Liquor Industry News 6-26-13

www.franklinliquors.com

Franklin Liquors

Wednesday June 26th 2013

BE PREPARED !

We Are Told

The per-pack tax on cigarettes will increase by $1 On Monday!!

Legislative leaders strike deal to raise taxes by $500 million

By Matt Murphy

|  State House News Service                       June 26, 2013

House and Senate leaders struck a deal Tuesday night to raise taxes by $500 million to fund short- and long-term investments in the state’s aging highway and transit system, directing enough new revenue to the MBTA to forestall immediate fare increases and providing what lawmakers consider to be enough new funding to facilitate future expansion projects.

The House and Senate could vote on the bill as early as Wednesday, when both branches will be in session.

The conference committee proposal, which is not subject to amendment by lawmakers, would raise the gas tax by 3 cents a gallon and tie future increases to inflation. The per-pack tax on cigarettes would increase by $1, and lawmakers hope to collect $161 million by applying the state’s 6.25 percent sales tax to computer system design services and $83 million from changes to the utility classification and sales sourcing for tax reporting.

The bill would require the Massachusetts Department of Transportation to come up with plans to toll additional roads, including border tolls, and appropriate $100,000 for an advisory council to help MassDOT develop a statewide asset management system.

Legislative leaders believe the plan will provide enough additional financial support to shore up operations of the Massachusetts Bay Transportation Authority and MassDOT in the near term, while allowing for projects like the Green Line extension to Medford and the South Coast rail extension to move forward.

Though the tax on software services was included in both the House and Senate bills and was not subject to the most recent negotiations, Massachusetts Taxpayers Foundation President Michael Widmer blasted its inclusion in the bill, suggesting that lawmakers have failed to grasp its full impact.He also estimated that software design businesses will pay as much as $500 million in new taxes under the deal, far more than the $160 million lawmakers are expecting.

House Ways and Means chairman Brian Dempsey and Senate Ways and Means chairman Stephen Brewer were not available to comment on the accord, but the contours of the plan mirror those presented in April by House Speaker Robert A. DeLeo and Senate President Therese Murray, according to a summary obtained by State House News Service.

The six-member conference committee, asked to negotiate a compromise between the previously passed House and Senate versions of the bill, also accepted Senate-backed provisions that would direct up to $805 million in additional spending to transportation needs by 2018. The concession from the House could help mitigate an April threat from Governor Deval Patrick to veto the bill if it insufficiently funds transportation.

SABMiller rises on target talk and EM hope

 

Source: FT

By Bryce Elder

Jun 25th

 

SABMiller bounced from a six-month low as analysts revived speculation that the brewer was a likely target for AB InBev.

 

Numis Securities started coverage of SAB with a “buy” rating. Investors were undervaluing emerging market operations such as Snow Breweries, SAB’s 49 per cent-owned Chinese associate, it said.

 

China accounts for a quarter of global beer consumption and Snow has a market share of about 25 per cent, yet the division will provide only 3 per cent of SAB’s earnings this year, Numis said.

 

Once domestic competition settles down, China should become one of SAB’s principal drivers of growth, said Numis.

 

The long-standing theory that Inbev would try to buy SAB also justified a takeover premium for the stock, the broker continued.

 

While last year’s acqusitions of Fosters and Modelo by SAB and Inbev, respectively, looked to have pushed back the prospect of a mega-merger between the brewers, Inbev management was unlikely to have given up on “achieving dominant global leadership” through an SAB bid, Numis argued.

 

It put a £37 target on SAB shares, which rallied 2.8 per cent to £30.94. The stock had lost nearly 18 per cent over the past month as a weaker South African rand and Colombian peso cut earnings expectations.

 

 

——

Diageo – FY13 results preview

 

Defensive attractions to the fore

 

Source: Nomura

June 26, 2013

 

European Beverages

Stock Rating: Buy

Target Price: 2250p

DGE.L (1843p)

Ian Shackleton – NIplc

 

Strong defensive attractions in uncertain markets

With its wide portfolio of emerging markets (none accounting for over 4% of group EBIT) and its large exposure to US (c35%), we see some strong defensive characteristics and believe that medium-term revenue guidance of 6% pa can still be achieved, even with some emerging market slowdown.

 

Factoring in slightly negative FX

The company is due to report FY13 results on 31 July. Our slight reduction in our FY13 and FY14 EPS estimates is driven by some FX headwinds but our assumptions on organic revenue and EBIT are unchanged. Our TP falls to 2250p from 2400p to reflect our more conservative assumptions that the 6% revenue growth rate will not now accelerate in later years given some emerging markets softness.

 

Appointment of new CEO puts greater focus on emerging markets

With the appointment of Ivan Menezes as CEO from 1 July, we see even greater focus on growth in emerging markets (which we expect to be at least 50% of revenues by 2015, excluding United Spirits) and for M&A to reflect this, with further moves likely in local spirits.

 

M&A opportunity still there

We believe Diageo’s strong balance sheet (estimated net debt/EBITDA of c2x by year-end) offers scope for further M&A activities, especially in local spirits. Longer term, we still see potential for a quantum leap, possibly with Moet-Hennessy.

 

Valuation

Diageo trades at cal 2014E P/E of 15.4x vs spirits avg of 16.7x.

 

 

——

Pernod Ricard – FY13 Results Preview

 

Street expectations for FY14 look high

 

Source: Nomura

June 26, 2013

 

European Beverages

Stock Rating: Neutral

Target Price: EUR 89.00

PERP.PA (EUR 84.90)

Ian Shackleton – NIplc

 

No surprises in FY13. . .

Pernod Ricard is due to report its FY results on Thursday, 29 August. We expect FY EBIT org growth of +5.8% vs company guidance of “close to 6%”, with a continuing soft dynamic in China; we estimate Q4 organic revenue +6.6% with ROW +6.8%.

 

. . .but still pressure on FY14

For FY14, we revise down our FY EPS estimate marginally due to FX. However, our organic assumptions appear well below the street consensus (NE EPS EUR5.20 v Bloomberg cons EUR5.42) as we continue to be cautious on any immediate recovery in Asia/China.

 

Some signs of a hiatus period

With Alexandre Ricard not due to take over as Chairman/CEO until 2015, we continue to see a hiatus period, with no major M&A moves likely (also held back by leverage).

 

Longer-term growth more normalised

Our TP reduces from EUR104 to EUR89 as we factor in more normalised growth in later years (6% organic revenue and 8% organic EBIT), as the emerging market slowdown pulls back our growth rate estimates.

 

Valuation

Pernod trades at a calendar 2014E P/E of 15.5x vs. spirits sector average of 16.8x.

 

 

——

EU, Cuba spar with US over ‘Havana Club’ rum

 

Source: France 24

Jun 25th

 

The European Union and Cuba locked horns with the United States on Tuesday at the World Trade Organization, slamming Washington’s long failure to void a trademark law affecting the rum business.

 

The battle centres on a 1998 law which allows a US brand of rum to use the “Havana Club” name despite it already being owned by a company based in Cuba, which is in business with France’s Pernod Ricard group.

 

The law was struck down by the WTO in 2002.

 

The WTO oversees respect for the rules of global commerce amongst its 159 member nations, and in 1999 was asked by the EU to assess whether the law was out of line.

 

The US law on intellectual property rights allows companies to use trademarks even if they were previously registered to Cuban companies.

 

Cuba has been under US sanctions since 1960, the year after Fidel Castro came to power and installed a communist state, seizing the property of US individuals and companies.

 

The WTO wrapped up its complex dispute settlement process in 2002, finding fault with the legislation, and the US was ordered to adapt it within a reasonable period of time.

 

As the plaintiff, the EU agreed multiple extensions of the deadline set for Washington to act.

 

But at a dispute settlement hearing on Tuesday, its trade diplomats told the WTO that it was time for Washington to settle the issue, officials said.

 

Although Cuba is not formally a plaintiff, its trade diplomats also told the session that enough was enough, a message echoed by members, including China.

 

Washington’s trade diplomats countered that the relevant bills were before US lawmakers, and that the country was working to resolve the issue.

 

But critics said that lodging bills could not be considered falling into line, saying Washington had had ample time to comply.

 

The 1998 law banned Havana Club Holdings, a joint venture between Pernod Ricard and Havana Rum and Liquors of Cuba, which owns the Havana Club trademark, forcing it to defend its business in US courts against the Bacardi-Martini group.

 

As late as May 2012, the US Supreme Court refused to hear a Pernod Ricard appeal of the law, allowing Bacardi to keep selling its Havana Club brand of rum inside the United States.

 

Bacardi-Martini, based in Bermuda, has been distributing its rum in the US under the Havana Club brand name since 1994.

 

 

——

Pennsylvania: Beer distributors continue to oppose liquor privatization efforts in Pennsylvania

 

Source: Patriot News

Sue Gleiter

June 25, 2013

 

In the spirited debate on whether or not to liberalize Pennsylvania’s liquor monopoly, beer distributors have stood their ground.

 

They have repeatedly said they don’t want to face increased competition from big-box stores and supermarkets. It could hurt business and force many of the 1,200 family operated distributorships to possibly close.

 

Now, as yet another proposed version to privatize the state-run system is headed to the Senate floor for a potential vote this week, those in the beer industry continue to voice their opposition.

 

Sen. Charles McIlhinney, a Bucks County Republican who drafted the legislation, has said he would like to protect state-run businesses such as beer distributors from competing against corporate groups.

 

The latest proposal doesn’t carve out specific licenses for supermarkets to sell booze, but it does allow 14,000 current license holders in the state, including hotels, taverns, restaurants and distributors, to sell beer, wine and spirits.

 

And that Mark Tanczos, president of the Malt Beer Distributors Association of Pennsylvania, said would devalue beer distributors’ licenses.

 

He said it would be unfair for the state’s 1,200 distributors to have to compete against 14,000 potential outlets selling beer as well as wine and spirits.

 

“At this point, we have been asking for what we have been asking for. Wine and liquor is not ours to take. We have been asking for package reform,” Tanczos said.

 

The bill calls for allowing beer distributors to sell smaller quantities of beer such as six- and 12-packs, something Tanczos said the industry has been requesting for more than seven decades.

 

“I just go back and forth. It’s just the unknown factor that gets you,” said Genevieve Christ, owner of Oakhurst Beverage in Susquehanna Twp.

 

The idea of selling wine and spirits doesn’t sit well with Christ. As it is, her store is crammed with cases of domestic and craft beers. Obviously, she said she would have to expand the store, buy new shelving and an inventory system to accommodate additional inventory.

 

Deciding exactly what to do with the business would boil down to seeing the final law as well as how many outlets would be selling alcohol, she said.

 

Jay Wiederhold, president of the Pennsylvania Beer Alliance, takes a slightly different approach. He said the latest proposal out of the Senate is fair and a step in the right direction.

 

In addition, he said, it shows the Senate has a strong knowledge of where the beer industry is coming from and realizes privatization could be detrimental to the state if it’s done wrong.

 

“I think the Senate has really taken on the seriousness of what could happen. We like the fact the language doesn’t devalue current licensees because they do employee tens of thousands of people in the state,” Wiederhold said.

 

However, he said the beer industry would like to see the legislation stick to what the consumers want – the ability to buy wine and beer at more outlets – while keeping liquor sales in the hands of the state.

 

 

——

Brewers Power Up Technology for ‘Smart’ Beers

 

Source: Dow Jones

SIMON ZEKARIA

Jun 25th

 

Lager is going high-tech.

 

With demand falling in the West’s biggest beer-drinking markets, where mainstream sales have been stung by a consumer shift to spirits and wine, brewers are changing up the game by plowing money into research and development.

 

At Milan Design Week in April, Heineken NV HEIA.AE +1.14% released 200 “Ignite” bottles of its eponymous lager brand that strobe when they are drunk, light up when clinked with another bottle and flash as the music beats thanks to a custom-built circuit board with motion sensors, computer processor and wireless receiver. When left alone, the bottle dims and goes into hibernation.Paul Smailes, Heineken’s global head of digital, said the brewer was planning to release an improved version next year at large music events.

 

“We have lost a little bit of ground to spirit and champagne brands. We really wanted to tackle that in an innovative way,” said Mr. Smailes.

 

Connected products are having a “big impact for brands and companies around the world,” he said. “Other brands are already playing in this space, like the Nike+ FuelBand and the Pebble smartwatch. Adidas has a smart shirt, shoes and [soccer] ball.”

 

Bernstein Securities analyst Trevor Stirling said “big beer was asleep at the wheel” on marketing for many years. “They have woken up. If they didn’t do this, beer would continue to decline in relevance as an [alcohol] category.”

 

There must be care in assessing technology’s impact on consumer perceptions, according to Simon White, chief planning officer of advertising agency Draftfcb. “Once you start adding wizzy bits of technology, it could start affecting brand image,” he said. “Although the taste is the same in reality, your perception of that taste changes.”

 

However, Mr. White said the social aspect of beer drinking lends itself to social-media technology. “If you are a young man going out drinking in a bar, it is not about the beer but being seen,” he said. “If beer truly is a social lubricant, then [technology] can help you.”

 

This can be advantageous, said Pete Brown, writer and blogger on the beer industry. “I think brand owners mistake the level of reverence that consumers have for their product. The brand isn’t the sole focus of being there. It is very much a facilitator to having a good time.”

 

With mobile technology, the cost factor is critical. Heineken doesn’t disclose what it spent on the Ignite project, but Mark Van Iterson, the brewer’s global head of design, said that even though the souped-up bottle won’t be found “in every six pack in every supermarket,” ground-breaking product innovation will reap financial rewards. While some lager brands allow interaction with smartphones by scanning bar codes, beers with embedded motion-based technology, like the “Ignite”, are available to consumers only through marketing events. Mr. Van Iterson says that may change as the product becomes more sophisticated.

 

“The more functionality we add to it, the more value it will add for people so maybe they will be prepared to pay for it and it becomes a business case.”

 

Draftfcb analyst Chris Miller says current interactive beverages are “just the tip of the iceberg”. “I would guess in 10 years it would be strange not to have it. The challenge will be to move it from gimmick to relevancy.”

 

Budweiser’s “Buddy Cup,” created by the company’s Brazilian unit, already has smartphone connectivity. A code on the bottom, when scanned though a Budweiser smartphone app, links the tumbler to a Facebook Inc. FB +1.30% profile. A “bump sensor” then enables the drinker to “friend” request someone when two cups strike during a toast.

 

The cup was tested in a pilot event in São Paulo. Brazil is one of parent company Anheuser-Busch InBev NV’s ABI.BT +2.12% major markets, yet a relatively new one for the Budweiser brand. Brazil is hosting the FIFA soccer World Cup next year, representing a big opportunity for the global brewer to release innovative products.

 

“Once technology is proven and consumer benefits are proven, then we roll [products] out,” said Pedro Earp, AB InBev’s global vice president of consumer connections, without specifying individual projects. “The World Cup is going to be probably the most social event we’ve seen in the last decade.”

 

Brewing rival Carlsberg AS says it has a number of “interesting projects” in the pipeline, while SABMiller SAB.LN +1.55% PLC says it is focused on brand and packaging innovation.

 

Marketers for liquor distillers are also starting to think high-tech. Pernod Ricard SA’s RI.FR +1.65% whiskey brand Ballantine has teamed up with a niche clothing specialist to create a digitally-connected T-shirt enabled to flash online status updates. And Diageo DGE.LN +0.64% PLC has allowed consumers to create personalized video messages when gifting its blended Scotch drinks. By scanning codes on the bottle with a smartphone, the recipient can view the video.

 

Beer makers need to “premiumize” their brands to boost margins as Western volumes struggle, and technology is another tool to do that, said Jefferies analyst Dirk Van Vlaanderen.

 

“They need to create excitement about the brands again. It has become more prevalent in the last two to three years as we have seen a big slowdown in mainstream categories,” Mr. Van Vlaanderen said. The U.S. and Germany, the two biggest Western beer markets, saw beer demand between 2009 and 2012 fall 2.5% and 2.3%, respectively, according to research group Euromonitor.

 

“I don’t think it’s a game of desperation. I think it is good sense [by] keeping edgy,” said Mr. Van Vlaanderen.

 

Beer makers know they have to “fight back,” said Mr. Brown, the writer. “Lager has become commoditized. Brands have become interchangeable and less special.”

 

For Heineken’s Mr. Van Iterson, there is simply the need to stand out.

 

“The money we invest in music sponsorship like festivals and concerts is one of our biggest. The challenge is how do we make sure we are not just another beer brand that is sponsoring music,” he said.

 

Technology “is a tool that makes that money work harder for us,” he added.

 

 

——

Beverage Companies Tap the Crowd

 

Source: Dow Jones

SIMON ZEKARIA

Jun 25th

 

Swedish cider maker Kopparberg told Anastasia Emmanuel to come to one of London’s hippest shopping areas to claim her secret prize.

 

Nestled down an alley in Camden Lock in the north of the city, where shops sell studded bags and steel-capped leather boots, the company had parked a black open truck, its interior kitted out like a winter forest, complete with ice bar, billowing fake snow and tree logs. An indie guitarist playing Britney Spears heralded Ms. Emmanuel’s arrival.

 

Ms. Emmanuel, a 27-year-old social-media marketer, had won Kopparberg’s latest online social media competition, called “Happenings”, where fans were simply asked why they wanted the company to make something “happen” to them. The winner promised to do something “intriguingly worthwhile” if she won-then sent in a photo of her climbing a tree. Amelia, another entrant on the final shortlist, wanted the company to send an airship over the city delivering cider from above.

 

Beverage is the latest industry to jump on the “crowdsourcing” phenomenon, as companies turn to fans online for product brainstorming, design and advertising. While traditional marketing concentrates on a single, direct message, crowdsourcing engages with the consumer in a two-way process.

 

For example, Kopparberg was able to use its competition to collate opinions, commercial ideas and drinking habits from the submitted answers, as well as creating a promotional buzz around cloudberry and elderflower cider twists. Kopparberg’s London “Taste Lab” last year saw drinkers experiment and vote on different flavors, providing valuable insight at a fraction of normal product testing costs.

 

Crowdsourcing labor investment is minimal compared with normal research outsourcing and can involve lower commercial and strategic risk with direct guidance from the target market. “[A company can] spend millions on trying to work out whether a product will be successful. Now brands are being a little bit more daring,” said Joel Windels of social media tracker Brandwatch. “The majority of people who are giving feedback don’t necessarily know they are being listened to. That is the real power behind it.”

 

Heineken NV’s HEIA.AE +1.04% web-based “Ideas Brewery” serves as an online laboratory to crowdsource ideas through competitions. A previous winning project, for example, was adding flavored foam to draft beer. Now the Dutch giant is offering $10,000 to consumers who come up with ingredients, packaging and serving ideas aimed at 60-70 year-old beer drinkers. “The creative young class is extremely influential, very well-connected and has loads of ideas,” says Mark Van Iterson, Heineken’s global head of design. “It keeps us connected to what keeps people busy, what’s in their minds, what they think about the brand.”

 

“The more functionality we add to it, the more value it will add for people so maybe they will be prepared to pay for it and it becomes a business case,” Mr. Iterson said.

 

Not everyone is convinced crowdsourcing will replace more traditional methods of research. Shaun Varga, chairman at brand consultancy Ingenuity, says crowdsourcing will never be able to trump professional marketing expertise.

 

“Crowdsourcing is rather like gold mining. You have got to go through 10 tons of rubble before you uncover that one little nugget,” said Mr. Varga. “Creative ideas, in the advertising world, are there to fulfill a set of commercial objectives. That isn’t realistically something you can ask your customer base to figure out for you.”

 

Steve Grout, chief executive of digital agency TBCH, cautions that while crowdsourcing is “another tool in the armory” of marketers, it is not always the answer. “[The danger] is that you do it because you feel everyone else is doing it.”

 

Mr. Grout said some companies forget that crowdsourcing attracts lovers of online activity, as well as brand devotees. “What you don’t know about these people is whether they are actually buying your beer.”

 

Still, some U.S. beer makers are trusting fans implicitly. Samuel Adams produced B’Austin Ale, a “fully crowdsourced” beer, in Texas last year, after fans submitted ideas on color, clarity, mouth feel, sweetness and bitterness. As B’Austin Ale was produced by the people, the brewer made the recipe public.

 

Chicago-based upstart Arcade Brewery, which celebrates “beer, nerd culture, and community”, gave fans until mid-March to design a label for its William Wallace Wrestle Fest scotch ale. Atlanta’s Monday Night Brewing, run by executives with quirky titles like “Taste-testing Ninja” and “Yeast Whisperer”, used enthusiasts to create a mural of neck ties to decorate a factory wall. And MobCraft Beer makes monthly custom craft beer based on public votes, like a spiced barley wine called “Arabian Date Night”.

 

“The larger brands are [generally] more interested in [dialogue], whereas some of the small businesses and microbreweries are absolutely interested in what the consumer wants to buy,” said Adam Penny, creative director at Connected Pictures, a video production company specializing in brand advertising.

 

For smaller beverage makers, where there is crowdsourcing, “crowdfunding”-or pooled investment-is not far behind.

 

U.S. independent craft brewers are also creating their own source of capital in a tough lending period by investing in a “crowdfunding platform” called “Craft Fund.” It aims to strengthen the craft sector by encouraging beer enthusiasts, as well as disrupting the acquisition trail of the global brewers for rising craft brands.

 

Niche Scottish brewer BrewDog, which got noticed after putting beer bottles in taxidermied animals, has grown revenue strongly after raising £2.3 million, or $3.5 million, from 7,000 investors to build a new brewery in return for shares. Its shareholders then created an “Electric India” beer for the brewer, with orange peel, heather honey and Nelson Sauvin hops. Fans also advised on beer style, alcohol percentage and barrel aging to create a “Mashtag” brew. “Every single element of that beer was determined by fans [via] Twitter, Facebook FB +1.30% and blog,” said BrewDog’s marketing executive Sarah Warman.

 

Kopparberg’s Mr. Calder admits quantifying return on investment from crowdsourcing is difficult. “You can’t just turn on a tap and sell to people online.”

 

Luckily for Kopparberg, Ms. Emmanuel is a fan anyway. “Yeah, I love it.”

 

 

——

More Offices Offer Workers Alcohol

 

As Workday Expands, Alcohol Flows More Freely, but Practice Can Be Risky, Exclusionary

 

Source: WSJ

RACHEL EMMA SILVERMAN

Jun 25th

 

The keg is becoming the new water cooler.

 

At least, that’s the case at such firms as the Boston advertising agency Arnold Worldwide, where workers cluster around a beer-vending machine-nicknamed Arnie-after the day’s client meetings are done. As they sip bottles of home-brewed beer, employees exchange ideas and chitchat, often sticking around the office instead of heading to a nearby bar.

 

Plenty of offices provide free food to their workers, but as the workday in many tech and media companies stretches past the cocktail hour, more companies are stocking full bars and beer fridges, installing on-site taverns and digitized kegs and even deploying engineering talent to design futuristic drink dispensers.

 

The perk, firms say, helps lure talent, connects employees across different divisions and keeps people from leaving the office as the lines between work and social lives blur.

 

But employment lawyers worry that encouraging drinking in the workplace can lead to driving while intoxicated, assault, sexual harassment or rape. Plus, it may make some employees uncomfortable while excluding others, such as those who don’t drink for health or religious reasons.

 

Drinking on the job has long been part of work life in the U.S. and abroad, whether it’s a beer with colleagues in the United Kingdom or Japanese salarymen entertaining clients at sake bars. But holding happy hour in the office is different, experts say, because it brings after-hours activity into the professional space.

 

At the New York-based company Thrillist Media Group, teams frequently pop open beers at the end of the day and hold regular liquor tastings, often sponsored by the site’s alcohol advertisers. Allowing workers to drink on the job may even keep them at their desks longer, says Thrillist’s founder, Ben Lerer.

 

“This is a group of adults,” says Mr. Lerer. “I’m fine if you are having a beer out on your desk, sticking around and doing more work and enjoying yourself doing it.” Plus, there are nonalcoholic alternatives. But if an employee is getting drunk, he says, “Go home.”

 

Jay Chinthrajah, a technical lead at Thrillist and a competitive runner in his spare time, usually chooses ginger ale over beer. Co-workers sometimes wonder why, he says, but the gatherings are “more about the experience of stepping out from your desk and interacting with people.”

 

Some firms tout their free booze as a way to signal to in-demand workers that their company isn’t stuffy, bland and corporate. The recruiting site for the online-storage firm Dropbox, for instance, touts its “Whiskey Fridays” soon after such perks as health and dental insurance. (A firm spokeswoman declined to comment.)

 

Desk-side drinking seems to happen most often in urban workplaces where employees tend to be young, male and unattached.

 

As tech firms, in particular, have come under fire for anemic diversity, researchers say that office drinking may turn off anyone who doesn’t fit the demographic, such as parents, people of color or those with strong religious views, not to mention recovering addicts and alcoholics.

 

“These are well-intentioned practices, but they can make people uncomfortable,” says Wharton professor Nancy Rothbard, who studies workplace socializing.

 

In her research, Dr. Rothbard has found that workplace social events, such as happy hours, increase bonding among like groups of employees-such as young white males-but tend to make those who are dissimilar feel less comfortable.

 

“People who were racially dissimilar weren’t having as positive an experience at these events,” says Dr. Rothbard. “They felt it was almost an obligation to attend.”

 

Christina Wallace, the director of the Startup Institute, a New York career bootcamp, says that the fraternity-house cultures at some startups can be off-putting.

 

“When you are predominantly young men and you have a kegerator right next to the ping pong table, that can be a big turnoff,” she says.

 

Liability issues also abound. If employers serve alcohol and something goes awry as a result, the company may be on the hook, says employment lawyer Craig Annunziata, although some of the risk may be covered by liability insurance. “I’m not seeing a lot of upsides when there is alcohol in the workplace,” he adds.

 

Yet, say proponents, light drinking on the job can help workers connect and make them feel appreciated, especially when they are expected to work long hours to complete a project or build a fledgling company.

 

“It is a very easy way to keep employees committed,” says Paul Roman, a sociology professor at the University of Georgia who studies workplace drinking. “You don’t need to go off and spend eight bucks on premium beer; you can enjoy it for free on company grounds.”

 

Some firms are tapping the keg on company time. Employees at San Francisco-based review site Yelp Inc. YELP +0.55% and Seattle real-estate site Zillow Inc. Z +4.44% spent “hackathon” periods developing tablet-controlled kegs. At Zillow, the keg creates individual user accounts and snaps photos of staffers as they tap their beer, says Christopher Roberts, who helped develop the “kegbot.”

 

Companies are also keeping an eye on what employees consume.

 

Arnold in Boston isn’t exactly the hard-drinking ad agency portrayed on television’s “Mad Men”: Workers get three to five drink credits a month, and managers can allot more to reward their charges.

 

“It’s enough to get you through the month,” says Matt Karolian, a social-media strategist who helped develop Arnie.

 

 

——

Australia: Red Bull pushes for state U-turn on alcohol mix (Excerpt)

 

Source: Just Drinks

By Andy Morton

25 June 2013

 

Red Bull has called for Western Australia to drop its on-trade ban on mixing energy drinks with alcohol as the state reviews its liquor laws.

 

The Austria-based company said in a submission to a review committee there is “no clear scientific basis” for the ban, which was introduced to hotels, bars and clubs in 2010. “The current balance of evidence does not support a harmful toxicological or behavioural interaction between caffeine and alcohol,” Red Bull Australia regulatory affairs manager Zac Rich told just-drinks today (25 June).

 

 

——

Australia: Convenience stores bid to sell liquor

 

Source: TheShout

By James Atkinson

26/06/2013

 

Australia’s convenience stores have called for regulators to break the supermarkets’ stranglehold on liquor by allowing convenience stores to get in on the product category.

 

In its submission on Western Australia’s Liquor Act review, the Australasian Association of Convenience Stores (AACS) says there is “no credible reason” why convenience stores should not be permitted to sell alcohol products.

 

“As evidenced by the responsible sale of tobacco products, convenience store operators are entirely capable of the responsible retailing of alcohol and compliance with all regulations,” AACS executive director Jeff Rogut says.

 

“The convenience store sector in the United States, Europe and South East Asia is permitted to sell alcohol products and this has proven an important revenue source for the sector, one Australian stores are missing out on.”

 

Rogut says the two main supermarket chains have “successfully used the existing regulatory framework to dominate alcohol sales to a level that has become unsustainable”.

 

“Reviewing legislation to permit convenience stores in Western Australia to sell packaged alcohol is one way to generate new revenue opportunities for small business and in some way correct the massive imbalance in market share enjoyed by the two major chains,” he says.

 

He stresses that convenience stores are not seeking to compete directly with the traditional bottleshop or big-box liquor stores offering.

 

“We are in the convenience business and our offer would reflect this,” he says.

 

Rogut proposes that convenience stores be subject to limits on the proportion of refrigerated shelf space and floor space devoted to liquor and maximum limits of packaged alcohol available for purchase per customer.

 

“This could be one six pack of beer per customer, or a limit of two bottles of wine per customer,” he suggests.

 

Rogut says AACS recognises there is a “significant emotional hurdle” that needs to be overcome for legislative reform in this area to proceed.

 

“The review of the Liquor Control Act 1988 represents an opportunity for Western Australia to take a national leadership position on this important issue,” he says.

 

 

——

Bottoms Up: Beer-Flavored Ice Cream

 

Source: The New York Times

By LUCY BURNINGHAM

June 25, 2013

 

They are two of summer’s signature indulgences. But ice cream and beer, one a childhood staple and the other a primal toast of adulthood, have long worked opposite ends of the picnic.

 

Now they’re starting to become acquainted, as a new kind of sweet gains traction: beer-flavored ice creams and floats, from a number of small dairies around the country.

 

Think ice cream made with Belgian-style Tripel ale and apricot jam; a three-hops ice cream with chunks of upside-down cake baked with candied pineapple, tangerine zest and hop leaves; or a scoop of vanilla floated in a creamy milk stout.

 

Mixing alcohol and dairy isn’t revolutionary. Liquor has long shown up in bourbon milkshakes and rum-raisin ice cream. But as artisan ice-cream makers seek local ingredients that push the envelope, craft beers offer new dimensions, said Jeni Britton Bauer, the founder of Jeni’s Splendid Ice Creams in Columbus, Ohio.

 

“Beer can help bring some bitterness and dryness to an ice cream, which is traditionally sweeter than other desserts,” she said. “It has this great functionality.”

 

Inspiration for flavors can come from brewers, beers or the culinary world. On first sip, a porter named Sue, made with smoked-cherry-wood malt by the Yazoo Brewing Company of Nashville, tasted meaty to Ms. Britton Bauer. “I thought: You know what we need with this? The kind of coating you’d put on a roast.”

 

So, she tossed pecans, cashews and Spanish peanuts in cayenne, rosemary, brown sugar and salt, roasted the nuts and added them to an ice cream made with the porter. The result, Yazoo Sue With Rosemary Bar Nuts, is now a Jeni’s best-seller.

 

Techniques to get beer flavors into ice cream vary. Ms. Britton Bauer tried boiling beer to reduce it before adding it to ice cream but said the heat destroyed desirable flavors. Now, she adds unaltered beer to the ice-cream base just before freezing.

 

Humphry Slocombe Ice Cream, the trendsetting ice-cream shop in the Mission District of San Francisco, creates a line of beer ice creams every year for that city’s Beer Week. They’re made by reducing each beer by half before adding milk and cream, said the owner and chef, Jake Godby. “When the base is done, I might add a little more beer if I think the flavor needs to be more pronounced.”

 

The marriage isn’t always harmonious. The water in beer tends to create icy textures, making it difficult to make a creamy ice cream with discernible beer flavors. So the darkest, most concentrated beers are the best candidates for beer ice cream.

 

Some producers avoid iciness by keeping beer out altogether. Tyler Malek, the head ice-cream maker at Salt & Straw in Portland, Ore., has developed a “six pack” of beer ice creams, five of which do not include any beer. He worked with local brewers to “deconstruct, then reconstruct” specific beers into ice creams using a variety of malts, lactic acid, a partly fermented beer, yeasts, a bourbon barrel and whole and pellet hops. “We’re pushing the limits of what you can do with ice cream and food in general,” Mr. Malek said.

 

There may be limits, though, on mixing innocent sweets and adult beverages. In March, the Brazilian Advertising Self-Regulating Council warned the brewer of Skol, a popular beer in Brazil, that its Skol-flavored ice cream could entice children because posts about the product appeared on the company’s Facebook fan page. A spokesman for Skol, which is owned by Anheuser-Busch InBev, wrote in an e-mail message that the ice cream, with an alcohol content of 0.12 percent, was available only to adult customers in bars in São Paulo and Rio de Janeiro.

 

In the United States, the Food and Drug Administration regulates food products with 0.5 percent alcohol by volume, and the Alcohol and Tobacco Tax and Trade Bureau regulates anything above that. (Additional state-by-state laws can also apply.)

 

Frozen Pints, an Atlanta manufacturer, sells seven beer ice creams that fall under the jurisdiction of both agencies, so nutrition and alcohol content must be listed on each pint. (All of the other ice creams in this article contain less than 0.5 percent alcohol by volume.) Frozen Pints’ Peach Lambic, for example, has 1 percent alcohol; Vanilla Bock, 3.1 percent. As they have more than 0.5 percent (and because Georgia treats them as beer), they are considered an alcoholic product and can be sold only to people of legal drinking age.

 

“It’s not often you get carded for buying ice cream,” said Ari Fleischer, a founder of Frozen Pints. Mr. Fleischer (no relation to the former White House press secretary of that name) came up with the idea for the dessert after a friend accidentally knocked a beer over near an ice-cream maker.

 

For those of drinking age seeking a looser union of beer and ice cream, beer floats offer a sweet buzz.

 

“What’s universally appealing about floats is the way the creaminess of ice cream works with effervescence,” said Julia Collins, the director of restaurant development for Murray’s Cheese in New York. Murray’s Cheese Bar has a roster of beer floats that will change throughout the summer. “After every sip of creamy ice cream, the bubbliness clears the palate and makes your mouth ready for the next bite.”

 

Murray’s floats will be made with new house-made-cheese ice creams, including a Prairie Breeze Cheddar and peanut butter flavor. The inaugural float pairs a wild cherry Chiriboga Blue Cheese ice cream with Oud Beersel Framboise, a Belgian raspberry lambic – a tart and fruity combination that Ms. Collins said was designed purely “for an adult palate.”

 

 

——

Truett-Hurst raises $14.1 million in IPO

 

Source: PRESS DEMOCRAT

Tuesday, June 25, 2013

 

Truett-Hurst raised $14.1 million for the Healdsburg wine company, after expenses, from its initial public stock offering last week, the company announced Tuesday.

 

The company sold 2.7 million shares of stock to the public at $6 a share. Its stock, which began trading on the Nasdaq last Thursday under the symbol “THST,” was trading at $5.80 a share midday Tuesday.

 

Proceeds from the stock sale will be used to pay down debt, increase working capital, hire employees and other corporate purposes.

 

The company generates about 75 percent of its sales from custom labels produced for Trader Joe’s, Safeway and Total Wine & More. It also sells wine under its Truett-Hurst, VML, Healdsburg Ranches and Bradford Mountain labels.

 

 

——

French AOC system marred by ‘commerce and politics’, say analysts

 

Source: Decanter

by Jane Anson in Bordeaux

Tuesday 25 June 2013

 

The future direction of the appellation controllée (AOC) system in France, which dates back to the 1930s, is the subject of increasingly fierce debate, with many producers both inside and outside the system calling for its overhaul.

 

‘The AOC system has become an economic tool instead of a safeguard of our terroir,’ said Geneviève Teil, a researcher for INRA, the French national agricultural research institute.

 

‘AOC rules are getting too far away from their origins. Regulations allow agricultural practices that destroy vineyards, such as the use of phytosanitary products on the vines that disrupt biological balance, and allow yields that are far too high, diluting the terroir’s expression. Commerce and politics are replacing quality concerns.’

 

At the heart of the argument are producers whose wines have been rejected from the AOC by the tasting committee that oversees the right to use the term on a wine label.

 

Wines are checked across a number of criteria; most obviously for faults such as volatile acidity, but also the more difficult to define idea of non-typicity to a specific AOC. In the Gironde (Bordeaux) region alone in 2011, 10,000 samples were tested and 17% were flagged up as potentially problematic.

 

These ranged from minor faults (12%) to major faults (4.5%) to critical (0.5%). Minor faults result in a warning, and critical faults are withdrawn from sale. Major faults, in contrast, can either be appealed by the producer, or still sold, but within the Vins de France category, not AOC.

 

Many of the producers who have been rejected from AOC – a group known as ‘Les Refusés’ – believe they are suffering not from their own winemaking issues, but a wider problem within the AOC system.

 

‘There are only a small number of wines refused for technical quality issues,’ says Teil. ‘Instead most fall outside of what is deemed typical’.

 

‘The problem is that many modern winemaking techniques have clouded the idea of what is typical,’ Teil says. ‘New oak is used to sweeten up the taste and add a touch of vanilla spice, cultivated yeasts encourage certain aromas over other ones. The way that we decide what constitutes quality and typicity has to be drastically redefined.’

 

 

——

Fladgate buys Wiese & Krohn stock

 

Source: Drinks International

By Christian Davis

26 June, 2013

 

The Fladgate Partnership has announced that it has purchased the brand, stocks and vineyard holdings of Wiese & Krohn in a deal that includes stocks of aged tawnies and colheitas dating back to 1863, plus Quinta do Retiro Novo in the Rio Torto Valley in the Douro.

 

The Fladgate Partnership, which owns the port houses Taylor’s, Fonseca and Croft and holds more than 500 hectares of vineyards in the Douro. sees this as a long term investment and one which strengthens its position in the aged tawnies sector.

 

Fladgate CEO Adrian Bridge said: “The recent growth and interest in aged tawnies worldwide has fuelled our interest to expand our stock and introduce a range of exceptional colheitas to our portfolio for the first time.

 

“Wiese & Krohn is recognised for its expertise in this field and the acquisition of the company includes the highly desirable grade A vineyard of Quinta do Retiro Novo, in the Rio Torto Valley.”

 

Wiese & Krohn has been owned and run by the third generation of the Falcão Carneiro family. Its stocks include around five million litres of port which are stored in six cellars in Vila Nova de Gaia and one in the Douro. These stocks, its operating systems and the team at Wiese & Krohn will be fully integrated into the Fladgate Partnership.

 

“The acquisition of Wiese & Krohn demonstrates our confidence in the market for premium port and will further strengthen our ability to service future growth in this segment,” said Bridge.

 

 

——

Investing in Wine: Sour Grapes or Liquid Gold?

 

Exploring wine as an investment option

 

Source: US News and World Report

By Rob Silverblatt

June 25, 2013

 

Exploring wine as an investment option

 

When reviewing their portfolios, many investors will instinctively reach for a glass of wine if their holdings have taken a hit. But in recent years, wine has proven to be more than just an antidote for investment-related blues. Instead, it is increasingly becoming an investment in and of itself.

 

Wine investments have existed for quite some time. Perhaps the most rudimentary example is the private wine purchaser who buys a bottle, sticks it on a shelf and resells it at a profit after it ages. From that model, which has existed for centuries, the concept of the wine fund emerged. The idea is simple: Investors pool their money and entrust it to a fund manager. The manager then purchases wine on behalf of the investors and looks to resell it. Any profits are then reinvested in more wine or returned to the shareholders.

 

There are many permutations of this basic model, but one of the more interesting versions is the fund that invests not in wine but in wine-related real estate. Take, for instance, the Blue Chip Winery Fund, which is based in the Bahamas and uses its investments to buy stakes in vineyards and wineries in Europe and Canada.

 

Although wine investors could once expect to squeeze promising returns from their grapes, the market has cooled down quite a bit in recent years. The bad news for the industry is exemplified by the Vintage Wine Fund. According to the Financial Times, the fund, which once had more than $100 million in assets under management, is preparing to liquidate due to disappointing performance.

 

Nonetheless, for investors who are optimistic about wine as an investment, there are still plenty of options. The key, of course, is to understand the risks.

 

Perhaps the biggest risk is that wine, somewhat ironically, is an investment that is prone to liquidity problems. Rare bottles may command high market values, but none of that matters unless someone is willing to buy them for what they’re worth. “The issue with [wine] funds is always your exit strategy,” says Sergio Esposito, who co-manages the Bottled Asset Fund, a fund that specializes in Italian wines. “Knowing how to sell … is extremely important.”

 

By a similar token, wine is often hard to value. Particularly for the most expensive wines, value is tied more to whatever a particular buyer is willing to pay than it is to objective indicators. “Wine is a unique product, much like art is a unique product. It’s all in the eyes of the beholder,” says Jeff Stevenson, the president and CEO of the company VinoPRO, a company that helps wine producers sell their products. “Trying to figure out how [a wine fund] is going to pay out … is like rolling the dice.”

 

Another risk is that wine funds are often based abroad and frequently follow a private equity structure, which means there are fewer regulatory assurances than there are with the heavily regulated domestic mutual fund market.

 

Given the risks, most people who put money into wine funds are high-net-worth investors. Indeed, most funds have limitations that effectively ensure only wealthy investors can participate. Esposito’s fund, for instance, has a minimum investment of $50,000, which is fairly common among wine funds.

 

Although a number of wine funds have been struggling, Esposito, whose fund is projected to earn investors an annualized return of around 35 percent (net of fees) over the course of its life span, still sees plenty of opportunities, particularly in the Italian wine market. “[Italian] wines are getting more and more recognition every day,” he says.

 

 

——

Downton Abbey wine to be released

 

Source: Fox News

June 25, 2013

 

Downton Abbey has inspired many things: tourist attractions, spin off-parody shows, even a clothing line. So it’s not a surprise to hear that the PBS hit has spawned a line of wine.

 

The folks at Wines That Rock –who produce Grateful Dead, the Rolling Stones and Pink Floyd-branded wine — have teamed up with Dulong Grands Vins de Bordeaux to create a ‘vintage’ wine collection that even Carson would approve of.

 

The range of Bordeaux clarets and whites are the type of clarets imported by the British aristocracy from France in the early 1900s. The recreated wines are from grapes grown on the same vines and from the same soil as the era depicted in Downton Abbey.

 

“We are working with The Dulong Grands Vins De Bordeaux vineyards, which have been in the same family for five generations,” said Bill Zysblat, co-owner of Wines That Rock said in a release. “They have over 130 years of experience in creating the world’s best wines so these are wines the Crawley family would have been proud to serve at Downton.”

 

The wines will be sold in single bottles and also packaged as gift sets, and will be available through distributors in the U.S. and Canada –just in time for season four.

 

A note of interest: Downton Abbey’s creator, Julian Fellows, just announced that Paul Giamatti –who played a Pinot Noir-guzzling oenophile in the movie “Sideways,” will be joining the cast as Cora’s playboy brother, Harold.

 

Sounds like a great time to crack open a bottle and watch Lady Mary with her new baby George.

 

 

——

Online retailers need to appeal to a different type of wine consumer

 

Source: Harpers

by Katherine Canfield

Tuesday, 25 June 2013

 

Both large and small online retailers need to rethink their sales models to appeal to a very different type of consumer, according to new research revealed at last week’s Vinexpo exhibition in Bordeaux.

 

The results of an ‘E-Performance Barometer 2013’ study from the BEM-KEDGE Business School in Bordeaux said there are three key ways in which online retailers can appeal to this new consumer: through mobile phones and m-commerce; social media networks; and wine subscriptions and clubs.

 

Mobile commerce could move ahead of e-commerce in the near future and websites should prepare “responsive designs” that are compatible with mobile devices, said Grégory Bressolles, marketing professor and director of the e-commerce and distribution faculty at BEM-KEDGE Business School. “It will facilitate the experience of online sales,” he said.

 

Whilst social media will be especially important among younger consumers, subscriptions and wine clubs have experienced rapid growth and will ensure success for online wine businesses. “It is at the same time the birth and the golden age of this type of model,” he said.

 

The research also found that online wine shoppers are more likely to spend far more online and can spend on average up to ?14 more on a bottle of wine.

 

 

——

LVMH Promotes Daughter of Bernard Arnault (Excerpt)

 

Delphine Arnault Becomes Executive Vice President at Louis Vuitton

 

Source: WSJ

NADYA MASIDLOVER

Jun 25th

 

Delphine Arnault, a daughter of LVHM’s chairman, will oversee all product-related activities at Louis Vuitton, the flagship brand of LVMH.

 

LVMH Moët Hennessy Louis Vuitton SA MC.FR +1.27% Tuesday appointed Delphine Arnault as No. 2 at its Louis Vuitton brand, the most high-profile elevation yet of one of Chairman Bernard Arnault’s children.

 

Ms. Arnault’s promotion to executive vice president-the second major appointment in less than a year at the top of LVMH’s largest fashion label-comes as the brand seeks to revive its business in the face of increasingly sluggish sales growth. Starting in September, the 38-year-old manager will oversee all product-related activities at Vuitton.

 

 

——

Beam Inc installs emerging markets MD (Excerpt)

 

Source: Just Drinks

By Andy Morton

25 June 2013

 

Beam Inc is to up its focus on new South American markets with its latest appointment.

 

Pryce Greenow will take on the newly-created role of MD for emerging markets, South America, from 15 July, Beam said today (25 June). Greenow will seek growth for Beam’s brands across “attractive South American markets”, the company said.

 

 

——

Walgreens refocuses following weaker than expected Q3

 

Source: RT

June 25, 2013

 

Walgreens cited a challenging economy and low front-end comparable store sales for its weaker than expected third quarter results.

 

The company has therefore initiated a three-point plan to boost front-end performance as the company shifts its Balance Rewards customer-acquisition focus into second gear with a greater emphasis on redemption and rewards.

 

“While we are seeing several positive indicators in our Daily Living business, such as increases in customer delight, basket size and gross margins, our front-end sales and traffic are still not up to expectations,” Greg Wasson, Walgreens president and CEO, told analysts early Tuesday morning. To that end, Walgreens is implementing a three-point plan – making adjustments to pricing and promotions; maximizing the value of the company’s 75-million strong Balance Reward loyalty program; and enhancing store segmentation to better meet the needs and preferences of local communities.

 

While Walgreens outlined its strategy to improve the front-end, Wall Street reacted to lower-than-projected revenue expectations. Shares of Walgreens fell more than $3 to $44.75 per share in early morning trading. Walgreens reported earnings of $624 million, or 65 cents per share. Excluding items, Walgreens earned 85 cents per share, falling short of analyst expectations of 91 cents per share, according to Thomson Reuters I/B/E/S.

 

To help boost results going forward, Walgreens will be tweaking its promotional strategy to include more circulars. “We’re applying what we’re learning from our Balance Rewards program to ensure we have the items that are most relevant to our customers in both assortment and price to meet their daily living needs,” Wasson said. Walgreens will also be highlighting the dollar value of points earned in both stores and circulars to help improve loyalty card utilization and customizing promotions to better serve communities on the local level.

 

Front-end comparable store sales increased 0.4% in the third quarter, customer traffic in comparable stores decreased 3.9% and basket size increased 4.4%, while total sales in comparable stores increased 1.4%.

 

On the other side of the bench, “we’re beginning to hit on all cylinders,” Wasson said. “[Pharmacy comp sales were up] 7.1%, compared to 5.7% in the second quarter; we gained 80 basis points in marketshare, from 18.4% to 19.2%; 90-day prescriptions continue to grow, increasing 19% year-over-year while IMS [Health] continued to report slowing growth of mail,” Wasson said. “All of this comes in an environment where physician visits are down 2.7% year-over-year in May, according to JP Morgan’s monthly tracker, and this follows year-over-year declines February through April,” he added.

 

Looking forward, Walgreens’ pharmacy operations will benefit from the long-term contracts with predictable rates with many of the major commercial payors in the market. Walgreens is also expected to capitalize on a growing Medicare Part D business, especially as several states expand their Medicare rolls beginning in 2014. “Our increase in Medicare Part D volume has exceeded the market every month since January,” Wasson said. “And with 10,000 people turning 65 every day and signing up for coverage, we have tremendous opportunity to continue growing our volume over time,” he said. “With more and more folks coming into the Medicaid population that are conducive to 90-day supplies of chronic medications, there are opportunities for us to work with states [in ways] that we haven’t in the past [to help] drive adherence.”

 

Healthcare reform is also expected to be a positive driver behind pharmacy. “Walgreens, with our 8,000 locations and 70,000 healthcare professionals, is increasingly well-positioned to meet the growing demand for convenient, affordable non-emergency care,” Wasson said.

 

During the quarter, Walgreens’ Take Care Health division expanded its scope of services to include diagnosis, treatment and management for hypertension, diabetes, high cholesterol and asthma. “With our leading role in three [Accountable Care Organizations] and our strategy to service many others, patients providers and payors are recognizing the value of community pharmacy as part of the solution to meet the triple aim of improving the patient experience, driving better health outcomes and lowering overall healthcare costs.”

 

Walgreens posted a net earnings of $624 million for the third quarter ended May 31, a 16.2% increase. Third quarter sales increased 3.2% compared with the prior-year quarter to $18.3 billion, while sales for the first nine months decreased 0.5% to $54.3 billion.

 

Prescription sales, which accounted for 63.1% of sales in the quarter, increased 3.4%, while prescription sales in comparable stores increased 2%. The company filled 209 million prescriptions in the quarter, an increase of 8.7% over last year’s third quarter. Prescriptions filled in comparable stores increased 7.1% in the quarter.

 

“This quarter we continued to see a strengthening in our pharmacy performance as we maintained strong margins and increased our retail pharmacy market share from 18.4% to 19.2% year over year,” Wasson stated. “This, in combination with our focus on cost control, and the contribution from Alliance Boots and related synergies, resulted in adjusted earnings per diluted share growth of 18.1% [to 85 cents] in the quarter.”

 

Walgreens joint synergy program with its strategic partner, Alliance Boots, is on track to deliver combined first-year synergies of between $125 million and $150 million, compared with the company’s previous target of between $100 million and $150 million. Alliance Boots contributed 10 cents per diluted share to Walgreens third-quarter adjusted results, including a negative impact of 2 cents per diluted share due to reconciliation of International Financial Reporting Standards with GAAP. Alliance Boots is anticipated to contribute 8 cents per diluted share to fourth-quarter adjusted results, including a negative impact of 1 cent per diluted share from weakening in the British pound between February and May.

 

Notables throughout the course of the quarter included Walgreens’ launch of No7 Men skin care products through both Walgreens and Duane Reade locations and the opening of flagship stores in Boston, New York, San Francisco and Washington. Walgreens now has 10 flagship locations across the U.S.

 

 

——

UK appoints regulator to protect grocery suppliers

 

Source: FT

By Andrew Bowman

Jun 25th

 

A new government adjudicator tasked with enforcing better treatment of UK supermarket suppliers was formally established on Tuesday, with powers to launch investigations and hand out fines to retailers.

 

As the Groceries Code Adjudicator, former managing director of the Co-operative Group’s farming subsidiary Christine Tacon will receive complaints and arbitrate disputes between food suppliers and the UK’s 10 supermarket chains with a turnover greater than £1bn.

 

Retailers found by Ms Tacon to be breaking the Groceries Supply Code – which covers buyer abuses, such as arbitrary retrospective changes to supply agreements and payment delays – could be forced to publish apologies or receive fines.

 

Retailers have voiced concerns about the adjudicator and its powers in the past, but Andrew Opie, director of food and sustainability at the British Retail Consortium, said: “We’re ready to work with the adjudicator, it’s important we have a constructive relationship.”

 

Mr Opie stressed the adjudicator needed to make it clear that the scope for submitting complaints would be limited to direct suppliers of supermarkets and not the entire supply chain.

 

“Unfortunately, for whatever reason, whether it’s communications from pressure groups or discussions in parliament, the expectations have been raised.”

 

Deborah Cawood, head of Food Chain at the National Farmers’ Union, said, “We hope that by improving the business environment for direct suppliers this will in turn improve the health of UK farming.”

 

The NFU remains disappointed, however, that the adjudicator is not empowered to cover the full length of the supply chain.

 

Moves towards the establishment of the adjudicator began following a 2008 Competition Commission investigation into supermarket supply chain relations. The adjudicator does not expect to launch investigations until the end of the year, pending a consultation.

 

 

——

2Q13 Survey: SBUX/PNRA/BLMN/CAKE appear best positioned

 

Source: Goldman Sachs

Jun 25th

 

Intent-to-spend improved further in 2Q, especially at the high end

We completed our latest quarterly survey of 2,000 US consumers in mid-late May. (1) Consumer optimism remained robust, (2) we saw further increases in intent-to-spend and (3) Restaurants improved at the category level. This said the increase in consumer intent-to-spend was driven almost entirely by high-income consumers. We highlight SBUX/PNRA within QSR and BLMN/CAKE within Casual Dining, which our survey suggests are the companies most highly levered to the high income cohort.

 

West coast strong relative to rest of the US

When we parse out the results into regions, the West Coast is a stand out. More consumers in that region believe their home price is currently rising than in any other US region, potentially leading to a heightened wealth effect. In addition, we note that a disproportionate 46% of all new US jobs have been created in the Northwest/Southwest year-to-date, despite it being only 32% of the population. SBUX/CAKE are the most exposed.

QSR findings: PNRA/SBUX strong, MCD improved, CMG mixed

 

(1) PNRA re-took the top spot in our survey as its score increased the most amongst QSR. (2) SBUX was also a stand-out with increases in penetration and frequency of visits. (3) MCD saw the first increase in its conversion scores in a year. (4) CMG’s overall score increased, however, we continue to see lower recommend scores and reported frequency of visits.

Casual Dining findings: BLMN/EAT stand-outs, BWLD mixed

 

(1) BLMN’s Outback brand saw the biggest increase in score, jumping four notches to the #5 CDR brand. Bonefish/Carrabba’s also fared well. (2) EAT’s Chili’s brand continued to see increases in “modern look and feel” scores likely from its ongoing remodels. (3) BWLD saw improvement overall, but our survey continues to suggest a weak value proposition.

Restaurant competitive intensity may be heating up

 

One other dynamic we are monitoring is a 6-7% increase in Restaurant ad spend year-to-date. QSR is leading the increases at +8%, and within that we note that MCD is losing share of voice running flat versus +12% for all other QSRs. In Casual Dining, traditional Bar & Grill ad spend has reached a level of spend that has not been seen since 2008, a pressure for the group.

 

 

——

New York: NY pol says liquor bill slipped in at last call

 

Source: Associated Press

Jun 25th

 

State Sen. Liz Krueger (KROO’-gur) says a bill to allow a catering hall that could serve liquor to operate near a church in her Manhattan district was slipped in during last call of the legislative session.

 

The Democrat and local neighborhood groups had opposed the idea of giving the hall a reprieve from state law that prohibits sale of liquor within 200 feet of a church.

 

But Krueger says Tuesday the catering hall operators hired Albany lobbyists to get a carve-out that was passed at 2 a.m. Saturday on the last day of the legislative session.

 

She’s urging Gov. Andrew Cuomo to veto the measure.

 

 

——

Canada: Expanded booze sales good for consumers and government, study finds

 

Expanded booze sales would increase the return for the Ontario government and decrease prices for consumers, a new economic study finds.

 

Source: The Star

By: Richard J. Brennan Provincial Politics

Mon Jun 24 2013

 

Lower booze prices and convenience are two key findings of a detailed economic study of expanded alcohol sales in Ontario.

 

A system blending the LCBO with private sales similar to the system used in British Columbia would increase the amount of money the province gets from alcohol sales and result in lower prices, University of Waterloo economist Anindya Sen said.

 

“Government and consumers in Ontario should strongly benefit from some increased competition in the retail sale of alcohol,” he said.

 

The detailed study for the Ontario Convenience Store Association concludes competition would actually hike booze sales by as much as 9 per cent, while driving down prices.

 

“The econometric analysis reveals that increased competition is significantly associated with roughly a 5 per cent and 9 per cent increase in net and gross per capita income. . . ,” Sen states in his 25-page report provided to the Star.

 

The study results may conflict with the common belief that expanding retailing would decrease government revenues from alcohol sales, but Sen insists the findings are “consistent with standard economic models, which predict that an increase in competition results in an increase in revenue collected by the provincial government from retail sales.”

 

The report bolsters Tory Leader Tim Hudak’s promise to end the LCBO’s monopoly on the sale of wine and spirits if he forms government.

 

One of the systems Hudak would consider is the one Sen has put forward, in which the LCBO, the world’s largest buyer of wines and spirits, would remain the wholesaler, but corner stores and supermarkets would be able to sell beer, wine and liquor along with private specialty stores.

 

“Treat me like an adult. We’re in the 21st century, we’re not back in the 1950s,” he recently told reporters.

 

In his 2011 report, then auditor general Jim McCarter said the price of booze in Ontario is unnecessarily high and that revenues are not being maximized.

 

Earlier this month, the Liquor Control Board of Ontario announced it set record sales in 2011-12 for the 18th year in row, pumping $1.7 billion into provincial coffers.

 

Sen said he approached the Ontario Convenience Store Association with the idea of further studying the impact that private booze sales would have on provincial revenue.

 

“I am getting the sense that people don’t like the concept of a monopoly, but they like the fact that the LCBO does make quite a bit of profit, which is then transferred to the government,” he told the Star.

 

Sen said a combination of competition, efficiencies and convenience would see the province get even more money than it does now.

 

“Once you have competition in any market, you are forcing the incumbent to be more efficient. That forces them to look for savings, it pushes the marginal cost down and they are going to make higher margins,” he said, adding that “for sure” prices would also come down. The LCBO’s markup on booze is more than 50 per cent of the final retail price, he said.

 

Sen’s study of provincial systems, including that of Alberta, which has a purely private system, found “provinces with more competition actually generate more per capita revenue for the government (according to StatsCan data).”

 

Dave Bryans, CEO of the Ontario Convenience Store Association, said the study further supports what Ontarians have been telling pollsters time and again: they want to have choice.

 

“Sixty-seven per cent of all Ontarians (according to pollster Angus Reid) have said over and over that ‘let’s open up the market,’ ” Bryans told the Star.

 

Bryans noted there are already has 217 privately run agency booze stores in rural and northern Ontario “with no issues at all.”

Like Us On Facebook

FB1

http://www.facebook/com/franklinliquorsMA

Follow Us On Twitter

TWITTER

http://www.twitter.com/franklinliquors

Our Website

Mobile Version As Well

FRANKLIN LIQUORS LOGO

http://www.franklinliquors.com

Advertisements

Tags: , ,

Leave a Reply

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

WordPress.com Logo

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

Twitter picture

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

Facebook photo

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

Google+ photo

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

Connecting to %s


%d bloggers like this: