valuation and marketing company Brand Finance has compiled a ranking of the world’s biggest spirits by brand value. Here is the top 50.
This year’s Brands by Value table continues to see a volume shift towards local brands from developing countries. The potential for these brands, especially from China, is immense and opportunities to develop variants to enhance margin – and, in turn, cross borders – remain. Margin growth remains with the global power brands however.
BFb: 4Q13 Earnings Pre-Game Primer
Solid Net Sales Growth Expected – In 4Q13, we expect BFB’s reported sales to increase 5.5% YoY, the result of: (i) a relatively easy comp as sales were up just 1.3% in the year-ago period, (ii) the benefit from the company’s 1Q13 price increases, and (iii) the solid volume trends seen in Nielsen-tracked channels (particularly for the Jack Daniel’s, Gentleman Jack and Woodford Reserve brands). The Street is looking for 7.5% sales growth. We expect that currency movements will act as a 1-pt drag such that underlying net sales will be up 6.5% YoY.
Margins Should Contract – We expect that BFB will deliver a 52.5% gross margin (-10 bps YoY), driven primarily by an unfavorable comp (as 4Q12 benefitted from favorable cost variances). We believe that BFB’s operating margin will contract to 18.3% (-40 bps), the result of higher SG&A spending related to reorganizations in Europe and Asia, and also due to increased advertising and promotional investments. We highlight that our operating margin estimate (which is 50 bps ahead of consensus) may be somewhat high given that BFB began a significant ad campaign (including TV spots) for the Gentleman Jack brand in mid-April.
EPS Unchanged YoY – In 4Q13, we expect that BFB will deliver pro forma EPS of $0.49, which is essentially unchanged YoY and is three cents above consensus.
What We’ll Be Interested in Hearing About – An update on bourbon pricing, including a read into whether BFB will act as a price leader in the category; management’s expectations for the growth of whiskies going forward, including share shifts between brown and white spirits; additional detail regarding the alcohol advertising ban in Turkey and its potential impact on Jack Daniel’s; color on the NTSB proposal to reduce the legal blood alcohol limit for drivers; and BFB’s gross margin expectations for FY14.
Conference Call Details – Wednesday, June 5, at 10:00 am ET. Dial-in: 888-624-9285 (domestic) and 706-679-3410 (international). No password is required.
Belvedere revenue falls by 5% y/y in Q1
Source: Warsaw Business Journal
3rd June 2013
Belvedere, owner of the Sobieski vodka brand, had a revenue of ?188.7 million in the first quarter of 2013, 5 percent less than in the corresponding period of 2012. In Poland, which accounts for 60 percent of Belvedere’s sales, revenue fell by as much as 9.4 percent.
The company explains that the situation in the Polish vodka market has worsened, but it managed to maintain its leading position, with Krupnik vodka’s market share at 14 percent. All of Belvedere’s brands have a combined market share of 17.5 percent in Poland.
Sales in the US were hit as well, falling by 46.5 percent compared to the same period of last year. The reason behind this could be the fact that Belvedere decided to move Sobieski vodka to the premium category and as a result increased its price.
There are markets where Belvedere increased its revenues. In France, sales grew by 8.4 percent, in Denmark they rose by 4.8 percent and in Latvia they grew by 11.1 percent.
Pennsylvania: Deadline looming, Pa. senator to submit a different plan on privatizing liquor stores
By Karen Langley
June 5, 2013
After a final hearing on privatizing state liquor sales, the chairman of a key Senate committee said Tuesday he will unveil a plan that departs from the House proposal with less than two weeks to negotiate differences before Gov. Tom Corbett’s requested deadline.
Sen. Chuck McIlhinney, R-Bucks and chair of the Law & Justice Committee, said he has set aside the bill the House passed in March and will propose his own plan the week of June 17. Mr. Corbett has repeatedly said he wants a privatization bill on his desk by June 30.
Mr. McIlhinney said he favors maintaining the current number of retail licenses but allowing businesses to sell more types of alcohol. Where the House plan sells off the wholesale operation, Mr. McIlhinney said the state should wait to see how changing the rules of retail sales affects the worth of a wholesale license.
“I’m having a really tough time getting a handle on that value of the wholesale system,” he said. “Selling it right now, outright, isn’t something I think you’re going to see in the bill.”
Such a change spells trouble in the House, where Majority Leader Mike Turzai, R-Bradford Woods, said any liquor-privatization bill must be “substantially similar” to the legislation that cleared his chamber.
“Wholesale divestiture is a crucial component to make sure there is a competitive market,” he said. “It’s an essential component.”
Mr. McIlhinney said he opposes the House bill in large part because it divests the state’s wholesale business through a one-time sale of licenses. He said he would not use the bill, which he described as “rather complicated,” as a starting point.
But Mr. Turzai said he expects the House bill to be considered by the Senate.
“I believe that the Senate as a whole will ultimately take up House Bill 790 and study it in detail,” he said. “The only bill that gets to the governor’s desk is a serious bill, one that is substantially similar to House Bill 790.”
The House bill would create 1,200 licenses for the sale of wine and spirits, first available to beer distributors, with the possibility of up to 600 additional licenses as state liquor stores close. Groceries could buy licenses to sell wine but not beer, except through existing restaurant licenses. State stores would be required to close by county as private retailers opened, and the Liquor Control Board would be required to close all state stores when the number fell below 100.
Mr. McIlhinney said he wants to allow holders of alcohol licenses to sell more types of products. Asked what a grocery could sell under this plan, he said: “You’re talking about an alcohol license. Alcohol means wine, spirits and beer.”
Mr. Corbett kicked off this year’s attempts at privatization in January with a proposal that, unlike the House bill, would have allowed groceries and convenience stores to sell beer and would have set a deadline for shuttering the state stores. But he hailed the passage of the House version as a momentous step.
Testifying before the Senate panel Tuesday, Lt. Gov. Jim Cawley said the administration believes its plan is best suited to achieve its goals. But he said Mr. Corbett has shown he is willing to talk with legislators about how to improve convenience, selection and pricing in liquor sales.
“Certainly the governor has indicated his willingness to enter into and continue discussions,” he said.
Mr. Corbett’s spokesman, Kevin Harley, declined to say whether the components Mr. McIlhinney described would be acceptable to the governor.
“We look forward to seeing Sen. McIlhinney’s bill and working with him and the Senate to provide consumer choice and convenience,” he said. “We’ll wait to see the details of his bill.”
The committee meeting featured a sharp exchange between Mr. Cawley and Sen. Jim Ferlo, D-Highland Park, who called the lieutenant governor’s remarks “totally outrageous” — drawing applause from the union members filling the hearing room — and criticized the secretary of health, Michael Wolf, the commissioner of the state police, Frank Noonan, and a deputy secretary of education, Carolyn Dumaresq, for sitting beside him.
Afterward, Mr. Noonan and Mr. Wolf said the proposal would bring additional money to liquor enforcement and alcohol education, while Ms. Dumaresq spoke about an education grant program that Mr. Corbett proposed, using the proceeds from his privatization plan.
Pennsylvania: Boisterous and Tense Moments at Pa. Liquor Store Privatization Hearing
Source: CBS Philly
By Tony Romeo
June 4, 2013
The chairman of the Pennsylvania state senate committee vetting liquor privatization legislation says he expects to offer his own bill in about two weeks, now that his panel has held the last of three hearings on the issue.
The last hearing before the Senate Law and Justice Committee turned raucous when the ranking Democrat on the panel, Jim Ferlo, attacked several members of the Corbett cabinet for supporting liquor privatization as a room packed with state store workers cheered him on.
“For the colonel of the state police to even suggest that a proliferation of alcohol around the state is somehow going to be enhanced under privatization I think is just almost laughable on its face,” Ferlo said.
But his comments got a stern rebuke from Lt. Governor Jim:
“What should be embarrassing to you is the way you just impugned the character of three very excellent public servants!”
The Pennsylvania House has already passed a liquor privatization bill. The chairman of the Senate committee says he expects to offer his own bill that will significantly reduce the number of state-run liquor stores in Pennsylvania.
Oregon: OLCC Commissioners to vote on extending the 50-cent surcharge on distilled spirits and a possible 25-cent increase of the surcharge
The Commissioners of the Oregon Liquor Control Commission will hold a special Commission meeting Thursday, June 6 at 7:30 a.m. via phone. At the meeting, the Commissioners will vote on whether to continue the 50-cent surcharge on distilled spirits in addition to a separate 25-cent surcharge increase on distilled spirits.
The Governor’s Balanced Budget for the Oregon Liquor Control Commission for the 2013-2015 biennium includes an extension of the current 50-cent surcharge on distilled spirits. OLCC Commissioners’ action is required to continue the current surcharge levels.
The current 50-cent per bottle (25 cents per mini) surcharge is scheduled to expire June 30, 2013.
The proposed 50-cent surcharge is a continuation of the surcharge that was initiated in the 2009-2011 biennium and extended through the 2011-2013 biennium. Should the Commissioners approve an extension, the surcharge could continue.
If the 50-cent surcharge is continued, it is expected to generate $32.4 million for the biennium. If the Commissioners approve an additional 25-cent surcharge, it could generate an additional $16.2 million for the biennium.
How the revenue is distributed is determined by statute and can only be changed by the legislature.
The Commissioners will consider public comment heard at the April Commission meeting as well as written public testimony submitted during the public comment period.
Written comments on both proposals were accepted until 5:00 PM, June 3, 2013. No public comment or testimonials will be accepted at the June 6 telephone meeting.
Whiskey Makers Court Jewish Market
Source: The New York Times
By ROBERT SIMONSON
June 4, 2013
For avid whiskey lovers, few events are more eagerly anticipated than WhiskyFest, an enormous tasting that touches down in several American cities throughout the year. But when sponsors of the New York festival suddenly moved it last year from Tuesday to Friday and Saturday, many regulars were unable to attend.
An alternative arrived suddenly in the form of a new one-night event, held on the eve of WhiskyFest. Despite little time to advertise, it drew a crowd of 250 to its unlikely Manhattan location: the West Side Institutional Synagogue.
These whiskey devotees, it turned out, were Jews shut out of the big event because they observe the Sabbath. And to drive home the point of the tasting, its founder, the fledgling Jewish Whisky Company, called it Whisky Jewbilee.
Whiskey has numerous fan bases, but few are more devoted – and arguably less noticed by the press and public – than Jews, particularly observant Jews. Synagogues are increasingly organizing events around whiskey, and whiskey makers are reaching out to the Jewish market.
Retailers have long recognized Jews as valuable customers. “Jewish men are very interested in the selection of whiskey available at a wedding or bar/bat mitzvah,” said Jonathan Goldstein, vice president of Park Avenue Liquor Shop, a Manhattan store known for its whiskey selection. “They very often will pick up a special bottle to offer close friends or relatives.” Of the Friday before the Jewish holiday of Purim, last February, he said, “It was like Christmas in here.”
Part of the spirit’s appeal to many Orthodox Jews is that most whiskey is naturally kosher. In contrast, wine, owing to its long connection to Jewish tradition, must satisfy many regulations to earn a hechsher, the symbol of kosher certification.
But that hasn’t stopped prominent Scotch producers like Glenrothes, Glenmorangie, Ardbeg, Bowmore and Auchentoshan from courting the Jewish consumer by obtaining official kosher certification for certain bottlings.
Bourbon producers have even less to worry about, because by federal law their spirits must be aged in new casks, rather than in the sherry, port or wine barrels that some whiskey distillers use, and that give some kosher drinkers pause because of their exposure to wine. Yet the Buffalo Trace Distillery in Kentucky recently enlisted the help of the Chicago Rabbinical Council in laying down more than 1,000 barrels of three styles of whiskey, all certified kosher and set for release in five or six years.
In a smaller-scale but similar enterprise, the Royal Wine Corporation, a New York producer of kosher wine and grape juice, asked Wesley Henderson two years ago if he would be interested in making a kosher-certified version of his boutique bourbon, Angel’s Envy. “We were looking for a bourbon line in general,” said Shlomo S. Blashka, a wine and spirits educator at Royal, also the New York-area distributor of Angel’s Envy. “The Jewish community is a very big bourbon community.”
Mr. Henderson did not have to be told. “You’d have to be blind not to notice it,” he said. “I thought, if you had a kosher bourbon, that would be a great thing. It seemed a no-brainer.”
For the new whiskey, Angel’s Envy was aged for six months in barrels that had held Kedem kosher port for 20 years. The run sold quickly, Mr. Henderson said, and may become a permanent addition to the bourbon maker’s line.
In 2011, Jason Johnstone-Yellin and two partners founded the Jewish Whisky Company, which has bottled barrels from six Scotch distillers. “We had the opportunity to purchase casks, where not everybody would have that opportunity,” said Mr. Johnstone-Yellin, who was born in Scotland and whose American wife is Jewish.
During a recent trip to the Victoria Whisky Festival in British Columbia, he said, he buttonholed a representative of a well-known international whiskey distillery and asked if it would let the Jewish Whisky Company bottle one of its casks.
“The response was: ‘We’re very protective of our brand. We don’t do that,’ ” said Joshua Hatton, another partner in the business, who also founded a popular blog, Jewish Single Malt Whisky Society – now renamed Jewmalt.
Mr. Johnstone-Yellin, not giving up, gave the man his card and pointed to the word “Jewish.” “This is our market,” he said. “These are our customers and members.”
The man paused, he said, then agreed to talk to them.
The bond with whiskey goes way back. Mr. Blashka said early Jewish immigrants to America, unable to trust the provenance of local wines, turned to certain distilled liquors, including whiskey. “Because the wine was an issue, typically spirits was their avenue for drinking,” he said.
As recent decades have ushered in a revival in Scotch, bourbon and other whiskeys, Jews, like many other groups, have moved beyond the usual blends and have developed more sophisticated tastes. “Now we have many whiskeys that we know are kosher,” said Rabbi Aaron Raskin of Congregation B’nai Avraham in Brooklyn Heights, whose preferred whiskey is the smoky Laphroaig, a single malt from Islay. “It is used to add to our joy.”
“And it helps attendance at synagogues,” he added.
Whiskey-centered events at temples are a lot more common than they used to be, said Joshua London, a lobbyist for the Zionist Organization of America who regularly writes about whiskey for Jewish publications. For the last three years, Mr. London has been asked by his Orthodox synagogue in Potomac, Md., to pull together bottles for an annual pre-Passover whiskey and barbecue night.
This year, 350 people attended the sold-out event. One rabbi, Charles Arian, began developing an interest in bourbon 10 years ago, after he married a woman from Kentucky. When he moved from Connecticut to a new post at Kehilat Shalom in Gaithersburg, Md., he began organizing bourbon tastings. “There are two things I am passionate about besides Judaism,” he said. “Bourbon and Georgetown basketball.”
For him, a big attraction of whiskey is its handmade origin. “It can only get so technical because of the barrel,” he said. “A barrel is made by a human being, just like a Torah scroll can only be made by a human being. We’re not importing Torah scrolls from China.”
The extent of a congregation’s, or congregant’s, embrace of whiskey can vary. “It all depends on what rabbi you hold by,” Rabbi Arian said. Some are content with whiskeys that are kosher by nature; others like the extra insurance of a hechsher. Aging or finishing in wine barrels will disqualify a bottle for one drinker, while another isn’t troubled by the distinction.
For years, there was no greater yardstick of Jewish interest in whiskey than New York’s WhiskyFest, sponsored by Whisky Advocate magazine.
“If you went years ago, you’d see that close to 50 percent of the people attending were wearing kippot,” Mr. Blashka said, referring to skullcaps. When WhiskyFest became a two-day event in 2012, held during the Sabbath, many Jews who wanted to attend were not pleased. “I wish I could tell you the sheer number of e-mails I received from my readers, distributors, importers, distillers,” Mr. Hatton said.
He said an importer and a distributor entreated him to assemble a pop-up festival for the disenfranchised customers and many producers in town for WhiskyFest.
Whisky Jewbilee will return this fall, at a larger site, and a second date in Westchester County will be added. “There were a couple distillers that we didn’t reach out to” last fall, Mr. Johnstone-Yellin said. “They said, ‘You will have us be part, won’t you?’ They’re smart people. They know who’s not going to be standing at their table on Friday and Saturday night.”
Return of the Cocktail Culture (Excerpt)
A New Film Celebrates Barkeeps and the Cocktails They Serve
By STEVE DOLLAR
Bow-tied bartenders serving classic Manhattans in coupe glasses for an eclectic clientele may be a familiar scene in New York now-as it was more than a century ago-but it took a long time for the cocktail to come back to its full glory. In his new documentary “Hey Bartender,” which has its premiere Friday at Village East Cinema in the East Village, Douglas Tirola explores that revival, using expert witnesses like the pioneering mixologist Dale DeGroff (aka “King Cocktail”) and an insider’s look at such local cocktail-culture staples as PDT, Milk and Honey, the Flatiron Lounge and Employees Only. Messrs. DeGroff and Tirola annotated a timeline devoted to the cocktail’s rise, fall and return.
China Ups Ante in Trade Spat With EU
China increased the stakes in its efforts to roll back the threat of European Union tariffs on its solar equipment exports Wednesday by announcing an investigation into what it called unfair EU wine-trade subsidies.
In a two-pronged response to what is becoming one of the biggest China-EU trade disputes, Beijing’s commerce ministry said it hoped to find solutions to the solar dispute acceptable to both sides as soon as possible, and reiterated its strong opposition to the tariffs.
The moves came hours after EU officials said they would delay for two months the full impact of import tariffs they plan to put on Chinese solar power equipment to allow Chinese manufacturers to negotiate a settlement.
“Trade relations are an important foundation for the China-Europe relationship,” commerce ministry spokesman Shen Danyang said. “China is unwilling to see the trade friction in the solar sector have an impact on the overall China-Europe relation.”
His remarks were diluted by the simultaneous announcement that the ministry has opened anti-dumping and antisubsidy investigations into wine from the EU.
“Wine imports from the EU enter our market via dumping, subsidies and other unfair trade practices, and have hit our wine production,” the ministry said.
The EU’s decision Tuesday came after a campaign of intense lobbying by the Chinese government that appeared to help swing the tide of opinion among some of the 27 EU national governments against the tariffs.
China is the EU’s second-largest trading partner, though that relationship has been marred by spats over trade in telecommunications, chemicals and seamless pipes.
The solar tariffs will come into force Thursday at 11.8%, a quarter of the average level seen in a European Commission plan circulated last month. The tariffs were supposed to average around 47%. They will cover solar panels and their main components-solar cells and silicon wafers-which the commission says Chinese companies are dumping at below fair-market prices.
Mr. De Gucht is giving Chinese solar-panel manufacturers until Aug. 6 to propose an acceptable alternative to the tariff plan. All manufacturers will face the same 11.8% tariff for the two-month period. If an agreement isn’t reached by then, the tariffs will come into force at the originally planned level.
Solar panels and related equipment make up a large chunk of China’s exports, accounting at their peak in 2011 for 7% of all Chinese sales to the EU.
Chinese solar-panel producers are already facing tough economic conditions, as a cyclical downturn has hammered demand and pushed Chinese giants like Suntech Power Holdings into bankruptcy proceedings STP -1.96% . The U.S. government last year slapped antidumping tariffs on Chinese-made solar cells, the devices in panels that convert sunlight into electricity.
Likewise, China’s wine market has exploded in recent years, with Europe-France in particular-its main trading partner.
China imported 430 million liters of wine last year valued at $2.6 billion, up 8.9% from a year earlier; more than two-thirds of that came from the EU, according to local wine consultancy Ease Scent Wine & Culture Co. Ltd., citing government customs data.
Wine imports from France alone were 170 million liters last year, up 11% on-year and accounting for 40% of China’s total wine imports.
Chinese investors have also sought out investments in Europe’s wine industry. Among other examples, Cofco Group, China’s largest state-owned food trading firm, purchased Château de Viaud, a winery in the Bordeaux region in 2011.
Wine consumption per capita in China is still a fraction of that in other countries. Chinese drinkers consumed only 1.4 liters of wine per person in 2011, far below the French average of 53.2 liters per person, according to research company International Wine & Spirit Research. It predicts China’s per capita consumption will increase to 2.1 liters per person over the next three years.
Share of Chinese winemakers soared in response to Wednesday’s developments. Yantai Changyu Pioneer Wine Co. 000869.SZ +10.00% Ltd., China’s largest listed grape winemaker in terms of market capitalization, was 10% higher at 44.44 yuan Wednesday afternoon.
Gansu Mogao Industrial Development Co. 600543.SH +9.33% shares rose 7.3%, while Tonghua Grape Wine Co. 600365.SH +7.52% Ltd. was 5% higher and Citic Guoan Wine Co. Ltd. increased 7.5%.
George Grant joins Glenfarclas board
Source: the drinks business
by Gabriel Savage
4th June, 2013
Glenfarclas Distillery owners J&G Grant has announced the appointment of George Grant to its board of directors.
The sixth generation of his family to work for Glenfarclas, George joined the company in 1997. Having spent two years working with Fine Vintage to promote the single malt Scotch whisky in Hong Kong, he returned to Speyside in 1999.
Since then, George has taken on responsibility for promoting Glenfarclas across North America, Germany and the UK. As sales director, he now oversees the company’s presence in more than 70 markets, overseeing sales growth of over 75% during the last four years.
Welcoming his son to the board, chairman John Grant said: “He has done an excellent job in challenging times over the last few years, and we are confident that as sales director he will continue to grow our brand around the world”.
Among the recent activities from Glenfarclas was last month’s £14,000 joint release with Hine Cognac of 1953 vintage expressions.
GLAZER’S, INC. APPOINTS DAVID AIKENS VICE PRESIDENT MULTICULTURAL SALES AND MARKETING
June 4, 2013
Glazer’s, Inc. today announces the promotion of David Aikens to Vice President, Multicultural Sales and Marketing, effective June 1, 2013. In this position, Aikens will be responsible for marketing efforts across Glazer’s business channels to positively impact sales execution and engagement across multicultural markets, including African-American, Hispanic/Latino-American, Asian-American and GBLT populations.
Aikens joined Glazer’s in 2011 and most recently was Director of Multicultural Sales and Marketing, DMH. Aikens led the promotional marketing team that earned Glazer’s Diageo’s “Golden Bar Award” for Multicultural Marketing in 2012. Prior to joining Glazer’s, Aikens held various positions in advertising, distribution, promotions, marketing and new business development working with a diverse portfolio of clients in the beverage alcohol and consumer products industries. His knowledge across multiple marketing avenues, as well as his multicultural market expertise, positions Glazer’s well to continue its lead in this area. Aikens earned a Bachelor of Science degree in Marketing from Rochester Institute of Technology.
Sarah Pearson Appointed Director Of Marketing For The Hess Collection Winery
Source: Hess Collection
Sarah Pearson has been appointed Director of Marketing for The Hess Collection winery, reporting to Chief Marketing Officer Derek Bromley.
Pearson will primarily focus on The Hess Collection Winery and Hess Family Wine Estates wineries Artezin, MacPhail and Sequana, and will also contribute to domestic marketing efforts for Hess Family wineries Glen Carlou, Peter Lehmann, Colomé and Amalaya.
Source: Premier Beverage
With a heavy heart, we announce that a beloved member of the Premier Beverage family, Frank Soares, passed away on the morning of Saturday, May 25th as the result of a heart attack. Frank joined the Premier team in 2003 as the Senior Manager of Operations for the Jacksonville facility and in 2009 became the Senior Manager of Operations and Distribution for the Miramar house. He was with the Premier Beverage team for 10 years and made a lasting impact on everyone he knew. He had an incredible can-do attitude and a constant quest for continuous improvement. Frank was also a loving husband to his wife of 26 years, Dianna, and a devoted father to their three children Michelle, Nick, and Emily.
Tesco recovery in doubt as sales fall
By Andrea Felsted, Senior Retail Correspondent
Tesco said sales from UK stores open at least a year fell by 1 per cent in the past three months.
This is a reversal from the 0.5 per cent increase in UK like-for-like sales, excluding petrol and VAT, in the three months to the end of February.
The performance raises questions about the momentum behind Tesco’s recovery, after Philip Clarke, chief executive, last year said he would invest £1bn to turn round the UK business after Tesco’s first profit warning in 20 years in January 2012.
The first quarter performance also compares with a period a year ago when UK like-for-like sales fell by a similar amount.
Mr Clarke said the performance was held back by a revamp of its non-food business in the UK, where it was ditching some lines and going more upmarket in others in an effort to win customers from rivals such as John Lewis.
However, he said the group had seen positive like-for-like sales in all food categories, with the exception of chilled convenience and frozen food after the horsemeat scandal.
Outside the UK, like-for-like sales in Asia fell by 3.8 per cent, where Tesco has been hit by restrictions on opening hours in South Korea. Like-for-like sales in central Europe fell by 5.5 per cent.
“Conditions outside the UK remain challenging and we have broadly maintained our performance from the fourth quarter of last year,” said Mr Clarke.
Ahold: shopping for growth
Dutch grocer must spend wisely after disappointing investors with small buyback
Even the most adept people-pleasers struggle to meet everyone’s needs equally. Ahold must know how that feels. On Tuesday, alongside first-quarter results, the cash-rich Dutch grocer said that it would return ?2bn to shareholders through a buyback programme over the next two years. Shareholders showed their disappointment that the buyback was not bigger by marking down the shares by 3 per cent. But Ahold made the right compromise.
It was the sale of Ahold’s 60 per cent stake in Scandinavian retailer ICA for ?2.5bn that has given it the firepower to increase the share buyback from ?500m. But even after the programme there will be ample room for Ahold to invest in growth. The retailer has net cash of ?1.2bn. Deutsche Bank estimates that, following the ?2bn buyback, Ahold will still have a comfortable net debt position of 1.5 times adjusted earnings before interest, tax, depreciation and amortisation, well within its 2 times target threshold.
After all, Ahold needs to shop for growth. Its exposure to the US and European markets means that same-store sales growth has been slipping. It fell 20 basis points in the first quarter from a year earlier to 1.8 per cent. In 2011 those sales were growing at almost 3 per cent. And top-line growth is becoming more important as margins falter. Operating margins were down from 4.3 per cent a year ago to 4.1 per cent in the first quarter. Much of that came from a one-off pension settlement in the US, but Ahold admitted that the shift to online and pricing pressure played a role.
Ahold now trades on 13 times forecast earnings, on a par with the average of its European peers. It is also ahead of its closest rival, Belgium’s Delhaize, on 12 times, but then Ahold has better management and a stronger market position. It will need to spend wisely if it wants to please investors further.
Consumables buoy Dollar General’s record Q1 results
June 4, 2013
Dollar General reported record sales, operating profit and net income for the first quarter ended May 3, thanks to strong growth in its consumables categories.
The company reported net sales of $4.23 billion for the quarter, an increase of 8.5% from $3.9 billion in the prior year’s quarter. Same-store sales increased 2.6%, resulting from increases in both customer traffic and average transaction amount. Total sales increases in consumables significantly outpaced increases in the company’s non-consumable categories, reflecting the impact of continued financial pressures on consumers as well as unfavorable weather conditions in many of the company’s geographic regions.
The company’s gross profit, as a percentage of sales, was 31% in the 2013 first quarter, a decrease of 89 basis points from the 2012 first quarter. The gross profit rate was negatively affected by higher markdowns; a higher mix of consumables, which generally have lower gross profit rates; increased inventory shrinkage; and lower initial markups. These factors were partially offset by improved transportation efficiencies and other logistics initiatives, in addition to modestly lower fuel rates.
While the company’s gross profit was lower than it anticipated, its operational profit saw record growth. Dollar General’s operating profit for the quarter was $395 million, or 9.3% of sales, a 3% increase from $384 million, or 9.9% of sales, in the prior year’s quarter.
“For the quarter, we achieved same-store sales growth of 2.6% reflecting strong growth in our consumables categories offset by softer sales in seasonal and weather-sensitive categories,” said chairman and CEO Rick Dreiling. “We believe the continued strength in consumables is a sign of the underlying health of our business.”
The company’s net income was $220 million for the quarter, a 3.5% increase from $213 million in the prior year’s quarter. Adjusted net income – which excludes expenses relating to secondary offerings of the company’s stock in both the 2013 and 2012 periods, losses associated with restructuring the company’s credit facility in 2013, an amendment of the company’s revolving credit facility in 2012 and income tax effect of adjustments – was $232 million for the quarter, an 8% increase from $215 million in the prior year’s quarter.
“We have updated our outlook for the year to reflect moderating sales growth and a lower expected gross profit rate than we previously anticipated,” Dreiling added. “We are well positioned for our same-store sales growth to accelerate to 4 to 5% for the year as our key initiatives, such as the roll out of tobacco and Phase 5 planogram changes, continue to gain traction through the year. Sales of non-consumables are expected to remain challenging, and we anticipate a continued shift to lower margin items within consumables and higher inventory shrink. We believe that our customers’ dependence on our everyday low pricing and convenient locations has never been greater.”
Restaurant sales continue to rise in May
Black Box Intelligence analyzes the results of the latest Restaurant Industry Snapshot
Jun. 4, 2013
Black Box Intelligence and People Report released The Restaurant Industry Snapshot for May this week, reporting a third straight month of positive sales.
Same-store sales rose 0.8 percent in May, showing an improvement over April’s 0.4-percent increase. Same-store traffic results declined 1.6 percent, a slight improvement over April.
Consumer Edge Research, a partner company to People Report and Black Box Intelligence, released the Restaurant Willingness to Spend Index last week with a value of 88 for May, an increase over the index score of 86 reported for April. Based on historical data gathered through the partnership, an increase in the index score suggests a higher Black Box Intelligence same-stores sales rate in the month of June.
“Sales are still weaker than we would like to see, but three straight positive sales months is a result not seen since last June through August, 2012,” said Bill Schaffler, president at Black Box Intelligence and People Report. “Additionally, we are encouraged the consumer continues to indicate they may be turning a bit of a corner, as they indicated an increased desire to spend their money two months running, a result we have not observed since 2011. This is encouraging news as we enter the summer months.”
In addition, 104 out of 176 DMAs posted a positive result in May. The New England region performed the best with a 3.5-percent same-store sales increase. The Southwest was the lowest-performing area, with a same-store sales decrease of 1.0 percent.
People Report also presents turnover results by position by segment to their member companies each month. In April, results show management and hourly turnover increasing.
The most recent job growth reported by People Report is an increase of 1.0 percent, higher than last month’s increase of 0.4 percent. The job growth, although positive, remains slower than reported in most of 2012.
The Restaurant Industry Snapshot is a compilation of real sales and traffic results from 170+ DMAs from 100+ restaurant brands and approximately 15,000+ restaurants that are clients of Black Box Intelligence. Currently, data is reported in four distinct segments: casual dining, upscale/fine-dining, fast casual, and family dining. Black Box Intelligence is a sister company to People Report, which tracks one million restaurant employees on workforce analytics. The Restaurant Industry Snapshot also includes the Restaurant Industry Willingness to Spend Index from Consumer Edge Research, which is a monthly household survey of more than 2,500 consumers. Consumer Edge Insights is a marketing partner with Black Box Intelligence and People Report
Landry’s buys Mastro’s Restaurants
Plans to expand the steak and seafood concept are already in the works
Jun. 4, 2013
Landry’s Inc. of Houston has confirmed its purchase of Mastro’s Restaurants LLC of Woodland Hills, Calif., and already has plans to expand the 11-unit, upscale brand by three more units during the next 15 months.
Terms of the deal were not disclosed, but a Landry’s spokesman said Mastro’s chairman and chief executive Mark Levy would stay with the Landry’s division. “Levy and his management team will remain in place to run day-to-day operations of the concept,” a company spokesperson said.
“Mastro’s is the best steak and seafood restaurant concept in America,” Tilman Fertitta, owner, chairman and chief executive of Landry’s Inc., told Nation’s Restaurant News Monday. Landry’s owns and operates a wide variety of restaurant, hospitality and gaming brands, ranging from Landry’s Seafood and Rainforest Café to the Golden Nugget Casinos and Hotels.
“[Mastro’s] is the leader in all markets in which it operates,” Fertitta said. “Business will continue as usual without any changes visible to the customer, and I look forward to helping the management team continue to grow the brand with three new planned unit openings over the next 15 months.”
Fertitta said that on May 24, Landry’s acquired all of the Mastro’s Restaurants equity interests, which included those of the founding Mastro family. A majority interest in the company was held by Kinderhook Industries LLC and Soros Strategic Partners LP, two New York-based private-equity firms that had grown the company since buying it in 2007. At the time of the 2007 purchase, Mastro’s Restaurants included five Mastro’s Steakhouses and two Mastro’s Ocean Clubs.
The original Mastro’s Steakhouse remains in Scottsdale, Ariz., and the company has added Mastro’s City Hall Steakhouse in Scottsdale, as well as steakhouse locations in Chicago and the California communities of Beverly Hills, Costa Mesa, Thousand Oaks and, in the fall of 2012, Palm Desert. Also in fall 2012, the Beverly Hills location opened The Penthouse, an upscale lounge.
The Mastro’s division also has upscale seafood Mastro’s Ocean Club units in Las Vegas; Newport Beach, Calif.; and Scottsdale.
An industry insider familiar with Mastro’s units speculated that Mastro’s produced earnings before interest, taxes, depreciation and amortization of about $22 million, and indicated a selling price would be around 10 times EBITDA. The Mastro’s units were likened to Morton’s Steakhouse, which Landry’s acquired for $116.6 million in a deal closed in February 2012.
Average Mastro’s Steakhouse checks are estimated around $135, ranking it among the nation’s more expensive steakhouses.
Privately-owned Landry’s also owns McCormick & Schmick’s Saltgrass Steak House, Landry’s Seafood House, Claim Jumper, Bubba Gump Shrimp Co. and The Chart House, as well fine-dining restaurants Vic & Anthony’s, Brenner’s Steakhouse, Grotto, LaGriglia, Willie G’s and Oceanaire.
Landry’s also owns the Golden Nugget Hotel & Casinos in Atlantic City, N.J., Las Vegas and Laughlin, Nev.; the Isle Casino Hotel in Biloxi, Miss.; the Kemah (Texas) Boardwalk; the Galveston Island (Texas) Historic Pleasure Pier; the San Luis Resort, Inn at the Ballpark; and the Downtown Aquarium in Denver and Houston.
Landry’s said in 2012 that its companies were expected to generate about $2.5 billion in revenue.
Conference recap: Strong restaurant fundamentals in the spotlight
Source: Goldman Sachs
Four common themes emerged at the conference
We hosted our 2013 Lodging, Gaming, Restaurant and Leisure conference over the past two days. Participating restaurant stocks included: BWLD, CAKE, DNKN, DPZ, EAT, SYY, THI, and YUM. We thought the tone was solidly positive and identified four key themes that emerged:
(1) Continued unit growth opportunities abound
Every single restaurant company that presented is planning to build more units – and we found these plans to be credible. For BWLD, DNKN and THI the primary growth is to take place in North America. YUM and DPZ, on the other hand, are primarily expanding overseas – largely in emerging markets. CAKE and EAT represent somewhat of a hybrid, with unit growth both here and abroad. We are most optimistic with respect to DPZ and YUM, as we believe there is more of a natural tailwind in emerging markets where chain restaurant penetration is still in the single digits.
(2) Trends may be choppy, but share gainers posting solid results
While industry trends are somewhat choppy, and some companies talked to increased promotional/competitive intensity (i.e. EAT, THI), most of the companies that presented were posting solid SSS results. This includes BWLD, DNKN, DPZ and CAKE – all of whom are gaining market share.
(3) Margins may be poised to rise further
There were a few companies that talked to margin pressures from a tough competitive environment. But for the most part, restaurant companies expect to enjoy margin expansion as a result of SSS leverage, cost cutting and benign food inflation. We concur as we are modeling for operating margin expansion for all presenting companies with the exception of YUM (China issues) and BWLD (wing inflation) – but we expect margin expansion for these two exceptions as the discreet issues fade in 2014.
(4) FCF deployment and capital structures remains in focus
All of the companies that presented, other than BWLD (which is reinvesting for growth), talked to their capital allocation strategies. Further, some companies (DNKN, THI) indicated a likelihood to take on more debt to enhance returns to shareholders. While not as explicit, comments from SYY and DPZ also suggest the potential for increased debt leverage.
Commentary: EAT Management at the Goldman Sachs Lodging, Gaming and Leisure conference
Source: Goldman Sachs
By Michael Kelter and Ivan Holman
4 Jun 2013
-Casual dining industry: EAT management noted that it has shifted its focus from unit growth towards driving sustainable EPS growth. The casual dining industry is exhibiting signs of maturity; however, there remain markets where Chili’s has significant opportunities to gain share, particularly from independents. Notably, the competitive environment remains challenging, with a step-up in promotional activity from some key competitors.
-Pizza launch: The company was upbeat on its current Pizza and flat bread platform, suggesting it is on pace to reach 8-10% of sales as per its expectation. The product is preferred by consumers once they get a trial, and it carries a higher margin contribution profile.
-Kitchen investments: The company continues to make significant investments in the back of house and kitchen. Management indicated that it expects these investments, and the ability to further expand menu innovation, to drive improvements in traffic and margin profile. Units equipped with the new kitchen platform can now roll out baked items via new oven capabilities. EAT is also testing a new fryer that may save money in the future.
-Pace of remodels: company-owned remodels are currently 40% completed. Management expects to be able to complete 60+ units per quarter, and by 2014/2015 will have fully rolled out re-images to all of its markets. The company expects franchisees to remodel units in the future as well, but the franchisees are still digesting the expenses associated with the new kitchen equipment at the moment.
-Cost cutting: The company expects to achieve a targeted 400bps of cost cutting benefits by the end of next year. There remain opportunities to further build on these gains as the company focuses on waste reduction initiatives and as restaurant employees get more comfortable with the new kitchen equipment.
Commentary: CAKE Management at the Goldman Sachs Lodging, Gaming and Leisure conference
Source: Goldman Sachs
By Michael Kelter and Ivan Holman
-Key drivers of profitability: Management highlighted five key levers available to drive long-term earnings growth: 1) SSS momentum, 2) domestic unit growth, 3) international unit growth, 4) operating margin improvement, and 5) capital deployment to shareholders.
-High-end exposure: Management indicated that SSS trends have benefited from the company’s exposure to higher-income consumers. This subset of consumers has not seen as pronounced an impact with regard to higher payroll taxes and fluctuations in gas prices. Furthermore, the company has been able to drive top-line growth without relying on significant discounting activity, in stark contrast to many Casual dining peers.
-Real estate discipline: The company believes it can achieve 300 Cheesecake Factory units domestically over the long run. Site selection follows a rigorous review process, with new units yielding 10% higher sales per square vs. legacy.
-Menu differentiation: CAKE highlighted menu differentiation as a significant driver of sales growth. The company believes this will remain a key driver of comp looking forward.
-International strategy: CAKE’s international runway remains intact, with the company seeing significant positive contribution to the P&L from international royalty streams. Management believes that international growth will be a key contributor to operating margin expansion back towards historical high-water levels. CAKE recently signed a license agreement for development in South and Central America, and sees further potential for growth in the Middle East. Management indicated that it is actively pursuing incremental licensing agreements over the coming years.
-License vs. Franchise: Management indicate that it is pursuing a licensing strategy vs. a franchise model in international markets. This structure allows tighter control over site selection, as well as processes and best practices in international locations.
-Capital allocation: Management indicated it remains committed to deploying excess cash flow to shareholders through both share repurchase activity and future dividend increases. The cadence of share repurchases is structured to offset options creep, as well as provide EPS accretive returns of shareholder capital.
North Carolina: Beer bills hop through committee
By Laura Leslie
Two House bills that would facilitate beer sales are headed to the Senate floor after a very brief appearance in the Senate Commerce Committee.
House Bill 829, the “Growler Bill,” would allow restaurants, retailers and wine shops to sell resealable 64-ounce glass jugs of beer. Growler sales and refills are currently allowed only at the brewery.
Sponsor Rep. Chuck McGrady, R-Henderson, was barely two sentences into his presentation when Sen. Clark Jenkins, D-Edgecombe, motioned for a favorable report. The bill passed unanimously with no debate.
House Bill 610, In-Stand Beer Sales, also chugged through in record time. It would allow vendors to sell beer in the stands at professional sporting events at venues with a seating capacity of 3,000 or more. Vendors would not be allowed “to verbally shout or hawk the sale of malt beverages.”
Current law allows in-stand beer sales only at Bank of America Stadium in Charlotte. Patrons at other venues must stand in line at the concession counter to buy beer.
Sponsor Rep. Jon Hardister, R-Guilford, called it a “customer service bill.”
Rev. Mark Creech, executive director of the Christian Action League of North Carolina, warned the committee that in-stand sales would lead to more consumption. He cited a 2008 study by the National Institutes of Health that found that in-stand alcohol vendors were more likely than concession workers to sell to intoxicated or underage customers.
But Tim Kent, executive director of the North Carolina Beer and Wine Wholesalers Association, said professional sports team owners want the right to provide in-stand sales. He said patrons will be able to spend more time in their seats with their family and friends, instead of standing in long lines at the beer counter.
The second measure also passed unanimously with no debate, except a quip from Sen. Jim Davis, R-Macon.
“Are all these alcohol bills directly related to being in the House?” he asked Hardister.
United Kingdom: They’re opening a Wetherspoon’s on the motorway? Booze Britain’s addiction is totally out of control
I am not against anyone enjoying a drink. But it’s really started to feel like the drinks industry has a grip on almost every aspect of our culture
Source: The Independent
The announcement that the Women’s Prize for Fiction is to be sponsored by Baileys has drawn accusations of sexism. Why pair such a saccharine, sickly drink that is so overtly targeted at women with a contest that celebrates the blistering, strident writing of novelists like Zadie Smith and Lionel Shriver?
Some suggest instead using Johnnie Walker, which, like Baileys, is also owned by drinks company Diageo. But wouldn’t it be better that alcohol was nowhere near a prize the aims of which surely include encouraging girls and young women into novel-writing?
I don’t want to sound like a killjoy. In fact, my twenties and early thirties were effectively sponsored by Sauvignon Blanc (only becoming a parent has driven me away from drink for fear of dealing with both a hangover and a young child at the same time). I am not against anyone enjoying a drink. But it does sometimes feel like the drinks industry has a grip on every aspect of our culture.
In what must be the most bizarre of decisions by a council’s licensing committee, the pub chain JD Wetherspoon has been given the go-ahead for a bar at a motorway service station. If you’re driving down the M40 between 8am and 1am, you can peel off at Junction 2 at Beaconsfield for a pint of lager or a glass of white wine. What could possibly go wrong?
Of course, there is nothing to stop someone on the M40 leaving at the same junction and finding a country pub a few miles away, but they would have to make the special effort. Now they can just have a swift half in between popping to the loo and filling up the tank. The bar will be open by Christmas – just as the nation’s drink-drive levels soar. The health minister, Dr Dan Poulter, described the move as “extraordinary”. As a former hospital doctor, he should know.
Last year, there were more than 1.1 million alcohol-related admissions to hospital – more than double the number 10 years ago. Drink costs the NHS £2.7bn every year, including a £1bn burden on accident and emergency services. Alcohol Concern predicts that this will rise to £3.7bn by 2015. There are many causes of the current crisis in A&E (waiting times are at a nine-year high, it was revealed yesterday), but alcohol is a factor that is growing in significance every year. Nationally, “alcohol admission episodes” for 2010/11 were 1,895 per 100,000 in the population, compared with 1,389 in 2006/07.
During my last visit to an A&E department in south London, I sat in the waiting room for an hour watching other patients arrive. One woman was so drunk she rolled off her chair, vomiting on the floor. A man was carted in by paramedics who described him as “completely pissed”. Another woman, only marginally less drunk, had broken her arm. It was 11 o’clock in the morning.
In my home city of Liverpool, I have walked down streets where, before midday, it is commonplace to see people already staggering from drink. This may sound hysterical, but is backed up by the depressing statistic that Liverpool has the second-highest level of alcohol-related hospital admissions for men (after Salford) in England and the third-highest for women. It is not just traditionally working-class areas that have a problem. A University of Sunderland study found that 60 per cent of women in high-income postcodes – including Knightsbridge in central London and Esher in Surrey – drink more than three units of alcohol a day.
All the evidence is there that we as a nation have a drinking problem, and we cannot handle it. Visiting tourists, including those from the US, gaze open-mouthed at our heavy drinking culture. And yet the Government, for fear of being branded Nanny Statists, has failed to take action. A year ago, David Cameron promised to introduce a minimum price for alcohol, which he said would lead to 900 fewer deaths a year by 2020. It was backed up by a Home Office report saying that minimum pricing would reduce consumption, and, in turn, alcohol-related illness and death. The Prime Minister lamented that beer had become cheaper than water. His words turned out to be cheaper still – earlier this year he dropped the plan. Mr Cameron, it was said, did not want to deny hard-up people a can of lager at the end of the day.
This is a mystery because a year ago, when he pledged the minimum price, our economy was hardly booming. But perhaps the mystery is solved when we consider how hard the drinks industry works. The decision to relax licensing hours under Tony Blair’s government in 2004 was the result of some concerted behind-the-scenes lobbying. Is it just a coincidence that, since that year, hospital admissions have risen so dramatically? The Home Office is currently looking at relaxing laws outlawing pubs on publicly owned land at motorway service stations (the Beaconsfield one is on private land).
And the latest spotlight on the lobbying industry reveals that the All-Party Parliamentary Beer Group is sponsored by a roll-call of drinks companies, including Molson Coors, Greene King, Carlsberg, Enterprise Inns, M&B plc, Punch Taverns, and Heineken. The group also received £8,227 from Diageo, owners of Baileys. They do get about, don’t they? It’s enough to turn you to drink.
Australia: Independents, brewers protest wine in supermarkets plan
By James Atkinson
Independent bottleshops, brewers and the health lobby have voiced their objections to a South Australian plan that would allow wine to be sold in supermarkets, which has support from lobbyists for IGA, Foodland, Coles and Woolworths.
The proposal for SA supermarkets with a minimum of 400sqm floor space to be able to sell bottled wine attracted a total of 59 published submissions, most of them in opposition.
The Australian Liquor Stores Association (ALSA) questioned the need for the new class of liquor licence, given that supermarkets are already able to apply for a liquor licence under existing laws, providing the licensed premises is classed as separate.
“It is important that the liquor licensing regime is fair and equitable with all liquor licence applicants treated the same, using the same assessment criteria and taking into account the merits of each application,” said ALSA CEO Terry Mott.
Staunchly resisting the proposal was the Australian Hotels Association – which launched the ‘Let’s Draw The Line’ campaign in February – as well as many independent bottleshop operators who made their own submissions, including Wayne Anderson, manager of Glynde Hotel Cellars.
Anderson said his Adelaide bottleshop already has nine liquor stores operated by Woolworths and Coles within a five kilometre radius.
“If the proposed amendments are passed there will be potentially another 16 licences granted to supermarkets within this same radius, eight of them owned by Woolworths and Coles, the rest trading under the IGA or Foodland banner,” he said.
“This is an excessive increase in licences that goes way beyond catering for the demand within the community,” Anderson said.
“Wine and grapes over beer and barley”
Several health organisations wrote to oppose the plan on the basis that it may cause alcohol-related harm, while the Brewers Association objected on the basis of “product discrimination”.
“It seems illogical that a South Australian Government would unfairly favour wine and grapes over beer and barley, yet they all contribute to the economy and its strong cultural heritage,” said CEO Denita Wawn.
The Independent Supermarket Retailers Guild of SA, which primarily represents the independently-owned Foodland and IGA stores – which do not have an existing liquor retail footprint and therefore have the most to gain – said it was “delighted” to support the proposal.
“Both Foodland and IGA owners have established a policy to stock and sell only branded South Australian wine in their supermarkets,” said CEO Colin Shearing.
“They will not introduce a house brand in any wine category and nor will they stock cleanskins.”
Proposal gets support from the chains
Representing Coles and Woolworths, the Australian National Retailers Association (ANRA) said it was “supportive overall” of the plan, calling for the new supermarket licensing scheme to be transparent and straightforward for applicants.
“The current liquor licence application process for retailers in South Australia is cumbersome and our members have experienced extreme difficulty in obtaining new licences,” ANRA said.
Woolworths provided its own submission, arguing that SA currently has just 194 retail liquor licences, the lowest density of packaged liquor licences in Australia.
“The benefits of the proposal will be particularly evident in rural and regional areas where choice for consumers is limited and communities are underserviced by packaged liquor outlets,” said Andrew Wilsmore, manager – public affairs at Woolworths Liquor Group.
Business SA CEO Nigel McBride said that if the state is serious about promoting its wine industry then wine in supermarkets is a “logical decision”.
“One cannot imagine visiting Paris and not being able to find Champagne in the supermarket so likewise, Clare Valley Riesling, Barossa Shiraz or Coonawarra Cabernet Sauvignon should also be available in supermarkets in South Australia,” he said.
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