Archive for the ‘Wine Education’ Category

Wine Of The Day: Leonard Kreusch Maywine

May 15, 2013


April showers have brought us Maywine!
You “MAY” have heard about this wine BUT have you ever seen it or tasted it??
Well now is your chance! Every once and a while we see and taste things that are just amazing about the wine world.
Introducing a BLAST FROM THE PAST….
Leonard Kreusch Maywine – Light Wine flavored with Woodruff


Color: Very Pale Golden

Grapes:We tried researching this..all we know is White, but beyond that it didn’t say.
We do know the grapes of the region are:

Riesling 62.1%
Müller-Thurgau 20.7%
Elbling 9.5%

Being A German wine it starts with slight sweetness, BUT the finish is very refreshing with almost a glazed donut flavor.
Yes…Glazed donut…Overall it is very refreshing!
Woodruff is also involved.
What  is Woodruff?: Woodruff is a flowering herb-type plant.

It’s super-strongly scented, the scent originating largely from a chemical called coumarin.
You’ve probably encountered it in perfume – it’s sweet and floral and strong.
It’s a very strong rodent-killer and can be toxic to humans in much larger doses than anyone’s likely consume.
The Germans apparently love woodruff – it’s in everything from Maywine to brandy to sausages to jam to ice cream.
If you want an idea of how it tastes, think violets, but then make the violets white instead of purple.

May Wine is an old, traditional beverage that originated in Germany and is consumed throughout Europe.
Infusing white wine with Sweet Woodruff gives this libation an herbal flavor with green notes that are refreshing
and pleasant. Often served on May Day and at spring and early-summer weddings,
this beverage is perfect for sharing with friends and family during dinner parties,
backyard barbeques, picnics, and at other get-togethers. We think it would pair well with
any sweet grilling sauce!

May Wine was historically brewed during the May and June months when Sweet Woodruff is in flower,
but there is no need to restrict consumption to these months.  This light and refreshing herbal infused beverage is a perfect treat
that can be enjoyed throughout the year!

Are you curious??

750ml $10.99

6@ $9.89

12@ $8.79




Liquor Industry News 5-14-13

May 14, 2013

Franklin Liquors


Tuesday May 14th 2013

Today Is A Biodynamic FLOWER Day.

Great To Taste Or Drink Wine!


US Spirits – Nielsen Data – Price/mix now consistently strong


No sign of any weakening of the trend


Source: Nomura

May 13, 2013


European Beverages

Sector View: Bearish

Ian Shackleton – NIplc


Price/ mix continues to be strong

AC Nielsen released US spirits data for four weeks to 27 April 2013. Pricing was positive at +3.8%, slightly lower than previous month’s +4.3%, but in line with YTD figures (+3.9%). We had noted that NABCA pricing had stepped up since June, as price increases were made early by the control states; now both the Nielsen and NABCA data (March +3.5%) are consistently showing some rebasing upwards of pricing into the +3-4% range.


Volume sees some dip in momentum

After adjusting for the reclassification of Washington state (which is now an open state, included in Nielsen data), total industry volumes were negative at -1.6% vs strong comps at +3.8% and softer than the previous month’s +1.3%. Although volume growth was negative, we do not see this as a change in trend and remain upbeat on the US spirits outlook. Certainly there has been no company commentary to suggest any slowdown in the volume dynamic for the industry. Remember that Nielsen only accounts for c10% of US spirit volumes.


Diageo outperforms on pricing – remains our preferred investment

As expected, Diageo’s pricing continues to be better than the industry per Nielsen, at +5.2% (vs industry +3.8%), but vs previous month +5.9. However, this continues to be at the expense of volume loss -7.0%. Diageo in its 1H results had indicated that peers are now taking pricing higher across most categories, suggesting a more rationale pricing environment, and also flagged that taking pricing at the 2-3% level every year looks achievable in the US. This appears to be true with the recent Nielsen data showing improvement in price/mix for most companies. Within the spirits space, we continue to prefer Diageo given its substantial exposure to the US (c40% of EBIT) together with further upside potential from M&A. In addition, the slowdown in momentum in China is likely to have a more adverse effect on Remy (Reduce) and Pernod (Neutral) given their high exposure to that region. Estimated profit exposure to China – Remy c30%, Pernod c15% and Diageo c1%.




Nielsen Spirits: April data slows across the board on weak volume


Source: Goldman Sachs

May 13th


Industry sales grew only +1.6% in April on weaker volume

Spirits data in Nielsen-tracked xAOC (food, drug, mass, WMT) increased +1.6% for the four weeks ended April 27th. Price/mix was healthy at +3.2%, but volume inflected negatively (-1.6%) for the first time since 2010. Sales and volume were well below 52-week trends, while pricing was slightly above. Among major categories, Scotch led growth at +11.5%, followed by bourbon (+8.2%), Canadian whiskey (+7.8%), vodka (+1.7%), gin (-1.9%), rum (-3.1%), and tequila (-3.1%). The white liquor categories, along with brandy/cognac, slowed on a sequential basis. Calendar alignment may have had a slight impact, as pre-Easter purchases (Easter was March 31st this year vs. April 8th last year) would have fallen in last month’s data this year vs. April data in 2012.


BEAM sales decelerate to +1.3%

BEAM’s overall company sales grew only +1.3%, driven by +4.4% price/mix and -2.9% volume. This is both a sequential (sales up +6.7%) and y-o-y deceleration (+12.2% last year). Core Jim Beam was strong, up +5.4%, in line with recent mid-single-digit trends. Maker’s Mark decelerated slightly but was still up +14.5%, despite a -1420bp reduction in percent sold on promo. Pinnacle and Skinny Girl both decelerated this period, as the broader vodka slowed meaningfully (+1.7% this period vs. +8.9% year-ago).


BF_B sales also decelerate, up +2.5%; JD back to LSD growth

BF_B sales were up +2.5% this period, driven by +2.6% price/mix and -0.1% volume. Sales/volume came in below recent trends, while price/mix was stronger. Core Jack Daniels grew +1.9% this period, a sequential slowdown from last month’s +5.0% print but broadly in line with the 6-month average of +2.3%. SoCo sales grew +1.0% this period, while Woodford Reserve was up +29.3%, reflecting the strength of ultra-premium whiskey. Finlandia sales grew +8.4% this period, lapping a -15.6% year-ago comp.


STZ leads the category in this channel; sales up +8.7%

STZ spirit sales grew +8.7% this period, on +10.3% volume and -1.5% price/mix drag. This is a slight sequential deceleration, but a year-over-year improvement and in line with the 52-week average of +9.1% sales growth. SVEDKA continues its impressive double-digit growth, up +13.6% this period despite a weaker vodka category.




Campari First-Quarter Profit Misses Estimates Amid Sales Slump


Source: Bloomberg

By Clementine Fletcher

May 13, 2013


Davide Campari-Milano SpA (CPR), the maker of Wild Turkey bourbon, reported first-quarter profit that missed estimates as sales fell because of weak shipments to Italian retailers and bad weather in Germany.


Earnings before interest and tax dropped 18 percent to 51.5 million euros ($66.9 million) in the three months through March 31, the company said today in a statement. The average estimate of 12 analysts was 60.1 million euros. Sales excluding the effect of acquisitions and disposals slid 9 percent.


Milan-based Campari had warned that some sales in Italy recorded in the first quarter of last year would this year be booked in the second and third quarters as a change in the country’s shipment law led retailers to delay new orders. The company got 29 percent of revenue last year from Italy. The new law reduced sales by about 25 million euros in the first quarter, it said, adding that it may not recoup the losses.


“The results in the first, and traditionally low-season, quarter of 2013 were poor, due to the one-off impact of destocking in Italy,” Chief Executive Officer Bob Kunze-Concewitz said today in the statement. The company also suffered “continued weakness in Germany” because of bad weather and a commercial dispute that affected the Campari and Aperol brands.


Campari fell as much as 3.8 percent in Milan trading and was down 3.2 percent at 5.97 euros as of 1:25 p.m.


“We expect the evolution in consumption trends and the potential persistence of poor weather conditions in Italy and in euro-zone markets to be the key challenges to the group’s ability to recover the first-quarter one-off destocking impact over the next quarters,” Kunze-Concewitz said.


Revenue rose 13 percent to 315.2 million euros after the company bought Lascelles deMercado & Co. last year to add Jamaican rum Appleton as it pushes into emerging markets and expands in the U.S. and Canada. The inclusion of the business depressed operating profit as a percentage of sales, as did Italian drinkers choosing less pricy drinks, Campari said.


Sales improved in the U.S., Latin America and Russia, aided by gains for Skyy vodka, the company said.




Campari: Poor results in small first quarter 2013 mainly due to the ‘one-off’ destocking in Italy


Positive perimeter contribution thanks to Lascelles deMercado acquisition


Source: Marco Fusco, D’Antona&Partners / Campari

May 13th



.         Sales: ? 315.2 million (+12.9%, organic change -9.0%)

.         Contribution after A&P: ? 115.1 million (-1.6%, organic change -13.8%, 36.5% of sales)

.         EBITDA pre one-offs: ? 57.1 million (-20.0%, organic change -26.6%, 18.1% of sales)

.         EBIT pre one-offs: ? 47.6 million (-25.3%, organic change -23.3%, 15.1% of sales)

.         Group pre-tax profit: ? 39.4 million (-25.4%)

.         Net financial debt at ? 914.1 million as of 31 March 2013 (? 869.7 million as of 31 December 2012)


The Board of Directors of Davide Campari-Milano S.p.A. (Reuters CPRI.MI – Bloomberg CPR IM) approved today the consolidated results for the quarter ending 31 March 2013.


Bob Kunze-Concewitz, Chief Executive Officer: ‘As anticipated, the results in the first, and traditionally low season, quarter of 2013 were poor, due to the ‘one-off’ impact of destocking in Italy, generated by so called article 62 which introduced a binding time limit to the payment terms, which determined a significant deterioration of the sales mix, and further exacerbated the weak local consumption trends. Results were strong in the Americas, showing continued positive momentum in the US market and improvements in Latin America, and Eastern Europe (particularly Russia), offsetting continued weakness in Germany, exacerbated by very poor weather conditions, and softness in Australia. Moreover, the integration and development activities of the Lascelles deMercado business are progressing in line with plan, and were marked by the transition of the international business into the Group network. Looking forward , the outlook for the current year remains unchanged. In particular, we expect the evolution in consumption trends and the potential persistence of poor weather conditions in Italy and in Eurozone markets to be the key challenges to the Group’s ability to recover the Q1 ‘one-off’ destocking impact over the next quarters.’.


In the first quarter of 2013 Group sales totalled ? 315.2 million showing a reported growth of +12.9% and an organic change of -9.0% (? 25.0 million in absolute terms). The exchange rates effect was negative by -1.6%. The perimeter effect was positive at +23.4%, driven by the newly-acquired Jamaican rum company Lascelles deMercado&Co. Ltd. (‘LdM’).


It should be noted that, as anticipated, the overall negative sales organic change was mainly attributable to a technical effect of so called article 62  (introducing a binding time limit to the payment terms that can be extended to the clientele) on the summer load program in Italy (a commercial initiative usually implemented in the first months of the year ahead of the summer seasonality consumption peak). The consequence was a ‘one-off’ destocking effect of ? 25 million on sales in the first quarter of 2013, which determined a significant deterioration of the sales mix and, consequently, a negative impact on operating margins. Moreover, the impact of the new LdM business, although in line with plans both in absolute terms and marginality, generated a further dilution in the Group margins driven by the higher concentration of lower margin non-core sugar and merchandise businesses vs. low seasonality spirits&wines in the first quarter.



Looking at sales by region in the first quarter of 2013, the Americas (45.1% of total Group sales) posted an overall growth of +66.7%, with a strong organic increase of +10.8%, thanks to the sustained growth across all markets, a perimeter effect of +60.2% thanks to LdM, and an exchange rate effect of -4.4%. In the U.S. (19.6% of total Group sales) sales registered an organic increase of +7.6%, driven by double digit growth in the Wild Turkey franchise as well as the continued positive performances of the SKYY franchise, Espolón and Cabo Wabo tequilas and Campari, a perimeter effect of +0.4% (due to LdM) and an exchange rate effect of -0.7%. Sales in Brazil (4.0% of total Group sales) registered an organic growth of +22.4%, thanks to accelerating performances of premium brands (SKYY, Campari, and Sagatiba) as well as a partial recovery of local brands (Dreher, Old Eight and Drury’s), also due to an easy comparison base. Sales in the other Americas (21.5% of total Group sales) showed an organic growth of +14.0%, mainly thanks to a strong performance in Argentina (Cinzano, Old Smuggler and Campari). Perimeter change in the Other Americas was +320.4%, driven by the consolidation of LdM (Jamaica reaching 14.8% of Group sales in the first quarter 2013). Exchange rate effect was -9.9%.


The Italian market (23.8% of total Group sales) recorded an overall decline of -26.2%, attributable to an organic performance of -26.3% and a positive perimeter effect of +0.1%. The negative organic performance was driven by the expected destocking effect, linked to the introduction of the above mentioned article 62 which has further exacerbated the local weak consumption trend. The organic change excluding the ‘one-off’ destocking effect would have been negative by low/mid single digits. The key brands (Campari, Campari Soda and SKYY Vodka) recorded a strong decline in shipments; the wine portfolio declined, suffering from a slowdown in the restaurant channel. Soft drinks were also heavily affected by the above mentioned trade destocking as well as by the overall slowdown in consumption in the traditional day-bars channel.

Sales in the rest of Europe (19.2% of total Group sales) declined by -2.8%, driven by a negative organic change of -8.8%, a positive perimeter effect of +6.5%, thanks to a new distribution agreement in Germany as well as LdM, and a negative exchange rate effect of -0.5%. The organic performance was driven by continued softness of Aperol and Cinzano sparkling wine in Germany, exacerbated by very poor weather conditions. Russia on the contrary was up +52.9% showing strong results across the key Cinzano and Mondoro brands. Other European markets registered mixed results with Austria and Switzerland positive trends more than offset by decrease in France, Spain and Greece.


Sales in the rest of the world (including Global Travel Retail), which accounted for 11.9% of total Group sales, grew by +24.5% overall, with a negative organic change of -6.9% and a negative exchange rate effect of -1.5%. and a perimeter effect of +32.9% thanks to LdM. The organic sales decline was driven by weak shipments of the Wild Turkey franchise and Riccadonna sparkling wines, due to tough comps (+41.7% in 1Q 2012) and heightened competitive pressure on core bourbon and RTD’s in Australia. A positive development was also achieved in the region’s other key markets, including China, Nigeria and GTR.


Looking at sales by the key brands, regarding spirits (71.1% of Group sales) Campari declined by -12.4% impacted by weak shipments in Italy, due to so called article 62 introduction, in part offset by a good performance in Brazil and continued traction in international markets, in particular in U.S., Argentina and Nigeria. Aperol registered a negative organic performance of -15.3%, affected by continued weakness in Germany which was exacerbated by bad weather, in part offset by a positive performance in Italy (despite destocking) and other international markets. Overall organic growth excluding Germany was +4.8%. SKYY sales achieved an organic growth of +1.9%, driven by a positive performance in the US thanks to SKYY Infusions’ continued success and positive momentum behind core. Good results continued in key international markets, particularly Brazil. The Wild Turkey franchise registered an organic change of -0.3%, due to the mixed effect of strong growth in US offset by softness in Australia and Japan, as well as a tough comparison base (+24.0% in 1Q 2012). The Tequila portfolio registered a strong organic growth of +35.3%, driven by both Espolón and Cabo Wabo in the key U.S. market. Campari Soda declined by -28.3%, affected by so called article 62 and weak consumption trend and trading conditions in day bars channel and off trade in Italy. The Brazilian brands posted a good recovery in first quarter 2013, up +15.9%, thanks also to easy comps. GlenGrant registered a negative organic performance of-11.8%, as the positive performance in Germany, GTR and Japan was not able to offset weak performance in the core Italian market.


In terms of wines, which accounted for 13.1% of total sales, Cinzano vermouths registered an organic growth of +7.8%, driven by positive performances in Russia, Germany and Argentina. Cinzano sparkling wines sales registered a negative organic performance of -10.5%, driven by a strong performance of Russia, which was not able to compensate soft sales in Germany and Italy. Other sparkling wines (including Riccadonna, Odessa and Mondoro) grew organically by +49.9% driven by a strong trend of Mondoro in Russia, whilst still wines (mainly Sella&Mosca, Enrico Serafino and Teruzzi&Puthod) declined due to continued weakness in the Italian on premise channel.


In terms of soft drinks (5.3% of total sales), Crodino declined by -45.0% driven by destocking in connection with so called article 62 as well as weak trading conditions and consumption trend.




Davide Campari-Milano SpA: What matters: Growth still lags peers


Source: Barclays

May 14th


Stock Rating/Industry View: Underweight/Neutral

Price Target: EUR 5.70 (from EUR 6.00)

Price (10-May-2013): EUR 6.17

Potential Upside/Downside: -8%

Tickers: CPR IM / CPRI.MI


What to do – retain Underweight, as discount is likely to widen: Campari remains the worst performing Spirits stock in our universe YTD and we expect this trend to continue while trading remains uncertain in its key European markets. Further, cost constraints at the gross margin level and marketing investments to counter its top-line pressures will result in lower earnings generation compared to its peers. We expect Campari to report F13e top-line growth of +2%, with only flat organic earnings; behind its peers which we expect to generate high-single digit top- and bottom-line growth. Subsequently, given the lower relative growth potential and earnings certainty we expect the shares to trade at a discount to its Spirits peers, rather than its current 3% PE premium (C14e PE on 17x).


What’s next – short-term outlook remains challenged: With the Q1 delivery impacted by a ?25mn destock in Italy, due to the change in payment terms regulation, and continued competitor pressures for Aperol in Germany, the market’s focus will be on the company’s ability to recover the lost sales in Q2/Q3. However, with tight credit conditions for domestic wholesalers and poor weather impacting underlying consumption trends, management does not expect to recover the destock entirely in Q2. Further, to help recover the lost share in Germany, Campari will lift its marketing spend significantly, reducing any chance of a potential margin over-delivery in Q2.


What we learnt – Europe a significant drag: Campari’s Q1 result missed market expectations by 19% at the EBIT level. Organic Group sales fell -9% with large misses in Italy, Germany and Australia. 65% of Campari’s key brand portfolio reported negative sales trends, with Aperol, soft drinks, and surprisingly Wild Turkey, particularly weak. Italian organic sales fell 26%, given the wholesaler destock, with underlying consumption trends still down -4%. German sales fell -20% given the continued pressures on Aperol from cheaper imitation products and poor weather, while sales in Australia fell a disappointing -11% as competitors promoted heavily in the bourbon and RTD categories.


What’s changed – weak margin outlook: We have downgraded our F13e and 14e earnings by -8% to account for the soft Q1 result, and weaker full year margins due to a higher-than-expected organic marketing investment and a stronger volume deleverage impact on organic Group margins. We subsequently reduce our price target to ?5.70.




Vodka Maker’s Ch. 11 Plan OK’d Despite Shareholder Protest


Source: Law360

By Matt Chiappardi

May 13, 2013


A Delaware bankruptcy judge on Monday approved the Chapter 11 plan for vodka distributor Central European Distribution Corp. that slashes debt by $665 million but gives total control of the company to Russian billionaire Roustam Tariko over the objection of an Italian shareholder.


CEDC investor Eugenio Rainoldi will see his $3.3 million equity stake in the company wiped out with the confirmation and had argued that the process was somehow tainted with Tariko, who is also CEDC chairman and whose Roust Trading Ltd. already owns a 19.5 percent equity stake in the company, swooping in to take it over.


But U.S. Bankruptcy Judge Christopher Sontchi rejected that reasoning Monday, ruling that the Russian billionaire’s influence over the prepackaged plan was tempered by the independent committee that negotiated it.


“This process was beyond reproach,” Judge Sontchi said in court. “Given the business reality in the case, there is no question Mr. Tariko had some leverage in his negotiations, but the special committee neutralized the power that he had.”


The prepackaged plan for the CEDC – a New Jersey-based holding company that encompasses vodka distilleries and alcohol distribution operations in Poland, Russia and other Eastern European countries – slashes the company’s debt by $665 million, per the funding agreement by which Roust would inject $172 million of new money into the company, forgive a previous $50 million loan and get full control over the reorganized company.


But all of the shareholders’ equity claims are wiped out in the bankruptcy plan, something that did not sit well with Rainoldi.


He accused Tariko, whose firm has interests in premium vodka and spirits distribution, of taking advantage of the bankruptcy process just to assume full control of CEDC.


“This is an individual who bought a minority stake and wanted to take over,” Rainoldi’s attorney, Alec P. Ostrow of Becker Glynn Muffly Chassin & Hosinki LLP said in court Monday. “He wanted to get the benefit of an increase in value all for himself.”


Ostrow also took issue with the speed of the case, after CEDC filed for Chapter 11 protection on April 7, calling the process, “a rush to get the plan through on unsuspecting shareholders.”


Attorneys for CEDC countered Monday that the hurried pace was necessary because the company was set to run out of money for its Russian operations by July and would be forced to begin liquidating.


CEDC’s attorney Jay Goffman of Skadden Arps Slate Meagher & Flom LLP also argued that after the company pays secured debtors holding bonds scheduled to mature in 2013 and 2016, all of whom will be receiving reduced recoveries, there just wasn’t enough money left over for shareholders.


In the plan, creditors holding the outstanding 2013 notes would receive $55 million, recovering only 35.4 percent of their investments. Those holding the $982 million in 2016 notes will see an estimated recovery of at least 83.7 percent, receiving $172 million in cash, $450 million in new secured notes and $200 million in new convertible notes, according to CEDC.


All of the restructuring transactions are expected to close by the end of the month, the company said in a statement Monday.


CEDC, which has its roots in Poland, fell on hard times almost as soon as it entered the Russian market in 2008, right before the global economic crisis and an initiative by the Russian government to impose excise taxes on alcohol to cut down on consumption.


The taxes drove up prices, forcing CEDC to deeply discount its inventory in order to retain customers, the company said.


Tariko said Monday that CEDC will emerge from bankruptcy a stronger firm.


“The court’s approval of our financial restructuring is a very positive step forward for the company,” he said. “The company’s world-class brands are now able to continue to build on their success locally and globally and perform as category leaders.”


CEDC is represented by Scott Simpson, Jay Goffman, Mark McDermott, Mark Chehi and Sarah Pierce of Skadden Arps Slate Meagher & Flom LLP.


Rainoldi is represented by Alec P. Ostrow of Becker Glynn Muffly Chassin & Hosinski LLP and Joseph H. Huston of Stevens & Lee PC.


The case is In re: Central European Distribution Corp., case No. 1:13-bk-10738, in the U.S. Bankruptcy Court for the District of Delaware.




Why AB InBev and Big Brewers Are Betting on Hard Cider


Source: Bloomberg

By Venessa Wong

May 13, 2013


For those who can’t get enough of that alcoholic apple juice we call hard cider, here comes more. On May 13, Anheuser-Busch InBev (BUD) releases Stella Artois Cidre in the U.S., starting in 26 states. A nationwide rollout is planned for early next year. Cidre, pronounced cee-dra, first launched in the U.K. in 2011 and sold about 291,000 hectoliters (or about 247,980 U.S. barrels) at grocery and liquor stores there in the year ended March 30. The company hopes Americans’ budding love for cider will help Cidre take off in the U.S.


Why is cider seeing a revival in the U.S.? IBISWorld estimates that while brewers’ hard cider sales, which were $601.5 million in 2012, represent about 2 percent of total revenue, they’re growing rapidly. Sales increased an average 27.5 percent annually during the last five years. Such numbers don’t go unnoticed by big brewers: C&C Group acquired Vermont Hard Cider, MillerCoors bought Crispin, and Heineken added Strongbow to its portfolio.


Brewers say three main groups are driving demand: the young, craft beer crowd; the growing number of consumers avoiding gluten; and women.


Charles van Es, senior director of portfolio brands at Heineken USA, says the company’s cider buyers are largely 21- to 29-year-olds who are “adventurous with their beverage selection and drink more craft and upscale beer.” The craft beer boom has stirred up curiosity about life beyond Bud.


The perception that cider’s healthier should not be underestimated. Says Agata Kaczanowska, an analyst at IBISWorld: “At the core of the movement toward hard cider is the health consciousness of Americans. It is fruit-based, so people associate it with a more positive nutritional value.” The gluten-free food movement has given cider a boost, too, because the beverage is naturally gluten free. NPD found that 30 percent of adults claimed to cut down on or avoid gluten completely in January.


As for female consumers, “just like in the white wine category, they are very important,” says Rick Oleshak, director of Stella Artois in the U.S. “There’s probably more of a female opportunity within the cider category than there is within a high-end European beer.”


Rather than being pitched as an alternative to beer, Cidre, which claims to be drier than typical American ciders, will be marketed in the U.S. as an alternative to white wine. AB InBev’s only cider product in the U.S. until now was Michelob Ultra Light Cider, which launched in 2012 and currently represents 6.6 percent of the U.S. cider market. “We’re trying to reshape the category,” says Oleshak. “The opportunity is now.”


Cider sales are expected to grow in the next few years, Kaczanowska says, yet it’s difficult to tell if the beverage will be a passing fad. Still, she notes, the distribution power of AB InBev, MillerCoors, and Heineken can only help get it in front of more drinkers.




Vijay Mallya’s United Breweries, United Spirits get Rs 91 crore service tax notice


Source: Press Trust of India

May 13 2013


Directorate General of Central Excise Intelligence (DGCEI) has issued a show-cause-cum-demand notices to Vijay Mallya-owned firms United Breweries and United Spirits Ltd, for allegedly evading service tax of Rs 91 crore.


“Both the firms have evaded the service tax on sponsoring various shows and sports events,” a senior DGCEI official said.


The notice is pertaining to sponsoring events like the Indian Premier League, East Bengal Football Team, Force India Team, Wills India Fashion Week, Mohan Bagan Team.


The notice issued to United Breweries is for the amount of Rs 21.7 crore, while that to United Spirit is of Rs 69.3 crore.


According to the officials, a DGCEI team had recently visited the Bangalore offices of both the firms.


Officials said that if the amount was not paid within a month, penalty of 25 per cent would be imposed on the total amount.


Meanwhile, United Spirits in its statement to PTI said that the DGCEI Mumbai has asked them to furnish the soft copy of the ledger extract of Advertisement & Sales Promotion expenses for the period 2007 – 08 to 2011 – 12.


“DGCEI has, without verifying the nature of the expenses accounted for in the ledger extract, considered the entire amount as ‘sponsorship services’ and have served the show cause notice on 23/4/13 for Rs.69.3 crore”, the statement said.


The company said that it was in the process of replying to the show cause notices by highlighting the “error”.


While United Breweries in its statement to PTI said that, “DGCEI Mumbai has issued show cause cum demand notices on various sponsorship payments like IPL, Force India, United East Bengal Football Team, etc for payments totalling to Rs.21.7 crore covering the period from Oct ’07 to Mar ’12, ignoring payment of service taxes already paid till date”.


The statement added that UB has been regular in paying service tax wherever applicable and they are in the process of filing replies and explanations shortly.




GuestMetrics: Beer prices on the rise.though higher Craft beer prices driven by growing popularity of the more expensive Craft brands


Source: GuestMetrics

May 13th


According to GuestMetrics, the overall average price for beer in full service restaurants and bars accelerated during the first quarter of 2013, though higher average prices in the Craft beer segment was driven by more expensive craft beers becoming increasingly popular among consumers.  


“While beer’s price/mix was up +3.2% during 2012 compared to the prior year, that accelerated to +3.6% during the first quarter of 2013,” said Bill Pecoriello, CEO of GuestMetrics LLC.  “Looking specifically at the Craft beer segment, its price/mix was up +3.5% in 2012 and accelerated to +3.8% during the first quarter of 2013.  Additionally, looking at pricing in absolute terms, while Craft and Imports were generally at parity in 2011, the gap widened in 2012 as the price of Craft increased faster than that of Imports, and widened even further during the first quarter of 2013.  However, in analyzing the various price tiers within Craft, our analysis indicates that the increase in average prices was primarily the result of a mix effect as consumers increasingly chose more expensive Craft beers,” continued Pecoriello.  Based on data from GuestMetrics, the average Craft price was $5.42 vs. Import of $5.39 in 2011 for a 3-cent delta, Craft was $5.59 vs. Import of $5.52 in 2012 for a 7-cent delta, and during 1Q13, Craft was $5.72 vs. Import of $5.62 for a 10-cent delta.


“As we wrote about earlier in the year, the majority of growth among Craft beers in 2011 and 2012 was driven by the more expensive price tiers within Craft beers, and during 1Q13, this trend continued at an accelerated rate,” said Peter Reidhead, VP of Strategy and Insights at GuestMetrics. “Based on our data, while the most expensive brands within Craft, which we call Tier #1, accounted for 15% of Craft beers sold in 2011, that increased to 22% in 2012, and was 29% during the first quarter of 2013.  However, while there was a fairly dramatic trade-up taking place within Crafts, the average price paid within each of the four price tiers has remained largely unchanged over the past nine quarters.  Therefore, the increase in Craft price from $5.42 in 2011 to $5.59 in 2012 to $5.72 in 1Q13 was due almost exclusively to mix effect as consumers traded up to more expensive brands.”


“Given the rapid shifts taking place in on-premise and the beer category in particular, we believe this is a perfect example of why operators and suppliers need to have an up-to-date understanding of the changes taking place in consumer preferences,” said Brian Barrett, President of GuestMetrics.  Based on data from GuestMetrics, looking at the y/y growth of price/mix in 2012 and 1Q13 compared to their respective prior year periods, Premium Light price/mix accelerated from +2.2% to +3.2%, Premium Plus from +2.4% to +3.4%, and Premium Regular from +0.9% to +1.4%.       




SAM: Minding Our Ks and Qs: Our Read of SAM’s Fiscal 1Q13 10-Q


Source: CITI

May 13th


SAM Tidbits – In their 1Q13 10-Q, published May 1, 2013, SAM provided information and forecasts related to its capital expenditures, purchase commitments, litigious developments, income tax audits, and capital lease requirements.


FCF Decreased Owing to Operating Cash Flow Usage – SAM generated negative free cash flow of $34.0 million in 1Q13, vs. the negative $13.2 million in free cash flow generated in 1Q12. The difference is attributable to the usage of operating cash flow in the current year (vs. OCF generation in 1Q12) and also to an increase in capital expenditures in 1Q13.


Investing Cash Flow Usage Increased – SAM used $21.1 million on investing activities in 1Q13, compared to the $15.0 million used on investing activities in the year-ago period (owing primarily to increased capital expenditures in the current year).


Financing Cash Flow Usage Increased – SAM used $8.2 million on financing activities in 1Q13 vs. $2.0 million generated in the year-ago period, a difference we attribute to an $11.0 million increase in share repurchases in the current year.


Conclusion – While we very much like much like SAM’s notable exposure to (and share of) the U.S. craft beer segment as well as the company’s expansion and success in new categories such as cider, we believe the company’s shares are fully-valued given that they are currently trading at roughly 25.5x our FY14 EPS estimate. As such, we maintain our $158 target price and Neutral rating on SAM.




This Map Shows Just How Much Your State Taxes the Beer You Drink


Source: Benzinga

Alex Biles, Benzinga Staff Writer

May 13, 2013


The Tax Foundation rolled out a new map last week looking at state excise tax rates on beer.


High tax rates are likely to affect major brewers like Anheuser-Busch (NYSE: BUD [FREE Stock Trend Analysis]) and Molson Coors (NYSE: TAP) than craft brewers, whose already high prices have drawn in a faithful who are willing to pay a premium.


The state with the lowest excise tax rate was Wyoming at $0.02, while Tennessee taxed beer the most at $1.17. How much does your state tax beer? Check out the map below (click to enlarge):


Read more:




Woodford Reserve-themed room planned at Fort Knox


Source: Business First

David A. Mann

May 13th


Officials at Louisville-based Brown-Forman Corp. plan to celebrate the opening of a Woodford Reserve Room at The Saber and Quill Club at Fort Knox on Wednesday.


It will be the first-of-its-kind branded room on a military post, according to a media advisory for the event.


The room will feature bourbon barrels around and above a bar as well as images from the Woodford Reserve Distillery, the advisory said. The hope is, with the many troops who come through Fort Knox as a duty station or for training, that they will take away a little piece of bourbon country and the Woodford Reserve brand with them.


Joe Bollinger, director of military and transportation for Brown-Forman is among speakers at the event, which will also include a ribbon cutting for the room.




The CDC Goes To War Against Wine (Excerpt)


Source: Forbes

May 13th


The May 2 editorial in Pennsylvania’s Scranton Times Tribune, said it all: “Perdition just a vote away.” The plan by Governor Tom Corbett to end the state’s monopoly on wine and spirits sales has triggered hellish prognostications from a constellation of groups who argue that the best way to prevent alcohol abuse is to have the government sell it reluctantly.


“This reckless scheme will put alcohol on every street corner and increase crime,” said a million-dollar ad campaign paid for by the United Food & Commercial Workers,” a union with 3,000 members at risk of losing their monopoly.


“I’m a clinician, not a politician, and I don’t think we should privatize because I think it will work – there will be an increase in alcohol sales,” Deb Beck, the president of the Drug and Alcohol Service Providers of Pennsylvania, ” said at a Senate hearing on the bill (as reported by the Philadelphia Inquirer). “And why in the world,” she continued, “would we want to increase access to something that causes so many problems?






Source: Exane BNP

May 13th


The bubble monitor – Self-inflicted pain?


LAURENT-PERRIER (=) TP: EUR69 . Upside: 5%

Beverages (-) . France . Price (09 May. 13): EUR65.6


VRANKEN POMMERY (-) TP: EUR18 . Downside: 13%

Beverages (-) . France . Price (09 May. 13): EUR20.7


Champagne shipments down 12% in March against a very easy comp

At Q1 sales release, Vranken-Pommery indicated that March had been a weak month for the champagne market. Indeed. Global champagne shipments declined 12% in March, the worst monthly performance since March last year, when volumes already sunk 16%.


Unsurprising yet worrying deterioration in France (-17% y/y)

Shipments to France were down 17%, the second worst monthly decline since Feb 2009. Whilst we acknowledge the volatility of monthly data, we cannot help but notice that the volume decline at champagne houses is even worse (-23%, one of the worst performances ever).


Self-inflicted pain or competitive pressure from cooperatives?

We believe that part of the volume decline from champagne houses in France is a necessary self-inflicting pain as the likes of Vranken-Pommery end their non-profitable distribution contracts (essentially in the off-trade). It is hard however to disaggregate this voluntary volume loss from the underlying weakness of demand. Our channel checks suggested price rises of 1-2% in March vs. February at the retail level in France for Pommery and Laurent-Perrier. This could potentially explain why cooperatives are gaining share (volumes up 16% in Q1 in France vs. -14% for champagne houses.) We shall know in the coming months.


Risk rises with French exposure; stay away from champagne for now

With France accounting for 52% and 23% of Vranken and Laurent-Perrier sales respectively, our relative preference still goes to Laurent-Perrier (Neutral) vs. Vranken-Pommery (Underperform) given its higher exposure to non-European markets. However, we believe a continuation of these very weak trends in France could potentially lead to consensus cuts for both companies. With Vranken-Pommery and Laurent-Perrier trading on 19.4x and 17.4x CY13e earnings, we clearly see better opportunities elsewhere in the sector.




South Africa Wine Exports Setting Records on China Demand


Source: Bloomberg

By Guy Collins

May 13, 2013


South African wine exports are poised to beat their 2012 record this year following high yields and on demand for premium vintages from North America and Asia, industry executives and growers said.


Wine exports rose to 469 million liters (124 million U.S. gallons) in the year ending April 30, up 25 percent from the previous 12 months and more than triple the total shipped in 2000, data from the Wines of South Africa trade body, or WOSA, show. Bulk shipments rose 53 percent while those of bottled and packaged wines fell 5 percent, as large producers bottled more in export markets.


Although wine has been grown in South Africa since Dutch settlers arrived in the 17th century, the country was cut off from trade during the apartheid era of racial discrimination, which ended in 1994 with the first all-race elections. Two decades on, exporters are seeking to consolidate in established markets such as the U.K. and Germany while boosting sales in Asia and Africa.


“If you think about South Africa’s history, we’ve been making wine for 350 years but it’s only really since 1994 that we’ve actively pursued the export market, that we’ve been welcome and accepted,” Johan Erasmus, general manager of the Glen Carlou winery in the Paarl Valley north east of Cape Town, said at a London tasting in March. “We are much more in touch with consumers worldwide.”


A wet winter meant plenty of underground water, helping to boost yields in 2013, according to Su Birch, Chief Executive Officer at WOSA. Yields at the 2012 harvest rose to 14.13 metric tons per hectare (2.471 acres), the highest for at least six years, and probably climbed to about 14.90 tons this year, according to estimates based on preliminary data from WOSA.

Export Outlook


WOSA’s September forecast was for wine exports this year of between 430 million and 440 million liters, after a record 409 million in 2012. A combination of high yields, more marketing in the U.S. and elsewhere and global demand for bulk wine means that’s already looking too low. “It depends what the rand does,” Birch said by phone from Stellenbosch last month, predicting full-year exports of about 460 million liters.


The currency is near a four-year low against the dollar, helping exporters. It has weakened 7.1 percent this year, the most among 245 major emerging-market currencies tracked by Bloomberg. Leading export brands include First Cape, Kumala and Distell Group Ltd. (DST)’s Fleur du Cap.


Premium Market


Still, costs in South Africa are rising. The government boosted the minimum wage for farmworkers by 52 percent to 105 rand ($11.51) a day from March 1 after strikes in wine-growing areas in the Western Cape province began in November and turned violent, prompting the police to respond with tear gas, stun grenades and water cannons. Some vineyards were torched.


In the premium market, defined by WOSA as wines above $10 a bottle, a shift by growers to more Cabernet Sauvignon, Shiraz and other international grapes following the end of apartheid and to proportionately less Chenin Blanc, a French varietal popular in South Africa, has helped boost brand appeal.


The proportion of vineyards planted with Cabernet Sauvignon, a classic Bordeaux grape, tripled to 12 percent in 2011, the latest year for which figures were available, from 4 percent in 1990, according to WOSA.


Sauvignon Blanc climbed to 10 percent from 4 percent while Shiraz, also known as Syrah and associated with France’s Rhone Valley, rose to 10 percent from 1 percent and Merlot jumped to 6 percent, also from 1 percent. Pinotage, a hybrid between pinot noir and cinsaut developed locally, has also increased its plantings, although outpaced by Shiraz and Chardonnay.


Producers growing international grapes include Glen Carlou, a 28-year-old winery owned by Swiss-based Hess Family Estates, whose range includes Pinot Noir, Shiraz and Cabernet Sauvignon.


Bordeaux Varietals


Oldenburg Vineyards in Stellenbosch grows Bordeaux varietals Cabernet Sauvignon, Cabernet Franc and Merlot as well as Syrah, Chardonnay and Chenin Blanc.


“It’s not so much a yield game, it’s more a quality game,” said Oldenburg’s owner Adrian Vanderspuy while visiting London in March. “We aim to be at the premium end.”


Even as Europe remains South Africa’s biggest export destination, with between 60 percent and 70 percent of sales, Vanderspuy said the market on both sides of the Atlantic is changing amid demand for higher-quality wines.


“We’re not necessarily going for the supermarkets” in the U.S., Vanderspuy said. “The whole category of South Africa is growing. Our first shipment of wine has just gone to Shanghai.”

Shelf Space


The U.K. took the biggest share of South Africa’s wine exports last year with 22 percent and Germany was second with 19 percent, according to WOSA. While shipments of South African bottled wine to the U.K. and the U.S. fell in the five years to 2011, they rose sixfold to 4.28 million bottles in China and almost tripled to 3.44 million in Nigeria.


With exports rising, South Africa is still battling for shelf space. Its share of wines imported into the U.S. was 1.2 percent last year, down from about 8 percent in the 1990s, according to the San Francisco-based Wine Institute and George Monyemangene, South Africa’s consul-general in New York.


In August Wal-Mart, the world’s largest retailer, started selling South African wines in the U.S. after spending $1.8 billion in 2011 buying 51 percent of Johannesburg-based Massmart Holdings Ltd. (MSM), Africa’s biggest food and goods wholesaler.


Not all wineries plant just classic French grapes, even if they are aiming for foreign markets. At Da Capo Vineyards in Stellenbosch, founded by Milan-born Alberto Bottega in 1998, his son Roberto said Italian varieties Nebbiolo, San Giovese and Barbera grow alongside Cabernet Sauvignon and Merlot.


“South Africa is in a unique position,” Bottega, who promotes his father’s estate, said at a London tasting. “Our wines are somewhere between the old world and the new.”




Markets respond to ‘stunning’ 2011 Ports


Source: the drinks business

by Gabriel Savage

13th May, 2013


Port producers are reporting significant demand from markets worldwide in the wake of their superlative-fuelled 2011 vintage declarations.


Just two weeks since his company declared its 2011s and with the main US push not due to start until next month, Adrian Bridge, CEO of The Fladgate Partnership, confirmed: “Around the world there is strong interest.”


In addition to healthy demand from established markets, Bridge highlighted recent efforts to reach new customers. “Our own company opened up five new markets in South America last year,” he told attendees of a 2011 vintage Port tasting organised in London by the Institute of Masters of Wine.


Explaining the reason for this healthy interest in the 2011 declarations, he told the drinks business: “It’s a convergence of factors: a great vintage at a time when Bordeaux is selling 2012 en primeurs that are perhaps not as exciting as previous years. So you’re looking at lacklustre Bordeaux versus something stunning come out of the Douro.”


Meanwhile Christian Seely, managing director of AXA Millésimes, who manages both Quinta do Noval – which finally declared yesterday, including the first Nacional declaration since 2003 – and his own property Quinta da Romaneira, stressed the enormous value offered by Vintage Port.


“The best ones are equivalent to premier cru Bordeaux,” he told db. “It’s such an absurd steal that it doesn’t matter so much what the rest of the fine market’s like at the moment.”


However, Seely predicted that the market could soon wake up to this value. “It could easily be about to change,” he observed. “The sharpest investors don’t always look back but ahead. With the expanding world wine market, the big names like Bordeaux are the first thing to be discovered but eventually people discover more exotic aspects of the wine world.”


For Bridge, the quality and accompanying high profile of 2011 looks set to highlight not just the value of this vintage, but also older Ports on the market.


“I’d like to think there’ll be some price appreciation on this vintage, but it’s sure to put the spotlight on previous years,” he commented. “People will see that Taylors 2011 is £60 but £75 gets you Taylor’s ’85. We will see a reflection onto previous vintages.”


However, with prices for the 2011 vintage only slightly higher than Fladgate’s last declaration of 2009, Bridge stressed a desire to avoid the inflation that has affected Bordeaux in recent years.


“Vintage Port is the icing on the cake,” he acknowledged of the category’s relatively minor role in both collectors’ cellars and Fladgate’s own sales figures. “We could charge more but we’re very conscious that our main business is the LBV and other styles.”


However, he noted: “We do like to leave something for the consumer – the difficulty for Bordeaux is that it’s sucked out every bit of cash in the system so the end consumer might not see much price appreciation.”




Quinta do Noval latest house to declare 2011 vintage


Source: Harpers

Written by Chris Mercer   

Tuesday, 14 May 2013


Quinta do Noval has added its name to the plethora of port producers declaring a vintage for 2011.


Alongside declaring its 2011 ‘classic’ Noval vintage, Quinta do Noval has also taken the rare step of declaring its Nacional Vintage, something it has not done since 2003.


Over the past month, the much-vaunted 2011 vintage has been widely declared by major Port houses, many of which believe the year could be the best for a generation.


“Immediately after the foot treading in the lagares that September, we knew we were in the presence of what could be a great vintage year,” said Quinta do Noval managing director Christian Seely.


“The 2011 wines – many made from our replanted sites, now well into maturity – showed excellent aromas, with the true deep rich colour we look for in a wine with magnificent ageing potential,” he said.


It was not always so clear that 2011 would turn out well, however. The group said erratic weather through spring and summer, including a prolonged dry

spell in the final weeks before harvest, caused uncertainty among the winemaking team until the very last moments.




Chateau La Fleur Jonquet sold to Chinese architect


Source: Decanter

by Chris Mercer

Monday 13 May 2013

Chinese architect Wengcheng Li has acquired Chateau La Fleur Jonquet in Graves.


La Fleur Jonquet will become Li’s third wine property in Bordeaux, where he already owns Chateau La Dominante, in Saint–Denis de Pile and Chateau Lucas in Castillon-la-Bataille.


The deal for the nine-hectare Fleur Jonquet, a family business based in Arbanats and Portets, is another example of Chinese investors moving into Bordeaux wine production.   


‘Everything will continue as before,’ Fleur Jonquet cellarmaster Eric Jouin told, adding that he and others will remain in their posts.


La Fleur Jonquet’s winemaker and newly ex-owner, Laurence Lataste, could not be immediately reached for comment. However, she was quoted as telling the Sud Ouest newspaper that she decided to sell because none of her three children wanted to take the Chateau on.


She added that the chateau exports 75% of its annual production, which is around 50,000 bottles.


A third generation winemaker, Lataste founded the chateau in 1986, originally calling it Junquet. It has vines more than 80 years old, some of the oldest in Graves.




Bordeaux 2012: Smith Haut-Lafitte, Pichon Baron drop 10% on 2011


Source: Decanter

by Jane Anson in Bordeaux

Monday 13 May 2013


Smith Haut-Lafitte and Pichon Baron head a fresh flurry of Bordeaux 2012 wine releases, as this year’s campaign continues to lack vigour.


After a pause for French bank holidays, the Bordeaux 2012 campaign has restarted with a few high profile chateaux bringing the total number of released prices to nearly 70% of the expected total.


Chateau Smith Haut-Lafitte brought its red wine out at a drop of 10.53% on last year, to ?40.80 ex-Bordeaux, while keeping its white wine unchanged at ?57.50.


Chateau Pichon Baron de Longueville and Chateau Clos Fourtet both saw a similar discount, down by 10% to ?65 and ?45 respectively ex-Bordeaux.


Chateau Calon Ségur dropped by just 3% to ?38.40, but after a significant fall in 2011 from ?57.60 in 2010. The estate is under new ownership this year, with a small investment from the Moueix family of Pétrus, and is reported to have sold out quickly.


‘Calon is always a strong brand,’ one courtier told, ‘and it has been one of the few wines this year that sold through immediately upon release.


‘Pichon Baron, in contrast, has not been so well received. It’s more expensive than other comparable vintages on the market, such as the 2006, and almost the same price as the 2011. It’s not helping what is an already difficult campaign.’


Several smaller estates have also released at the start of this week, including: Pedesclaux at ?19.20 ex-Bordeaux, down 5.88%; Fayat at ?16.5, down 1.44%; Capbern Gasqueton at ?10.8, down 4.26%; and Clos Puy Arnaud at ?13.50 down 1.74%.




Rupert Murdoch buys Moraga Vineyards estate in Bel Air


Source: LA Times

By Meg James

May 10, 2013


Rupert Murdoch has just popped the cork on a deal to buy a rare trophy property in Los Angeles: the 16-acre Moraga Vineyards estate, located in the hills above Bel Air.


The billionaire media mogul announced his purchase on Twitter on Friday afternoon: “About to celebrate buying beautiful small vineyard right in LA. Great wine, Moraga, owned by great Angelino, Tom Jones, Time cover, 1961!”


Murdoch did not reveal the purchase price.


The listing price for the Santa Monica Mountains property, which can be glimpsed from the 405 Freeway, was just a tasteful sip below $30 million, according to The Times’ Daily Dish blog.


Jim Kline, the listing agent with Surterre Properties of Newport Beach, declined to comment on the sale when reached Friday night. Kline confirmed the listing price was $29.5 million.


The Hollywood Reporter first reported in February that Murdoch was sniffing around the property after reading about the vineyard in one of his company’s properties, the Wall Street Journal.


A spokesperson for Murdoch declined to comment Friday.


According to the winery’s website, Moraga was the first commercial winery to be bonded in the city of Los Angeles after Prohibition ended in 1933.


In the 1930s and 1940s, the property was a horse ranch owned by Victor Fleming, the director of such Metro-Goldwyn-Mayer classics as “Gone With the Wind” and “The Wizard of Oz.” Fleming began developing the property in 1937 and completed it in 1940 after finishing “The Wizard of Oz.”


Such Hollywood luminaries as Clark Gable, Vivian Leigh, Ingmar Bergman and Spencer Tracy were frequently invited to the estate.


Tom Jones, the most recent property owner, is former chief executive of the Northrop Corp., a position he held for 30 years. He was featured on the cover of an issue of Time magazine 52 years ago.


Jones and his wife, Ruth, bought the 16-acre property in 1959. They have lived there since then.


Elevation of the vineyard, which sits five miles from the Pacific Ocean, is 600 to 900 feet. Annual rainfall is 24 inches, compared with 15 inches in downtown Los Angeles.


When Jones learned Moraga Canyon had deep gravel soil, he was intrigued enough to try growing some Bordeaux varietals on his land – Cabernet, Merlot, Petit Verdot, Cabernet Franc and Sauvignon Blanc.


Moraga wines are sold in some of Los Angeles’ toniest restaurants, including the Bel Air Country Club, the Beverly Hills Hotel, Patina, Spago, and Morton’s Steakhouse.


According to Forbes magazine, Murdoch’s net worth is estimated at $11.2 billion.




Restaurant sales hit record high in April


Source: NRA

May 13, 2013


In his latest commentary, the National Restaurant Association’s Chief Economist Bruce Grindy reports on April sales and some new consumer survey data.  Restaurant sales bounced back from a dampened first quarter to hit a new record high in April.  Meanwhile, consumers’ pent-up demand for restaurants remains historically high, which suggests they will be ready to ramp up spending even more when their financial situation improves.


Restaurant sales hit a new record high in April, according to preliminary figures from the U.S. Census Bureau.  Eating and drinking place sales totaled $45.9 billion in April on a seasonally-adjusted basis, up 0.8 percent from March and approximately $200 million above the previous high registered in December 2012.


After totaling nearly $45.7 billion in December, eating and drinking place sales were dampened somewhat during the first three months of 2013, likely due in part to the impact of the payroll tax hike.  On a cumulative basis, eating and drinking place sales in the first quarter were roughly $850 million short of December’s baseline level.


While spending appears to have generally bounced back from the first quarter’s downtick, new NRA survey data shows the potential is there for even more improvements in the months ahead.  In a national survey of 1,000 adults conducted April 25-28 for the NRA by ORC International, consumers were asked if they are using restaurants as often as they would like.


The answer was a resounding no, with 49 percent of adults reporting they are not eating on the premises of restaurants as frequently as they would like.  This indicator of pent-up demand was even more pronounced among middle-aged consumers, with 59 percent of 35-to-44-year olds and 54 percent of 45-to-54-year olds saying they aren’t eating out as often as they would like.  Women (54 percent) were more likely than men (44 percent) to say they would like to dine out more often.


The story is similar for the off-premises market, with 51 percent of adults saying they are not purchasing take-out or delivery as often as they would like.  Like the on-premises responses, women (55 percent) were more likely than men (46 percent) to say they would like to be utilizing take-out and delivery options more frequently.


These new survey results suggest that once consumers are feeling more confident about their personal financial situation, they will be primed to burn off some of their accumulated pent-up demand for restaurants.




Pennsylvania: Pa. senators to hear from beer, liquor sellers


Source: ABC 27

Posted: May 14, 2013


State senators will continue exploring the liberalization of Pennsylvania’s wine, beer and liquor laws in a second hearing that’ll focus on groups that make and sell alcoholic beverages.


The Senate hearing Tuesday afternoon is the second of 3 planned hearings, as Gov. Tom Corbett pushes his fellow Republicans who control the Legislature to expand the sale of alcohol to more outlets.


A bill passed the House in March that would create 1,200 new private wine and liquor store licenses and allow thousands of bars, restaurants and grocery stores to begin selling bottles of wine.


Among the people testifying in front of the Senate Law and Justice Committee are expected to be representatives of beer distributors, bars, restaurants, wineries and more. Corbett wants a bill on his desk by July 1.




Virginia: Wine distributor uncorks expansion plan


Source: Richmond Biz Sense

David Larter

May 10, 2013


Hanover County is about to catch a wine buzz.


Wine distributor Republic National Distributing Company will build a 200,000-plus-square-foot facility in Ashland off Elletts Crossing Road, near the new Vitamin Shoppe warehouse center.


Republic National President Tom Cole confirmed the move Thursday.


“We’re very happy to be expanding our presence in Virginia,” Cole said.


Gary Archuleta, executive vice president with Republic National, said that the distribution center is in the design phase but that it will be more than 200,000 square feet with room for expansion.


“We are acquiring the land, and right now we are in the due diligence process,” he said.


The center is being developed by an internal group at the company, Archuleta said.


He said he could not give an accurate cost of development because the project has yet to be bid out.


Republic National currently occupies a 160,000-square-foot space in Sandston at 5401 Eubank Road. The company has about 300 employees in the area. It does not plan to immediately add jobs related to the move but will as needed over time, Archuleta said.


The company primarily distributes wine and sells about 3 million cases per year, Archuleta said. (That’s 36 million bottles of wine)


Republic National distributes dozens of brands, including such household names as Sutter Home, Woodbridge, Black Box, Little Penguin and Franzia.


“We’ve had several successful years back to back,” Archuleta said. “We’re in a position now where we have to expand in order to maintain the current volume we have.”


The 22-acre parcel of land is directly south of the Vitamin Shoppe parcel and is currently owned by Virginia Truck Center of Richmond, according to Hanover County records. BizSense was unable to reach anyone at Virginia Truck Center for comment.


The site is near the split of Washington Highway and Elletts Crossing Road and is visible from Interstate 95. It was most recently assessed at about $960,000, according to county records.


Hanover County Economic Development Director Edwin Gaskin said via email that he could not comment, citing a confidentiality agreement.


According to Archuleta, the company has been in Virginia since March 1997.


Its neighbor Vitamin Shoppe’s 300,000-square-foot distribution center, which is under construction and will add 170 jobs to the county.


The Republic National news is the latest in a string of big announcements for Hanover County.


The state’s Department of Game and Inland Fisheries is building its new headquarters there. And plans are in place for a 392,000-square-foot outlet mall developed by California-based Craig Realty Group.




Turkey: Turkey considers tighter limits on alcohol sale and consumption


Source: Reuters

By Humeyra Pamuk

Mon, May 13 2013


The Turkish government has prepared a draft law that would ban advertising alcoholic drinks in what officials say is an effort to protect children but could further divide religious and secularist Turks.


The bill, which was sent to parliament on Friday, would also ban companies that produce alcohol from sponsoring events, restrict where alcoholic drinks are sold and consumed, and require Turkish producers to place health warnings on packaging.


“Our aim is to protect society, particularly children and youth from taking up these habits at an early age, and not to limit an adult’s alcohol consumption,” Yahya Akman, a lawmaker in the ruling AK Party and one of the draft’s signatorees, told Reuters on Monday.


The move was made only weeks after the conservative prime minister, Tayyip Erdogan, who is known for his dislike of alcohol, declared ayran, a non-alcoholic, yogurt refreshment as the national drink.


It follows a ban on drinks service on several routes flown by state-run Turkish Airlines.


Islam prohibits the consumption of alcohol. Although Turkey’s population is 99 percent Muslim, it has a secular constitution. It belongs to NATO and is a candidate for European Union membership.


Many secularist-minded Turks fear tighter rules on drinking could undermine the separation of state and religion.


The bill, expected to become a law before parliament recesses in July, would bar venues that allow the sale and consumption of alcohol from openly displaying the products to people outside.


The government says it is not attempting to interfere in people’s lives and is trying to bring Turkey up to European norms by controlling alcohol sales and protecting the younger generation as it negotiates to enter the EU.


“This is to make sure that alcohol consumption is not encouraged among young people. The state has a responsibility to protect the family and the public,” Akman said.


Passage of the law would also be another blow to local brewers that are already grappling with taxes that are more than 100 percent on alcohol, one of the highest in the world.


Akman said public health is a higher priority than companies’ revenues.


“A company’s profit is insignificant when compared with the health of the general public, which is what’s at stake here.”

Mother’s Day Gift Ideas:Wine Tasting Saturday:Wines In Our Dispenser

May 10, 2013



Our Newsletter

Gift Ideas And More!!

Wine Tasting Saturday 3-6Pm

Stop In On Saturday May 11th 3-6pm

We Will Have Many Wines To Try That Moms Will Love!


Wines For Mom In Our Dispenser

Our Wine Dispenser

Stop In And Try!

Did You Know We Have A Wine Dispenser??

Everyday You Can Try Up To 4 Wines!

This Week We Feature Our Best Selling Wines For Mom!




Pinot Grigio


Mommys Time Out

Pinot Grigio


Liquor Industry News 4-24-13

April 24, 2013

Franklin Liquors

Wednesday April 24th 2013

Heineken Flags Moderating Growth as Quarterly Volume Falls


Source: Bloomberg

By Clementine Fletcher

Apr 24, 2013


Heineken NV (HEIA), the world’s third- biggest brewer, reined back its expectations for annual growth after reporting an unexpected decline in first-quarter sales, sending the shares down the most in 20 months.


So-called organic volume and revenue will improve this year at a slower pace than the company had anticipated as tough conditions in austerity-hit markets in Europe as well as a slowdown in Nigerian sales hold back purchases, Heineken said today. The brewer hadn’t previously given a specific forecast.


Heineken fell as much as 6 percent in Amsterdam trading, the steepest intraday decline since Aug. 24, 2011. In addition to sliding sales in western Europe, the brewer also reported lower volume in the central and eastern part of the continent, Asia Pacific and the Americas (HEIA).


“It was always going to be a tough quarter, but it seems to have been even worse than feared,” Jonathan Fyfe, an analyst at Mirabaud Securities in London, wrote in a note to clients today. “We expect to lower our forecasts.”


The shares dropped 5.6 percent to 54.47 euros as of 9:54 a.m. in Amsterdam, trimming this year’s gain to 8.3 percent.


Consolidated lager volume, excluding the effect of acquisitions, dropped 4.7 percent, the brewer said, missing the median estimate of 12 analysts for a 0.6 percent increase. Revenue excluding currency swings and acquisitions dropped 2.7 percent compared with a median estimate for a 2 percent rise.


Russian Tax


Heineken, which gets the largest portion of its revenue from western Europe, posted an 8.8 percent decline in beer volume in the region. Central and Eastern European volume dropped 3.7 percent as Russian beer tax increases and regulation to stop sales of the drink in freestanding kiosks cut demand.


Heineken is trying to offset stagnant developed markets with sales in faster-growing economies. It bought out its joint- venture partner’s stake in Asia Pacific Breweries for S$5.6 billion ($4.5 billion) last year to gain greater control over south-east Asian markets including Vietnam. The APB integration is “progressing well,” Heineken said.


Consolidated beer volume in Asia Pacific fell 1.4 percent. Volume in the Americas (HEIA) also fell as Mexican demand waned due to bad weather and the Brazilian beer market declined. The volume of the eponymous Heineken brand fell by 4.7 percent on an organic basis.


Unfavorable currency movements reduced revenue by 34 million euros, or 0.9 percent, the company said.


Earnings before interest and taxation slid at a pace in “mid single-digits,” excluding some items and the effect of acquisitions and currency fluctuations, Heineken said.


Accounting Change


“Global market conditions remain volatile, contributing to a weaker-than-expected first quarter,” the brewer said. “Challenging trading conditions in austerity affected markets in Europe and inflationary pressures in Nigeria are expected to continue to impact volume development for the balance of the year, leading to a moderation in organic growth expectations.”


Results for the year will also be affected by a charge related to a change of accounting standards, reducing adjusted net profit by 75 million euros, the company said. Analysts had expected annual profit on that basis of 1.86 billion euros.






Source: Nomura

Apr 24th


Neutral, PT Eur 60, Lord Shackleton


Q1 Topline miss, talking down FY growth rates – expect weakness in stock. Consensus looks set to be hit by about 6%. Most of this is the IAS 19 pension impact (4%) with the rest from moderating growth in the core business. Stock should be down by as much but am always nervous given high short base. Q1 organic consolidated beer volumes -4.7% vs Nomura -2.0% and consensus +0.6%. Organic revenues -2.7% vs Nomura +0.5% and cons +2.0%.


Big miss in Africa and Middle East (-4.6% vs est flat) and Western Europe (-8.8% vs est -5.0%) with misses in Americas (-2.4% vs. est +2.0%), Asia Pacific (-1.4% vs est 2.0%). CE Europe was better -3.7% vs. -5.0%. Organic EBIT declined mid-single digit. Company indicates a moderation of growth rates for the FY, mentioning Europe and Africa.


Company flagging 2013  hit from IAS 19 of Eu0.13 at EPS (4%). Street consensus currently EUR 3.25 for 2013 (NE 3.20) -with the IAS19 adjustment and shaving of FY estimates for slower growth, we would expect street EPS to move down to Eu3.05 or lower


The shares have seen a strong re-rating since the Asia-Pacific Breweries (APB) deal at the end of last year, which has substantially closed the gap with the average sector rating (Heineken 2014 P/E 16.3 v sector 17.1x).



Carlsberg – Q1 due 7 May –  mixed – Russia down mid-single digits. We estimate Carlsberg E Europe -5% in Q1 which looks ok . W.Europe weak for Heineken ; we estimate Carlsberg -5%, which will be less negative due to Scandinavia


ABI – Q1 due 30 April – negative – Heineken indicating Brazil down mid-single digits in-line with market. We estimate Q1 Latam North volumes -2%




US Spirits – “March NABCA data looks light”


Source: UBS

Apr 23rd


March data appears soft due to technical effects

On an unadjusted basis, March volume declined by -2.7% and sales were up +0.5%. NABCA data (covering 22% of US spirits volumes) released for March looks light, but was impacted by several technical effects: five calendar Sundays in March 2013 vs. four last year (Sunday sales prohibited in 6 Control States), timing of Easter, and the fact that Michigan (16% of NABCA vols) reported 4 weeks of sales vs. 5 weeks of sales in March 2012. March adjusted volume growth is +2.9% and sales +6.4%, implying price/mix +3.5% y/y. 12 month rolling trends are vols +3.4% and value growth +6.4%, with price/mix +3.0%.


Diageo lost volume share, but price/mix remains higher vs. market

Diageo unadjusted Dec volumes declined -8.4% y/y, continuing to lose volume share (LTM -0.6% y/y). However, according to Nielsen data, Diageo has higher price/mix growth than the rest of the market, partly affecting its volume growth. Pernod Dec volumes fell -2.8% (LTM +1.1%) in line with the market.


Constellation, Remy, Campari gained volume share in March

Brown-Forman unadjusted March volumes fell -3.7% y/y (LTM +2.3% y/y), below the market growth rate. Moet Hennessy underperformed with -5.1% volume growth y/y in Mar (LTM +9.0% y/y). Remy’s March volumes were down -1.2 % y/y (LTM 10.5%) implying some share gain relative to the market down -2.7%. Campari’s March volumes grew by 6.1% y/y (LTM +3.9% y/y).


Buy ratings for Pernod, Constellation Brands and Brown-Forman.

We estimate 2013 US spirits volume and value growth of +2.0% and +4.5% y/y.




Maker’s Mark’s Samuels took lesson from New Coke


Source: Business First

Kevin Eigelbach

Apr 23rd


Bill Samuels Jr., the chairman emeritus of Maker’s Mark Distillery Inc., said he took a lesson from The Coca-Cola Co.’s New Coke fiasco during the 1980s when his company contemplated changing its product earlier this year.


Speaking at a meeting of the Louisville chapter of Financial Executives International today at the Hurstbourne Country Club, Samuels said that when Coca-Cola was taking flak for introducing New Coke in 1985, Maker’s Mark took out newspaper ads defending Coca-Cola. The chairman of Coca-Cola at the time was so impressed that he flew Samuels to Coca-Cola headquarters in Atlanta to have lunch with him.


They met for about two hours, with the Coca-Cola chairman speaking for about one hour and 59 minutes of the time, Samuels said. It gave Samuels a two-hour lesson in what to do if anything like that would ever happen to Maker’s Mark, he said.


As Business First previously reported, something like that did happen in February, when Makers’ Mark announced that it would water down its product to help meet demand. After enduring a barrage of complaints from customers, the company soon reversed course – much more quickly than Coca-Cola reversed course on New Coke.


As I recall, that product lingered on store shelves for several years, with Coca-Cola bringing back the original formula as Classic Coke. Now, it’s all the original formula again.


Anyway, Samuels said Maker’s Mark – which is owned by Deerfield, Ill.-based Beam Inc. (NYSE: BEAM) – received 140,000 e-mail responses to the plan to water down the product, all of them saying “don’t mess with my whiskey.” It wasn’t hard to figure out what to do after that, he said.


To keep American customers supplied, the company has had to cut back on its international sales, Samuels said. But that’s OK, he said, because the company believes in serving its current customers first.


The incident very well could have destroyed all the goodwill that Maker’s Mark has built up with its customers in the past 50 years, he said. The company has had 33 straight years of double-digit growth and now has assets of just less than $3 billion.


Since he retired as president of Maker’s Mark in 2011, one of Samuels’ roles has been to make sure the company follows the principles laid down by the company’s founder, his father, Bill Samuels Sr. He said he feels he has done a pretty good job of that, except for the initial decision to water down the product.


One of those principles is to always exceed expectations, he said, which makes your product one that others will discover and talk about. That’s good advice for anyone who provides a product or service, he said.


“You may own the product, but the consumer owns the brand.”




Lead abatement, alcohol taxes and 10 other ways to reduce the crime rate without annoying the NRA (Response)


Source: Washington Post

Ray Scalettar

Apr 23rd


Unfortunately, Mr. Matthews chose to cite advocacy research when it comes to the impact of higher alcohol taxes. Repeated studies, including research by the National Institute on Alcohol Abuse and Alcoholism, have shown that alcohol abusers are not deterred by higher prices. It is the moderate, responsible consumers who are most sensitive to prices and are the ones that cut back the most when prices increase.


In fact, in 2011 the CDC itself cited moderate alcohol consumption as one of four healthy lifestyle behaviors that help people live longer. This is supported by the Federal Dietary Guidelines and the scientific literature, which conclude that moderate consumption of alcohol– distilled spirits, beer or wine– is associated with the reduction of cardiovascular disease as well as all-cause mortality. As the American Heart Association points out, cardiovascular disease is the number one cause of death in the United States. To the extent price increases unduly affect moderate drinking patterns of responsible adults, these important health benefits could be lost.


Advocates of price increases also fail to account for the enormous economic impact the blunt instrument of higher taxes would have. Not only would it hurt the vast majority of responsible, moderate consumers, but also thousands of entry level men and women employed by the small businesses in the hospitality industry located in every town and city in America.


Raymond Scalettar, M.D., D.Sc.

Clinical Professor of Medicine, George Washington University Medical Center

Former Chair of the American Medical Association, Medical advisor to the Distilled Spirits Council




Mexico asks for “justification” over high-alcohol Tequila ban (Excerpt)


Source: Just-Drinks

By James Wilmore

23 April 2013


The Mexican Government has asked China to give “scientific justification” for its long-running restriction on high-alcohol Tequilas in the country.


Mexico’s authorities have been in talks with China since 2009 over its ban on distilled spirits containing more than two grams of methanol per litre. The measure prevents premium Tequilas being sold in China, whereas other Tequilas have access to the market.




Washington: Some big name retailers caught selling liquor to minors


Source: KING 5 News


April 23, 2013


Some of the biggest retail food and drug stores in the Puget Sound region top a list of offenders when it comes to the sale of hard liquor to minors.


The KING 5 Investigators obtained data compiled by the Washington State Liquor Control Board (LCB) since a new law went into effect last June that privatized liquor sales in the state.


The records show that undercover “stings” by LCB resulted in nine citations issued to Safeway stores for the sale of liquor to a minor.  Most of those are stores in Western Washington.


Following Safeway are Fred Meyer stores, with 7 citations; Walgreens, 6 citations; Rite Aid, 5 citations; QFC, Albertsons and Walmart,  4 citations each;  Costco, Bartell and Trader Joe’s, 2 citations each.


The companies topping the list — Safeway and Fred Meyer — said they take the violations seriously and they discipline or fire employees who violate their strict policies for the sale of booze.


Safeway also pointed out that with 160 stores across the state it is now Washington’s largest liquor retailer, meaning its sheer size can explain why it had more infractions than other retailers.


In all, 82 citations have been issued to “spirits retailers” across Washington since the new law took effect last June.


Undercover stings


Voter approved Initiative 1183 spelled the end of state-run liquor stores, handing the reins over to private companies.  Hard liquor is now sold in hundreds of larger stores across the Washington.


The LCB says it hopes to conduct compliance checks at each one of those retailers before the one-year anniversary of the new law.


“I think people were concerned because it’s a new thing and we don’t have the control system like we used to,” said LCB Sgt. Lorn Richey during a sting operation earlier this month.


Richey and another officer watched as a trained high school student entered several stores that sell hard liquor.  When she attempted to buy a bottle, clerks in each store turned her down.


“It went great. Everybody was complying with the law. That’s what we want to see,” said Richey.


Stores that sell to the undercover teen could pay a steep price.  Under the new law, the fine for a first time offense is $1,000.


But the KING 5 Investigators found many retailers found to have sold liquor to minors aren’t paying that amount, thanks to the LCB’s Responsible Vendor Program. Retailers that participate in the program provide extra training to employees and adhere to the strictes alcohol sales policies.


“Since everybody’s got additional training the likelihood that they’re going to fail a compliance check is a lot lower if they follow those best practices,” said Sgt. Richey, explaining the program’s goal of helping retailers follow the law..


However, records reviewed by KING 5 show that 25 percent of the spirits retailers cited since June  2012 are enrolled in the responsible vendor program.


The law allows them to pay a reduced fine for their first offense of just $500.


The fact that so many enrollees in the responsible vendor program ended up being ticketed appeared to surprise officials at LCB.  However, they cautioned that they will need more data before reaching any conclusions about which parts of the new law might not be working.


LCB officials say that compliance checks at spirits retailers show that 93 percent of them are following the law and denying sales to minors. That’s about the same compliance rate that liquor stores had when they were run by the state.




Wine industry must grapple with big health care, tax, estate changes


Source: North Bay Business Journal

By Gary Quackenbush

Apr 22nd


Business owners, particularly the wine industry that makes up a significant proportion of the North Coast economy, need to pay attention to major health care insurance, tax and estate law changes this year to avoid steep noncompliance penalties and mitigate significant tax increases, according to local tax-planning and insurance experts.


Mike Parr, employee benefits broker with Northwest Insurance agency, a subsidiary of George Petersen Insurance, focused on how business owners should prepare for health care reform at a recent roundtable on wine industrial financial issues hosted by accounting firm Moss Adams LLP.


“There are positive aspects of the new health care reform bill at a time when insurance costs are increasing 10 to 20 percent annually,” said Mr. Parr.


Since March 2012, all preventative care is covered by all carriers and plans under the federal Affordable Care Act. Children are also covered up to age 26, and insurers cannot decline coverage for children with pre-existing conditions for individual coverage. Furthermore, lifetime maximums on health insurance plans have been eliminated.


A small-business tax credit covers eligible employers with 25 or fewer full-time equivalent (FTE) employees whose annual wages are less than $50,000. This tax credit equals 35 percent of an employee’s annual premiums the employer has paid for in years prior to 2014. It will increase to 50 percent after 2014.


Employers must provide employees with a summary of benefits and coverage (SBC), available from a broker or health insurance carrier. This document must include relevant data, including out-of-pocket costs, deductibles, limitations, referrals, etc., with definitions and examples, along with a standard form to help participants understand and compare plan options, according to Mr. Parr.


The penalty for not providing the summary is $100 per day for each affected employee.


Covered California is the name of the online health insurance exchange ( where small business employers with two to 50 workers can purchase group health insurance. Individual health plans are also available, along with access to a Federal Subsidy Assistance calculator.”


The exchange is scheduled to go live on Oct. 1 for health insurance plans with a Jan. 1, 2014, or later effective date. The exchange website already is live and has background information.


Employers are also required to provide employees with a notice of insurance exchange (NIE). The deadline for issuing these notices was originally set for this March, but has been delayed by state and federal courts. A new date has not been established.


An employer mandate to provide health care insurance applies to large businesses with 50 or more full-time-equivalent (FTE) employees, each working 30 or more hours per week, or 130 hours per month.


This mandate does not include designated seasonal employees working less than 120 days during the year. Leased employees also are not included. If a business is a large employer, seasonal employees working in excess of 30 hours a week are eligible for the penalty calculation.


The employer mandate comes with a series of penalties for non-compliance, such as when coverage is not offered and one employee obtains a subsidy in the exchange, triggering a state or federal audit and fines.


Will large employers keep their health care plans? Research suggests that most will, according to the experts at the roundtable.


“Top reasons for keeping their plans include retaining current employees, the ability to attract future talent and also in order to maintain employee satisfaction and loyalty,” Mr. Parr said. “This doesn’t mean that employers won’t compare the cost of offering health insurance to costs associated with paying penalties.”


Big changes to tax law in 2013


An overview of tax law changes was provided by Michael Ricioli, CPA, tax partner with Moss Adams LLP.


“As taxpayers prepared for the fiscal cliff at the close of the 2012 tax year, emphasis was placed on accelerating income, rather than escalating deductions, in an effort to take advantage of lower tax rates in 2012,” Mr. Ricioli said.


The federal top income tax rate increased from 35 percent in 2012 for ordinary income to 43.4 percent in 2013, including a new 3.8 percent surtax on net investment income.


Rates on long-term capital gains and qualified dividends rose from 15 percent in 2012 to 23.8 percent this year, also including the 3.8 percent surtax.


The new 3.8 percent net investment income surtax for Medicare is payable by individuals, trusts and estates on the lesser of net investment income, or excess modified adjusted gross income, over $200,000 for singles, $250,000 for married couples filing jointly and $11,950 for trusts and estates.


A 0.9 percent increase in the employee portion of Medicare Hospital Insurance (HI) FICA tax on wages is in effect for wages exceeding $200,000 for singles or $250,000 for jointly filing married couples in a calendar year. There was no change to the employer portion.


‘Sweet spot’ for S-corp.


Taxpayers can be hit with both Medicare and hospital insurance tax increases, and there will be more focus on lesser-involved owners to document their active participation in the business, according to Mr. Ricioli.


“A sweet spot exists for active S-corporation business owners who are paid reasonable wages,” he said. “These owners may be able to avoid both the 3.8 percent Medicare and the 0.9 percent HI taxes.”


Winery owners who do not have this structure, will likely start taking a closer look at S-corporations to minimize their tax liabilities, he said.


A business must have taxable income to take advantage of the accelerated-depreciation provisions under Internal Revenue Code Section 179. Amounts expensed under this section are excluded from uniform capitalization, or UNICAP. Therefore, these deductions are not required to be capitalized into bulk or cased goods inventory.


The expense limitation for the 2013 tax year is $500,000 and this benefit begins to phase out once eligible asset additions exceed $2,000,000.


The 50 percent bonus depreciation provision has been extended through 2013 and applies to new assets only. It includes qualified leasehold improvements (excluding related party leases) and will not cause an AMT adjustment, but it is subject to UNICAP.


In California, net operating losses are now available for use in the 2012 tax year. A single sales factor for apportionment calculations will be mandatory in 2013 under Proposition 39.


The state’s top individual income tax rate is now 13.3 percent under Proposition 30, and a sales-tax increase of 0.25 percentage points is also in effect due to Prop. 30.


A key item that applies to vineyard and winery owners is an analysis of the purchase-price allocation as it relates to the purchase and sale of a vineyard or winery.


“Various exemptions and provisions are sometimes overlooked pertaining to a sale, and it is important to understand what are the related tax implications of assigning different values to the assets being purchased to both the buyer and the seller,” he said.


Tools for growers, exporters


With the increase in tax rates in 2013, vineyard owners have an opportunity to take advantage of farm income averaging. This is another commonly overlooked provision that can provide vineyard owners with some significant tax benefits in upcoming tax years.


As wineries continue to increase global sales, tax planning has increased around international transactions. Although tax rates have gone up, wineries with international sales are still taking advantage of the use of an Interest Charge-Domestic International Sales Corporation (IC-DISC).


If structured correctly, this allows a winery to have a portion of its income that would otherwise have been taxed at their ordinary tax rate, converted to a qualified dividend that is taxed at the current maximum rate of 23.8 percent.  This tax rate arbitrage can provide significant tax savings for wineries, given the right circumstances.


Cost-shifting eases tax impact


Despite all the estate planning done in 2012, such a review for this year will continue to be relevant due to relatively low valuations, higher exemptions, the possible elimination of valuation discounts, and limitations of leveraging techniques – like grantor trusts such as grantor retained annuity trusts (GRATs), according to Jay Silverstein, J.D., LLM, a Moss Adams principal.


“In 2012, planning was based on the assumption that the $5.12 million exemption would be reduced, when, in fact, it was increased,” he said. “Because of the higher exemptions, more emphasis will be placed on making ownership transitions that preserve and protect business assets and shift income to adult children who are in lower tax brackets.”


Estate, gift and generation-skipping tax (GST) rates all went up to 40 percent this year from 35 percent last year. However, the exemption for all categories increased from $5.12 million to $5.24 million per person, or to $10.48 million for a married couple.


Owners of large wineries, those with a net worth in excess of $10 million, can take advantage of valuation discounts and GRAT benefits and grantor trusts to transfer significant wealth free of estate and gift tax, according to Mr. Silverstein.


“With increased income tax rates and estate and gift exemptions, winery owners will have to weigh estate and income tax benefits of current gifting with the loss of basis step up on assets held until death,” he said.


“Higher income tax rates and the new 3.8 percent Medicare tax, have made shifting income more important,” Mr. Silverstein said. “However, we should let the tax tail wag the dog by gifting assets to the next generation to minimize estate and income taxes, but not create an ownership structure that fails to preserve the value of the winery because of family conflicts.”






Source: Rabobank

April 23, 2013


Rabobank has published a new report on the global wine industry, looking at issues of supply, demand and pricing in key markets around the world.


In the report, Rabobank’s Food & Agribusiness Research and Advisory group says that the impact of tighter global wine inventories has mainly been felt in Europe and in the lowest price segments to date.  Although bulk wine shipping has helped to globalize the world wine trade, the impact of tighter supply has been felt very differently across producer regions.


Stephen Rannekleiv, Rabobank wine industry analyst, commented, “With rising prices and tighter inventories in Europe, a key question for the industry is whether the traditional buyers of European bulk wine – such as other EU countries, Russia and China – will accept higher prices, move to seek lower quality sources of supply, or simply reduce bulk wine purchases because consumers will not accept higher prices for wine.”


Russian bulk wine buyers have been adjusting sourcing as European bulk prices have risen, but have yet to purchase significant quantities of higher priced New World bulk wine.  Price premiums have also kept other highly price-sensitive bulk wine buyers from bidding more aggressively on New World supplies.


“As the year progresses, it will be important to watch how these price-sensitive markets react and whether consumers will accept higher prices or switch from wine to spirits and/or beer,” added Rannekleiv.


The Northern Hemisphere harvest of 2012 was mixed, with production increasing more than 20% in the U.S. and declining 10% in Europe.  The price of bulk wine in France and Spain rose significantly towards the end of 2012, as it became clear that inventories had tightened and the coming harvest would be light.   South African bulk wine prices remained stable in the domestic market, but the weakening of the Rand  lowered the cost for foreign buyers seeking alternative sourcing.


Somewhat surprisingly, the tightening supply situation has not yet caused Chilean bulk prices to rise. This likely reflects a combination of factors, such as its higher average price, the expectation of a large harvest in April, and the fact that Chile’s largest buyer (the U.S.) just had its largest harvest on record.


The wine industry’s attention now turns to the 2013 Southern Hemisphere harvest, which is currently underway. Preliminary expectations are for a larger Southern Hemisphere wine harvest in 2013, with the potential to lower bulk wine prices from those regions.




The Wine Advocate & Unveil Two More Reviewers Joining Its World-Renowned Editorial Team


Award-Winning Critics to Cover Italy, Spain, Argentina and Chile


Source: NBC News



The Wine Advocate and, the most trusted authority in wine reviews, couldn’t be more thrilled to introduce the two newest members of its world-renowned review team: Monica Larner, who will focus on Italian wine, and Luis Gutiérrez, who will take on Spain, Argentina and Chile.


“We’re excited about the new team and assignments,” said founder and chairman, Robert M. Parker, Jr. “Monica is one of the most comprehensive writers of Italian wines out there. Having the advantage of devoting herself full-time to this important region and living within its culture is phenomenal. And Luis is known as the foremost expert in Spanish wine today. From his home base in Spain, he’ll be putting his Spanish-speaking skills to great use as he reviews wine from Spain, as well as Chile and Argentina.


Larner was most recently the first Italian editor for Wine Enthusiast, establishing and running the tasting bureau for 10 years. She utilized the 100-point scoring system, reviewed 3,000 wines per year (a total of 16,000 published reviews overall) and produced a 185-page special collector’s Wine Enthusiast Wines of Italy edition showcasing her decade-long body of work. She was awarded the top prize for journalism by the Comitato Grandi Cru d’Italia three times — more than any individual. Before that, Larner spent years reporting for BusinessWeek in Rome, Italy Daily of International Herald Tribune and La Repubblica before her stint as a freelance writer. She is an active member of the Ordine dei Giornalisti, a certified sommelier with the Italian Sommelier Association, and has written four guidebooks about Italy, including a photographic archive of 50,000 images. Larner is an American who has lived in Italy off and on since she was 11 years old — attending high school in both California and Italy. She grew up in a family that celebrated everything about wine culture, developing a deep appreciation and love of wine from an early age. She earned a bachelor’s degree in journalism from Boston University and a master’s in journalism from New York University. She currently resides in Rome.


A native of Spain, Gutiérrez most recently split his time between being an IT professional for more than two decades, a Spanish correspondent for, and a founding member of, the most prestigious wine Web site published in Spanish. He received the Spanish National Gastronomy Award for journalism in 2012. In addition, Gutiérrez wrote for publications belonging to El Mundo newspapers in Spain, as well as contributed to various wine and gastronomy publications in Spain, Portugal, Puerto Rico and the United Kingdom. He primarily covered wines from Portugal and Douro Valley, Spain and wrote about wines from Burgundy, Rhone, Germany, Champagne and other classic European regions. He also contributed to the Spanish wine coverage in 1001 Wines You Must Taste Before You Die and co-authored the award-winning book, The Finest Wines of Rioja and Northwest Spain (2001) in the United Kingdom, United States and Japan. He lives in Madrid with his wife and three children.


About The Wine Advocate and

For more than 30 years, The Wine Advocate and have been the independent consumer’s guide to fine wine. Both were created by world-famous Robert M. Parker, Jr., the only critic in any field to receive the highest Presidential honor from three countries — France, Italy and Spain. The guides provide a wealth of information to its subscribers, including a searchable database of more than 220,000 professional wine ratings and reviews, plus articles, videos, daily news content, online retail availability and pricing, and an active professionally moderated bulletin board. For more information, visit




Port 2011 hailed ‘classic’ as producers rush to declare


Source: Decanter

by Richard Woodard

Tuesday 23 April 2013

The 2011 Port vintage is set to become the first widely declared year since 2007, with the wines hailed as ‘classics’, with a character ‘rarely seen in the Douro Valley’.



Several producers have moved to declare 2011 in the past few weeks, two years after 2009 was declared by some producers – notably Taylor, Fonseca and Croft – but not by others, including the Symington quartet of Dow, Graham, Warre and Cockburn.


‘From the beginning I think we knew we were in the presence of a great vintage,’ said Luis Sottomayor, winemaker for Sogrape-owned Sandeman, Ferreira and Offley.


‘I have been working in the Douro Valley for more than 23 years, I have made a lot of vintage Port and I have never seen a wine with so much concentration, power and these tannins.


‘It’s a typical, classic vintage . We have the same acidity as in 2007 but a much stronger and more robust wine.’


Taylor, Fonseca and Croft owner The Fladgate Partnership declared 2011 today, St George’s Day, as is the company’s custom, with winemaker David Guimaraens highlighting ‘wines that have elegance as well as depth and stamina’.


He added: ‘The 2011s stand out for the purity of the fruit and the quality of the tannins, which are silky and well integrated, but provide plenty of structure.’


As well as Taylor, Fonseca and Croft, Fladgate also declared Vargellas Vinha Velha, made from selected old vines on the Quinta de Vargellas estate.


The Symingtons – who declared Graham, Dow, Warre and Cockburn – said strong winter rains in late 2010 had played a ‘crucial’ role, resulting in wines with ‘an exceptional depth of colour and concentration, rarely seen in the Douro and with marked minerality from the schistous Douro soil’.


The company has also made two single vineyard wines from the 2011 vintage – Graham’s The Stone Terraces (from selected plots at Quinta dos Malvedos) and Capela do Quinta do Vesuvio, which was launched with the 2007 vintage.


Meanwhile, Fladgate CEO Adrian Bridge said the company would be selling double magnums and imperials of the 2011s in response to growing demand for larger formats.






Source: Giant Noise

April 23, 2013


Deep Eddy co-founder and CEO Clayton Christopher announced today that he and co-founder Chad Auler have named Eric Dopkins the new chief executive officer of the all-natural craft vodka company based in Austin, Texas. Christopher will transition from CEO and become executive chairman and chief innovation and marketing officer. The appointment of Dopkins, a veteran in the spirits industry with over 20 years of leadership experience, signals Deep Eddy’s commitment to continued expansion and the goal of becoming a national leading vodka brand.


“I’ve had a lot of reasons to celebrate over the past few years since we launched Deep Eddy Vodka, but this is definitely one of the most epic milestones since we started,” says Christopher.  “It’s exciting when the brand has become much bigger than “you,” and Deep Eddy is not only at that place now, but also got there much faster than we ever imagined. Eric is one of the top spirits executives in the industry. He has the skill, experience and passion needed to help make Deep Eddy a national player in our space. This move will position Deep Eddy for strong, sustained growth for many years to come. Eric shares the competitive drive and a passion for high quality, all natural spirits and mission driven values that Deep Eddy is all about.”


“The spirits business is dynamic and tomorrow’s category leaders are often not the big brands of today. Consumers are changing, and Deep Eddy Vodka has the potential of becoming a category-leading brand,” says Dopkins. “Developed by a talented and innovative team, Clayton Christopher and Chad Auler have crafted a premium, all-natural lifestyle brand that is truly American and truly Austin. The long-term potential of Deep Eddy excites me, and I look forward to working with a quality team of talented individuals.”


Dopkins most recently served as president of Young’s Market Company California, a California-based beverage distributor with annual revenue of $1.55 billion. Previously, he served as V.P. general manager of west U.S. for Pernod Ricard, USA, where he led sales, marketing and finance with sales revenue of approximately $300 million. Dopkins also served as president for Boz Spirits, Inc., Diageo general manager & V.P. of western region for Diageo North America and district manager for Canandaigua Wine Company. Dopkins received his B.S. in Business Administration (Marketing) from C.S.U. Chico.


For information Deep Eddy, please visit




Brinker: March sales drove 3Q profit


Sales turned around at Chili’s, Maggiano’s after a difficult start to the quarter


Source: NRN

Ron Ruggless

Apr. 23, 2013


After a challenging environment in January and February, Brinker International Inc. reported Tuesday that March same-store sales improved at its Chili’s Grill & Bar and Maggiano’s Little Italy brands and helped the company log a third-quarter profit.


For the quarter ended March 27, Brinker reported net income rose to $52 million, or 71 cents per share, from $44.9 million, or 56 cents per share, in the same period last year. Revenue inched up 0.1 percent to $724.8 million.


The company’s operating margins improved to 17.9 percent from 17.2 percent in the year-earlier period amid some easing of commodity prices and mid-quarter introductions of a new pizza platform, executives said in a conference call with analysts.


Same-store sales at restaurants open at least 18 months fell 1.1 percent at Chili’s and rose 0.4 percent at Maggiano’s during the quarter. Consolidated same-store sales for both brands fell 0.9 percent.


Chili’s sales turned positive in March, coming in at 1.3 percent for the month after being negative in January and February, the company said.


“We had a bad February, clearly,” said Guy Constant, Brinker’s chief financial officer. “I think the whole space did. We’re happy it’s over. I think what we are seeing now in terms of the macro economy is kind of where we’ve been over the past two or three years.”


Constant noted that the quarter was marked by slow job growth and muted consumer confidence. “But we know we can generate results in that kind of economy,” he said.


Wyman Roberts, Brinker’s chief executive and president, told analysts he remained confident about the new menu platforms made possible with kitchen remodels.


“The rollout of our new kitchens is complete across our domestic system, with the franchise system now fully online, ” Roberts said. “With this new equipment in place, we’re exploring menu innovation we wouldn’t have had capability to execute in the past.”


Pizzas and flatbreads are among the first new menu offerings out of the new kitchens. “We’re excited about the potential this [pizza-flatbread] category has for us to introduce more guests to the product – a product, by the way, that has the added benefit of better-than-average margins,” Roberts said. Flatbreads will be rolled out to the entire system in the fourth quarter, and Brinker expects to see it produce margin improvements as well as help increase traffic when advertising and marketing support get behind both pizzas and flatbreads.


“That’s when we’ll have the messaging that I think really has the potential to drive traffic,” Roberts said. “I think pizza can do some good things for us, but it’s really the combination of pizzas and flatbreads that could get this to a scale for a message that is compelling to drive some traffic.”


The pizzas and flatbreads will also be offered in the “2 for $20” dinner and lunch combo menus. “It will be available to our guests in various different places on the menu,” Roberts said.


“We anticipate guest excitement for the category will continue to build with the rollout of flatbreads in the next few weeks,” he said. “In the future, we see the potential of the pizza and flatbread category mixing up to 10 percent of our menu.”


Brinker extended its reimaging program to 47 more restaurants in the third quarter, bringing the total so far to 316, the executives said. The company expects to have 370 reimaged restaurants by the end of the fiscal fourth quarter. Constant said the company aims to achieve a 3-percent sales lift at the reimaged units.


At the Maggiano’s brand, Brinker has been emphasizing the beverage programs. “Our skilled bartenders are creating handcrafted classic cocktails featuring fresh-squeezed juices and handmade garnishes,” Roberts said, noting that those cocktails, as well as a new option that allows guests to trade up to a nine-ounce wine pour, “have made a measurable impact” on checks.


In the international division, Brinker added six new restaurants, including the new market of Colombia. The company has units in 32 nations outside of the United States.


Brinker has a total of 1,268 domestic Chili’s units and 44 Maggiano’s units in addition to 276 international Chili’s units.




EAT: First Take: 3QFY13 in line with expectations on all key metrics


Source: Goldman Sachs

Apr 23rd



EAT reported adjusted fiscal 3Q13 EPS of $0.72, ahead of GS/consensus estimates of $0.69. Revenues of $743mn were roughly in line with consensus, but profitability was solid ($0.01) and the company benefited from a lower tax rate in the quarter ($0.02). It reiterated its guidance of $2.75-2.80 EPS by 2014, ahead of the current $2.72 consensus.



Revenues – Chili’s SSS of -1.1% were roughly in line with our -1.0% estimate and the -0.9% consensus. On a monthly basis, January came in at -0.4%, February at -4.3% and March was +1.3%; tracking similar to overall industry trends. In March, Chili’s results split the Knapp Track and Black Box figures suggesting sales trends that are in line with the industry. The company did not comment on April trends post quarter close that would include the impact of its recent pizza launch.


Margins – Restaurant margins of 17.9% split our 17.7% estimate and the 18.0% consensus. This compares favorably to last year’s 17.1% level. We see this as strong as the company’s ongoing cost-cutting efforts more than offset any de-leverage from the negative SSS in the quarter. Corporate operating margins of 10.9% were in line with Street forecasts, but above our 10.4% estimate, with lower SG&A driving the delta versus our model.


Other – EAT repurchased another $60mn of its shares in the quarter, bringing the total to $192mn through its fiscal 3Q. The 5.8mn repurchased shares represent a 7% reduction from its year-end 2012 share count through the first three quarters of this fiscal year.



We expect a muted stock reaction as the quarter was more or less in line with expectations, pending any commentary on the call regarding April trends. Our estimates and price target are unchanged.




EAT: SSS, margins and FCF deployment all on track – Buy on weakness


Source: Goldman Sachs

Apr 23rd


What’s changed

We reiterate our Buy rating on EAT shares on the heels of its fiscal 3Q13 earnings, and encourage shareholders to buy on today’s weakness.



(1) A primary reason for today’s sell-off relates to March/April SSS trends; however, we believe SSS are in better shape than is broadly appreciated. Last year in March Chili’s SSS were +3.5%, driven by the successful steak launch, versus -0.3% for Knapp Track, and it is now anniversarying that promotion. On a two-year basis, Chili’s SSS outperformed Knapp Track in March by the widest variance in months. As such we expect Chili’s SSS to reaccelerate against easier compares in the coming months.


(2) Margins continue to come in better than anticipated with restaurant level margins +80bp and EBITDA margins +170bp year-on-year – in spite of de-leverage associated with the February slowdown. Both labor and restaurant expenses were actually down in dollars this quarter. We raise our 2013-2015 EPS estimates to $2.33/$2.83/$3.27 primarily to reflect higher profitability assumptions going forward.


(3) FCF deployment remains robust with buybacks up to $192mn through three quarters, effectively reaching our prior estimate for the year. Given that EAT ended the quarter with $86mn in cash on the balance sheet, we raise our estimate for repurchases for the year to $225mn. Further, we are now modeling for sustained 7% share count reduction per year in out-years (in addition to EAT’s 2-3% dividend yield).



We retain our $44 P/E and DCF-based 12-month price target, which equates to 17% upside in EAT shares.


Key risks

The primary risk is lower-than-expected SSS, either due to the macro environment or from company-specific missteps.




The die is cast as Caesars splits in two


Source: FT

By Henny Sender

Apr 23rd


Caesars Entertainment, the debt-laden casino company acquired by Apollo and TPG near the height of the buyout boom in 2008, is to split into two companies as part of a capital restructuring involving fresh equity investments that could reach $1.2bn.


Apollo and TPG will inject a combined $500m into the new entity, known as Caesars Growth Partners, with up to $700m coming from Caesars Entertainment shareholders and investors that backed the buyout team’s $30bn takeover of the casino company formerly known as Harrah’s Entertainment.


Caesars Entertainment’s stake will range between 57 per cent and 77 per cent, depending on how much of the $700m is committed.


Caesars Growth Partners will use the equity to pay $360m to Caesars Entertainment for stakes in Planet Hollywood Resort & Casino in Las Vegas, and Horseshoe Baltimore, a casino venture under development in Baltimore. It will also hold bonds with a face value of $1.1bn.


The restructuring is “intended to improve the company’s capital structure and provide support for new projects”, Caesars Entertainment said. It would allow Caesars “to fund growth opportunities in a less leveraged and more flexible vehicle”.


Caesars Entertainment shares jumped 29 per cent to $16.11 by lunchtime in New York, valuing the company at $2bn. At the end of 2012, Caesars Entertainment had about $23bn in gross debt.


Even in pliant capital markets, “there are limits to additional debt financing”, said a person familiar with the matter. “Already the leverage on the company is so expensive. But everyone wants and needs this company to grow.”


It has already undergone a complex series of debt refinancings to improve its financial footing.


The capital restructuring comes as another large deal struck at the height of the buyout boom grapples with its debt burden.


TPG along with KKR and Goldman Sachs is fighting to keep portfolio company Energy Future Holdings from sinking under the weight of its $46.6bn debt load.


Apollo, one of the biggest holders of EFH’s debt, sits on the other side of the table from its private equity rivals, underscoring the sometimes complicated nature of relations between private equity groups.


Buyout groups often keep money in reserve from their funds to support ailing companies in their portfolios that they believe can be saved.


When the original Caesars investment was made, casino companies were believed to be relatively immune to economic downturns. However, the company has struggled under the weight of its debt burden as the value of its assets tumbled.




California: California 4am last call for alcohol proposal rejected


Source: ABC 7

Tuesday, April 23, 2013


It looks like last call for alcohol will continue to be at 2 a.m. in California.


After the Democratic majority struggled over which way to vote, a state Senate committee rejected a controversial proposal giving cities and counties the power to extend bar hours like their counterparts in New York, Las Vegas, New Orleans and Miami. California’s last call would have been 4 a.m.


Opponents urged lawmakers to think about public safety. When one jurisdiction closes at 2 a.m. while another closes at 4 a.m., law enforcement warned the situation would create what they call “liquor commuters.”


“People driving to those other locations, and then after having consumed many times a substantial amount of alcohol, driving back,” said John Lovell, a lobbyist for the California Police Chiefs Association.


Low-income neighborhood activists pointed out that there’s already a big alcohol problem in the state and said the last thing California needs is more opportunities to drink.


“You go down one block to another and you’ll have three to four mom and pop stores with liquor licenses. We don’t need an extension of the ability to drink – not in the state of California,” said Richard Zaldovar of the Las Memorias Project.


But Sen. Mark Leno, who carried the bill, insisted cities that allow longer bar hours do not experience higher rates of alcohol-related crashes than places with normal hours. In this 24/7 society, the San Francisco Democrat says services need to cater to all groups.


“Not everyone is working 9 to 5, Monday through Friday, and for that reason I think it makes sense to consider this extra hour or two of alcoholic services,” Leno said.


Dollars are also driving the push for extended bar hours. Leno said strict drinking hours are costing businesses money, and a 4 a.m. last call would allow California bars and restaurants to keep up with the nightlife in other major U.S. cities. Leno said a later last call would provide communities with more jobs, tourism and local tax revenue.


Some city leaders and bar owners say the Golden State is at a disadvantage when trying to lure conventions and tourists.


“We’re losing a lot of our people to places like Las Vegas, to New York, to Miami,” said Robert Vinokur, who owns six restaurants in L.A. “People don’t want to come to California, Los Angeles, San Francisco, San Diego.”


The committee’s decision doesn’t mean the fight is over. Supporters of extended bar hours are considering a ballot measure asking state voters to decide on the issue in 2016.




Washington: State House Dems drop beer tax, other revenue proposals


Source: AP


Apr 23, 2013


House Democrats in Washington state have dropped their plan to extend the state’s beer tax and backed away from other revenue proposals they felt were distracting.


Democratic Rep. Reuven Carlyle, one of the chamber’s budget writers, said the beer tax might have been subjected to a ballot challenge from large beer companies. He said he thought it and other proposals could have created problems for the larger goal of increasing funding for education.


“Some of those items were particularly distracting from our success,” Carlyle said. “Goal No. 1 is to be successful at getting a revenue package to fully fund public education.”


The beer tax extension would have raised a projected $60 million over the next two years. The Democrats also dropped a plan to eliminate tax breaks for insurance agents and dockworkers, which would have raised more than $80 million. They also passed on a proposal to pursue a sales tax on janitorial services, which would have brought in an estimated $41 million.


The House is still pursuing a variety of tax changes, including the extension of business taxes that would raise $620 million over the next two years. Senators have approved a budget without those tax changes, and the two sides are now involved in final budget negotiations.


Lawmakers are under pressure from the state Supreme Court to increase funding for education while at the same time dealing with a projected revenue shortfall. Senators have accomplished that by a variety of fund transfers and cuts to social services programs, while the House has argued that the Senate budget is unsustainable.




Texas: Beer bills pass “another hurdle” with unanimous House committee vote


Source: The Chronicle

Tuesday, April 23, 2013


The closely watched package of bills that would give Texas craft brewers new ways sell their product was unanimously passed this afternoon by the House Licensing and Administrative Procedures Committee.


Rick Donley, president of The Beer Alliance of Texas, a distributors group that has supported the legislation throughout the session, called it “another hurdle overcome.” The five related bills, identical in wording to those already passed by the Texas Senate, were sent to the Calendars Committee before a full House vote.


In what would be among the biggest changes to the state’s beer laws in 20 years, the legislation would allow breweries to sell a limited amount of beer in their own taprooms for consumption on site. Another major provision would allow brewpubs to package beer for sale in groceries and other off-site outlets.


The Beer Alliance issued the following statement from Donley:


We commend Chairman Wayne Smith and members of the House Licensing and Administrative Procedures Committee for today passing a package of Senate bills intended to create a more robust malt beverage marketplace.


Senate Bills 515, 516, 517 and 518 by Senator Kevin Eltife, sponsored in the House by Chairman Smith, will open markets in Texas more broadly to the fast-growing craft brew sector. Craft beer makers and brewpub owners will, upon full House passage, be able to produce, market and sell greater quantities of product to Texas consumers, and, importantly, add to greater employment in the craft brew sector.


Additionally, Senate Bill 639 by Senator John Carona, sponsored in the House by Chairman Charlie Geren, brings additional regulatory certainty and clarity to marketing practices of beer wholesalers.


The Beer Alliance of Texas looks forward to working with all members of the Texas House of Representatives on enactment of this important consumer legislation.




United Kingdom: Supermarkets ‘distorted’ scientific findings on alcohol


Source: The Independent


Wednesday 24 April 2013


Leading supermarkets and drinks companies distorted evidence in an attempt to prevent the Scottish Government introducing a minimum price for alcohol, researchers say.


Academics from the London School of Hygiene and the University of York examined 27 submissions by the alcohol industry to the Scottish Government’s consultation. They claim the industry “ignored, misrepresented and undermined” the scientific evidence.


Tesco, Asda and the Wine and Spirit Trade Association (WSTA) were among organisations that sowed doubt about the Scottish Government’s plans, questioning the evidence on which they were based and citing small, poorly carried-out surveys suggesting they would not curb problem drinking, according to the academics.


Tesco claimed there was “little evidence” to support the impact of prices on consumption, while the WSTA cited a small trial that contained “weak evidence” in support of its counter-view, the researchers say. Asda claimed that minimum pricing would create a black market in alcohol sales. The Portman Group, an alcohol industry-funded organisation which promotes responsible drinking, even warned that restricting sales could create a “mystique” around alcohol, turning it into a more desirable “forbidden fruit”.


Dr Jim McCambridge, who led the study published in PLOS Medicine, said: “There is a broad consensus internationally among researchers that the most effective measures to control problems caused by alcohol are to raise the price, control availability and restrict marketing activities. However, our study shows that key players in the alcohol industry constructed doubt about this wealth of scientific evidence and instead chose to promote weak, survey-based evidence, as well as making unsubstantiated claims to their advantage.”


But their attempts to derail the Scottish plan failed and the Alcohol (Minimum Pricing) (Scotland) Act 2012, banning the sale of alcohol below 50p a unit was passed in May last year, although it is now being challenged in the courts.


The academics fear that drinks producers and retailers may have used the same methods to stave off attempts to introduce a minimum price in England during the Home Office’s consultation on the issue.


A minimum price for alcohol has been backed by David Cameron but now looks set to be dropped amid reports of a cabinet split.


Unlike in Scotland, not all the submissions to the English consultation are publicly accessible, raising “concerns over the alcohol industry’s ongoing involvement in alcohol policy-making for England and Wales”, the researchers say.


A spokesperson for the Portman Group said: “Our 2008 response is published in full on our website and does not misrepresent anything. In it, we say that public policy should focus on tackling the irresponsible elements of our drinking culture and not penalise the majority of moderate, responsible drinkers who are doing the right thing.”


Miles Beale, chief executive of the WSTA, said: “It is disappointing that this study fails to recognise the good work being delivered by the drinks trade, health community and Government working in partnership, as it seeks to deny the trade from contributing to the debate.”


Tesco and Asda referred requests for comment to the WSTA.


Tesco claimed there was ‘little evidence’ to support the impact of prices on consumption




United Kingdom: Anna Soubry: Minimum alcohol pricing is still Government policy


Source: The Telegraph

By Peter Dominiczak, Political Correspondent

23 Apr 2013


Miss Soubry, the MP for Broxtowe, suggested that her senior Cabinet colleagues abandoned plans to have a minimum price per unit of alcohol over fears that it would lead to accusations of a “nanny state”.


In an interview with Total Politics magazine, Miss Soubry also hit out at Conservative colleagues plotting against the Prime Minister, accusing backbenchers of engaging in “quite a lot of twattery”.


“The Tory Party must learn from its own history that when we fight each other, you can guarantee to lose,” Miss Soubry said.


The plan to set a minimum price of alcohol at 45p a unit was abandoned in the budget amid opposition from the Home Secretary and Treasury officials.


Critics of the policy say it will unfairly raise the price of wine, beer and spirits for responsible drinkers who do not have a problem with alcohol.


Estimates suggest it could add 70p to the price of a bottle of cheap supermarket wine and £2 to a bottle of gin or whisky.


Mr Cameron had previously been one of the main advocates of a minimum alcohol price, claiming that making drinks more expensive would curb problem drinking.


Miss Soubry insisted that she is still “convinced” that minimum pricing is correct and claimed that the measure is “still official policy”.


“Don’t get me wrong,” she added. “I absolutely understand why it would be that someone at a senior level in government was saying, ‘Well, the political cost would be. [that] it looks like a step too far, it looks too much of a nanny state’.


“You have to get the balance right, especially with public health, so that you take the measures that benefit the public’s health, but without causing people to resent you so that you actually don’t cure the ill that you seek to cure.”


Elsewhere in the interview, Miss Soubry attacked Tory MPs criticising Mr Cameron’s leadership.


There has been growing speculation in recent months of a backbench plot to unseat the Prime Minister.


“When people talk about such-and-such a person as an alternative to Cameron, there is no vacancy,” Miss Soubry said. “What we now need to do is stop people in the party engaging in quite a lot of twattery, and to accept that we’ve achieved a huge amount, and it’s all to play for.”


She added: “I came into politics to fight lefties. that’s where political fighting goes. The Tory Party must learn from its own history that when we fight each other, you can guarantee to lose.”

Liquor Industry News 4-22-13

April 22, 2013

Franklin Liquors

Monday April 22nd 2013


Beer Merger Advances


Source: WSJ


Apr 19th


Anheuser-Busch InBev NV BUD +1.69% and Mexico’s Grupo Modelo GMODELO.MX +0.04% SAB completed a settlement resolving the Justice Department’s challenge to the beer makers’ planned merger.


Under the proposed arrangement submitted Friday for federal court approval, the companies would sell Modelo’s entire U.S. business to Constellation Brands Inc. STZ +2.49% In turn, AB InBev would get the green light to acquire the 50% of Modelo it doesn’t already own.


The companies issued statements confirming the settlement and said they expect their $20.1 billion merger to close in June. The deal will give AB InBev, brewer of Bud Light and Budweiser, a dominant position in Mexico, the world’s sixth-largest beer market, and one where sales are expanding more quickly than in the U.S.


AB InBev, which already brews nearly a fifth of the world’s beer, plans to make Modelo’s Corona brand its second global flagship brand behind Budweiser.


AB InBev and Grupo Modelo said the settlement was largely in line with the revised merger terms they unveiled after U.S. antitrust officials sued in January to block the original transaction.


Under the deal, the companies will sell Modelo’s state-of-the-art Piedras Negras brewery in Mexico to Constellation, which also will secure perpetual U.S. licensing rights to seven Modelo brands currently sold in the country. They include Corona and Modelo Especial, the No. 1 and No. 3 imports in the U.S. In addition, Constellation will gain rights to three Modelo brands that aren’t offered in the U.S. yet.


The Justice Department said Constellation, which is paying about $4.75 billion for the Modelo assets, has committed to expand the Piedras Negras brewery in order to brew and package “sufficient quantities” of Modelo beers to meet growing U.S. demand.


Bill Baer, the Justice Department’s antitrust chief, said the agreement was a good deal for American consumers and ensures that Constellation will be a “totally independent competitor” using the Modelo brands.


“If this settlement makes just a 1% difference in prices, U.S. consumers will save almost $1 billion a year,” Mr. Baer said.


Constellation Chief Executive Rob Sands said the deal would nearly double the sales of his company and “solidify our place in the U.S. beer market for the long term.”


The Justice Department had argued that the originally proposed AB InBev-Modelo merger threatened to lead to higher beer prices by eliminating Modelo as an important independent competitor in an already concentrated beer market.


The department’s antitrust enforcers said Modelo had increased its market share by keeping its beer prices only slightly higher than those of Bud Light and MillerCoors LLC’s Coors Light, encouraging some drinkers “trade up” to Modelo beers.




DOJ deal on Modelo will affect A-B distributors


Source: St. Louis Today

April 19, 2013


The recent focus on antitrust negotiations between the U.S. government and Anheuser-Busch InBev has been on the divestiture of Grupo Modelo’s U.S. business and the sale of a Mexican brewery on the border. Both were key to getting the Justice Department to stop its attempt to block A-B InBev’s proposed acquisition of control of Modelo, the maker of Corona beer.


However, the deal also imposes some interesting conditions on Anheuser-Busch’s relationship with beer distributors, both the businesses that the brewer owns directly and those operated by independent franchises.


Today’s proposed settlement allows Constellation Brands, the proposed buyer of Modelo’s U.S. business, to end Corona distribution rights to Anheuser-Busch-owned distributors. For a period of two years starting in April 2014, Constellation can request A-B to sell those rights to another party. And if A-B buys a distributor that sells Corona during that period, Constellation also can force the brewer to sell those distribution rights.


For independent Anheuser-Busch distributors, the settlement prevents the brewer from tweaking its marketing incentive programs to put at a disadvantage those distributors that sell Modelo products. The brewer currently provides extra money for distributors that are considered exclusive sellers of A-B products.


Once the Modelo acquisition is completed, the deal says the brewer also can’t hold Modelo distribution against a distributor when determining exclusivity. It also can’t make any changes to incentive program that would affect how Modelo is treated when it doling out incentives.




With InBev-Modelo Deal, DOJ Antitrust Chief Sends Message


Source: Law 360

By Melissa Lipman

April 19, 2013


In forcing Anheuser-Busch InBev NV to sell Grupo Modelo SAB de CV’s entire U.S. business to win clearance to buy the $20 billion Mexican brewer, new antitrust chief Bill Baer on Friday demonstrated a willingness to flex his agency’s litigation muscle to extract costly remedies in merger cases.


When AB InBev originally took its $20.1 billion Modelo deal to the agency, it offered a far more limited fix that would have given Constellation Brands Inc. full control over the joint venture that distributes Modelo’s popular imports in the U.S. and a 10-year supply agreement with the Belgian-American beer giant.


But to resolve the DOJ’s antitrust suit, the companies finally agreed to fixes that went far beyond that, requiring AB InBev to give Constellation a state-of-the-art Modelo brewery in Mexico, a perpetual exclusive license to sell Modelo brands in the U.S. and a much more limited three-year transition supply deal. The measure even takes the unusual step of requiring Constellation to commit to expanding the brewery’s capacity, after the DOJ voiced concerns about the alcohol importer’s incentives to compete with the Budweiser maker on price.


Attorneys say that result should serve as a word of warning for other companies hoping to use “fix-it first” remedies – solutions companies agree to before consummating a merger, with the goal of speeding the clearance process.


“Under Bill Baer, going in with a fix-it-first remedy and thinking that that proposed remedy is not going to get scrutinized up and down is a poor strategy,” said Baker Botts LLP partner Stephen Weissman. “If you’re a merging party and you come in with a fix-it-first to preemptively address antitrust issues, you’ve got to believe that you’re still going to be in for a full regulatory review and that your remedy at the end of the day may need to be sweetened.”


In the original merger announced in June, AB InBev already had planned to sell off Grupo Modelo’s 50 percent stake in Crown Imports – its U.S. distribution joint venture with Constellation – to the third company for $1.85 billion.


But in late January, the DOJ sued to block the combination, which would have given the new entity a 46 percent share of the U.S. beer market. At the time, Baer warned that removing Modelo from the competitive landscape would make it even easier for AB InBev and the other “remaining beer companies to engage in coordinated leader-follower pricing strategies in the future.”


In an effort to win the DOJ’s approval, in February, AB InBev upped the assets it would sell to Constellation. It agreed to divest a total of $4.75 billion, including all of Modelo’s U.S. operations, perpetual licenses of Modelo’s brands, and ownership of the Piedras Negras brewery in Mexico.


And, because the brewery near the Texas border currently meets only 60 percent of the U.S. import demand for Corona and Modelo’s other brands, the revised deal also included a three-year transition services agreement to give Constellation time to build up the plant.


The proposed settlement sent to the district court for approval Friday largely follows the outlines of the second offer, though it imposes some additional commitments on the parties during the transition period, including detailed milestones for Constellation to hit to make sure Piedras Negras can fully supply U.S. demand for Modelo’s beer within three years.


“The remedy itself has some unusual features, for sure: a 36-month supply arrangement is unusual, of course this requirement that Constellation expand the capacity of the plant is unusual,” WilmerHale partner Molly Boast said. “What they’ve done is … made it as ironclad as possible. And you have Constellation added as a defendant so the court can have oversight of the build-out.”


Those features and others – including a broad licensing provision and a mandate that the companies set up a firewall during the transition period to protect sensitive information – offer a “full panoply of protections” to safeguard competition during the three years it is expected to take to bring the Piedras Negras brewery up to full capacity, Boast said.


“What they’re doing here is creating a new freestanding competitor where one didn’t exist even prior to merger,” Boast said. “They were given the opportunity to fix a problem, and they really tried to fix it.”


Friday’s settlement also underscores Baer’s preference for “clean structural remedies” in merger cases, attorneys said, which should be familiar from his previous stint as head of the Bureau of Competition at the Federal Trade Commission.


“That’s what he looked for at the FTC. That’s what he will require,” Boast said. “It’s consistent with what his practice has been in enforcement positions.”


The DOJ is also fresh off a series of litigation wins in high-profile merger challenges like the H&R Block Inc. case and AT&T Inc.’s bid for T-Mobile USA Inc. And the decision to challenge the AB InBev deal points to the agency’s newfound confidence in its litigation skills.


“[It shows] that he knows he has a strong litigation shop and looks for consents that really address anti-competitive harm,” said O’Melveny & Myers LLP’s Haidee Schwartz. “He’s not afraid to litigate, [and] this shows that they’re going to make sure that they get what they need in meaningful remedies.”


For companies taking deals to the agency for antitrust review amid the recent growth in merger activity, the case shows the need to be prepared to face the threat of litigation and the demand for stronger remedies.


“In light of DOJ’s recent litigation successes, DOJ is understandably emboldened in terms of the leverage it has over merging parties and the remedies it’s able to extract to get them to avoid litigation,” Weissman said. “You’re seeing the fruits of the DOJ’s recent litigation successes at work, and this is Exhibit A.”


That means that in cases like the AB InBev-Modelo deal, in which the agency has a “reasonably good case,” it may be willing to use the threat of holding up a deal in litigation for months in order to get the kind of remedies it wants, according to Weissman, who has represented companies in the beer industry in the past.


“The message with this entire sequence of events is very clear,” Boast said. “Mr. Baer is saying, ‘Don’t bring me half a loaf when you’re presenting a merger remedy.'”




ANHEUSER-BUSCH INBEV (-) Q1 13 Results on 30 April


Source: Exane BNP

Apr 22nd


TP: EUR67 . Downside: 11%

Beverages (-) . Belgium . Price (19 Apr. 13): EUR75.6


A slow quarter in Brazil

We expect no material y/y volume growth in Q1 in LatAm North, due to the early timing of Carnival. Note that the implementation of stricter drink-driving laws is also likely to have affected consumption. This was confirmed by Diageo recently at their IMS as one of the reasons growth in Brazil slowed down in Q1.


US: New launches likely to have helped volume growth

We expect ABInBev to have outperformed MillerCoors in Q1, with volumes down 1.5% versus sales to retailers down 3.3% at Miller Coors. New launches like Budweiser Black Crown are likely to have boosted volumes.


Modelo finally a done deal

On Friday 19 April, ABInBev announced they had reached a final agreement with the DoJ to acquire the remaining stake in Modelo. The closing of the deal is expected in June. As our forecasts already incorporate a contribution to earnings by Grupo Modelo from late Q2, we expect changes to our forecasts from the new timing of the integration to be limited.




Budweiser’s New Pitch: Less Beer, Pay More


Source: Time

By Brad Tuttle

April 21, 2013


How’s this for a sales pitch: With Budweiser’s new can design, you’ll get less beer, and you’ll get to pay more per ounce. You’ll also get to support the aluminum industry.


Anheuser-Busch is messing with the classic 12-ounce can. Starting in May, Bud will be available in a new “bowtie”-shaped can, which is angled inward in the center, mimicking the vertical Budweiser logo created in 2011. Each of the new cans contains 137 calories of beer, 8.5 fewer calories than the usual can of Bud. And how is Anheuser-Busch lowering the per-beer calorie count? Easy! It is putting less beer inside each can. Bowtie cans, which will be sold in addition to regular cans rather than replacing them, will hold 11.3 ounces of beer.


The “shrink ray,” as the advocacy site calls it, has been applied to all sorts of products over the years. Cereal boxes, bags of chips, orange juice containers, plastic soda bottles, ice cream cartons-these and countless other goods have been carefully redesigned so that manufacturers can create the illusion consumers are getting the same amount of product, even as the packages hold less than the previous models. It’s a way for manufacturers to boost revenues without appearing – to the average consumer, at least – to raise prices.


Now Anheuser-Busch InBev, the world’s biggest beermaker, is pointing the shrink ray at the iconic can of Bud. The company isn’t marketing the new can design this way, of course. Here’s the spin presented to the St. Louis Post-Dispatch:


“We know there are a large number of consumers out there looking for new things, the trend-seekers,” Anheuser-Busch’s vice president of innovation Pat McGauley told the Post-Dispatch. “We expect both our core beer drinkers and new customers to try it.”


It seems like A-B doesn’t expect beer drinkers to do math, however. The new cans will be sold in 8-packs rather than the standard 6-pack; this will make it more difficult for shoppers to make quick apples-to-apples price comparisons in stores. The new can will also be made of nearly double the amount of aluminum as the usual can, so that it will feel a little heavier in one’s hand. Yes, in a tricky bit of packaging ingenuity, the can with 11.3 ounces of beer won’t feel any lighter than the can holding 12 ounces of beer.


To Anheuser-Busch, this qualifies as “innovation.” “We’ve done a lot of innovation in products and we’ve been lagging in packaging,” McGauley told the Post-Dispatch. “We’re consciously working to bring innovation to the packaging side.”


This is hardly the first time beermakers have put the focus on new cans or bottles, rather than the product inside. Coors Light, Miller Lite, and others have come in all sorts of aluminum beer bottles, and some designs feature a “grip can,” with raised ink designed to resemble the feel of a football.


Two newish Anheuser-Busch products-Bud Light Platinum and Beck’s Sapphire-were purposefully created to come in atypical, eye-catching bottles that stand apart from the pack. When the packaging matters more than the beer, that doesn’t say a lot about the beer, of course.


But the beermaker seems game for trying almost anything to boost sales-especially among young people, and especially for its signature brew, Budweiser. Bud sales have been plummeting for years, as younger drinkers especially have increasingly demonstrated a preference for wine, craft brews, and hip vodkas and other spirits.


Given that many younger drinkers seem disinclined to chose Budweiser, maybe they’ll like the new bowtie cans. After all, there’s less Bud to drink inside each one.




Exane BNP Paribas equity research : REMY COINTREAU (=): Q4 13 sales: Better than feared


Source: Exane BNP

Apr 19th




TP cut by 9% to EUR82 . Downside: 5%

Beverages (-) . France . Price (17 Apr. 13): EUR86.0


Q4 FY13 organic growth better than feared.

Q4 FY12/13 organic sales growth of 12.5% was better than feared (we believe consensus was expecting +9%) given increasing reports of a soft Chinese New Year.


China has slowed down from record growth in 2012, but still growing attractively

Rémy Cointreau confirmed gifting and banquet activity to have slowed down vs 2012. Cognac organic growth of 13.9% in Q4 is in line with expectations but compares with +55% in Q3 12 (when last Chinese New Year took place).


Expect slight destocking for cognac in China in the coming quarter

A consequence of the more ‘quiet’ trading in China over the recent Chinese New Year is that inventories are higher than average at distributors. As a result, some degree of destocking could be expected in the coming months.


Rémy targets 10% organic growth in profit

Rémy Cointreau now targets growth in operating profit of 10%/15% on an organic/reported basis. While this is a very respectful growth rate, it is materially lower than the group’s 20% organic growth rate in operating profit achieved in FY11/12.


We move our forecasts to reflect guidance and more modest pricing in FY13/14e

While we have upgraded slightly (+2%) our forecasts for FY12/13e to reflect the new operating profit guidance, we have downgraded our FY13/14e Cognac organic sales growth forecast to +13% (vs +21% previously). Behind our downgrade is a more modest growth rate in Cognac volumes, but also price/mix (+7% vs 13% before) Note that competitor Hennessy indicated price increases of +4.5% for FY13/14e. Our new FY13/14e operating profit forecast is now 4% below consensus and we remain concerned market expectations may need to correct further. Our new TP based on 12m EPS to mid-2015 is EUR82.




GuestMetrics: Cider shows strong growth in 1Q13 driven by Sam Adams Angry Orchard


Source: GuestMetrics

Apr 22nd


According to GuestMetrics, based on its POS database of over $8 billion in annual sales, cider continued to display strong growth in full service restaurants and bars in the first quarter of 2013, driven primarily by Sam Adams Angry Orchard.


“While cider still has a small share of the broad beer category, hard ciders volume sold in on-premise grew 40% in 2012 compared to the prior year, and picked up further momentum during the first quarter of 2013, growing 70%,” said Bill Pecoriello, CEO of GuestMetrics LLC. “This is generally similar to the growth in off-premise, namely 80% in 2012 and around 100% during the first quarter of this year, according to IRI, though cider was growing off of a smaller base in off-premise than in on-premise.”  According to data from GuestMetrics, cider accounted for 0.35% of the broadly-defined beer category (which includes cider in this analysis) in 2011, then grew share to 0.50% in 2012, and further expanded to 0.70% during the first quarter of 2013, roughly double cider’s share of the broad beer category in off-premise, per data from IRI.


“In order to get a better understanding of what drove the cider growth, we analyzed the specific brands within the category.  Based on our data, Sam Adams Angry Orchard had a 27-share of ciders sold during 2012 in on-premise, and grew that share to a 44-share by the first quarter of 2013,” said Peter Reidhead, VP of Strategy and Insights at GuestMetrics. “These figures are generally quite similar to Angry Orchard’s share of ciders sold in off-premise, which had a 23-share of cider during 2012, and a 39-share during the first quarter of this year, according to IRI.”


“As restaurant operators consider how to optimize their menu offerings, having up-to-date knowledge of the fastest growing categories and brands in the alcohol space is critical,”   said Brian Barrett, President of GuestMetrics.




Tales of the Cocktail – 2013 Sponsor Letter & Statement of Etiquette


Source: Tales of the Cocktail

Apr 22nd


After over seven years of involvement with, and co-ownership of, Tales of the Cocktail, I have finally been given the honor of writing this year’s Sponsor Letter and Statement of Etiquette.  While I am sure that most of you are unfamiliar with me, my participation in Tales of the Cocktail, and my background, I can assure you that I am very aware of the support each of you have provided over the years to Tales of the Cocktail, making it by far the most unique and successful Event of its kind, throughout the World.


Almost from the inception of my involvement in 2006, it became clear to me that in order for Tales of the Cocktail to be a sustainable success, we needed to ensure that at every opportunity, we involved Representatives from throughout the Industry.  That is why since then we have maintained a select group of Committees made up of Bartenders, Spirit Manufacturers, Suppliers, and Media, to assist us with everything from the selection of Seminars, planning of After-Hour Events, and the election of Spirited Award Winners, to the selection of each year’s Cocktail Apprenticeship Class, and so on.  Tales of the Cocktail is, without dispute, the Industry’s Event, programmed by the Industry; Ann, our Staff, the numerous Interns and Volunteers, and I, are merely responsible for executing the Event, to the best of our ability.


I grew up in the Restaurant Industry and for the last five years have been a Senior Executive and Partner in one of the fastest growing Restaurant Companies in the Country.  We hope to finish 2013 with 180 Restaurants in 18 States, and begin focusing on International Development by the fourth quarter.  My role and responsibilities with Tales of the Cocktail center more around Financial Management, Legal, the development of, and compliance with, our Mission, Vision and Values, and most exciting, working with Ann on how we can best give back to the Industry, that has given us so much support, over the years.  Truly, we would not be celebrating our Eleventh Year, without each of you; thank you.


During my travels I am fortunate that on occasion I can slip into my role as “Mr. Cocktail” so I can converse with Bartenders from around the World, your Brand Ambassadors, and when appropriate, sample a few Cocktails.  When ordering a libation I always make it a point to call for those Brands that have done so much for us, over the years.


The success and continuation of what is arguably the Best Global Cocktail Event is dependent upon the continued support and cooperation of you, our Sponsors.  Ann and I make it a point to ensure that you maximize the return on your investment in Tales of the Cocktail, year after year.


With Annual Attendance of between 20,000 and 25,000, most of who are Bartenders, Spirit Manufacturers, Suppliers, Media, and admittedly a few Hardcore Cocktail Enthusiasts, we hope that you would agree that Tales of the Cocktail is the best value, for the monies spent.


Our Average Seminar Sponsorship is $3,500, with an Average Attendance of 150 Guests.


Our Average Tasting Room Fee is $2,200, with Average Participation of 300 Guests.


In 2012, we had over 2,554,423,603 Media Impressions, in which most of our Sponsors were recognized. (Yes, nearly 2.6 Billion)


So given what it costs to maintain a single Brand Ambassador with Salary, Product, and Travel & Entertainment, I would like to think that Dollar for Dollar, we give you tremendous exposure, access to some of the most influential Bartenders and Decision Makers in the Industry, from around the World, and a terrific return on your Investment.


With the monies we generate through Tales of the Cocktail we support such programs as the Cocktail Apprenticeship Program, which is in its sixth year.  As a Cocktail Apprentice, for perpetuity, you can apply for Scholarships to further your education, seek support from the Medical Assistance Fund, or request funding for a special Project that would benefit the Industry as a whole.  In 2015 we hope to establish a Program providing development and funding support for Bar Concepts, through yet again, another Committee who will be responsible for the evaluation of Business Plans and recommendations for Funding.


In 2013 we began funding Tuition for an Advanced Level B.A.R. Program and for the third year in a row, we will be providing Scholarships to the Crescent City School of Bartending through the Flo Woodard Scholarship Fund.


So as you can see, we do a lot for the Industry but as I said before, none of this would be possible without your support, which is why we vehemently protect those Brands that provide Sponsorship Dollars to Tales of the Cocktail, and why we are so aggressive when it comes to shutting down, rogue and unsanctioned Events.


Throughout the years, with 2013 being no exception, we have had various Brands attempt to take advantage of everyone’s generosity by circumventing the processes that are in place to protect our Sponsors and the Industry, by holding unsanctioned Events.  As we have done in the past, we will do our best to shut these down.  In the past, we’ve successfully closed “Pop-Up” Bars in which rogue Brands have spent tens of thousands of dollars, only to find themselves entertaining less than a dozen Participants and nearly twice as many NOPD Officers and a Fire Marshall.  We’ve made sure that those Brand Ambassadors who feel that their Expense Accounts are best spent buying Illicit Drugs for a dozen of their Friends, renting a Bus and visiting a Local Strip Club for “Special Favors,” understand how inappropriate we feel these actions are and how inconsistent we think they are, with their Brand’s Image.  While we want everyone to have a good time and enjoy him or herself, we do expect them to behave.  Brands that fund these rogue and unsanctioned Events are not only minimizing the return on their investment, but they are ripping off the very Industry, they claim to be supporting.  If it is not on the Official Tales of the Cocktail Schedule, chances are it is an unsanctioned, rogue Event.


While at the moment, you may not always agree with our suggestions and the directions that we try to point you towards, know that we always act with the best of intentions to ensure that you maximize your return on your investment in your Brand, and that the Industry as a whole, benefits from your support.  We do this to ensure the continued success of Tales of the Cocktail, and the benefit to those who so graciously support us through Sponsorships.  All we ask is that you give us the opportunity to help you be as successful as possible.


I want to once again thank you for your support and encourage you to feel comfortable enough to contact me directly at (504) 402-0208 with any questions, comments, or concerns,




Paul G. Tuennerman

Chief Bar Back & Co-Owner

Tales of the Cocktail




South Africa: Black middle class fuels whisky sales


Source: BD Live

by Adele Shevel

April 21 2013


Whisky is the fastest-growing liquor in South Africa, outpacing cider and beer. Nielsen research shows the top sellers to be Bell’s, Johnnie Walker, Firstwatch, Black & White and J&B.


Imports to South Africa have grown in double digits since 2009 as the black middle class switches from brandy to whisky.


South Africa is now the sixth-largest market for whisky by volume, and seventh by value, according to South African Wine Industry & Information Systems -and was worth R6.6bn for the 12 months to June .


Premium and super-premium whiskies made up 87% of sales – far above levels seen in other international markets, said a 2011 report by DNA Economics.


Gerald Mahinda, MD of Brandhouse, said last year the company sold about 2-million cases of Scotch whisky in South Africa, led by Johnnie Walker and Bell’s.


Globally, whisky exports hit a record £4.3bn in 2012, up 87% over 10 years, the Scotch Whisky Association said this month.


Whisky producers are investing heavily in emerging markets. Europe used to be the big market for whisky, but the future is likely to be in Africa, Latin America and Asia.


Diageo makes 40% of its sales in emerging regions. It plans to invest £1bn in scotch production over the next few years to meet growing global demand, a large part of it from developing countries. At the half year, Diageo grew net sales by 15% in South Africa, driven mainly by Johnnie Walker (up 33%).


Emerging markets account for about 40% of sales of Pernod Ricard, the world’s second-largest spirits maker (which owns brands such as Chivas Regal). South Africa had been Pernod’s only foothold on Africa, but last year it opened commercial units in Morocco, Ghana, Nigeria, Namibia, Angola and Kenya to promote its whisky, cognac, vodka and champagne brands.


Jason Duganzich, whisky expert and collector, credits much of Johnnie Walker’s success in South Africa to Mickey Baloyi, nicknamed “the African Scot” because he knew whisky so well.


“He was Mr Johnnie Walker. He was probably the first person to expose the older black gentlemen in the townships to what it was that makes a whisky, and what goes with it.”


Consumption levels in Africa are still relatively low. While Africa drinks four million cases of blended Scotch a year, Latin America drinks 14-million cases and western Europe 33-million cases, according to Euromonitor.


South Africa’s home-grown brands are giving the established whisky countries like Scotland and Ireland a run for their money.


The Three Ships five-year-old Premium Select was named the world’s best blended whisky of 2012 at the annual World Whiskies Awards. Its first single-grain whisky, Bain’s Cape Mountain, launched in 2009, won three gold awards at the international Wine and Spirits Competition. Both brands are owned by Distell, South Africa’s biggest spirits and wines business.


This week Distell bought Burn Stewart Distillers Limited for more than R2.2bn from Trinidad and Tobago-based CL Financial, in a deal that allows Distell to capitalise on the global growth in whisky consumption.




Washington: Jeff Call, Washington Bar Owner Allowing Pot Use, Faces Crackdown


Source: Huff Post




Jeff Call knew he was pushing the envelope when he started letting people use marijuana at his rum-and-pizza joint in Tacoma.


But he didn’t quite know the extent of what he was in for: the governor’s office demanding state regulators do something about it, local authorities revoking his business license, and his insurance company dropping his liability policy – developments that threaten to sink his 3-year-old establishment even as he vows to fight them.


“The screws are coming down from all over,” says Call, owner of Stonegate Pizza. “But we’re open. Everything is still the same.”


Washington and Colorado last fall became the first states to legalize marijuana for adults over 21. Both ban the public use of marijuana – which typically would include bars and restaurants – and most bars are steering clear of allowing pot use at least until officials come up with rules for the new weed industry.


But the Stonegate and a few others have been testing the boundaries in hopes of drumming up business and making a political statement.


Call, 48, allows a medical marijuana dispensary to use space on the second floor of his brick, two-story establishment as a “vape bar,” where people can use devices that “vaporize” marijuana, or heat it without burning it. That’s a way to get around the state smoking ban.


The upstairs bar is set up as a private club, with a nominal fee for membership – an attempt to get around the ban on public use of pot.


Medical marijuana patients can buy hits of potent marijuana oil, but everyone else has to bring their own pot and then rent a vaporizer – an effort to evade the ban on non-licensed marijuana sales to recreational users.


Soon after an Associated Press story featured Call’s bar last month, Gov. Jay Inslee’s staff instructed the state’s Liquor Control Board, which is devising rules for the new marijuana industry, to do something about it. The board responded by announcing that it would draft rules to require establishments with liquor licenses to ban marijuana use on site. Officials are concerned about people mixing marijuana and alcohol, especially if they’re going to be driving home.


Inslee spokesman David Postman also said it’s important to crack down on such establishments to demonstrate to other states, as well as the U.S. Justice Department, that Washington is implementing its new law responsibly. Marijuana remains illegal under federal law, and the DOJ hasn’t decided whether to sue in an effort to prevent the legal pot sales from ever happening.


“The law is clear on the prohibition on the consumption of marijuana in public,” Postman said. “From what the Liquor Control Board tells us, that’s exactly what this is.”


The governor wasn’t the only one concerned.


Tacoma officials sent a letter on April 9 revoking Call’s business license for violating the city’s nuisance ordinance, which bans marijuana gardens, dispensaries and “any place other than a private residence where cannabis is smoked or ingested.”


Call filed an appeal Thursday, a day before he had been ordered to close his doors. He can continue to operate during the appeal.


His attorneys, Douglas Hiatt and Aaron Pelley, say they plan to challenge the city’s nuisance ordinance. They say such local laws are barred by the state and federal Controlled Substances Acts, and cannot ban activity that is legal under state law, as they argue Call’s business is.


Call is also in the market for new liability insurance, after Western Heritage Insurance Co. notified him it was canceling his policy effective May 14.


Frankie Schnarr, the owner of Frankie’s Sports Bar and Grill in Olympia, another bar that allows marijuana use in a private room, is in the same boat after Western canceled his policy, too.


Call, who says his wife died of cancer 14 years ago and who lost his home to foreclosure as he tried to keep the Stonegate afloat, doesn’t know how he’ll pay for his legal representation. He plans some fundraisers at the bar.


“I have no idea what the road looks like for me,” he said. “But it’s not going to be a short road.”




Four Loko Maker Clamors For Personal Injury Suit Coverage


Source: Law 360

By Sean McLernon

April 19, 2013


The manufacturer of the controversial fruit-flavored alcoholic beverage Four Loko lodged a complaint against a pair of insurance companies in Illinois state court Wednesday demanding coverage for four underlying lawsuits linking the drink to severe bodily injuries.


Phusion Projects Inc. claims that insurance broker A.F. Crissie & Co. Ltd. breached its contract with the company when it failed to secure sufficient insurance coverage for Phusion’s distinct business needs, and must be held liable for the drink maker’s rising legal fees as it fights the underlying litigation and battles its insurance providers for coverage.


The beverage manufacturer also included Selective Insurance Co. of South Carolina as a defendant in the suit, claiming that the insurer is obligated defend and indemnify the company against the underlying actions alleging Four Loko consumption resulted in physical injuries.


Two other insurance providers have already escaped coverage of the underlying suits, as an Illinois federal judge ruled in January that Netherlands Insurance Co. and Indiana Insurance Co. have no duty to defend Phusion because of their policies’ liquor liability exclusions.


Phusion is blaming A.F. Crissie and the company’s owner Frank A. Crissie for allowing the provisions to be included in the policies.


“The communications and discussions between A.F. Crissie and Phusion formed a contract whereby A.F. Crissie agreed to provide insurance brokering services so as to obtain for Phusion commercial general liability insurance tailored to Phusion’s business niche and its unique business needs at a competitive premium cost,” the complaint says.


According to the suit, Phusion approached Crissie in early 2009 to help find a replacement for its existing liability coverage with Safeco Insurance Co., seeking a policy that sufficiently protected Phusion from liability risks from its “particular business operations.”


Crissie asked Phusion if the company needed “dram shop” coverage, which he said was only necessary if the beverage maker sells directly to consumers, the suit says. When Phusion told Crissie that it only sells to distributors, the broker advised the beverage maker to avoid the liquor liability coverage.


Now that Phusion is paying the price for not obtaining the extra coverage, the manufacturer is accusing Crissie of breach of contract, negligence and negligent misrepresentation.


Phusion is facing several wrongful death suits linking the drink to fatal automobile deaths and shootings, among other incidents. One suit alleges that a California man became paranoid after drinking two cans of Four Loko and began firing a shotgun in his yard until responding police officers were forced to shoot him eight times, resulting in his death.


The Federal Trade Commission tightened label requirements for the drink in February, requiring new disclosures about its alcohol content. Four Loko’s 23.5-ounce cans contain the same amount of alcohol as four to five 12-ounce cans of beer, which means drinking it in one sitting constitutes unsafe binge drinking, according to the FTC.


A Selective spokeswoman declined to comment on the suit. A representative from A.F. Crissie was not immediately available for comment Friday.


Phusion is represented by John S. Vishneski III, Stanley C. Nardoni and Noel C. Paul of Reed Smith LLP.


Attorney information for the defendants was not immediately available.


The case is Phusion Projects Inc. et al. v. Frank A. Crissie et al., case number 2013CH10322, in the Circuit Court of Cook County, Illinois.




Alcohol consumption can have sobering consequences for women


Source: Reporter-Herald

By Joyce Davis



Women’s bodies don t handle alcohol like men’s do, and research now shows alcohol can affect their brains, their sleep and their immune systems.


It’s happy hour at your favorite watering hole and an equal opportunity occasion for women when the drinks are being poured.


But some sobering research shows that while women often can match men drink for drink, the effects on their bodies are dramatically more dangerous. Neurologically, alcohol affects women more quickly and severely than men, compromising self-control, judgment and emotions.


The Centers for Disease Control and Prevention defines heavy drinking as consuming an average of more than one drink daily. For women who drink heavily, the disruption in the brain’s neurotransmitters compromises everything from breathing, movement and the ability to think clearly in less time than it takes to affect a man.


In research from the University of Gothenburg in Sweden, published last year in the journal “Alcoholism: Clinical & Experimental Research,” a significant decrease in the function of the serotonin system in a women’s brain — 50 percent — appeared after four years of heavy drinking, while a corresponding decrease in men took 12 years to appear. The serotonin system regulates mood and impulse control, among other functions.


The CDC also says female binge drinkers — those consuming four or more drinks within two hours — can experience anxiety, depression and memory loss as the brain cells shrink. They also have a 39 percent higher risk for stroke as heart muscles are weakened.


Dr. Jennifer Lentz, family practice physician with Banner Health Center in Loveland, says excess amounts of alcohol can definitely have adverse effects. “Women’s bodies are usually smaller than a man’s, so they weigh less and the alcohol can be more toxic,” she says. “When you’ve had too much to drink, everything comes down — your inhibitions, your ability to make decisions, your immune system.”


Societal changes show that more working women are partaking in “happy hour” gatherings during which they may drink too much. Even women who go straight home after work are more frequently having a cocktail or two before dinner or a nightcap before bed.


Having that cocktail to “unwind” or to help you sleep may have an opposite result, Lentz says. “Alcohol blocks the receptors in your brain that allow sleep. It actually worsens your sleep patterns because there is no REM period necessary for quality sleep.”


No matter where or when the drinking occurs, the bottom line is that a woman’s body doesn’t handle alcohol like a man’s, so matching drink for drink can have serious effects. According to the National Institute on Alcohol Abuse and Alcoholism, women have less water in their bodies as well as less of the enzyme dehydrogenase in the stomach lining, thus preventing the dilution of alcohol before it enters the bloodstream. As a result, higher amounts of alcohol remain in the organs for longer lengths of time.


Women may also tend to drink more wine, glass after glass, believing it’s a healthier choice.


“Yes, red wine has properties that are good for you, but it’s still alcohol,” says Lentz. “It’s recommended you limit yourself to 5 ounces of wine a day.”


Women also should understand how their immune system and liver can be affected by too much alcohol. “There are definitely risks that can creep up, especially with your liver,” says Lentz. “You may not realize it until years later, but by then the damage is done.”


Women who drink are encouraged to talk with their doctors about their alcohol consumption and any risks that may apply to them — even though studies show that most patients aren’t truthful about just how much and how often they drink.


“I always ask my patients how much they drink at one time,” Lentz says. “In general, if it’s three to five drinks per week, I’m not that concerned, but if it’s more than that — one, two, three a day — I need to give that talk about potential serious problems.”


Women’s drinking patterns


Alcohol consumption — a July 2012 Gallup poll shows 44 percent of Americans drink alcohol regularly, and 22 percent admit they sometimes imbibe more than they should.


Moderate drinking — the U.S. Dietary Guidelines for Americans defines moderation as up to 1 drink a day for women or up to 2 drinks a day for men.


Binge drinking — a dangerous drinking pattern defined as the consumption of 4 or more alcohol drinks for women (5 or more drinks for men) on an occasion — generally considered to be about 2-3 hours. Binge drinking usually leads to acute impairment (intoxication), but most binge drinkers are not alcoholics or dependent on alcohol.


About 12.5 percent of adult American women binge drink, about 5.7 drinks on each occasion and 3.2 episodes a month. About one in eight U.S. adult women and one in five high school girls binge drink.


Binge drinking is most prevalent among women 18-24 (24.2 percent) and 25-34 years (19.9 percent), in households with annual incomes of about $75,000.


Among women binge drinkers, women 18-24 had the highest frequency (3.6 episodes) and intensity (6.4 drinks).


Among high school girls, the prevalence of current alcohol use was 37.9 percent, the prevalence of binge drinking was 19.8 percent and the prevalence of binge drinking among girls who reported current alcohol use was 54.6 percent.


Source: Centers for Disease Control ( Data from the 2011 Behavior Risk Factor Surveillance System and the Youth Risk Behavior Survey (U.S. high school girls in grades 9-12).


Alcohol and cancer


Women at the greatest risk for breast cancer are those with a family history; for those women, drinking alcohol significantly increases that risk.


A Mayo Clinic study of 9,032 women found that women who had close relatives with breast cancer and were daily drinkers had double the risk of breast cancer, compared to those who never drank. Even moderate drinkers had an increased risk for breast cancer, according to a Harvard Medical School study of 105,986 women.


Women who drank only 3 to 6 drinks a week had a 15 percent increased risk, according to the study, while women who drank an average of two drinks per day increased their risk by 51 percent. Another study found that binge drinking — more than four drinks during one drinking session for women — increased the risk of breast cancer whether those sessions were frequent or not.


The same study found that it didn’t matter if the women began drinking at an early age or waited until after age 40 — if they consumed alcohol, their risk increased.


Source: U.S. Department of Health and Human Services’ “9th Report on Carcinogens — Review of Substances for Listing/Delisting”




United Kingdom: Wine could become ‘only for the elite’ if Government bans drinks offers in supermarkets


Source: Daily Mail

By Helen Lawson

20 April 2013


Wine could become too expensive for anyone but the wealthy thanks to Government restrictions and taxes, says one major retailer.


A potential ban on multi-buy offers in supermarkets and the recent 10p rise in wine duty could be responsible for drinkers turning to beer instead, according to Stephen Lewis, the chief executive of Majestic Wine.


This could reverse the ‘revolution’ of people enjoying a glass of wine with a meal, he said.


‘Having established this culture of food and wine, you know, which is a sea change from where we were 30 years ago, why would we want to stop that?’ Mr Lewis, whose chain has nearly 200 stores in the UK. told the Daily Telegraph.


He said that banning drinks offers in supermarkets would not solve the problem of anti-social behaviour.


‘The Majestic consumer is not the person who’s smashing up things, they’re not the problem drinkers’, he told the newspaper.


Yesterday, the minister for public health indicated a decision over introducing minimum alcohol pricing may never be taken, despite it being backed at first by David Cameron.


Anna Soubry said the policy could seem like ‘big bossy government cracking down on people who don’t have a problem’, in an interview with BBC Radio 4’s Today programme.


She said the Government was yet to decide if it would introduce a 45p minimum unit price and possibly never would.


Reports emerged last month that the controversial plans had been ditched amid claims David Cameron had run into fierce opposition from Cabinet colleagues, including Home Secretary Theresa May.


The Prime Minister insists the Government is considering the outcome of a consultation and wants to act to curb cheap drink.


Ms Soubry told BBC Radio 4’s Today programme: ‘On alcohol, I don’t think we have actually made a decision yet and there are good arguments both in favour of it and against it.


‘I was not convinced. I have been convinced because I met a whole load of liver specialists and doctors and they persuaded me it was a good idea.’


Asked if she had convinced Mr Cameron, she replied: ‘Oh yeah.’


Asked when there would be a decision on alcohol pricing: ‘I don’t know.’


When presenter John Humphrys said: ‘In other words we may not?’, she replied: ‘We may not.’




10 best craft brew states in America


Source: USA Today

Apr 21st


The craft beer movement continues to boom across the USA. 10Best editors have compiled this state-by-state guide so you can plan your next beer pilgrimage.


1. California, 268 craft breweries


Wine isn’t the only libation California is known for. With 268 craft breweries and counting — more than any other state in the USA — there’s bound to be a brew for every taste. While labels like Stone, Sierra Nevada and Anchor have become household names across the country, smaller breweries with more limited distribution are holding their own.


2. Washington, 136 craft breweries


Coming in at a respectable second, Washington state has 136 craft breweries, including the well-known Pyramid Brewery, headquartered in Seattle. It’s no surprise that this evergreen state has such a passion for beer, as the first American microbrewery — Yakima Brewing & Malting Co — was based here.


3. Colorado, 130 craft breweries


Left Hand in Longmont, New Belgium in Fort Collins, Avery in Boulder…Colorado’s craft brewery list reads more like a roundup of the best breweries in the country. If that’s not enough, Denver hosts the Great American Beer Festival where you can sample 2,200 beers from 500 of the country’s best breweries.


4. Oregon, 124 craft breweries


Oregon certainly does its part in carrying on the beer heritage of the Pacific Northwest. When you land in Portland, you’ll find a Rogue Brewery right in the airport, and you can easily take a beer tour of the state just as easily as a wine tour. Don’t miss Deschutes in Bend, Ninkasi in Eugene, Full Sail in Hood River and the original McMenamins in Portland.


5. Michigan, 102 craft breweries


Michigan is quickly moving up the ladder in the world of craft beers with over 100 breweries in the state. You may not find the big name craft brews of other states, but what you will find is some hidden gems — and maybe your new favorite — at local institutions like Bells Brewery and Founders Brewery.


6. Pennsylvania, 93 craft breweries


German immigrants to Pennsylvania brought with them a love of good beer, and the state already had six breweries pre-Prohibition, more than any other state in the country. Beer lovers will probably be familiar with Pennsylvania’s Golden Monkey and Hopdevil from the Victory Brewing Company, but the state has a lot more than just these heavy hitters.


7. Wisconsin, 75 craft breweries


With a Major League Baseball team called the Brewers, it’s a safe bet you’ll find a good beer to drink in Wisconsin. Sure, Wisconsin’s home to the likes of Pabst Blue Ribbon — hardly a craft beer — but you’ll find a slice of microbrew heaven at Ale Asylum in Madison, Lakefront Brewery in Milwaukee and plenty more.


8. New York, 72 craft breweries


Whether you’re cooling off in the summer or warming up in the winter, New York’s hoppy libations have you covered. With 72 breweries, you probably don’t have to go far to find one. Some of the best include Brooklyn Brewery, Southern Tier Brewing Company and Ithaca Beer Company.


9. Texas, 59 craft breweries


From St. Arnold, the oldest brewery in Texas, to the new microbreweries popping up in Austin every other day, Texas is quickly becoming a beer heaven. It’s also one of the fastest growing states when it comes to craft beer, so expect the Lone Star State to be moving up the list in years to come.


10. Illinois, 54 craft breweries


Illinois is starting to make a name for itself in the microbrewing world, and you’ll find many of its 54 breweries in the Chicago area. If you want to sample what’s available, plan to attend the Chicago Craft Beer Week in May.


10Best provides its users with original, unbiased, and experiential travel content on top attractions, things to do, and restaurants for top destinations in the U.S. and around the world.




News From TTB


Source: TTB

Apr 19th


Jill Murphy selected as Director, Office of Strategic Planning and Program Evaluation

We are pleased to announce the selection of Jill Murphy for the position of Director, Office of Strategic Planning and Program Evaluation. The director reports to the Deputy Administrator and the Administrator and manages the Bureau’s strategic planning process, oversees the Bureau’s performance management framework, coordinates the Bureau’s program review process, and serves as the primary Bureau representative to higher Departmental strategic planning offices and executives.


“Other” Uses of Alcohol


While many people may associate the word “alcohol” with beverages, alcohol has many other scientific, medical, and industrial uses. The Other Alcohol homepage provides information and resources on all of the other uses of alcohol regulated by TTB.


Denatured Alcohol

Specially Denatured Alcohol (SDA) is alcohol to which denaturing materials have been added. Manufacturers may use SDA in the manufacture of any product that is not intended for consumption. Generally, SDA is used in cosmetic products but its use extends to pharmaceuticals, chemical manufacturing, and products where SDA is the solvent or reactant.


Completely Denatured Alcohol (CDA) is alcohol that has been so thoroughly denatured that the product is utterly unfit for beverage use, and the denaturants used are very nearly inseparable from the alcohol. The use of CDA is authorized without permit restrictions because of the reduced risk that the pure alcohol can be extracted and diverted to beverage use.


Nonbeverage Alcohol Products

Nonbeverage drawback alcohol is pure alcohol, the same as that used for beverages. However, when manufacturers use that alcohol in the production of a food, flavor, medicine, or perfume, and the Nonbeverage Products Laboratory approves the product as unfit for beverage purposes, they can claim a return of most of the distilled spirits excise tax paid.


Alcohol Fuel

The law states that alcohol produced at an Alcohol Fuel Plant (AFP) is restricted to be “exclusively for fuel use.” The law, however, does not contain a definition of “fuel use.” TTB interprets the term to mean only the use of alcohol in motor fuel products that decrease the U.S. reliance on petroleum.




Bordeaux 2012: cautious optimism as Lynch Bages released


Source: Decanter

by Jane Anson in Bordeaux

Friday 19 April 2013


Five days in to the 2012 campaign and there seems to be cautious optimism that the Bordeaux chateaux are listening to the market and are prepared to lower their prices.


Following Mouton Rothschild’s successful price release yesterday morning, Pauillac fifth growth Lynch Bages came out yesterday afternoon at ?60 ex-Bordeaux, a drop of 13.5% from last year, but still a long way above its 2008 price of ?32.


The second wine, Echo de Lynch Bages, was released at ?21.60, a drop of 5%.


The renowned Moulis former Cru Bourgeois Chateau Chasse Spleen has released at ?16.80 (-5%) and Chateau Pibran at ?16.80 (-7%). Chateau Lamothe Bergeron, AOC Haut-Medoc, has remained unchanged at ?8.30.


Négociants have bought Lynch Bages, but they are reporting slightly slower selling to wine merchants, even for such a strong brand.


‘Of the major releases this week, the reaction to Lynch Bages has been lukewarm,’ said Paolo Pong of Altaya Wines in Hong Kong.


‘Some customers are fine, and we have bought a little for stock, but if they had come out 10-15% below, we could have sold thousands of cases.


‘Rauzan-Ségla has gone well, it has done exactly what everyone wanted, and gone with a similar price to 2008, and we should all applaud them for being fair.


‘Gazin for us was not so successful, because there are plenty of available vintages at the price or below, while Mouton also did the right thing, with a price similar to cheapest vintage available. It’s moving but not flying out the door.’


‘If more can go in the direction of Rauzan-Ségla we will end up selling some wine, and get a real campaign for first time since 2010,’ said Pong. ‘Let’s hope the message is getting though.’




Parker praises Pomerol in 2012 overview


Source: the drinks business

by Rupert Millar

19th April, 2013


Critic Robert Parker has praised Pomerol in his latest overview of the 2012 vintage.


He described the vintage and resulting wines as “complex” but only because of the difficult weather.


However, Parker explained that the earlier ripening Merlot meant that the Right Bank was not subject to the agonies of the Left, where the length of the season meant that most of the Cabernet Sauvignon crop was still on the vine when rains came in October, leading to rot.


He said that the quality of Pomerol “unquestionably” made it the top appellation, with the quality “not far off the blockbuster years of 2009 and 2010.”


Saint Emilion he also praised and the whites of Graves, which he thought had the potential to be better than the 2010s.


The reds too he thought excellent, although it is probably no coincidence that the problems he described with the Cabernet has led Haut-Brion to declare that it is adding “record” amounts of Merlot to this year’s wines.


The Médoc he described as the most complicated to navigate though there were good wines to bee had “but pick extremely selectively”. He ended by stressing that prices had to come down, ideally to 2008 levels but he conceded he could not see that latter wish coming to fruition in most cases.




Churchill’s declares its 2011 vintage


Source: the drinks business

by Andy Young

19th April, 2013


Churchill’s Port has followed Symington Family Estates and Sogrape in declaring its 2011 vintage.


The house’s 2011 Vintage Port has been blended from a variety of its old vineyards, with “the backbone of the blend” being sourced from a field blend of 50-year-old-and-over vines at Quinta da Gricha.


Owner Johnny Graham said that he was “particularly proud to present this stunning vintage”, adding that it is “what I call a classic vintage Port.”


Johnny Graham said that the 2011 vintage “may lack the instant appeal of more precocious wines at an early age; it tends to be closed on the nose, tannic on the palate and tight in structure, but, after a decade in bottle it will begin to open-up and reveal its true identity; that fabulous combination of distinctive but individually different component wines, which make up its well balanced and complex character.”


He added: “The Churchill’s 2011 is a wine that has the concentration, complexity, quality and finesse, as well as the natural acidity and tannic structure to age well for at least 50 years.”


The Churchill’s declaration comes after Symington’s declared an “exceptional” 2011 vintage earlier this week. Sogrape Vinhos was the first major Port company to make an official declaration, at the end of March. The Fladgate Partnership, traditionally waits until St George’s Day on 23 April before confirming any declaration.




Diageo names new president


Source: Drinks International

By Lucy Britner

19 April, 2013


Diageo is to appoint a new president for its Latin America and Caribbean arm.


Alberto Gavazzi, managing director, Diageo West Latin America and Caribbean (WestLAC), will take on the role of president, Diageo Latin America and Caribbean with effect from 1 July 2013. He is to report to Ivan Menezes, chief operating officer and will replace current president Randy Millian, who is to retire by June 30, 2014. Gavazzi will also replace Millian on the Diageo executive committee.


From 1 July 2013, Millian will take on a new non-executive role as chairman, Diageo LAC reporting to Menezes. He will continue to represent Diageo on the Zacapa board and the OAS (Organization of American States) trust board until his retirement.


Paul S Walsh, chief executive of Diageo, said: “Alberto brings a wealth of global and regional experience to his new role. Over the past 19 years he has succeeded in a variety of marketing and general management positions, including general manager, Brazil; global category director whisky, gin and Reserve Brands, and VP consumer marketing North America. I believe he will be equally successful in his new role and I congratulate him on his appointment.


“Randy leaves a strong business for Alberto to build upon.


“It has been a pleasure to work with Randy and I am very grateful to him for his commitment to our brands, values and our people over his long and successful career with Diageo.”






Source: Cronin Communications

Apr 21st


V2 Wine Group is pleased to announce the appointment of wine industry veteran Ken Meyerson as the company’s Director of National Retail Accounts. Meyerson, whose 17-year industry background includes top sales roles with blue chip wine companies, will oversee all sales in the National Retail Account arena for V2 Wine Group’s expanding portfolio which includes Dry Creek Vineyard, Qupé Wine Cellars, Steelhead Vineyards, Valley of the Moon and Toad Hollow Vineyards among other luxury brands. He will report to Scott Ericson, V2 Wine Company’s Vice President, National Sales Manager.


“V2 Wine Group continues in a rapid growth phase and our outlook for continued expansion is nothing but optimistic,” said Dan Leese, President of V2 Wine Group. “As our portfolio of world-class wineries and brands continues to increase in size and scope, bringing on a retail professional of Ken’s caliber is an obvious next step. Our on-premise business continues to be the backbone of our business, however, expanding our retail presence is our next big opportunity.”


“I am excited to join this entrepreneurial group of sales and marketing folks in expanding their portfolio and presence in the retail marketplace,” commented Meyerson.


Meyerson has held important sales positions with Ascentia Wine Estates, Diageo Chateau & Estates, Terlato Wines, and E & J Gallo during his impressive 17 year career.


“Ken’s depth of experience and industry knowledge is a key to our continued growth and strength in the national market,” stated Katy Leese, General Manager of V2 Wine Group.


V2 Wine Group is a wine production, marketing and sales organization dedicated to building strong wine brands in the North American marketplace. Based in Sonoma, California, the company is a partnership between wine industry veterans Dan and Katy Leese and entrepreneur Pete Kight.




Walmart could benefit from Tesco’s exit


Source: RT

April 18, 2013


With 6,700 stores in 12 markets, Tesco is a formidable competitor globally, but Walmart won’t have to worry about competing with the company on its home turf.


Tesco this week confirmed earlier indications that it would indeed exit the U.S. market following disappointing results from its 199 unit Fresh & Easy concept that was introduced in Western U.S. markets in 2007. The company also indicated it has received interest from third parties for Fresh & Easy assets and would treat the business as a discontinued operation, resulting in a roughly $1.8 billion after tax negative impact on profits.


The $1.8 billion writedown associated with U.S. operations was only half the bad news for Tesco which also took other writedowns related to its operations in the United Kingdom and Eastern Europe that brought the total to negative profit impact to $3.5 billion. The big charge on its home turf where the company competes with Walmart’s Asda division was related to a decision to not develop 100 locations that had been acquired five to 10 years ago.


“All the writedowns relate to strategic decisions that I’ve taken since being CEO and are logical extensions of those – calling an end of the (UK) space race, deciding to exit the U.S.,” according to a Reuters report. “My job’s not to look back, my job is only to look forward.”


As for what’s next for the Fresh & Easy real estate, Walmart could conceivably be a bidder as it is keen on expanding it smaller format stores and Tesco has already done much of the heavy lifting in markets such as California where Walmart hasn’t exactly been embraced. Tesco indicated it had received a lot of interest from a range of buyers but doesn’t expect to complete the divestiture process for three months.




Chipotle Mexican Grill, Inc. (CMG): Solid quarter, but 20%+ growth likely in the rearview mirror


Source: Goldman Sachs

Apr 19th





What’s changed

CMG reported adjusted 1Q13 EPS of $2.35, ahead of the $2.13 consensus and our $2.03 estimate. We tweak our 2013-2015 EPS estimates to $10.27/$12.44/$14.77 to reflect a lower run rate of food costs, higher ad spending for the rest of the year, and a delay of price increases until 4Q.



We retain our Neutral rating on CMG shares as we see more reasonably priced growth stocks elsewhere in our coverage universe:


(1) We believe that CMG’s revenue growth has decelerated to a rate under 20%, likely from this point forward. SSS have settled into a more modest low-mid single digit trajectory, unit growth is being impacted by the law of large numbers and new unit productivity has fallen to below 90%.


(2) In light of the lower steady state SSS, we believe CMG’s restaurant level margins, corporate EBITDA margins and return on invested capital may stagnate from here. Management has acknowledged that CMG needs mid-single digit SSS in order to leverage its fixed cost base. Given this, we believe annual EPS growth may stabilize in the 15-20% range.


(3) While we appreciate that a sustained 15-20% EPS growth rate in out-years is robust, it is only inline with other Restaurant growth stories such as PNRA and SBUX. We do not believe inline growth is likely to support a superior multiple, as was the case in CMG’s hyper-growth heyday. As such, multiple contraction may serve to offset the compounding EPS base, limiting shareholder returns over the next few years.



We raise our P/E and DCF based 12-month price target by $10 to $320, 25X our forward 24 month EPS estimate, roughly inline with PNRA and SBUX.


Key risks

Primary upside/downside risk is incremental SSS upside/downside.




Texas: Texas distilleries in high spirits


Source: My SA

By Jennifer McInnis, Staff Writer

Saturday, April 20, 2013


Texas was late to the craft distilling party, but it’s quickly catching up to other states.


Sixteen years ago, Tito’s Handmade Vodka paved the way as the first legal Texas distillery. Now, there are 45 distilling permits registered with the Texas Alcoholic Beverage Commission, although not all of them are producing. The market has grown rapidly, and some have risen above the rest. Not only has the number of distilleries increased, but the variety of products they are making continues to expand. Here is a roundup, in alphabetical order, of updates and trend-setting distillers and some of their new products.


Balcones Distilling Any discussion about the future of Texas distilling should start with Chip Tate’s Balcones Distilling in Waco. It opened five years ago with Balcones Rumble distilled from honey, mission figs and turbinado sugar; and Baby Blue, a whiskey made from Hopi blue corn meal. The expanded lineup includes Balcones Single Malt Whiskey, Balcones True Blue Cask Strength, Balcones Brimstone, True Blue 100 Proof and Rumble Cask Reserve. Among its more than 40 awards, the distillery was named 2012 Craft Whiskey Distillery of the Year among Whisky Magazine’s Icons of Whisky, and 2012 Global Distillery of the Year and U.S. Craft Distillery of the Year at the Wizards of Whisky International Competition.


Banner Distilling Co. in New Sweden was granted its permit on April 4. Co-founders Logan Simpson and Tony Jimenez have spent years in the tech industry but wanted a change of pace. “I really have this need, desire to make a product that people can hold and touch and enjoy,” Simpson says. He plans to use local ingredients, including grains grown by farmers within the county. Simpson wouldn’t reveal much more but says there are more details to come about other unique ingredients.


Deep Eddy Vodka in Austin is known for its successful Sweet Tea Vodka that launched in 2010. Last year, the company started using 9-year-old San Antonian Bo DeWees’ Bo’s Bees Honey in the bottles sold here. Deep Eddy expanded into 16 markets last year, and its newest product is an instant success. The grapefruit-flavored Deep Eddy Ruby Red launched earlier this month, and Brandon Cason, vice president of marketing, says they’ve had to increase production to keep it on shelves.


Dorcol Distilling Co. (pronounced door-chole) is under construction at 1902 S. Flores St. Co-founders Boyan Kalusevic and Chris Mobley plan to open the distillery this summer. It will produce unaged and aged spirits, as well as small-batch seasonal expressions.


Dripping Springs Vodka has come a long way since opening in 2007 and a setback with a fire in 2009 that destroyed the original distillery. The company introduced Dripping Springs Texas Orange about two years ago and 1876 Well Vodka last year. The distillery is unveiling a new label, and it has increased production by 20 percent in the past year to expand distribution into the Midwest.


Garrison Brothers Distillery Owner and distiller Dan Garrison only makes one spirit – bourbon – but he wants it to be the best. Garrison Brothers Texas Straight Bourbon Whiskey is produced in Hye, and it’s one of the state’s most sought-after spirits. Batches are released in vintages, and they quickly sell out. Garrison also released Texas Opus, a white dog whiskey, and has plans for a high-proof bourbon, Hye Rye and small releases of five, seven and 10-year reserves.


Ranger Creek Brewing & Distilling The local distiller recently released Rimfire in its small-caliber series. It’s made from the same recipe as the Mesquite Smoked Porter minus the hops. The first release in the series was Ranger Creek .36 Texas Bourbon Whiskey, which earned 86 points from Whisky Advocate and a bronze medal from the American Distilling Institute’s Craft American Spirits. The distillery plans to release in July Belgian White Whiskey as an evil twin to its La Bestia Belgian Ale.


Treaty Oak Distilling launched in 2007 in Austin with a Platinum Rum. Last year, it released Starlite Vodka, an aged rum, and Waterloo Gin, which has wonderful Texas botanical notes of lavender, grapefruit and lemon. Newer to the lineup are a Two-Year Barrel Reserve and plans for Waterloo Gin Antique, which is also aged.




Utah: Nothing silly about Utah’s liquor laws


Source: Deseret News

by Matthew Hartvigsen

April 20 2013


Utah is known nationwide for its strict liquor laws, and these policies drive a lot of debate. A recent article by Sutherland Institute’s Paul Mero titled, “Nothing silly of embarrassing about Utah’s liquor laws,” states five reasons why Utah’s liquor policy should stay:


1. “Liquor is a personal and societal negative. Pertaining to character, liquor never has made any human being a better person. Never. And a free society requires that we become our better selves.”


2. “Liquor makes human beings less free, if being truly free requires full mental faculties.”


3. “Liquor consumption impairs cognitive judgment and mechanical skills.”


4. “Liquor consumed by children is harmful to the child, especially in brain development. To dismiss the ill effects on children of the outward culture of drinking as an isolated matter for parents not only displays a naiveté about the real world, it also displays a sad ignorance of the proper role of law and government in the maintenance of a free society.”


5. “In an aggregate, a culture of drinking can exist – such as in a bar setting. In these circumstances, most policy-makers feel fully justified in regulating a culture of drinking.”




Washington: Wash. brewers protest proposed beer tax


Brewers gathered at the Capitol on Friday to protest a House budget proposal that makes permanent a beer tax on large breweries and extends the tax to small brewers.


Source: The Associated Press

Apr 21st


Several state brewers spoke against the proposal at a public hearing in the morning before heading out to the Capitol steps, where about 100 people held a rally, carrying signs including “Give me beer or give me death” and “WA Beer (equals) WA Jobs.”


The House wants to permanently extend a beer tax on large brewers selling more than 60,000 gallons that was set to expire in June, but looks to lower it from 50-cents-per-gallon to 25-cents-per-gallon. The tax would be extended to small brewers at 15-cent-per-gallon. Combined, the tax would bring in $58 million to the state.


The Senate’s budget proposal does not include the tax.


Lawmakers are nearing the end of the 105-day legislative session where they’re tasked with patching a projected budget deficit of more than $1.2 billion while also putting more money into the state’s basic education system. The House and Senate will have to work out their budget differences before the April 28 end of the regular session if they want to avoid going into special session.


Brewers say the tax will hurt their business, especially that of smaller brewers.


“This is just a crushing proposal,” said Dick Cantwell, co-founder and head brewer of Elysian Brewing Company in Seattle. He said his brewery will likely end up having to pay an additional $600,000 a year if the proposal stands.




South Carolina: SC minibottles switch hasn’t had results


Source: WISTV 10

Apr 22nd

South Carolina’s switch from minibottles to regular-sized liquor bottles hasn’t led to a decrease in drunken driving.


An analysis published Sunday by The Post and Courier of Charleston also notes that the change hasn’t led to any increase in funding for alcohol treatment.


Instead, South Carolina has been tapping its general revenue fund for more than $1 million yearly since free-pour liquor drinks became legal in 2006. The paper says that move has made up for lost taxes to support a network of alcohol and drug treatment agencies.


And the average number of drunk drivers involved in fatal South Carolina accidents has gone up in the years after free-pour became legal.

Liquor Industry News 4-18-13

April 18, 2013

Franklin Liquors

Thursday April 18th 2013

Diageo sales boosted by US spirits


Diageo said a strong performance and higher prices in its US business has led to sales growth, balancing out weaker sales in Europe.


Source: Daily Telegraph

By Rebecca Clancy

18 Apr 2013


In a trading update released this morning, the drinks giant said it had organic net sales growth of 5pc in the nine months to March 31, with volume up 1pc.


US spirits, Diageo’s biggest business, was the key driver of performance in North America, with organic sales growth of 6pc, compared to a 4pc fall in sales in Western Europe.


Diageo, which has shifted its focus to emerging markets, also reported a jump in sales of 14pc in Latin America and 9pc in Africa and Eastern Europe.


However, the maker of Johnnie Walker whisky and Guinness stout said overall volumes were down 1pc in the first quarter of 2013 but that it had benefited from a strong price/mix and a small positive impact from foreign exchange, with organic net sales up 4pc.


The company said performance in Latin America and Caribbean moderated in the third quarter as consumer weakness in Brazil impacted performance despite share gains.


“Diageo’s performance for the nine months is in line with the first half and our expectations,” said Diageo chief executive Paul Walsh.


“Strong performance from our biggest business, US spirits; the continued growth of spirits in Africa; share gains across our markets in Asia Pacific and double digit growth of Johnnie Walker, Crown Royal, Buchanan’s, and Tanqueray are the highlights of the quarter.


“Given our market positions and geographic diversity we remain confident that Diageo’s performance continues to be in line with our medium term guidance.”


Rival drinks company SABMiller also released a trading update this morning which shows that group revenue for last year grew by 7pc.


Lager volumes on an organic basis were up 3pc for the full year, while soft drinks volumes were up 4pc, the group reported.


SABMiller said the overall financial performance in 2013 was in line with its expectations.




Quick Note – Diageo (DGE LN, Buy) – Q3 slightly lower, but no change to estimates


Source: Nomura

April 18, 2013


Stock Rating: Buy

Target Price: 2400p


Q3 slightly lower but no change to our estimates

Q3 organic revenue growth +4% vs Nomura and consensus +5%. The Q3 run-rate +4% is slightly slower than H1 +5.2% and 9M +5%, but this mainly reflects rounding. We maintain our FY13 estimate of +5% (slightly below company medium-term guidance of +6%). In our preview note, we had reduced our FY revenue estimate to 5% vs previous 6% to reflect slightly slower Q3 and Q4. However, we retain our EBIT and EPS estimates as we see stable infrastructure and marketing costs.


Cal 2014E P/E 16.6x vs Pernod (Neutral) 16.3x and spirits avg 17.7x.


Next news:Diageo Innovation Day on 9 May.


M&A story still has legs

Although the M&A story appeared to have stalled at the end of 2012, with the company ruling out a Cuervo deal, we believe Diageo’s strong balance sheet (estimated net debt/EBITDA of under 2x by year-end) offers scope for further M&A activity. In addition, it looks likely that the company will gain control of United Spirits over time, even though it looks unlikely that the tender offer (planned to increase the 27% holding to over 50%) will succeed at the price being offered (R1440).


Growth by division

Although the company does not report Q3 revenues by division, we estimate from the nine-month run-rate implied Q3 organic revenue growth N. America +8.5% (NE +5% and 9mth +6%), Western Europe flat (NE -4%, 9mth -4%), Africa, EE & Turkey +5% (NE +11%, 9mth +9%), Latin America and Caribbean +8.5% (NE +12%, 9mth +14%), Asia Pac +1% (NE +5%, 9mth +4%).


Colour by region


N. America – Q3 sees some acceleration in spirits revenue (price/mix driven), with beer and RTD a drag factor as in H1.


Western Europe – We believe no change to the underlying dynamic. Q3 benefitted from technical factors given weak French comp after the duty hike at the beginning of cal 2012, earlier Easter and shipment phasing in Spain, which is expected to reverse in Q4. We believe Spain, Greece and Ireland will remain challenged, partially offset by positive growth in Germany


LatAm – Brazil was weak despite market share gains driven by negative consumer sentiments and drink-driving regulation brought in December. In Colombia and Venezuela, systems changes led to higher shipments in the first half which reversed in Q3.


Africa, EE & Turkey – Key market Nigeria remains weak together with one-off impact in Kenya from elections. Q3 was negatively affected in Turkey by stocking up in Q2 ahead of duty increases.


Asia Pac – Weaker vs a strong comp last year owing to pricing timing. Korea scotch market remains weak. China is robust, but off a small base.




SABMiller posts strong growth in Africa, LatAm weak in Q4


Source: Reuters

April 18, 2013


Global brewer SABMiller Plc said on Thursday it had posted a 7 percent rise in full year organic revenue, boosted by strong demand in Africa and a surprisingly robust performance in Europe.


The London-based company, which owns more than 200 beer brands, said full-year lager volumes had grown by 6 percent in Africa on an organic basis despite tough comparatives, as additional capacity came on stream. The final quarter was up 9 percent.


However, lager volumes in Latin America, its largest market, declined 1 percent in the final quarter, hit by softer economic conditions and a price increase in some markets.


Europe proved to be more resilient than expected, with new “brand and pack innovations” outweighing the tough economic conditions to send lager volumes up 6 percent on an organic basis in the full year, and 3 percent in the final quarter.


Warmer weather in China helped the company to post an improved performance in the fourth quarter after the country’s coldest winter in 28 years hit demand in the third quarter.


The group, which operates in over 75 countries with its Pilsner Urquell, Peroni and Grolsch brands, said overall full year lager volumes were up 3 percent in the year and 4 percent in the quarter, with overall financial performance in line with expectations.




Rémy Cointreau: Consolidated Sales for the 12 Months


Source: Herald Online

April 18, 2013


Rémy Cointreau’s (Paris:RCO) consolidated sales for the financial year ended 31 March 2013 were ?1,193.3 million, an increase of 16.3% (up 8.8% organically). Group brands increased by 18.6% (up 10.3% organically). This performance is even more remarkable in that it was achieved on the back of double-digit growth the previous year.


Over the 12 months, the foreign exchange effect was a positive 6.8%, whilst changes in the Group’s structure, related to acquisitions, were a positive 0.7%. The organic growth of 12.4% in the fourth quarter exceeded the full-year average, due to the favourable effect of a later Chinese New Year.


The US and Asia maintained their double digit growth. Europe, despite a mixed economic environment, also contributed to this performance.


Jean-Marie Laborde, Chief Executive Officer, commented:


“This performance confirms the Group’s strategic orientation initiated over the last few years. Our results were driven by the move upmarket of the entire brand portfolio, innovations supported by targeted investment and the expertise of our worldwide distribution network.


“During the financial year we have, once again, consolidated our positioning and reaffirmed our high value and long-term strategy.”


Rémy Martin achieved double-digit organic growth for the fourth consecutive year, an increase of 12.7% (up 21.5% as published). The Group’s ongoing policy of moving upmarket, the pricing policy, combined with high quality innovations as well as a more modest increase in volumes, in line with our long-term objectives, all contributed to this good result.


Asia and the Americas were the main drivers of Rémy Martin’s growth. In the Europe/Africa region, growth was driven by Russia and Western Europe where sales also increased, particularly in the UK.


Liqueurs & Spirits – The entire division increased 3.9% organically (up 10.8%). The increase was enhanced by Bruichladdich’s integration within the division’s portfolio from 1 September 2012.


Cointreau achieved a strong full-year performance with 7% growth, thanks, in particular, to expansion in the US supported by increased marketing investment. The brand reported good results in Western Europe, driven by Benelux and the UK.


Despite a continued challenging economic situation in Greece, Metaxa grew in its markets with high potential (Eastern Europe). Sales of Passoa and St Rémy also increased.


Partner Brands – The growth in brands distributed on behalf of our partners was primarily driven by Scotch whiskies in the US. The worldwide refocus on a high value strategy, initiated more than a year ago by Piper-Heidsieck champagnes is bearing fruit, particularly in the US, despite the difficult economic climate in Europe. The relaunch of Charles Heidsieck champagnes met a positive welcome in the markets.


Rémy Cointreau will focus on achieving estimated growth in current operating profit of around 10% on a like-for-like basis, and above 15% as published.


In a worldwide economic environment which is still disrupted, particularly in Europe, but nevertheless remains favourable for the premium spirits industry, Rémy Cointreau remains true to its long-term high value strategy. The Group will continue to rely on its very high quality brands, the dynamism of its distribution network and its strict cost control.


Read more here:




Hine is put up for sale


Source: Harpers

by Lucy Britner

Wednesday, 17 April 2013


The managing director of Hine has confirmed to Harpers that the Cognac house is up for sale.


Francois Le Grelle said he was unable to release any more information at this stage and that meetings are yet to be had with any potential buyers.


The news follows the announcement earlier this week that Hine’s owner, CL World Brands, had agreed to sell its Scotch whisky arm, Burn Stewart Distillers to South African drinks giant, Distell,  in a deal worth £160 million.  The move followed the sale of a majority stake in Jamaican Appleton rum’s parent company Lascelles DeMercado to Italian drinks company Gruppo Campari in September 2012. CL World Brands is  a subsiduary of the troubled Caribbean company CL Financial, which came under the management of the Trinidad and Tobago government in 2009, following a bail out.


Hine is best-known for its vintage approach to Cognac and the house is celebrating 250 years of production this year.




AB to sell stake in City Beverage distributorship


Source: Chicago Tribune

By Emily Bryson York

April 17, 2013


Anheuser-Busch has agreed to sell its interest in Chicago’s City Beverage, its largest local distributor.


The agreement is part of a bill expected  to clear the Illinois House this week, ending a multi-year battle that amounted to a referendum on how alcohol is regulated in the state.


“Anheuser-Busch is pleased with the agreement reached with the Illinois legislature as it relates to our minority investment in City Beverage,” Mark Bordas, region vice president of state affairs with Anheuser-Busch said in a statement.


The world’s largest brewer, owned by Leuven, Belguim-based Anheuser-Busch InBev, has until Jan. 1, 2015, to sell off its interest in City.


Most states regulate alcohol sales through what’s called a “three-tier system,” designed to separate manufacturing, distribution and retail sales between different business interests.


The bill, HB 2606, amends the Liquor Control Act of 1934 and states that “no person licensed as a manufacturer of beer … shall have any interest, directly or indirectly, in a holder of a distributor’s license or importing distributor’s license.”


“I know of no opposition to my legislation,” Rep. Frank Mautino said in a statement released Wednesday by the Associated Beer Distributors of Illinois. He did not immediately respond to a request for additional comment.


Bill Olson, president of the distributor’s association, said the amendment sprung from meetings held by Senate President John Cullerton, including Anheuser-Busch, MillerCoors, Wine and Spirits Distributors of Illinois, and his organization.


Anheuser and the Illinois Liquor Control Commission have been involved in a string of litigation on this issue since the ILCC blocked the world’s largest brewer from acquiring City Beverage in 2010.


BDT Capital, an investment firm owned by Byron Trott, now owns 70 percent of City Beverage.  BDT did not immediately respond to a request for comment on this story.




United Spirits Hits New High


Source: WSJ


Apr 17th


Shares of United Spirits Ltd. 532432.BY -1.84% rose to hit a record high of 2,195 rupees in intraday trade Wednesday on speculation that Diageo DGE.LN -0.76% PLC may raise its offer to minority shareholders in its bid to increase its stake in the Indian liquor company.


The stock came off the peak and closed 6.1% higher at 2,156.20 rupees, still substantially higher than Diageo’s offer of 1,440 rupees a share.


“It is rumors that the fresh offer will be made at 2,200 rupees a share, and this is the sole reason for the stock to hit a high,” said a strategist at a local brokerage, who declined to be named.


“The current offer is much below the market price and is expected to fail. However, we have no way to confirm whether the fresh offer will be made and are advising investors to stay cautious,” the strategist said.


A spokesman for Diageo declined to comment.


On April 5, the U.K.-based brewer had said that its offer would remain at 1,440 rupees a share and that the price was “justified” based on local regulations.


Diageo is offering to buy an additional 26% stake in the Indian company to bring its total shareholding to 53.4%. Diageo’s offer opened April 10 and closes April 26.


Nomura in a research report issued the day the offer opened recommended that investors buy shares in United Spirits, with a target price of 2,200 rupees. The brokerage said the company would be well-placed to take advantage of growing consumer spending in India over the next two years, particularly with Diageo buying a majority stake in the company.


However, Nomura also said Diageo’s offer to United Spirits shareholders was much lower than the market price and wasn’t likely to succeed. United Spirits shares closed at 1,818.50 rupees the day the Nomura report was issued.




Suntory in race to buy British soft drink brands Lucozade, Ribena from GSK


Source: DBR

18 April 2013


Suntory Holdings, a Japan-based beverage company, plans to acquire two British soft drink brands – Lucozade and Ribena – for over £1bn from UK-based pharmaceuticals giant GlaxoSmithKline (GSK).


Lucozade sports drink range includes Lucozade Energy, Lucozade Revive, Lucozade Sport and Lucozade Sport Lite.


Ribena is a fruit drink brand available in different flavors including apple, orange, raspberry and pomegranate.


Ribena Really Light is the low-calorie version of Ribena with no added sugar. The Ribena Plus range includes Ribena Plus with vitamin A and vitamin C to help support immunity, and Ribena Plus with calcium for healthy bones.


The Japanese company is in discussions with banks including Morgan Stanley and Nomura about gathering a bid.


The move is in line with the company’s intent to expand presence into western markets.


On the other hand, the British drugmaker intends to sell Lucozade and Ribena brands to focus on emerging markets.


Suntory produces soft drinks under the brands such as Orangina and Schweppes.




German Liquor supplier Waldemar Behn buys Danzka vodka from Belvedere


Source: DBR

18 April 2013


German liquor supplier Waldemar Behn has purchased Danzka vodka from France-based Belvedere Group for an undisclosed amount.


The deal is said to be the biggest in Behn’s 121-year history.


With sales of 2.6 million bottles in 2012, Danzka vodka is well known brand globally and is available in over 50 markets at global duty-free and travel-retail accounts.


Waldemar Behn managing director Rudiger Behn was quoted by as saying that Danzka vodka will be the main asset of the company.


“Danzka ensures our independency in the liquor industry and will boost our international business, especially in duty-free, heavily,” Behn added.


“And, finally, with Danzka we are invested now in one of the largest and fastest-growing spirit categories.”


The acquisition includes appointment of Torben Vedel Anderson as global sales director for the brand. From 1 May 2013, Anderson will work towards the growth of the brand.


Andersen told the website that Danzka vodka’s main market is duty-free channel and will continue to be so.


“I am also new to the Behn Group and the new owners, but I have been met with big ambitions for Danzka vodka and very creative ideas to be rolled out,” Anderson added.


“I have been appointed global sales director and will focus on the continued development of the Danzka vodka brand and other Behn products including Dooley’s liqueurs in Asia, Middle East, Americas duty-free and Latin America.”




Elephant dung beer sells out in minutes


Source: the drinks business

by Andy Young

17th April, 2013


A Japanese brewery created a beer using ingredients from elephant dung and it sold out within minutes of going on sale in the country.


The beer, which is called Un, Kono Kuro, is made using coffee beans that have passed through an elephant.


The Sankt Gallen brewery called the beer a “chocolate stout”, despite it not containing any chocolate. The coffee beans used in the beer come from elephants at Thailand’s Golden Triangle Elephant Foundation, which cost over US$100 per 35 grams. The beans are so expensive as 33kgs of beans in the mouth yields 1kg of useable coffee beans.


The beans are definitely a candidate for one of the top 10 weirdest beer ingredients.


Mr Sato, from Japanese website, tasted the beer and said: “After taking my first sip there was an initial bitterness that got washed over by a wave of sweetness. Following that, a mellow body rolled in and spread out through my mouth.


“Usually people talk about aftertaste when drinking beer but with Un, Kono Kuro the word afterglow is much more appropriate.


“After downing the last drop, slowly rising from my throat and mouth was that afterglow. The combination of bitter and sweet stayed fresh and lingered in my head. It was a familiar aroma that accompanied me through the entire beer.”


Although the bottles of the stout sold out after going on sale on the Sankt Gallen website the brewery has said that it plans to put the beer on tap at its new shop, which opened in Tokyo earlier this month.




68 percent of teen alcohol-related deaths actually due to factors other than drunk driving, MADD reports


Source: Fox News

By Amanda Woerner

April 17, 2013


When Debbie Taylor’s 18-year-old son, Casey, died of alcohol poisoning following a night of drinking at a party, she was blindsided.


“Casey was an honor roll student; he was very smart, he was very responsible,” Taylor told


Taylor knew her son drank occasionally, and she had spoken to him about the risks of drinking and driving.


“I always taught him that he shouldn’t drink and drive,” Taylor said.  “And I went as far as to tell him, ‘Call me, I’ll come and get you,'” Taylor said. “As a parent, I thought that message would be enough.”


“The conversation I wish I would have had was to tell him not to drink until he was 21,” Taylor said.


After Casey’s death, Taylor began working with Mothers Against Drunk Driving (MADD) to educate parents about the importance of talking to their teenagers about alcohol – beyond just the risks associated with drinking and driving.


And the importance of addressing teen-related drinking deaths outside of the parameters of drunk driving is critical: A new analysis of data released by MADD  on April 17 revealed that 68 percent of teenage deaths attributable to underage drinking are not traffic-related, but due to other factors like alcohol poisoning, drowning or suicide.


The data is released in advance of MADD’s annual Power Talk 21 Day, which takes place April 21, a national day dedicated to encouraging parents to talk to their kids about drinking.


Power of parents


MADD first launched Power Talk 21 Day two years ago.


“It is really a day to draw attention to the information we have available to parents, to help them start talking about underage drinking, and the dangers of it, with their children,” Jan Withers, the national president of MADD, told


To help parents start the conversation, MADD offers a research-based, instructional booklet called Power of Parents, which is free to download, on their web site.


“In the past three years, we’ve been able to literally reach one parent every 30 minutes – to get the handbook in the hands of a parent every 30 minutes,” Withers said.


MADD partnered with Dr. Robert Turrisi, a professor at Pennsylvania State University with a joint appointment in the Department of Biobehavioral Health and the Prevention Research Center, to create the Power of Parents booklet.


“Most people think that when young people get a little older, their parents make less of a difference and peers and friends are everything,” Turrisi said. “It’s undeniable that friends are important – but research is showing a much more important role for parents than may have been initially expected.”


Turrisi’s research indicates that by discussing alcohol with teens, parents can dramatically reduce the odds of their children engaging in dangerous drinking.


“When we look at things like the frequency of drunkenness in the past 30 days, highest level of BA (blood-alcohol) concentration, or heaviest drinking nights – it varies slightly from study to study and outcome to outcome – but typically you are seeing a reduction of something around 50 percent,” Turrisi said.


And Turrisi and Withers note it is important for parents to discuss drinking with their teens on more than just one occasion.


“The real key, the most important thing, is to have that respectful communication be ongoing. Don’t just assume that they know because you’ve had the discussion. The key is to continually have that conversation,” Withers said.


Through her work with MADD and with the efforts of events like Power Talk 21 Day, Taylor hopes she will be able to encourage other parents to speak to their children about drinking.


“It can’t hurt to have that conversation with your kids,” Taylor said.




Sporting bodies are ‘in alcohol industry’s pocket’


‘We facilitate the drinks industry to groom our children,’ psychiatrist tells committee


Source: Irish Times

Fiona Gartland

Thu, Apr 18


Sporting bodies are “very much in the alcohol industry’s pocket”, an Oireachtas committee was told yesterday.


Prof Joe Barry of Alcohol Action Ireland told the Oireachtas Committee on Transport and Communications that suggestions alcohol sponsorship of sports did not have an effect on alcohol consumption in young people were not true.


He said he read the transcript from a previous committee meeting at which the IRFU, FAI and GAA made the assertion and he was “saddened” to hear it. “Their relationship with these companies is causing a lot of harm to young people.”


Prof Barry said alcohol companies would not spend so much on marketing and advertising if it did not work.


A study, funded by the seventh framework programme of the European Commission and carried out among 6,500 children aged 13 to 15, showed an association between exposure to alcohol sports sponsorship and increased drinking in school children, he said.


Dr Bobby Smyth, a consultant child and adolescent psychiatrist with Alcohol Action Ireland, said it was with “typical arrogance” that the alcohol industry, “and those in receipt of its money”, had demanded evidence be provided that proved sponsorship promotes consumption.


“If they have proof that alcohol sponsorship does nothing to increase alcohol related harm, than Alcohol Action Ireland would have no issue with this activity,” Dr Smyth said.


The average consumption in Ireland for adult drinkers was the equivalent of one bottle of whiskey for each man and woman, per week, and the average age to begin drinking was 15 .


“There are 60,000 children who are going to start drinking this year,” Dr Smyth said.


Dr William Flannery, from the faculty of addiction psychiatry at the College of Psychiatry of Ireland, said suicide was the leading cause of death among 15-24 year-olds in Ireland. A 2010 study showed that in 24 per cent of all cases of self harm, alcohol was involved.






Sourcing priorities are shifting from ‘flexibility’ to ‘control’


Source: RaboBank

April 17, 2013


In its newly published report on sourcing opportunities for U.S. wineries, Rabobank says that securing appropriate quality wines at prices that permit acceptable margins remains a challenge for many wineries, despite record levels reached by the U.S. wine-grape crop in 2012.


In the report, Rabobank’s Food & Agribusiness Research and Advisory (FAR) group says the reduction of the oversupply of wine is creating challenges for wineries to secure the right product at the right price. U.S. wineries should review their sourcing strategies and shift their priorities from “flexibility to control.”


The report, “From Flexibility to Control: Wine Sourcing Strategies for Future Growth,” by Stephen Rannekleiv, Rabobank wine analyst, addresses a variety of options for U.S. wineries to explore when developing sourcing plans.


“There are many options that wineries can consider to secure supply for their brands,” said Rannekleiv. “Each entity will need to keep long-term strategic plans in mind as they focus on where they will go to secure their supply.”


Rannekleiv outlines three key areas in which  U.S. wineries can improve their long-term sourcing strategies:


1.       Looking above and beyond for vineyard acquisitions. Vineyard acquisitions are an important way to secure greater supply for long-term growth. However, wineries committed to making acquisitions will need to pay prices that are above traditional prices for land; otherwise they may need to look beyond their traditional production regions.


2.       Consider alternative partners for third-party contracts. Wineries must be careful not to over-commit on contract prices, particularly in California’s  San Joaquin Valley, where pricing may begin to see downward pricing pressure. The lower pricing in planting contracts (compared to current pricing) has limited interest in expanding acreage among traditional growers, but alternative partners (such as almond growers and investment funds) have been emerging, which may allow wineries to continue contracting for future supply.


3.       Improving efficiency to optimize productive assets. Growers expanding production in the San Joaquin Valley will need to invest in improved production technology to assure long-term price competitiveness with imports. In California’s north coast region, there may be opportunities to optimize the use of available fruit in wine brands that offer more attractive margins.


The report concludes that those U.S. wineries that do not implement adequate sourcing strategies will have limited ability to grow brands in the future.


About Rabobank Group

Rabobank Group is a global financial services leader providing wholesale and retail banking, leasing, real estate services, and renewable energy project financing. Founded over a century ago, Rabobank is one of the largest banks in the world, with nearly $1 trillion in assets and operations in more than 45 countries.  Rabobank is a premier bank to the global food, beverage and agribusiness industry, and has been financing leading food and agribusiness companies across North America for over 30 years.  Rabobank’s Food & Agribusiness Research and Advisory team is comprised of more than 80 analysts around the world who provide expert analysis, insight and counsel to Rabobank clients about trends, issues and developments in all sectors of agriculture.




Bordeaux 2012: Stream of small chateaux release but no big names yet


Source: Decanter

by Jane Anson in Bordeaux

Wednesday 17 April 2013


After Chateau Gazin started things off on Monday morning, a steady stream of smaller chateaux have released their Bordeaux 2012 wines, with a few healthy – and other less healthy – reductions, and a glimmer of hope that there may be a market for the wines.


Two Cru Bourgeois, Chateau Sénéjac was released this morning at ?7.80 ex-Bordeaux (-5% on last year), and Chateau Belle Vue at ?8.30 ex-Bordeaux; a healthier drop of 14% for a wine that was widely appreciated during last week’s tastings.


Fifth growth Chateau Camensac saw an 11% drop to ?14.40 ex-Bordeaux, while another Cru Bourgeois, Chateau Citran has come down 3.3% to ?8.75 ex-Bordeaux.


Yesterday, Chateau Le Prieuré in Saint Emilion and Pomerol’s Vray Croix de Gay both managed a slightly under 8% drop to ?21 and ?30 respectively.


Joss Fowler, head of fine wine at Fine+Rare, told, ‘There’s been nothing to get our customers excited about so far. From a commercial point of view, something needs to come out at the right price, and big enough to send a message. From a Bordeaux point of view, no one wants to be the litmus test and go first. They don’t want to be too cheap and fly out the door, but they don’t want to be too expensive and fail. So despite rumours of a quick campaign. I wonder.’


Jerome Jacober of Eminent Wines, a merchant based in London and Hong Kong, who works with many private clients and restaurants on the Chinese mainland, sees demand from his clients potentially picking up after a significant drop last year.


‘The big labels still count in China. But I want and expect a 25% price drop to assure client interest. It’s a tricky vintage, all about grapes and brands, but I will be recommending my clients to buy at the right price.’


‘As the Asian en primeur market is so young,’ added Fowler, ‘those who bought in 09 and 10 have only had experience of getting burnt. So just like in Europe and the US, it’s only seriously interesting prices that will tempt them.’


Alex Dolan, sales manager at Symbolic Wines, which is based in California but does half its turnover with Russian clientele, said, ‘The vast majority of our Russian clients still want the labels. En primeur represents under 10% of our turnover, but we expect that to go up this year, if we can offer good value.’


Also in California, but concentrating more specifically on the US domestic market, Chuck Hayward of JJ Buckley thinks chateaux need to be realistic about supply and demand. ‘Many wineries still have stock from the more expensive 2010 vintage, while the 2011s currently in barrel saw little demand when they were offered last year. In addition, consumers can buy older vintages at prices that rival the prices for 2009s and 2010s.’


NB in all En Primeur articles ‘ex-Bordeaux’ indicates the price from the negociants, ie the Bordeaux Place




Martignetti Companies Announces New Leader for Classic Wine Imports


Source: Martignetti Companies

April 17, 2013


Martignetti Companies, New England’s leading Wine & Spirits distributor has announced the appointment of Mary Masters to the position of Vice President of its Classic Wine Imports Division of Massachusetts effective May 1, 2013.


Masters, a Portfolio Manager with the company since 2006, has over twenty years of experience in the fine wine sector of the industry with a concentration on the distribution tier of the business.


Mark Fisher, Martignetti Companies’ President of Sales and Marketing commented, “Mary’s expertise within the fine wine arena; coupled with her leadership and interpersonal skills will prove to be an exceptional addition to Classic Wine Imports.  Her background and experience will bring a focused approach to the areas of distribution and qualitative execution within the Classic Division which will accrue to the benefit of our valued suppliers.”


Previous to her role as Portfolio Manager with Martignetti Companies, Mary held roles with Southern Wine & Spirits, Western Distributing and with National Distributing in Orlando, FL and Atlanta, GA.




BNA Wine Group Adds Mark Castaldi as Chief Operating Officer



April 16, 2013


BNA Wine Group has hired wine industry veteran Mark A. Castaldi as the company’s chief operating officer, with responsibility for full oversight of company operations, fiscal efficiencies, supply chain management, grower relations, grape procurement and other outside vendor contracts.


Castaldi has more than 20 years experience working and consulting in the wine, beverage and food industries. His extensive experience includes serving as COO or general manager for noted California wine companies, including Sonoma Wine Company, Schug Winery, Constellation Wine Company, Kendall-Jackson Wine Estates and Beringer Wine Estates.


“Mark is extremely well-connected in the wine industry and his operations experience will be invaluable as we take our young company to the next level,” said John Hooper, owner and president of BNA Wine Group LLC. “With Mark onboard we’ll have the solid operational foundation from which to expand our wine portfolio and distribution network.”


Currently, there are five wines in BNA Wine Group portfolio: Butternut Chardonnay, Bandwagon Pinot Noir, Bandwagon Chardonnay, The Rule Cabernet Sauvignon and Volunteer Cabernet Sauvignon. Retail prices for the wines range from $15-30.


In 2012, Hooper sold Tennessee Wine and Spirits distributing company, which his family founded in 1939, and teamed with Little Lion Wine Company founder and winemaker Tony Leonardini, and industry sales veteran Gary Carr to launch BNA Wine Group. The team has a keen understanding of both sides of the wine business and is dedicated to creating distinctive wines notable for taste and value.


BNA Wine Group is headquartered in Nashville, Tenn., but also has offices in St. Helena, Calif., where both Leonardini and Castaldi are based.




Chuck Wright Joins Phusion Projects’ National Account Team


Source: Phusion Projects

April 17, 2013


Phusion Projects today announced the hiring of Chuck Wright as the national account team lead. In this role, Wright will be tasked with the management of Phusion’s chain business in Arizona, Nevada and Southern California.


Wright brings nine years of experience to Phusion Projects and most recently worked at Lagunitas Brewery Company where he was the southwest regional sales manager. He also spent several years working at Diageo-Guinness as a distributor manager and off premise specialist, and Miller Brewing Company as a retail sales representative.


“Wright has great experience in the industry and will be a strong addition to our national account team,” said Robbie Farquharson, vice president of national accounts. “His addition to our company comes at a perfect time as we continue to see tremendous growth with all three of our brands.”


Wright resides in San Diego, Calif. and graduated from the University of South Carolina with a degree in marketing and management.




Pennsylvania: For Corbett, privatizing liquor stores is about saving his own job: As I See It


Source: Patriot-News

By Wendell W. Young IV

Patriot-News Op-Ed

April 16, 2013


It only took two years, but it appears that Gov. Tom Corbett has finally ‘fessed up about why he persists in trying to dismantle Pennsylvania’s wine and spirits shops: he really likes his job.


According to recent reports, the governor is leaning on fellow Republicans to support dismantling the Pennsylvania Liquor Control Board so he can bolster his reelection chances.


It would be more ironic than tragic if not for the stakes. Gov. Corbett wants to put as many as 5,000 PLCB employees and roughly 12,000 beer distributor workers out of a job so he can save just one: his own.


At least our governor has come clean and told voters the truth, a rarity in his first three years in Harrisburg. Time and time again, our governor has proven that he just cannot be trusted.


He promised to balance our state budget by spreading the pain across the board – on businesses and the middle class alike. Not true: He has given his business friends $800 million in tax cuts, made up by middle class taxpayers who have yet to see a single break.


He promised that by cutting corporate taxes, he would create jobs and the middle class would benefit. Not true. Our state unemployment is higher than the national rate and is headed in the wrong direction.


He promised to reform Harrisburg and change the way that ‘politicians’ in Harrisburg work. Not true. Our governor has taken yacht trips, helicopter rides, tickets to black tie galas and other goodies from corporate and lobbyist friends. It’s now been revealed that one of his corporate patrons, who paid for the governor’s private flights and a yacht vacation, is accompanying Gov. Corbett on a state-sponsored trade mission to South America, and previously joined him on a similar junket to France and Germany.


When pressed, his defense was that he didn’t break the law.


At least our governor has come clean and told voters the truth.


He promised to conduct a transparent government accountable to the voters. Not even close to the truth. Gov. Corbett continues to try and cut a backroom deal with a foreign company to outsource our state lottery. He signed the first deal – later ruled illegal by our Attorney General Kathleen Kane – without benefit of one single public meeting.


On the LCB issue, the governor continues to mislead. He strong armed the state House to rush a bill through without a single hearing (sound familiar?) because he simply cannot stick to the facts and make a compelling case.


Corbett claims the state stores make no money. Not true: They’re  currently running at 14.8 percent profit.


Corbett first claimed that an auction of liquor licenses would generate $2 billion; then it was $1 billion and, then $800 million. On this point, nobody knows how much the auction might generate because the bill was rushed through the process. But the record suggests that Gov. Corbett’s projections remain a pipe dream.


Corbett and his allies say that displaced workers will find new jobs. Not true. The governor’s own experts at Public Financial Management concede that 2,300 full-time equivalent employees will go on unemployment compensation and virtually no new jobs will be created. None. And that estimate did not include the impact on the 12,000 employees of our state’s beer distributors who could lose their jobs under Corbett’s current plan.


Finally, Gov. Corbett said that not one person has told him that privatization is a mistake. Not true. There are too many groups opposed to privatization to list here but a very quick sampling includes: Mothers Against Drunk Driving, PA Fraternal Order of Police, PA Chiefs of Police, Drug and Alcohol Service Providers Organization of Pennsylvania, The Commonwealth Prevention Alliance.


In addition, a taskforce of The U.S. Centers for Disease Control issued a recommendation against wine and spirit privatization because of increased public health risks, while not addressing Pennsylvania specifically.


The truth of the matter is that privatization is bad public policy: it will cost jobs, hike prices and increase underage drinking, drunk driving and other public health risks. Gov. Corbett cannot convince his fellow party members on the merits, so he needs to make it about keeping his job.


But UFCW is encouraged that public hearings when this complex and important issue are to be convened in the Senate. Our members are confident that issues are aired, the governor’s political wishes will lose to good old fashioned facts.


Wendell W. Young IV is president of Local 1776 of the United Food and Commercial Workers Union, which represents state liquor store employees.




Ireland: Further decline in alcohol industry sales


Source: Irish Times

Mark Hilliard

Wed, Apr 17, 2013


Alcohol sales in pubs has continued to decline while increases in related taxes have catapulted the wider drinks industry into further “chaos”, research published today has shown.


The Drinks Industry Group of Ireland (Digi) has warned that the current picture means the trend of job losses – 6,000 in Irish pubs since 2009 – will continue.


Its annual ‘Drinks Market Performance Report’ shows that the volume of pub sales has dropped by nearly one third in the past five years while consumptions levels have fallen by 0.5 per cent last year and by almost 20 per cent since 2001.


Digi points to a hike in alcohol product taxation of up to 41 per cent as being a major contributor, fortified by a shift in consumer habits.


Almost 60 per cent of alcohol sold in Ireland last year was done so in the off-licence trade, although the independent operators in this sector have also suffered a further decline in business.


“The figures in this report are stark; the Irish pub and independent off-licence sectors are in crisis and that crisis is being exacerbated by the huge tax hikes the sector has had to shoulder in the last 18 months,” said Digi chairman Peter O’Brien.


And things do not appear to be improving according to report author Anthony Foley of DCU’s Business School who says bar sales in January of this year dipped nearly 7 per cent on 2012.


“The overall market will be hit by the very large increases in excise levels in Budget 2013 and will decline slightly due to reduced average consumption and loss of consumers through emigration,” he said.


Digi has warned that apart from the obvious rolling impact on jobs, the decline in the industry is a threat to the tourism sector which relies on the ‘traditional pub’ and to local communities.


The report points to VAT increase from 21 per cent to 23 per cent in January 2012 and large excise increases in Budget 2013 resulting in beer excise increasing by 22 per cent, spirits by 18 per cent and wine by 41 per cent.


Digi warns that “the huge wine excise has had a particularly negative impact on the already hard pressed restaurant sector, and has counteracted any benefit from the introduction of a lower tourism VAT rate”.


Consumption too has taken its toll, it says, with average per adult rates decreasing by 0.5 per cent in the past year and by 19 per cent in since 2001.

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April 17, 2013

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Beverages: Keeping an Eye on CPI


Source: CITI

Apr 16th


Alcoholic Beverage Prices Were Up Again – The CPI for Alcoholic Beverages (Off-Premise) increased 1.1% in March, showing a sequential acceleration compared to the prior month (+0.8%). The CPI for Alcoholic Beverages (On-Premise) increased 2.6% this month, slightly up from the 2.3% increase seen in the previous month. The CPI for Beer (Off-Premise) increased 1.0% this month, in line with the 1.0% increase seen in the prior month. The CPI for Spirits (Off-Premise) was up 1.5% this month, above the 0.3% change seen in February. The CPI for Wine (Off-Premise) increased 0.9% in March, above the 0.7% increase seen in February.




China’s Fake Alcohol


Its black market in fake alcohol is a health risk and costly to legitimate restaurants and bars.


Source: The National Review

By Jillian Kay Melchior

Apr 16th


Two days before Christmas, Chinese authorities led a raid in the capital city. Their findings would be shocking, had it been anywhere but China: 37,000 bottles of counterfeit alcohol, destined for Bar Street in Sanlitun, a popular drinking hub for expats in Beijing.


A gang of counterfeiters had apparently been collecting empty bottles of genuine alcohol, refilling them with a cheap substitute from who knows where, and then reselling them to bars. The police arrested a handful of people, but expats suspected the bar owners had been complicit, too – how else could they afford to offer their famously strong “10 kuai drinks” (U.S. $1.61)?


China is notorious for forgeries and counterfeits. Earlier this year, the China Bee Products Association claimed that half of all honey sold in the mainland is fake. Kunming in Yunnan Province brims with artificial Apple shops, converted overnight to “Smart Stores” throughout the duration of government campaigns to stamp out intellectual-property violations. Before the final Harry Potter book was released in 2007, J. K. Rowling knockoffs, including Harry Potter and the Crystal Vase and Harry Potter and Leopard Walk Up to Dragon, made their way to Chinese bookstores, as CBS reported.


Shops at the Beijing Silk Market hawk everything from fake Adidas to fake Gucci. And near Drum Tower, I once saw a gift shop selling a suitcase full of phony American hundred-dollar bills.


Alcohol is yet another item that’s frequently counterfeited. Joe Passanante, an American doctor based in Beijing, tells me that “from what I’ve seen clinically, [counterfeit alcohol] seems to be a widespread problem,” adding that “being a physician, I think it’s personally happened to me.”


Like melamine-tainted milk and counterfeit pharmaceuticals, China’s fake alcohol can carry significant health risks. Sometimes, it’s merely an inferior alcohol – think two-buck Chuck – being substituted and sold as a pricier one. But counterfeiters also use chemically distinct alcohol that’s dangerous if consumed. It’s generally made from one of three bases: ethylene glycol, which is essentially antifreeze, attacks the kidneys and heart and is potentially fatal; methanol, which attacks the retinal nerve and can result in blindness; and isopropyl alcohol, more commonly known as rubbing alcohol.


Passanante says that from what he’s seen, he suspects most of the counterfeit alcohol in Beijing is isopropyl alcohol – though “we never know. There’s no specific test for it. . . . If it doesn’t kill you the night you drink it, most people will be fine.” The clearest indications are a slightly fruity breath smell and a crippling hangover the next morning, Passanante says.


As little as 250 milliliters – just over a cup – of isopropyl alcohol causes heavy intoxication and can reportedly be fatal, though people have survived after drinking much more. Passing out, imbibers can enter a coma. Those who die after drinking isopropyl alcohol generally drown in their own vomit or saliva. And “there are a lot of what appear to be responsible people ending up in a coma,” Passanante says.


Jeff Gi, an expert mixologist and the owner of Beijing’s Mai Bar, tells me he’s been approached by vendors who offered him fake liquor at hugely discounted prices. Known for his dedication to cocktail perfection – Gi often takes five minutes to fine-tune even the simple Hendricks and tonic – Mai Bar uses only genuine alcohol.


“But a lot of people use fake alcohol because they want to save money, and it’s cheap,” Gi says. “They don’t care about the quality or their customer’s experience . . . and they don’t care if you come back or not.”


Like any black-market product, China’s counterfeit alcohol is hard to quantify. Some big liquor producers collect their own statistics on the prevalence of alcohol counterfeiting, but they keep them secret, fearing their brand might become associated with fakery and therefore altogether avoided in China’s huge and emerging consumer-goods market, says Marjana Martinic, the deputy president of the International Center for Alcohol Policies.


The few estimates that have emerged are disturbing. George Chen, a restaurateur who specializes in wine, told TimeOut Shanghai that his best guess is that up to 80 percent of the city’s alcohol isn’t genuine – either not meant for consumption or an inferior substitute marketed as a higher-priced brand. The chief executive of Brown-Forman, maker of Jack Daniels, has claimed that one-third of the alcohol consumed globally is produced illicitly. And the World Health Organization has found that in Southeast Asia, homebrew or other illegally procured beverages account for 69 percent of overall alcohol consumption.


Even anecdotally, it’s evident that fake alcohol is a big problem in China. Barely a month after the December 23 crackdown, Beijing police busted a bigger ring, arresting 88 suspects and confiscating counterfeit alcohol worth $861,000. The state-run media reported in February that a single public-security officer was responsible for monitoring the alcohol quality in more than 20 Sanlitun bars, and when I was there in March 2013, 10-kuai drinks were still abundantly available.


Nor is alcohol counterfeiting limited to Beijing. Last November, authorities in Zhejiang Province discovered 10,000 bottles of fake Château Lafite Rothschild, valued at around $16 million. China’s nouveau riche crave wine as a status symbol, and sometimes the flamboyant display of wealth is more pleasurable than taste; the BBC has reported that around 70 percent of the Château Lafite bottles sold in China aren’t the real thing.


Two years ago, Chinese police reported that at least $33,800 in fake booze had been sold around Shanghai before 25 people were caught and arrested. In Huaihua, Hunan Province, police found counterfeit alcohol valued at $675,000 in 2011; and in Shoaxing City, Zhejiang Province, police broke up a $305 million operation that had sold counterfeit alcohol in 97 Chinese cities. The China Daily reported that the suspects “had allegedly poured cheap liquors into real containers . . . that they had bought from liquor vendors and rag pickers.” And those are just a few examples.


Counterfeit alcohol is not only dangerous – it’s also harmful to businesses, which are already contending with China’s complicated and often corrupt economic system.


“It’s a nightmare. It’s an absolute nightmare,” says Charlie, a veteran bartender in China who works at The Stumble Inn in Sanlitun, who declined to give his last name. “The fake booze hurts. If you poured it in your car, it would probably work. I’ve siphoned petrol out of a car before, and it was a more pleasant taste. But it’s a roaring trade. It’s a 10-kaui mojito, and people are cheap.”


Charlie tells me that fake alcohol presents “a massive problem, especially when you’re trying to run a good, clean establishment.” There’s the competition factor – a rum and Coke at Stumble Inn costs about 45 yuan, compared to 10 yuan for a drink of questionable origin across the street. Moreover, customers bar-hop in Sanlitun, starting the night out at Stumble Inn and ending up at a less reputable establishment. The next morning, they show up with a brutal hangover, and they want to blame Charlie for selling them fake booze.


Stumble Inn has coped by establishing a reputation for an honest drink. Each bottle of liquor is examined. The latest labeling information from the company is scrutinized, and the liquor is taste- and smell-tested before it’s served. Whenever possible, the bar uses vendors recommended by the liquor companies. When it can’t, it instead consults with other expat bars to find a supplier with a good reputation. Stumble Inn also withholds 40 to 60 percent of suppliers’ payments for at least 30 days, and if even one fake is discovered, “we stop dealing with them immediately, and they will not be paid,” Charlie says. He estimates the bar spends more than $800 a month on quality control for food and drinks.


Vouching for the integrity of alcohol can be difficult for suppliers, too, though. Chinese manufacturers expert in forging have been known to produce not only counterfeit bottles and counterfeit liquor – some also counterfeit the customs stamps and certifications that are supposed to mark the real deal.


Consequently, China’s bartenders have come up with their own tests. One tells me that Jack Daniels “is the benchmark. If they’re using it, I can smell it and I can taste it. It’s the most unique-smelling alcohol there is.” An additional perk? If it’s real, Jack Daniels will leave a white band around the perimeter of a glass when it’s mixed with Coca-Cola. The fake version doesn’t. Bombay and tonic is also a good test, bartenders tell me, because it has a slightly bluish tint when exposed to light. And seasoned drinkers can often taste the difference, too.


Of course, the fact that bartenders and bar owners feel the need to do their own diligence is telling. China’s black market in counterfeit goods challenges not only the health of its people but also its legitimate economy. It’s essentially a short-sighted approach   economics. And like fake alcohol, it can be expected to end in one hell of a hangover.




Cognac shipments down -7% in March, with Asia volatility continuing


Source: Barclays

Apr 16th

Global Cognac shipments fell -7% in March, a turnaround from the +10% reported in February, despite a soft comparable of -1%. Exports fell -6% (+5% in February), impacted by weak reported Asian shipments. There was also a meaningful fall in domestic shipments (5% of industry), down -20%. 12-month rolling industry volumes are now up +2.4% vs. the +2.8% rate in February.

Asian shipments were soft again, down -18% following the -11% drop last month. However, the comparable was particularly tough at +28%. Chinese volumes fell -29%, following the -22% drop in February, but was cycling a +78% comparable given the earlier Chinese New Year (CNY). We note next month’s comparable will remain equally tough at +79% given the stock build last year after the CNY celebrations and ahead of price increases. The rolling 12-month shipment trend into China is now +4%, compared to the prior double-digit run-rate (c.+10%). Singaporean shipments (the largest Asian market) fell -9% vs. a -2% decrease in February, while Hong Kong fell -40%; both are markets where most of the product ends up moving into China. Taking both of these markets into account, we estimate overall exports to China fell -21% in March vs. the 12-month trend which is still up +6% (this was +9% in February).

The US, the largest global export cognac market (c.30% of exports), reported shipments up only +1% (+11% in February) while some of the larger European markets also reported weaker trends; Germany -10%, Norway -36% and Russia -27%. However, the UK reported a solid result with shipments up 15%, a continuation of the strength we have seen year to date.

There continues to be volatility in the monthly cognac data with the March dataset still impacted by the shift in Chinese New Year in our view (difficult China comparable). The focus now is on price increases taken by the industry in March/April. LVMH mentioned on its Q1 sales analyst call (April 16th) that it has taken a 4.5% price increase on VSOP brands and slightly more on XO.

Given the favourable price/mix dynamics of brown spirits and attractive industry TSRs, we remain fundamentally positive on the major spirits companies and reiterate our Overweight ratings on Diageo (PT 2400p) and Pernod (PT EUR110). However, given the current uncertainty around consumer off-take in China and concerns over the future for gifting/banqueting in the region following the recent political transition, we accept Pernod may struggle to make significant headway until greater trading clarity is established. Diageo remains our preferred play for now given its leading position in the growing US market, benefits still to come from the United Spirits acquisition in India and favourable FX tailwinds.



Drinks industry “no role” to play in alcohol policy creation – WHO (Excerpt)


Source: Just-Drinks

By Ben Cooper

16 April 2013


The alcohol industry has “no role” to play in formulating alcohol policies designed to tackle alcohol-related harm, according to the director-general of the World Health Organization.


The claim was made by Dr Margaret Chan in a letter to the British Medical Journal (BMJ) last week. The creation of alcohol policies must be “protected from distortion by commercial or vested interests”, said Dr Chan, who also gave explicit support to the Global Alcohol Policy Alliance (GAPA), a consortium of health NGOs and academics that has voiced its opposition to industry engagement on the issue.




One small glass of wine a week fine during pregnancy, suggests study


Pregnant women who consume low levels of alcohol ‘no more likely to have children with cognitive or behavioural problems’


Source: The Guardian

17 April 2013


Women who drink one small glass of wine a week while pregnant are no more likely to have children with cognitive or behavioural problems as those who do not drink at all during pregnancy, research suggests.


Light drinking during pregnancy “is not linked to adverse behavioural or cognitive outcomes in childhood”, the new study found.


Previous studies have linked heavy drinking during pregnancy to health and development problems in children. But the authors wanted to examine the effects of low-level consumption.


In the new study, published in BJOG: An International Journal of Obstetrics and Gynaecology, more than 10,000 seven-year-olds took cognitive tests and their parents and teachers interviewed or asked to complete questionnaires.


The findings suggest that children born to light drinkers – those who drank two units or less a week – had lower behavioural difficulty scores than children born to mothers who abstained from drinking during pregnancy. Similarly they were found to have higher cognitive test scores for reading, maths and spatial skills tests.


When the authors adjusted the score for potential confounding factors, most of the results did not prove to be significant. But boys born to mothers who drank small amounts during pregnancy were found to have significantly better reading and spatial skills.


The paper concludes that while children born to light drinkers appeared to have more favourable developmental profiles compared with those born to mothers who did not drink during pregnancy, after statistical adjustment these differences largely disappeared.


“In this large, nationally representative study of seven-year-olds, there appeared to be no increased risk of a negative impact of light drinking in pregnancy on behavioural or cognitive development,” the authors wrote.


“Prior to statistical adjustment, children born to light drinkers appeared to have more favourable developmental profiles than children whose mothers did not drink during their pregnancies, but, after statistical adjustment, the differences largely disappeared.


“Our findings . support the suggestion that low levels of alcohol consumption during pregnancy are not linked to behavioural or cognitive problems during early to mid-childhood.”


Prof Yvonne Kelly, co-author of the study from University College London, said: “There appears to be no increased risk of negative impacts of light drinking in pregnancy on behavioural or cognitive development in seven-year-old children.


“We need to understand more about how children’s environments influence their behavioural and intellectual development. While we have followed these children for the first seven years of their lives, further research is needed to detect whether any adverse effects of low levels of alcohol consumption in pregnancy emerge later in childhood.”


The government’s advice to women who are pregnant or trying to conceive is that they should avoid alcohol altogether.


But if they choose to drink they should not consume more than one or two units once or twice a week.




Top 10 biggest US craft brewers


Source: the drinks business

by Andy Young

15th April, 2013


The Brewers Association, a not-for-profit trade group that collates production statistics for the US brewing industry, has released details of the top craft breweries in the US.


Craft beerThe association describes an American craft brewer as “small, independent and traditional”.


Small means that the brewer has an annual production of six million barrels of beer or less, “flavoured malt beverages are not considered beer for purposes of this definition”.


Independent means that “less than 25% of the craft brewery is owned or controlled by an alcoholic beverage industry member who is not themselves a craft brewer”. And traditional relates to “a brewer who has either an all malt flagship (the beer which represents the greatest volume among that brewers brands) or has at least 50% of its volume in either all malt beers or in beers which use adjuncts to enhance rather than lighten flavour.”


The association claims that there are more than 2,000 breweries in the US and 97% of these are “small and independent”, adding that “on average, most Americans live within 10 miles of a brewery, and hundreds of thousands of people have toured or tasted at their local brewery.”


Craft beer sales are booming in the US and the association said: “Nielsen research confirmed that beer drinkers are shifting to more robust beer styles and we know from Information Resources that seasonal beer is one of the top selling craft beer categories.”


Speaking about these results Paul Gatza, director of the Brewers Association, said: “In 2012, craft surpassed 6% of the total US beer market, with volume and dollar sales reaching record levels. Increasingly, beer lovers are turning to craft brewed beer from small and independent producers to satisfy their thirst for bold, innovative and flavour-forward beers.”


Click through the following pages to find the top 10 US craft brewers, based on 2012 beer sales volume.




NABCA – Register for the 76th Annual Conference


Source: NABCA

Apr 16th


Dates:  May 15-19, 2013

Location:  Phoenix, Arizona


Please remember to register with NABCA by next Monday, April 22, 2013 before the fees increase!  The Arizona Biltmore room block has sold out, please contact the Meetings Department for an alternate list of hotel options.  We recommend making a reservation with one of these hotels as soon as possible.  Visit for registration and rooming details.


For questions, please contact the Meetings Department at or 703-578-4200.  Thank you!




Direct-to-consumer wine sales outperform overall US wine exports: Report


Source: DBR

17 April 2013


The US direct-to-consumer wine sales has increased by 10% to $1.46bn in 2012, which is greater than the overall value of wine exports in the US, according to 2013 Direct Shipping Report by ShipCompliant and Wines & Vines.


The report was prepared by combining the different transactions processed through ShipCompliant Direct compliance platform and Wines & Vines’ comprehensive database of wineries to find out the consumer shipping channel of a winery.


According to the report, the volume of wines shipped directly to consumer increased 7.7% to more than 3.17 million nine-liter cases in 2012, when compared to 2011 figures.


Among different region wineries, Napa County wineries topped the sales list with $713m worth of wine shipped in 2012. However, the value was less than the overall wine shipping channel.


ShipCompliant CEO Jason Eckenroth said the report will guide wineries emphasizing the importance of direct-to-consumer channel.


“The idea is to give wineries not just the systems to help sell to consumers, but also new ideas and insights to apply to wine sales and marketing,” Eckenroth.


US-based ShipCompilant provides wine and spirits suppliers and importers with automated alcohol beverage compliance tools.




Moscato drives US wine sales to new heights


Source: Decanter

by Chris Mercer in California

Tuesday 16 April 2013

Sales of wine in the US hit a new record in 2012, spurred on by drinkers’ growing thirst for Moscato.


Figures released by the California-based Wine Institute show that Moscato sales rose by a third in volume last year in US chain retailers, excluding bars and restaurants.


The grape variety, which has been talked up by hip-hop stars such as Lil’ Kim and Kanye West, now commands a 6% share of wine bought in retail chains, where it is more popular than Sauvignon Blanc and only two percentage share points behind Pinot Grigio.


Moscato’s rise, based largely on the lower-alcohol, lightly sparkling style, helped overall wine sales in the US to rise by 2% in 2012, to 360.1m cases. Sales rose by 5% in value, to US$34.6bn.


‘It is likely that American [wine] consumption will continue to expand over the next decade,’ said wine industry consultant Jon Fredrikson, of Gomberg, Fredrikson & Associates.


He cited strong demographics and better distribution, noting too that Facebook Gifts and Amazon have both moved into online wine sales. Direct wine shipping is now allowed in 39 US states.


‘Consumers have more access to wine with wine-selling locations expanding by well over 50,000 from five years ago,’ added Danny Brager, vice president of beverage alcohol practice at Nielsen.


California accounted for 58% of wine sales by volume and close to 64% of sales by value in the US last year.


Other varietals performing well in chain retailers included Malbec, which saw volume sales rise by a fifth in this channel off a low base. Sweet red wine is also considered a style to watch.




Non-sulphur wines ‘a reality’ with natural preservative


Source: the drinks business

by Rupert Millar

16th April, 2013


Integrapes, a company in Italy, is currently testing an anti-oxidant and anti-bacterial preservative derived from grape pips that it claims is as effective as sulphur.


Furthermore, the wine is supposed to retain more of its natural aromas, particularly the more delicate floral aromas that sulphur can cover.


Derived from the polyphenols found naturally in grape seeds, the resulting solution is added to the must and wine at various points in the winemaking process.


The kits vary only slightly for red, white, rosé and sparkling but essentially involve one litre of the preservative added to every 20 hectolitres of wine at the end of the alcoholic and then malolactic fermentations and then prior to bottling.


The resulting wine is then non-sulphur but supposedly with the potential to age, something many “natural” wines are criticised for not doing.


Commercial director, Donatello Calaprice, told the drinks business that the company had been experimenting and conducting trials for the past seven years and still had wines from that time which are drinkable.


He described the method as a form of “homeopathy”.


Integrapes compares four figures regarding levels of sulphur, anti-oxidants (in vitro using both the Folin-Ciocalteu Index and ORAC Unit) and pigmentation (anthocyanins C3GE) in wines using sulphur and those using Integrapes method.


In nearly all cases, wines (red, white and sparkling) produced with Integrapes’ solution outperform those produced with sulphur.


For example, a 100% Cabernet Sauvignon displayed sulphur levels of 2mg per litre, registered 50.05 on the Folin-Ciocalteu Index, 120.33 C3GE/100ml (anthocyanins equivalent) and 16,665 ORAC Units.


By contrast, the Cabernet Sauvignon produced normally displayed equivalent results of: 41mg/L SO2, 35.55 on the Folin-Ciocalteu Index, 32.22 C3GE/100ml and 11,820 ORAC Units.


The product has been endorsed by one of Italy’s leading wine writers Luca Maroni, who is also collaborating in the on-going tests.


He has stated: “I have tasted hundreds of wines from around the world developed without sulphur dioxide (natural, organic, biodynamic, etc.).


“But so far each of these has turned out to be, irreversibly, off, oxidised or stained by oenological processing defects which compromise the integrity of the fruit.


“Then I tasted the first white wine produced with the Integrapes method and the fruit was blameless, pure and oxidatively still intact.


“The dream of wine without added sulphites in now a reality.”




Parker and Galloni settle dispute


Source: Decanter

by Adam Lechmere

Tuesday 16 April 2013

Robert Parker’s Wine Advocate and its former correspondent Antonio Galloni have settled their dispute out of court.


Antonio Galloni told he could make no comment on the confidential settlement but he said the dispute had been resolved amicably.


On the bulletin board, Robert Parker said, ‘We are pleased to announce that The Wine Advocate and [Galloni’s company] All Grapes Media have resolved all of our outstanding issues amicably, and The Wine Advocate has withdrawn its lawsuit against Mr Galloni and All Grapes Media.’


In March, the Wine Advocate announced it was suing its former California correspondent for breach of contract, fraud and defamation.


Galloni, who was contracted by the influential wine journal for a reported US$300,000 a year to cover California wines, resigned earlier this year after a majority share in the Wine Advocate was bought by a group of Singaporean investors.


The crux of the Wine Advocate’s suit was a report on Sonoma wines that Galloni was due to deliver, explaining to subscribers on his new website that he would not be able to do justice to the diversity of the region in time for the Wine Advocate’s February issue.


Parker said, ‘We expect that Antonio’s Sonoma report will appear in the April issue of The Wine Advocate and that Antonio’s Brunello reviews will be added to our data base sometime in May. We thank our subscribers for their patience during this period.’




20 Individuals From Across the United States Earn Title of Advanced Sommelier


Martin Sheehan-Stross of San Francisco Takes Home the Rudd Scholarship



Apr 15th


Five days of intense examination culminated today with 20 new names being added to the Court of Master Sommeliers, Americas list of distinguished Advanced Sommeliers.


Held at Disney’s Grand Californian Resort from April 8-12, 39 candidates sat for the exam, which is the third in a series of four increasingly challenging tests of knowledge and skill offered by the court. At this level, candidates with a superior understanding of wine theory and beverage service, as well as a highly sophisticated tasting ability, are distinguished from the thousands of wine service professionals who attempt the court’s exams on a yearly basis. Of the 20 passers, one rose to the top as the exam’s highest scorer. Martin Sheehan-Stross of San Francisco earned the Rudd Scholarship, offered by the Guild of Sommeliers, which provides funds toward the coursework needed to prepare for the Masters Exam and an invitation to attend the prestigious Rudd Masters Roundtable in Napa Valley, California.


By the time candidates reach the Advanced Examination, most have already invested years of study, in addition to significant time working in and around the beverage industry. From here, they’ll set their sights on the Court’s Master Sommelier Diploma Exam, which just 197 individuals worldwide have ever managed to pass.


“The dedication and talent needed to pass this portion of the exam and succeed in this field is tremendous,” said Shayn Bjornholm, the examination director for the Court of Master Sommeliers, Americas. “It is a pleasure to see such impressive qualities in these 20 individuals, and their commitment and enthusiasm is an inspiration to the industry.”


“I am pleased to welcome these exceptional individuals to the next level in wine education,” said Greg Harrington, dhairman of the Court of Master Sommeliers, Americas. “They should all be, as we are, extremely proud of their achievements.”


The complete list of candidates who earned the title of Advanced Sommelier at the recent Anaheim, California exam includes:


    Martin Beally (Seattle, WA)

    Caryn Benke (Andina Restaurant, Portland, OR)

    Paul Coker (Stonehill Tavern at St. Regis, Monarch Beach, CA)

    Lauren Collins (L’Espalier, Boston, MA)

   Nicholas Daddona (Boston Harbor Hotel, Boston, MA)

    Michael Dolinski (Restaurant Gordon Ramsay at the London, New York, NY)

    John Filkins (Wit & Wisdom, A Tavern by Michael Mina at Four Seasons, Baltimore, MD)

    Alexander Good (Alloy Dining Ltd., Calgary, Alberta, Canada)

    Sean Isono (Halekulani, Honolulu, HI)

    Carlin Karr (Frasca Food & Wine, Boulder, CO)

    Patrick Miner (Ruth’s Chris Steakhouse, Walnut Creek, CA)

    Jeremiah Morehouse (SPQR, San Francisco, CA)

    Steven Murphey (Mid-State Wine and Liq., Houston, TX)

    Carolyn Peete (Charleston, SC)

    Cameron Porter (Los Olivos Wine Merchant and Café, Los Olivos, CA)

    Benjamin Roberts (Masraff’s Restaurant, Houston, TX)

    Martin Sheehan-Stross (San Francisco, CA)

    Jonathan Sloane (Quince, San Francisco, CA)

    Ryan Stetins (Napa, CA)

    Shane Taylor (Blue Water Café, North Vancouver, British Columbia, Canada)


About the Court of Master Sommeliers

The Court of Master Sommeliers was established in England in 1977 to encourage improved standards of beverage knowledge and service in hotels and restaurants. The first Master Sommelier Diploma Exam to be held in the United States was in 1987. The title Master Sommelier marks the highest recognition of wine and spirits knowledge, beverage service abilities, and professionalism in the hospitality trade. Education was then, and remains today, the Court’s charter. There are four stages involved in attaining the top qualifications of Master Sommelier: 1) Introductory Sommelier Course; 2) Certified Sommelier Exam; 3) Advanced Sommelier Course; and 4) Master Sommelier Diploma. There are 129 professionals who have earned the title of Master Sommelier as part of the Americas chapter since the organization’s inception. Of those, 111 are men and 18 are women. There are 197 professionals worldwide who have received the title of Master Sommelier since the first Master Sommelier Diploma Exam. For more information, visit




William Grant & Sons appoints new US chief (Excerpt)


Source: Just-Drinks

By James Wilmore

16 April 2013


William Grant & Sons has promoted one of its senior executives to the role of managing director and president of its US division.


The appointment of Jonathan Yusen, currently the company’s senior US marketing VP, was announced by the UK-headquartered group today (16 April). Yusen replaces Simon Hunt, who was recently promoted to the newly-created role of the group’s chief commercial officer, the Glenfiddich distiller said.




Mendocino Wine Company Names Verónica E. Portello as Western Division Manager


Source: Balzac

Apr 16th


Mendocino Wine Company, a family-owned wine company based in Mendocino, California, has named Verónica E. Portello as Western Division Manager, effective April 8, 2013.


With over 19 years of experience in the wine and spirits industry, Portello is a proven performer. Prior to joining Mendocino Wine Company, Portello spent time at Freixenet as their West Division Sales Manager, Vice President of National Accounts at Huneeus Vintners, and at Aveniu Brands as Regional Sales Director.


“Having called on the entire west at some time or another, I am thrilled to take on the division manager position at Mendocino Wine Company,” said Portello. “Brand building is my strength, and I look forward to working closely with the distributor network in promoting, growing and educating the public on the fantastic wines of MWC. Working alongside the Thornhill family and with industry veterans such as Gary Glass and John Girty will be a great honor for me.”


“We are very excited to have Verónica on our team,” stated Chase Thornhill, Senior Brand Manager for Mendocino Wine Company. “With her years of knowledge and experience she’s a perfect fit, and we look forward to growing the brands with her help.”


About Mendocino Wine Company

Formed in 2004, the Mendocino Wine Co. (MWC) owns and operates Parducci Wine Cellars, Mendocino’s oldest winery, as well as Paul Dolan Vineyards, Sketchbook and Wines That Rock, among others. The Thornhill family continues the tradition of making award-winning wines using sustainable wine growing and land use practices.




Tesco profits halve as supermarket group confirms US exit


Tesco, Britain’s biggest retailer, has reported its first fall in profits since the early 1990s after its decision to pull out of the US cost more than £1bn and a slowdown in sales in the UK also hit the company.


Source: Daily Telegraph

By Graham Ruddick

17 Apr 2013


Philip Clarke, chief executive, said the results “are natural consequences of the strategic changes we first began over a year ago and which conclude today”.


Mr Clarke launched a strategic review of Tesco’s US venture Fresh & Easy last year and has now confirmed that the company will exit the business.


Sir Terry Leahy, Mr Clarke’s predecessor, launched Fresh & Easy in 2007 but it is yet to make a profit.


In order to exit Fresh & Easy, Mr Clarke has been forced to book a £1bn writedown on the value of Tesco’s assets in the US. On top of £169m of trading losses in the last year, this means the US venture has wiped £1.2bn from profits.


In the UK, Tesco has also written off £804m after deciding not to build stores on more than 100 sites that it controls.


The company said: “We have reviewed all of the schemes included in the pipeline individually, assessing their viability and potential to deliver an appropriate level of return on capital employed if built out.


“As a result, we have identified more than 100 sites – the majority of which were bought between five and ten years ago, at a higher point in the property cycle – which we no longer plan to develop and have therefore written their values down.”


Last year, Mr Clarke launched a £1bn investment plan to revitalise Tesco in the UK after it was forced to warn that profits would be lower than expected.


This plan included hiring more staff, revamping stores, and relaunching food ranges, such as converting Tesco Value into Everyday Value.


Mr Clarke said Tesco is making “real progress” in the UK.


However, trading profits in the 52 weeks to February 23 fell 8.3pc to £2.3bn.


In total, Tesco reported pre-tax profits of £1.96bn, a 52pc drop on last year. However, this does not include the US writedown, which has been accounted for as a discontinued operation. When this is included, Tesco made just £120m after tax, compared to £2.8bn last year.


The company held its final dividend at 10.13p.


Mr Clarke said: “The announcements made today are natural consequences of the strategic changes we first began over a year ago and which conclude today.


“With profound and rapid change in the way consumers live their lives, our objective is to be the best multichannel retailer for customers.


“Our plan to ‘Build a Better Tesco’ is on track and I am pleased with the real progress in the UK. We have already made substantial improvements to our customers’ shopping experience, which are starting to be reflected in a better performance.


“We have set the business on the right track to deliver realistic, sustainable and attractive returns and long-term growth for shareholders. The consequences are non-cash write-offs relating to the United States, from which we today confirm our decision to exit, and for UK property investments which we will not pursue because of our fundamentally different approach to space.


“We have also faced external challenges which have affected our performance, notably in Europe and Korea.


“Our focus now is on disciplined and targeted investment in those markets with significant growth potential and the opportunity to deliver strong returns.”




Target lowers Q1 sales and profit forecast


Source: RT

By Mike Troy

April 16, 2013


Softer than expected sales trends prompted Target to lower its first quarter earnings outlook Tuesday morning.


The company said it now expects first quarter comps to be flat, after previously forecasting a range of flat to 2% growth. The softer than expected sales prompted the company to revise first quarter adjusted profit expectations to an unspecified level of “slightly below” earlier guidance of $1.10 to $1.20.


The reduced guidance was offered as part of a financial update connected to the company’s recent settlement of a debt tender offer and credit card portfolio sale. According to the company, factors contributing to the reduction included losses related to the early retirement of debt of approximately $445 million, or 41 cents per share and expected earnings per share dilution of 23 cents related to the company’s Canadian segment somewhat offset by accounting gains of approximately 36 cents associated with the sale of Target’s entire consumer credit card receivables portfolio to TD Bank Group.


The sales weakness was characterized as softer than expected, but Target chairman, president and CEO Gregg Steinhafel did offer a heavy dose of pessimism when sharing his first quarter outlook back in February when fourth quarter results were reported.


“As we enter 2013, we will plan appropriately, as the U.S. economy is growing at a painfully slow rate and unemployment remains persistently high,” Steinhafel said during the company’s fourth quarter conference call. “While there are some encouraging signs in the housing market, volatility in consumer confidence, the payroll tax increase, and rise in the price of gas all present incremental headwinds. Given these new challenges facing an already sluggish economy, we have a tempered view of the near-term sales environment.”


Despite the first quarter weakness, Target maintained its full year profit forecast which calls for adjusted earnings per share in the range of $4.85 to $5.05.


Target currently operates 1,784 in the United States and 24 units in Canada.




Minnesota: Minnesota brewers, liquor lobbyists say proposed alcohol tax hike will hit consumers


Source: Associated Press

By Kyle Potter

Apr 16th


Lawmakers’ plan to boost alcohol taxes in Minnesota could add as much as $2 to the cost of a standard 12-pack of beer, local brewers and liquor lobbyists said Tuesday as they tried to rally opposition to the proposed tax spike.


House Democrats argue that a hike in Minnesota’s alcohol excise tax, which was part of the tax package they unveiled Monday, would be a small, 7-cent-per-drink increase to help the state raise revenue and pay for the social costs of alcoholism. But executives at two of Minnesota’s largest homegrown breweries said the proposal would quadruple their annual tax bills and eventually hit beer drinkers’ wallets.


“Ultimately, we throw our customers under the bus and expect them to pay for this,” said Mark Stutrud, founder and CEO of St. Paul’s Summit Brewing. “I’m terribly uncomfortable.”


Minnesota charges brewers and wholesalers that sell their products in the state a different excise tax rate based on the type of alcohol. Currently, brewers including Summit pay the state $4.60 for every 31-gallon barrel they brew. Liquors and other spirits are currently charged $1.33 for each liter bottle. For bottles of wine, it varies based on alcoholic content.


Those rates haven’t changed since 1987. The House tax bill looks to bump up all of those taxes, by as much as $27.75 for each barrel of beer.


Summit expects to brew about 120,000 barrels of beer this year, Stutrud said. Even after a $1.4 million tax credit, the proposed increase would

increase Summit’s tax bill to the state from about $550,000 last year to about $1.9 million. Ted Marti, president of August Schell Brewing Co., said he expects a similar figure for his brewery in New Ulm, Minn.


Stutrud and other opponents of that increase said it would compound as a barrel travels to the consumer: Brewers will hike their prices to distributors to cover the cost of the tax increase, then distributors will do the same before selling to retailers. Eventually, the trickledown results in higher prices on bar menus and liquor store shelves.


“It’s not 7 cents a drink anymore. It’s terrible spin. It’s a lie,” Stutrud said.


House Tax Committee Chairwoman Ann Lenczewski, DFL-Bloomington, said she doesn’t buy that argument.


Lenczewski said the projected revenue from the excise tax increase would do little to tackle an estimated $3 billion in costs for alcohol abuse.


“We’re trying to get the high users of alcohol to help the state recoup some of its costs,” she said.


Lenczewski said the bill deliberately provides extra help to Minnesota brewers small and large. It includes a tax credit that wipes out the excise tax for up to 50,000 barrels a year, so microbreweries would be off the hook. Brewers and wholesalers who sell more than 200,000 barrels a year aren’t eligible.


“They don’t feel that way because it’s a tax increase, but they’re getting special, preferential tax treatment,” she said.


Stutrud said Summit is on track to pass that 200,000-barrel threshold in the next five to six years, and August Schell may do the same. That means both companies could lose that tax credit.


Even at that point, Marti said: “You’re by no means a large brewer.”




Mississippi: Governor vetoes bill allowing transport of liquor through dry counties


Source: Associated Press

April 16,2013


Gov. Phil Bryant has vetoed a bill that would have allowed Mississippians to transport a limited amount of unopened alcohol through dry counties.


Senate Bill 2526 was passed during the waning days of the 2013 session. The bill would let a person buy the liquor in a wet county and drive through dry counties to another wet county. The bill also set limits on how much unopened liquor could be transported.


In his veto message, Bryant said the bill would undermine illegal liquor enforcement in Mississippi.


He said state law barring possession of alcohol in a dry county is straightforward.


“However, if the law is amended to permit the carrying of alcohol through such jurisdictions, then officers will be required to question every person they encounter who is in possession of alcohol to determine whether the person is merely passing through on his or her way to a wet jurisdiction.


“Further, such a person could create an issue of fact, and probably require a full-blown trial, simply by claiming that he or she was on his way to a wet county. Consequently, the prohibitions applicable in dry counties would be much more difficult to enforce,” Bryant said.


Mississippi in 1966 became the last state in the nation to legalize liquor sales, but only in counties that agreed to exempt themselves from the state’s prohibition. Mississippi has a patchwork of “wet” and “dry” counties.

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Billionaire William Koch wins $12 million in courtroom wine fraud battle


Wealthy wine collector says he will use the money to further his campaign to highlight counterfeiting of bottles


Source: The Guardian

Saturday 13 April 2013 10.31 EDT


A jury has awarded the Florida billionaire Bill Koch $12m in his long-running dispute over phony vintage wine. Vowing to do more to expose wine frauds, Koch proclaimed the court win on Friday to be his happiest day since winning the America’s Cup in 1992.


“Out of sight. Over the moon,” he said as he described his feelings after emerging, giggling with glee, from a courtroom in US District Court in Manhattan. “We weren’t even expecting any damages and we got $12m. Unbelievable.”


The verdict went against the businessman Eric Greenberg, who insisted that he had not intentionally sold a fake bottle of wine in auctions that generated about $42m for him over an eight-year period. The trial involved alleged that counterfeit bottles of Bordeaux were labeled as if they were made from 1864 to 1950. In a statement, Greenberg called the verdict “a disappointment because I believed all the consigned wine to be authentic”. Outside court, Greenberg declined to comment further.


Koch’s lawyer, John Hueston, suggested that a criminal investigation of Greenberg was underway, saying: “We’re co-operating with the FBI.” He declined to elaborate.


In a chilly drizzle outside court, the 72-year-old Koch celebrated with his lawyers, posed for pictures and met briefly with at least one of the eight jurors who decided on Thursday that Koch had been defrauded, awarding him $380,000 in compensatory damages.


Jurors returned Friday to hear Koch and Greenberg testify again and deliberate over punitive damages. “I’m very sorry I had counterfeit wine,” Greenberg told them. “It’s a horrible thing. Both of us have lost millions of dollars.” The verdict was another blow to Greenberg, a former billionaire who built two internet consulting companies before the 2000 collapse of those stocks reportedly reduced his net worth by as much as 90%.


Koch said he planned to use the $12m to continue his crusade to clean up the wine auction industry, including by creating a website that highlights fake wines and who sells them. He said he would include in the list the 421 bottles he had identified in his own collection as fake after buying them for $4.4m.


“I’m sad at the amount of fakes,” he said. “That’s why I stopped buying very old wines.”




Distell buys international whisky distilleries for $244m


Source: Engineering News

By: Natasha Odendaal

15th April 2013


South African wines, spirits and flavoured alcoholic beverage producer Distell is expanding its global exposure with the acquisition of Scotch whisky producer Burn Stewart from CL World Brands (CLWB) and Angostura for $244-million.


The deal would see the JSE-listed group take over three Scotland-based malt whisky distilleries – Tobermory, located on the Isle of Mull; the Isle of Islay-based Bunnahabhain; and Deanston, in Doune, near Stirling – producing a total of 6.7-million litres a year of alcohol.


The Glasgow-headquartered Burn Stewart, which maintained a strong portfolio of blended and single malt whiskey brands, also had a branch in Taiwan and had partnered with Distell in a joint venture operation in sub-Saharan Africa.


“Burn Stewart’s strong presence in the UK, Taiwan and other countries provides Distell with enhanced sales platforms and route-to-market opportunities,” the company said in a statement on Monday.


The acquisition also filled a “category gap” in the South African group’s portfolio and would provide access to a “highly attractive” sector, the company explained, citing the growing demand for Scotch whiskey.


Over the past decade, Scotch whisky exports rose 87%, reaching £4.3-billion, while single malt exports jumped 190% from £268-million to £778-million.


“Rising demand for Scotch whisky from both mature and emerging markets saw the value of exports grow for the eighth consecutive year,” Distell commented.


The South African company said it would retain Burn Stewart’s MD and senior executive management. Burn Stewart would also continue to bottle and distribute for the Caribbean-based rum producer Angostura.


Distell released an initial payment of $229-million on April 12 and a contingent amount of $15-million would be payable in cash in the next year, subject to Burn Stewart achieving a specific earnings before interest, tax, depreciation and amortisation.


CLWB parent company, Trinidad-based CL Financial, would appoint two directors to the board of Burn Stewart for the duration of the contingent consideration, Distell noted.




Missouri: Major alcohol suppliers, local distributors face off in court


Source: St. Louis Post Dispatch

By Lisa Brown

Apr 14th


A battle brewing in local courtrooms and in Jefferson City could dramatically reshape the way wine and spirits are distributed in Missouri.


Lawsuits involving the country’s largest liquor suppliers began piling up in federal court in St. Louis in recent months as they seek to end deals with local distributors.


The most recent one was filed last week, which pits St. Louis-based wine distributor, Garco Wine Co., against Constellation Brands in Victor, N.Y..


Spirits suppliers Diageo Americas and Bacardi USA already have filed suit against St. Louis-based Major Brands, the state’s largest wine and spirits distributor, seeking to terminate distribution deals. Alcohol importer Pernod Ricard also filed suit against Major Brands and St. Charles-based Glazer’s Midwest, a unit of Dallas-based Glazer’s Inc.


While the litigation unfolds, Missouri lawmakers are renewing efforts to change state liquor laws to help local distributors, a year after similar legislation was vetoed by Gov. Jay Nixon.




After the repeal of Prohibition in 1933, the three-tier distribution system was created. It requires alcohol producers and suppliers to sell their products to distributors, who then sell the beverages to retailers.


In Missouri, the Franchise Act was amended in 1975 to clarify that liquor distributors’ relationships with their suppliers were deemed franchises.


But in recent years, legal efforts to challenge distributors’ status as franchisees have intensified, as suppliers seek to consolidate the number of distributors they use across the country to cut costs.


Opponents say consolidation will be the death knell for independent distributors like Garco Wine and lead to a handful of megadistributors that are more difficult to regulate for state authorities.


The ruckus in Missouri started with a 2011 federal court decision that gave suppliers the upper hand. In Mo. Bev. Co. vs. Shelton Bros. Inc., the U.S. District Court for the Western District of Missouri ruled that a business relationship between Missouri Beverage Co., a distributor, and Shelton, a Massachusetts-based supplier, was not that of a franchisee-franchisor under Missouri law.


The court reasoned that a franchise relationship didn’t exist because Shelton hadn’t granted Missouri Beverage the use of its trademarks. It also ruled that a “community of interest” didn’t exist between the two parties, in part, because Missouri Beverage wasn’t economically dependent on Shelton.


That ruling – which was affirmed last year by the 8th U.S. Circuit Court of Appeals – prompted distributors, including Major Brands, to support legislation last year to rewrite Missouri law to make it more difficult for suppliers to terminate their relationships with distributors.


But the legislation was vetoed by Nixon in July, in part, because of a potential negative impact on the state’s wine growers.


As similar legislation is pending before the Missouri Legislature, suppliers are taking this window of opportunity to terminate their agreements with distributors.


In late March, Constellation Brands – one of the largest wine and spirits suppliers in the country, with brands including Robert Mondavi and Svedka vodka – notified St. Louis-based Garco Wine that it would stop fulfilling its orders, effective April 30.


Garco, which has distributed Constellation’s brands in Missouri since 2004, sued Constellation in federal court in St. Louis on Tuesday, alleging Constellation wrongfully terminated its franchise relationship with Garco without good cause, thus violating Missouri law.


Garco’s sales of Constellation products totaled more than $5.6 million last year, representing 37 percent of Garco’s total sales revenue. That high level of sales constitutes a “community of interest” between the parties that offers protections to Garco under Missouri law, Garco argues in its lawsuit.


The breakup between the two companies occurred after Constellation demanded a change to their agreement.


The wine and spirits supplier asked Garco to submit a proposal as part of a “request for commitment” process – essentially asking Garco to accept that its agreement with Constellation was over and that it would have to reapply.


To participate in the proposal process, Constellation asked Garco to relinquish its rights to sell Constellation products and release Constellation from lawsuits and other claims related to the termination of its distributor agreement with Garco.


Garco refused, and alleged in its breach of contract lawsuit that Constellation is prohibited under Missouri law from terminating their agreement without good cause.


“If Garco’s relationship is terminated by Constellation Brands, Garco will lose its customers and those business relationships it developed to a new wholesaler appointed by Constellation Brands, despite the fact that it was Garco’s efforts and business acumen that cultivated those relationships for the sale of Constellation Brands’ products in Missouri,” Garco states in the suit.


An attorney representing Garco and its president, Michael Cohen, declined to comment. Constellation also declined to comment on the lawsuit.




In other cases, alcohol suppliers are the ones filing lawsuits against distributors.


In January, New York-based Pernod Ricard USA sued its two Missouri distributors, Major Brands and Glazer’s Midwest, seeking court approval to terminate agreements with both companies. Pernod Ricard’s brands include Absolut Vodka, Kahlúa Liqueur and Seagram’s Extra Dry Gin.


In March, both Diageo Americas Inc. and Bacardi USA also filed suit in federal court in St. Louis, seeking to terminate their distributor agreements with Major Brands, and Major Brands countersued.


In its lawsuit, Pernod Ricard argues Missouri franchise law doesn’t apply to its agreements with Major Brands or Glazer’s because sales of its products at either distributor are no more than 6 percent of their total sales – not enough to constitute a “community of interest,” according to Pernod Ricard.


While that case is still pending, Pernod Ricard announced Tuesday that it selected Major Brands as its exclusive distributor for all its wine and spirits brands in Missouri, effective May 1, and Glazer’s will continue to distribute Pernod products in Arkansas and Kansas.


“The lawsuit is still pending and at this point, there are no plans to drop it,” said Pernod Ricard spokesman Jack Shea. “Our decision to appoint Major Brands as our distributor in Missouri underscores our belief that market forces are sufficient to determine business relationships.”




As the franchise lawsuits make their way through the courts, lawmakers in Missouri again are pushing new legislation, Senate Bill 365 and House Bill 759, that would make it more difficult for alcohol suppliers to sever their relationships with distributors.


This time around, the Missouri Vintners Association, the winery owners group that opposed the legislation last year, is supporting it.


Seeking to block the legislation is the Distilled Spirits Council of the United States, a Washington-based trade group that represents spirits suppliers, which opposes franchise protection for distributors nationally.


“It’s a type of legislation that’s anti-consumer, anti-competitive and violates the spirit of free enterprise,” said Ben Jenkins, the group’s vice president of government communications.


The trade group contends that spirits are vastly different than franchises such as Dairy Queen or McDonald’s restaurants because alcohol distributors distribute hundreds of other brands from competitors. “There’s no community of interest (with spirits),” Jenkins said.


But some distributors disagree, including Major Brands, a family-owned distributor that got its start in 1934 and has grown to more than 700 employees statewide. Its wine and spirits business totals $430 million in annual revenue.


Susan McCollum, Major Brands’ chairman and CEO, declined to comment on the pending lawsuits, but she said she supports the proposed bills in the Missouri Legislature that would strengthen protections for distributors.


She also is closely watching a case that’s before the 8th U.S. Circuit Court of Appeals – Southern Wine and Spirits of America vs. Missouri Division of Alcohol and Tobacco Control. In that case, which had oral arguments last week, Miami-based Southern Wine and Spirits argues that a Missouri law that requires a residency requirement for distributors is unconstitutional.


Regarding the proposed legislation, McCollum said if it doesn’t pass, it will lead to more consolidation in the industry, hurting Missouri businesses and consumers.


“The federal court decision created confusion and uncertainty, and we’re merely seeking to clarify Missouri law that we’ve abided by for decades,” she said. “Without this clarifying legislation, our state runs the risk of losing hundreds of good jobs and a homegrown, Missouri-based business with deep roots in the communities it has served for nearly 80 years.”




Australia: Chains bottle up liquor market


Source: SMH

April 14, 2013


Coles has bought one of Sydney’s most popular independent wine stores in a sign of further influence by the big chains over how and where shoppers buy their alcohol.


Ultimo Wine Centre was sold to Coles last week and reopened on Wednesday under the supermarket chain’s brand Vintage Cellars.


As Coles and Woolworths continue to increase their market share – the two chains own more than half all liquor outlets across Australia – small players are feeling the pinch.


A 2010 report by consumer group Choice said 45 per cent of Australian liquor outlets were run by Coles and Woolworths, but a July 2012 report from the McCusker Centre for Action on Alcohol and Youth puts the figure at more than 58 per cent.


Coles spokesman Jim Cooper said in the past four years Coles had opened “about 30” liquor outlets, and was focused on “making sure the stores we have are in the right locations and are the right kind of store for that location as well”.


A spokeswoman for Woolworths, which owns Dan Murphy’s and BWS, said the company does not discuss market share, but ”growth has closely mirrored our supermarket openings and reflects our customers’ desire for one-stop shopping”.


Terry Mott, the chief executive of the Australian Liquor Stores Association, said in the past six years in NSW the number of liquor stores had grown from about 1600 to about 2180.


“There’s been a significant increase in the number of outlets but the overall market has been flat or declining so what that’s led to is an increase in competition in a market that’s effectively flat,” he said.


Mr Mott said the biggest change in the sector was in the number of online retailers.


“Online-only has grown from a handful of six in 2008 to over 200 now,” he said.


Without the cost of a retail space or staff, online stores are able to provide big discounts, making it difficult for independents to match them.


With the local bottle shop finding itself caught between ferocious competition from big chain stores and a boom in online sales, some are becoming more specialist as a way to survive.


Simon Clarke, the manager of the independently owned wine store The Oak Barrel in Sydney’s central business district, said the store had made a conscious choice to focus on customers ”wanting and demanding more choice”.


The store is packed with unusual and hard-to-find wines, beers and spirits, and has earned a loyal following because of the depth and breadth of its range.


“We consider ourselves educators as well as retailers,” Mr Clarke said.


However Mr Clarke conceded the competition was challenging.


“Online selling is both an opportunity and a curse,” he said.


“A number of wineries and suppliers undercut independent shops by selling their products considerably cheaper online.”


Camperdown Cellars is another independent outlet. Owner Rip Viropoulos said chain stores were not able to react to customer trends as easily as independents could.


“Being a smaller independent retailer, we have the ability to effect change very quickly and keep up with all the latest trends,” Mr Viropoulos said.


“We don’t have all the red tape and paperwork to cut through before getting (new products) and small suppliers that don’t produce enough to feed the chain stores are still able to look after our customers.”




Australia: Think Spirits to take over distribution rights of Jose Cuervo from Diageo


Source: DBR

15 April 2013


Think Spirits, a New South Wales-based distributor of premium spirits and liqueurs to both trade and consumers, is set to take over the distribution rights of Jose Cuervo brand from Diageo Australia.


Effective from 1 July 2013, Think Spirits will be the sole distributor of entire Jose Cuervo range in Australia.


The move follows Diageo’s decision in late 2012 to drop acquisition of Jose Cuervo brand and also to end distribution of Jose Cuervo range by June 2013, reported The Shout.


Think Spirits earlier handled Casa Cuervo’s three tequila brands, 1800 Tequila, Gran Centenario Tequila and Agavero Tequila Liqueur, in Australia.


However from July 2013, the distributor will also distribute Jose Cuervo’s premium tequila brands such as Especial Reposado, Especial Silver, Tradicional Reposado, Reserva Platino and Reserva de la Familia, and Cuervo Margarita Mix 1l throughout Australia.




P. Diddy throws massive tantrum over vodka


Source: Vancouver Sun

Apr 13, 2013


P Diddy apparently had a major meltdown at a Golden Globes pre-party over the weekend because the bar wasn’t selling his brand of vodka. Even though the party he was at was sponsored by Grey Goose Vodka, P Diddy wanted staff to serve him his own brand.


“He made quite a big deal about it, prompting the polite bartenders to finally ignore him and help other guests.”


Diddy was spotted at the party with Cameron Diaz getting cosy supporting prior rumours that P Diddy and Ms Diaz are more than just flirty friends despite P Diddy having a long term girlfriend.



Wells Fargo’s Weekly Economic & Financial Commentary


Source: Wells Fargo

April 13th



.         Recent economic data suggests another spring slowdown.

.         2Q13 GDP growth will likely be 1.8%, compared to the 2.8% pace expected for 1Q13.

.         Small business optimism retreated in March as business owners remain concerned about taxes, regulations, and general economic health.

.         The negative outlook could keep near-term job gains limited.

.         Inflationary pressures should remain muted as the slower global demand environment restrains energy price increases.

.         Retail sales declined in March as consumers cut back on spending.

.         Weak job and income growth combined with a surprising fall in consumer sentiment indicate a more cautious buyer.



.         Past experience with North Korea suggests propaganda rather than imminent threat, but one can never be too careful.

.         Financial markets, however, seem to believe the current situation is nothing more than posturing.

.         Despite indications of a slowing economy, the Bank of Korea left rates unchanged, citing inflation concerns.

.         The lack of a rate cut opens the door to a fiscal stimulus package.

.         Economic activity in Korea should pick up in 2H13 as exports improve.




US retail sales fall 0.4 percent in March, most in 9 months, a sign of consumer caution


Source: By Associated Press

April 12


Sales at U.S. retailers fell in March from February, indicating that higher taxes and weak hiring likely made some consumers more cautious about spending.


Retail sales declined a seasonally adjusted 0.4 percent last month, the Commerce Department said Friday. That followed a 1 percent gain in February and a 0.1 percent decline in January. Both February and January figures were revised lower.


Consumers cut back across a wide range of categories last month. Sales at auto dealers dropped 0.6 percent. Gas station sales dropped 2.2 percent, partly reflecting lower prices. The retail figures aren’t adjusted for price changes.


Excluding the volatile categories of autos, gas and building materials, core sales dropped 0.2 percent in March. That followed a gain of 0.3 percent in February. Department stores, electronics retailers and sporting goods outlets all reported lower sales.


The retail sales report is the government’s first look at consumer spending, which drives about 70 percent of economic activity.


The decline in March shows higher Social Security taxes are starting to affect consumers and could dampen growth in the spring.


Many economists still predict economic growth accelerated to an annual rate of roughly 3 percent in the January-March quarter. That would be a significant increase from the anemic growth rate of 0.4 percent reported for the October-December quarter.


Still, economists say the improvement is likely temporary. Many now expect weaker spending will be among factors that slow growth again in the April-June quarter, to an annual rate of around 1.5 percent.


“The U.S. consumer looks a little less resilient,” said Michael Feroli, an economist at JPMorgan Chase. “It now appears that close to $200 billion in higher taxes may have actually had some impact on consumer spending.”


A separate report Friday on April consumer confidence seemed to bolster that point.


The University of Michigan’s preliminary survey of consumer sentiment fell to 72.3. That’s down from 78.6 in March and the lowest since July. The discouraging jobs report and other weak economic reports weighed on consumers’ minds.


Companies are also less optimistic about the next few months, according to a separate Commerce report issued Friday. Businesses increased their stockpiles only 0.1 percent in February, the smallest gain in 8 months. That suggests companies had expected sales to weaken this spring, a point confirmed by the March retail sales figures.


Economists said restocking will likely stay tepid in the April-June quarter. Slower restocking means companies will order fewer goods, slowing factory output and growth.


“The economy appears to have lost some momentum,” Paul Dales, an economist at Capital Economics, said. “But with gasoline prices now falling, we don’t expect too sharp a slowdown.”


The cost of a gallon of gas averaged $3.56 nationwide Thursday, down from $3.70 a month earlier.


The increase in Social Security taxes has lowered take-home pay this year for nearly all workers. Someone earning $50,000 has about $1,000 less to spend in 2013. A household with two high-paid workers has up to $4,500 less.


Growth for the rest of the year will depend on what happens with hiring.


Employers added only 88,000 jobs last month, much lower than the average gain of 220,000 in the previous four months. But hiring may pick up in the coming months. Weekly unemployment benefit applications fell sharply last week, suggesting that companies are cutting fewer jobs.


There were a few positive signs in the retail spending report. Furniture stores reported a 0.9 percent sales increase, suggesting the housing recovery is still encouraging more spending. And sales at hardware and garden supply stores ticked up 0.1 percent, despite an unseasonably cold March.


But sales at general merchandise stores, which include major department stores such as Macy’s and big discount stores such as Wal-Mart and Target, dropped 1.2 percent.




Heineken to sell Finnish arm to Hartwall Capital: report


Source: Reuters

Fri, Apr 12 2013


Dutch brewer Heineken (HEIN.AS: Quote, Profile, Research, Stock Buzz) plans to sell its Finnish unit Hartwall to Hartwall Capital, an investment firm owned by the family which started the beverage business, a report said on Friday.


The report in the Finnish business magazine Talouselama cited unnamed sources and gave no deal value.


Hartwall Capital’s chairman Tom von Weymar, in the report, was quoted as saying the firm was “eyeing” a purchase but declined to comment further.




Regulating Density of Alcohol Outlets a Promising Strategy to Improve Public Health


Source: Johns Hopkins University Bloomberg School of Public Health

Published: April 11, 2013


Regulating alcohol outlet density, or the number of physical locations in which alcoholic beverages are available for purchase in a geographic area, is an effective strategy for reducing excessive alcohol consumption and associated harms. A new report from the Center on Alcohol Marketing and Youth (CAMY) at the Johns Hopkins Bloomberg School of Public Health documents how localities can address alcohol outlet density, and outlines the critical role of health departments and community coalitions in these efforts. The report, published in the journal Preventing Chronic Disease, is an important resource for public health practitioners, many of which are often unaware of the potential of this evidence-based strategy.


“Excessive alcohol use is the third leading cause of preventable death in the U.S., and responsible for approximately 80,000 deaths annually,” said lead study author David Jernigan, PhD, CAMY director. “Public health agencies are on the frontlines of addressing the toll alcohol misuse has on the public’s health, and are therefore well-positioned to inform communities about the benefits of addressing alcohol outlet density in their communities.”


The report notes that the public health profession has a tradition of promoting health and preventing harm through the use of evidence-based strategies, including land use and zoning codes. “Despite this tradition and evidence supporting regulation of alcohol outlet density, many public health professionals are unaware of its potential and do not know how to work with local authorities to implement the strategy,” said Jernigan.


The authors cite several examples of the significant relationship between alcohol outlet density, consumption and harms: in Los Angeles County, researchers estimated that every additional alcohol outlet was associated with 3.4 incidents of violence per year, and in New Orleans, researchers predicted that a 10 percent increase in the density of outlets selling alcohol for off-premise consumption would increase the homicide rate by 2.4 percent.


The report provides four ways in which states and localities can reduce alcohol outlet density: Limit the number of alcohol outlets per specific geographic unit; limit the number of outlets per population; establish a cap on the percentage of retail outlets per total businesses in a specific area; and limit alcohol outlet locations and operating hours. In addition, localities may use land-use powers to limit, deny or remove permission to sell alcohol from existing outlets.


A previously released Action Guide, Regulating Alcohol Outlet Density (see, developed by CAMY and Community Anti-Drug Coalitions of America (CADCA) – the nation’s leading substance abuse prevention organization, representing over 5,000 community anti-drug coalitions across the country – outlines nine specific steps community coalitions and public health departments can take to educate and inform policy makers. “By providing the data necessary to inform policy decisions and building partnerships with community coalitions, state and local health departments can offer critical support to states and localities in these efforts,” said report co-author Evelyn Yang, deputy director of Evaluation and Research at CADCA.


“Since the publication of the Guide, we’ve collected several case studies of local health agencies and community coalitions effectively working to regulate alcohol outlet density,” stated Jernigan. “With increased uptake by more agencies, communities can become healthier, safer places to live and work.”




Legislators’ Report Confronts Energy Drinks


Source: Natural Products Insider

April 11, 2013


U.S. Rep. Edward Markey (D-MA) and Senators Richard Durbin (D-IL) and Richard Blumenthal (D-CT) have released a report based on their ongoing concerns over the way these products are regulated and marketing, contending the safety of these products is a major concern for children. The report is based on their investigation of 14 commonly sold “energy drink” products and details marketing, labeling, safety and regulatory findings, as well as recommendations to improve transparency and protect consumers, especially children.


The primary target of the lawmakers’ ire is caffeine content, targeting children and the way these products can be marketed as beverages or supplements-rules on labeling and caffeine limits are different between the two categories.


The report opens with notes on how FDA has released a bunch of adverse event reports (AERs) associated with energy drink products and is currently investigating this segment of products. It also noted the Department of Health and Human Services has reported emergency room visits related to energy drink consumption have doubled to 20,000 between 2007 and 2011.


In their report, the legislators note, “…nearly identical energy drinks can be marketed and represented to consumers differently, leading to consumer confusion and a lack of transparency.” They said marketing identical products in different regulatory categories can result in full disclosure of caffeine content in one product and little to no disclosure of caffeine in the similar product. The report further lists some known caffeine amounts for popular energy drinks, including CocaCola’s NOS (260 mg per can, among the highest) and Monster’s Worx Energy Shot (200 mg per 2 ounces).


What was not in the report were caffeine amounts for popular beverages like coffee and tea. According to the Mayo Clinic, generic brewed coffee can range from 95 to 200 mg, while Starbucks brewed can be as high  as 330 mg per 16-ounce serving-at Starbucks, 16 ounces is a Grande, w hile a Tall is 12 ounces, a Venti is 24 ounces and a Trenta is 31 ounces. Mayo also lists amounts for tea (most are lower than 100 mg per 8 ounces), soft drinks (nothing on the list is more than 55 mg per 12 ounces) and energy drinks (most popular names are under 100 mg per 8 ounces, except for 5-Hour Energy, which packs 207 mg in two ounces.)


The ingredients issue is not with caffeine alone, but additional, often undisclosed, sources of caffeine, as well as other stimulants such as guarana and green tea. The report takes a shot at taurine, a popular energy drink ingredient, saying it is not approved as a food additive, but is instead is self-determined as safe-self-GRAS, generally recognized as safe-by manufacturers for  inclusion in such products.


Among the bigger claims in the report is the argument energy drink marketers target children. Countering statements from 14 such companies that denied marketing to children, the lawmakers assured the evidence is clear the products are paraded to young Americans, via sports-based marketing. “The use of unconventional marketing practices combined with product design and placement on store shelves assists in creating product images that appeal to children and teens,” the report states. They further lament some energy drink products are meant to mimic alcoholic drinks.


In addition to target audience, the marketing is rife with irresponsible claims, according tot he report, which singles out claims to “energize and hydrate,” provide “50 percent more focus,” improve “up to the nanosecond performance,” and provide “increased concentration and reaction speed.”


Recommendations in the report include a call for clearly labeling the products for total caffeine content (from all sources) and for the entire container, not just whatever is deemed as a serving. In addition, the legislators would like to see all products containing more than 200 mg of added caffeine, the limit for self-GRAS by FDA, bear a warning statement such as: “This product is not intended for individuals under 18 years of age, pregnant or nursing women or for those sensitive to caffeine. Consult with your doctor before use if you are taking medication and/or have a medical condition.”


The report’s recommendation to cease marketing of energy drinks to children and teens under 18 could be an even trickier suggestion, as it calls for curtailing the use of social media and sponsorship of sports and other events.


Further, the proposal to mandate reporting of serious AERs to FDA when they relate to energy drinks marketed as beverages appears to address earlier criticisms of the lawmakers’ complaints-the argument was energy drinks were marketed as dietary supplements for easier regulation, but supplements are regulated by a serious AER law that beverages are not.


How this report will influence regulators and legislators is unclear, but it sends a clear message these lawmakers are not giving up on making changes to this category. “We’ll follow up with the FDA and FTC to make sure they are taking appropriate action, because even one more emergency room visit linked to energy drinks is unacceptable,” Blumenthal said.


Rend Al-Mondhiry, regulatory counsel for the dietary supplement-focused trade group Council for Responsible Nutrition  (CRN), said the recently released recommended guidelines for caffeine-containing dietary supplements are very similar to many of the recommendations made in the Durbin/Blumenthal/Markey report. “We have shared our recommended guidelines with their offices,” Al-Mondhiry said, adding the legislators’ report was likely in very late stages when the CRN guidelines were released. “Maybe it impacted their report.”


The CRN caffeine guidelines focus on full disclosure of total caffeine content from all sources, label advisories from conditions of use, intake and serving size suggestions, and restrictions on marketing in combination with alcohol. Among the small differences, the lawmakers’ report highlights the marketing focus on children and teens  under 18 as a concerning and major  issue, while the CRN guidelines only mention children under 18 in its proposed conditions of use labeling-any supplement with a total caffeine content more than 100 mg per serving should bear an advisory such as: “This product is not intended /recommended for children and those sensitive to caffeine.” In fact, Al-Mondhiry said there is a big difference between young people under 18 and those over that age, and CRN does not currently see pervasive marketing of energy drinks to those under 18.


Effective April 1, the guidelines are intended as a basis for how companies should communicate with consumers on such products, and CRN recommends companies comply with the recommendations by April1, 2014. “The guidelines are not mandatory,” Al-Mondhiry reminded. She did report, however, a group  of CRN member companies met several times with CRN staff to come to a consensus on the caffeine guidelines and the membership supports the finished publication.




Commentary: Latest Durbin energy drink report unlikely to generate much ‘buzz’; includes relatively benign recommendations


Source: Goldman Sachs

By Judy E. Hong

Apr 12th


In an April 10 report entitled “What’s all the BUZZ about?” Congressman Edward J. Markey and Senators Richard J. Durbin and Richard Blumenthal released their latest findings, criticisms, and recommendations for the energy drink category.


We view the conclusions from this wave of criticism from Senators Durbin and Blumenthal as broadly benign with respect to the energy drink category and MNST (Buy, $55.86). On the positive side, the report calls for explicit steps to improve product transparency and representation, ones that MNST is already in compliance with, can readily adjust its practices in accordance with, or do not apply to the firm or its products.


Label caffeine per serving and total caffeine from all sources – MNST, Red Bull, and Rockstar already disclose caffeine content in their products


Larger and more descript precautionary statement – both MNST and Red Bull include statements that their products are not recommended for children, pregnant or nursing women, or people sensitive to caffeine.


The specific language of the statement could be easily adjusted to include specific age specifications, which the report recommends.


Cease marketing products to children and teens under 18 – the core of MNST’s marketing activity consists of extreme sports sponsorships to build brand awareness. These events are not directly “intended for an audience comprised primarily of children or teens” and would therefore most likely be allowed to continue. Red Bull’s advertising and marketing is more traditional, and does not directly target adolescents as part of its broader campaign.


Report to the FDA adverse events associated with energy drink use – this is only required by the FDA for dietary supplements, and thus could be contested on the grounds that MNST, Red Bull, and Rockstar all classify their products as beverages. However, this guideline could also be accommodated by the companies’ voluntary disclosure.


We are encouraged by the report, as we believe that these recommendations suggest that more drastic and onerous restrictions (e.g., an outright ban on energy drinks, age restriction, product reformulation) are unlikely. In addition, we believe the energy drink companies will be more proactive in addressing some of these recommendations (as evidenced by the decision by MNST and Rockstar to being classified as a      beverage).






Source: Glazer’s

Apr 13th


Glazer’s, one of the country’s largest beverage distributors, and Aveníu Brands, a leading marketer of distinctive brands from the world’s foremost regions, have announced that Glazer’s Indiana has been awarded the statewide distribution rights for the Aveníu portfolio. This appointment is part of a newly enhanced strategic alignment between Glazer’s and Aveníu Brands. The agreement affirms both companies’ commitment and investment to build Aveníu’s growing portfolio of premium brands, including Artesa, Anna de Codorníu Cava, Septima, Vina Zaco, James Mitchell, Clos La Chance, Amarula Cream Liqueur, Piccini, Raimat, and Elements.


Glazer’s Executive Vice President Sales and Marketing Mike McLaughlin stated, “We are thrilled to have acquired the rights to Aveníu Brands for Indiana. We look forward to building these brands with a team that has been a long term strategic partner for our company. Today’s announcement is an endorsement of Glazer’s Indiana team and our whole business relationship.”


Aveníu Brand President Andrew Mansinne added, “Glazer’s is one of our key growth partners nationally.  We are delighted to finalize our agreement in Indiana to support the growth of the Aveníu portfolio at Glazer’s for years to come.”




Champagne shipments down -6.1% in February against a tougher comp


Source: Barclays

Apr 12th


CIVC global shipments declined by -6.1% in February 2013 (5% of annual volumes), a deterioration from the +8.3% reported in January. We note February 2012 volumes were -0.9%, while January 2012 volumes fell -13%. France was down by -4.2% on an easy comparable (-7.4% in February 2012). European volumes declined by -5.1%, compared to -8.8% a year before. Shipments to other countries (19% of volumes) deteriorated by -10.3% (+22.6% in February 2012). YTD industry shipments are up +1.1%, with a -4.4% decline in France, +9.7% in rest of Europe and +5% in other countries.

Although we believe austerity measures will continue to hold back any sharp recovery in core European markets, with tentative signs of a bottoming in total industry data, the outlook is arguably a little more encouraging. Lanson recently stated in its FY result press release that 2013 had started “a little bit better than 2012”. We recently changed our ratings on Laurent-Perrier and Lanson-BCC to EW from UW, and kept the EW rating on Vranken-Pommery, see our report “Tough comps – buy on any weakness” from 11 April 2013. Our preferred pick in the European Beverages space is Diageo (OW, PT 2400p), a reflection of its increasing Emerging Markets exposure augmented by improving price/mix delivery in the US.



Wine critics say cheers to Bordeaux’s new vintage


Source: AFP

by Suzanne MUSTACICH

Apr 14th


Wine professionals declared themselves “pleasantly surprised” with the 2012 Bordeaux vintage but demand from China was expected to be weak due to losses on 2010 wines.


China is currently Bordeaux’s biggest market in terms of volume and second in value, but Chinese buyers were expected to stay away this time.


“They won’t touch it,” said Gary Boom, managing director of Bordeaux Index, with offices in London, Hong Kong and Los Angeles.


Chinese clients are still smarting over their losses on the 2010 vintages, bought when Bordeaux prices soared, only to fall quickly after the wines were sold.


“They’ve learned that the price can go down as well as up.”


Alain Raynaud, vintner and president of the Cercle Rive Droite, a winemakers association, said he had been “very pleased ” by the quality of the 2012 wine despite the difficult growing conditions last year.


“In the end the vintage was much better for everyone than expected,” he said.


The wine samples are drawn directly from the barrels in the cellars, more than a year before bottling, to give professionals a chance to assess the quality before they are sold as a futures commodity in the coming weeks.


The primary organisers of the tastings, the Union des Grands Crus de Bordeaux (UGC) told AFP attendance was up seven percent from last year with over 5,700 professionals from around the globe taking part. Another popular winemakers group, the Alliance of the Crus Bourgeois, hosted 1,200 visitors. And the Cercle Rive Droite logged 1,300 visitors for their 140 wines presented.


The strong attendance, despite competition for travel budgets from Vinexpo in June and this week’s events at Vinitaly in Verona, reaffirms interest in Bordeaux.


The stakes are high. The region sold 740 million bottles in 2012, worth EUR4.3 billion ($5.6 billion). Each vintage’s commercial success is strongly influenced by the ratings the wines receive from critics, journalists and buyers during this round of barrel tastings.


Bordeaux’s sweet wine growers suffered a particularly difficult season when some vineyards waited in vain for botrytis — or noble rot — to properly develop, robbing the wines of their famous concentration of sugar and aromas.


“The summer was very dry, the water stress very strong, and until the end of September the noble rot was zero,” said Denis Dubourdieu, consultant, professor and vintner.


The spread of noble rot was especially slow on the soil of Sauternes, leading three prominent estates, Chateau d’Yquem, Chateau Suduiraut and Chateau Rieussec, to decide against releasing early samples of the 2012 vintage.


Nevertheless, the sweet wines from several estates around Barsac received rave reviews, including Chateau Coutet, Chateau Doisy-Daene and Chateau Doisy-Vedrines.


“We were very happy with the wine we made, especially in Barsac. It was easier than in Sauternes,” said Dubourdieu, owner of Chateau Doisy Daene.


Dry white wines, picked prior to the downpours in October, were well-received, and red wine producers in the Right Bank appellations of Saint Emilion and Pomerol where the early-ripening Merlot dominates were also able to pick before the rain.


“Without a doubt, the maturity of the Merlot on the Right Bank made it more accessible and easier to taste en primeur,” said Raynaud. “But the Left Bank also has some lovely wines, but perhaps less homogeneous.”


The late-ripening Cabernet variety, which dominates the Left Bank appellations in the Medoc, created some hits and misses.


Positive response from potential buyers left many vintners with a spring in their step despite the gloomy world economic outlook.


“I hear people were quite pleasantly surprised by the vintage. It’s fresh, appealing, some wines have more fruit than others,” said Sophie Schyler, co-owner of grand cru classe Chateau Kirwan in the Margaux appellation.


“I think we’ll have a good demand from America.”


Hot on the heels of the swirling, sipping and spitting at the tastings comes the haggling over prices and anticipation of demand.


“It doesn’t matter how nice the wines are. The harsh reality is that people have a choice. You need to give them a compelling reason to buy, and the only compelling reason to buy this vintage is price,” said Boom.


Several chateau owners, meanwhile, called for reasonable pricing and a brisk sales campaign to show that Bordeaux still knows how to offer good value to its traditional markets.


“We hope all Bordeaux will release soon, fast, with good pricing, in an efficient way so the message can be communicated positively,” added Schyler.




Bordeaux 2012: major releases ‘next week’


Source: Decanter

by Jane Anson, Adam Lechmere and Georgie Hindle in Bordeaux

Friday 12 April 2013

A flurry of early Bordeaux 2012 releases is expected next week including Chateau Gazin in Pomerol, Rauzan Ségla in Margaux, and ‘a high probability’ of a First Growth.


Merchants and négociants are gearing up to get straight into the 2012 campaign, without the usual break that is observed after the en primeur tastings, as chateaux owners seem to be listening to calls for a quick campaign.


Among the chateaux expected out next week are The 13 RendezVous Médoc chateaux, including Arsac, Cambon La Pelouse and Caronne Ste Gemme, have already confirmed that they are coming out with prices next week, from April 15 to April 19.


Jean Luc Thunevin’s Valandraud is expected out on April 22, at half the price of its 2011, despite its new status as a classified Saint Emilion – meaning around ?96 ex-Bordeaux.


At Chateau Angelus, managing director Stephanie de Bouard did not comment on timing but said they would set their price at ‘between ?140 and ?200 per bottle’ – the hike in price from last year’s ?115 to reflect the fact the chateau is now in the top level of the St Emilion classification, Grand Cru Classe ‘A’.


Chateau Rauzan-Ségla in Margaux has been criticised in the last few campaigns for its high prices, but director John Kolasa today that he hopes to come out early, and close to the 2008 price of ?36 ex-Bordeaux, although the final decision would be taken by the Wertheimer brothers, owners of the chateau. ‘There are many friendly wines in 2012,’ said Kolasa, ‘and I hope to offer some friendly pricing also, and give people a good deal.’


As ever with difficult commercial vintages, the First Growths are being asked to come out early and ‘set the tone’, as one leading courtier said this week.


This same source suggested that Mouton would lead the way next week. Director Philippe Dhalluin would not confirm timings, but did agree that the campaign was likely to be early.


In a sign that prices at Mouton is likely to be responsive to the market, Jean-Emmanuel Danjoy, director of the Mouton’s sister property Clerc Milon in Pauillac, told French magazine Terre des Vins that he expects to release at under last year’s exit price of ?30.


At another first growth, Chateau Margaux, director Paul Pontallier said they would adapt to the ‘diffcult’ market conditions. ‘That’s what we always try to do, more or less successfully’, and Nicolas Glumineau at Pichon Comtesse agreed: ‘I think that all of us have understood we have to decrease the price’.


Philippe Dambrine, director of Chateau Cantemerle said, ‘I expect it to be a fast campaign. Prices won’t go as low as 2008, that’s a dream, but maybe close. The difficulty is that we have found if we price too low, it can harm sales. So we have to find the right level.’


The bi-annual Vinexpo wine fair begins on June 15 this year, and most observers expect the campaign to be largely over by then.


‘We have to get people drinking the wines,’ said Kolasa, ‘and recognise that when things are just about points and egos, it’s not professional. Effective distribution has a cost, and everyone involved needs to be able to make their margin.’


Kolasa also said he would like to see the top properties releasing at ?200 per bottle – ‘and even that would be too much. We’d like to be able to sell at ?200 per bottle.’


Privately, owners and directors around Bordeaux expect the top properties to release at between ?230 and ?250 per bottle.




Profits up at Rite Aid


Source: RT

By Alaric Dearment

April 11, 2013


Rite Aid’s profits grew in fourth quarter and fiscal year 2013 amid stronger front-end sales and prescription count, the retail pharmacy chain said Thursday.


The company reported a $123.1 million profit for the fourth quarter and a $118.1 million profit for the fiscal year, compared with respective losses of $161.3 million and $368.6 million during the same period last year. In third quarter 2013, the company reported a profit of nearly $62 million, its first in five years, which together with the fourth quarter’s results helped deliver the company’s first profitable year since 2007.


Behind the results was a combination of stronger sales in Wellness-format stores, retention of most patients who switched to Rite Aid during the dispute between Walgreens and pharmacy benefit manager Express Scripts, the Wellness+ loyalty card program and increased use of generics.


“Together, we are successfully transforming Rite Aid into a true neighborhood destination for health and wellness,” president, chairman and CEO John Standley said in a conference call with investors to discuss the results.


The company plans to remodel 400 more stores in fiscal year 2014, the “vast majority” of which will be remodeled according to the updated “Genuine Well-Being” format, similar to the updated Wellness store in Lemoyne, Pa., featured in a recent video on Drug Store News’ website. For this purpose, $175 million of the $400 million Rite Aid plans to invest in the year has been set aside.


Sales for the fourth quarter were $6.5 billion, compared to $7.1 billion in fourth quarter 2012. Sales for fiscal year 2013 were $25.4 billion, compared to $26.1 billion in fiscal year 2012.


Same-store sales for the quarter decreased 2%, including a 0.3% increase in front-end same-store sales and a 3.1% decrease in the pharmacy. For the fiscal year, same-store sales decreased 0.3%, including a 1.4% increase in front-end same-store sales and a 1% decrease in pharmacy same-store sales. Same-store prescription count increased 3% for the quarter and 3.4% for the fiscal year.


Wall Street responded with optimism to the results. “Importantly, the underlying business, excluding the generic benefit and the Walgreen windfall, appears quite healthy,” Guggenheim Partners analyst John Heinbockel wrote in a note to investors. Following the company’s announcement, Rite Aid’s stock was trading at $2.08 per share in late-morning trading, up by 10 cents, from the start of the trading day’s $1.98.




Woolies posts five per cent sales growth


Source: TheShout

By James Atkinson



Woolworths’ Australian Food and Liquor division has reported third quarter sales of $9.9 billion, an increase of $0.5 billion or 5.6 per cent on the previous year (4.9 per cent Easter adjusted).


Comparable store sales in the division were up 3.8 per cent or 3.1 per cent Easter adjusted, which compared to a 2.4 per cent increase in the first half of the 2013 financial year.


Director of liquor Brad Banducci said the liquor business had another quarter of good growth with Convenience (BWS and Woolworths Supermarket Liquor) and Dan Murphy’s both producing pleasing results despite the cycling of heavy promotional activity in the prior year.


“During the quarter, we continued the rebranding of our Woolworths Supermarket Liquor sites to BWS. A further 152 sites were rebranded as we work towards our target to have the majority of these sites converted to the BWS brand by the end of FY13,” he said.


The company opened three Dan Murphy’s during the quarter, taking the total to 174. It plans to open two more Dan Murphy’s in the final quarter of the 2013 financial year.


Hotel sales through the Australian Leisure & Hospitality business were $353 million in the third quarter, an increase of 19.7 per cent on the previous year or 20.5 per cent Easter adjusted.


Comparable sales for the third quarter were up 11.4 per cent or 12.3 per cent Easter adjusted.


Growth was driven by the acquisition of 29 hotels in New South Wales, two in Queensland and one in Western Australia during the first half of the 2013 financial year as well as the impacts of the Victorian gaming regulatory changes that came into effect in August 2012.


ALH Group CEO Bruce Mathieson Jnr said: “Overall, the third quarter result was pleasing with positive comparable sales growth. Our Food offer remains a focus with strong sales continuing to counter ongoing challenges in the bar environment which are being experienced across most states.”


ALH added one hotel to its business during the third quarter, bringing the total number of venues to 325.




Restaurant sales pick up in March


Source: NRA

April 12, 2013


In his latest commentary, the National Restaurant Association’s Chief Economist Bruce Grindy looks at the Census Bureau’s latest sales data.  After declining in both January and February, total restaurant sales volume bounced back in March with a solid gain.  However, sales remained dampened from their December levels, which suggests the impact of the payroll tax hike is still being felt.


Restaurant sales registered a solid gain in March, according to preliminary figures from the U.S. Census Bureau.  Eating and drinking place sales totaled $45.6 billion in March on a seasonally-adjusted basis, up 0.7 percent from February’s level and the first increase in three months.


The March uptick gained back some of the losses from January and February, which were both down from December’s record high of $45.7 billion.  However, on a cumulative basis, eating and drinking place sales in the first quarter remained nearly $800 million short of December’s baseline level.  (Note that these figures are preliminary, and will potentially be revised by the Census Bureau in upcoming releases.)


Despite the dampened first quarter results, restaurants fared much better than many other sectors in March.  Sales at electronics and appliance stores (-1.6%), general merchandise stores (-1.2%) and sporting goods, hobby, book and music stores (-0.8%) all fell sharply in March.


Sales at gasoline stations fell 2.2 percent in March amid lower pump prices, which is a positive development for consumers after their sales surged 5.4 percent in February.  Overall, total retail sales excluding autos and gasoline were down 0.1 percent in March on a seasonally-adjusted basis.


For their part, restaurant operators are cautiously optimistic that business will improve in the months ahead.  In the Association’s March 2013 Restaurant Industry Tracking Survey, 41 percent of restaurant operators said they expect to have higher sales in six months, compared to the same period in the previous year.  Only 14 percent expect their sales will be lower in six months, while 45 percent think their sales will remain about the same.


Read more from the Economist’s Notebook and get additional analysis of restaurant industry trends on Restaurant TrendMapper (subscription required). For an annual overview of the restaurant industry, see the 2013 Restaurant Industry Forecast.




New Hampshire: Another change coming atop NH Liquor Commission


Source The Telegraph

Kevin Landrigan

April 14th


There’s yet another shake-up in the works at the state Liquor Commission.


The Sunday Telegraph confirmed that Eddie Edwards, the longtime chief of the agency’s enforcement division, will retire in June.


Attempts to reach Edwards for comment last week weren’t successful.


Associates of Edwards say he’s looking to start his own law enforcement consulting business, which presumably would work with officials here and in other so-called “control” states that sell their own liquor.


Surely, Edwards had his run-ins with the powers that be at the SLC.


As we first reported, the commissioners had pointed fingers in the missing wine fiasco for failing to get to the bottom of whether 300 cases of high-priced wine had disappeared when a Portsmouth liquor store changed sites.


To his credit, Edwards’ own report cast real doubt on whether any product in that case had disappeared, which was what Attorney General Michael Delaney ultimately concluded.


Then there was the now infamous crackdown on a former Keene bar that resulted in Gov. John Lynch’s move to oust SLC Chairman Mark Bodi.


Ultimately, the council didn’t decide to remove Bodi for his role in handling the Keene incident, but instead stripped him of his chairmanship. Bodi resigned from the commission last June.


Delaney and his staff maintained that Edwards allowed Bodi to influence that investigation, a charge Edwards vigorously denied.


Throughout his tenure, Edwards was a by-the-book professional who wasn’t fond of leniency with scofflaw license holders. In addition, Edwards has maintained in the past and did so in the missing wine report he wrote that there is an alarming number of reported “breakage” at the stores.


And in the past, Edwards has noted much of the “damaged” product that may disappear out the back loading docks was often of the high-priced variety.


Bodi deposed in contract suit


The plot also thickens regarding the 20-year liquor warehouse contract controversy.


Law Warehouse of Nashua filed a civil suit in court claiming the contract was illegally awarded to Exel, and its executives have maintained throughout that the commission was determined to terminate their long relationship.


Bodi was deposed as part of the lawsuit last week, and according to informed sources, he corroborated the suit’s claim that the two other commissioners did not want Law to get the job under any circumstances.


State prosecutors had filed a motion in Superior Court trying to prevent Bodi from being deposed, maintaining that as part of the commission, his testimony would violate the lawyer-client privilege.


The judge rejected that argument and ordered Bodi be deposed.

New Wines In Dispenser-Once Upon A Vine Wines

April 13, 2013
Our Wine Dispenser

Stop In And Try!

New Wine Line Now In Our Dispenser To Try

Once Upon A Vine

vine logo

Like the fairytales for which they are named,  Once Upon a Vine wines each have a rich and enchanting story to tell. They give a new twist on our old favorites – a seductive Pinot, A big bold Red Blend and a fair and lovely Sauvignon Blanc. Luscious and decadent, each allows an escape from the everyday.


2010 Once Upon a Vine The Big Bad Red Blend
A blend of several red varietals, The Big Bad Red blend appeases our inner dark side, satisfying that craving for the bold and daring. The wine leads with a bramble of berries, dark black plum and root beer flavors, framed by toasted spices. Fleshy and ripe, the palate delivers layers of black fruit with a savory and spicy character. Supple tannins hold flavors into a long, lasting finish. A perfect pairing for a dark and stormy night.

Varietal Composition – 33% Merlot, 25% Syrah, 11% Cabernet Sauvignon,  9% Zinfandel, 9% Tannat, 6% Grenache, 7% other reds

Oak Aging – 12 months – French and American oak

red blend

750ml $10.99

2011 Once Upon A Vine, Charming Pinot

Elegant, sophisticated and approachable, A Charming Pinot(Pinot Noir) is every girl’s dream.  Dark cherry, currant and cola aromas seduce the senses followed by a lush, velvety palate of ripe black fruit.  Hints of bacon, toastiness and espresso give depth and complexity, enhancing the appeal.  Rich fruit gives a lovely finish to this dashing wine, picking up sweet mocha notes as it extends into a long, finish

A portion of the grapes whole berry during fermentation, giving a bright pop to the palate.

Pinot Noir

750ml $10.99

2011 Once Upon A Vine, The Lost Slipper Sauvignon Blanc

Once upon a time, she searched all the wine shelves for her one true Sauvignon Blanc. Then she found The Lost Slipper. With vibrant tropical fruits and a rich, round style, it was the perfect fit. The nose radiated lively passion fruit aromas, giving way to ripe guava and pineapple flavors. The varietal’s bright, crisp character was elevated by sur lie aging, which added weight and fleshiness to the palate. Friendly, inviting and delicious, it was love at first sip

Sur lie aging produced weight and length in the palate.

Sauv blanc

750ml $10.99

Everyday Discount 6 Bottles 10% Off

12 Bottles 20% Off

All 750ml Wines Mix For Discount

Liquor Industry News 4-12-13

April 12, 2013

Franklin Liquors


Friday April 12th 2013

Chhabria eyes $1bn Tilaknagar deal


Source: Times of India

Boby Kurian & Reeba Zachariah

Apr 12, 2013


Liquor baron Kishore Chhabria’s Allied Blenders & Distillers (ABD) is discussing a merger deal with rival Tilaknagar Industries, makers of Mansion House brandy, in what could be the biggest consolidation move in Indian liquor industry after Vijay Mallya’s takeover of Shaw Wallace & Co almost a decade ago.


The privately held ABD, India’s third largest distiller, and the listed Tilaknagar have talked about a stock swap cum cash deal to create a combined entity valued at $1 billion, said people directly briefed on the matter. Chhabria has 95% stake in ABD which owns the top selling Indian whiskey brand Officer’s Choice, while the Dahanukar family controls 56% stake in Tilaknagar. Its Mansion House is the world’s second largest selling brandy after McDowell’s.


Chhabria, on a comeback trail after settling legal battles with long time rival Mallya, would be the majority shareholder, while Tilaknagar chairman Amit Dahanukar will retain a sizable minority interest in the joint company, said the source cited earlier. The talks are preliminary and there is no certainty of a deal, the person added.


Alcobev industry veteran and ABD chief executive Deepak Roy is seen as the intermediary in the discussions between Chhabria and Dahanukar. Roy and Dahanukar declined to comment on the story, while Chhabria is traveling abroad and could not be reached for immediate comments. Analysts said French drinks giant Pernod Ricard, which has a bottling tie-up with Tilaknagar, could be attracted to a potential takeover, but the former said it hasn’t had any discussions in this regard.


Dahanukar has had multiple rounds of talks with Chhabria and Roy in recent months, with both parties agreeing that a deal was a workable and winning idea. But substantial issues – including valuations and the question of their respective equity ownerships – have not been tackled yet, said a second source. Chhabria will not settle for anything less than a big majority stake if there’s a merger, he added.


ABD sold 20 million cases (of nine litres each) in the just ended financial year, while Tilaknagar’s volume sales were closer to 10 million cases. India’s spirits sale is estimated at 275 million cases in FY13 even as growth slowed to 4%, possibly the slowest in a decade.


A possible deal would give Chhabria a big presence in the fast growing brandy segment, better access to the southern markets besides a base of distilling and bottling assets. Tilaknagar, which has faced a probe from taxmen and legal disputes on the brand Mansion House, would have a strong ally in Chhabria and get to play a bigger role in India’s consolidating liquor industry. ABD recently appointed Ambit Corporate Finance for a $100-million fund-raise, eyeing $750 million in valuation as part of this separate exercise. Tilaknagar, which saw its stock price decline 33% since January this year, has a market capitalization of Rs 700 crore, or roughly $130 million. Tilaknagar Industries stock ended marginally higher at Rs 57.50 by close of Thursday’s trade on the BSE.




STZ: Solid Finish to FY13; Crown Imports Remains the Focus Heading into FY14


Source: CITI

April 11th


Estimate Change


STZ Posts 4Q13 EPS of $0.47 – STZ reported adjusted 4Q13 EPS of $0.47, two cents ahead of our estimate and the Street, largely driven by a lower-than-expected tax rate, as better-than-expected wine and spirits results were offset by below expectation growth from Crown Imports.


Wine and Spirits Trends Look Solid – On a full-year basis, we were encouraged by the acceleration in North American wine and spirits net sales (to +5.3% in FY13 vs. +3.8% in FY12). Furthermore, we applaud management’s decision to continue to invest behind its brands, despite the implication for margin pressure in FY14 (we’re looking for operating margin contraction of 40 bps for the year), as we expect this to result in more sustainable top- and bottom-line growth for the segment over the long term.


Beer Pricing Remains the Focus – While we understand the motivation behind Crown Imports’ pricing restraint, the business’ below-industry price increases and negative mix-shift (resulting primarily from the growth of Modelo Especial) are hindering the opportunity for margin expansion. Looking ahead to FY14, we expect to get an initial read into STZ’s pricing strategy for the Crown Imports brands in June, at the company’s analyst meeting as this will (likely) be the first presentation from management following the close of the deal.


Updating Our Estimates; Maintain Neutral Rating – Taking into account the guidance provided by management and continuing to assume that the Crown deal closes at the end of fiscal 1Q14, we are updating our estimates as follows: FY14 to $2.80 (from $3.24) and FY15 to $3.32 (from $3.70). Our FY16 estimate is $3.59. We assert that STZ should trade at a 16x multiple (reflecting the company’s diverse earnings base and significant accretion opportunities from the pending Crown Imports deal) and derive a $52 target price based on our CY14 EPS estimate of $3.27. As this represents 5% ETR, we maintain our Neutral rating on the stock.




Constellation Brands A Look at FY2014 with US Modelo Ops


Source: UBS

Apr 10th


Introducing Full P&L for Pro-Forma Entity

With the deal expected to close by June, we are adjusting the accretion in our model. We expect FY14 consolidated revenue to be $5.3bn ($2.35bn from Crown) and generate $1.2bn in EBIT ($630m from Crown). Organically, we have 5% topline growth with 4.8% EBIT growth in wine, and 5.5% topline growth at Crown with 6.5% EBIT growth. Interest expense is expected to be $350m (guided), but we expect tax closer to 32% than the guided 37%, resulting in FY14 EPSe of $2.99 (guidance $2.55-$2.85). Our FY15e EPS is now $3.83 (from $3.87).


We Differ from Guidance on Taxes

At the guided tax rate, our FY14 and FY15 EPS estimates would be $2.77 and $3.54, respectively. Recall initial FY13 tax guidance was 34% (26% actual), FY12 was 29% (17% actual), FY11 was 35% (30% actual), and FY10 was 38% comparable (30% actual). We consider the guided 37% FY14 tax rate to be an absolute ceiling rather than the most likely outcome and are using 32% in our estimates.


Investment Thesis – Post-Deal World

We believe future STZ will feature: 1) structurally improving wine business, 2) strong, steady-cash flow generating beer biz, with margins that will improve as increased capacity eliminates need for supply from ABI; and 3) Spirits growing double-digits. As STZ pays down debt and capacity at Piedras Negras is optimized, we expect Constellation will generate ~$1bn in FCF on a normalized (i.e. excluding incremental CAPEX) basis.


Valuation: Reiterate Buy; Price Target Remains $54

Our $54 price target is based on 14 times our FY15e EPS of $3.83.






Blanton’s Bourbon and Caribou Crossing Whisky Win Chairman’s Trophies for the Second Consecutive Year


Source: Buffalo Trace Distillery

Apr 11th


The winners from last month’s 2013 Ultimate Spirits Challenge have been announced. Buffalo Trace Distillery was honored for one of its newer whiskeys introduced in 2012, along with some classic favorites.


For the second year in a row, judges awarded Blanton’s Single Barrel Bourbon the highest honor of “Chairman’s Trophy” winner among all other bourbon whiskeys. Blanton’s was the first Single Barrel Bourbon Whiskey ever commercially sold back in 1984 and remains a favorite among connoisseurs.


Within the Canadian Whisky category, Caribou Crossing Single Barrel Canadian Whisky was awarded the “Chairman’s Trophy,” also for the second year running.  This $50 Canadian Whisky is the first Canadian Single Barrel whiskey of its kind and has been well received by both consumers and reviewers alike since its introduction in 2010.


Colonel E. H. Taylor, Jr. Small Batch Bourbon was the newest whiskey created by Buffalo Trace Distillery that earned the distinction of “Extraordinary, Ultimate Recommendation.”  This bourbon, introduced last year, was described by the judges as being, “Pleasantly fruity on the nose suggesting, apricot, pear and cherry while maintaining a toasted oak characteristic as well.”


The other Buffalo Trace Distillery whiskeys awarded the distinction of “Extraordinary, Ultimate Recommendation” include:

–        Pappy Van Winkle Family Reserve 20 Year Old Bourbon

–        William Larue Weller Bourbon


All three of these bourbons were also named Finalists for the Chairman’s Trophy.


Awarded the distinction of “Excellent, Highly Recommended” were:

–        Benchmark Old No. 8 Kentucky Straight Bourbon

–        Buffalo Trace Kentucky Straight Bourbon

–        Eagle Rare Single Barrel Bourbon

–        George T. Stagg Bourbon

–        Sazerac Straight Rye Whiskey


Buffalo Trace and Sazerac Straight Rye were also named Finalists for the Chairman’s Trophy in their respective categories, and Benchmark and Buffalo Trace were deemed to be “Great Values.”


In all, the whiskeys from Buffalo trace Distillery received a total of 10 “Ultimate” or “Excellent” recommendations.


Find a complete list of winners online at




Johnnie Walker usurped as whisky’s no.1


Source: Drinks International

By Hamish Smith

11 April, 2013


Johnnie Walker’s has been knocked from the apex of the whisky category after United Spirits’ aptly named McDowell’s No.1 sold more bottles in 2012, according to The Millionaires’ Club 2013.


Despite sales volumes of Diageo’s flagship Scotch climbing 5% last year to 18.8m 9-litre cases, its Indian adversary – and soon-to-be stable mate – reached 19.5m cases, piling on 21% growth.


It is the first time Johnnie Walker has not been the world’s no.1 selling whisky since at least 2002, and probably going back much further.


A spokesperson for Intellima, the research agency that compiled The Millionaires’ Club 2013, said: “The upper reaches of the whisky sector remain a battle between two seemingly unstoppable forces – the global might of Johnnie Walker and the domestic market-driven volume increases of Indian brands selling to a growing moneyed middle class. But now Johnnie Walker has been knocked off its perch by United Spirits’ McDowell’s No 1.”


If growth rates remain constant through 2013, Johnnie Walker could find itself leapfrogged by Allied Blenders & Distillers’ Officer’s Choice by the time The Millionaires’ Club 2014 is published.


Officer’s Choice, another Indian brand, grew 10% last year, registering volumes of 18.1m cases. The brand has grown an average of 22% annually over the last six years.


The overall picture is one of Indian whisky dominance with eight of the world’s top ten whiskies based in India.


Jack Daniel’s headed up the North American contingent, ranking eighth with volumes of 10.7m cases and growth of 1%.


Intellima said: “US whiskey Jack Daniel’s is the only gatecrasher in the top 10 party but a relatively flat performance did little to enhance its volume standing this year, though Brown-Forman has reported a healthy rise in brand revenues after its first global price increase for several years.”


Jim Beam was in 11th place with volumes of 6.3m cases and 8% growth, while Diageo’s Canadian whisky Crown Royal finished 13th with volumes of 4.8m cases and 2% negative growth.


The 2013 edition of The Millionaires’ Club will be available to download in May from




Diageo to close Waterford plant with loss of 22 jobs


Shock as state-of-the-art Guinness essence facility to close by the end of the year


Source: Irish Times

Ronan McGreevy

Thu, Apr 11, 2013, 17:56


Diageo has announced that it intends to pull out of its Waterford city facility ending hundreds of years of brewing on the site.


Guinness will close its plant by the end of the year with the loss of 16 full-time and six support staff.


The plant makes Guinness flavour essence (GFE), a liquid concentrate made from barley, which is used in all Guinness brewed worldwide.


Though parent company Diageo said the plant was under review, the closure of the operation still came as a shock to the workers involved.


Diageo invested ?40 million in the brewery in 2004 and it remains a state-of-the-art facility.


The company is now looking to consolidate its brewing operations in an expanded facility in St. James’ Gate.


Siptu representative Terry Bryan said the workers were particularly shocked that the plant is closing at the end of this year.


When Diageo announced that it was closing its Dundalk and Kilkenny facilities, the lead in time was almost five years.


He said that the workers did not intend to take the proposed closure as a “fait accompli” and would be making the case for it to remain open.


In the event that it does remain open, he said the workers would look for deployment to the new facility in Dublin and decent redundancy terms.


Diageo Europe beer supply chain director Paul Armstrong said the decision was being made with “sadness and regret” but the company was already working with Enterprise Ireland to find an alternative use for the site.


Sinn Féin Senator David Cullinane described the proposed closure as a “devastating shock to the workers and their families”.


He said it was a further body blow for a city where unemployment is 25 per cent higher than the national rate.




Bacardi sets $1B refi, shifts to U.S. model


Source: Reuters

By Michelle Sierra

Thu, Apr 11 2013


Bacardi International Ltd is shifting to a U.S. pricing model as it looks to refinance an existing $1 billion revolver, allowing the company to pay lower initial interest rates, banking sources told Thomson Reuters LPC.


Bank of America Merrill Lynch, Barclays and BNP Paribas are leading the $1 billion, five-year refinancing revolver that launched this week. Pricing on the new facility is based on the company’s debt to Ebitda ratio. It opens at LIB+112.5 with a 12.5bp commitment fee.


The new credit will refinance a $1 billion revolver the company entered into in 2010. Pricing on that facility followed a European-based pricing model at LIB+75 undrawn with a 26.25bp commitment fee, according to sources.


In Europe the undrawn pricing is determined as a percentage of the drawn margin. In this case the undrawn pricing was 35 percent of the undrawn. In the U.S., however, pricing grids are determined by comparison with deals for companies in the same industry or ratings category or a smaller percentage of the drawn spread, banking sources explained.


Because the new facility is expected to remain undrawn, Bacardi will end up paying only the commitment fee on its loan, making the U.S. pricing model more attractive.


“The perception is that undrawn pricing is cheaper in the U.S. for the better-rated names,” a banker following the situation said.


Though the company’s bank group currently includes U.S., European and global banks, Barcadi’s relationship lending had been conducted mainly out of Europe, according to banking sources.


“Particularly in 2010, in Europe drawn spreads were tighter,” a banking source said. “But now, the commitment fee as a percentage of the draw margin is higher than in the U.S.”


The new pricing is on a grid tied to the company’s debt-to-Ebitda ratio ranging from LIB+150 to LIB+87.5 for a debt-to-Ebitda ratio of greater or equal to 3.5 times to under 1.5 times. The facility pays an undrawn fee ranging from 22.5bp to 8bp if it remains undrawn for the same debt-to-Ebitda ratio.


For some, the fact that European desks would sign on to a deal with U.S.-type terms is a sign of the times. The low new issue loan volume has created fertile ground for a borrower’s market where corporates dictate the lending terms.


“People are saying, ‘I might as well lend right now because I don’t know when I will get a chance to lend again,'” a banker said.


It is unlikely, though, that Bacardi’s option to shift terms would be available for other companies in the same BBB- ratings category. This comes as the market views Pembroke Bermuda-based Barcardi as a unique issuer with deep pockets and global banking relationships that is increasingly behaving like a U.S. borrower issuing both U.S. dollar-denominated bonds and commercial paper.


Bacardi is a global, privately-held, spirits company.




Credit agency lowers ThaiBev rating (Excerpt)


Source: Just-Drinks

By James Wilmore

11 April 2013


Trading in ThaiBev’s shares resumed earlier today (11 April), after a credit agency lowered its rating on the group.


Standand and Poor’s dropped its long-term credit rating for the Chang brewer to BBB- from BBB and gave it a negative outlook. ThaiBev had suspended trading in its shares on the Singapore Stock Exchange ahead of the announcement.




Governments should use zoning to limit liquor stores, Hopkins researchers say


Source: The Baltimore Sun

By Andrea K. Walker

April 11, 2013


Zoning laws have become a powerful way to reduce the number of liquor stores in cities, but too few government officials use them, Johns Hopkins University public health researchers said in a new report.


Researchers from the Center on Alcohol Marketing and Youth at the Johns Hopkins Bloomberg School of Public Health have created a guide to advise governments of the regulatory power they have to combat alcohol abuse.


They hope the report, published in the journal Preventing Chronic Disease, will bring more attention to the issue.


Studies have found that reducing the number of places where people can buy alcohol helps curb excessive drinking in communities. Los Angeles County researchers said that one additional liquor store was associated with 3.4 additional acts of violence a year. New Orleans researchers found that a 10 percent increase in liquor stores would correlate to a 2 percent increase in the homicide rate.


“So many health departments are unaware that they can influence alcohol-related problems through the planning and zoning process,” said David Jernigan, the report’s lead author, who is director of the Hopkins center.


Excessive alcohol use is the third-leading cause of preventable death in the United States and causes 80,000 deaths each year, Jernigan said.


He cited Baltimore as a good example of a place’s using zoning to combat alcoholism.


About 100 stores throughout the city would be forced to stop selling alcohol under new rules being considered as part of the most extensive change in zoning regulations in 40 years.


Baltimore officials have said that they think reducing the concentration of liquor stores and taverns will improve health and safety.


The code would prohibit liquor stores from being located in the middle of a residential block and redefine what qualifies as a tavern. For example, more than 50 percent of a store’s average daily alcohol receipts would need to come from sales consumed on the premises for it to qualify as a tavern.


Liquor store owners have said the city is discriminating against them and that their stores do not cause the city’s health and crime problems. The proposed zoning has passed the planning commission and is now before the City Council.


“Baltimore is a leader on this issue,” Jernigan said.


The Hopkins report outlined four ways states and localities can thin the density of liquor stores in their communities.


It said cities can limit the number of alcohol outlets per geographic area or limit the number of stores based on population. Zoning laws also could be used to establish a cap on the percentage of liquor stores based on the total number of businesses in an area. Municipalities could limit the places alcohol outlets locate as well as their operating hours. Land-use powers can be used to limit and deny certain places from selling alcohol.




United Kingdom: Pubs demand minimum alcohol price


The heads of pubs, nightclubs and breweries are pleading with David Cameron to stick to his plans to introduce a mininum alcohol price.


Source: Daily Telegraph

By Laura Donnelly, Health Correspondent

11 Apr 2013


In recent weeks, sources have indicated that the Prime Minister has bowed to pressure from the Treasury, which opposes plans for a 45 pence per unit minimum price which would reduce tax revenues.


Mr Cameron had argued that making drinks more expensive would curb problem drinking, but several ministers said that a minimum price would only serve to penalise the responsible majority of drinkers.


Now the chief executives of 12 pub chains, nightclub groups and brewers have written a letter to The Daily Telegraph, urging the Prime Minister to “stick to his guns”, saying that the proposed measure would “save lives and protect great British pubs”.


The executives say that the introduction of a minimum price for alcohol would protect society from “irresponsible” drinking blighting Britain’s streets.


In the letter, they say: “Minimum unit pricing will not solve all our alcohol-related ills but it will help to encourage responsible drinking and curb excessive drinking.”


They urge Mr Cameron “not to waste this opportunity and ask that he continues to show courage and strong leadership in these difficult times, by sticking to his guns.”


The introduction of a minimum price would not increase prices at pubs and nightclubs, who charge more for their drinks than off-licences and supermarkets, some of whom have been criticised for selling beer more cheaply than water.


Rooney Anand, chief executive of Greene King pub chain and brewer, one of the signatories to the letter said the easy availability of “excesssively cheap alcohol” was causing “devastating” effects across society.


Peter Marks, chief executive of the Luminar Group, which runs 56 nightclubs in England, said too many town centres were now suffering the consequences of binge drinking, especially from young people who “pre-loaded” by drinking cheap alcohol at home before arriving in pubs and nightclubs. .


He said: “What we are finding more and more is that when people arrive at our venues, there are too many who arrive having had too much to drink, having drunk spirits and wine at home before they go out. We will people away if they are worse for wear – but then we are left with people causing trouble in high streets and town centres all over the country.”


According to research by the Wine and Spirits Trade Association a 45p increase would bring the minimum cost of a bottle of wine to £4.39 and a bottle of vodka to £11.81.


The Treasury has opposed the plans, on the basis that they will reduce tax revenues, while several ministers have argued that the plans would penalise the majority of drinkers who consume in moderation.


Theresa May, the Home Secretary, Michael Gove, the Education Secretary, and Andrew Lansley, the former health secretary, are all understood to have put pressure on the Prime Minister to abandon the plans.


There have also been concerns that a minimum alcohol price in England and Wales would be subject to legal challenge.


A plan to introduce a 50p minimum price in Scotland is being considered by courts, after a claim that it infringes European Union competition laws.




Billionaire wins wine fight; jury awards him $380K


Source: MSN News

By Larry Neumeister of AP

Apr 12th


A Florida billionaire said he planned to drink a glass of wine to celebrate a federal jury’s conclusion Thursday that he was defrauded by a California businessman who sold him two dozen bottles of fake vintage wine at a 2005 auction.


“It’s a home run!” a smiling William Koch told a supporter immediately after the jury in U.S. District Court in Manhattan awarded him $380,000 in compensatory damages for the counterfeit bottles of Bordeaux labeled as if they were created from 1864 to 1950. Koch paid $29,500 for the most expensive bottle, a 1921 magnum bottle of Chateau Petrus. The jury returns Friday to decide if punitive damages are warranted.


Koch, a yachtsman who won the America’s Cup in 1992, had accused Eric Greenberg of fraudulent misrepresentation, fraudulent concealment, deceptive business practices and false advertising. The jury’s six men and two women sided with Koch on each civil charge.


Outside the courthouse, he said he was going to a trendy French restaurant on Manhattan’s Upper East Side to celebrate.


“I’m thirsty,” he said with a smile. “I want a glass of wine.”


A dejected Greenberg only shook his head when asked to comment. One of his lawyers said he did not want to comment until the jury had completed its work.


For Koch, though, the jury verdict was part of a crusade against counterfeit wine sellers that he promised would continue.


“To me, the whole industry is being corrupted,” he said, recounting how his investigators had helped put one wine seller in jail and forced a judgment against another. “I absolutely can’t stand being cheated.”


“Now we have this faker,” he said, referring to Greenberg. “We’re moving down our hit list of fakers. This is just a start.”


Koch, 72, testified during the trial that he has mostly stopped buying wines at auction because he has been cheated so many times and no longer trusted the market.


Greenberg – a former billionaire who built two Internet consulting companies before the 2000 collapse of those stocks reportedly reduced his net worth by as much as 90 percent – had insisted on the witness stand that he never intentionally sold a bad bottle of wine.


“I wouldn’t sell a fake wine,” he said as one of the trial’s first witnesses. “I’ve never intentionally sold fake wine in my life.”


Millions were spent by both sides on lawyers in the case.


Koch, the founder and president of the Oxbow Group, based in West Palm Beach, Fla., spent $3.7 million at the 2005 auction, buying 2,600 bottles of wine. He paid someone more than $75,000 daily for two days to make his bids, though he decided before the sale not to inspect the wines he eventually bought.


Koch, a Palm Beach resident and the brother of industrialists and conservative political supporters David and Charles Koch, conceded on the witness stand that the wine he bought from Greenberg was not his first encounter with fakes. In 1988, he said, he paid $400,000 for four bottles of French wine he falsely believed had been owned by Thomas Jefferson.




Amazon Wine expands services to Texas


Source: San Antonio Business Journal

Mike W. Thomas

Apr 11th


Amazon Inc. is expanding its online wine delivery service to include Texas.


Amazon Wine allows customers to make purchases directly from more than 350 wineries and 2,200 participating labels and will now include Texas wineries as well. is a one-stop shopping place. With Amazon Wine, we will be able to get in front of millions of new customers,” says Mike Laughlin, tasting room manager for Llano Estacado Winery in Lubbock.


Other highly-rated Texas wines that will now be available through the service include selections from Messina Hof, Becker Vineyards, McPherson Cellars and Brennan Vineyards.


In addition to Texas, Amazon’s direct-to-consumer shipping from wineries is available in California, Colorado, Connecticut, Florida, Idaho, Illinois, Iowa, Maryland, Nebraska, Nevada, North Carolina, Oregon, South Carolina, Washington, Wyoming, and the District of Columbia. Customers can ship up to six bottles of wine for $9.99.




Offering Large Selection of Wine Brands Boosts Sales at Restaurants and Especially at Bars, Survey Shows


Source: Consumer Edge Insight

Apr 12th


According to Alcoholic Beverage DemandTracker, a periodic survey of US adults age 21+ who consume any type of alcohol at least once a week or more, offering a larger selection of wine brands in the on-premise channel helps the operator sell more wine, especially for bars.


Among wine drinkers who visit restaurants regularly, 31% of them say they are more likely to drink wine and 23% say they order more servings of wine as a result of being offered a larger selection of wine brands. Some wine drinkers are also more likely to experiment by ordering wine brands they’ve never tried before (26%). Only 32% of wine drinkers who visit restaurants say that a larger selection of wine brands has no effect on their consumption.


Among wine drinkers who visit bars regularly, 38% of them say they are more likely to drink wine and 31% say they order more servings of wine as a result of being offered a larger selection of wine brands. Some wine drinkers are also more likely to experiment by ordering wine brands they’ve never tried before (25%). Only 25% of wine drinkers who visit bars say that a larger selection of wine brands has no effect on their consumption.

“Our latest findings confirm the value for on-premise operators of offering a large selection of wine,” said David Decker, President of Consumer Edge Insight. “For those who enjoy wine, seeing a large selection of wine brands at a bar or restaurant is an invitation to consume and experiment. Bars and restaurants that provide a larger wine offering should lead to a larger number of servings consumed on each occasion.”




Unveiling Bordeaux’s New Vintage


Source: WSJ

By Will Lyons

Apr 12th


IN A SMALL BISTRO off the Place des Quinconces, a large tree-lined square in Bordeaux’s 18th-century city center, two men-a négociant and courtier-sit hunched over their supper, steak frites and red wine. It’s early spring, which in Bordeaux means only one thing: Conversation is dominated by talk of the new vintage.


Growing conditions in 2012 were capricious. Flowering was late, there was too much rain in the spring and the summer was very dry. A late heat wave in August allowed the grapes to ripen evenly so by mid-September things were looking up. Then came the rain.


En Primeur week is the yearly ritual when wine professionals from all corners of the world descend on Bordeaux to taste and evaluate the new wines that been aging in barrels for just a few months. WSJ travelled to Bordeaux to taste the 2012 vintage.


“The rain prevented it from becoming a very good vintage,” says Patrick Maroteaux, owner of St.-Julien’s Château Branaire-Ducru.


Those châteaux that picked before the rain or, in the case of the Right Bank communes of Pomerol and St.-Émilion, that benefited from early-ripening varieties such as Merlot, made good wines. Others resorted to the technical innovations that have made it easier to make drinkable wine during unfavorable growing seasons. From the few wines I tasted in early March, my impression was that the fruit was expressive and ripe, but the wines lacked the weight and structure of 2010.


At the Place des Quinconces, talk isn’t about the quality or the weather, but the price. The past two decades have seen a phenomenal bull run in Bordeaux. This, coupled with a trio of outstanding vintages beginning with the 2005 and including ’09 and ’10, has seen prices increase dramatically-in some cases climbing as much as sevenfold. But after increases in ’09 and ’10, many in the industry feel that the opening prices didn’t drop far enough in ’11 to attract consumers who simply refuse to pay what is being asked (up to ?450 a bottle).


In Bordeaux, the châteaux determine the price, but unlike any other wine regions in the world, the châteaux sell their wines directly to négociants-collectively known as the Place de Bordeaux-who, in turn, sell the wine to restaurants, merchants and major retailers. Added to this is yet another layer, the courtiers, who act as middlemen between the châteaux and the négociants.


“Everyone got carried away in 2009 and the prices haven’t come down,” says one courtier, who wished to remain unnamed. “If the châteaux do not get the price right, the 2012 campaign could be a disaster.”


Most agree that prices have to drop by around 30% to attract interest. Whether the châteaux owners, who are in some cases four tiers away from the consumer, listen is another question. But Gary Boom, founder of London wine merchant Bordeaux Index, says that in order to give the general public a reason to buy this vintage, the prices will have to fall. Compounding the problem is the small matter of unsold ’10 and ’11. As one négociant tells me: “There is an awful lot of stock on the market that is sitting in warehouses waiting to find buyers.”


Back at the Place des Quinconces, the two men smile ruefully. “In Bordeaux, it is always the same,” says the courtier, explaining the annual cycle of events: talk of crisis, followed by selling and a period of calm, then all talk is “of the new vintage.”




Leading Man of Burgundy Puts Down His Glass


Source: New York Times


Apr 11th


To watch Jacques Lardière scoot about the cellar at the headquarters of Louis Jadot in Beaune, France, the crossroads of Burgundy, is to see a man in his element. With white hair cascading from his head like a puffy cumulus cloud, red pants the likes of which only a Frenchman could even think of carrying off, twinkling eyes magnified by spectacles and an ever-present smile, Mr. Lardière is a cross between a wizard and an elf, climbing over barrels and digging deeper into Jadot’s rich Burgundian holdings in a determined effort to explain the wondrous mysteries that keep Burgundy lovers so everlastingly entranced.


In his 42 years as technical director, supervising winemaking and viticulture, Mr. Lardière has traveled the globe promoting Jadot and Burgundy while solidifying his status as one of the most unforgettable characters in wine. He has led tastings, sat through thousands of dinners and greeted countless collectors. If a record exists for posing for most snapshots with awe-struck Burgundy fiends, Mr. Lardière most likely holds it.


I, for one, have run into Mr. Lardière in Jackson Hole, Wyo., and Portland, Ore., San Francisco and Pismo Beach, Calif. I’ve walked vineyards with him in Beaujolais and tasted Pouilly-Fuissé with him in the Mâconnais. Yet in my mind, I will always see him scampering through the Beaune cellar, a scheduled 30-minute tasting of the new Jadot wines turning into an hour, then two hours, the points he is trying to make never quite catching up to the rush of thoughts conveyed in a combination of French, English and Lardière-speak, a mystifying torrent of brain-twisting notions that communicate in passion and impressions rather than in smoothly linear ideas.


He was at it again in New York last month, though this was different. Mr. Lardière, 65, was stepping down. He had already turned over his duties to Frédéric Barnier. “The breadth of the new generation is very good,” Mr. Lardière said.


It was the culmination of a two-year retirement tour in which he had spanned the globe, receiving honors and tributes even as he continued to offer the usual thought-provoking monologues.


The occasion was an extraordinary tasting of 20 vintages of Jadot’s Chevalier-Montrachet “Les Demoiselles,” a superb grand cru white Burgundy, as part of La Paulée de New York, Daniel Johnnes’s homage to a Burgundian harvest festival.


“This is maybe your 20th last event,” Mr. Johnnes said, by way of an introduction, to the audience in an upstairs dining room at Eleven Madison Park.


Mr. Lardière plunged right in, only hinting at the elegiac.


“When you drink wine, you must realize you are drinking something more than wine,” he said to start things off. “It’s a very meditative beverage.”


He spoke of the vines pumping minerality from the ground and pulling molecules from the air, “some lighter and higher than others.” He referred to the flavors of hawthorn and green hazelnuts, studding his English sentences with regular “doncs,” a French transitional that served as connective tissue between thoughts. “The more you drink, the more you are,” he concluded.


More concretely, Mr. Lardière played the sly provocateur in assessing the wines, his own views of vintages often contradicting the conventional wisdom. The first flight included three recent vintages, 2011, 2010 and 2009. I loved the beautiful, energetic, tightly coiled 2010, but Mr. Lardière selected as the best of the three the ripe, opulent ’09, a year in which many white Burgundies seem to lack finesse.


“It will be more elegant than we suppose,” he said.


As a group, the wines were gorgeous, showing the differing characteristics of many vintages yet bound by their vitality, the persistence of their flavors and their savory mineral character. Among my favorites were the precise, transparent 2008, the sedate ’97 and the urgent ’96, the rich yet balanced ’90, the grand ’85 and the golden, placid ’84, a notoriously poor vintage in Burgundy.


“I must be crazy to show you the ’84,” Mr. Lardière told the group, “but after 30 years, ahhhh.”


Older vintages included a shining ’78, a minty, apple-tinged ’67, which happened to have been bottled by Mr. Lardière in his first year at Jadot, and a fresh, spicy 1929 that got better and better in the glass.


It was left to others to speak of what Mr. Lardière has meant to Burgundy and Jadot, a leading négociant who over the course of his tenure has improved the quality of its wines to the point where they are now among the best values in Burgundy.


“Jacques taught me everything,” said Pierre-Henry Gagey, who succeeded his father, André, as president of Louis Jadot in 1992 after joining the company in 1985. “He’s been so energetic and positive in his outlook. For me, who has tasted with him every day in the last 28 years, I am always amazed by this capacity.”


More specifically, Mr. Gagey credited Mr. Lardière with making the wines purer, with a finer texture, after they had been darker and more concentrated, and for pushing Jadot to adapt biodynamic viticulture in its own vineyards. Mr. Lardière is originally from the Atlantic coast, near the Fiefs Vendéens, a small wine region near the mouth of the Loire, and Mr. Gagey said not being a native of Burgundy had been a tremendous advantage.


“He didn’t have an idea of how things were supposed to taste, which allowed him to find the direct link between the soil and the wine,” he said.


Larry Stone, a leading American sommelier and wine executive, who has known Mr. Lardière since 1988, said he had helped improve the region as a whole, and had especially inspired small producers.


“His winemaking is very modern and intuitive, with lots of room for creativity and different styles,” Mr. Stone said. “He gave small producers the courage to move forward, inspiring them by the improvement of the négociants.”


As for Mr. Lardière’s flights of oratory, Mr. Gagey said, “It’s absolutely true, we don’t always understand Jacques, but we understand the meaning of what he says.” He said that Mr. Lardière would continue to work on various projects for Jadot, but that Mr. Barnier was now in charge.


As much as I’ve enjoyed Mr. Lardière’s company and learned from parsing his words, I’ll probably remember best one of the clearest bits of wisdom he imparted to me.


“Good wine is not enough to explain the potential of Burgundy,” he told me on a visit in 2008. “Some wines are like mystery books that you read fast, enjoy and forget. Burgundy is like a classic that you take in slowly, assimilate and always remember.”


Just like Mr. Lardière.




Treasury Wine Seeks Cooler Land as Climate Shifts Season


Source: Bloomberg

By David Fickling

Apr 11, 2013


Treasury Wine Estates Ltd. (TWE), the world’s second-largest listed wine company, is seeking out vineyards in cooler regions in preference to ones in warmer areas as climate change starts to shift growing seasons.


The wine maker’s land acquisition teams are looking to buy and lease vineyards in Australia’s Tasmania state, Chief Executive Officer David Dearie said in an interview yesterday. Harvests are already starting as much as a day-and-a-half earlier each year as a result of climate change, he said.


Areas suitable for viticulture may drop 68 percent in Mediterranean Europe by 2050 and fall 73 percent in regions of Australia with a so-called Mediterranean climate, according to a study published this month in the Proceedings of the National Academy of Sciences of the United States of America. New Zealand’s area will more than double and it will also surge in northern Europe and western North America, the authors wrote.


“As the world heats, Tasmania’s very well positioned because of the cooler climate,” Dearie said. “We’ve got out of places like the Hunter; in the longer term I think it will be hot and dry and expensive.”


The Melbourne-based company earlier sold its vineyards in the Hunter Valley north of Sydney, where the Lindemans brand originated, as part of a shift to more profitable growing regions, he said.


Australia’s most prestigious wine award went in 2011 to a shiraz from southern Tasmania, a region better-known for cooler- climate white wines and pinot noir grapes.


Monitoring Vineyards


Treasury’s growers are monitoring vineyards’ growing seasons to update their forecasts of local climate change impacts, and delaying pruning work to give time to harvest grapes as seasons move later, Rebecca Smith, a spokeswoman, said by e-mail.


Shares of Treasury have climbed 39 percent in the past 12 months in Sydney trading, outperforming the S&P/ASX 200 Index’s 18 percent gain in the period.


Treasury needs to source more high-quality land to meet demand for premium wines and is looking in the U.S., Australia and New Zealand, Dearie said. While the company would also like to find vineyards in France as a means to gain access to the Asian market, prices were too high at present, he said.


“We don’t actually have the wine,” he said. “It’s a question of making the wine first and then selling ourselves into the market.”


The wine maker wasn’t finding the limits of demand for the most expensive wines, Dearie said. Treasury April 4 increased prices for its 2008 Penfolds Grange vintage to A$785 ($827) a bottle, a 26 percent increase on the previous year’s output and 15 percent above an initial pricing in January, as growing Chinese demand for high-end wines outpaces supply.


China will become the largest wine market in the world within 10 years, Dearie said in an interview with Bloomberg News last month. Still, it will take 30 to 50 years for the country, the fifth-largest grower of wine grapes, to establish high quality wine growing regions, he said yesterday.




Costco posts disappointing March sales


Source: The Associated Press

Apr 11th


Costco Wholesale Corp.’s revenue from established stores rose 4 percent in March, but that was short of Wall Street expectations.


The Issaquah, Wash., company said changes in gas prices and foreign exchange rates hurt revenue from stores open at least a year for the five-week period that ended April 7.


Analysts expected, on average, that revenue from stores open at least a year would rise 5.2 percent, according to Thomson Reuters.


Revenue at stores open at least a year is a key gauge of a retailer’s health because it excludes results from stores recently opened or closed.


The wholesale club operator said revenue from established U.S. locations climbed 5 percent, while international sales rose 2 percent. Not counting the effect of gas and foreign exchange rates, revenue from stores open at least a year increased 6 percent.


Total revenue for that period climbed 7 percent to $9.67 billion compared to the same period last year.


The company currently runs 626 warehouses, including 449 in the United States and Puerto Rico, 85 in Canada and 33 in Mexico.


Costco said last month its fiscal second-quarter net income climbed 39 percent, topping Wall Street expectations, as it pulled in more money from membership fees, sales improved and it recorded a large tax benefit. The company earned $547 million, or $1.24 per share, for the period that ended Feb. 17 on $24.87 billion in revenue.


Its shares finished at $102.56 per share on Wednesday. Its shares set a 52-week high of $107.75 on April 2.




Chuy’s: 3-Million Share Secondary Offering Prices at 3.4% Discount


Source: WSJ

By Nathalie Tadena

Apr 11th


Chuy’s Holdings Inc. (CHUY) said an offering of 3 million shares sold by certain shareholders priced at a 3.4% discount to the restaurant chain’s Thursday closing price.


The company said the secondary offering priced at $33 a piece. It won’t get any of the proceeds from the sale, which is being made by selling stockholders, primarily Goode Partners LLC. After the sale, Goode will have reduced its stake in Chuy’s to 4.7% from 22.7%.


As of March 25, Chuy’s had 16.2 million shares outstanding.


Based in Austin, Texas, Chuy’s operates a chain of about 40 namesake restaurants serving Mexican and Tex-Mex food. The company was founded in 1982 and boasts that it prices only three out of 49 menu items at more than $10.


Earlier this week, Chuy’s disclosed its revenue for the fiscal first quarter rose about 25% from a year ago to $46.7 million, as comparable restaurant sales increased about 2.3% for the 13-week period ended March 31, compared with the 13-week period ended April 1 of last year.


Shares were off by 15 cents to $34.02 after hours. The company’s stock has more than doubled from its July initial public offering price of $13.




Texas: Bill aims to level Texas’ playing field for alcohol marketing


Source: Austin Business Journal

James Jeffrey

Apr 11th


Supporters of legislation filed this week claim it will provide Texas’ beer industry with long-needed parity with the wine and liquor industries when it comes to marketing practices.


State Sen. Leticia Van De Putte’s, D-San Antonio, Senate Bill 870 would remove the current $1 value limit on consumer novelties – a value established more than 25 years ago – and instead permit it to be a reasonable value as mandated for ale, wine and liquor novelties. It would remove the prohibition on using advertising specialties for beer and would allow for the co-packing of items such as holiday glassware or steins, practices already permitted for ale, wine and liquor.


“There is no legitimate reason to regulate beer more restrictively than these other offerings with higher alcohol content with regard to these kinds of promotional items,” said Keith Diggs, vice president of sales for Anheuser-Busch in a five-state region including Texas. “This legislation will move toward correcting those inequities.”


The legislation would also help avoid situations such as those that led to Jester King Craft Brewery’s lawsuit filed in 2011 against the Texas Alcoholic Beverage Commission, claiming that several of the commission’s regulations were unconstitutional, Diggs said.


No one spoke in opposition to the bill during an April 9 hearing before the Senate Committee on Business and Commerce, and it remains pending in committee.


“This bill is just one part of a broader, yearlong effort by my colleagues and I to iron out inconsistencies in the Texas Alcoholic Beverage Commission code,” said Van de Putte, who has worked with fellow lawmakers in shaping other legislation to help craft brewers. “I hope this will level the playing field.”




Canada: Beer dominates Canada’s $21B alcohol industry, but thirst for wine growing


Source: The Province

By Karl Kofmel

April 11, 2013


Statistics Canada’s yearly report on alcohol sales shows Canada is slowly refreshing its love for beer. But it seems our affection for wine and spirits is bubbling even more.


After beer sales fell 0.6 per cent in 2010-11, they shot back up by 0.6 per cent in 2011-12. Sales are still below 2009-10 levels by approximately 0.25 per cent, however.


Here are a few other facts from the report:


-Wine sales increased by 5.9 per cent and spirits sales went up 3.9 per cent last year. For the second year in a row, both wine and spirits saw bigger spending boosts than beer.


-By volume, 236.2 million litres were purchased in 2011-12 – an increase of 3.5 per cent over 2010-11.


-Beer still led sales, however: Canadians purchased $9.2 billion worth of suds, $6.5 billion worth of wine, and $5.3 billion worth of spirits. In total, it’s a $21-billion alcohol industry.


-Canadians spent over $8 billion on imported products, with Ontario and Quebec accounting for over two-thirds of those sales.


-Most beer imports come from the United States (23.5 per cent), most wine from Italy (19.2 per cent) and over half of our imported spirits also come from the U.S. (53.9 per cent).


-Yukon is the leading consumer of alcohol per capita, at 167.7 litres annually. Yukoners also purchase the most beer and spirits, 131.4 and 14.8 litres respectively. Only Quebec purchases more wine per person at 23.4 litres.


-Among the provinces, Quebec purchases the most per capita: 121.7 litres. Alberta (114 litres), Saskatchewan (101.3 litres), B.C. (98.9 litres ) and Ontario (95.1 litres) all trail la belle province.


-Newfoundland and Labrador are the biggest beer purchasers among the provinces (99.6 litres per person per year) and spirit purchasers (12.3 litres).


-Since 1950, the only times that the sale of alcohol went down year-to-year were the fiscal years 1954-1955 and 1993-94.


The Statistics Canada report looks at sales for the previous fiscal year. This year’s report was based on numbers up to March 31, 2012.


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