Thursday June 20th 2013
Massachusetts: Councilor Files Bill to Uncap Liquor License Restrictions in Boston
Source: Boston Magazine
By Steve Annear
June 19, 2013
Boston City Councilor Ayanna Pressley thinks the state’s liquor laws are extremely outdated.
“State control over liquor licenses was a result of [a] Prohibition-era frenzy about alcohol, and a power struggle between Yankee legislators and Irish-dominated local governments,” Pressley said in a petition filed Wednesday to reestablish the distribution of licenses in the city. “Those conditions no longer apply, yet these restrictions are still in effect.”
Calling for drastic changes on the limited number of licenses Boston is allowed to award restaurants looking to serve alcohol to customers, Pressley submitted a home rule petition that she spent one year crafting. Pressley filed the bill with the state legislature in an effort to attempt to put the responsibility of determining the number of liquor licenses the city can have in the hands of Boston’s licensing division.
Currently, Boston has a cap on the number of licenses it can distribute to business owners. This can lead to restaurateurs charging upward of $400,000 to transfer a license to a new business owner if they decide to close.
Boston’s cap is set at 650 full liquor licenses and 320 wine and malt beverage licenses. “The unnecessarily high cost of doing business makes it difficult for entrepreneurs-particularly small [and] local, minority, and women-owned business enterprises-to bring innovation to the cultural, arts, and culinary arenas,” Pressley said in her proposal. “It unduly burdens entrepreneurs who wish to open small neighborhood establishments, who in some estimates rely on alcohol sales for up to a quarter of their revenue.”
Because state law ties the number of licenses a city or town can have to a community’s overall population, pursuing a business venture can become costly in a place like Boston, and deter a neighborhood from expanding or bringing in new clientele. It can also lead to restaurants seeking other locations, like Cambridge or Somerville, where obtaining a license is less costly based on more availability.
“The time for legislative action is now; cities should have control over the alcohol licensing process,” Pressley said. “It’s time for us, not the state, to determine how to economically revitalize our neighborhoods.”
Pressley said some neighborhoods are over-saturated with licenses, like the North End, while others-such as “communities of color”- barely have any, with a scant chance of receiving them anytime soon based on the outlandish costs to obtain one from a previous holder.
Pressley’s proposal would not only lift the state’s cap, but it would allow more prospective restaurants to seek a license, and eliminate the transfer of licenses out of empowerment zones, urban renewal districts and transit oriented developments, so they would no longer cost hundreds of thousands of dollars to procure in the event that an owner closes up shop and decides to sell off a license. Instead, licenses would have to be returned to the city, so they could award them accordingly.
To meet the demands of current license holders, who Pressley worked closely with to craft the home rule petition, they would be “grandfathered in” and retain the ability to sell their license in the future.
Michael Nichols, a candidate for City Council, said he helped weigh in on the draft legislation during the yearlong study on how to improve the liquor license situation in the city, adding that Pressley’s proposal would drastically open up channels of private investment and economic revitalization in every interested neighborhood.
“More restaurants or bars may not be right for every area, but returning the regulation of liquor licenses to the city would enable who knows Boston best-our local government and our neighborhoods-the opportunity to revitalize business districts. It is unquestionably the right policy,” Nichols said.
May, 2013, Control State Results
During May, nine-liter spirits case sales in the control states were up 2.2% compared to a tough comparable 2012 period. Note, however, that sales during May this year benefited from five Fridays versus four during last year’s May. Rolling-twelve month reported volumes grew at 2.5%, down from April’s 3.2%. Alabama, Idaho, Montgomery County Maryland, Michigan, Mississippi, North Carolina, Ohio, Oregon, Utah, Virginia, and Vermont reported monthly growth rates exceeding their twelve month trends.
Control state spirits shelf dollars were up 5.4% during May while also trending at 5.4% during the past twelve months. Alabama, Idaho, Montgomery County Maryland, Maine, Michigan, Mississippi, North Carolina, Ohio, Oregon, Utah, and Virginia reported growth rates exceeding their twelve month trends.
Price/Mix for May increased to 3.2% from April’s 2.6%. The NE control states-Maine, New Hampshire, and Vermont-reported 5.0% that exceeded the other control state regions.
During May, Irish Whiskey, with 0.8% share of the control states spirits market, was the fastest growing category with 17.0% growth reported and a twelve month growth trend of 17.5%. Vodka, with 34% share, grew during the same periods at 2.9% and 3.6%. During May, Canadian Whiskey, Cordials, Domestic Whiskey, Gin, Scotch, and Tequila grew at rates that exceeded their twelve-month trends.
May’s nine-liter wine case sales growth rate grew 1.1%. Pennsylvania, New Hampshire, Utah, Mississippi, Montgomery County Maryland, and Wyoming reported -0.8%, 2.9%, 6.9%, 3.0%, 4.0%, and 7.2%, respectively. May’s rolling-twelve month wine volume growth, 4.4%, is down from April’s 5.0%.
Quick Note – Spirits: US NABCA data point – Price/mix continues to be strong
June 20, 2013
Ian Shackleton – NIplc
Price/mix remains strong
NABCA (which accounts for 20% of industry volumes) released US spirits data for May. Price/mix for May was robust at +3.2%, better than April +2.6% and broadly in line with March +3.5%. This is consistent with the latest AC Nielsen US spirits data for four weeks up until 25 May where pricing was up +3.9%, suggesting a more rational pricing environment. This is consistent with the Nielsen data, which shows improvement in price/mix for most companies. NABCA does not disclose price/ mix by company.
Softer volumes but underlying trend still robust
Reported industry volumes were positive at +2.2%, despite very strong comps (+11.0%) and better than ytd +2.0%. However there was some benefit from an extra Friday in this data v the comp; we believe that, adjusting for this, volumes would have been flat to slightly up. However, we still see the underlying volume trend in the US growing at +2-3% (year to date NABCA +2%).
Diageo volumes (reported) were -3.1%, and behind the industry at +2.2%, similar to the trend seen in AC Nielsen US spirits data, where Diageo is also outperforming on pricing but at the expense of some volume loss. However, in its Q3 to March, as reported, N. America revenues grew overall by over 8%, which implies a better overall performance than that shown by Nielsen or NABCA. Pernod volumes were -0.9%, Brown Forman +0.7%, Beam -0.6%, Davide Campari +3.6% and Remy +0.1%.
On calendar 2014E P/E, Diageo (Buy) trades at 16.2x, in line with Pernod (Neutral) and spirits average 17.4x. Within the spirits space, we prefer Diageo given its valuation, as well as the substantial exposure to the US and wider geographical exposure in emerging markets and lower exposure to China. US accounts for c40% of Diageo profit, c25% of Pernod, while China accounts for c33% of Remy, c16% of Pernod and Diageo under 1%.
Pernod hosts its Europe divisional investor call on 25th June.
? Total industry volumes were positive at +2.2% (reported), giving MAT +2.5% and ytd +2.0%.
? Diageo volumes were soft at -3.1%. Key brands: JW Black +4.1%, JW Red +8.9%, Smirnoff -0.7%, Captain Morgan -5.3%, Bailey’s -4.2%.
? Pernod volumes were slightly negative at -0.9%. Key brands: Chivas -1.3%, Jameson +20.5%, Absolut -2.2%.
? Brown Forman volumes were positive but lagged the industry at +0.7%. Key brands: Jack Daniel’s +1.1% and Southern Comfort -6.8%.
? Campari volumes were strong at +3.6%. Key brands: Skyy vodka -1.4%, Wild Turkey +1.9%; Wild Turkey American Honey was +26.1%.
? Remy volumes were flattish at +0.1%.
? Beam volumes were weak at -0.6%.
Diageo’s Walsh named Compass chairman
Compass Group (CPG.L: Quote, Profile, Research), the world’s biggest caterer, named outgoing Diageo (DGE.L: Quote, Profile, Research) chief executive Paul Walsh as its new Chairman on Thursday, to help drive the firm’s overseas expansion.
Walsh, who will be replaced at Diageo by Ivan Menezes on July 1 after some 13 years with the drinks group, will join Compass as a non-executive director next January and will become chairman on February 6.
Walsh will replace Roy Gardner, who is retiring.
Compass operates in some 50 countries and serves 4 billion meals a year at locations ranging from schools and hospitals to offshore rigs and the Wimbledon tennis tournament.
The group is targeting growth in its core North American business and in emerging markets, and said Walsh’s experience in international expansion would benefit the firm in its aims.
In May Compass posted an 8 percent rise in first half underlying pretax profit to 611 million pounds and said it was upbeat on its prospects for the full-year.
Rémy Cointreau Appointment
Source: BUSINESS WIRE
On 4 June 2013, the Board of Directors of Rémy Cointreau SA (Paris:RCO) renewed the term of office of Jean-Marie Laborde as Chief Executive Officer from 27 July 2013 to 30 September 2013.
On 24 September 2013, a proposal will be put to the Board of Directors to appoint Frédéric Pflanz as Chief Executive Officer of Rémy Cointreau SA with effect from 1 October 2013.
Having joined the Group in 2010 as Chief Financial Officer, Frédéric Pflanz has, since December 2012, also acted as Chief Operating Officer of the Group, alongside Jean-Marie Laborde.
NOMURA CONSUMER: C&C, Remy (Excerpt)
Buy, TP Eur 6.40, Ed Mundy
The Nielsen data shows share loss. We know that. Having spoken recently to the company we still feel confident that the US Cider business can grow 20% plus, that the Irish cider business will show good growth as they integrate Gleesons, and once again the market will be surprised positively. The recent pullback in the stock is unquestionably a buying opportunity. Current 2014 EBITconsensus Eur132m and expect guidance range to be given on 3 July with Q1 results (anticipated to be soggy at this point, so am not inclined to avoid into the print).
The Magnificent Mundy met with C&C IR in Dublin while I was gallivanting around the USA. The company sees consensus EBIT for F14 EUR 132m. We would expect an EBIT range for F14 to be given on 3 July with the Q1 release. Specifically on Q1 results. Specifically on Q1 – weather has been tough (esp March) in UK and ROI but weather has been better into May and continued in June.
On USA – the company confident can generate 20% volume growth for Vermont for F14. Integration issues now behind. Company not chasing volume growth. Sellside sentiment is now very negative and while this is a ‘show me the money’ scenario, the risks feel to the upside. 20% is not heroic and this is NOT the key driver of earnings. Suspect better data in the coming months, doubling of Vermont capacity, and the investor event in November will make the balance of this year more encouraging.
On ROI – a lot going on with headcount reductions as co generates synergies post Gleeson and business moves from the BA to Easyjet model. Good people in Gleeson, focus now on integrating the business and growing profits. ROI in a good position to grow.
On Tennent’s UK – more of the same. Good earnings visibility here.
And last but not least – UK cider – off-trade remains tough however not important for profits. Cost savings programme on-going. Paolo Mortarotti now in charge of UK cider, with both Shepton brands and Magners. Greater focus on growing the legacy Shepton brands.
Reduce TP Eur 82, Lord Shackleton
New CEO announcement, not a surprise but may not be seen as a positive. Co announces that CFO Pflanz will take over as CEO in September following the retirement of current CEO Laborde. This had been potentially flagged at end of 2012 when Pflanz was moved up to COO; however, we remain slightly surprised by this move as Pflanz only came into the spirits business in 2010 when he joined Remy from L’Oreal and does not have much background in the industry, whereas Laborde was an industry veteran having worked at Moet-Hennessy and Pernod before Remy.
We continue to be nervous that newsflow on China spirits (est a third of profits) will continue to be weak here for the rest of 2013 – May cognac shipment data released a few days ago was weak ( total volumes -11% with Asia -15%) – and we see some pressure on FY14 estimates (NE 3.54 v cons 3.64). Valuation 2014 PER 21.4 v spirits ave 17.4x.
Olympics chief hits out at Diageo in row over ban on drink ads
Source: Irish Independent
20 June 2013
Olympics boss Pat Hickey lashed out at the manufacturers of Guinness yesterday, saying the company had “no interest” in Ireland.
His attack came in the wake of the drinks giant having to deny a ban on drinks sponsorship could ultimately lead to a reduction in its operations here, despite a warning from its Irish chief at the weekend.
But sports bosses warned the ban of alcohol sponsorship of sports events will result in Ireland and the provinces losing more of rugby superstars to foreign clubs.
Mr Hickey, the Olympic Council of Ireland president, hit out at Diageo in the wake of its strong opposition to the proposed ban on alcohol sponsorship.
Speaking at the Oireachtas Committee on Transport and Communications, Mr Hickey said it wasn’t the position of a multinational company to tell elected officials what to do.
“I thought it was an absolute disgrace to read a report of an international company, Diageo, making an attack on the Irish Government and the Irish State about how they should conduct their business and investment, etc,” he said.
“This is a multinational that has no interest whatsoever in Ireland except they happen to have a product beginning with ‘G’ and they promote that in Irish pubs just to get bigger profits around the world.
“The Government should not accept that kind of carry-on from a multinational,” he added.
Mr Hickey said his views were a personal remark and the International Olympic Committee did not take alcohol sponsorship of any kind.
But Irish Sports Council (ISC) chief executive John Treacy warned that Ireland and the provinces would lose more of rugby superstars to foreign clubs, if the Government goes ahead with its plan to ban alcohol sponsorship from sport.
“Our (Sports Council) budget is ?42m. If you take ?30m (in sponsorship) out of the system it will make a major impact on some of these sports,” the 1984 Olympic silver medallist said at the Oireachtas committee.
And Irish Sports Council chairman Kieran Mulvey agreed, asking: “If we withdraw (drinks) sponsorship in that kind of one fell swoop then is the State going to put the replacement money into the IRFU and FAI and other sporting organisations?
“The answer is it’s not.”
Hogan: Government won’t be dictated to by advertisers in booze sponsorship ban
Source: Irish Independent
19 June 2013
Environment Minister Phil Hogan says the Government will not be “threatened” by any company into watering down their ban on alcohol sponsorship of sports events.
The minister’s comments follow opposition from the manufacturers of Guinness to the proposed ban on alcohol sponsorship.
Drinks giant Diageo has denied a ban on drinks sponsorship could ultimately lead to a reduction in its operations here, despite a warning from its Irish chief at the weekend. Diageo, which owns Guinness and controls 40pc of the market, told a Sunday newspaper that a clampdown on sponsorship might force the company to reduce spending in future.
Mr Hogan said the issue of alcohol sponsorship is being discussed within the Government.
“I don’t think the Government will be threatened by individual company,” he said.
The minister said Diageo was already consolidating its business in the country.
Health Minister Dr James Reilly said he stands firmly by his belief the Government should separate sponsorship from alcohol.
MillerCoors to drop “non-core” economy labels, glass bottles (Excerpt)
By Andy Morton
19 June 2013
MillerCoors is to shake-up its low-margin beer category as it plans to dump its non-core brands and heavy glass packaging.
The Molson Coors and SABMiller US JV did not specify which labels will go, but said the move will allow it to focus on other economy brands such as Keystone Light and Milwaukee’s Best Light. The company will also expand the Coors Miller High Life and Hamm’s brands, it said during an investors day call yesterday (18 June).
“Our mantra is simplify and amplify,” said MillerCoors’ president & CEO, Tom Long. “This is a great opportunity for us to reduce costs and inefficiencies in our network, and one way of doing that is by eliminating the non-core SKUs.”
United Spirits: Volume growth under pressure
By Ranjit Shinde
20 Jun, 2013
United Spirits, the nation’s largest spirits maker, has been on investors’ radar for some time now. The stock has gained over 30% in the past three months due to expectations of strong synergies after its deal with the UK-based Diageo.
While Diageo’s acquisition of a controlling stake in United SpiritsBSE -0.85 % last November is likely to benefit the company in the long run, the operating woes in the near term will impact its financial performance.
Its March quarter results continued to show pressure on volumes due to a lower offtake in Tamil Nadu. This, together with volatile prices of extra-neutral alcohol, will limit the extent of revenue growth and improvement in profitability.
United Spirits’ volume growth has slowed since the December 2011 quarter following a shift in the policy of spirits distribution in the southern state of Tamil Nadu.
The state’s contribution was estimated to be over 5% to total sales volumes before the change in the policy.
After the new policy was implemented, the growth in volumes fell to less than 5% from above 10% earlier. During FY13, volumes grew by 3%. The company has lost 13% market share in Tamil Nadu so far with a 15% drop in volumes in FY13 over and above the 22% fall in the previous year.
The management does not expect any major changes in the scenario in the near term. This means the overall volume growth may be under pressure even if the company improves volumes of its strategic brands.
On the positive side, the company is on course to gradually improve profitability.
Even though the FY13 operating margin fell 50 basis points to 11.2%, margin for the fourth quarter expanded by 90 basis points to 10.3%.
Besides, interest outgo reduced to Rs 157 crore during the March quarter compared with Rs 163.6 crore a year ago.
The volatility in the price of extra-neutral alcohol, a major input, will be crucial for the operating profitability of the company in the coming quarters apart from the growth in sales volumes.
The company reported net loss for FY13 due to higher foreign exchange loss. Hence, the price-to-earnings ratio will not be meaningful to evaluate the stock. It has increased substantially in the past three months on likely synergies from the Diageo deal.
But, investors need to wait to see signs of major improvement in the company’s performance before making fresh investments.
Hermès challenges LVMH’s ‘illicit’ stakebuilding (Excerpt)
By Scheherazade Daneshkhu in Paris
Hermès International, the Paris-based luxury goods group, has stepped up the pressure on LVMH, its unwelcome shareholder, by filing a legal compliant aimed at nullifying the derivative contracts that allowed its larger rival suddenly to take a 12 per cent stake.
The maker of silk scarves and Birkin bags has gone on the legal offensive since last autumn, arguing that LVMH’s stakebuilding was “illicit”.
Hermès said on Wednesday that it had lodged a complaint with the Paris commercial tribunal, “with the aim of nullifying the equity swaps used by LVMH to acquire 12 per cent of Hermès’ capital. Hermès has always considered these swaps as having an illicit reason and as an instrument for fraudulent behaviour.”
FDA grants E. & J. Gallo Winery’s request to use color additive in distilled spirits
Wednesday June 19 2013
E. & J. Gallo Winery, a Modesto, Calif.-based winery, has received the green light from FDA to use mica-based pearlescent pigments in distilled spirits. The ruling goes into effect on July 15.
In March 2012, FDA announced in the Federal Register that Gallo was seeking permission to use mica-based pearlescent pigments prepared from titanium dioxide and mica in distilled spirits containing between 18-23% distilled alcohol by volume but not including distilled spirits containing more than 5% wine on a proof gallon basis.
Eighteen Beverage Licensees Honored at ABL Conference
June 19, 2013
On June 10, 2013, American Beverage Licensees (ABL) presented the 2013 Brown-Forman Retailer of the Year Awards in Washington, DC. Eighteen beverage licensees were recognized for their hard work, success and commitment to the retail beverage alcohol industry by ABL President Chuck Ferrar and ABL Conference Chairman David Jabour. This is the eleventh year Brown-Forman, a leading distilled spirits company, has sponsored the awards.
“Those we are honoring have been leaders in advocacy, business practices, or their state associations,” said Jabour upon presenting the awards. “They are the shining stars of independent retailers, upholding tenets of responsible service and sales, and community engagement.” The 2013 winners include:
Wilbur’s Total Beverage, Fort Collins, CO
Doc’s Eastside Discount Wine & Liquor, Laurel, MD
Boluldercrest Package Store, Atlanta, GA
The Office Lounge & Liquor Store, Livingston, MT
Crehan’s Irish Pub, Belleville, IL
Joe Canal’s, Bellmawr, NJ
Grand & Western Liquors, Chicago, IL
Newkirk Station Liquors & Wines, Brooklyn, NY
Bedrock Liquors, Lafayette, IN
The Vineyards Wine & Spirits, Middletown, NY
Liquor Barn, Lexington, KY
Bottles Beverage Superstore, Mt. Pleasant, SC
B.K. Miller Meats & Liquors, Clinton, MD
Kings Liquor, Fort Worth, TX
Frank’s Den, Glen Burnie, MD
The Village Supper Club, Delavan, WI
Debucas Wine & Liquors, Raynham, MA
Four Winds Liquor & Lounge, Cheyenne, WY
“It is always inspiring to honor successful, compelling entrepreneurs and their businesses,” said John D. Bodnovich, ABL’s Executive Director. “It is important to recognize independent retailers and what they stand for. They represent the face of the beverage alcohol industry to their customers, and we are proud to work with Brown-Forman to praise them and their achievements each year.”
The Brown-Forman Retailer of the Year Awards have been presented annually to beverage licensees selected by ABL’s state affiliates. These beverage retailers, the last to handle licensed products before they reach consumers, work tirelessly to make the American beverage alcohol marketplace the most diverse in the world, offering tens of thousands of products to their customers. They also provide unique and memorable settings for nearly every social occasion imaginable.
Beverage retailers are also important members of their communities, supporting 1.4 million well-paying jobs and actively engaging in their communities by supporting local charities, participating in local government, and reaffirming their commitment to the safe and responsible sale of beverage alcohol.
ABL Applauds Introduction of Estate Tax Repeal Legislation
Bill with bipartisan support would protect family-owned businesses
America’s beer, wine and spirits retailers, many of whom are multi-generational family businesses, applauded the re-introduction today of the Death Tax Repeal Act of 2013 (S. 1183, H.R. 2429). The legislation, introduced in the House and Senate, would fully repeal the federal estate tax or, as it is commonly known, the death tax, a goal that ABL and its members have long supported.
With a host of bipartisan cosponsors, Senator John Thune (R-S.D.) and Representative Kevin Brady (R-Texas) introduced their bill to put an end to a punitive tax on family businesses that arrives with the death of an owner. The bill is almost identical to legislation introduced in the 112th Congress that garnered the bipartisan support of 223 Representatives and 38 Senators.
“ABL will continue to actively engage with members of Congress on the estate tax, working toward the association’s long-stated goal of permanent repeal,” said ABL Executive Director John Bodnovich. “We took a step forward last year to stave off devastating automatic estate tax increases, and we are now ready to take the next step to protect family-owned American businesses.”
Last year, ABL supported the provisions in the American Taxpayer Relief Act of 2012, including a $5 million estate tax exemption, indexed for inflation, permanent lower tax rates and provisions for spousal transfer and stepped-up basis.
Following the introduction of today’s legislation, ABL sent letters of support to both Representative Brady and Senator Thune, noting that their efforts “will help multigenerational bars, taverns and package liquor stores keep their identities as truly local small businesses, and help them grow to meet their customers’ needs.”
As a member of the Family Business Estate Tax Coalition (FEBTC), ABL also cosigned letters to each of the sponsors, thanking them for their leadership on this issue.
For more information about repealing the federal estate tax, visit www.estatetaxrelief.org.
New Organization Gives Voice to Interests of Wine Consumers
Newly launched American Wine Consumer Coalition (AWCC) arises from the frustration of consumers and their Interests being ignored by lawmakers and alcohol industry
Source: PR Web
Lawmakers, the alcohol trade and the media are not accustomed to hearing from the consumer when issues of access to wine are discussed and that needs to change.
Given the lack of representation of wine consumers, it should be no surprise that when states revise their laws concerning access to wine, beer and spirits, consumers are left out of the conversation. Meanwhile, new laws and regulations represent the interests of the alcohol beverage trade, not the consumers. Today, with the founding of the American Wine Consumer Coalition (AWCC), wine consumers are given a voice.
The AWCC website is located at: http://www.wineconsumers.org
The American Wine Consumer Coalition is a non-profit 501c4 organization dedicated to representing the interests of the nation’s wine consumers in state houses, on the federal level, and with state alcohol regulatory commissions-all institutions where consumers have never before had representation nor a voice in deliberations concerning consumer access to wine. Additionally, the AWCC provides its members with a variety of benefits to aid them in their wine appreciation and education, from discounts on wine education, wine journals and wine accessories to access to wine events across the country.
“In 2011 Congress held hearings on a bill (HR 1161) that, if passed, would have fundamentally and negatively impacted consumer access to wine, yet not a single consumer was invited to testify before Congress,” notes AWCC President David White. “While this was not the first nor the last time those most impacted by these kinds of deliberations were shut out of the conversation, this is when it became clear to a number of wine consumers across the country that their voice is ignored, and that something needed to change.”
Today, numerous states block consumer access to wine and the ability of consumers to enjoy a simple bottle as a result of a variety of archaic and protectionist laws that serve special interests, but not the basic interests of wine consumers:
11 states still ban their residents from having wine shipped to them from out of state wineries.
36 States still ban their residents from having wine shipped to them from out of state retailers
17 States still ban its residents from buying wine in grocery stores
4 states ban the purchase of wine on Sundays
2 States control the sale of wine, rather than allowing its residents to buy their wine in a free and open marketplace
15 states ban their residents from bringing a bottle from home into a restaurant.
Among the issues that are high on the AWCC’s agenda are legal consumer access to wine via direct shipment, grocery store wine sales and privatization efforts that take the government out of the business of selling wine and putting it into the hands of the much more responsive free market.
“Lawmakers, the alcohol trade and the media are not accustomed to hearing from the consumer when issues of access to wine are discussed,” said White. “That needs to change. It’s simply irresponsible and unfair to continue down the road of ignoring wine consumer interests and looking out only for those members of the industry who have long gamed the system in their favor.”
Wine Consumers across the country can learn more about the American Wine Consumer Coalition at its website: http://www.wineconsumers.org. An annual membership brings with it the knowledge that a real voice for wine consumers is being supported as well as a number of benefits that will aide wine lovers in their wine appreciation. Annual consumer membership is $35.00.
Chateau Ste. Michelle’s 2012 Riesling a record 1.2 million cases (Excerpt)
Source: Great Northwest Wine
By Andy Perdue
June 18, 2013
Already the world’s largest producer of Riesling, Chateau Ste. Michelle stepped up its game in 2012 to craft more Riesling than ever.
In fact, Washington’s oldest winery made a cool 1.2 million cases of Riesling from last fall’s record harvest.
“That’s a lot of Riesling,” said Bob Bertheau, Chateau Ste. Michelle’s head winemaker.
Here’s how Chateau Ste. Michelle’s Riesling breaks down in 2012:
Riesling, Columbia Valley: 898,000 cases
Harvest Select Riesling, Columbia Valley: 210,000 cases
Dry Riesling, Columbia Valley: 80,000 cases
Eroica Riesling, Columbia Valley: 31,000
Cold Creek Riesling, Columbia Valley, 4,600 cases
That’s 1,223,600 cases of Riesling. And this does not include 70,000 cases just released under the nationally distributed Anew Riesling or anything from Snoqualmie Vineyards or Columbia Crest, which last year combined for another 100,000-plus cases of wine.
New investor group acquires Rotta Winery in California
20 June 2013
A new investor group comprising wine entrepreneur Jason Shorrock, the founding Giubbini family, and a private investor have acquired Rotta Winery of California for an undisclosed amount.
The purchase includes 35-acre estate winery and vineyards, the tasting room and the business, and the winery will now be operated as Rotta Winery LLC.
Located in Templeton, California, Rotta Winery is known as one of the major direct-to-consumer focused wineries in the Paso Robles area.
Established in 1908, the winery produces ultra-premium wines from grapes grown on its 20-acre vineyards containing Cabernet Sauvignon, Cabernet Franc and Zinfandel, and grapes purchased from local growers.
Shorrock, who will serve as managing partner of the new business, said Rotta’s distinction as the oldest, continuously operating winery in the Paso Robles, its prime west side location and its heritage attracted them to this opportunity.
“Rotta’s reputation for premium quality wines coupled with a history rooted in family traditions offer the authenticity that wine consumers are increasingly looking for in a wine brand,” Shorrock added.
“Our focus will be to tell the many stories that have not been told yet, with the goal to make Rotta one of the true thoroughbreds of the AVA.”
Rotta Winery owner and winemaker Mike Giubbini, who will work with Shorrock, said the wine business today requires marketing and financial resources that, as a small winery, Rotta was no longer able to afford on its own.
“I believe that Jason Shorrock is the right person to take Rotta to the next level. After building his career at the LVMH Group (Moet Hennessy Louis Vuitton) and discovering the potential of Paso Robles during his stint as General Manager at JUSTIN Vineyards & Winery, Jason has the credentials to successfully lead Rotta into its next era,” he added.
Henberger served as exclusive advisor to the Giubbini family in the transaction.
Burger Chain Johnny Rockets Sold To Sun Capital Unit
Source: Law 360
By Jeff Sistrunk
A Sun Capital Partners Inc. affiliate has purchased 1950s-themed burger chain Johnny Rockets Group Inc. for an undisclosed amount, the private equity firm said Wednesday.
Florida-based Sun Capital said it reached a deal this month to buy the 300-location chain from Virginia-based Red Zone Capital Management LLC, the private equity firm co-founded by billionaire Washington Redskins owner Daniel Snyder.
Terms of the deal were not disclosed.
Johnny Rockets spokeswoman Cozette Koerber said investment bank North Point Advisors first met with Red Zone and Johnny Rockets in October and initiated a sales process shortly thereafter.
“We had a lot of interest, and lot of presentations, and we’re thrilled by the deal with Sun Capital,” Koerber said.
Kenneth Alberstadt of Akerman Senterfitt LLP, who served as lead attorney for Red Zone, said his firm was equally excited about the successful transaction.
“We were thrilled to be part of Red Zone’s success with Johnny Rockets and to complete another significant transaction in the restaurant space, where Akerman remains intensely focused,” Alberstadt said.
Johnny Rockets, which is headquartered in Aliso Viejo, Calif., has 300 corporate and franchise-owned restaurants in 30 states and 16 countries. The chain generates annual revenues of more than $300 million.
Koerber said Sun Capital had expressed an interest in continuing Johnny Rockets’ trend of domestic and international expansion.
“They look at us as a growing company, and they’ve encouraged us to continue that pattern of growth,” Koerber said.
Red Zone bought Johnny Rockets in February 2007. The acquisition came on the heels of other high-profile endeavors undertaken by Snyder, including the July 2006 launch of three sports radio stations in Washington and an ill-fated 2005 investment in amusement park company Six Flags Entertainment Corp.
Sun Capital, a privately held investment firm focused on leveraged buyouts, equity, debt and other investments, is no stranger to the food service industry. Other restaurant chains in the firm’s portfolio include Captain D’s, Fazoli’s, Boston Market and Friendly’s.
Red Zone is represented by Akerman Senterfitt LLP. North Point Advisors served as financial adviser to Red Zone and Johnny Rockets.
Counsel information for Sun Capital was not immediately available.
Nebraska: A Dry Reservation Clashes With Its Liquor Store Neighbors
June 19, 2013
At the Pine Ridge Reservation just outside the town of Whiteclay, Neb., an upside-down American flag flies on a wooden pole next to a teepee. About 60 people gathered here Monday to protest as beer truck drivers unloaded cases into a Whiteclay liquor store a few hundred yards away.
Whiteclay has one paved street and four liquor stores. Alcohol is banned on Pine Ridge, but alcoholism is rampant here and the unemployment rate hovers around 80 percent. The town sells the equivalent of about 5 million cans of beer annually – mostly to impoverished tribal residents. Homeless Native Americans who drink and sleep in Whiteclay can outnumber town residents.
The protesters want to block further alcohol deliveries, and are using blockades and marches like this to try to curb beer sales.
A Protest Escalates
Oglala Sioux Tribal President Bryan Brewer is among the protesters. “As leaders we should be ahead of the people,” he says. “We need to support our activists who are stepping up and confronting this issue.”
Beer delivery truck drivers wait in Whiteclay on Monday as protesters block their way. Liquor stores in the town sell millions of cans of beer annually to residents of the reservation.
Sheridan County Sheriff Terry Robbins confronts the blockade, and Brewer steps up. He says the beer trucks “are not going in today. … Any other day, but not today.”
“Yes, they are,” the sheriff replies.
“I’m sorry, but they’re not,” Brewer says. “Don’t argue with me.”
Brewer is ultimately arrested. As the crowd resists, an officer puts a stun gun to a protester’s neck, and the conflict quickly escalates into shouting and shoving.
Brewer remains calm and tries to pacify those around him. He is charged not for blocking traffic, but for an outstanding warrant on a bad check. Jamian Simmons, the county prosecutor, says the charges were dropped once Brewer made good on the check.
While Monday’s conflict passed without major violence, Simmons says that wasn’t the case during a similar blockade last month.
“[The protesters] used axes and sledgehammers to smash up the [delivery] trucks,” she says. “There were threats made to the drivers that if they came back to Whiteclay, they would be killed. Individuals were flashing knives.”
Protesters argue that attacking delivery trucks is not an act of violence. They also accuse a liquor store owner of arming local thugs with baseball bats to intimidate them. Store owners and beer distributors refused to comment for this story.
Protests against alcohol deliveries are a recurring event in Whiteclay. Authorities have accused the protesters of vandalizing beer trucks, while activists say a liquor store owner has hired people to intimidate them.
Putting Prohibition To A Vote
As the protest on the Whiteclay-Pine Ridge border continues, the tribal council approved a permanent checkpoint at the border to try to stem the flow of liquor onto the reservation.
But the council is also putting prohibition itself up for a referendum. Council member Robin Tapio backs efforts to legalize alcohol here. “Alcohol is a choice that we make,” she says. “So I did not support the [protest] up there because I just don’t feel it’s right.”
Protest leaders like Olowan Martinez harshly criticize council members who want to allow alcohol on the reservation. “They’re cannibals because they want to profit,” she says. “They want to gain something off of the misery of their own. To me that’s a form of cannibalism.”
Strong words that underscore the strong feeling here. Following council president Brewer’s arrest, Martinez and others maintained the blockade and the beer trucks eventually turned away.
Protesters may have won the battle this week – but the beer trucks are likely to roll into Whiteclay again, and this conflict shows few signs of ending soon.
Washington: Men charged with stealing $16,000 of liquor since privatization
Source: Komo News
By Michael Harthorne
Jun 19, 2013
According to the King County Prosecutor’s Office, four young men wasted no time taking advantage of privatized liquor sales, stealing nearly $16,000 worth of hard alcohol starting the day after it became available in grocery stores.
The Prosecutor’s Office has charged 21-year-old Charles Askew of Tacoma, 21-year-old Devonte Jack of Kent, 20-year-old Darren Dean of Renton and 22-year-old Blake Kirvin of Seattle with conspiracy to commit organized retail theft in connection with at least 16 cases of shoplifted liquor.
According to probable cause documents, a loss prevention manager at Albertsons has been collecting cases involving the four men, along with a fifth named Dirkston Gonzales, that occurred throughout King, Pierce and Snohomish counties since June 2012.
The first theft for $300 was reported June 2, 2012 at a Top Foods in Federal Way, only one day after private liquor sales started.
According to probable cause documents, Askew, Jack, Gonzales and Dean were arrested following their second theft of $1,010.66 worth of liquor from the same Top Foods June 3, 2012. Officers reportedly found 16 bottles of stolen liquor and two stolen guns in the Tahoe being driven by the men.
Surveillance footage showed all four men seemingly nonchalant about the theft and not caring if they got caught, according to the documents. And, Gonzalez reportedly admitted to stealing the liquor.
Only a month later, the men were back at it, stealing $454.89 worth of liquor from an Albertsons in Tacoma, according to the probable cause documents.
Eleven thefts followed over the next two-and-a-half months, with the men reportedly hitting Albertsons, Safeways and QFCs in Redmond, Maple Valley, Sammamish, Mercer Island, Woodinville, Duvall and Mountlake Terrace.
According to probable cause documents, the men would steal dozens of bottles of liquor at a time. The largest reported theft was worth $3,764.
On Sept. 22, 2012, officers stopped Kirvin, Jack and Gonzales on their way out of a Mill Creek Safeway. Kirvin and Jack had liquor bottles concealed on them and Gonzales had dropped a basket of unpaid-for alcohol near the store’s door, according to probable cause documents.
The three men were arrested, and the Tahoe was again searched, reportedly revealing 74 bottles of liquor.
A final theft of $420.19 worth of liquor was reported at an Issaquah Safeway Oct. 19, 2012 involving Gonzales and two unidentified men.
All four men being charged with the liquor thefts have prior convictions.
Askew was previously convicted for criminal attempt and theft.
Jack has eight prior convictions for theft, vehicle prowl and obstructing a police officer.
Dean has prior convictions for carrying a concealed pistol, malicious mischief, criminal trespass and theft and has had five warrants issued for his arrest since 2012.
Kirvin has prior convictions for firearm possession, controlled substance violation and resisting arrest. He has had three warrants issued for his arrest since 2009.
The four men are scheduled to appear in court June 27.
Gonzales is already being charged for other crimes in Kitsap County. His alleged involvement in these liquor thefts was being rolled into that case.
China: Thanks to a new trade deal, China could up its tequila intake by 2400% in five years
By Roberto A. Ferdman
June 19, 2013
Chinese consumers love luxury products, but they drink crummy tequila. At least until now. Earlier this month, China’s President Xi Jinping and his Mexican counterpart Enrique Peña Nieto signed a bilateral trade agreement that will allow Mexican imports of 100% agave tequilas (Spanish link) into China for the first time since 2008.
China banned high-end tequilas in 2008 because of the relatively high methanol levels found in tequila made with 100% agave (methanol is a small byproduct of the agave distillation process). It was part of a bigger legislative move to address the rising incidence of methanol poisonings in the country, many of which had been caused by the consumption of fake alcohols, often made with toxic amounts of methanol. The country has, however, continued to let in lower-end tequilas, or tequila mixtos, which only contain 51% agave, and therefore less methanol.
The influx of high-end tequilas into China could be a big win for the Mexican tequila industry, which has failed to penetrate the Chinese market partly because its consumers aren’t aware of the product. At the moment, China imports less tequila than any other major spirit. “Most people don’t even know what tequila is, and that’s a big problem,” Patricio de la Fuente Saez, managing director of Hong Kong-based wine importer Links Concept, told Quartz. Chinese consumers tend to go for luxury goods that boast global prestige, director of corporate communications at Patron Greg Cohen told Quartz. They appreciate “quality” and “sophistication,” he says.
With a little consumer education, Chinese drinkers could become prime targets for the beverage. According to Patron’s Cohen, Chinese tourists are already plucking high-end tequila from duty free shelves abroad. “Our duty free partners have told us that Chinese tourists are a huge part of our consumers.” Chinese drinkers are also fans of hard liquor, which makes up 60% of the country’s alcohol consumption. Ninety-five percent of that hard alcohol intake is baijiu, a locally distilled white spirit that, like tequila, is consumed in a shot.
Despite the long-held ban on high-end tequilas, low-end tequila exports to China have grown more than four-fold since 2008. And there’s more room to grow. The country still only imports a modest 400,000 liters of tequila a year, but the president of Mexico’s national tequila industry chamber Francisco Soltero believes they will grow to 10 million liters in five years, assuming China’s wealthy latch on to 100% agave.
In that scenario, China would go from being the world’s 23rd largest tequila importer to its second largest in five years. And tequila would supplant whisky and cognac (brandy) as China’s hard alcohol of choice.
Even then, China would rank far below the world’s biggest tequila guzzler: the US. Americans bought $625 million in Mexican tequila last year, nearly 400 times as much as China. Even quintupling China’s tequila imports would only amount to a fraction of all those American tequila shots.
Smoking: Plain packaging war smoulders
By Rose Jacobs
When James Reilly, the Irish health minister, announced in May that he would introduce legislation next year requiring that cigarettes be sold in packets bearing no more decoration than a brand name and a health warning, stocks in tobacco companies stumbled. This was despite the fact that Irish smokers contribute just a tiny fraction to the industry’s revenues.
Yet supporters of such a law say this was the rational market recognising what antismoking groups have been arguing for years – well before 2012, when Australia introduced the world’s first plain-packaging law – that standardised packets would significantly reduce the number of people who take up smoking, continuing a drive that television and radio advertising bans started several decades back, and which public health advocates say has saved millions of lives.
But the tobacco industry is adamant that the law will have little impact on the incidence of smoking – and might even increase tobacco use, since plain packaging is likely to reduce pricing power.
Moreover, the industry’s executives and lobbyists insist, plain packaging will make life easier for black-marketeers, providing oxygen to a seedy network of smugglers, robbing government coffers of duties and endangering smokers by allowing unregulated counterfeit products to seep into the market.
The world’s four biggest tobacco companies – British American Tobacco, Imperial Tobacco, Philip Morris and Japan Tobacco – challenged the Australian law domestically, and lost. Philip Morris is pursuing a separate case in Hong Kong, and Ukraine and Cuba are battling the legislation through the World Trade Organisation. But whereas some countries, such as New Zealand, are awaiting the outcome of the WTO challenges before following in Australia’s footsteps, and others, such as the UK, have indicated plain packaging is not a priority, Mr Reilly’s decision in Ireland shows that legal wrangling might not stem the tide of countries deciding to follow suit.
The appeal of standardised packets, says Mark Costigan, the Irish health minister’s spokesman, is that while smoking bans in bars, restaurants and workplaces have had quick and demonstrable success in reducing second-hand smoke exposure, plain packaging offers a chance to chip away at the stubbornly steady number of young people who continue to smoke.
There is not yet strong evidence from Australia that standardised packets reduce smoking, but Deborah Arnott at Ash, the UK antismoking group, argues it is early days yet. “Fifteen- and 16-year-olds have had 14 years of seeing cigarette packs. The impact will grow over time.” Moreover, evidence linking advertising and smoking incidence is abundant. A 2008 report from Cochrane, a scientific review group, looked at nine studies measuring the relationship and found that “non-smoking adolescents who were more aware of or receptive to tobacco advertising were more likely to become smokers later”. And in the US, the number of Americans who smoke nearly halved in the three decades following a 1970 ban on cigarette advertisements on TV and radio advertising.
Of course, other measures also contributed to that decline, and governments facing the steep costs associated with nearly 6m smoking-related deaths a year – forecast to rise to 8m by 2030 – are considering all the levers. The European Parliament is weighing the adoption of an updated Tobacco Products Directive that would not impose plain packaging but instead increase the size of health warnings, ban flavoured tobacco and prohibit products with higher-than-average toxicity or addictiveness. Private insurers, meanwhile, have long offered monetary incentives for customers to give up smoking, in the form of lower rates.
Martin Deboo, a tobacco analyst at Investec Securities, argues that the best way to reduce smoking is to increase the price of tobacco products. But in countries such as the UK, that measure is reaching its upper limit.
That might leave public health authorities in developed countries scrambling for new ideas, and balancing health with civil liberties as they weigh bans on smoking at home, for example, or when children are in the car.
But the developing world, which is home to the majority of the world’s 1bn smokers, has more room for improvement. “Smoking rates will go up as incomes go up, and you’ve got this industry promoting its product very heavily … in the countries where incomes are rising rapidly,” says Ms Arnott. “That’s where the battle will be fought.”
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