Monday June 10th 2013
Constellation Brands buys beer business for $4.75 billion
Source: News 10
Corona beer and others will now be imported and sold by a local company. Constellation Brands announced it has officially purchased Groupo Modelo’s U.S. Beer Business from Anheuser-Busch InBev. The total sale is just under $5 billion.
In addition to Corona, Constellation will import, market and sell Corona Light in the U.S. It will do the same with three additional Mexican beers and one beer from China.
The sales means Constellation will have two operations, a beer division and a wine and spirits division.
Pennsylvania: Pennsylvania liquor bill not a certainty
The liquor issue in Pennsylvania looked like a shoe-in for Republicans this year.
Until it didn’t.
After years of fights in the Capitol between governmental, union, nonprofit and private groups, many believed the House passage of a GOP-favored vote to privatize the liquor industry was finally ready to sail through the full Legislature.
A confusing piece of legislation, much of the House debate came across as partisan and rushed. There were questions like: What would happen to the 5,000 UFCW state store employees? The revenue the booze business brings into the state? Would an increase in liquor sales put “booze on every block” as some politicians fear? Much of that was overlooked as the bill passed largely along party lines and went to the Senate.
Now, it seems as though an even newer bill will be written and introduced in the Senate, making the Big Change to the PLCB anything but a certainty this year.
That new bill is being written by state Sen. Charles McIlhinney (R-Bucks). As the chairman of the Senate Law and Justice Committee, he’s a key vote on the liquor issue, and many Republicans in favor of privatization believed he’d be a holdout vote. His plan, he said, would be ready in two weeks and less confusing than the current House-approved plan lawmakers are wrestling with. Unlike the current plan, he says, his would give current all license-holders, like bars, restaurants, grocery stores with a restaurant license and beer distributors, the option to expand on the type of liquor they can sell.
McIlhinney’s bill would require a new push, including debates and votes, from the Senate and House. It’s unclear whether Republicans would be able to get that done before the Legislature retreats for its summer recess.
And with any form of privatization, McIlhinney is unlikely to get the 23 Senate Democrats on board with his idea. Democrats have been opposed to the bill since the beginning, being as it would eliminate 5,000 union jobs and obliterate a large source of income from the state government. Like many ideas pushed by Republicans, both in Pennsylvania and nationally, part of the motivation behind liquor privatization seems to be to bleed the government of resources so it can, so to speak, drown in a bathtub.
All polling on this issue for the past 11 years has shown the public ready and willing to privatize the system. That is, until a recent Franklin and Marshall poll released a poll in April showing-for the first time ever-a majority of Pennsylvanians no longer support privatizing the liquor industry.
“When times are tough, it’s hard for anyone to hate on somebody else that’s trying to earn a living,” says State Rep. Brian Sims (D-Philadelphia). “And I think what people realized is that part of this bill is meant to be a union buster . I think people saw there was malice in this bill.”
In the past, Sims has told PW and others that if we were writing the Pennsylvania constitution today, of course we wouldn’t have the state controlling the alcohol business. But here we are-and, he says, the system works.
On the Senate side, members of the Philadelphia delegation agree. “No new people will get hired,” says State Sen. Vincent Hughes (D-Philadelphia). “And at the same time, the 5,000 [UFCW workers], the tax-paying citizens getting benefits, they’re done. They’re out. What happens to them is, they lose a job.”
Oddly, Susquehanna Polling and Research, the Republican-affiliated firm which embarrassed itself with ridiculous Pennsylvania polling numbers during the 2012 election, often showing Mitt Romney leading Barack Obama, released their own poll this week. And-surprise!-they found a majority (55 percent) want to privatize the system.
The Pennsylvania Democratic party released a damning and hilarious statement about the poll.
“Susquehanna Polling & Research is one of America’s worst polling firms and any poll from them should not just be viewed skeptically but laughed off entirely. Their work in 2012 made them a laughingstock and any news outlet that print the results of these polls are doing a great disservice to their audience,” they said.
Rather than privatization, Democrats have put their focus on what they call “modernization,” which would allow residents to get liquor shipped directly to their homes, among other things. As state Rep. Daryl Metcalfe (R-Butler) noted at the Pennsylvania Leadership Conference this year, though, Republicans should view any call for modernization as one for the status quo.
Other than the jobs, legislators in less well-to-do parts of the state worry expanding and privatizing liquor sales could have detrimental effects on their communities.
“I’m very fearful of booze on every corner in every community,” adds Hughes. “That would be, for a city that is distressed as Philadelphia is, that has some of the highest levels of poverty of any city in the nation, to have more alcohol available in these distressed communities, that is not what people are looking for.”
Pennsylvania: Pa. liquor privatization drive hits wholesale snag
Source: NJ Herald
By MARC LEVY
Jun 08, 2013
What may end up derailing the Republicans’ drive to privatize Pennsylvania’s sale of wine and liquor is not who gets to sell it – but who gets to deliver it.
Both a four-month-old plan by Gov. Tom Corbett, a Republican, and a bill that passed the GOP-controlled House in March would dismantle the Pennsylvania Liquor Control Board’s less-seen but lucrative business of buying and delivering wine and liquor.
However, a state senator who will play a key role in drafting that chamber’s plan has sent strong signals that he does not think now is the right time to privatize the wholesale system, even as a top House Republican takes the hard position that no privatization bill could pass his chamber without it. That disagreement is emerging as a key sticking point as top Republican lawmakers try to reach a compromise in a quickly shrinking amount of time before the July 1 deadline that Corbett has pressed them to finalize a plan.
Complicating their efforts is opposition to privatization from Democratic lawmakers and the union that represents state wine and liquor store employees, who warn that it could simply empower a few big wholesalers that profit handsomely from their control of top-selling brands in Pennsylvania. In the meantime, distillers and wholesalers – the companies that ship and market wine and liquor – are vying for the upper hand in whatever regulatory structure fills the vacuum if the Liquor Control Board is banned from the wholesale business.
Sen. Charles McIlhinney, who heads the Senate committee that is handling the matter, said he is leaning toward writing legislation that would break state control of wine and liquor sales at the retail level, albeit under a different format than those envisioned by the governor’s plan or the House bill.
But McIlhinney, R-Bucks, also argued that selling the wholesale system right now would be unwise. Doing so would ignore the potential that it would be much more valuable once retail privatization legislation allows more stores to sell wine and liquor, McIlhinney said. And getting as much bang for the state’s privatization buck will be especially important since the state stands to lose a revenue stream of more than $100 million a year in profits from the state’s liquor business, McIlhinney said.
“It might be a better choice to find some sort of a lease program or some sort of an avenue where maybe we do keep the wholesale for the time being until we can guarantee some revenue without having the price go up,” McIlhinney told reporters after his third and final hearing on the subject Tuesday.
It is a valuable business: The architects of Corbett’s plan and the House bill each estimated the wholesale side would account for more than 50% of the overall value to the state if newly created licenses are sold to private companies that want to transport or sell alcoholic beverages.
And right now, it is what gives the Liquor Control Board substantial negotiating power. The agency’s status as a single large buyer allows it to cut out many middlemen brokers that exist in other states and negotiate favorable prices directly with distillers and vintners. That leverage helps produces profits for the state treasury, proponents say.
A substantial retail expansion could demand tens or hundreds of millions of dollars to build warehouses, hire workers and buy trucks and inventory systems, whether it is carried out by the Liquor Control Board or by private-sector wholesalers, said Dawson Hobbs of the Wine and Spirits Wholesalers of America, a Washington, D.C.-based trade association.
But privatizing the wholesale system could potentially create what some warn would be an oligarchy of a few private wholesalers to the detriment of consumers.
To that end, a trade association for liquor companies, the Washington, D.C.-based Distilled Spirits Council of the United States, asked the Senate to reject parts of the governor’s and House plans that would allow wholesalers to have “franchise protection” rights. Such legal protection, which exists in about a dozen other states, would give wholesalers exclusive control over the distribution and marketing of liquor brands with virtually no fear of losing the contract to a competitor, council official Mark Gorman said.
That, he suggested, could hurt consumers on the key elements that could otherwise benefit them: price, availability and selection.
House Majority Leader Mike Turzai, an ally of Corbett’s in the crusade to privatize the state’s wine and liquor business, said any Senate bill that does not immediately sell off the wholesale end of the business will not pass the House. It is, he said, “an essential component.”
Turzai, R-Allegheny, also played down the influence that McIlhinney will have over any bill that ultimately comes to the Senate floor.
“There will be a full body of the Senate that takes this up,” Turzai said. “It’s not going to be limited to a singular member.”
Australia: Alcohol spilling into young minds
Source: The Australian
by: Madonna King
June 08, 2013
SOMETIMES it’s the things that creep up on us that pose the most danger: our weight, a nagging health issue we ignore, a problem we look past with a child.
Our use of alcohol has now fallen firmly into that camp too.
But just as the grassroots revolt over how accepted gambling had become in our lives saw Tom Waterhouse pull his head in, perhaps a crackdown on the “normalisation” of alcohol is next.
In Coles, alongside the soft drink, you can buy a four-pack of Coopers Ultra Light.
It looks like a beer, it’s in a can like a beer, and it’s brewed by Coopers Brewery in South Australia.
The alcohol content is small, at 0.5 per cent.
Coles is not breaking any law. Under the Liquor Act 1992, you don’t need a liquor licence to sell drinks unless the alcohol content creeps above 0.5 per cent.
Coopers Ultra Light is wedged in with the lemonade and ginger beer in the drinks aisle.
You are expected to see it as a soft drink, and no doubt children do.
My eight and nine-year-old daughters purchased a four-pack with money I gave them.
I was wanting to see if any staff, including those at the checkout, would raise an eyebrow? No one did.
That worries federal AMA president Dr Steve Hambleton who says we are now “grooming the next generation of drinkers”.
Hambleton doesn’t think something masquerading as a soft drink should carry any alcoholic content – but his bigger concern is that the Ultra Light is placed with other drinks.
That approach “de-sensitised” children to the shapes and brands of alcohol and defied widespread research which showed that the earlier you expose a child to advertising, the earlier they will test drinks.
And the earlier a child test drinks, the heavier they will later drink.
My beef is not whether supermarkets sell alcohol or not, as long as they follow the law. But surely alcohol should be seen as alcohol, not something else.
It should be labelled, placed separate from other drinks, and off-limits to children.
Late this week we saw one Queensland high school ban its students from consuming energy drinks because of health fears.
Isn’t this as – or even more – dangerous?
But as one reader of this column found, no one in authority could be bothered showing interest.
After seeing the drinks for sale at her local Coles, Pam phoned the Australian Competition and Consumer Commission to determine whether they needed a permit.
There she was told it was not in their jurisdiction and that she needed to go to a state authority.
Pam called the state office of fair trading, which she said told her they would need all the details in writing.
Next stop was the office of her local MP, who promised they would look into it – but that it could take a while.
“The retailers are attempting to normalise the sale of alcohol by associating it with groceries and other everyday purchases,” Pam wrote.
“I consider this to be a deliberate, deceitful attempt to introduce children and young people to alcohol, similar to the practice of handing out free cigarettes in the shopping malls years ago.”
But it could be something as simple as Coopers Ultra Light being sold in your supermarket that turns alcohol advertising on its head.
Tom Waterhouse’s recent retreat was prompted by a public backlash which targeted him as the gambling pin-up boy.
Such was the outrage that any support for his position reached the indefensible.
All of a sudden, it was clear that gambling had seeped too far into our everyday lives.
Perhaps it’s time to look at alcohol that way too, because it has now become a “normal” part of everyday living – from television advertising to sporting sponsorship to our home, where the witching hour has us reaching for a glass.
The problem is not the alcohol content; it’s the priority we are granting it.
And selling it with soft drink to children is just plain wrong.
Pernod Ricard takes pregnancy logo scheme global
Source: Marketing Week
By Sebastian Joseph
Fri, 7 Jun 2013
Pernod Ricard is to expand the use of its European on-pack health warning system for pregnant women to the rest of the world as part of ongoing efforts to promote responsible drinking.
Pernod Ricard will inform women worldwide not to drink when pregnant with warnings on bottles.
A logo telling pregnant women not to drink will be seen on all bottles for brands such as Chivas Regal, Absolut and Malibu produced by the company’s 80 subsidiaries. The business says the expansion of the voluntary labelling system aims to “unambiguously” highlight to pregnant women the dangers of drinking.
It will be supported by public conferences, leaflets and PR activity that will also highlight the company’s other commitments to responsible drinking.
Drinks makers have come under increasing pressure from the Government to implement pregnancy warnings on labels. The Portman Group has pledged to ensure pregnancy warnings along with unit information and daily guidelines will be included on 80 per cent of all labels by the end of 2013 as part of the industry’s commitment to the Responsibility Deal.
Pernod Ricard became the first global drinks business to include the logo throughout Europe in 2008.
Wells Fargo’s Weekly Economic & Financial Commentary
Source: Wells Fargo
. May’s larger-than-expected rise in nonfarm payrolls does not mark a significant change in the economic outlook.
. A very large proportion of the jobs being added are in lower-paying sectors, most notably the leisure and hospitality sectors.
. Employment in many higher-paying sectors has actually weakened.
. Manufacturing employment fell by 8,000 with most of the weakness coming from nondurable goods.
. The recent slide in the ISM manufacturing survey, combined with declines in the related areas of the employment report, has likely raised concerns at the Fed that slow global growth and sequester-related defense cutbacks are taking a heavier toll on the economy than previously thought.
. The global economy has started to show bits and pieces of good news on the production side.
. This good news could be an indication that the global economy many not be weakening further.
. The stronger PMI reported in the U.K this week was a very positive development.
. The reading came in at 51.3, which is supportive of an expansionary environment.
. In Brazil, industrial production increased by 1.8% for the month-much stronger than the expected 1.0%.
. The slowdown in Germany appears to be coming to an end.
. Industrial production has been up for three consecutive months.
Point of View
. Interest Rate Watch
. The jobs report supports economic growth outlook and continued Fed easing.
. The rise in the unemployment rate signaled Fed policy would likely remain easy through at least September.
. Credit Market Insights
. Household net worth is at an all-time high, but consumers remain cautious.
. Household borrowing has been particularly weak.
. The bulk of the gains in consumer credit have been in the form of student loans.
Topic of the Week
. Commercial real estate enters a new world.
. With the exception of apartments, the sluggish economic recovery has made for a painfully slow improvement in operation fundamentals and new construction.
Giant US firm which makes Budweiser crushes tiny UK brewers – for naming beer after their children’s primary school
Source: Daily Mail
By Martin Delgado
8 June 2013
With just £1,000 in the bank and one part-time employee, the Belleville Brewing Company is hardly in a position to threaten the global dominance of the world’s biggest drinks producer.
But Anheuser-Busch, the powerful US corporation which numbers Budweiser among its brands, apparently thinks otherwise.
Lawyers acting on its behalf have written to the group of parents who run Belleville demanding that they drop the name or else face court action which could bankrupt them with legal fees. The US giant claims that customers could confuse Belleville’s ales and its own fruit-flavoured Belle-Vue beer.
The heavy-handed intervention has shocked the fledgling British business, which is named after the popular state school attended by the children of Belleville’s two directors – real ale fans Adrian Thomas and Mark McGuinness-Smith.
Potential investors are also required to have a child at Belleville Primary in Wandsworth, South London, to ensure the small-scale enterprise retains its community links. Mr Thomas, 50, said: ‘The legal threat is ludicrous because the products are completely different.
‘Belle-Vue is a Belgian fruit-flavoured beer with a tart taste. Our beer is made with American yeast and hops and is more like a pale ale. None of the shops and pubs we supply are more than a few miles away.’
However, Anheuser-Busch – which last year generated revenue of nearly $40billion (£26?billion) – has made the extraordinary claim that consumers could confuse the two.
A warning letter, drafted by British lawyers hired by the Missouri-based company to protect its UK commercial interests, says: ‘Visually and aurally, Belle-Vue and Belleville share the first six letters in common and end with the same letter “e”.
‘Conceptually, both Belle-Vue and Belleville would be understood by the English-speaking consumer as signifying something beautiful.
‘As a result of this considerable degree of similarity .??.??. your use [of the name] is bound to lead to deception and confusion among the public and our clients’ consumers and potential customers.
‘Such use also enables you to take unfair advantage of, or free ride on, our clients’ reputation in the EU.’ The letter, from Bristol law firm Humphreys & Co, demands the destruction of all packaging and promotional material bearing the microbrewery’s name and the removal of any references to Belleville on the company’s website within 28 days.
Mr Thomas, a musician who played guitar and keyboards with Tubular Bells creator Mike Oldfield in the 1990s – said his first instinct was to defy the threat of a High Court injunction. But after consulting colleagues, he decided a more prudent course would be to choose another name. One option under consideration is Northcote, the name of a road in Wandsworth.
Mr Thomas started home-brewing in his kitchen and offered his ale for the first time at a beer festival organised by the parent-teacher association at Belleville. His nine-year-old son, Callum, attends the school and elder son Jake, now 11, is a former pupil.
Mr Thomas added: ‘There is only one member of Belleville staff – me – and I don’t draw a salary.
‘The legal action must have been triggered when we registered the name. We feel coerced and bullied. It’s as if they’re saying, “We have more money than you, so you’ve got to do as we say.”?
A UK spokesman for Anheuser-Busch, whose chief executive Carlos Brito last year received a £2.7?million bonus, said: ‘We are unable to comment on ongoing legal matters.’
Vijay Mallya tells striking Kingfisher Airlines staff he has no money to pay them
Jun 7, 2013
Kingfisher Airlines chairman Vijay Mallya today told his agitating employees, who began a hunger strike, that he did not have money to clear their salary dues.
“I don’t have the money to pay your salary dues, because I cannot use the proceeds from the United Spirits-Diageo deal for this due to an injunction from the Karnataka High Court,” Mallya reportedly told the striking employees.
‘Vicki’s Vodka’ $250K lawsuit: Vicki Gunvalson, Brooks Ayers sued for fraud
By: Rachael Monaco
June 8, 2013
The original real housewife Vicki Gunvalson may have dug herself a hole she cannot get out of this time. Vicki and her boyfriend Brooks Ayers are being sued by Robert Williamson III for $250,000 on the grounds that they conspired to commit fraud in their joint “Vicki’s Vodka” venture.
Professional poker player Robert Williamson III filed court documents on June 7 Radar Online reports. In the documents Williamson alleges that Gunvalson breached their contract, committed fraud, failed to live up to good faith dealings, misrepresented herself and “conspired to unjustly enrich herself. “Brooks Ayers is named as a co-defendant in the action.
What happened? Vicki Gunvalson and Robert Williamson III launched a business venture together, creating “Vicki’s Vodka.” Gunvalson then gave Brooks Ayers 16.67 percent of the business without Williamson’s knowledge.
Ayers then turned around and sold his 16.67 percent of “Vicki’s Vodka” to Williamson for $50,000, who is now claiming fraud. A written agreement dated March 6, 2013 confirming the sale was filed in Clark County, Nevada.
Williamson III lawsuit alleges that Brooks and Vicki used the purchase as a way to extort additional money from him in bad faith “without the intent to honor the intent of the transaction.”
Williamson alleges that Gunvalson “demanded” that the ownership he purchased from Ayers be returned to her. The lawsuit claims that Brooks Ayers and Vicki Gunvalson intended to “lure Robert Williamson II into the purchase of Brooks interest” without the good faith intent to move forward with the company and make it successful.
Vicki Gunvalson later sent Williamson a cease and desist letter claiming a “total lack of cooperation’ to make “Vicki’s Vodka” a success. The Twitter account for “Vicki’s Vodka” has not had a tweet posted since May 12. The “Vicki’s Vodka” Facebook page has not had a post since February.
News From TTB
MAKING ALLOWABLE CHANGES TO APPROVED ALCOHOL BEVERAGE LABELS
If you are an alcohol beverage industry member (such as an importer or bottler) and are considering making changes to your previously approved alcohol beverage label, please review our complete list of allowable revisions before you submit your certificate of label approval (COLA) application – you may not need to send us the revised label at all!
When we updated our COLA application, TTB Form 5100.31, Application for and Certification/Exemption of Label/Bottle Approvalin July 2012, we expanded the list of items an alcohol beverage industry member can change on a previously approved label without TTB approval.
The idea behind the change is this: With a longer list of allowable revisions, we expect a decrease in the number of submitted label applications. With a decrease in the number of submitted label applications, we anticipate a faster review time for labels for new products and products with major changes.
A key component to the success of these changes is for industry members (or even consultants and attorneys practicing in the field) to know and understand the specific types of changes allowed for previously approved labels, and to exercise their freedom to make minor allowable changes to their labels without sending unnecessary requests for additional COLA approvals. With these changes, we anticipate industry may see a faster and easier application process in the future!
In China, fake European wine more worrying than tariffs
By Terril Yue Jones
Bruno Paumard, the cellar master at a vineyard in China, can’t stop laughing while describing a bottle of supposedly French wine a friend gave him two years ago.
It’s white wine, with a label proclaiming it is from the vineyards of Romanee-Conti, the bottle bearing the logo that is on bottles of Chateau Lafite-Rothschild, and declares its origin as Montpellier in southern France.
Domaine de la Romanee-Conti, better known for highly prized and highly priced vintages from France’s Burgundy region, makes only a tiny amount of white wine, labeled Montrachet. It has nothing to do with the equally prestigious Lafite, which is from the Bordeaux region, and neither brand is produced anywhere near Montpellier.
“It’s the most magnificent example of a hijacked brand of wine I’ve ever seen,” says Paumard, who works with Chateau Hansen in China’s Inner Mongolia. “It doesn’t get better than that.”
Liquor stores, restaurants and supermarkets in China, the world’s most populous nation and fifth-largest wine consumer, wage a constant battle against fake wines. The amount of knock-offs on the market may increase as Beijing investigates wine imports from the European Union, threatening anti-dumping tariffs or import curbs.
It announced the investigation after the EU slapped anti-dumping duties on Chinese solar panels.
“More expensive wine is okay, I just don’t want any fakes,” said Helen Nie, a Beijing housewife sharing a bottle of the Italian house white at a restaurant with a friend.
“If the cost goes up I’d still buy wine, though some people wouldn’t – the price makes a difference. But the quality is important; it’s a health question.”
EU wine exports to China reached 257.3 million liters in 2012 for a value of nearly $1 billion, more than a ten-fold increase since 2006 as rapidly increasing wealth transformed lives and tastes in the world’s fastest growing major economy. More than half of the 2012 total – 139.5 million liters – came from France.
Nobody knows how much of the market is cornered by fakes and copycats, says Jim Boyce, who follows China’s wine industry on his blog, grapewallofchina.com.
“Things that are faked tend to be things that are very popular,” Boyce said.
And wine, especially expensive wine, is popular in China, sometimes more for bragging rights than taste.
“Those expensive wines are where you see more fakes,” said Maggie Wang, who was sharing the house wine from Sardinia at the Beijing restaurant with Nie.
“But there’s lots of phony wine. Everything’s faked in China,” she said. “For a lot of Chinese consumers, the more expensive it is, the more they’ll buy it. Chinese like things like that – they’ll buy the most expensive house, drive the most expensive car. They don’t want the best, they want the most expensive.”
Given the high margins and the demand, the counterfeiters tend to focus on European fine wines.
The iconic Chateau Lafite has become the poster child for wine forgery. A bottle of Lafite from 1982, considered one of the greatest vintages of the 20th century, can cost upwards of U.S. $10,000.
That has led to a thriving industry in Lafite knockoffs in China. Aficionados say there is are more cases of 1982 Lafite in China than were actually produced by the chateau that year.
Christophe Salin, president of Domaines Barons de Rothschild, which owns Lafite-Rothschild, says fake Lafite however isn’t the major problem.
“I have never seen a bottle of fake ’82 Lafite,” says Salin, who has been travelling to China for 20 years.
“The problem we have is the creative attitude of some Chinese. They sometimes use our name in funny ways,” he told Reuters in a telephone call from Paris.
Several wines on the market are branded with names close to Chateau Lafite, including “Chatelet Lafite”. Chatelet is the name of one of the busiest subway stations in Paris.
Lafite “is such a generic brand in China that it has widespread appeal as a name and as a status symbol,” says Boyce.
The mystique extends beyond the wine — in Beijing there is a “La Fite British Exotic Bar” and the “Beijing Lafitte Chateau Hotel.”
The first step for anyone counterfeiting wine is to find or manufacture a bottle that is close to the original.
“People will also use real bottles with something else inside, or make labels that are spelled differently,” says Cheng Qianrui, wine editor for the Chinese lifestyle website Daily Vitamin. “If you know wines, you can tell, but not a lot of Chinese do.”
Last year’s 10 percent surge in wine imports over 2011 was led by Spain, which accounted for 36 percent of cheaper bulk wine imports to China in 2012, according to Chinese customs figures. Bulk wine accounted for just under half of all wine imports last year.
The copyright problems however tend to focus on the better-known marques.
Importer Torres Wines includes Chateau Mouton-Rothschild, another top-ranked Bordeaux, in its portfolio. Sales Director Sun Yu says phony wine brands such as “Mouton & Sons” or “Edouard Mouton” pop up in the Chinese market.
“It happens in secondary or third-tier cities where they don’t have much wine knowledge,” Sun says.
Elite wine makers are trying to fight back, sometimes by smashing bottles after tastings, to prevent their being refilled for resale.
Anti-counterfeiting measures by major international spirits brands, which also fall victim to fakes in China, include bottle buyback programs, tamper-proof caps and covert tagging of bottles. But such measures are less common with wine brands, according to an executive at an international beverage company in China.
Domaines Barons de Rothschild has been putting tamper-proof tags on bottles of Chateau Lafite and its second label, Les Carruades de Lafite, since the 2009 vintage.
But the producer has been protecting its elite bottles since 1996, company president Salin says, with four other identification techniques that he won’t reveal.
“If you show me a bottle of Lafite, I can instantly tell you when it was bottled, a lot of things,” he says. “To counterfeit it is not easy.”
Wine Advocate slams branded cases claim
Source: the drinks business
by Lucy Shaw
7th June, 2013
Lisa Perrotti-Brown MW, editor-in-chief of The Wine Advocate, has slammed recent claims that Robert Parker is involved with the sale of branded wine cases.
As reported on db.com earlier this week, négociant Bordeaux Vins Selection (BVS) announced it was to release cases of wines given 100-point scores by Parker in specially designed wooden gift boxes signed by the US wine critic.
However, Perrotti-Brown dispelled the claims yesterday on The Wine Advocate bulletin board, stressing that Parker never authorised the use of his signature.
“Robert Parker did not give permission for his signature to be used on any such packaging, and after speaking with Bordeaux Vins Selection, they will no longer be using his signature at all.
“We spoke with BVS last night to confirm that Robert Parker’s signature was not to be used in their packaging, in the format of our logo or otherwise,” she said.
“Some of the claims in the media suggest that we are profiting from the marketing and packaging of wines. This is not true. We continue to maintain our strict policy of not profiting from the sale of wine.
“Endorsing wines for profit is in direct conflict with the policy we have maintained for more than 34 years. We have no plans to change this policy,” she added.
The Wine Advocate recently moved into the sale of commercial licenses, allowing merchants like Bordeaux Vins Selection to market and sell cases using Parker’s perfect scores for the wines as a commercial hook.
The license allows merchants to reproduce Parker’s tasting notes and scores, though the use of Parker’s signature is not permitted within the agreement.
“This deal is in no way exclusive to BVS – other merchants are free to put together their own selections of Robert Parker rated wines,” Perrotti-Brown clarified.
“Neither Parker nor the TWA team have had any part in the selection of wines. We are not endorsing or profiting from the packaging or sales of the BVS cases,” she added.
In addition to commercial licenses, The Wine Advocate has also moved into the sale of bundles of subscription gift cards to eRobertParker.com to retailers.
“They are no different from the subscriptions available on the website; it’s just in a fancy card format that makes for a more presentable gift,” said Perrotti-Brown.
Nobles Crus suspended
by Jim Budd
Friday 7 June 2013
The Nobles Crus wine fund has been suspended due to a lack of liquidity.
The Luxembourg Commission de Surveillance du Secteur Financier (CSSF) temporarily suspended the fund on 27 May. It is not allowed to pay out redemptions or accept new funds.
Due to recent changes in European law, as of 31 December 2013, fund managers running unit trusts will not be allowed to invest in wine funds and other alternative investments.
This has led a number of Nobles Crus’ institutional investors to sell their holdings in the fund.
Miriam Wilson and Michel Tamiser, general partners in Noble Crus’ parent company Elite Advisers, have told their investors that ‘Nobles Crus now finds itself confronted with a few requests from some large institutional for redemptions involving considerable sums of money.
‘Currently, Nobles Crus does not have the necessary liquidity to honour these requests in the very short term.’
They continue: ‘As we have always emphasised, the fine wine market is relatively liquid, however, in different proportions to those of the financial markets. We are well aware of the importance, in the current circumstances, to sell at market price and not too hastily sell in order to free up the necessary liquidity to honour these redemption requests.’
Nobles Crus shares were worth ?180.25 as of 30 April 2013.
Last year valuations of fine wines by the Nobles Crus wine fund were questioned by the Financial Times and by French website LeVif/L’Express; Elite vigorously defended its valuation procedure.
A sale in February 2013 where ?8.7m was achieved at the ‘valuation price of Nobles Crus portfolio’ is further evidence of the accuracy of their prices, Wilson and Tamisier say.
In a separate development, on 4 June the UK Financial Conduct Authority (FCA) banned the promotion of wine funds and other alternative investments to the ‘vast majority of retail investors in the UK’.
From 1 January 2014 these products will be limited to sophisticated investors and high net worth individuals.
French site accused of selling Yquem 2012
Source: the drinks business
by Rupert Millar
7th June, 2013
An online retailer, 1855.com, has been criticised for apparently trying to sell Château Yquem 2012 en primeur – even though that vintage was not produced by the estate.
Several Sauternes châteaux announced that they would not be producing a 2012 vintage because of poor conditions.
However, according to French newspaper Sud-Ouest, this did not stop the fine wine retailer trying to sell 2012 Yquem.
The paper managed to capture a page from the site, which it claimed showed that1855.com promised customers delivery of the wine by 2015 and available at the soonest possible price.
The page has since been taken down.
In reply, 1855’s president, Emeric Sauty de Chalon, wrote to Sud-Ouest: “1855 has never put Yquem 2012 on sale; no price was ever announced, there was no possibility to buy this product and it was never available to our clients and, evidently, no bottle was ever sold.
“Only the possibility of being informed of its availability was accessible to our clients.
“1855 very much regrets that Sud-Ouest did not contact the company before distribution of the article, the objective of which seemed to be to blacken the image of our group more than faithfully inform its readers.”
As Sud-Ouest pointed out, and as the drinks business reported at the time, Yquem announced in December of last year that it would not be producing a 2012 vintage.
The newspaper has previously reported that 1855.com has been censured before for late and damaged deliveries and even not delivering wine at all to some 200 clients.
There have also been questions raised concerning an affiliate company of 1855.com,ChateauOnline.com, by Château Conseillante in Pomerol, which said that the site was offering its 2012 vintage at a “ludicrously reduced” price and that it feared there was “very little chance” of buyers receiving the wine.
Reports of dissatisfaction with 1855.com date back at least as far as 2011, as this French site “Into The Wine” makes clear.
Japanese wine investors
By Jancis Robinson
Some of the finest wines are made by Japanese-owned companies, but you would never know this from the labels
Last month I witnessed the opening of spanking new winery buildings at an estate in the Rheingau that attracted 600 guests from all over the world and included every luminary of German wine. But the most extraordinary aspect of the celebrations was that there was not a Japanese face in sight. German wine has long been relatively popular in Japan but that is not why I was surprised. Weingut Robert Weil has been owned by the Japanese whisky giant Suntory since 1988, yet you would never know it.
There was no mention of the connection in any of the literature handed out at the event. The Suntory website acknowledges its three subsidiaries in the European wine business but directs you firmly to Robert Weil’s own website on which there is not a mention of Suntory or Japan. Yet in the words of the president of the Rheingau wine growers association, Stefan Ress of the Weingut Balthasar Ress in the next village, “What an opportunity was given to the Rheingau by Suntory’s investment in Weil. Nothing better could have happened to the region.”
Weil is widely seen as the jewel of Rheingau, historically Germany’s grandest wine region. The pristine estate and its smart new cellars, not to mention its growth from 18 to 90 hectares of vineyard in the past 25 years and the impeccable quality and consistency of its wines, including a miraculous Trockenbeerenauslese every year, are all presumably made possible by the yen underpinning them. Wilhelm Weil, who had to take over the family estate as a very young man at about the time of the sale to Suntory, is an exceptional steward.
This extreme discretion, I realised on reflection, is characteristic of Japan’s best-known acquisitions in the world of wine, which include some of the very finest producers of all.
In Bordeaux, Suntory owns part of a negociant business and also owns the third-growth Château Lagrange of St-Julien. Here too they have steered a property that was far from realising its potential to one that, despite its less-than-perfect location, is a model of consistent delivery, making long-lasting wines of dependable quality and harmony. The current director Bruno Eynard told me once that someone from Suntory visits every so often, adding with only slight exasperation that he always has a full-time Japanese employee who “wants to understand everything exactly all the time; le feeling is not enough for them. But Suntory is definitely motivated by top quality rather than profit.” This determined learning process is presumably driven by the fact that Suntory has its own large winery in Japan where very passable ripostes to red bordeaux and white burgundy are crafted by dedicated staff, but otherwise the French management are left to get on with things.
There is an even more hands-off approach at other high-profile Japanese-owned wine producers. In 1988 Madame Lalou Bize-Leroy acquired the Charles Noëllat domaine in Vosne-Romanée and set up Domaine Leroy in competition with the world-famous Domaine de la Romanée-Conti whose door she was shown after a family tiff. But she was able to do this only because she was backed by her Japanese importers Takashimaya, whose name she has always had difficulty pronouncing. It is hard to think of a more headstrong producer in the world. I cannot imagine the Japanese managing to lay down any sort of law with her. Indeed the only evidence of a Japanese connection with Domaine Leroy is the number of bottles of its wines found in the smartest wine shops of Tokyo and Osaka. Hew Blair of Justerini & Brooks, who has been visiting Domaine Leroy since the beginning, reports that he is yet to see any evidence of Japanese influence.
Japanese presence elsewhere is just as subtle. Few visitors to Ridge Vineyards, California’s truly iconic producer of great, ageworthy, classical reds based on ancient Zinfandel vines and Bordeaux blends from almost equally historic vineyards, know that it has been owned since 1987 by a Japanese wine lover. Paul Draper continues to run this tight ship and although his travels take him all over the world, he rarely visits Japan. Also in the late 1980s Markham winery in Napa Valley was bought by Mercian, one of Japan’s most significant wine producers, but it is run by an all-American team.
There are California wineries such as Kenzo, Freeman, Dalle Valle and Clos Pegase that are obviously and explicitly Japanese-owned or part-owned. In the case of Kenzo most of the wine produced on its 100 acres of vineyard is exported to Japan. But I am even more fascinated by the – perhaps coincidental – way in which all over the world some of the producers of the wines I admire most happen to have Japanese owners who are as firmly in the background as the make-up artists in a kabuki theatre.
My favourite producer on Madeira, for instance – hardly an obvious investment prospect – is Barbeito. Ricardo Diogo de Freitas, arguably the island’s most talented and certainly most dedicated winemaker, took over the reins of this relatively young family company only in 1991. He encouraged other family members to exit the bulk madeira business and concentrate on top quality bottled wines; he now even bottles single-cask madeiras. But Barbeito needed capital to embark on this adventure. It sought and received it from the Kinoshita family whose business had long been importing Barbeito madeiras. Yet, again, there is no evidence of any Japanese connection at its immaculate new lodge outside Funchal – just delicious evidence of yen transformed into nectar.
In New Zealand, perhaps partly because of proximity, Japanese influence is relatively strong. At least two small-scale producers of fine, handcrafted reds, Kusuda of Martinborough and Sato of Central Otago, are family affairs where the work is done by Japanese immigrants and their friends. But De Redcliffe near Auckland is an example of a high-profile outfit whose Japanese ownership is very much in the background.
Japanese discretion and precision are two very positive qualities for wine in my book.
China v European wine: aux armes!
In EU-China trade dispute, France is likely to be the biggest loser
The hardy citizens of Europe made it through the banana wars. They even survived the bra wars – against China, no less. Trade disputes capture the imagination only when they have a catchy name. The solar panels at the heart of the spat between Europe and China were never going to excite interest. But that has changed since China this week said it would probe European winemaking subsidies. The battle for the bottle, perhaps? Aux armes, Bordeaux and Burgundy!
About a fifth of the wine drunk in China last year came from the EU. Sixty per cent of that, or 227m bottles, was French. EU wine exports to China have grown more than 50 per cent a year for the past three. For a country that increasingly likes the odd glass of foreign wine, it is odd that China has taken threatening action that could sharply raise the cost of that wine. But China is anything but reckless: the 2bn bottles the Chinese drank last year work out at under two per head. That makes the country a mere entry-level toper compared with the 60-plus bottles the average French person consumes, or even the eight drunk by Hong Kongers.
In other words, France’s one-tenth share of China’s wine market, which is expected to grow in volume by about 8 per cent a year, is more important to France than the cost of each bottle is to China’s small if growing band of oenophiles. And those wine fans have options, too. Any drop in European imports will probably only benefit its 450 domestic wine producers. Less than a third of China’s wine is imported and it is already the sixth biggest producer in the world, ahead of Australia, according to Vinexpo.
Pitting French viniculture against Chinese power could turn into a real fight. The French wine industry – the world’s biggest – is no slouch at promoting a sons-of-the-soil, family enterprise image. Yet the one-quarter of exported Bordeaux that headlines its wine sales to China and Hong Kong comes from big-production vineyards that can hardly be deemed artisanal. With China’s wine imports already taxed at about 50 per cent of value, French wine fans had better stock up in case the wine wars are only just beginning.
Restaurants set to double overall job growth
June 7, 2013
In his latest commentary, the National Restaurant Association’s Chief Economist Bruce Grindy breaks down the latest jobs report. Restaurants added more than 38,000 jobs in May, and are on pace to post their second consecutive year of job growth above three percent. Meanwhile, the overall economy continued down the path of steady but moderate employment gains.
The restaurant industry continued to be one of the top job creators in the economy in May, according to figures from the Bureau of Labor Statistics. Eating and drinking places – the primary component of the restaurant industry which accounts for roughly three-fourths of the total restaurant and foodservice workforce – added a net 38,100 jobs in May on a seasonally-adjusted basis, the third time in the last four months with gains above the 30,000 level.
Meanwhile, the overall economy added a net 175,000 jobs in May, which essentially matches the average number of jobs added during the last 12 months. The private sector added 178,000 jobs in May, while government payrolls declined by 3,000.
On a year-to-date basis through May 2013, eating and drinking places added jobs at a strong 3.2 percent rate, which is double the 1.6 percent gain registered in the overall economy.
If the current trend holds, 2013 will represent the 14th consecutive year in which restaurant industry job growth outpaces the overall economy, and the third consecutive year in which the industry registered job growth in excess of 2.5 percent. In comparison, the overall economy hasn’t posted job growth above 2.5 percent since 1998.
Restaurant Serves Kids Alcohol Instead Of Orange Juice
Source: You Tube
Jun 7, 2013
Some New Jersey parents are upset this week after they say a family restaurant served their kids alcohol.
Jeremy and Dawn DeRoo took their three daughters to brunch at Bazil’s on Sunday and ordered them orange juice; when one of the girls complained that it tasted funny, their mom figured it was just different than the kind they were used to and didn’t think much of it. But after tasting it later, she discovered that it was actually a mimosa. To add insult to injury, the waitress allegedly brushed it off as no big deal and offered to replace the drinks with milk, and the manager never came over to apologize.
The DeRoos say their kids showed signs of being drunk later that day and slept for hours after they got home.
“That’s not good enough for parents having kids, drunk and sleeping all day. It’s not fair. These little kids shouldn’t have any alcohol period,” Jeremy DeRoo said.
The restaurant’s owners say they aren’t sure how the mixup happened, and that all drinks are labeled to avoid mixups; luckily for them, the DeRoos say they aren’t going to pursue legal action.
Fuller’s pulls in profits and taps premium cider market
By Duncan Robinson
Fuller, Smith & Turner, the London-based brewer, has jumped into the premium cider market for the first time in its 168-year history by buying Cornish Orchards for £3.8m.
Michael Turner, chairman of Fuller’s, said the 21-year-old cider maker was “small but perfectly formed”.
“They are completely passionate about the quality of what they produce – and we’re going to bring some commercial rigour,” said Mr Turner. The deal comprised £2.4m in cash, £500,000 of assumed liabilities and another £900,000 to be paid depending on production targets.
Fuller’s, which makes London Pride, announced the deal as it unveiled its full-year results. Pre-tax profits rose 22 per cent to £35.2m for the year to March 30 as the group benefited from exposure to the more resilient premium end of the pub market.
While domestic demand for beer was slack, Fuller’s exports have almost doubled over the past five years. “Our exports have been moving ahead very quickly and the difference is the duty,” said Mr Turner.
Beer in the UK attracts up to 12 times more duty than on the continent. Exports now account for about a fifth of the group’s beer volumes.
Overall revenues rose 7 per cent to £271.5m as the group expanded its estate. Diluted earnings per share rose a quarter to 52.1p, while the group’s dividend rose 10 per cent to 8.35p.
Management hopes that increased demand for craft beers will continue and help maintain volumes. Fuller’s entered the craft lager market this month with the launch of Frontier.
“If you look at food, the good old days of meat and two veg have changed,” said Mr Turner. “Everyone looks at different types of food now. People’s tastes are getting far more sophisticated and the same is happening with beer.”
Like-for-like profit growth in the group’s managed division was 6 per cent, compared with a 1 per cent rise in like-for-like profits in the tenanted division. Tenanted pubs across the whole industry have struggled with rising utility and other costs.
Improved recent weather resulted in a 7 per cent jump in like-for-like sales at the group’s managed pubs and hotels for the nine weeks to June 1. Fuller’s tenanted division continued to struggle, however, with like-for-like profits down 1 per cent over the same period.
Shares in Fuller’s were 5.7 per cent ahead in afternoon trading at 930p, having risen more than a quarter over the past 12 months.
In a Grocery Face-off, Is Costco Amazon-Proof?
By Brad Stone
June 06, 2013
Seattle-based Amazon.com (AMZN) has a cross-town retail rival in Costco Wholesale (COST), located in nearby Issaquah, Wash., and the histories of the companies are interestingly intertwined. During Amazon’s formative years, founder Jeff Bezos got some key advice from his Costco counterpart, Jim Sinegal. And Amazon Prime, the two-day shipping club, was inspired in part by Costco’s membership fees and the psychological inclination of shoppers to maximize the benefits of a club they have already paid to join.
As I was researching the connections between the companies last year for my upcoming book on Amazon, I called Sinegal and left a message asking if he could talk. He called back on a Saturday and left his cell phone number, then invited me to Costco’s headquarters for a one-on-one visit. That kind of availability and transparency is extremely unusual for the leader of a Fortune 500 company, and the conversation lead to my story in this week’s Bloomberg Businessweek about the company’s bizarro corporate culture and Sinegal’s like-minded successor, Craig Jelinek.
Costco is thriving, but Amazons’s relentless expansion looms over the second-largest retailer in the U.S., as it does every other retailer. The online giant is moving rapidly into apparel and is reportedly set to expand AmazonFresh, its Seattle-only grocery delivery business-two categories that are key to the continued vibrancy of big-box behemoths such as Wal-Mart Stores (WMT), Costco, and Target (TGT). Last year, I wrote that Amazon was poised to extend grocery delivery beyond Seattle, and on Wednesday the company quietly rolled out the service in Los Angeles.
Costco executives watch Amazon closely and believe the companies share a lot of cultural values, such as frugality and an interest in building for the long term. Like everyone else, they also marvel over the fact that Wall Street allows Amazon to get away with nearly nonexistent profit margins. “At some point people have to make some profits,” says Jelinek. “It is fashionable to make a lot of money these days.”
Jeff Brotman, Costco’s co-founder and chairman, says Bezos “doesn’t have to make a profit or break even on” services like Amazon Prime and AmazonFresh. “He’s building great loyalty with that, as we have with our executive membership,” which costs $110 a year and entitles members to additional benefits. Like other Costco executives, Brotman was skeptical that home grocery delivery could be profitable, but he notes that Amazon doesn’t really have to make it work perfectly in the short term: “He can spend a billion dollars experimenting and putting televisions on a truck and delivering them the same day with apples and oranges. That’s a research and development experiment that competitors and normal online businesses can’t do.”
So is Costco (and, for that matter, Wal-Mart) doomed if Amazon figures out home delivery of perishables and other sundries? Costco executives certainly don’t think so, and I agree. As others have noted, Amazon still has a lot of work to do to make home grocery delivery an economical option. And Costco members, attracted in part by its low prices, are exceedingly loyal, as its recent earnings reports have demonstrated.
Costco executives are not blind to the Amazon threat, and they talk in vague terms about evolving to meet the challenge. “It’s obviously a huge point of discussion around here,” says Paul Latham, vice president in charge of membership, marketing, and services. “We view Amazon as one of our primary competitors in almost every category. We all believe we are going to have to adapt in some form.” Latham also adds that “there’s a recognition that at some point Amazon has to start making money. They can’t continue on their current path of just pouring everything back into more infrastructure.”
Norway: Norwegian Politicians Defend Wine Monopoly
The majority of the country’s local politicians want continuation of wine monopoly and are against wine sale at convenience stores and supermarkets.
Source: Nordic Page
A survey conducted among the country’s politicians for Newspaper News Agency (ANB) shows a majority against open for the sale of wine in regular stores. 52 percent of the respondents are against sale of high degree alcoholic beverages including wine at regular stores.
While 97 percent of the Christian Democratic Party politicians are against wine shops, 90 percent of FrP politicians want sale of wine at regular stores.
The greatest resistance to the wine shop is on the predominantly conservative West Coast of Norway.
It may Lead to Higher Consumption of Alcohol
According to press chief Jens Nordahl in Wine Monopoly, a principle decision to move wine sales to the corner store have dramatic consequences.
– Product selection will be significantly lower, and the price will go up. And market access for the people will be drastically larger when the number of outlets will increase from the current 280 to 5,000 stores, said he.
Also, the politicians and health authorities are concerned that consumption will increase drastically with allowing wine sale out of monopolies. When alcopops were moved from monopolies to the convential stores in the early 2000s, sales of alcopops had dramatically increased from four million to 16 million liters per year.
A recent study conducted by TNS Gallup for Wine Monopoly also shows that 90 percent of the population is satisfied with the availability of the wine monopoly. Only eight percent are dissatisfied with the availability.
Vinmonopolet (English: The Wine Monopoly) is a government-owned alcoholic beverage retailer and the only company allowed to sell beverages containing an alcohol content higher than 4.75% in Norway.
As the arm of the Norwegian government policy to limit the citizens’ consumption of alcohol, primarily by means of high cost and limited access, the primary goal of the Vinmonopolet is to responsibly perform the distribution of alcoholic goods while limiting the motive of private economic profit from the alcohol industry. Equally significant is the social responsibility of Vinmonopolet, to prevent the sale of alcohol to minors and visibly inebriated customers.
Outlets, located across the country from cities to smaller communities, typically close business earlier than other shops, normally weekdays at 18:00 and Saturdays at 15:00. In 2007 Vinmonopolet sold 71,100,000 litres (18,800,000 US gal) of alcohol.
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