Liquor Industry News 6-24-13

www.franklinliquors.com

Franklin Liquors

 

Monday June 24th 2013

LETS GO BRUINS!!!!!!

On Premise Beer and Spirits volumes improve in 2Q vs 1Q, Wine Slows on higher prices

 

Source: GuestMetrics

Jun 23rd

 

According to GuestMetrics, food & beverage sales at table service restaurants and bars through mid-June 2013 lost some of the improvement seen towards the beginning of 2Q13.  While total F&B sales were up +1.3% in 1Q13 and improved slightly to +1.6% during 2Q13 to-date, when looking specifically at the most recent 4 weeks ending June 16th , sales were softer at +0.6%.

 

“While there were signs of improvement in food & beverage sales during April and the first half of May after a weak 1Q13, the full service restaurant and bar channels appear to have decelerated during the 4-week period through June 16th,” said Bill Pecoriello, CEO of GuestMetrics LLC. “On-premise alcohol volumes were in negative year-over-year territory during 1Q13 at -2.3%, then improved slightly during 2Q13 to-date to -1.1%, but looking specifically at the most recent 4-week period ending June 16th, they softened further into negative territory at -1.4%.  It will be important to monitor in the coming weeks and months whether this is just a temporary pause in the recovery perhaps due to either weather or a temporary slowdown in consumer discretionary spending, or an early sign of a negative inflection point as we head further into the important summer season.”

 

According to GuestMetrics, alcohol dollar sales were up +1.1% during 1Q13, accelerated to +2.6% for 2Q13 to-date, but looking specifically at the most recent 4 weeks, softened to +2.2%.  Price/mix in overall alcohol has remained fairly consistent at +3.5% in 1Q13, +3.7% in 2Q13 to-date, and +3.6%, though the various alcohol categories have taken differing degrees of pricing during those periods.

 

“Looking at the alcohol categories, on-premise beer volumes were -4.3% during 1Q13, but improved to -2.1% during 2Q13 to-date, and remained consistent with that pace at -2.0% in the past 4 weeks,” said Peter Reidhead, VP of Strategy and Insights at GuestMetrics. “Spirits saw a difficult 1Q13 with volumes at -1.7%, improved to -0.8% during 2Q13 to-date, and in the most recent 4 weeks remained consistent with that pace at -1.0%.

 

Looking at wine, however, we see a different story.  Wine started out the year on a positive note with volumes up +2.2%, decelerated to +1.5% during 2Q13 to-date, and when looking specifically at the most recent 4 weeks, fell into negative y/y territory at -0.8%.  The deceleration for wine volumes was seen across all three on-premise segments, and is potentially linked to an increase in in price/mix with the category moving up from +1.1% in 1Q13 to +2.2% in 2Q13 to-date, with a particularly meaningful uptick of +3.8% during the most recent 4-week period.”  Based on data from GuestMetrics, price/mix for beer increased from +3.4% in 1Q13 to +3.9% during 2Q13 to-date, and was at +4.0% during the most recent 4 weeks.  For Spirits, price/mix increased from +2.9% in 1Q13 to +3.3% in 2Q13 to-date, and was at +3.0% during the most recent 4 weeks.

 

“When looking at the various segments within on-premise, all three decelerated in the latest 4 weeks ending June 16th.  The most dramatic deceleration was among bars/clubs, where sales decelerated from +0.2% in 1Q13 to -1.4% in 2Q13 to-date, but looking at the most recent 4 weeks, sales were down -3.2%.  While casual dining sales had shown signs of improving going from -2.0% in 1Q13 to +0.1% in 2Q13 to-date, sales were -1.2% during the most recent 4 weeks.  Fine dining sales have remained in positive y/y territory, but are also showing signs of some slowdown recently, decelerating from +5.1% in 1Q13 to +4.0% in 2Q13 to-date, with the most recent 4 weeks at +3.6%.  Much of the deceleration in on-premise was driven by the food category, which accounts for about 65% of total sales in the on-premise sector,” said Brian Barrett, President of GuestMetrics.

 

“While food sales were up +1.5% during 1Q13 and have held generally steady at +1.4% during 2Q13 to-date, looking specifically at the most recent 4 weeks, food sales growth decelerated to just +0.1%.”

 

 

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Darden: Major brands see 4Q sales turnaround

 

Source: NRN

Erin Dostal

Jun. 21, 2013

 

Same-store sales increased at the company’s Olive Garden, Red Lobster and LongHorn Steakhouse brands at the end of a difficult year.

 

Darden Restaurants Inc. reported same-store sales increases across all of its major brands during the fourth quarter of 2013 – a bright spot in an otherwise gloomy year for the Orlando, Fla.-based company.

 

“I think many of you know that we moved with added urgency to address the same-restaurant traffic erosion we’ve been experiencing since the recession started,” said chief executive Clarence Otis during an earnings call with analysts. “But in the fourth quarter of fiscal 2013, our same-restaurant traffic decline exceeded the industry’s.”

 

The company’s fiscal 2013 fourth quarter and full year ended May 26.

 

During fiscal 2013, Darden shifted its focus toward value-conscious consumers at its three largest brands: Olive Garden, LongHorn Steakhouse and Red Lobster, Otis said. But that shift toward affordability wasn’t without its challenges.

 

“As we look back, we also know that many of our promotional core menu affordability efforts involve more margin pressure than initially anticipated,” he said.

 

The last year had its host of challenges with staffing, too, Otis said, including adding new leadership roles that required “new skill sets and professional experience.”

 

“Now as we look back, the cost of the leadership changes we made was much higher than we expected,” he said. “And the most significant but difficult-to-measure cost was that associated with reduced executional effectiveness.”

 

Darden’s net income during the fourth quarter was $133.2 million, or $1.01 earnings per share, a decrease from $151.2 million, or $1.15 per share the prior year. Revenue for the quarter was nearly 2.3 billion, an increase from just shy of $2.1 billion the prior year quarter.

 

Net income for the full year was $411.9 million, or $3.13 per share, falling from $475.5 million, or $3.57 per share, the previous year. Revenue for the full year was slightly more than $8.5 billion, rising from nearly $8 billion in fiscal 2012.

 

This year, Darden’s reported net income included costs and adjustments related to the Aug. 29 acquisition of Yard House, the company said in a statement. The acquisition reduced net earnings per share for the quarter by one cent, Darden said, and net earnings by $1.9 million.

 

Same-store sales swing positive

 

Olive Garden, Darden’s largest brand, reported total sales of $952 million and a same-store sales increase of 1.1 percent during the quarter. For the full year, the brand reported total sales of $3.68 billion, and a same-store sales decrease of 1.1 percent.

 

At Red Lobster, U.S. same-store sales rose 3.2 percent during the fourth quarter, with sales totaling $703 million. For the full year, the brand reported a same-store sales decrease of 2.2 percent at U.S. locations. Red Lobster reported total sales of $2.62 billion for the full year.

 

LongHorn Steakhouse reported a same-store sales increase of 3.5 percent during the fourth quarter at U.S. locations, reporting total sales of $339 million for the period. Annually, the steakhouse chain reported total sales of $1.23 billion – a 10.3-percent year-over-year increase – and a same-store sales increase of 1.2 percent.

 

Next year, Darden will continue to differentiate LongHorn from other steakhouse competitors by adding more fine-dining elements like seasonal appetizers and add-ons, said Andrew Madsen, chief operating officer and president at Darden.

 

“We plan.to elevate culinary innovation with approachable new dishes inspired by fine-dining and polished-casual restaurants,” he said.

 

At Darden’s specialty restaurant group, which performed strongly throughout 2013, same-store sales rose 4.5 percent for the fourth quarter. The group reported $295 million in revenue for the quarter and $986 million in revenue for the year.

 

The specialty restaurant group is composed of Seasons 52, Yard House, Eddie V’s, The Capital Grille and Bahama Breeze.

 

In 2014, boosting in-restaurant traffic will be the priority for Darden, even if that means taking a hit on margins, Otis said.

 

“We believe that same-restaurant traffic growth is critical,” Otis said. “That, ultimately, is the best measure of brand health.to the extent that that puts pressure on restaurant-level margins, that’s pressure we’re willing to accept.”

 

In 2014, same-store sales should be flat to an increase of 2 percent at LongHorn Steakhouse, Olive Garden and Red Lobster, said Brad Richmond, Darden’s chief financial officer. Same-restaurant traffic at the three brands should be flat to a 1-percent increase for the year, he said.

 

Total sales growth for 2014 is expected to be between 6 percent and 8 percent, he said.

 

Stephen Anderson, senior analyst, restaurants, at Miller Tabak + Co. wrote in a report that although Darden missed Wall Street’s expectations for earnings during the fourth quarter, top-line trends are encouraging.

 

“We acknowledge continued margin pressure as management adjusts to changes in menu mix and higher management compensation expenses, but argue investors should focus more on positive comps at nearly every concept last quarter, marking the first time this has happened in five quarters [and] sequential improvement at DRI’s largest concept, Olive Garden, in each month of the May quarter,” he wrote.

 

“DRI posted its best overall same-restaurant sales quarter since early 2012,” Anderson added.

 

Darden has more than 2,100 company-owned restaurants systemwide, including 828 Olive Garden locations, 430 LongHorn Steakhouses and 705 Red Lobster restaurants.

 

 

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Darden Restaurants, Inc. (DRI): Reducing EPS estimates to reflect increased margin investments

 

Source: Goldman Sachs

Jun 21st

 

What’s changed

We lower our FY2014-2016 EPS estimates to $2.99/$3.09/$3.19 from $3.09/$3.26/$3.40. Our revenue estimates are up slightly, but we expect increased margin investment to generate the top-line growth. We retain a Neutral rating on DRI shares as fundamentals remain challenged.

 

Implications

 

(1) Traffic growth returned to positive territory in 4QFY13; however, we believe this was driven more by easy compares than by true improvement in fundamentals. Going forward, Casual Dining industry trends are soft, DRI’s brands lack momentum and the competitive environment is tough.

 

(2) We now expect restaurant margins to decline by 70bps in 2014, which would represent the third consecutive year of declines. Operating profit dollars declined at both Olive Garden and Red Lobster this past quarter, despite a return to positive SSS, due to DRI’s ongoing investments to rebuild traffic. Looking forward, margins may remain under pressure given DRI has signaled that it plans to absorb incremental food inflation and increased health care costs rather than pass them on to the consumer.

 

(3) Calls on DRI’s FCF are tight and leave limited room for flexibility. With this latest dividend increase, DRI now has a 70%+ dividend payout ratio, which is crowding out other potentially accretive uses of cash. Further, its EBITDAR coverage ratio is outside of its target zone, and thus DRI believes it needs to de-lever. Ultimately, if the company fails to hit SSS and margin targets, it will likely need to lower capex further to meet its commitments.

 

Valuation

We lower our P/E and DCF-based price target by $3 to $49 to reflect our lower estimates. This equates to a 4.5% dividend yield.

 

Key risks

Upside risks include better Casual Dining trends or a turnaround in DRI’s brands. Downside risks include lower margins than we are assuming.

 

 

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Why Alcohol Labels Are More Important Now Than Ever

 

Source: Huff Post

06/21/2013

 

The first half of 2013 has seen a flurry of activity related to alcohol regulation. Heads first turned in February when controversial alcoholic beverage (and onetime energy drink) Four Loko was ordered by the Federal Trade Commission to put new labels on its packaging to provide vital serving-size information.

 

A few months later, in May, the National Transportation Safety Board (NTSB) made headlines when it recommended that states lower the blood alcohol limit for drivers from .08 percent to .05 percent — nearly a 40 percent reduction.

 

Most recently, the Alcohol and Tobacco Tax and Trade Bureau (TTB) decided in early June to allow voluntary nutrition labels on alcoholic beverages for the first time in modern U.S. history.

 

Perhaps the stars are finally aligning to require nutrition labeling on alcoholic beverages, the subject of hot debate for decades. Alcohol labeling and the blood alcohol limit have usually been separate conversations, but the issues are actually connected. The link: how much consumers want or need to know before they drink.

 

NTSB Chairman Deborah Hersman told The Huffington Post that she believes “there are a lot of people who will embrace more information and use it to make better choices.” Facts like serving size and alcohol content “are important things for people to take into consideration, and it will change some people’s behavior,” said Hersman, whose agency does not have an official stance on alcohol labeling. “I think some people will drink less.”

 

The Consumer Federation of America, which has been vocal in its campaign for more extensive labeling of alcoholic beverages, takes no official position on the NTSB’s recommendation. But its director, Chris Waldrop, told HuffPost that the move “further demonstrates the need for alcohol labeling.”

 

“If [the blood alcohol limit] changed, that would affect consumers when they’re going out and drinking and considering how many drinks they’re going to have and whether or not they’re going to drive home,” Waldrop said.

 

In the century since the passage of the 1906 Pure Food and Drug Act, several governmental agencies have had a say in the labeling of alcoholic beverages, including the Food and Drug Administration, the Federal Trade Commission, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the TTB. Understanding the history of alcohol labeling means sifting through a dizzying series of rulings and memorandums involving these agencies, which at various times held sway over the issue. Today, matters related to the production of alcoholic beverages are mainly the provenance of the TTB, which was established in 2003.

 

Alcoholic beverages currently have no nutrition labels because in 1993 the ATF rejected a petition to require the kind of labeling that the FDA mandates for food and other beverage products. There was not enough consumer interest, the ATF reasoned, or sufficiently convincing evidence that nutrition labeling would prove useful to consumers.

 

Two decades earlier, the ATF had decided against requiring full ingredient labeling for alcoholic beverages. It cited several reasons, including the cost of implementing the labels, the existing regulation of alcohol content and the difficulty that labels pose in international trade negotiations. The 1975 ruling also reasoned that such labels would be “of little value and, in certain cases, even misleading” to consumers and that “ingredient labeling is supported by only a small segment of the public.”

 

Alcohol content by volume has been allowed on beer labels only since 1995, when a Supreme Court case filed by Adolph Coors Co. overturned a 1935 law forbidding it.

 

But times are changing. In the midst of a national obesity epidemic, the public has become increasingly health conscious.

 

Still, the future of both alcohol nutrition labeling and the blood alcohol limit remains unclear. The TTB ruling isn’t the final word, and the agency will continue to mull proposed rules to make nutrition labeling mandatory. The NTSB’s recommendation is not binding, although it could go a long way in influencing policymakers.

 

But Waldrop is hopeful. “We kind of see it as a first step forward,” he said of the TTB decision. As for the blood alcohol recommendation, Hersman suggests “this is a debate that will continue.”

 

Although she said she hadn’t considered it before, Hersman agreed that the two issues may be intertwined. “Certainly, talking about this and getting information out will make people more aware,” she said.

 

 

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Why She Drinks: Women and Alcohol Abuse

 

Women’s growing predilection for wine has a darker side-and the only way to deal with it is to acknowledge the profound differences between how women and men abuse alcohol.

 

Source: WSJ

By GABRIELLE GLASER

Jun 21st

 

Author Gabrielle Glaser talks to WSJ’s Gary Rosen about the growing problem of alcohol abuse among upper middle-class women and why A.A. is not the solution for most of them. Photo: Getty Images.

 

A few summers ago, I stuffed my car full of the last flattened cardboard boxes from a cross-country move and headed to the recycling depot of my suburban New Jersey town. I pulled up behind a queue of slender women at the wheels of shiny SUVs. Their eyes concealed by giant sunglasses, they hopped from their seats to their open trunks and, one by one, reached for the bags that are the totems of upper-middle-class life: silver ones from Nordstrom, plain ones from Whole Foods. Out poured wine bottles, clanking into the rusted recycling truck.

 

In Portland, Ore., where I lived for six years, I would watch most Sunday nights as a neighbor deposited two giant Merlot bottles in my recycling bin. Her house was a block away, and she had her own bin-but apparently mine seemed like a more discreet place to stash her empties. In New York’s Westchester County, where I had lived previously, women would pass around a flask at dreary school functions. Alcohol and motherhood were intertwined, so much so that after I had my third daughter in the anxious autumn after 9/11, I received bottle after bottle of wine as baby gifts.

 

The growing female predilection for wine seems at first glance like a harmless indulgence for harried mothers who deserve a break. There are T-shirts with a spilled wineglass that say, “Not so loud, I had book club last night.” Nearly 650,000 women follow “Moms Who Need Wine” on Facebook, FB +2.64% and another 131,000 women are fans of the group called “OMG, I So Need a Glass of Wine or I’m Gonna Sell My Kids.” The drinking mom has become a cultural trope, from highbrow to pop: Jonathan Franzen’s Patty Berglund wanders through the first half of “Freedom” with a ruddy complexion he calls the “Chardonnay Splotch.” Wine is so linked to the women of “Real Housewives” that several cast members have introduced their own brands. That’s no accident: According to the Wine Institute, an industry trade group, women buy the lion’s share of the nearly 800 million gallons of wine sold in the U.S. annually-and they are its primary drinkers.

 

Indeed, more women are drinking now than at any time in recent history, according to health surveys. In the nine years between 1998 and 2007, the number of women arrested for drunken driving rose 30%, while male arrests dropped more than 7%. Between 1999 and 2008, the number of young women who showed up in emergency rooms for being dangerously intoxicated rose by 52%. The rate for young men, though higher, rose just 9%.

 

These numbers are not driven solely by young women living it up on spring break. A recent Centers for Disease Control and Prevention study of binge drinking-that is, having four or more drinks for women or five or more for men within two hours-revealed a surprising statistic. While the greatest number, 24%, of binge-drinking women are college-age, 10% of women between 45 and 64 said they binge drink-and so did 3% of women older than 65. The college-age binge drinkers and the senior binge drinkers overdid it with a similar frequency, about three times a month.

 

Gallup pollsters have repeatedly found that the more educated and well off a woman is, the more likely she is to imbibe. White women are more likely to drink than women of other racial backgrounds, but in the past few decades the percentage of women who classify themselves as regular drinkers has risen across the board. An analysis of the drinking habits of 85,000 Americans in 2002 found that 47% of white women reported being regular drinkers, up from 37% in 1992. The percentage of black women who said they drank regularly rose from 21% to 30%, and the percentage of Hispanic women who said the same grew from 24% to 32%. (American Indian and Asian-American women were not included in the study.)

 

In one sense, the rising rates of alcohol consumption by women are a sign of parity. But this is one arena in which equal treatment yields unequal outcomes. Women are more vulnerable than men to alcohol’s toxic effects. Their bodies have more fat, which retains alcohol, and less water, which dilutes it, so women drinking the same amount as men their size and weight become intoxicated more quickly. Males also have more of the enzyme alcohol dehydrogenase, which breaks down alcohol before it enters the bloodstream. This may be one reason why alcohol-related liver and brain damage appear more quickly in heavy-drinking women than men.

 

Still, modern women haven’t caught up to the drinking habits of America’s early settlers, whose only safe beverage was alcohol. Historians estimate that colonial men and women drank about a gallon of low-alcohol beer or hard cider a day. In a collection of 500 recipes that Martha Washington left to her granddaughter, 50 were for boozy drinks, plus a couple of hangover cures.

 

The growing sales of wine to women can be traced to some clever marketing decisions in the 1960s by California’s vintners. Wineries had all but perished during Prohibition, and the beverage was considered the drink of poor immigrants and Skid Row drunks. Americans, accustomed to more straightforward spirits and beer, were slow to warm to wine’s complexities.

 

Wine also felt off-limits to women. It was consumed mostly in restaurants, where waiters offered men the wine list, the first taste and the cork. Strategists saw a growth opportunity in the vast numbers of postwar housewives. “We used to joke that if we could just get a bottle of sherry into the kitchen, we’d be off and running,” says Harvey Posert, one of the industry’s early promoters.

 

Vineyards got an unexpected boost from Jacqueline Kennedy, who in 1962 led 56 million viewers on a televised tour of the White House. In the dining room, the camera panned to the elegantly laid table, lingering for a few seconds on the crystal glasses next to each place setting. Few could afford the first lady’s designer clothes, but the crystal, manufactured in West Virginia, was a small piece of Camelot glamour that women could own for themselves. It took the Morgantown Glass Co. factory years to fill all the orders.

 

Surveys have found that the more educated and well off a woman is, the more likely she is to imbibe.

 

Getting female buyers for the wine, though, was another challenge. In California, where laws allowed wine to be sold in supermarkets, Robert Mondavi’s marketers hired middle-age housewives to stand at in-store tasting booths. The saleswomen offered shoppers sips from bottles that would pair perfectly with what they had planned for dinner. The friendly older women helped turn the younger women into confident consumers.

 

Women’s magazines offered tips on how to order, serve and drink the stuff; McCall’s magazine, in 1977, featured wine as essential to an “Anti-Stress Diet.” Meanwhile, women in California were beginning to make wine, too, experimenting with tastes and textures that appealed to them.

 

Today, wine is certainly in American kitchens. It’s there for enjoyment, of course, but also as a respectable antidote to modern stress-especially for women.

 

Some social scientists link the rise in female alcohol consumption to the changing role of women in society. Rick Grucza, an epidemiologist at Washington University School of Medicine in St. Louis who studies alcohol-use disorders, correlates women’s drinking to the rise in female college attendance. Others suggest that many women continue unhealthy postcollege drinking patterns in male-dominated industries such as finance and technology. Still others find a link among women who step away from their careers to be at home. “The baby’s crying, they’re not getting paid, they’re bored and anxious-and feel guilty that they’re bored and anxious,” says Mary Ellen Barnes, a psychologist in Rolling Hills Estates, Calif., who treats many female heavy drinkers. Drinking several tall glasses of wine can make those feelings recede-at least for a few hours.

 

Does that amount to a drinking problem? Doctors around the world differ. The National Institutes of Alcohol Abuse and Alcoholism and the Department of Health and Human Services say that for American women, anything more than a drink a day is risky. In countries such as France, Italy and Spain, where life expectancy for women is longer, authorities set the safe threshold at double that-and sometimes higher.

 

Many of the women whom I interviewed said that the strict limits set by American law helped to drive their drinking underground. A few glasses slide into a whole bottle, which becomes an embarrassing habit that needs to be concealed.

 

As she approached her 50th birthday, Joanna, a Pennsylvania information-technology specialist, grew tired of hiding her 1.5-liter empties from her husband. Joanna (who asked that her name be changed to protect her privacy) began attending meetings of Alcoholics Anonymous at the suggestion of her psychiatrist. In the U.S., the 12-step abstinence- and faith-based program is embraced by the nation’s courts, much of the medical establishment, insurance companies and popular culture as a one-size-fits-all approach to harmful drinking.

 

A.A. was founded in 1935 by two men who believed that alcohol dependence could be tamed by regular attendance at group meetings with other recovering alcoholics. Its doctrine calls for members to tame their egos, abstain from all drinking and acknowledge they are in the grip of a force they can combat only with help from a “higher power.”

 

It doesn’t take an advanced degree in gender studies to realize that this approach-which has worked well for millions of people-may not be perfect for women whose biggest problem is not an excess of ego but a lack of it. Women are twice as likely to suffer from depression and anxiety as men-and are far more likely to medicate those conditions with alcohol.

 

Many women who drink heavily are also the victims of sexual abuse and have had eating disorders. The idea of being powerless can underscore a woman’s sense of vulnerability, researchers say. “Women need to feel powerful, not like victims of something beyond their control,” says Dr. Barnes. “It gives women power to feel they themselves can change.”

 

Scientists are continuing to explore the biochemical differences in the way that alcohol affects men and women. Studies show that after drinking, men report feeling more powerful, often overstating their capabilities and accomplishments, while women say that it makes them feel more affectionate, sexy and feminine.

 

In Europe, Hong Kong and elsewhere in the industrialized world, clinicians treat alcohol-use disorders with a variety of techniques developed in the nearly eight decades since the founding of A.A. (Researchers favor the term “alcohol-use disorder,” which encompasses a range of severity, over “alcoholism.”) Many combine different behavioral therapies with medications such as naltrexone and topiramate, which help block cravings. Both drugs have proved to be effective in helping patients abstain or moderate. Studies around the world have found that for those who are not severely alcohol-dependent, controlled drinking is possible. Advocates of the 12-step program reject these findings and continue to maintain that abstinence is the only remedy.

 

For Joanna, wine was a nightly antidote for her pressure-filled job. It also provided a respite from a decade of depression after her parents’ deaths.

 

Joanna tried some coed and women’s A.A. meetings, but she never felt comfortable exposing herself to strangers. Her concerns were not unfounded: A.A. members talk about the tendency of old-timers to take sexual advantage of fragile newcomers, an act known as the “Thirteenth Step.” Questioned about the sexual abuse of young women by one of its own trustees, the A.A. board’s Subcommittee on Vulnerable Members responded in 2009 that it could not do anything to oversee tens of thousands of meetings each day. The public-information officer at A.A.’s central office in New York had no comment.

 

A.A.’s membership surveys reveal that 12% of members are ordered to attend by the courts. Though most have been charged with drunken driving, some are sex offenders and other felons with violent backgrounds. In Hawaii in 2010, a veteran with a history of violence, ordered by authorities to attend meetings after a stay in a psychiatric hospital, killed a woman he met in A.A. and her 13-year-old daughter before shooting himself.

 

A.A. views the thousands of meetings that take place each day as the work of autonomous groups, responsible for supervising themselves. A group based on anonymity, board members argued, could not do anything to screen members without undercutting its basic principles.

 

Joanna searched for new options and found the website of Dr. Barnes and her practice partner Ed Wilson. The two offer five days of intensive personal counseling. The idea is to examine what triggers a woman’s drinking and to help her decide how she might design a healthier life. “Most of our female clients slip into harmful drinking in their 40s and 50s, masking the discomfort of fluctuating hormones, the adjustment to an empty nest, the death of parents and other role losses,” Dr. Wilson says.

 

For many such women, the problem is learning how to moderate their drinking rather than stopping completely. Decades of research show that it is possible, Dr. Wilson says, and it has been his practice’s experience. Clients visit a family doctor who conducts a physical exam and prescribes naltrexone. Once clients return home, they may follow up with the psychologists by phone for several months.

 

To Joanna, the treatment, which costs $8,750, offered brevity, privacy and encouraging results. Dr. Wilson said that his practice’s 240 clients reported a 70% success rate after six years, having achieved their desired goal of moderation or abstention.

 

Joanna, who decided it would be easiest to quit booze altogether, hasn’t indulged in nearly four years. She credits her therapy and three months of naltrexone, which in some small studies has been shown to reduce alcohol euphoria most effectively in women, as well as meditation, for her success. “It’s liberating,” she says. “I remember what I read at night now.”

 

Mark Willenbring, a psychiatrist in St. Paul, Minn., and a former director of treatment research at the National Institute of Alcohol Abuse and Alcoholism, believes that the new drugs, along with others in development, will lift the stigma of alcohol-use disorders, much as Prozac changed views of depression.

 

Notwithstanding the well-publicized trips of celebrities to rehab, fewer than 10% of the estimated 20 million Americans with harmful drinking habits ever receive specialized treatment. That could change, Dr. Willenbring argues, if primary-care doctors were trained to administer antirelapse drugs and counseling to those on the less troubled end of the spectrum.

 

That would be good news for the many women who have crossed beyond a controlled sipping point but are unable to spend a month in rehab and uncomfortable with the notion of powerlessness.

 

 

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Champagne discounts “killing the drink”, warns Pernod Ricard exec (Excerpt)

 

Source: Just-Drinks

By Andy Morton

21 June 2013

 

A Pernod Ricard Champagne regional head has branded heavy European discounting in the category “totally unacceptable”.

 

Hughes Le Marié, Pernod’s Americas and Western Europe director for GH Mumm, said prices as low as EUR6 (US$8) are “destroying the dream” of Champagne. He warned that the sector’s trade body will tighten appellation rules in response.

 

 

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Wells Fargo’s Weekly Economic & Financial Commentary

 

Source: Wells Fargo

Jun 21st

 

U.S.

.         The Fed continues to send signals of slowing the pace of asset purchases before the end of 2013.

.         Core consumer prices increased more than expected in May.

.         The overall pace of inflation is expected to edge higher in 2H13.

.         Housing remains strong as new home construction improved, and permits for single-family homes rose to the highest level in five years.

.         The homebuilder’s sentiment index hit its highest level since march 2006.

.         Existing homes are also benefitting as the both the pace of sales and prices strengthened.

.         While the leading economic indicator index pushed slightly higher in May, some headwinds may slow the pace of economic expansion this quarter.

 

International

.         According to the HSBC Purchasing Managers’ Index, Chinese factory activity moved further into contraction territory in June.

.         This seems to reflect the struggles of shifting from an export-led economy to one focused on growing domestic demand.

.         While the Eurozone Manufacturing PMI remains in contraction territory, the better than expected report provides some hope that the European economy could return to growth in 2H13.

.         The services PMI also surprised to the upside.

.         U.K. retail sales surged in May, but an unemployment rate of 7.8% and rising inflation have caused concern regarding the sustainability of the growth.

 

Point of View

.         Interest Rate Watch

.         With the Fed observing fewer downside risks to the economy, it is increasingly likely that tapering will begin later this year.

.         Credit Market Insights

.         Despite recent increases in the household debt-service ratio, it remains near the lowest levels since record keeping began in 1980.

.         The upward movement in the debt-service ratio suggests that consumers are gaining confidence.

 

 

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News From TTB

 

Source: TTB

Jun 21st

 

REGISTER TODAY FOR THE NEXT WEBINAR IN THE PREVENTING UNDERAGE DRINKING SERIES

 

If you’re interested, mark your calendars for the next webinar in the Preventing Underage Drinking series!

 

The federal Interagency Coordinating Committee on the Prevention of Underage Drinking (ICCPUD), of which TTB is a member, sponsors this webinar series.

 

The ICCPUD member agency hosting this event is the Centers for Disease Control and Prevention (CDC).

 

Webinar #5:         The Role of Public Health in Preventing Underage Drinking and Excessive Drinking by Adults

 

When:         June 26, 2013, 2:00-3:00 p.m. EDT

 

Who: CDC leadership, CDC staff, and a panel of national experts on excessive alcohol use prevention

 

What:          In this webinar, national experts will provide an overview of recent scientific findings on underage and binge drinking in the U.S. as well as Community Preventive Services Task Force (CPSTF)-recommended strategies to address it; examine new research findings on the relationship between state alcohol policies and underage drinking; discuss the current status of alcohol regulations in the U.S.; and present case studies on the translation of CPSTF-recommended strategies into public health practice.

 

Where:        To find more information and to register, please visitwww.stopalcoholabuse.gov

 

 

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Beer Institute: Warehouse Fees Raise Costs for Metal Consumers

 

Source: WSJ

By TATYANA SHUMSKY

Jun 21st

 

A trade group that represents many of the world’s largest beer brewers has lodged a complaint with the London Metal Exchange, saying the exchange hasn’t done enough to alleviate supply bottlenecks in its warehouse system that the trade group says have raised the price of aluminum used in beer cans.

 

The Beer Institute says supply disruptions are raising the price of aluminum used in beer cans.

 

U.S. beer makers and their suppliers buy aluminum at prices set on the LME and must pay an added fee to cover the costs of metal transportation and delivery. This extra cost surpassed $200 a metric ton last year, as the wait to secure metal from LME-licensed warehouses stretched to a year or more in some locations.

 

In a letter to the LME sent in October 2012, the Beer Institute asked for “greater transparency” and changes in warehousing rules. The group represents brewers that account for 93% of beer sold in the U.S., according to the group’s calculations, including Anheuser Busch-InBev NV BUD -0.27% and MillerCoors LLC, as well as can manufacturers like Ball Corp. BLL -0.19% and Novelis Inc.

 

“These practices are basically preventing brewers and suppliers from obtaining aluminum in a reasonable time frame or at fair market prices,” said Christopher Thorne, a spokesman for the Beer Institute.

 

The LME said it shares the concerns of some in the market, and has “brought in a series of measures to relieve the situation,” an exchange spokesman said in an email. “We continue to monitor the situation and will act again if it is in the market’s best interests,” he said.

 

Aluminum began to pile up in LME’s Detroit warehouses in 2009. As of June 18, the LME’s Detroit warehouses held 1.4 million metric tons of aluminum, of which more than a million tons was in line to leave storage, according to LME data. At the current minimum delivery rate of 3,000 tons a day, it would take about 337 business days to empty those warehouses of the aluminum in line to leave storage. The LME’s total aluminum stockpiles are at a record 5.3 million metric tons, the data show.

 

Many traders say the long waits and rising fees are a result of warehouse operators being acquired by companies that also trade commodities. These companies pay above-market rates to lure metal to their warehouses, and can earn a profit from charging rent and on fees for prompt delivery, traders and consumers say.

 

The London exchange in April 2012 began requiring more metal to be released from warehouses each day, but metal users and traders said the rule changes haven’t resulted in shorter waits or lower delivery fees.

 

In April of this year, the exchange introduced another round of new rules, requiring warehouses with a hefty bottleneck in one metal to also deliver at least 500 metric tons of another metal a day.

 

Still, metal users and traders said neither rule change has resulted in shorter waits or lower delivery fees.

 

“We feel it was not enough to solve the problem…the distortion still exists,” the beer group’s Mr. Thorn said.

 

 

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Urban Outfitters Decides Maybe Prescription Pill Bottles As Shot Glasses Isn’t A Great Idea

 

Source: Consumerist

By Mary Beth Quirk

June 20, 2013

 

Would you like some booze with your painkillers?

 

Another day, another highly controversial item pulled from the shelves of Urban Outfitters. This time, the retailer caved to pressure from legislators in states like Kentucky and agreed to stop selling shot glasses, flasks and beer mugs that look like prescription pill bottles.

 

The thing is, Urban Outfitters sells a whole lot of merchandise to teens, and as such, many of their items are marketed directly at that age group. And in Kentucky, where the population is already struggling with addiction, sending the message to youth that prescription pills are funny and fun, and so is alcohol – well, that rubbed lawmakers the wrong way. They said such products trivialize the pain of people addicted to drugs.

 

“I wrote a letter to the Urban Outfitters CEO shortly after learning about this abominable product line, and I’m very pleased that the store has changed course,”  Gove. Steve Beshear said in a statement Wednesday via the Associated Press. “There’s nothing fashionable about prescription drug abuse, and selling teen-targeted items that glamorize prescription drugs is repulsive.”

 

The company issued a statement to the Courier-Journal of Louisville announcing the move to stop selling the items, after the campaign from anti-drug groups, legislators and 24 attorneys general. It called the “Prescription Line” a misinterpretation.

 

“In the 20,000 products that comprise our assortment, there are styles that represent humor, satire and hyperbole,” Urban Outfitters said in a press release. “We recognize that from time to time there may be individual items that are misinterpreted by people who are not our customer.”

 

Silly old people who aren’t hip enough to shop for overpriced bohemian chic clothing, don’t you get the joke? Booze and prescription drugs – together! What could possibly be wrong about that?

 

 

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Wine producers go hi-tech to outsmart fraudsters

 

Source: Phys.org

June 23rd, 2013

 

Making sure a glass of wine is everything it promises on the label was once a relatively simple process: hold against the light, tilt and observe the shade, swirl a little and give it a good sniff.

 

But with the ever-increasing global consumption of wine now attracting the attention of fraudsters, wine drinkers are soon just as likely to be advised to whip out their smartphones.

 

A quick scan can give the consumer a direct link to the supplier’s website to verify the label, trace the wine’s journey from vineyard to glass and provide information about the winery.

 

Fake wine and spirits can sour the drinks market, but new technology and international cooperation are now enabling producers to outsmart the fraudsters.

 

Castel, the largest producer of French wine, uses the technology on 13 million bottles for the Chinese market as well on exports to other emerging markets such as Vietnam where counterfeiting is most prevalent.

 

“The Chinese are asking for a lot of information and for reassurance regarding the origin of the product,” said Franck Crouzet, spokesperson for Castel.

 

But Chinese crooks are by no means the only perpetrators of wine scams.

 

“China is the most notorious but the problem is worldwide,” said Christophe Chateau, spokesperson for the Bordeaux Wine Council.

 

While many bottles are ugly reproductions easily spotted by a practised eye, others are quite clever.

 

And although little harm befalls a consumer uncorking bulk Chilean red instead of estate-bottled Bordeaux, the consequences can be lethal when criminals sell tainted drinks.

 

“Last year we had a case in the Czech Republic, at least 20 people died from drinking a counterfeit local spirit,” said Pierre Georget, CEO of GS1 France, part of a Brussels-based non-governmental organisation which uses unique bar codes to thwart the conmen.

 

GS1 guarantees that bar code numbers are never repeated worldwide, assuring traceability and authentication for everything from spare car parts and prams to Chianti.

 

“Chianti had some problems in the past in Russia. Our consortium spends 100,000 euros ($132,000) each year on registering and protecting our wines,” said Silvia Fiorentini, spokesperson for the Chianti Classico Consortium, which produces 35 million bottles annually, 80 percent of which is exported.

 

In order for wine lovers around the globe to feel confident they are drinking a bottle of wine originating in the hills of Tuscany, Fiorentini says Chianti Classico now carries a distinctive seal over the cap and neck of the bottle, marked with a unique number and code, as well as the appellation’s trademark black rooster.

 

Many wine regions are doing the same, and producers eager to learn more about fighting counterfeiters attended GS1’s presentation at Vinexpo, a major wine and spirits trade show held this past week in Bordeaux.

 

“In wine there is an enormous problem with counterfeiting,” said Georget. “The idea is to use unique identification – a bar code or data matrix bar code – to identify each bottle of wine. This is the same technology we already use for the FDA for drugs in America.”

 

But many say a bar code doesn’t go far enough and that the seal must contain an inviolable hologram.

 

“GS1 is a good start but it needs to be combined with a physical security feature,” said Damien Guille, sales manager for Tesa Scribos, a German company that produces so-called tesa VeoMark labels, used for brand protection in a wide variety of sectors, including luxury goods, car parts and wine.

 

The labels are scanned with a smartphone and Tesa Scribos counts among its customers the Bordeaux largest appellation, Bordeaux and Bordeaux Superieur producers, as well as merchants Barton & Guestier and Castel.

 

The Bordeaux Wine Council’s Chateau said that Bordeaux as a whole had chosen to work with firms ATT, Prooftag and Tesa Scribos, but that some 15 similar technologies also existed.

 

“Two years ago at Vinexpo, we had zero clients. Now we have a long list,” said Guille of Tesa Scribos.

 

 

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Wine-tasting: it’s junk science

 

Experiments have shown that people can’t tell plonk from grand cru. Now one US winemaker claims that even experts can’t judge wine accurately. What’s the science behind the taste?

 

Source: The Observer

David Derbyshire

Saturday 22 June 2013

 

Every year Robert Hodgson selects the finest wines from his small California winery and puts them into competitions around the state.

 

And in most years, the results are surprisingly inconsistent: some whites rated as gold medallists in one contest do badly in another. Reds adored by some panels are dismissed by others. Over the decades Hodgson, a softly spoken retired oceanographer, became curious. Judging wines is by its nature subjective, but the awards appeared to be handed out at random.

 

So drawing on his background in statistics, Hodgson approached the organisers of the California State Fair wine competition, the oldest contest of its kind in North America, and proposed an experiment for their annual June tasting sessions.

 

Each panel of four judges would be presented with their usual “flight” of samples to sniff, sip and slurp. But some wines would be presented to the panel three times, poured from the same bottle each time. The results would be compiled and analysed to see whether wine testing really is scientific.

 

The first experiment took place in 2005. The last was in Sacramento earlier this month. Hodgson’s findings have stunned the wine industry. Over the years he has shown again and again that even trained, professional palates are terrible at judging wine.

 

“The results are disturbing,” says Hodgson from the Fieldbrook Winery in Humboldt County, described by its owner as a rural paradise. “Only about 10% of judges are consistent and those judges who were consistent one year were ordinary the next year.

 

“Chance has a great deal to do with the awards that wines win.”

 

These judges are not amateurs either. They read like a who’s who of the American wine industry from winemakers, sommeliers, critics and buyers to wine consultants and academics. In Hodgson’s tests, judges rated wines on a scale running from 50 to 100. In practice, most wines scored in the 70s, 80s and low 90s.

 

Results from the first four years of the experiment, published in the Journal of Wine Economics, showed a typical judge’s scores varied by plus or minus four points over the three blind tastings. A wine deemed to be a good 90 would be rated as an acceptable 86 by the same judge minutes later and then an excellent 94.

 

Some of the judges were far worse, others better – with around one in 10 varying their scores by just plus or minus two. A few points may not sound much but it is enough to swing a contest – and gold medals are worth a significant amount in extra sales for wineries.

 

Hodgson went on to analyse the results of wine competitions across California, and found that their medals were distributed at random.

 

“I think there are individual expert tasters with exceptional abilities sitting alone who have a good sense, but when you sit 100 wines in front of them the task is beyond human ability,” he says. “We have won our fair share of gold medals but now I have to say we were lucky.”

 

His studies have irritated many figures in the industry. “They say I’m full of bullshit but that’s OK. I’m proud of what I do. It’s part of my academic background to find the truth.”

 

Hodgson isn’t alone in questioning the science of wine-tasting. French academic Frédéric Brochet tested the effect of labels in 2001. He presented the same Bordeaux superior wine to 57 volunteers a week apart and in two different bottles – one for a table wine, the other for a grand cru.

 

The tasters were fooled.

 

When tasting a supposedly superior wine, their language was more positive – describing it as complex, balanced, long and woody. When the same wine was presented as plonk, the critics were more likely to use negatives such as weak, light and flat.

 

In 2008 a study of 6,000 blind tastings by Robin Goldstein in the Journal of Wine Economics found a positive link between the price of wine and the amount people enjoyed it. But the link only existed for people trained to detect the elements of wine that make them expensive.

 

In 2011 Professor Richard Wiseman, a psychologist (and former professional magician) at Hertfordshire University invited 578 people to comment on a range of red and white wines, varying from £3.49 for a claret to £30 for champagne, and tasted blind.

 

People could tell the difference between wines under £5 and those above £10 only 53% of the time for whites and only 47% of the time for reds. Overall they would have been just as a successful flipping a coin to guess.

 

So why are ordinary drinkers and the experts so poor at tasting blind? Part of the answer lies in the sheer complexity of wine.

 

For a drink made by fermenting fruit juice, wine is a remarkably sophisticated chemical cocktail. Dr Bryce Rankine, an Australian wine scientist, identified 27 distinct organic acids in wine, 23 varieties of alcohol in addition to the common ethanol, more than 80 esters and aldehydes, 16 sugars, plus a long list of assorted vitamins and minerals that wouldn’t look out of place on the ingredients list of a cereal pack. There are even harmless traces of lead and arsenic that come from the soil.

 

Three of wine’s most basic qualities – sweetness, sourness and bitterness – are picked up by the tongue’s taste buds. A good wine has the perfect balance of sweet from the sugar in grapes, sourness from the acids, particularly tartaric and malic acid, and bitterness from alcohol and polyphenols, including tannins.

 

Many wines are more acidic than lemon juice and are only palatable because that acidity is balanced by sweetness and bitterness. “It’s the holy trinity of the palate – sugar, acid and alcohol,” says Dr James Hutchinson, a wine expert at the Royal Society of Chemistry.

 

Professionals distinguish between the balance of these three basic elements and a wine’s flavour. And here the chemistry gets more complicated.

 

The flavour of wine – its aroma or bouquet – is detected not by the taste buds, but by millions of receptors in the olfactory bulb, a blob of nervous tissue where the brain meets the nasal passage.

 

Chemists have identified at least 400 aroma compounds that work on their own and with others to create complex flavours – some appearing immediately on first sniffing, others emerging only as an aftertaste. Most of these are volatiles – aromatic compounds that tend to have a low boiling point and waft away from glasses and tongues towards the olfactory bulb.

 

Some of these, the primary volatiles, are present in the grape. Others, the secondaries, are generated by yeast activity during fermentation. The rest, the tertiary volatiles, are formed as wine matures in barrels or bottles.

 

Over the last few decades, wine scientists have begun to identify the compounds responsible for some of the distinctive aromas in wine.

 

The grassy, gooseberry quality of sauvignon blanc, for instance, comes from a class of chemicals called methoxypyrazines. These contain nitrogen and are byproducts of the metabolism of amino acids in the grape. Concentrations are higher in cooler climates, which is why New Zealand sauvignon blancs are often more herbaceous than Australian ones.

 

The flowery aroma of muscat and gewürztraminer comes from a class of alcohol compounds called monoterpenes. These include linalool – a substance also used in perfumes and insecticide – and geraniol, a pale yellow liquid that doubles up as an effective mosquito repellent and gives geranium its distinctive smell.

 

The spicy notes of chardonnay have been attributed to compounds called megastigmatrienones, also found in grapefruit juice.

 

“People underestimate how clever the olfactory system is at detecting aromas and our brain is at interpreting them,” says Hutchinson.

 

“The olfactory system has the complexity in terms of its protein receptors to detect all the different aromas, but the brain response isn’t always up to it. But I’m a believer that everyone has the same equipment and it comes down to learning how to interpret it.” Within eight tastings, most people can learn to detect and name a reasonable range of aromas in wine, Hutchinson says.

 

Detecting and finding the right vocabulary may be within everyone’s grasp. But when it comes to ranking wines, Hutchinson shares Robert Hodgson’s concerns.

 

“There’s a lot of nonsense and emperor’s new clothes in the wine world,” Hutchinson says. “I have had a number of wines costing hundreds of pounds that have disappointed me – and a number costing between £5 and £10 which have been absolutely surprising.”

 

People struggle with assessing wine because the brain’s interpretation of aroma and bouquet is based on far more than the chemicals found in the drink. Temperature plays a big part. Volatiles in wine are more active when wine is warmer. Serve a New World chardonnay too cold and you’ll only taste the overpowering oak. Serve a red too warm and the heady boozy qualities will be overpowering.

 

Colour affects our perceptions too. In 2001 Frédérick Brochet of the University of Bordeaux asked 54 wine experts to test two glasses of wine – one red, one white. Using the typical language of tasters, the panel described the red as “jammy’ and commented on its crushed red fruit.

 

The critics failed to spot that both wines were from the same bottle. The only difference was that one had been coloured red with a flavourless dye.

 

Other environmental factors play a role. A judge’s palate is affected by what she or he had earlier, the time of day, their tiredness, their health – even the weather.

 

For Hutchinson and Hodgson the unpredictability means that human scores of wines are of limited value.

 

So if people cannot be relied on to judge wine, how about machines?

 

“In terms of replicating what a human can do we are a long way off,” Hutchinson says. “The one thing we can do well, though, is a lot of amazing analytical chemistry that allows us to detect a huge range of different compounds in a glass of wine.

 

”We can start to have an indication of how the acidity balances with the sweetness and different levels of flavour compounds.

 

“But the step we haven’t got to is how that raw chemical information can be crunched together and converted into something that reflects someone’s emotional response. That might be something we can never achieve.”

 

Meanwhile the blind tasting contests go on. Robert Hodgson is determined to improve the quality of judging. He has developed a test that will determine whether a judge’s assessment of a blind-tasted glass in a medal competition is better than chance. The research will be presented at a conference in Cape Town this year. But the early findings are not promising.

 

“So far I’ve yet to find someone who passes,” he says.

 

PUNGENT OVERTONES

 

In 2007, Richard E Quandt, a Princeton economics professor, published a paper entitled “On Wine Bullshit: Some New Software?” The study sought to describe the “unholy union” of “bullshit and bullshit artists who are impelled to comment on it”, in this case wine and wine critics. Quandt compiled a “vocabulary of wine descriptors” containing 123 terms from “angular” to “violets” via other nonsense descriptions such as “fireplace” and “tannins, fine-grained”.

 

Then, with the help of colleagues, he built an algorithm that generated wine reviews of hypothetical wines using his “vocabulary of bullshit”. For instance: “Château L’Ordure Pomerol, 2004. Fine minerality, dried apricots and cedar characterise this sage-laden wine bursting with black fruit and toasty oak.” He concluded that whether his reviews were “any more bullshit” than real ones was a “judgment call”. Sadly, he didn’t explore how long it would take a monkey to type a wine review.

 

 

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Highs and (Rare) Lows in Restaurant Wine Prices

 

Good restaurants have a lot of costs to cover when they’re pricing their wines, but some restaurateurs seem to take it too far. Lettie Teague on how to tell when you’re overpaying

 

Source: WSJ

By LETTIE TEAGUE

Jun 21st

 

ALTHOUGH I’LL ADMIT I’m particularly (perhaps even preternaturally) sensitive to restaurant wine prices, it seems as if they’ve gone up a lot lately-even more than they have in retail wine shops. Are restaurant wine directors actually paying more for their wines, or are they just taking higher markups? According to Chuck Ellis, president of the Newton, Mass.-based research group Restaurant Sciences, it’s actually a bit of both.

 

Restaurant wine prices for the same wines are definitely higher overall, said Mr. Ellis in a recent phone call, and the reason is “a mix of higher wholesale prices and higher margins.” Restaurant Sciences tracks thousands of wine, beer and liquor brands across tens of thousands of restaurants, nightclubs and bars in the U.S. and Canada, and in the past six months, the company’s researchers found an “absolute increase” in wine markups.

 

The markup of a wine-the amount of money a restaurant charges above the wholesale price-is a rather touchy topic for most restaurateurs. In fact, that was the first point that Bernie Sun, beverage director for the Jean-Georges restaurant group, made in an email to me. Mr. Sun, who oversees around 20 restaurants all over the world, sees the situation from two perspectives. He’s “a wine guy” who was once a sommelier, which means he wants wines to be accessibly priced. But he’s also a corporate director who knows that wine is a “revenue center.”

 

As a revenue center, wine has to support several other costs, said Mr. Sun. For example, there is the expensive stemware (Riedel), the salaries of the sommeliers (Jean-Georges has four) and even the cost of the wine list itself. For example, the 16 leather wine-list binders at the Jean-Georges flagship cost $500 apiece and every page in the book costs 15 cents a sheet. The list is 32 pages long and changes almost daily.

 

And then there’s the cost of inventory, particularly with wines that are kept for a period of years before they’re placed on the list. It’s expensive to buy wines and then store them. While these wines may be more pleasurable to drink after a few years of age, they restrict cash flow-and take up precious cellar space.

 

These are some of the more defensible reasons for a markup between two and three times the wholesale cost of the bottle. As Mr. Sun notes, the “conventional markup” at New York fine-dining restaurants sees bottles sell for around three times the wholesale cost. This seems to be true in other parts of the country as well, according to restaurant directors I spoke with from California to Cleveland. But there are exceptions to this rule-restaurants that mark up their wines to four times wholesale or more. (Generally speaking, the retail markup on a bottle of wine is one and a half times its wholesale price.)

 

Take, for example, Montmartre in New York. This simple French bistro doesn’t have a wine list in a fancy leather binder (it’s one page in a plastic sleeve) or a team of sommeliers, and I doubt that it has the wines in its cellar for more than few weeks. The restaurant has been open for only a few months, after all. And yet, the markup on its wine list is close to four times wholesale-and often more.

 

The list features some nice choices, but the prices are high-not necessarily in terms of actual dollars, but in terms of markups. The bottle of 2011 Clos de Roilette Fleurie that I ordered cost $64 at the restaurant, but it’s only $15 a bottle wholesale in New York (and even less if more than three cases are ordered, according to its distributor, David Bowler Wines).

 

The 2011 Brick House Gamay, a lovely Oregon wine that costs $20 wholesale, was priced at $70 on the Montmartre list. And there was more. The 2010 Dashe Dry Creek Zinfandel, priced at $64, costs $17 wholesale. The seemingly reasonable 2011 Les Garrigues Côtes du Rhône (one of the cheapest wines on the list) was priced at $40 a bottle but costs only $7.33 wholesale-and that’s not counting possible quantity discounts. That seemed like a pretty fat profit margin to me.

 

When I contacted Gabriel Stulman, the owner of Montmartre and New York restaurants Fedora, Joseph Leonard, Chez Sardine, Perla and Jeffrey’s Grocery, he said the wholesale prices he’d paid were higher than the ones I’d found (though he couldn’t give exact figures). He also noted that his restaurants were very small and his expenses were high, including a “substantially higher payroll” for his staff than average (though he didn’t cite salary figures).

 

While it is certainly laudable to compensate a professional staff, such markups are still annoying to wine drinkers and to the winemakers themselves. When I emailed one producer to tell him how much his wine had been marked up on a list, he expressed great frustration, explaining that he only made a few dollars profit on the wine himself.

 

Why do restaurateurs indulge in this sort of outrageous stuff? “Because they can,” said Bobby Stuckey, the owner and wine director at Frasca Food & Wine in Boulder, Colo., which this year won a James Beard Award for outstanding wine service. And he had an interesting theory: It was because restaurant critics weren’t acting as watchdogs. “Restaurant critics don’t have the expertise about wine. If a journalist doesn’t know it’s an abuse, they can’t give a restaurateur an incentive to change,” said Mr. Stuckey.

 

There are restaurants that Mr. Stuckey simply won’t patronize on account of their wine pricing. Was that because he knew how much a wine actually costs? In fact, it was because Mr. Stuckey regarded the excessive markup as a red flag of sorts, a clue that the diner “might not be getting the greatest food product.” In other words, if they’re gouging you on wine, they’re probably not doing you any favors when it comes to the food. (Mr. Stuckey was careful to point out his theory didn’t apply to restaurants at the highest level that spend a great deal of money on glassware and staff education.)

 

Mr. Stuckey has changed his wine pricing structure over the years. For several years, he charged only $20 over the retail price of the wine on every bottle on his list. But it didn’t make a lot of fiscal sense, and worse, no one even seemed to notice they were getting a great deal-neither customers nor reviewers. Right now, the average Frasca markup is about 2.75 times the wholesale cost. The fact that the restaurant is now in its 10th year and is much-acclaimed would seem like a solid indication that this is a good route.

 

David Gordon has been the wine director at Tribeca Grill in New York for more than 20 years and presides over one of the most reasonably priced lists in the city. This is especially true of the wines with some age. Mr. Gordon doesn’t mark up wines he has had for years-even if they gain in value over time. That’s how he manages to offer wines like an eight-year-old Riesling from the legendary German producer Hermann Dönnhoff for a mere $40 and the 2007 Isabel Ferrando Colombis Châteauneuf-du-Pape for an incredible $120 (I’ve seen it priced at $125 in a store).

 

For his part, Mr. Gordon thinks that some restaurateurs believe they can get away with high markups because their customers won’t notice or complain. He’s clearly right-and yet, some drinkers do notice. For example, a friend of mine was so turned off by the wine prices at Montmartre that he went to its sister restaurant Chez Sardine instead. But the deals were no better a few blocks away. “I paid $67 for a German Weissburgunder that cost $16 wholesale,” he reported, adding that he found it in a nearby store for $23 a bottle. “They didn’t even have to keep the wine in stock-they could just send the busboy down the street to pick it up and they’d make a $40 profit,” my friend wrote, adding that this kind of pricing made him “angry at wine.”

 

More important, this sort of pricing can keep people from drinking wine. That evening at Montmartre, I noticed that both of the couples on either side of our table were drinking, respectively, water and cocktails. And that’s not a scene that any wine director, winemaker or wine lover is ever happy to see.

 

 

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Five men in court for stealing Bordeaux ‘to order’

 

Source: Decanter

by Sophie Kevany in Bordeaux

Sunday 23 June 2013

 

Police in Bordeaux have taken five men into custody on suspicion of stealing and selling on high-end wines including Petrus, Cheval Blanc, Ausone, Le Pin and Yquem.

 

The wines were stolen to order, then resold by a network that also fenced expensive cars and jewellery, a police statement said.

 

The men appeared in court last weekend in Libourne. Three of them were remanded in prison, awaiting trail, while the other two were placed on probation.

 

The gang’s latest wine haul, found in a warehouse on Bordeaux’s right bank at the end of May, was worth an estimated ?300,000. The cases have now been returned to their owners.

 

‘One of the most important parts of this operation was identifying not only the robbers, but the fences they work with,’ a member of the investigative team, Colonel Frédéric Bonneval, told Decanter.com.

 

Two of the five men are suspected of stealing the wine, while the other three are suspected of fencing it, ie selling it on. One of the men was a former jeweller in Bordeaux.

 

Bonneval said that although there were no statistics to show wine robberies in Bordeaux were on the increase, rising prices for fine wines made trade in ‘parallel markets’ more attractive. ‘Fine wine robberies, however, remain a specialised business, it’s not just anyone that can do it,’ he said.

 

Earlier this month thieves stole 380 bottles of Chateau d’Yquem worth ?125,000 from the chateau cellars. Bonneval said the two cases were not linked.

 

 

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Aldi Australia to venture into online liquor sales business

 

Source: DBR

24 June 2013

 

Aldi Australia is all set to enter into online liquor sales business by offering consumers with a range of liquors through its online platform, www.aldiliquor.com.au, from 1 August 2013.

 

The online liquor store will carry over 200 products under two categories – Aldi’s everyday range of local and international beer, wine and spirits, and online only ‘special buys’ available while stocks last.

 

To purchase the beverages, customers must be at least 18 years of age and above, and will have to provide age proof during delivery.

 

Aldi Australia group managing director Tom Daunt was quoted by The Shout as saying that considering not all Aldi stores in New South Wales, Australian Capital Territory and Victoria are able to stock liquor, and liquor licensing laws in Queensland do not currently allow sale at all, they wanted to extend this offering to all customers over 18 years of age to enjoy.

 

“Aldi has tapped into its international network to launch Aldi Liquor online,” Daunt added.

 

“Customers will find products not otherwise available in Australia – all at the click of a mouse. Backed by Aldi’s 100 per cent satisfaction guarantee, customers will be assured of great quality unique products at exceptional value.”

 

The Aldi Liquor online platform will soon be made available as an app for both iPhone and Android devices.

 

 

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Tesco chief’s basket of problems fills up

 

Source: FT

By Andrea Felsted, Senior Retail Correspondent

Jun 21st

 

When Philip Clarke, chief executive of Tesco, stood before shareholders at their annual meeting in Cardiff, the Welsh capital, last year, he was under pressure to pull out of the retailer’s US operations.

 

The Tesco veteran of almost 40 years has since heeded those calls, and pulled the plug on predecessor Sir Terry Leahy’s American dream – at a cost of £1bn.

 

But when Mr Clarke faces shareholders in London on Friday, he will do so with a plethora of other problems to contend with – and they will require him to reconnect not just with shareholders, but with the supermarket group’s other major stakeholders: its customers.

 

If a culture of success bred a reluctance to listen, then overcoming past failures will need a willingness to engage on both the shop floor and trading room floor, analysts now say.

 

Mr Clarke’s new management team – only one of the directors who ran the business under Sir Terry remains – already has a lengthy to-do list.

 

Agreement has not yet been struck to sell the US business, Fresh & Easy. Recovery in the UK, after Tesco’s profit warning in February 2012, is not yet a given. Meanwhile, in Tesco’s sprawling international empire, Mr Clarke continues to fight fires – from regulatory constraints in South Korea to economic malaise in central Europe.

 

“Obviously, the UK is now suffering, but everywhere else is as well,” says one top 10 shareholder.

 

Mr Clarke became chief executive in March 2011, in the company’s biggest management transition for 14 years. In taking over from Sir Terry, he was following a man who had transformed Tesco from a struggling domestic grocer into an assertive world-class brand.

 

Initially, Mr Clarke was enthusiastic about his inheritance. But in early 2012, after a £500m price cutting scheme failed to gain traction, he issued Tesco’s first profit warning in 20 years – which wiped £5bn off its market value.

 

Tesco UK, which still accounts for about two-thirds of group sales and profits, had been run too “hot”, he said, alluding to the way the group had been trying to squeeze out every last profit in the UK, to bolster operations elsewhere – including the US.

 

Having accumulated a large UK land bank over the preceding decade, Tesco had opened more big supermarkets – but appeared to have lost touch with its customers, who were increasingly shopping online or in convenience stores.

Mix is changing across Tesco outlets

 

Britain’s biggest retailer has about 850 large stores in the UK and revamped about 300 of them last year, representing about a quarter of its total domestic estate. It will refurbish another 300 this year, with a focus on its 1,500 convenience stores.

 

It is also changing the product mix in its supermarkets and revamping its larger hypermarkets, with a new-format store in Watford due to open in August. [Continue reading}

 

Clive Black, analyst at Shore Capital, says some of the issues Mr Clarke now faces were “undoubtedly” a legacy of past decisions. “To use rugby parlance, the ball was thrown somewhat faster and lower than he was expecting,” he says.

 

Nevertheless, Mr Clarke must now deal with the consequences.

 

Reconnecting with customers has meant changing Tesco’s culture. According to people familiar with the company’s management, a culture of success had led to a defensive arrogance. “I think he has tried to make Tesco listen again,” says Mr Black.

 

But Mr Clarke will need any change in attitude to deliver a quick turnround in his UK stores, where underlying sales fell 1 per cent year on year in the three months to May 25.

 

While sales are growing in convenience stores and online, analysts estimate that in the core store estate, they are going backwards.

 

He is spending £1bn making stores more inviting, putting food at the heart of the offer, and increasing staff numbers. But he also knows that the new shopfront is the internet. In a telling echo of a much-quoted statistic about Tesco’s share of high-street spending, research group Verdict now estimates that £1 in every £8 will be spent online.

 

Demand for many commodity items, such as consumer electronics, is migrating from supermarket shelves on to retail websites. Consequently, Tesco is ditching in-store sales of electricals, which will drag down sales.

 

It is also downsizing. A 120,000-sq ft store in Stockton-on-Tees, for example, is to be reduced to 80,000-sq ft – by installing a gym on the store’s mezzanine floor, and a children’s play area on the ground floor.

 

Philip Dorgan, analyst at Panmure Gordon, says Tesco is making strides online. He estimates that Tesco generated £2.4bn of UK grocery sales via the internet in the year to February, with another £281m of online groceries sales overseas.

 

By contrast, Mr Dorgan suggests Tesco Direct – which sells non-food items, such as clothing and entertainment online – generated online sales of just under £500m. He estimates UK and overseas grocery online made a profit of £225m, while Tesco Direct made a £60m loss.

 

But with the pressure on UK sales, concerns about Tesco’s profitability are emerging once more. Its shares have fallen 8.5 per cent since a disappointing first-quarter update.

 

“In an industry that keeps adding capacity faster than demand, Tesco is still losing market share, suffering like-for-like declines, and faces considerable profit pressures,” says Dave McCarthy, Investec Securities analyst.

 

If this were not enough, Mr Clarke faces challenges outside of Tesco’s domestic market. In the three months to May 25, like-for-like sales in Asia fell 3.8 per cent year on year, and 5.5 per cent in central Europe.

 

“What we can say beyond doubt, and according to Tesco’s accounts, is collectively, its international businesses are earning less than 6 per cent per annum, which is below the cost of capital,” notes Mr McCarthy. “They are destroying shareholder value.”

 

Mr Clarke, who ran Tesco’s international operations before becoming chief executive, has exited the US and Japan, and analysts believe further corporate activity is a possibility.

 

Tesco is already eyeing a joint venture in China, according to people familiar with the situation.

 

India also offers significant potential, although the global grocers want more clarity on retail liberalisation.

 

Either way, in the wake of the US debacle, any more bold global moves are unlikely. Any new ventures will be tested carefully. This approach is also being taken in the UK, where new formats are being refined before being rolled out. Tesco, it seems, is more willing to listen to customers. The question is: will shareholders be in a mood to listen on Friday.

 

 

——

Tim Martin tops list of pub industry’s most influential

 

Source: MA

By Rob Willock

21-Jun-2013

 

The chairman of JD Wetherspoon is back on the top of the PMA’s list of pub industry power players in 2013.

 

Every year, the PMA team compiles the definitive list of the sector’s power players – those who have helped to shape the trade in the past 12 months. And this year – as in 2010 and 2011 – it is headed by Tim Martin

 

Editor Rob Willock says: “It was hard to look far beyond Tim Martin in our search for the most influential person in the pub industry. He may even be our only true ‘personality’ in terms of public recognition – the Sir Richard Branson or Sir Stelios Haji-Ioannou of the on-trade. Surely it can only be a matter of time before a knighthood comes Martin’s way.

 

“Martin is a big character, both literally (at 6ft 6ins tall) and instantly recognisable by his trademark mullet haircut. This qualified barrister is a man of conviction, if not high fashion, and has combined a canny flair for business (he built JD Wetherspoon from a single site in 1979 to a managed estate of 870+ pubs today) with an instinct for a popular campaign.”

 

Martin is a passionate campaigner for a reduction in VAT for hospitality businesses – to level the playing field with supermarkets – and an outspoken critic of minimum unit pricing for alcohol.

 

His late support for the campaign against the Beer Duty Escalator campaign guaranteed it column inches in the tabloid press, and arguably helped secure the historic tax reversal.

 

http://www.morningadvertiser.co.uk/content/view/print/786487

 

——

Florida: Craft brewers clash with Big Beer lobby

 

Source: Tampa Bay Tribune

BY JAMES L. ROSICA

June 22, 2013

 

A battle is brewing between Florida’s craft beermakers, including Tampa’s popular Cigar City, and the Big Beer lobby, representing the state’s distributors.

 

It came to a head in this spring’s legislative session when the Florida Beer Wholesalers Association opposed a bill that would have allowed craft brewers to sell their suds direct to consumers by the half-gallon, in 64-ounce jugs known as “growlers.”

 

The law already allows bigger and smaller growlers, quart-size at 32 ounces and gallon-size at 128 ounces, but the 64-ounce is the most popular among craft beer aficionados and is considered the industry standard.

 

That bill didn’t pass, but Big Beer had already tucked what some privately called a “poison pill” into an amendment – one that goes far beyond the growler question to target how the state’s craft beer industry does business.

 

The battle ended in a stalemate – for now.

 

But the sides already are squaring off for next session in a conflict with its roots in the Prohibition era and the three-tiered alcohol distribution scheme that has emerged in Florida since then.

 

The wholesalers’ amendment would have changed an exception to Florida liquor law that enabled Tampa’s Busch Gardens, then owned by Anheuser-Busch, to serve beer at the theme park’s hospitality centers.

 

That exception allows smaller brewers like Cigar City’s Joey Redner to open tasting rooms next to their brewhouses, introducing visitors to their wares and letting them buy beer to take home.

 

“Tasting rooms are our marketing,” Redner said. “That’s our neon sign.”

 

After the country’s failed experiment with Prohibition from 1920 to 1933, states wanted to make sure no one – like mobsters – had monopoly control over booze.

 

They created a three-level system in which producers, including brewers, could sell only to wholesale distributors. The distributors then would sell to the retailers, and only retailers could sell to consumers. The idea was that nobody in one tier could unduly influence anyone in another, especially on pricing.

 

That system is what Mitch Rubin wants to preserve.

 

Rubin, executive director of the Florida Beer Wholesalers Association, disagrees that his group’s opposition is about protecting its own bottom line.

 

He points to a bill that passed this year, allowing the state’s craft liquor distillers to directly sell two bottles per customer per year, as “conscious policy making.”

 

“If you’re going to have an exception, the question becomes, what is the nature and extent of that exception?” he said. “This is a legitimate public policy debate.”

 

In 1963, Sen. Tom Whitaker Jr. of Tampa introduced a bill allowing beer manufacturers in Florida to get a “vendor’s license for the sale of alcoholic beverages.” It’s not apparent from historical legislative records that Anheuser-Busch, which had a brewery in Tampa, sought the change.

 

The bill was considered by the “Committee on Temperance,” eventually passed both chambers and then-Gov. Farris Bryant let it become law without his signature.

 

Over the years, the liquor law exception was changed to require beer makers to have “a single complex, which property shall include a brewery and such other structures which promote the brewery and the tourist industry of the state.”

 

The exception let Anheuser-Busch give away samples of its beer at an exotic-bird garden next to its Tampa brewery, which closed in 1995 and was torn down.

 

The bird garden evolved into what became the Busch Gardens theme park. In 2009, Anheuser-Busch’s new owners decided to sell off its theme parks.

 

The Florida Brewers Guild, which represents craft brewers and brewpubs, this year supported the half-gallon growler bill (HB 715/SB 1344).

 

In March, Sen. Maria Sachs, a Delray Beach Democrat, offered an amendment to the Senate bill. The Florida Beer Wholesalers Association had contributed $2,000 to Sachs’ 2012 campaign, according to the National Institute on Money in State Politics.

 

The amendment would have allowed half-gallon growlers, as well as take-home sales by “startup breweries.”

 

But it also would have required breweries taking advantage of the exception to have “at least 25 enclosed acres of land,” “a controlled entrance and exit,” “permanent exhibitions and a variety of recreational activities” and “at least 1 million visitors annually (who) pay admission fees.”

 

In other words, the legal exception-which had never explicitly mentioned theme parks-would almost certainly apply only to them and not to craft brewers.

 

“I’m not saying every brewer has to do what Busch Gardens did; that’s a huge investment,” Rubin said. “But there have to be other tourism structures,” arguing that a brewery alone isn’t sufficient to promote tourism under the exception’s language.

 

Sachs did not respond to a request for an interview. Her amendment was never voted on, and the House and Senate versions of the growler bill died in committee.

 

The beer distributors “don’t like that we’re using that exception for our small brewers,” said Josh Aubuchon, the Florida Brewers Guild’s executive director and general counsel. “Beer tourism is becoming big, with the craft beer movement gaining speed.”

 

Cigar City’s beers, which have won national and global awards, have gained a national following since debuting in 2009, including its ‘Jai Alai’ India pale ale and ‘Maduro’ brown ale. About 1,500 people a week visit the Spruce Street brewery. Its yearly beer release party-Hunahpu’s Day, named after the Mayan god of chocolate-attracts thousands, and Redner now employs 52 people.

 

Both sides expect to butt heads again next session. And retail sales and tasting rooms at breweries will continue to be a sore point for Big Beer.

 

“That’s where we can tell our story,” Redner said. “And if our story wasn’t compelling – and our product wasn’t so good – we wouldn’t be here.”

 

 

——

Washington: Total Wine & More to construct store in Spokane Valley

 

Source: The Spokesman-Review

Tom Sowa

Jun 22nd

 

Total Wine & More, the nation’s largest liquor retailer, intends to build its second area liquor store in Spokane Valley, the company announced Friday.

 

The 25,000-square-foot, $1.7 million retail center will open in time for the holidays.

 

Company officials chose the location to compete with other liquor retailers along the Washington-Idaho border.

 

Based in Maryland, Total Wine opened its north Spokane store last year after voters passed Initiative 1183, pulling the state out of the business of selling spirits. More than 1,400 retailers now sell liquor across the state.

 

After opening the 25,000-square-foot store in north Spokane, company owner David Trone said Total Wine regarded a location near the Spokane Valley Mall as a key in gaining more liquor sales.

 

Because the initiative imposes a 10 percent fee on spirits distributors, liquor prices in Washington are generally higher than in Idaho or Oregon.

 

That new fee has resulted in Washington consumers frequenting stores at border locations such as Post Falls and Stateline.

 

“The Spokane Valley Mall site is aimed directly at the Idaho traffic” from Washington customers, Trone said in an interview last December.

 

Total Wine has volume-order advantages and discount promotions with spirits producers that allow it to compete with the likes of Wal-Mart, Costco and low-margin grocery stores selling spirits in Washington, he said.

 

Trone also predicted the new Valley Total Wine will win over Idaho liquor customers, especially once the distribution tax imposed by I-1183 is scaled back and no longer passed along to customers.

 

That reduction, however, is not a done deal. Budget-cautious state legislators in Olympia are considering extending the 10 percent distribution fee beyond the first two years, said Chris Marr, a member of the Washington state Liquor Control Board.

 

Even so, Trone is confident Total Wine’s huge inventory and competitive pricing will keep the store competitive with or without the distribution tax reduction.

 

The north Spokane store’s shelves carry about 8,000 wines, 3,000 spirits and 2,500 beers, according to Total Wine’s marketing department.

 

Rather than converting an existing building, Total Wine decided to build its own store in Spokane Valley. The new location, at 13802 E. Indiana Ave., is west of the Spokane Valley Mall, between Great Floors and Fred’s Appliance Design Center.

 

No opening date has been announced. Construction is expected to start within 30 days. Company officials say the store will hire 40 workers.

 

 

——

Pennsylvania: Prohibition: PA liquor board shuts down attorney’s booze column

 

Do public employees have different rights to free speech?

 

Source: Philly.com

Melissa Daniels

Friday, June 21, 2013

 

For two years, attorney Alan Kennedy-Shaffer has had an insider’s view of Pennsylvania liquor laws. He’s assistant counsel for the Pennsylvania Liquor Control Board, the state agency that’s dominated headlines as the liquor privatization debate swells and sputters.

 

But the PLCB doesn’t want Kennedy-Shaffer writing about these laws in public, arguing it’s a conflict of interest.

 

Kennedy-Shaffer, no stranger to ruffling feathers, said that’s censorship.

 

“Public employees do not lose their right to free speech simply because their day job happens to be at the Pennsylvania Liquor Control Board, or any other agency,” he said.

 

Now he’s engaged in a debate with the state on that First Amendment right.

 

Proposed column on liquor laws

 

In late May, Kennedy-Shaffer approached the Philadelphia-based The Legal Intelligencer, the nation’s oldest law journal, about writing a column on Pennsylvania liquor laws. He wouldn’t get paid, but looked forward to seeing his name in the publication.

 

Given the widespread interest in state wine and spirit stores since Gov. Corbett made his privatization push earlier this year, Kennedy-Shaffer said he thought the column would be informative by explaining the history of how the PLCB developed since Prohibition, and answering reader questions about state laws.

 

“I felt honored to have the opportunity,” said Kennedy-Shaffer, who is also an active community organizer in Harrisburg. “I feel that I could provide a unique perspective on the issues that so many Pennsylvanians do care about.”

 

But before he started writing, he wanted to get permission from his employers. Kennedy-Shaffer filed a disclosure form – and found the PLCB was significantly less excited about one of their attorneys authoring columns about its laws.

 

They gave him two options – forgo the column, or resign from the PLCB.

 

“Any column authored by you regarding liquor law could be utilized to the Board’s disadvantage,” said the denial letter from PLCB human resources officials. “The Board does not give it consent to engage in this action.”

 

The letter said writing about liquor laws would conflict with Kennedy-Shaffer’s duties as an as attorney, and violate terms of the Liquor Code and the PLCB Code of Conduct.

 

By Kennedy-Shaffer’s own admission on the disclosure form, his position requires him to participate in contract, licensing and financial decisions. The PLCB told him they would not give him consent to disclose confidential information, and that his views could be interpreted as that of the agency.

 

“Given your current position, it would be difficult for readers of your article/column to differentiate and distinguish between your job duties and any opinions expressed in your column,” reads the letter.

 

Now Kennedy-Shaffer has appealed the decision to the Office of Administration, saying the PLCB is violating his right to free speech.

 

“Our First Amendment rights, especially freedom of speech, cannot be abridged by the Pennsylvania Liquor Control Board or any other government agency simply because the PLCB may disagree with our personal views or is fearful that we may say something they don’t like,” Kennedy-Shaffer wrote to Secretary of Administration Kelly Powell-Logan. “In this case, the PLCB has no right to censor my personal views on matters of public concern.”

 

This isn’t the first time that Kennedy-Shaffer’s extracurricular activities have raised concerns about conflicts of interest.

 

Kennedy-Shaffer went through a similar situation last year when he disclosed his creation of Harrisburg Hope, a community organization meant to engage city residents in Harrisburg’s debt recovery and local politics. Then, too, PLCB denied his request. But he appealed the case to the Office of Administration and won.

 

In this case, Kennedy-Shaffer said he thought the PLCB was heavy-handed in its denial.

 

“We need more government transparency, not less,” he said.

 

As for concerns about leaking proprietary information, Kennedy-Shaffer said no reputable attorney would violate their attorney-client privilege, or put their client at a disadvantage. He had also offered to allow the PLCB to review the column before submission, and include a disclaimer that his views didn’t represent those of the agency.

 

“My vision for the column was to encourage the readers to ask questions about liquor law or liquor issues, and then I would provide my views and any information I could,” he said.

 

The PLCB could not offer additional comment on the situation because it is a personnel matter, said press secretary Stacy Kriedeman.

 

Court rulings on the matter

 

The rights of public employees to share their views on issues involving their official duties has been tried and tested in the courts.

 

In May 2006, the U.S. Supreme Court ruled in Garcetti v. Ceballos by a 5-4 majority that the U.S. Constitution doesn’t protect public employees from employer discipline regarding statements made pursuant to their official duties.

 

Interpreting this involves whether or not the public employee was speaking as “a citizen on a matter of public concern.” If not, the employee does not have First Amendment protections.

 

“The question becomes whether the government employer had an adequate justification for treating the employee differently from any other member of the general public,” the court found. “A government entity has broader discretion to restrict speech when it acts in its role as employer, but the restrictions it imposes must be directed at speech that has some potential to affect the entity’s operations.”

 

Rick Esenberg, founder of the Wisconsin Institute for Law and Liberty, is a Marquette University Law School professor and lawyer with experience trying public employee free speech cases.

 

Pennsylvania law may provide Kennedy-Shaffer an avenue to argue free speech clauses, Esenberg said, if it has a broader interpretation than federal cases.

 

At a federal level, per Garcetti and other case law, if statements relate to a public employee’s job abilities, they do not have the same First Amendment rights, he said.

 

But again, it comes back to whether the speech is occurring under the responsibilities of begin a public employee.

 

“When you’re exercising your right to free speech as a public employee, you don’t have the same rights as someone else,” he said.

 

 

——

United Kingdom: Britain pays more for food and alcohol than most of Europe (but Norway is the most expensive place to shop)

 

Source: Daily Mail

Jun 21st

 

Alcohol in the UK 43% above the European Union average

Pub campaigners blame high taxes taken by the govermnment

Tobacco 94% more expensive than average across the EU

Norway most expensive for food and drink and Macedonia the cheapest

 

Alcohol prices costs in the UK are higher than most of Europe, new figures revealed today.

 

Families feeling the pinch will also be alarmed by research showing Brits pay on average more for milk, cheese and eggs than the European Union average.

 

And smokers face some of the highest prices in the whole of EU as taxes rise in an attempt to persuade cash-strapped addicts to quit.

 

The 2012 league table of food and drink costs reveals Norway is the most expensive place to shop, followed by Switzerland and Denmark, the Office for National Statistics said.

 

Across all food and non-alcoholic drinks, the UK pays four per cent above the EU27.

 

Norway has the highest prices at 86 per cent above the average while Macedonia is the lowest  on 42 per cent below.

 

But alcohol prices in the UK are some of the highest in Europe, some 43 per cent above the EU27 average, behind only high-cost Scandinavian countries like Norway, Finland and Sweden., and places like Iceland and Ireland.

 

Critics accused the government of driving up costs by increasing duty on beer, wine and spirits.

 

Brigid Simmonds, chief executive of the British Beer & Pub Association, said: ‘Huge tax rises are mostly to blame.

 

‘This is why the successful campaign to abolish the beer duty escalator was so vital. Up until the March Budget, we saw beer duty rise by 42 per cent over four years.

 

‘Huge amounts of red tape, and other taxes such as business rates, also push up prices.  The industry supports almost one million jobs – and we could be creating many more if tax and red tape weren’t so stifling.’

 

By comparison, in France alcohol costs are 12 per cent below the average and Germany 18 per cent lower.

 

The cheapest places to buy booze are Macedonia and Bulgaria, where prices are more than a third lower than Europe’s average.

 

The new figures show tobacco prices in the UK were 94 per cent above the average last year.

 

Only Norway (170 per cent higher) and Ireland (99 per cent above) were more expensive.

 

The form part of the Eurostat price survey on food, beverages and tobacco.

 

British shoppers also pay more for milk, cheese and egg prices with prices 7 per cent higher than the rest of Europe.

 

Once again, Norway is the most expensive at 114 per cent above while Poland is the cheapest at 37 per cent below the average.

 

Richard Lloyd, executive director of consumer watchdog Which?, said: ‘Our research shows that rising food prices is one of the top worries for financially squeezed consumers, with one in five households already saying they’re having to dip into their savings to pay for basics, such as food.’

 

According to latest Which? research, 9.8 million households are feeling the squeeze with 78 per cent of people now worried about food prices.

 

Four in ten people are likely to reduce their spending on groceries and food in the next few months.

 

According to the ONS study, the cost of meat in the UK was exactly in line with the average with Switzerland the most expensive and Albania least expensive.

 

The one glimmer of good news for Brits came on the cost of bread and cereals, which was 11 per cent below the EU average.

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