Archive for the ‘Wine Education’ Category

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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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.

Liquor Industry News 4-10-13

April 10, 2013

Franklin Liquors

Wednesday April 10th 2013

PERNOD RICARD : USA To Appoint Major Brands as its Exclusive Distributor in Missouri


Source: 4-Traders



Pernod Ricard USA® today announced plans to appoint Major Brands, Inc. as the exclusive distributor of its full line of spirits and wine brands in Missouri, effective May 1, 2013.


Bryan Fry, President and Chief Executive Officer, Pernod Ricard USA, said Major Brands was chosen based on its local market expertise, as well as its planning and execution skills. “We are very pleased to be able to achieve our goal to consolidate the distribution of our premium portfolio into one wholesaler in Missouri, as this move will further strengthen our powerful Route to Market in that state,” Fry said.


Martin Crane, Senior Vice President, Spirits Sales, Pernod Ricard USA, said the company “very much looks forward to this collaboration since we know that the Major Brands team – led by Barry O’Neil – will build upon their impressive track record of outstanding service and brand stewardship. We expect great things and are confident that, together, we can achieve strong growth for our leading brands.”


“Today’s announcement reaffirms the strength of the longstanding partnership between Pernod and Major Brands,” said Major Brands Chairman and CEO, Susan McCollum. “It reflects Pernod’s continued confidence in our company’s unique ability to deliver outstanding results in the Missouri marketplace.”


Previously, Pernod Ricard USA’s brands were distributed in Missouri by Glazer’s and Major Brands. Glazer’s will continue to distribute Pernod Ricard’s products in Arkansas and Kansas.


Earlier this year, Pernod Ricard USA asked a Federal Court in Missouri to declare that its terminations of Major Brands and Glazer’s as distributors of portions of Pernod Ricard’s portfolio in Missouri did not violate state law. That litigation is still pending.




Flavored Vodka Companies Continue To Debut New Flavors, But Why?


Source: The Huffington Post

By Carey Polis



Dear Any Liquor Company That Has Produced A Flavored Vodka In The Past Several Years,


It seems as if you are on to something. Last year, we learned that flavored-vodka sales are on the rise, and that in 2011, nearly a quarter of all sales were from flavored vodka.


This surprised us, to say the least. A year ago, we rounded up some of the worst-flavored vodkas of all time, that included non-appetizing flavors like smoked salmon and fluffed marshmallow.


In an effort to understand this craze, we’ve tasted various flavors, including peanut butter and jelly vodka and salted caramel vodka (the official flavor is spelled “Karamel,” for no apparent reason). The caramel was awful. The peanut butter and jelly was barely passable.


Within the past several weeks, even more flavored vodkas have come on the market. Smirnoff introduced a “Sorbet Light” line with three flavors: raspberry pomegranate, mango passionfruit and lemon. The aim of the line is to offer a reduced-calorie version when compared to other dessert-flavored vodkas. We tasted these vodkas on their own and as part of a cocktail, with recipes courtesy of Smirnoff. None of them were good. On their own, the flavors were medicinal, Ring Pop-like and reminiscent of bathroom cleaner. When mixed into cocktails, one of them was almost palatable; it reminded us of jungle juice at a frat party.


We’re not sure who had the idea of creating rainbow sherbet vodka but yes, it is now available and is as unpalatable as it sounds. And does anyone even want a rainbow sherbet cocktail? We’re having trouble understanding where the market for this flavor is. Adults that are nostalgic for childhood but would rather drink vodka than eat ice cream?


After sampling these various flavors over the course of several months, we feel fairly well versed in the flavored vodka arena. And you know what? We just don’t get it. How is this category selling well? There is no need for a flavor like lemon vodka when you can use plain vodka and add fresh lemon. And there is definitely no need for a vodka to taste like caramel (or rather, attempt to taste like caramel). Vodka is not a liquor category that needs to have dozens of iterations. Keep it simple and let the other cocktail ingredients elevate its taste.


Novelty vodka flavors do not make cocktails taste better. In fact, in most cases, they make them taste worse. If you want an interesting cocktail, don’t rely on artificial flavors to get you there.




HuffPost Taste & HuffPost Food




Big brand brandies top the spirits growth charts


Source: Drinks International

By Hamish Smith

09 April, 2013


The three fastest growing million-case spirit brands of 2012 all emanated from the brandy category, according to the Millionaires’ Club 2013.


United Spirits’ Golden Grape topped the charts with year-on-year growth of 71% to achieve volume sales of 1.4m 9-litre cases.


In second place in the fastest growing rankings was the Philippines’ Emperador brandy which, despite its colossal 20m case volumes in 2011, soared 54% to achieve 31m cases last year..


The Indian group’s McDowell’s VSOP grew 41% to 1.9m cases, while the sixth fastest growing spirit was also a brandy, Silver Cup, which saw 30% growth to achieve 1.4m cases.


A spokesperson from Intellima, the research company for the Millionaires Club 2013, said: “It’s no surprise that the fastest-growing Millionaires’ Club product is from India, nor that it’s one produced by United Spirits. Perhaps more surprising is that it’s a brandy, not a whisky, and one that was launched five decades ago.


“Golden Grape was first made at the Cherthala distillery in 1962 and was so popular in southern India that stocks had to be rationed. Such supply problems are a thing of the past, but the brand’s 50th anniversary saw renewed fervour for the product.


About Emperador, Intellima said: “When Andrew Tan launched the brand in the 1980s, the Philippines spirits market was dominated by rum and gin. The company built sales gradually through the 1990s and 2000s. A strong economy, new product lines and exports into Thailand and China have all helped accelerate growth in recent years.”


Sandwiched between the two Indian brandies in 3rd and 6th places is Diageo and Sean Combs’ Cîroc vodka, which grew 40% to 2.1m cases, and Bombay Sapphire, which saw a hike of 31% during the period to 2.6m cases.


Other notable movers in 2012 included Southern Comfort, which jumped 26% to 2.5m cases and Diageo’s Cacique rum which climbed 24% to 2.1m cases.


Despite already sizable volumes, bartenders’ favourite Fernet Branca piled on 17% in sales volumes to register 5.4m case sales.




GS Research – Beverages: 1Q13 preview: Blame the weather; earnings could be bumpy for beverages in 1Q (Excerpt)


Source: Goldman Sachs

Apr 8th


Beverage 1Q earnings likely to be tepid

We see potential for the beverage group to give back some of its YTD outperformance (XLP +11.6% YTD versus S&P 500 +8.9%) around 1Q earnings season, as fundamental are likely to remain lackluster. Our EPS estimates are broadly in line with consensus but we expect soft volume as the US faces a tough weather comparison, Europe remains challenging, and other key EMs (China and Brazil) also experienced poor weather recently. That said, downside is likely to be limited, as 1Q is seasonally a small quarter, weather-related issues are likely to be transitory, and fundamentals could accelerate in 2H13 as macro conditions improve.


Domestic NARTD lagging alcohol growth

Non-alcoholic beverage volume continues to slide (ex. bottled water) even as pricing has moderated. However, alcohol is seeing increasing price/mix in wine/spirits and volume demand for overall alcohol has been healthier, primarily as beer emerges from the cyclical doldrums. Among the alcohol names, we favor TAP given its valuation.


Above consensus for TAP/PEP; below consensus for BEAM

On TAP (Buy), fundamentals will still look soft and we have volumes down for both Canada and the US, but expectations are low and we believe commentary will be more constructive around the new product launches. On PEP (Neutral), Frito trends have been better recently and benign inflation and 2012 re-base should provide some cushion. We are below consensus for BEAM (Neutral) as the firm faces a tough volume comparison and India remains a drag




Off-trade beer volumes slip, but Heineken makes ground (Excerpt)


Source: Just-Drinks

By James Wilmore

9 April 2013


Off-trade beer volumes in the US fell by 3.4% in the latest quarter, but Heineken is continuing to gain market share, according to recently-released figures.


Domestic shipments for brewers in the three months to the end of February were down by 2.3%, while imports decreased by 2.9%, Nielsen figures, reported by analysts Bernstein Research today (9 April), revealed. The drop-off was attributed to a tough weather comparison.








Source: Law 360

Apr 9th


Constellation Brands’ Defective Notice of Termination Without Good Cause


On or about March 25, 2013, Garco received a letter from Constellation Brands notifying Garco that it would no longer accept Garco’s orders effective April 30, 2013.


A letter dated April 1, 2013 from Constellation Brands to Garco indicated that Constellation Brands would allow Garco to continue selling Constellation Brands’ products in Missouri after April 30, 2013, pursuant to the same terms and conditions under which the parties have been operating, but only if Garco would agree to relinquish and release all rights and protections afforded Garco under Missouri law, R.S.Mo. §407.400, §407.405, and §407.413.


The letter dated April 1, 2013 from Constellation Brands notified Garco that it was changing its business model in Missouri and that, as part of this process, it desired its wholesale distributors to respond to a Request for Commitment (“RFC”), which would serve as Garco’s application to become the sole wholesale distributor for Constellation Brands in Missouri.


Pursuant to the correspondence dated April 1, 2013, if Garco agreed to submit a response to the RFC, and agreed to relinquish and release all protections afforded Garco by Missouri law and release all claims it possessed against Constellation Brands, Garco could continue to sell temporarily Constellation Brands’ products after April 30, 2013, until such time as a permanent sole distributor can be chosen by Constellation Brands for the State of Missouri.


Garco responded to the RFC with a letter dated April 8, 2013, which refused to release Constellation Brands from any and all liability, and Garco refused to release its franchise protections under Missouri law.


Count I – Wrongful Termination Under Missouri Statute


A “community of interest” exists between Garco and Constellation Brands.


Approximately 37% of Garco’s total sales revenues are comprised of Constellation Brands’ products, and Garco sells those products pursuant to a marketing plan and sales goals promulgated by Constellation Brands.


Garco’s total sales of Constellation Brands’ products in 2012 were over $5.6 million.


The parties mutually benefit economically from their relationship in promoting and selling Constellation Brands’ products.


Garco and Constellation Brands, therefore, have a franchise relationship under R.S.Mo., §407.400.


Pursuant to R.S.Mo., §407.410, Garco is entitled to compensatory damages, including loss of goodwill, cost of this suit, and any and all equitable relief the Court deems proper.


Pursuant to R.S.Mo., §407.413, Constellation Brands unilaterally terminated the franchise relationship with Garco without requisite “good cause” as defined by statute.


Pursuant to R.S.Mo., §407.413.3, Garco is entitled to recover all damages it sustains, together with the costs of this suit and reasonable attorneys’ fees incurred by Garco.




Americans Hold Dangerous Misperceptions About Risks of Heavy Drinking    


SOURCE: PR Newswire

Screening for Mental Health

Apr 9th


Public Opinion Survey Reveals At-Risk Drinking Not Considered a Problem by Many


At-risk drinking (four or more drinks per day for men; three or more for women) is common in the U.S. but many people don’t consider it a problem. According to a recent national survey of American adults released this month by Screening for Mental Health, Inc., a nonprofit provider of mental health screening programs, half of all men and one-third of women had at least one at-risk drinking episode in the last year. Furthermore, one-fifth of Americans believe that regardless of how much a person drinks, it isn’t a problem unless there are negative impacts on their personal relationships or work performance.


The public opinion poll findings come as thousands of community-based organizations, military installations, and colleges prepare to host National Alcohol Screening Day events on Thursday, April 11. Anonymous online screenings are available


“These findings reinforce just how important National Alcohol Screening Day is,” said Douglas G. Jacobs , M.D., associate clinical professor of psychiatry at Harvard Medical School and medical director of Screening for Mental Health, Inc. “Despite public opinion, at-risk drinking increases your chances of developing alcohol use disorders-such as alcoholism-as well as other physical and mental health problems. In the U.S., about 18 million people have an alcohol use disorder. The screenings allow individuals to assess their drinking habits and have an opportunity to connect with local support resources.”


The telephone poll, conducted by Anderson Robbins Research, surveyed 1,000 American adults between March 22 and 28 and gathered information on drinking habits, opinions, and perceptions. Interviews were conducted by professional interviewers. Respondents were randomly selected for inclusion in the survey and were interviewed on cell phones and landlines.


Other key findings include:


Seven in 10 respondents (68%) said they’d be likely to speak with a health care provider if they thought they might have a problem with alcohol, but this drops to just half (51%) among those who had the most at-risk drinking episodes (20+ times) in the past year.


One-fifth (20%) feel that drinking heavily is a phase that many kids go through, but that it will not hurt them in the long run. However, according to the National Institute on Alcohol Abuse and Alcoholism (NIAAA), people who started drinking before age 15 were 50% more likely to become alcohol dependent as adults. The same was true to a lesser extent for those who started drinking between ages 15 and 17.


At-risk drinking is highly correlated with age and gender. Men under age 35 are the most likely (71%) to report at-risk drinking and women over age 55 are the least likely (21%).


Over three-quarters (77%) of Americans think pregnant women should avoid alcohol altogether, while one-fifth (20%) think an occasional glass of wine is fine. According to NIAAA, no amount of alcohol is safe during pregnancy. Consuming any kind of alcohol can potentially harm an unborn child.


Held annually in April as part of Alcohol Awareness Month, National Alcohol Screening Day raises awareness about alcohol misuse and provides referral options for individuals with alcohol problems for further treatment. More than 40,000 screenings were taken online and at in-person events last National Alcohol Screening Day. To take an anonymous and free screening online,


Screening for Mental Health Inc. (SMH) is the non-profit organization that first introduced the concept of large-scale mental health screenings with its flagship program, National Depression Screening Day®, in 1991. SMH programs include both in-person and online programs for depression, bipolar disorder, generalized anxiety disorder, posttraumatic stress disorder, eating disorders, alcohol problems, and suicide prevention. SMH programs have been used by hospitals, mental health centers, social service agencies, government agencies, older adult facilities, primary care clinicians, colleges, secondary schools, corporations, and military installations reaching individuals ranging from adolescents to older adults.




Bordeaux 2012: attendance good, but doubts about quality persist


Source: Decanter

by Jane Anson and Adam Lechmere in Bordeaux

Tuesday 9 April 2013

As the en primeur tasting week gets underway in Bordeaux, there are differing reports as to the quality of the vintage.


Decanter’s consultant editor Steven Spurrier is largely positive at this stage, having begun tasting both the Left and Right banks, ‘People have made a huge effort to combat the challenges of the vintage, and I find it much better than the 2011.


‘It’s so unfair that the top 60 chateaux get all the numbers because so many the others make terribly good wine. I didn’t find a bad bottle on the table at Cercle Rive Droite, and there are very few regions you can say that about.’


Decanter’s Right Bank correspondent James Lawther MW commented, ‘It’s an uneven vintage, which is logical given the difficulties of the year. On the Right Bank the successful appellation seems to be Pomerol, an earlier ripening zone. Elsewhere in St Emilion and the other satellite appellations it very much depends on the terroir and the human input.’


American-based Jeff Leve of the Wine Cellar Insider told, ‘the further north you go in the Médoc, the greener the tannins become. The best wines I’ve tried so far have been in Pessac Léognan and Pomerol. Producers that used a light hand did best. Those who overdid things just got tough tannins.’


Overall, numbers seem quite buoyant. Chateau Mouton Rothschild is reporting 1500 tasters, a rise on last year, as is Chateau Margaux. Lafite expects 1,350, the same as last year.


Initial numbers show 76% French attendance, with 53 countries overall. The UGC has issued 5,903 badges, up from 5,267 last year.


Nicolas Mestre at the UGC said, ‘there has not been the dip in numbers that we often see in Vinexpo years [referring to the bi-annual Bordeaux wine fair, which takes place in June this year]. Of course we won’t know final numbers until next week, but these are highly encouraging first indications.’


On the buying side, merchants are ambivalent. ‘The main concern,’ said Bud Cuchet, buying director at London merchant Fine+Rare, ‘is that if the Bordelais don’t get the price right now, it will have an effect on the whole year’s Bordeaux sales. If the momentum doesn’t build up with en primeur, it can be tough to generate interest later on’.


Lay & Wheeler sales manager Nick Connell, speaking at Domaine de Chevalier this afternoon, said while the wines did not have the concentration of the past few vintages, he was confident there would be a market for them. But, he added, ‘it all depends on price.’


As for the French press, Bordeaux’s paper of record, Sudouest, today suggests that critics and merchants, ‘glass in hand’ are finding a huge variation in quality: ‘the good, the less good, and the failures’.


It goes on to quote what it calls ‘a chorus of negotiants and courtiers’ saying there is ‘little enthusiasm’ amongst the hordes of wine professionals who have come to taste ‘a baby 2012 born in grief’.


‘At this moment, no one is here to taste this vintage with the genuine intention of buying en primeur – it’s the opposite of 2009 and 2010.’




Bordeaux 2012: Dry whites to offer Sauternes producers cash flow


Source: Decanter

by Jane Anson

Wednesday 10 April 2013


In a year where even the successful Sauternes and Barsac producers made incredibly low yields (the average in Sauternes was just 2.5hl/h), the trend for dry white wines from the region is proving an important source of cash flow.


Increasing numbers of Sauternes producers have said they are making no 2012 wine at all – Yquem, Suduiraut, Rieussec and Raymond Lafon have all said they did not produce enough quality grapes to justify making a wine under their first label. Raymond Lafon, Rieussec and Suduiraut are still to make a second wine.


Even those who have produced are reporting tiny quantities in the search for good quality grapes, with Chateau Guiraud’s yields 90% down on 2011, and many others reporting similarly drastic reductions.


Sauternes producers have been able to draw some consolation from the year’s high quality production of dry whites, which were picked in excellent sunny conditions in mid-September.


The trend to make dry whites has been growing for a number of years, and today almost every major estate produces one – from Y d’Yquem to S de Suduiraut, R de Rieussec and G de Guiraud.


At Domaine de Chevalier, Olivier Bernard recently unveiled a new range of wines from a Sauternes estate they bought in 2011 and renamed Clos des Lunes, choosing to turn almost the entire production towards dry white. Another recent dry white launch has been Opalie from Chateau Coutet.


‘We lost three quarters of our harvest,’ Yquem winemaker Sandrine Garbay told, ‘but the dry white is of exceptional quality, and we are happy to have some wine to offer our clients. We like the first stages of noble rot to form on the grapes, to lower the bitter polyphenols that are fairly typical of Semillon on clay, and this was highly successful this year, before the rains arrived in October.’




English sparkling wine could be biggest threat to Champagne sales


Source: Harpers

by Katherine Canfield

09 April 2013


English sparkling wine could become the biggest threat to future Champagne sales if the quality and diversity of offer continues to improve.


That was the prediction of Jean Smullen, wine educator and journalist (pictured), at a special seminar focused on global sparkling wine at Vinitaly in Verona this week.


“England is the biggest competitor for Champagne,” warned Smullen, “and the Champenois need to become more aware of that.”


Smullen said in the past the most prestigious sparkling wines have come from France, but now they have serious challengers amongst English winemakers.


Speaking at a special tasting seminar, ‘Bubbles across the Waves’, Smullen claimed England had the potential to dominate the sparkling wine category in terms of quality and prestige and that English sparkling wine was one of the strongest categories emerging on the international wine scene. “It is a force to be reckoned with,” she added.


England has also, she stressed, played a significant role in the history of sparkling wine production, dating back to its beginnings by supplying glass strong enough to hold a carbonated beverage. “The sparkling wine industry owns its origins to the English and their glass making abilities rather than the French,” she added.


But despite its historical connection, England has not gone on to become a major player in the sparkling wine category, until potentially now. “If I got this in a blind tasting, I never would have said ‘England’,” said Smullen, after tasting the Bolney Estate Blanc de Blancs Brut 2007.


It has been a strong couple of weeks for English sparkling wine producers in the international market following the success of their first stand at Prowein last month


“Watch this space,” said Smullen, “particularly for sparkling wines.”


The Bubbles Across the Waves seminar looked at award-winning sparkling wines from nine countries ranging from Russia to Brazil.


Vinitaly continues in Verona until April 10.




Figeac “won’t change” under Rolland


Source: the drinks business

by Lucy Shaw

9th April, 2013


The style of Château Figeac will not change now that Michel Rolland has been taken on as a consultant, the château’s director Frédéric Faye has insisted.


Speaking at an en primeur tasting at the château in St Emilion last week, Faye told the drinks business: “We want Figeac to be the star, not Michel Rolland.


“We will be keeping the traditional style of Figeac the same, and don’t want to tamper with its signature elegance and freshness.


“It’s very important that we keep our personality rather than going with what the fashion of the time is, so it’s Rolland who has the challenge, not us.


“Michel Rolland has a huge amount of experience and we want to work with him to tweak some finer details, increase the precision, finesse and concentration and modernise the wine, but we haven’t taken him on to change the wine’s style.”


Rolland did the 2012 blend for Figeac and work with the château on the 2013 vintage this year, though Faye insisted that he was in the driving seat.

Michel Rolland now consults for Figeac


Michel Rolland hopes to elevate Figeac to premier grand cru classé “A” status


“I’m very much in control of things here and have the power to tell Michel to stop if I disagree with what he’s doing. We go back a long way,” he said.


Faye admitted that Rolland had been brought in to try to elevate the château to premier grand cru classé “A” status, having missed out on the accolade last year while Angélus and Pavie, both of which Rolland consults for, were promoted.


“Rolland is a challenger and is passionate about brining us up to premier grand cru classé “A” status. Personally, I want to see Figeac on sale around the world.


Meanwhile, Hortense Manoncourt Idoine, Figeac’s president and co-general manager told the drinks business that the estate was not up for sale.


“There’s a lot of interest in Figeac and I get offers to buy the château every day but it’s out of the question, we want to keep the estate in the family and pass it on to the next generation,” she said.


Like Faye, Manoncourt Idoine also wants Figeac to be better known around the world: “I want to shout louder about us and get our name out there. I think we have enormous potential,” she told db.


As for the 2012 vintage, Faye said it would be far closer in price to 2011 than 2010: “The market conditions are not great right now and we have to listen to what the market wants and price our wine accordingly, but Figeac is expensive to produce so we have a minimum level we are willing to go down to,” he said.




Catherine Pere Verge dies


Source: Decanter

by Jane Anson in Bordeaux

Tuesday 9 April 2013

Catherine Péré Vergé, one of Bordeaux’s most respected proprietors, has died aged 74.


Péré Vergé – who died in Bordeaux on Friday afternoon, April 5 – owned Chateau La Violette, Chateau Le Gay and Chateau Montviel in Pomerol, La Graviere in Lalande-de-Pomerol, and Bodega Monteviejo in Argentina.


Before buying her first wine estate in 1985, Péré Vergé worked for over 40 years in the family lead crystal glassware business, Cristal d’Arques.


She purchased Chateau Montviel in 1985, a 5ha estate in Pomerol, and hired Michel Rolland as her consultant in 1988 (she was one of the founding members of his Clos de Los Siete project in Argentina).


She was perhaps best known for the 3.25ha Chateau La Violette, which she bought in 2006, and whose wines garnered effusive praise from critics.


Known for her passionate attention to detail, she oversaw everything in her vineyards herself, from pruning and harvesting to blending and selling the wines. ‘I’m the carbon copy of my father,’ she liked to say.


In 2010, at a dinner to mark her 25 years in Pomerol, she said, ‘Today, six of my nine grandchildren help with harvesting at the weekends, and at 10 years old (the youngest of them) Henri is already asking for magnums of Le Gay. so I know the future is assured.’


‘One word to sum up Catherine: energy,’ Alain Moueix, president of the Grand Cru Classés de Saint Emilion and owner of Chateau Mazeyres in Pomerol told, ‘She worked tirelessly for her estates.’


Péré Vergé is survived by four children and nine grandchildren. Her son Henri Parent is expected to take over the Vignbobles Péré Vergé estates.




Deutsch Family Wine & Spirits buys Eppa SuperFruit Sangria


Source: DBR

10 April 2013


Deutsch Family Wine & Spirits, a New York-based family-run privately owned firm, has purchased Eppa SuperFruit Sangria from Miami-based Eppa Wine Company (EWC) for an undisclosed amount.


Made in Mendocino, California, the Eppa Superfruit Sangria is crafted from certified organically-grown grapes and organic superfruit juices, including pomegranate, blueberry, blood orange and acai.


Eppa is rich with antioxidants and is said to be ideal for health-conscious consumers.


In 2012, Eppa accounted for 26% of the category growth, which grew by 19.4% in dollar volume, as against the 2011 figures.


Deutsch Family Wine & Spirits chairman and founder Bill Deutsch said, “While it’s always been popular in the on-premise market, there’s a big opportunity to make a stronger impact off-premise with premium quality ready-to-serve sangrias.”


Commenting on the acquisition, EWC co-founder John Gomez said, “Deutsch Family Wine & Spirits is the perfect organization to take Eppa to new consumers and new heights.”


Eppa SuperFruit Sangria is available at a suggested retail price of $11.99 per 750ml bottle.




General Manager of Jack Daniel’s Production to Retire; Veteran Brown-Forman Executive Named as Successor


Source: Business Wire

Apr 9th


Brown-Forman Corporation (BF-A) (BF-B) announced today that Tommy Beam, senior vice president and general manager of Jack Daniel’s Production Operations in Lynchburg, Tennessee, is retiring from the company after 48 years of service. His official retirement date is July 31, 2013.


“Tommy Beam has had a truly remarkable career in one of the top jobs not only within Brown-Forman but in our entire industry,” said Jane Morreau, senior vice president and chief production officer. “For the last eleven years he has led our entire Jack Daniel’s production operations while overseeing several expansion projects during a time of significant growth for the brand. Tommy has been a great leader and we wish him nothing but the best during his retirement.”


Beam joined the Jack Daniel Distillery in 1965 as an accountant and served in a succession of roles with increasing responsibility until being named general manager of all Jack Daniel’s production operations in 2002. During this time, Beam led a team of 435 employees to record levels of production, reaching shipments of about 11 million nine liter cases of Jack Daniel’s Tennessee Whiskey worldwide during fiscal 2012.


Brown-Forman also announced that Larry Combs has been named to succeed Beam as senior vice president and general manager of Jack Daniel’s operations. Combs joined Brown-Forman in 1992 and has been involved in nearly every aspect of the company’s production operations over the last two decades. For the last three years, he led Brown-Forman’s Technical Services group, including Quality Assurance, R&D, Engineering, Packaging and Environmental, with outstanding results. In addition, he has guided our European Operations and External Manufacturing Operations globally. Combs will continue to oversee external manufacturing operations in addition to his new role as general manager of all Jack Daniel’s production operations.


“Larry has demonstrated excellent leadership ability and we believe is the ideal person to take on the responsibility of managing the productions operations of our largest and most important brand,” stated Morreau.




Engel Leaves Mionetto for Riondo USA


Source: Riondo

April 2, 2013


Riondo USA has brought on board James Engel as vice president of sales.  Most recently, Engels was VP of sales for Mionetto USA.


Engels will head the distributor network management and a fifteen member executive sales team around the country.


John Blesse, now VP of operations for New Jersey-based Riondo USA, will lead the company’s internal operation and oversee existing and developing relationships with suppliers and on- and off- premise chains.






Source: MPSA

Apr 9th


2013-01006A Internet Advertising Platform

At the April 9, 2013 Full Board meeting, the Members of the Authority issued a declaratory ruling regarding the involvement of licensees, internet technology companies and third party advertisers in online sales of alcoholic beverages. This declaratory ruling provides guidance to licensees with respect to whether such relationships violate the Alcoholic Beverage Control Law. Chairman Rosen also announced that the Authority will be hosting meetings with industry members to further examine the issues involved with internet sales of alcoholic beverages.


Advisory 2013-3 – Brand Labeling

In addition, based on information obtained while this matter was being considered, the Members of the Authority also issued an advisory providing guidance to manufacturers, wholesalers and importers with respect to their ability to sell wines featuring the same brand, trade name and vintage with or without the addition of a sticker featuring the wording “Direct,” “Reserve,” or any similar wording.




California: Calif’s 4 a.m. last call bill already fuels debate


Source: AP


April 9th


The last call for drinks is 2 a.m. in California, but one lawmaker believes that’s just too early to set down the shot glasses and beer steins.


State Sen. Mark Leno’s proposal to let the liquor flow until 4 a.m. as a way to draw more tourists – and with them more revenue and jobs – is already spawning a sharp debate from Sacramento to watering holes in San Francisco and Los Angeles.


Leno said the measure would make the state more competitive with other hotspots like New York, Las Vegas and Miami that serve alcohol later into the wee hours of the morning or 24 hours a day.


Night-spot owners say a later last call will be good for business, but law enforcement officials argue that it increases the chances that cities will see more public drunkenness, violence, drunken driving and possibly fatalities.


Leno’s proposal, however, wouldn’t set a uniform standard across the state. Instead, it would give each municipality the option to push their last call back to 4 a.m.


“It will be up to the cities whether they want to participate or not,” said the San Francisco Democrat, whose district encompasses clubs in the trendy South of Market district. His bill is expected to get its first public committee hearing on April 23.


At Steff’s, a sports bar near the San Francisco Giants’ AT&T Park, patron Armand Gaerlan liked the idea of a 4 a.m. last call. “I’ve lived in New York City. If it’s working there, it can definitely happen here,” said Gaerlan, who thinks the move would allow for making later dinner reservations.


At nearby Nova Bar and Restaurant, customer Kendra Chrysler said it was a bad idea. “I’ll pass. I feel like nothing good happens after 2 a.m.,” she said.


In Los Angeles, there is a buzz about a later last call, said Barbara Jacobs, chief operating officer at a 1920’s-themed downtown nightspot, The Edison. She said the bar is making plans for a midnight breakfast and cocktail menu in case the proposal passes.


“We’re creatively driven and so we’re going to take advantage of it,” she said.


Industry groups such as the California Restaurant Association and the Hollywood Hospitality Coalition are endorsing the 4 a.m. last call.


Los Angeles hosted a record 41.4 million visitors last year, one million more than in 2011. And, the city said, guests spent more than $16 billion in 2012. The San Francisco Travel Association said the city drew 16.5 million tourists who spent nearly $9 billion in 2012, up from the previous year.


Jim Lazarus, a senior vice president for the San Francisco Chamber of Commerce, said he believes it will be especially appealing to businesses already with after-hours permits to stay open past 2 a.m. – without serving alcohol.


“There’s clearly a demand,” he said. “I think the younger population, especially the young tech workers – they’re working hours that are different from the traditional 9 to 5. They work later, so they party later.”


However, law enforcement officials argue that establishments serving alcohol past 2 a.m. will produce significant problems.


John Lovell, a lobbyist for the Sacramento-based California Police Chiefs Association, said an extended last call will further stretch many depleted law enforcement agencies that will be forced to monitor inebriated patrons when the bars close.


“That will be a whole new dynamic with those leaving a bar at 4 a.m. hitting the road when the early commute is in progress,” Lovell said. “That brings a whole new danger.”


Although San Francisco Police Chief Greg Suhr said he thinks the extended hours are a bad idea, Leno’s bill has the support of Mayor Ed Lee, who said that if the bill becomes law he would seek input from police, local bar owners and neighborhood leaders before the city opts for a late last call.


Leno said he authored a last call bill geared for San Francisco in 2004, which was rejected by the state Assembly. But he expects this one to fare better because it leaves the ultimate decisions with the cities.


Ludwig Chincarini, an associate economics professor at the University of San Francisco, said recent studies in the U.S. and abroad do not provide very clear links between longer last calls and impacts on crime and local economies.


Extended drinking hours may add more tax revenue, particularly from tourists, Chincarini said, but they are unlikely to bring a windfall to major California cities.


“The tourists who already come here could take advantage of possibly drinking for an extra couple of hours, that’s all,” he said. “I don’t think people are going to be traveling to San Francisco and Los Angeles to get the … Las Vegas experience in terms of extensive drinking and partying.”




Minnesota: SUNDAY LIQUOR SALE – Lawmaker proposes Super Bowl trial run


Source: KMSP

by Maury Glover

Apr 09, 2013


The Super Bowl is one of the most-watched televised events of the year, but Minnesotans must plan ahead if they want to enjoy a cold one on the couch on game day. Now, a lawmaker wants to change that.


Each year, there is an attempt to repeal the state’s ban on selling alcohol on Sundays. In fact, one such effort already expired in committee this session, but one lawmaker believes he’s come up with a plan that could make Super Bowl Sunday a day of super sales next year.


“Wintertime is slow. The Super Bowl is a big boost in business, no matter who’s playing,” said Ian Finch, who works at Four Firkins in St. Louis Park.


According to Finch, the days leading up to the Super Bowl are some of the busiest in the entire year, so they don’t understand why they can’t sell their specialty suds and craft beers on game day.


“Regardless of if Super Bowl Sunday is a big boon or not, we’d like to have the option of being open,” he said.


Yet, Minnesota law doesn’t allow liquor stores to be open on Sundays — even if the NFL’s championship face-off is one of the biggest beer-drinking days on the calendar. That’s why Rep. Pat Garofalo wants to make an exception for next year to offer a trial run of Sunday sales and see how it goes.


“For the average consumer, this bill is a reasonable way to try it out,” Garofalo said. “If it’s bad, we won’t do it again. If it’s good, maybe look at something for the future.”


Historically, the liquor store industry has opposed opening on Sundays because they want the day off and say it would cost them more on labor without providing a bump in business, but customers who spoke with FOX 9 News are welcoming the experiment.


Polls show a majority of Minnesotans favor selling alcohol on Sundays, and Garofalo’s bill will get its first hearing in a House committee on Wednesday afternoon — along with yet another attempt to repeal the ban on Sunday sales.




Washington: Debate over state’s beer tax hike coming to a head?


Source: Q13Fox

Apr 9th


Breweries and distributors are lobbying lawmakers to let the state’s temporary beer tax increase expire on July 1, as scheduled, and not adopt a proposal to extend the tax and expand it to even the smallest brewers.


Three years ago, the Legislature raised Washington’s beer tax from $8.08 per 31-gallon barrel to $23.58, which amounts to about 50 cents a six-pack. It limited the tax hike to brewers that sold more than 60,000 barrels in the state of Washington, however, thereby exempting microbreweries. The temporary tax increase was set to expire July 1, 2013.


But Gov. Jay Inslee proposed in his 2013 state budget plan that the tax continue beyond its expiration date – and that the tax be expanded to all breweries, even the micros.


Small brewers turned out at the state Capitol on Monday to lobby lawmakers against the Inslee proposal. The Senate budget proposal lets the beer tax increase expire on June 30, but the House budget proposal comes out Wednesday. The beer tax is likely to be debated until a final state budget is adopted; the legislative session is set to end April 28.




Florida: Distillery bill, once on life support, moving forward


Source: St. Augustine Record

By Matt Dixon

April 10, 2013


After limping out of the gate, a bill that’s a priority for the St. Augustine Distillery is flying through the committee process.


The bill would allow Florida distilleries to sell their products – things like vodka and rum – to customers, who would have to leave the premises to imbibe.


The burgeoning industry is trying to cast itself as a tourist attraction that uses Florida products like citrus.


“Your support will support Florida manufacturing, Florida tourism, Florida small businesses, Florida agriculture, free enterprise and Florida jobs,” said House sponsor, Rep. Ronald “Doc” Renuart, R-Ponte Vedra Beach.


His bill (HB 347) Tuesday passed the House Regulated Affairs Committee on a unanimous vote.


It’s the legislation’s third unanimous vote since the bill was rewritten to help strike a deal with beer and wine distributors.


They were concerned large companies like Bacardi could use loopholes to set up shop in Florida.


The biggest change was limiting a “craft distillery,” which is defined as producing less than 75,000 gallons annually, to selling two bottles per customer each year.


Another tweak specifies that a craft distillery can’t be owned by another distillery that produces more than 75,000 gallons annually.


After the compromise legislation was filed, distributors lined up in support of the bill, which is now headed for a vote on the Florida House.


The original legislation received enough push-back that it was withdrawn from its first committee stop. Renuart did not want the bill to go to a final vote because it would have been killed and not had the opportunity to advance.


During past committee stops, Phil McDaniel, owner of the St. Augustine Distillery, said it will be a local economic development engine.


“In our city in St. Augustine, the trains and trolleys are so excited about the new distillery,” he told members of the Government Operations Appropriations Subcommittee during a April 2 hearing “They have asked if they could bring their customers to us.”

The legislation’s Senate companion has one remaining committee stop.

Liquor Industry News 4-8-13

April 8, 2013

Franklin Liquors


Monday April 8th 2013

Great Day For Red Sox Home Opener!

AB InBev clears hurdle over Modelo deal


Source: FT

By David Gelles in New York

April 6th


The biggest beer deal in years looks set for completion as Anheuser-Busch InBev said on Friday it had reached an agreement with the US Department of Justice on antitrust challenges to its $20bn move for Grupo Modelo.


The settlement will allow AB InBev to move ahead with the deal, giving the Belgian brewer full control of the Mexican maker of Corona and other popular beers. A final settlement will be postponed until April 23, giving all parties time to complete the paperwork and obtain final approval from a judge.


AB InBev made its move for the half of Grupo Modelo it did not already own last June, the latest effort by the world’s largest brewer to increase consolidation in the beer market.


The DoJ objected in January, throwing a spanner into one of the biggest cross-border deals of 2012 by saying it would lead to price increases and hurt competition.


The justice department’s move came after five US senators raised concerns about AB InBev’s ability to put pressure on independent distributors to stop selling rival brands and craft beers.


In February AB InBev offered to offload assets and licences in an attempt to win regulatory approval. The concessions included agreeing to sell to rival Constellation Brands its Piedras Negras bottling plant, a high-tech facility near the US border that AB InBev had initially resisted selling.


It will also sell to Constellation the US rights to the Corona and Modelo brands for $2.9bn. The proceeds will help AB InBev offset the revenues from the US rights to Corona and Modelo that it will no longer enjoy.


When it announced its proposed concessions in February AB InBev also said it had found an extra $400m-$1bn in annual synergies.


As part of the original deal AB InBev will also sell Modelo’s 50 per cent stake in Crown Imports, a US joint venture, to Constellation for $1.85bn. The moves will position Constellation as a more robust competitor.


The DoJ said: “As we have said all along, any settlement would have to fully protect US consumers by preserving the competition that Grupo Modelo currently provides, while giving a divestiture buyer the freedom and capability to compete vigorously.”


AB InBev shares were up slightly in after-hours trading, after falling 2 per cent on Friday. They are up 33 per cent since the group announced the deal to take full control of Modelo.




Diageo rejects raising United Spirits bid


Source: FT

By Louise Lucas

April 5th


Diageo is unlikely to increase its holding in Indian group United Spirits after it opted not to raise the price for its mandatory takeover offer above Rp1,440 a share.


The maker of Johnnie Walker whisky and Smirnoff vodka is buying a 27.4 per cent stake in United Spirits, which is controlled by mercurial liquor baron Vijay Mallya, triggering a mandatory offer to shareholders under Indian stock market rules.


However, the distilling group is sticking with the Rp1,440 price paid to acquire shares directly from United Breweries. That price represented a 35 per cent premium over the close on September 24, the day before the talks were announced, but is sharply below the Rp1,755 close on the Bombay Stock Exchange on Friday.


Failure to scoop up more shares neither scuppers the deal nor represents a setback for Diageo. The world’s biggest distiller, as measured by profits, faced a similar situation in China when it acquired a controlling stake in baijiu maker Shui Jing Fang at a price well below where the shares were trading at the time of the mandatory takeover bid.


The United Spirits acquisition followed years of on-off talks as Diageo pushed for control. The structure of the existing deal gives it power to appoint the top two executives of United Spirits, and it will also control voting rights as Mr Mallya’s United Breweries will vote with Diageo for four years.


Diageo said on Friday: “Diageo believes that a shareholding in excess of 25.1 per cent, together with the voting arrangements and other governance arrangements agreed with UB Holdings and its relationship with Vijay Mallya as chairman of United Spirits, would enable Diageo to control United Spirits and therefore consolidate the results of United Spirits in the event that it does not acquire a majority interest.”




Buffalo Trace Distillery breaks ground on new experimental warehouse


Warehouse X to enhance whiskey research in search of the Holy Grail


Source: The Lane Report

April 5, 2013


Buffalo Trace Distillery broke ground Friday on an experimental barrel warehouse that will allow the distillery to take its quest for the “perfect bourbon” even further.


Named Warehouse X, this warehouse is the first new building Buffalo Trace has added to its 130-acre complex in more than 60 years. Comprised of brick, concrete block and skylights, this structure is no ordinary barrel warehouse. With a small footprint of only 30 feet by 50 feet, Warehouse X will have a capacity of around 150 barrels.


Its most compelling feature, however, is four independently operating chambers that will allow specific variables to be tested, in order to determine their effect on aging barrels. There will also be a barrel breezeway with an open-air rick, underneath a roof, that will allow a small number of barrels to age while being exposed to the natural elements.


The first four variables Buffalo Trace plans to experiment with are natural light, temperature, airflow and humidity. Warehouse X will test one variable at a time. For example, the first experiment will focus on the effect of natural light for at least two years. Each chamber will have varying degrees of light, ranging from 100 percent natural light to complete darkness.  After the natural light experiment is concluded, a new experiment will start on temperature, and then studies will start on the effects of humidity, and so on.


Warehouse X is projected to be finished by August 2013, but the construction progress can be tracked via a blog updated frequently at


Upon completion, visitors to Buffalo Trace Distillery will be able to walk around Warehouse X and learn about the current experiment occurring inside.


“It’s no secret that we’re on the hunt to find the Holy Grail of bourbon,” said Harlen Wheatley, master distiller. “By building this experimental warehouse, we’ll be able to keep a tight control on the variables that affect the barrel aging process and can make changes along the way to the aging environment that will hopefully allow us to one day come up with the perfect bourbon.”


The whiskeys that will be aging inside Warehouse X will be bottled under the Experimental Collection line. It will be a minimum of eight years after the warehouse is complete before any whiskey will be bottled from Warehouse X.


Buffalo Trace Distillery is a family-owned company based in Frankfort, Ky. It is a fully operational distillery producing bourbon, rye and vodka on site and is listed on the National Register of Historic Places.


To learn more about Buffalo Trace Distillery visit




Global I/O®: US Beer – Nielsen data Beer Weakens on Tough Weather Comp


Source: UBS

Apr 5th


Input: Providing Perspective on a Critical Channel

Convenience stores represent 30-35% of beer volumes, 3-8pp higher than “AOC” (Food, Drug, Mass & Walmart). Despite this reality, much of the focus on scanner data has been on AOC (11% more beer is sold in C-store than AOC). ABI dominates C-store with 60% volume share, versus nationally. MillerCoors sources evenly from AOC/C-Stores, while Craft and Imports skew far more heavily toward AOC channels. By adding C-store analysis to our AOC analysis, we are more than doubling our off-premise visibility.


Input: March data Weak and February Strength Restated to Weakness

In C-store, over the last 4 weeks through 3/16/13, Beer dollar sales were -0.4% through -3.2% volume growth and 2.8% price/mix.  Nielsen restated its beer data for the 4wks ended 2/16/13 in a meaningful manner.  Rather than dollar sales up 4% on +1.1% volume growth, the Feb 16th 4 week period was +1% on -1.8% volume declines – a 3pp downward revision. In the latest period, ABI remained the pricing leader (+3%), but with volumes down 5.1%. MillerCoors volumes were -2.1% (-1.5% over last 12wk), with +1.8% in pricing.  This represents the second volume share gain period for MC in our dataset. Volumes at Crown Imports remained strong, up 8%, while Boston Beer slowed in the c-store, with volumes +2% (+12% over last 12wks).


Output: Issue Facing Consumer Impacting Beer Sales

We reiterate our Buy on ABI & STZ and our Sell on SAM.




Beer: Nielsen C-Store Data Analysis: Category Dollar Sales Decline 0.4% YoY, As Pricing Strategies Remain in Focus


Source: CITI

Apr 5th


Beer C-Store Dollar Sales Decline – In the four-week period ended Mar. 16, 2013, c-store beer dollar sales fell 0.4% YoY (vs. +1.0% last period and +4.2% over the last 52 weeks). The decline was driven by a 3.2% decrease in volume sales (vs. -1.8% last period and +0.8% over the last 52 weeks), partially offset by a 2.8 pt contribution from price and mix (vs. +2.8 pts last period and +3.4 pts over the last 52 weeks). We note that across the major manufacturers, price gap management remains a key focus, as the companies that took less pricing than the category average largely posted outsized or improved volume growth.


MillerCoors Volume Share Trends Improve – TAP’s MillerCoors JV gained volume share for the second consecutive month, +0.3 pts YoY (to 26.4%). In the period, volumes were down 2.1% (vs. -1.1% last period and -0.4% over the last 52 weeks). Meanwhile, dollar sales were down 0.3% YoY (vs. +0.8% last period and +2.4% over the last 52 weeks), as the company saw a 1.8 pt benefit from price/mix (vs. 1.9 pts last period and 2.8 pts over the last 52 weeks).


Crown Imports Continues to Outperform – STZ’s Crown Imports JV continued its relative outperformance, posting dollar sales growth of 8.8% YoY (vs. +7.5% last period and +13.3% over the last 52 weeks). Volumes were the key driver once again, +8.1% in thee period (vs. +6.7% last period and +12.5% over the last 52 weeks), as Crown realized a modest 0.7 pt benefit from price/mix (vs. 0.8 pts last period and 0.8 pts over the last 52 weeks). Looking ahead, we’ll continue to monitor the margins for the Crown Imports business (as we believe growth is primarily being driven by the lower-priced Modelo Especial brand), as well as the company’s price gap management (given our expectation that Crown’s falling price gap has been a key driver of market share gains).


Boston Beer’s Growth Decelerates Notably – SAM saw its dollar sales growth decelerate for the second consecutive period, to +3.1% YoY (vs. +7.1% last period and +14.4% over the last 52 weeks). The company’s dollar sales growth in the period was driven by a 1.6% YoY increase in volumes (vs. +6.3% last period and +12.4% over the last 52 weeks) and a 1.5 pt contribution from price/mix (vs. 0.8 pts last period and 2.0 pts over the last 52 weeks). Looking ahead, SAM will continue to face challenging dollar sales growth and volume sales growth comps (in the HSD to LDD range) over the remainder of 2013, such that we will be interested to see whether the company can post a re-acceleration in its growth trends.




Vodka maker CEDC files for bankruptcy, Tariko to gain full control


Source: Reuters

Apr 8th


Poland’s Central European Distribution Corp <CEDC.O>, seeking to reduce its debt load, has filed for a pre-packaged bankruptcy that will give Russian businessman Roustam Tariko full control of the vodka producer, a court filing showed.


CEDC, which makes Absolwent and Parliament vodka and is a market leader in Russia, Hungary and Poland, has struggled with financial problems and the resignation of its chief executive.


A spat with Tariko ended last December when it ceded operational control to him in exchange for up to $65 million (42 million pounds) in funding.


The Chapter 11 restructuring plan, which was approved by the company’s creditors, will slash about $665.2 million in debt from the company’s balance sheet.


The filing showed CEDC had liabilities of $1.74 billion and assets of $1.98 billion.


If Delaware’s bankruptcy court approves the plan, Tariko’s Roust Trading will end up owning 100 percent of the company’s outstanding stock.


Holders of the existing 2016 notes which have claims totalling $982.2 million, will receive $822 million, consisting of $172 million in cash, $450 million in new secured notes and $200 million in new convertible notes.


Holders of 2013 notes who participate in the plan, will receive about $55 million, comprised of $25 million in cash and $30 million in secured notes issued by Roust Trading, resulting in an estimated recovery of 35.4 percent.


In a prepackaged bankruptcy, management negotiates the general terms of a bankruptcy plan with major creditors prior to the filing.


The case is Central European Distribution Corp et al, Case No. 13-10738, U.S. Bankruptcy Court, District of Delaware.




AB InBev Plans Acquisitions to Boost China Market Share


Source: Bloomberg News

Apr 8, 2013


Anheuser-Busch InBev NV (ABI), the world’s biggest beermaker, plans acquisitions in China as beer consumption rises in its third-largest market.


Business in China is growing at a “double-digit” rate, “so that’s very good,” Chief Executive Officer Carlos Brito said yesterday at the Boao forum in Hainan, China. “We also have plans for inorganic growth because we have parts of the country where we have no breweries but where we sell our brands. It makes sense to have the production place closer to the consumption place.”


The Leuven, Belgium-based maker of Budweiser beer will boost capital spending globally to $3.7 billion this year as it increases investment in capacity expansion into Brazil and China. Brito, who spearheaded a bid for Mexico’s Grupo Modelo SAB, said the growth potential of the beer market in China was “humongous,” with per-capita consumption levels of the beverage much lower than elsewhere in the world.


The beermaker plans to build breweries in western China over the next three years and will focus on expanding beyond the coastal provinces, the CEO said.


AB InBev made an unsuccessful bid to buy Guangdong, China- based Kingway Brewery Holdings Ltd. (124)’s beermaking assets last year. China Resources Snow Breweries Ltd., which SABMiller co- owns with government-backed China Resources Enterprise Ltd. (291), agreed to pay HK$6.6 billion ($850 million) for the assets on Feb. 5.


AB InBev gained 0.9 percent to 75.79 euros as of 9:25 a.m. in Brussels. Among Chinese brewers, Tsingtao Brewery Co. gained as much as 5.1 percent to HK$49.75 in Hong Kong trading; Beijing Yanjing Brewery Co. rose as much as 3.4 percent to 6.05 yuan in Shenzhen and China Resources rose as much as 2.7 percent in Hong Kong.


Brito said the beermaker has two weeks to submit the final agreement to the U.S. Justice Department on the purchase of Modelo, after receiving agreement in principle for it. The final document would be very similar to the revised offer submitted by the company on Feb. 14 this year, he said.


The brewer agreed in June last year to buy the remaining 50 percent of Modelo it doesn’t own for $20.1 billion, giving it full ownership of the maker of Corona. After being sued by the Department of Justice, it amended the terms of its acquisition on Feb. 14 to try to appease competition authorities in the U.S.




Seven die in Grupo Modelo accident


Source: FT

By Adam Thomson in Mexico City

Apr 8th


Grupo Modelo, the maker of Corona Extra beer, said that seven workers had died in an accident at its Mexico City brewery.


The company, which is currently the target of a $20.1bn takeover bid by Belgium-based Anheuser-Busch InBev, said that the workers died early Sunday while carrying out cleaning and maintenance work in a confined area of a cistern. Media reports speculated the workers inhaled toxic fumes but the company declined to give details.


Mexico’s largest brewer by volume said it had informed the families of the deceased as well as the authorities. “We are carrying out the corresponding investigations to find out the causes of the accident,” Grupo Modelo said.


The accident occurred at the company’s Mexico City brewery, where Modelo started its operations in 1925, according to the company’s website. A Modelo spokeswoman told the Financial Times that production had not been affected.


The tragedy comes as AB InBev, the world’s largest brewer by volume, and which last year recorded revenue of $39.8bn, is trying to acquire the 50 per cent of Grupo Modelo that it does not already own.


On Friday, Grupo Modelo, whose Corona brand is the US’s best-selling imported beer, said that it, AB InBev and two other beer companies had reached an agreement in principle with the US Department of Justice over AB InBev’s planned purchase of the rest of Modelo.


In January, the DoJ brought a lawsuit to block the proposed deal over concerns that it could lead to higher beer prices in the US.




Vodka firm Synergy’s sales fall after tax hike


Source: Reuters

by Maria Kiselyova; Editing by Megan Davies and Tom Pfeiffer

Fri, Apr 5 2013


Russian vodka firm Synergy said on Friday that first-quarter sales of its own brands fell by 30 percent after an increase in excise tax prompted retailers to bring purchases forward to the previous quarter.


Russia has been tightening regulation of alcohol sales to curb drinking, with measures including an increase in the minimum vodka price, a ban on advertising in all media and tax increases.


The excise tax on spirits has risen by about a third, prompting distributors and retailers to buy additional volumes in the fourth quarter before the increase came into force at the beginning of 2013.


Synergy, maker of Beluga and Russky Lyod vodka brands, said sales of its own products amounted to 1.9 million decilitres in the January-to-March period, compared to 2.7 million in the same period of 2012.


Chief Executive Alexander Mechetin said he was cautiously optimistic that sales would rise in full-year 2013.




PERNOD RICARD: Completion of the acquisition of the shares in Le Maine au Bois SAS


Source: 4-Traders



Further to our previous press release on February 11th 2013, Pernod Ricard announces the completion of the acquisition of the shares in Le Maine au Bois SAS.




Hard cider is filling more Americans’ beer glasses


It now garners a mere fraction of market share, but some big brewers are making major moves to expand its reach.


Source: MSN Money

By Jason Notte

April 5th


In Ireland, the U.K. and elsewhere, beer and hard cider coexist peacefully on adjacent taps at the local pub as equals. Hard cider hasn’t quite earned that respect in the U.S., but it’s coming.


The Craft Brew Alliance (BREW -0.13%), which produces Widmer Brothers, Redhook and Kona beers, announced the launch of its Square Mile Cider Company brand on Tuesday, and it says original and Spur and Vine varieties should be available on the West Coast starting in May.


That in itself isn’t such a big deal. But added to Samuel Adams producer Boston Beer’s (SAM -1.24%) jump into the cider industry, Anheuser-Busch InBev’s (BUD -1.96%) cider experiments and a recent spate of cider company buyouts, these are big moves by brewers to get a small piece of a growing segment.


Hard cider accounts for less than 1% of the total U.S. beer market, according to market research firm Symphony IRI. However, cider sales in chain and convenience stores brought in $450 million in 2011 and jumped 84.5% last year. That outpaces the 1.5% growth of the overall beer market, the 5.6% growth of wine and even the 17% growth of craft beer during the same span.


According to market research firm Nomura Research, beer companies have a whole lot of incentive to pick apples and get into the cider game. Roughly half of cider’s drinkers are women, who make up only about 20% of all beer buyers and drinkers. Cider also sells for an average of $35 a case, well above the $29-a-case paid for imported beers and the $33 brought in by craft beer.


Simply put, cider expands both demographics and income while still pouring the same 4.5% to 6.5% alcohol by volume served to the average beer drinker.


It hasn’t taken long for brewers to figure this out. In February 2012, MolsonCoors (TAP -1.69%) and SABMiller joint U.S. venture Miller Coors bought Minnesota-based craft cider producer Crispin for a reported $40 million. They plan to put it in their Tenth and Blake stable of craft and import beers. Last April, Boston Beer launched its Angry Orchard cider brands, which leaped into Nielsen’s (NLSN -0.97%) Top 10 beer growth brands by year-end. Angry Orchard grabbed 0.1% of the beer market’s volume and 0.2% of its share, which is noteworthy because all ciders combined made up 0.2% of the beer market in 2011.


Anheuser-Busch InBev, meanwhile, quietly launched its Michelob Ultra Light Hard Cider, but it stayed relatively quiet compared to the biggest player in the cider industry. Ireland’s C&C Group — which already produces Bulmer’s and Magners ciders — dipped a toe into the U.S. cider industry in 2011 by paying $25 million for California-based Hornsby’s ciders. It made a far bigger splash in December, when it purchased Woodchuck Cider maker Vermont Hard Cider Co. for $305 million.


Does any of this make cider any more respected or normal than it was in years past? The growth and evolution of cider in the last decade or so say yes. Once a syrupy sweet concession to young non-beer drinkers, cider has learned from small beer brewers and began offering seasonal and specialty batches flavored with maple, ginger and elderflower.


When Square Mile Cider launches from its home base in Portland, Ore., it will be surrounded by small West Coast ciders like Ace, Spire, Tieton, Blue Mountain and Wandering Aengus, and may even find its way into Bushwhacker Cider, Portland’s cider-only taphouse.


Cider may not be in America’s beer club yet, but drinkers are definitely saving it a place at the bar.




Topless beer cans set to revolutionise art of drinking brew


Source: ANI

April 05, 2013


A brewery from Pennsylvania has debuted a beer can in which the entire lid is lifted, so that the drinkers can sip from it as a normal cup. Many craft beer outfits have turned to aluminium in recent years, including Sly Fox Brewing Company, however, the small openings allowed by conventional beer cans make it difficult to enjoy a beer’s smell and Sly Fox’s 360 Lid seeks to remedy that problem, the Huffington Post reported.


The firm’s head brewer Brian O’Reilly told that the technology allows the full flavour and aroma of the beer to hit the drinker’s senses.


Sly Fox is the first outfit in North America to use the new lid; it had been originally developed by Crown Beverage Packaging in partnership with SABMiller and debuted at the FIFA World Cup tournament in South Africa in 2010.


Helles Golden Lager is a German-style beer, which is made with imported German Pils malt and Saaz and Hallertauer hops.


According to the New Jersey Star-Ledger, the company is planning to roll out a 360 Lid-version of another of its brews: Pikeland Pils, a light-bodied, North German-style Pilsner with a dry flavor.




Stop and Drink the Flowers


Source: WSJ

Eric Felten

Apr 5th


Artisanal distillers are taking a new approach to gin.


GIN HAS ALWAYS BEEN the worldliest of spirits. Its neutral liquor base is traditionally flavored not only with juniper berries, but also with exotic botanicals harvested all around the globe, from Asian cassia bark to citrus picked in the Mediterranean and West Indies to herbs, such as orris and angelica, found anywhere in between. It’s no accident that gin was the drink of empire.


Now artisanal distillers are taking a new approach to gin, rooting it in flavors and aromas closer to home. That’s the idea behind Terroir Gin (45% ABV, $35) from St. George Spirits in Alameda, Calif. Master distiller Lance Winters roams around nearby Mount Tamalpais, collecting California bay laurel, Douglas fir and coastal sage. Those and other local botanicals help create what he calls “gin with a real sense of place” (it just happens to be delicious, too).


In Spokane, Wash., Dry Fly Distilling is making soft, floral Dry Fly Gin (40% ABV, $30) flavored with hops from Yakima Valley, spearmint from Moses Lake and lavender from Pend Oreille River. And if Dry Fly captures Eastern Washington’s wild, scrubby terrain, the Botanist Gin (46% ABV, $40), from the distillery that makes Bruichladdich single-malt whisky, is a bracing portrait of the windswept Scottish island of Islay. They start with the basics-juniper berries, orris root, coriander. Then they give the gin an Islay accent with wild botanicals handpicked on the island: flowers from such native plants as heather, hawthorn, elder, gorse and creeping thistle; leaves of wood sage, sweet cicely, water mint and mugwort.


Nothing wrong with the old imperial style. But these gins offer a more specific sort of pleasure.




Should States Get Out of the Booze Business?


Source: Stateline

By Melissa Maynard

Apr 4th


Pennsylvanians love to complain about their state’s tangled system for alcohol sales. Consumers can’t buy wine at grocery stores and have to go to a state-run store if they want to purchase that or hard liquor. Bars and restaurants are the only outlets authorized to sell six-packs of beer, while beer-specific stores, licensed to sell only by the case or the keg, are the go-to source for variety and volume.


Earlier this month, the Pennsylvania House voted to privatize wholesale and retail liquor sales, bringing the state closer than it’s ever been to overhauling a system put in place just after Prohibition. But changing a state’s alcohol sales system is never simple.


Seventeen states have an agency charged with overseeing the wholesale or retail sale of liquor or wine, but only Pennsylvania and Utah exert complete control over all such sales. The roster of “control states” (see map) hadn’t changed significantly in decades until last June, when Washington privatized its state-run system, becoming the first state since the 1930s to completely abandon its role in both retail and wholesale liquor sales.


One reason it is difficult to change the status quo is that alcohol sales involve deeply entrenched interests – with even deeper pockets. Liquor stores, grocery stores, bars and alcohol distributors all feel the impact when a state alters its policy. According to the Distilled Spirits Council of the United States, an industry group, the beverage alcohol industry contributes $400 billion to total annual U.S. economic activity, including $90 billion in wages and 3.9 million jobs.


Meanwhile, some advocates complain that debates over privatization often revolve around state revenues and private profits rather than public health and safety. “People have forgotten the primary reasons for regulation and the specific reason for the control system, which was to eliminate the profit motive from the sale of alcohol,” said Pamela Erickson, CEO of Public Action Management and former executive director of the Oregon Liquor Control Commission.


The Community Preventive Services Task Force, an independent body appointed by the director of the U.S. Centers for Disease Control, recommended against further privatization of state liquor operations after a February 2011 review of existing research.


The task force noted that privatization typically results in alcohol being sold on more days for longer hours, a boost in advertising, more outlets selling alcohol and looser enforcement of rules, such as the minimum drinking age. It found “strong evidence that privatization results in increased per capita alcohol consumption, a well-established proxy for excessive consumption and related harms.”


In Pennsylvania, Republican Governor Tom Corbett has made privatization a top policy priority, but it is uncertain how the state Senate will deal with the House-approved privatization measure when it reconvenes April 8.


Few Pennsylvanians love the current system, but most people are so used to it they are afraid of what any changes would do to their bottom line – and their bar tabs. “Any time you try to make a change, other licensees are impacted,” said Republican state Representative Mark Mustio, sponsor of the privatization plan that passed the House. “Because of that, it has always been very difficult even to do anything of a minor nature.”


Pennsylvania’s Plan


Mustio said his plan aims for a smooth transition. There are tax breaks and education vouchers to help the 5,000 state store employees who would lose their jobs because of privatization, and the existing beer distributors would be given preference for licenses that would allow them to stock their shelves with liquor and wine. They would be allowed to sell beer in six-packs or even in “growlers,” reusable containers that consumers can bring back and refill.


Mustio said he was strongly influenced by a recent visit to Washington state, where he talked with consumers at retail outlets and met with officials from the Washington State Liquor Control Board. While state stores in Washington had to shut down immediately, Mustio’s plan would gradually shutter Pennsylvania’s state stores as private sellers get up and running.


Mustio blames higher taxes and fees in Washington state for the rise in average prices that has occurred since privatization there (up $1.60 per liter, according to the Washington Department of Revenue). He said he wants Pennsylvanians to enjoy the convenience, competition and choice he witnessed in Washington.


Still, his bill hasn’t earned the support of some key constituencies, notably the union representing state store employees and the Malt Beverage Distributors Association of Pennsylvania. “You go through their laundry list of what they want, and you give it to them,” Mustio said of the Malt Beverage Distributors Association. “But still they’re against it. They want to be the only outlet allowed to sell any type of alcohol.”


Mark Tanczos, who heads the Malt Beverage Distributors Association, said the beer distributors he represents already are feeling pressure from new entrants to the marketplace, including grocery stores that have opened up in-house restaurants so that they can sell six-packs of beer to-go. “This change makes our demise even quicker, because how do we compete with these large corporations that have been unfettered for years?” he said.


Even though Mustio’s proposal would allow distributors to sell liquor, wine and six-packs of beer – a change they’ve been asking for since 1937 -Tanczos worries that chain stores and liquor giants from out-of-state would drive them out of business.


Washington’s experience


In Washington, a variety of outlets have long been allowed to sell beer and wine. Still, a similar battle has been playing out there among large and small retailers. Costco spent about $20 million to promote the November 2011 ballot initiative that privatized hard liquor sales in the state. The initiative allowed smaller retailers to bid for the former state sites that were put up for auction, but allows only retailers with more than 10,000 square feet of space to sell spirits at a new location.


Smaller retailers paid $49,600 to $750,000 in the auction, but many of them have suffered buyer’s remorse. “A third of us are already bankrupt or were never able to open,” said David Cho, a board member of the Washington Liquor Store Association. Cho said the liquor store he owns in Tacoma is operating at a loss because of competition from neighboring big-box stores and expensive state fees, including a 17 percent charge on sales to restaurants and bars that he was told wouldn’t apply to those sales. “Once the auction happened, they changed the rules,” he said. The Liquor Store Association is lobbying to remove the fee on sales to bars and restaurants.


Cho agrees with privatization advocates that the state shouldn’t be in the liquor business, but he wishes Washington had taken a more thoughtful approach. “A free market economy is always a good idea,” he said. “However, it’s a state’s job to promote competition and to protect small business owners. Eventually in Washington state, you’ll only have big-box stores, and the small business owners will be wiped out.”




States still stuck in Prohibition: Column


Source: USA Today

Matthew Brouillette

April 6, 2013


It’s still a commonplace occurrence for states to meddle in the booze business — even when a majority of citizens support reversing this archaic public policy.


Eighty years ago, baseball was still segregated, Social Security was non-existent and it was illegal to buy alcohol in the United States. Times have changed, and Prohibition has since ended — except for a few holdout states that have failed to evolve their laws to coincide with changing national attitudes towards liquor.


It’s still a commonplace occurrence for states to meddle in the booze business — even when a majority of citizens support reversing this archaic public policy. In recent years, policymakers in Alabama, Idaho, Ohio, North Carolina, Pennsylvania, Texas and Virginia have all tried to end the government control of liquor sales without success.


The news isn’t all dismal, however. Last year Washington voters chose to kick the government out of the alcohol business, and just last week Pennsylvania lawmakers approved a privatization bill in the House of Representatives. An epic fight is now brewing in the Pennsylvania Senate between the defenders of the status quo and the friends of liquor liberty.


Pennsylvania’s battle highlights many of the issues facing the pro-privatization lobby in control states, though its system is more broken than most. It’s one of only two remaining states with a complete government monopoly over the sale of any type of alcohol other than beer, both wholesale and retail.


When the state created the Pennsylvania Liquor Control Board in 1933 following the passage of the 21st Amendment, then-Gov. Gifford Pinchot said it would “discourage the purchase of alcoholic beverages by making it as inconvenient and expensive as possible.”


To that end, government has been successful and Pinchot’s legacy lives on. While most of the country enjoys the freedom of walking to the corner grocery store to buy a bottle of wine or a six-pack of beer, Pennsylvanians face the annoying prospect of driving to the nearest government-run store — “nearest” often being a loose term — for wine or spirits, a distributor or tavern for beer, and making a third stop for groceries.


All of this could soon change, as the House vote shows. But standing in the way to block liquor freedom for Pennsylvania taxpayers and consumers are government unions that profit from the monopoly.


And what a fuss those unions are making. The United Food and Commercial Workers, which has roughly 3,000 members in the state-run stores, is doing everything it can to scare the General Assembly away from meaningful reform. One popular slogan, yelled loudest by a UFCW official at a pro-privatization press conference, is that privatization is a “picture of profit before people.”


Not true. The proposal would nearly triple the number of stores — mostly small, mom-and-pop businesses — selling wine and liquor, and allow thousands of grocery stores to expand and carry wine. The result is thousands of additional jobs for Pennsylvania families.


Pennsylvania’s economy would quickly feel the benefits. An economic analysis conducted for the state Office of the Budget estimated privatization would bring back $92 million from residents who now illegally cross state lines to buy their booze to get the prices and selection they want. Privatization would be an economic stimulus and create jobs.


It wouldn’t hurt the government’s coffers, either. The Office of the Budget estimates that alcohol would generate more tax revenue after privatization.


There’s also the small fact that liquor privatization is immensely popular. My organization, the Commonwealth Foundation, recently commissioned a poll of our state’s citizens. The poll showed that 61% of Pennsylvanians — Republicans, Democrats, Independents, even union households — want the government to get out of the booze business.


The numbers are even higher for regular patrons of the government-run stores. A full 77% of weekly customers voiced their support for cutting the red tape between them and the checkout counter.


Each of the 17 remaining government control states could benefit from privatization. While passage of liquor liberty legislation through the Republican-controlled Pennsylvania Senate remains far from certain, a victory here could generate the momentum in the remaining states to finally issue a last call for government-sold alcohol.


Matthew J. Brouillette is president of the Commonwealth Foundation.


In addition to its own editorials, USA TODAY publishes diverse opinions from outside writers, including our Board of Contributors.




Internet blossoms into virtual vineyard as online wine clicks with buyers


Source: Associated Press

April 4


The internet is blossoming into quite the virtual vineyard.


Online wine options are everywhere, from flash sale sites like Lot18 offering daily deals to Facebook prodding you to send a little something for Aunt Suzy’s birthday. And now there’s a new generation of startups such as Club W, which adds a little algorithm to your albarino, using surveys and ratings to figure out what you might like to drink next.


The click-and-sip approach seems to be catching on, says Jeff Carroll of ShipCompliant, a Boulder, Colo.-based company that helps wineries comply with shipping laws. “Wine is a unique product and it lends itself well to the social aspects of the Internet in terms of discovery.”


Online sales have been around for a while, with individual wineries selling wine through their websites, a practice that has become more prevalent as more states relax Prohibition-era laws that had banned alcohol shipments.


Today, only seven states have an outright ban on direct-to-consumer shipping, though some of the states that do allow shipping have various restrictions, and 89 percent of the U.S. population has access to direct-to-consumer sales, according to Steve Gross of the San Francisco-based Wine Institute, a trade association.


What’s changed is the rise of third-party sites run by companies that don’t make wine, like, which offers special deals on wine. These sites got a boost in 2011 when the California Alcohol Beverage Control officials issued guidelines allowing third-party providers to act as agents in the sale of alcohol but requiring wineries to stay in control of the wine, making them responsible for following all the relevant laws. The advisory applies only to California, but was seen as creating a framework that others could follow. “That really changed the dynamic,” says Carroll.


Since the guidelines were issued, major Internet retailer Amazon has gotten back in the wine business, its third attempt, and Facebook has added wine to the gifts friends can send each other. Meanwhile, a number of smaller companies have jumped into the market.


Thanks to the data-gathering and interactive capabilities of the new technology, online sites serve as more than a digital catalog. Relative newcomer Club W tries to anticipate what customers want by basing selections on information gathered from surveys on customer flavor preferences along with their ratings of wines already purchased.


Club W CEO and co-founder Xander Oxman says the idea is to combine the convenience of a traditional wine club shipment with the personalized experience made possible by tools that capture a buyer’s likes and dislikes.


The club, which sends out monthly shipments of three bottles for $39, aims to appeal to casual drinkers, who usually shop for wine at supermarkets or liquor stores.


In its first nine months, Club W sold more than 100,000 bottles of wine, Oxman says.


Though it’s easier to ship wine across state lines now than it was 10 years ago, there still are numerous legal challenges being played out and some state legislators are looking at bills that could restrict third-party sales. Opponents generally cite concerns that alcohol will be delivered to underage drinkers; proponents say age verification tools and adult signature requirements on delivery prevent that.


Jeff Stai, owner of Twisted Oak winery, a winery based in the foothills of the Sierra in Northern California, has sold online for years, including lately through Amazon and Facebook.


Twisted Oak is licensed to sell in 30 states and though the tasting room accounts for the bulk of sales, about 20 percent of his business is from outside California and Nevada.


Stai jokes that he’s “not shoveling money into the bank,” from third party site sales, but they do provide a steady stream of orders. Twisted Oak also sells wine directly from its own website, going back about nine years and that has steadily increased, especially during the past two years, Stai says.


“It went from, ‘Oh, look, we have an order today,’ to ‘We’ve got orders every day.'”




Rediscover Chardonnay


California’s versatile white-wine grape is escaping its syrupy reputation with lighter, brighter varieties untouched by oak


Source: WSJ


Apr 5th


IT’S GOOD. It’s bad. It’s out. It’s in. Is there any grape whose fortunes have risen and fallen more often than those of Chardonnay-particularly Chardonnay from California? I’m convinced this is thanks, in part, to the grape’s chameleon nature. Chardonnay can be oaky or steely, fruity or flinty, depending on where it’s grown and the style that the winemaker wants to produce. Indeed, style is key when describing this most malleable grape.


Less oak and more steel is the style that’s in vogue for a growing number of winemakers. It’s appealing not only to the anything-but-Chardonnay crowd but to a new generation of drinkers as well.


A new generation was the target audience for Avant, the Kendall-Jackson Chardonnay that debuted in late 2010. “Jess wanted a new wine that would appeal to a new generation of wine drinkers,” said Caroline Shaw, executive vice president at Jackson Family Wines, who explained that Jess Jackson, the late Kendall-Jackson founder, came up with the idea in 2008.


When the producer of one of the country’s more popular Chardonnays (the decidedly oakier Vintner’s Reserve) decides to produce a largely unoaked Chardonnay, it seems like a good indication that something bigger may be afoot. And while Avant is produced in tiny amounts (130,000 cases) compared with the millions of cases of Vintner’s Reserve, Ms. Shaw said there was “real growth potential” with Avant.


That potential has already been realized with the Chamisal Stainless Chardonnay from the Central Coast, which debuted in 2006 at 1,000 cases and is now up to 30,000 cases-making it the winery’s best-selling wine. “Stainless” refers to the stainless-steel fermentation tanks used to make the wine.


Chamisal winemaker Fintan du Fresne-who hails from New Zealand, where unoaked Chardonnay is quite commonplace-said he thinks today’s U.S. wine drinkers get what the Stainless name means. For his part, Mr. du Fresne said, he’d had a particularly hard time comprehending California Chardonnay when he arrived in the U.S., in 2006. “I was trying to wrap my brain around California Chardonnay-the level of oak, the richness, the viscosity, the Rombauer-esque nature,” Mr. du Fresne said. (Rombauer Chardonnay is considered the epitome of the oaky Chardonnay style.) “My first question to the winery’s owner was, ‘Can we make a stainless Chardonnay?’ ” The owner told Mr. du Fresne he was crazy, but six months later he said, “Sure.”


Did Mr. du Fresne think that oak-free Chardonnay was a winemaker-led change? “I think there has been a push by winemakers for a leaner, less oaky style,” he replied. But as Mr. du Fresne pointed out, this wasn’t just about taking out oak but “a complete reconstruction of Chardonnay.”


According to Mr. du Fresne, the making of a stainless-steel-fermented Chardonnay requires different grape clones, different fermentation techniques, cooler fermentation temperatures and, often, forgoing malolactic fermentation. (Malolactic fermentation converts the tart malic acid to the softer lactic acid, making a softer, richer, more buttery wine.)


One of the top California Chardonnay producers, David Ramey, refers to his style as “neo-Burgundian” and notes that it can be achieved with less new oak and by picking earlier, when the grapes are less ripe. Mr. Ramey is doing both-not in response to the market but to his own palate. “It’s my own development-a reaction to my own wines,” he said. “I wanted the oak to be less present.”


Mr. Ramey’s two “basic” Chardonnays (he makes seven Chardonnays altogether) were among the 17 wines I tasted recently with friends-most of whom said they rarely drank California Chardonnay because it had too much oak, too much sweetness and too little acidity. I assured them the Chardonnays we were tasting were different.


Of course, oak or its absence alone doesn’t make a wine good. When the wines that we tasted were in balance, the quality of the fruit shone through. But when the fruit wasn’t great or the winemaking less than perfect, the wines came off as insipid and dilute. (These might have been helped by a little “make-up” of oak.)


Thankfully, there were many more successes than failures. In no particular order, our favorites included the fresh and citrusy 2011 Paul Hobbs CrossBarn Sonoma Coast, the lively 2011 Chamisal Stainless Central Coast, the complex 2010 Ramey Russian River Valley as well as the elegant 2010 Etude Carneros, the 2011 Williams Selyem Unoaked Chardonnay and the 2011 Mer Soleil Silver. The last was a soft, lush and ripe wine made even more memorable by its packaging (a gray ceramic bottle that one friend said “looked like a bomb that you’d light with a fuse and throw”-making perhaps the first unoaked Chardonnay Molotov cocktail).


Best of all, perhaps, were the prices. Since there was little to no expensive new oak used, the wines were affordably priced. None cost more than $33, and most were $15 to $22. That helped to win over even the least Chardonnay-friendly friend: “These are better values than white Burgundy,” he proclaimed. “You get more flavor and satisfaction with these wines than you would with most $23 white Burgundies.”


California Chardonnay is back-yet again.




Crisis reduces Italian wine drinking


Source: The Age

April 6, 2013


Wine-drinking in Italy has reached record lows, thanks to the economic crisis and changing consumer habits.


A report by the country’s main farmers’ association says consumption has plummeted by 22 per cent over the past decade to its lowest level since the 19th century, with sales falling by two per cent between 2011 and 2012 alone.


Italians drank a total of 22.6 million hectolitres of wine in 2012, compared to 29 million hectolitres in the United States and 30.3 million in France.


An online survey found that 32 per cent of respondents said they only drank wine on special occasions, 18 per cent said they would have one or two glasses a week and six per cent said they never drank any wine.




Young Americans


Source: FT

Jancis Robinson

Apr 5th


Every one of the 50 states now makes wine, even Hawaii and Alaska. North Dakota was the last to succumb


To his contemporaries Dustin Wilson, 33, has a dream job. A Maryland boy, he is now a Master Sommelier and wine director at Eleven Madison Park, one of New York’s most admired restaurants. Previously he worked for such luminaries in the world of the grape as Rajat Parr of RN74 in San Francisco and Bobby Stuckey MS of Frasca in Boulder, Colorado. And he knows how lucky he is. “Right now is a really exciting time to be involved in wine in this country,” he told me recently. What particularly excites him is that so many young Americans are so actively interested in his chosen subject. He is also stimulated by the current revolutionary fervour in a new generation of producers who are offering wines that have never before been made in the United States.


I have been observing the American wine scene since 1976, when I reported on the novelty of the French, in the form of Moët & Chandon, investing in the Napa Valley. By the 1990s Napa Valley was one big vineyard, but the wine industry was under threat from those it called neo-Prohibitionists. Warning labels on bottles had been declared mandatory and producers and retailers seemed ever more constricted.


Today things are quite different. The US has long been by far the biggest producer of wine outside Europe (so the fourth biggest in the world), but it has recently become the single biggest market for wine, consuming more in total than the former old soaks of France and Italy. Not only that, but wine as a subject is also enjoying unprecedented status in the US.


Unlike Europeans, Americans see wine as something novel and exciting, so they are delightfully proactive in their interest in it. Wine classes and tasting groups proliferate. Wine tourism has never been more popular, and in many cities wine tourists don’t even have to travel further than the suburbs where many an urban winery has been established, giving city dwellers hands-on experience of tasting, blending and even making wine. An interest in wine seems particularly marked among those in their twenties and thirties. At a public talk I gave recently in New York, I spotted hardly anyone over 35 in the audience, and all the questions came from young women.


Not surprisingly, this flowering of consumption has been matched by one in production. A keen interest in drinking wine can all too easily lead to a desire to make it, a desire that can be relatively easily realised in a country as rich in land and capital as the United States. I long ago lost count of the number of Americans who had decided to devote a portion of the fortune they had made elsewhere to the dream of owning a vineyard.


The total number of bonded wineries in the US has risen from under 3,000 at the turn of the century to approaching 8,000 today. And these are not just in the three Pacific states so well known for their wine production – California, Oregon and Washington. Every one of the 50 American states now makes wine, even Hawaii (from various hybrid vines and tropical fruits) and Alaska (also from local fruits and imported grape juice). North Dakota up on the Canadian border in the Midwest was the last state to succumb to the charms of wine production and like several states with similarly vicious winters, had to resort to winter-hardy hybrid vines.


My American wine travels have been confined to the west coast, New Mexico, New York, Vermont and Virginia, but whenever I have had the chance I have always gone out of my way to taste wines from as wide an array of states as possible. Massachusetts Merlot? Tennessee Traminette? You betcha!


There is still no shortage of pretty awful wine made in what the campaign called Drink Local Wine ( calls “The Other 47″. But the exciting thing is that the proportion of good or very good wine made somewhere other than on the Pacific coast has been increasing markedly recently. My new book American Wine celebrates this revolution, and was written with Linda Murphy, a former wine editor of the San Francisco Chronicle and frequent judge at wine shows all over the US. No state is too obscure for Ms Murphy, fortunately for me since she has done by far the lion’s share of the work involved in the book.


I have tasted very respectable wines from Arizona, Colorado, Texas and New Mexico, and there are exceptional producers all over the country, but for us the hotspots of really top quality wine are the Finger Lakes of New York and the southern shore of Lake Michigan for fine Rieslings; Long Island for a wide range of rather European wines; and Virginia for increasingly fine red Bordeaux blends, Viognier, Petit Manseng and Petit Verdot. And it is possible to find decent Chardonnay virtually everywhere.


Things are changing in Oregon, Washington and particularly California too. Much to the delight of Dustin Wilson and the tight-knit posses of sommeliers on the American coasts, there is a perceptible pendulum swing away from turbocharged versions of a handful of international grape varieties towards much fresher, lighter wines that are more expressive of individual vineyards than cellar techniques. And they are made from a significantly wider range of grape varieties than used to be the case.


The trend was there but it has been encouraged by a succession of cool growing seasons in California – perhaps the result of climate change. In the panel I list a few of the newer producers associated with this trend, but I am well aware that newcomers on the wine scene have been sprouting just like the bright yellow spring crop of mustard between California’s blessed vines.


Tasting notes on Purple Pages of




Exane BNP Paribas equity research : LAURENT-PERRIER (=), VRANKEN POMMERY (-): The bubble monitor: February fails to fizz  


Source: Exane BNP

Apr 5th


LAURENT-PERRIER (=) TP: EUR69 . Upside: 11%

Beverages (-) . France . Price (04 Apr. 13): EUR62.3


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

Beverages (-) . France . Price (04 Apr. 13): EUR20.6


Champagne shipments down 6% in February

Both Lanson BCC and Vranken-Pommery mentioned a ‘slightly better start to the year’ in 2013. However, this is not backed up by the figures. Admittedly January and February are the two smallest months for champagne shipments, resulting in volatility in growth figures (+8% in January, -6% in February). The comp base however was not tough (global volumes dropped by 11% in Q1 12).


Recovering volume share in French off-trade will be tough for listed champagne players

Champagne houses lost considerable volume share in 2012 in French supermarkets, as they refused to compete with low-end brands on price. Recent comments by Vranken-Pommery suggest that at least part of these volume losses (1m bottles in the case of Vranken) should be recovered in 2013. Yet this is not what the 8% decline in shipments from champagne houses to France seems to suggest, after a 10% drop in January and against an easy comp base (-10% in Q1 12). Co-operatives on the other hand saw volume growth of 45% and 29% in January and February in France.


Steep volume drop in the EU and ROW for champagne houses in February

Shipments to the EU from champagne houses were down 10% yoy in February. There too, cooperatives gained volume share (shipments up +57%). In non-European markets, champagne houses experienced a 12% y/y drop in shipments.


Still cautious on listed champagne names

Our relative preference still goes to Laurent-Perrier (Neutral) vs. Vranken-Pommery (Underperform) given its higher exposure to non-European markets. However, we continue see better momentum and value elsewhere in the sector.




Ste. Michelle Wine Estates Announces Executive Sales Promotions


Source: SMWE

Apr 5th


Ste. Michelle Wine Estates, the Northwest’s oldest and most acclaimed wine company, has promoted two executives to lead the company’s domestic and international sales regions.


The promotions are effective May 1, 2013 with the retirement of Glenn Yaffa, a 30-year veteran of Ste. Michelle Wine Estates whose accomplishments contributed greatly to Ste. Michelle’s success.  He most recently held the position of Executive Vice President, Sales.


Frank Genovese has been appointed to succeed Yaffa as Executive Vice President, Sales.  He will have direct oversight of the company’s domestic and international business units, the customer service department and the company’s wine education team.


Genovese joined Ste. Michelle in 1999 as Vice President for the East Sales Region.  He was promoted to Senior Vice President National Sales Manager in 2005.


Ted Baseler, Ste. Michelle’s President and CEO said that Genovese is uniquely qualified to lead Ste. Michelle’s sales organization and build on Ste. Michelle’s current position as the third largest premium wine company in the U.S.


“The breadth of Frank’s executive sales experience, including leadership roles for Ste. Michelle and a major New Jersey wholesaler, has contributed greatly to Ste. Michelle’s phenomenal growth during the past 12 years,” Baseler said.  “He is respected by our network of customers and wholesalers; he has a valued perspective on the complexity of the marketplace; and he is strongly committed to developing the company’s future leaders.”


“Ste. Michelle is a dynamic company with a wine portfolio that is unparalleled in the industry,” Genovese said.  “My personal goal is for all tiers of the industry to recognize that Ste. Michelle is the premier fine wine company in the world.”


Dan Heller, Ste. Michelle’s West Region Vice President, will succeed Frank as Senior Vice President of Sales.  The four regional sales vice presidents will report to Heller beginning May 1.


“As a 27-year veteran of the Ste. Michelle sales team, Dan has developed exceptional leadership and sales planning expertise.  He also has built extraordinary relationships that have a win-win focus on achieving great business outcomes for all,” Genovese said.


Heller’s successor will be announced soon.






Source: Liquor Stores NA

April 4, 2013


Liquor Stores N.A. Ltd. (the “Company”) (TSX: LIQ), North America’s largest publicly-traded liquor retailer, announces that Stephen Bebis is appointed President and Chief Executive Officer effective May 7, 2013.


Mr. Bebis has a deep resume of experience in the retail sector, and most recently was the President and Chief Executive Officer of U.S.-based Brookstone Inc., a specialty lifestyle retail company. From 1998 to 2011, Mr. Bebis served as the founder, President and CEO of Golf Town, the largest specialty golf retailer in Canada and one of the largest in the world. From 1996 to 1998, he was Chairman, President, and CEO of Sports and Recreation Stores, Tampa, Florida. Prior thereto, Mr. Bebis held various executive-level positions, including (among others) President of Home Depot Canada, and founder and CEO of Aikenhead’s Home Improvement Warehouse.


Jim Dinning, Chairman and current Interim Chief Executive Officer commented, “On behalf of Management and the Board, I am pleased to welcome Stephen to the Liquor Stores organization.”


Dinning added “With his rich retail experience and his remarkable success at growing the likes of Golf Town and Home Depot, we are confident we have a leader who will enhance the Company’s prospects for continued expansion and profitability, especially as we look towards growth in new U.S. markets.”


It is anticipated that Mr. Bebis will be appointed to the Board of Directors.






Source: Agency Brazil

Apr 5th


Stephen Davies, managing director of Penderyn, the award-winning single malt whisky producer based in Wales’s Brecon Beacons, has been announced as chairman of the Craft Distillers’ Alliance.


Formed in 2012, the Craft Distillers’ Alliance is a body formed to uphold the interests of small spirits producers from around the world. The organisation was founded by whisky writer and enthusiast Dominic Roskrow, and as chairman, Stephen Davies will take an active role in the organisation, using his experience in the whisky industry to help the body to do more to aid small producers. The organisation has already scored a major success by striking a deal with a Glasgow-based distribution company to allow members to distribute directly to British trade and retail customers quickly and at an equitable price.


Dominic Roskrow, founder of the CDA, commented: “Having Stephen Davies and Penderyn on board is a significant step for the Craft Distillers’ Alliance. Under Stephen’s leadership, Penderyn has developed from being one of the smallest distilleries in the world into a world-class distillery whose products are enjoyed internationally, all without losing the independent spirit and craft production methods that made it so successful. It’s a perfect example of what’s so exciting about craft distillation, and I can’t wait to see what Stephen brings to the organisation.”


Stephen Davies, managing director of Penderyn, commented: “A look at the shelves of any drinks shop will show you that the industry is changing: along with the traditional brands which have been around for centuries, you’ll see spirits from a new breed of craft distillers: unique, vibrant and distinct, but all united by a real passion for creating a wonderful spirit for its own sake. This is a time of change for the whisky industry in particular as more and more craft distillers enter the market, and we wholeheartedly support the CDA’s aims of promoting small spirit producers and lobbying to provide easier routes to markets around the world.”


The CDA currently has more than 30 members including Compass Box, Berry Bros & Rudd and Wemyss in Britain, as well as members in Australia, New Zealand, America, Japan, India and across Europe.


Penderyn is imported and distributed in the United States by Gemini Spirits and Wine




Tesco faces £1bn writedown to quit America


Tesco is facing a bill of about £1bn to quit its loss-making Fresh & Easy business in the US.


Source: Daily Telegraph

By Graham Ruddick

07 Apr 2013


The size of the charge, which will be in the form of a writedown in the value of Tesco’s assets, highlights the torrid time that Britain’s biggest retailer has faced in the US since opening in 2007.


Philip Clarke, the chief executive, is set to confirm in the company’s full-year results next week that Tesco will exit the US after launching a strategic review last year.


However, this will come at the cost of a writedown on the value of Tesco’s investments in the country, including the wholly-owned stores, leases and a major distribution centre in Riverside, California.


Mr Clarke is understood to be working on the sale of the business – with Aldi one of the potential buyers – but a closure of Fresh & Easy and then a piece-by-piece sale of the assets remains the most likely outcome.


Tesco may not reveal the future of Fresh & Easy in the results, but in order to break with the past and underline its determination to leave the US, it is understood that the FTSE 100 company will book a substantial impairment.


Tesco is the third biggest retailer in the world. Under Sir Terry Leahy, it built successful businesses in countries ranging from Ireland to the Czech Republic, South Korea and Thailand.


But Fresh & Easy will go down as one of Sir Terry’s and Tesco’s biggest failures. Other retailers to have suffered in the US include J Sainsbury and Marks & Spencer.


Mr Clarke has been under pressure to review the loss-making Fresh & Easy since taking over from Sir Terry in March 2011.


Last October, Mr Clarke halted new store openings in the US and then announced two months later that Tesco would begin a strategic review because Fresh & Easy “will not deliver acceptable shareholder returns on an appropriate time frame in its current form”.


Mr Clarke said: “This has not been an easy decision but I know it’s the right one.”


Tesco declined to comment on Sunday night.




Punch hits out at bondholders


Source: FT

By Mark Wembridge, Duncan Robinson and Michael Stothard

Apr 5th


The head of Punch Taverns hit out at disgruntled bondholders for not coming up with a viable alternative to the pub company’s latest restructuring offer which some spurned last week.


Stephen Billingham, executive chairman of the debt-ridden group, said: “They’re not pitching anything – there are no alternative proposals. We’ve not seen viable alternatives.”


Punch has been in extended talks to restructure its £2.4bn of net debt, which consists of two securitised vehicles that require regular cash injections to keep them from breaching covenants.


The rejected offer would see investors in one of the vehicles, Punch B, write off a quarter of their £914m of debt. Creditors involved in the larger £1.5bn Punch A vehicle would see amendments in their financial covenants and defer restructuring in order to buy time for a turnround in the business.


Mr Billingham said, however, that a number of bondholders simply did not understand the restructuring offer. “There has been a learning curve. It’s not confusing, it’s just complicated.”


The plan, which needs the approval of three-quarters of creditors in each debt vehicle for the restructuring to be implemented, could achieve a £463m cut in debt service payments over the next five years.


One senior bondholder warned that the restructuring was unlikely to happen in its current form. “The only proposal from the five US hedge funds that control Punch has been publicly rejected by the senior bondholders,” he said.


“It is difficult to see how this restructuring gets launched in the first half.” Hedge funds such as Glenview Capital Management control the bulk of Punch’s equity.


The update on the restructuring came as Punch reported a year-on-year slip in interim revenues for the 28 weeks to March 2 from £264.6m to £243.3m, as the group pared down its estate of non-core pubs. Punch plans to sell about 400 non-core pubs in each of the next four years.


A £42.9m one-off charge for an interest-rate swap dragged Punch to a pre-tax loss of £16.7m. On an underlying basis, pre-tax profit shrunk by a fifth to £26.2m. The diluted loss per share was 2p – down from earnings of 3.7p a year ago – and there was no dividend.


Punch’s tenanted pubs have suffered from declining like-for-like income in recent years, with dwindling beer consumption, higher taxes, and a plethora of cut-price supermarket offers for alcohol hurting the whole sector.


Since it was spun out from its parent company in 2011, Punch has struggled under the weight of its debt burden, which was built up during the credit binge before 2008. Roger Whiteside, Punch’s former chief executive, quit the company in February to run Greggs, the bakery chain, leaving Mr Billingham as executive chairman.


Punch shares rose 3.5 per cent to 11p.




New York: Critics stomp on stained wine pol


Source: New York Post


April 8, 2013


Good-government groups and a fellow Democrat yesterday criticized Bronx state Sen. Jeff Klein for pushing a bill benefiting a national wine distributor that contributed $33,000 to his campaign.


The Post first reported yesterday that Klein’s re-election war chest is brimming with $33,000 in donations from Empire Merchants LLC.


The company, in turn, is pushing a measure to require all wine to be warehoused in New York for at least a day before being sold in local stores – which could tack an extra $7 on a bottle of wine for consumers.


“That becomes questionable in light of what’s happened in the last couple of days. That would raise concern,” said former Bronx Assemblyman Michael Benjamin, referring to last week’s arrest of Assemblyman Eric Stevenson for allegedly accepting bribes from businessmen in exchange for tailor-made legislation.


Benjamin added that aiding a particular industry is not uncommon – but said it’s questionable when an elected official receives campaign contributions from the very industries the lawmaker is supporting.


“I’m sure more bills are going to be scrutinized,” said Benjamin, Stevenson’s predecessor.


George Venizelos, assistant director in charge of the FBI’s New York office, said last week’s corruption arrests are important to establish and maintain public trust.


“Once you lose that public trust, it hurts everybody,” he said. “It hurts the city and the country.”


And Barbara Bartoletti, legislative director of the New York State League of Women’s Voters, said: “This is clearly giving campaign contributions with the bottom line in mind. That’s why we need campaign-finance reform.”


Meanwhile, Mayor Bloomberg told reporters that “there’s more corruption” to be uncovered and urged, “We’ve got to clean up Albany.”




Kansas: House breaks with Senate on alcohol bill; Capitol stays ‘dry’


Source: Wichita Eagle

By Dion Lefler

Friday, April 5, 2013


The Kansas House has decided that the Capitol will stay “dry,” at least for now.


Hours after the Senate approved a measure to allow alcohol under the dome under certain circumstances, the House sent the bill back to a committee for a rework.


The provision, part of Senate Substitute for House Bill 2199, was proposed to allow drinking in the Capitol during official functions, such as a planned party to celebrate completion of the renovation of the Capitol building.


But the House sent it back to a conference committee of representatives and senators after a ruling that an unrelated part of the bill dealing with home beer brewers had been improperly added to the catch-all measure.


The rules decision came after an impassioned plea on the floor by Rep. Pete DeGraaf, R-Mulvane.


DeGraaf railed against another part of the bill, which would allow automatic wine-dispensing machines to be used under limited circumstances at state-owned casinos.


“Why is that?” DeGraaf said. “Because we profit from state-owned casinos.”


Moments later, he asked, “What’s next? Fountains with flowing alcohol where you can just go in and drink it?”


A number of House members applauded that suggestion.


The bill had appeared to have sufficient support to pass, after a procedural motion to send it back to committee failed 67-50.


Earlier Friday, the Senate voted in favor of the bill 29-10.


The only issue that got much attention there was the provision on drinking at the Capitol, which touched off a lengthy debate about the role of the Capitol in public life.


Sen. Julia Lynn, R-Olathe, said she feels that the Capitol belongs to the people and should be available for public events such as art openings and concerts, where it would be appropriate to have alcoholic beverages in a controlled environment.


“We’re not opening up the Statehouse so we can stash flasks in our desks,” she said.


Others, however, balked at the idea, saying that allowing alcohol would diminish the gravitas of the center of the state’s government.


“This building is dedicated to the people’s business,” said Sen. Pat Apple, R-Louisburg. “It is not for rent, it is not for sale.”


Senate President Susan Wagle said the only event currently proposed to be alcohol-optional would be a celebration of completion of the long-running renovation of the Capitol.


She said she and Gov. Sam Brownback are hoping to use the rededication party as a fundraiser to benefit a Kansas charity. “We want to open it (the Capitol) up and show it off,” she said.


The Capitol renovation project is in its final stages and expected to be completed this year.


The bill would have allowed alcohol to be served at Capitol events with the approval of the Legislative Coordinating Council, a group of House and Senate leaders.


The bill also would have made several other changes in alcoholic beverage laws, primarily in allowing some liquor licensees, such as hotels, to provide free samples or coupons for free drinks.


Negotiators say they will rework the bill when they return from a monthlong break in May.

New Wine In Our Dispenser To Try-Stlto Un-oaked Chardonnay From Italy

April 6, 2013
Our Wine Dispenser

Stop In And Try!


As you know we reserach(taste) to find wine from all over the world.
STLTO is our latest wine find.
After seeing MANY stories on the internet about this wine( And Its owner Sarah Liberatore ) we had to try it.
This is a small woman run company that is supported by a small distributor which we love.
The whole line is very easy drinking.


The STLTO Story


STLTO is a seriously stylish wine from Italy, where both fashion and wine making are world-renowned. Picked from 40-year-old vines in the lush Abruzzo region, the grapes used to create the STLTO collection deliver gorgeous colour and density. With its sleek bottles and stunning glitter cap closures, the STLTO collection is playful, seductive and versatile—just like a pair of fabulous stilettos. Whether you’re hosting a dinner party, visiting friends or getting ready for a night of dancing, the STLTO collection is always a perfect fit.

So kick up your heels and raise your glass!







We now stock the full Line: Un-oaked Chardonnay,Prosecco,Malbec/Merlot And Pinot Grigio

Please stop in and try the 2011 Unoaked Chardonnay in our wine dispenser:

Like the perfect little black dress,STLTO White is a wardrobe staple. Classic yet flirty, this plush white is an un-oaked Chardonnay with bright grapefruit flavours and aromas of white peach and lemon chiffon.

100% Chardonnay From The Abruzzo Region In Italy

Serving Suggestion Great match for seafood pasta

750ml $11.99

As always 10% off on 6 20% off on 12 bottles of any 750ml wines!


Find them on the Web

Read the press:

Liquor Industry News 4-5-13

April 5, 2013

Franklin Liquors


Friday April 5th 2013

Biodynamic ROOT Day


Brown-Forman to Distribute Jägermeister in Australia


Source: Business Wire

Apr 4th


Brown-Forman Australia (NYSE:BF-A – News) (NYSE:BF-B – News) announced today that it has been appointed the exclusive distribution rights to Jägermeister, effective July 1, 2013. Jägermeister has become a leading liqueur brand in Australia since it was introduced eleven years ago, transcending pop culture and building legions of loyal consumers.


In September of last year, Jägermeister introduced two RTDs in Australia, Jägermeister Raw and Jägermeister Ginger & Lime, to offer the great taste of Jägermeister as premium all natural RTDs. These were the first two brand extensions in the history of the franchise and provide a strong platform for future growth.


“Jägermeister has achieved an enviable position in the on-premise and achieved national distribution since its introduction to the Australian market and is experiencing encouraging early results for the RTDs,” said Marshall Farrer, managing director for Brown-Forman Australia. “We are pleased to add this brand to our portfolio in Australia.”


“After more than a decade of great success, we now look forward to taking Jägermeister to the next level in the Australian market,” said David Bell, Regional Director Asia Pacific at Mast-Jägermeister SE.


Suntory will continue to distribute Jägermeister through June 30 and the companies will jointly work to ensure a smooth transition for all customers.




AB InBev Near Final Agreement With U.S. Over Modelo Deal


Source: Bloomberg

By Sara Forden

Apr 5, 2013


Anheuser-Busch InBev NV (ABI) and the U.S. Justice Department are close to a settlement of a lawsuit seeking to block the brewer’s purchase of Grupo Modelo SAB, three people familiar with the matter said.


An agreement will probably be announced next week, said the people, who asked not to be named because the discussions are confidential. There’s a chance both sides will seek a short extension of an April 9 deadline to report progress on a settlement to the federal judge in charge of the case so they can put the final touches on the deal, two of the people said.


AB InBev is negotiating with the Justice Department for approval of a revised merger plan that would have Modelo sell control of all its brands in the U.S., as well as a brewery it built in Piedras Negras, Mexico, to Constellation Brands Inc. (STZ), a winemaker and beverage distribution company.


The department is reviewing Constellation’s plan to boost brewing capacity at the Piedras Negras plant by about 70 percent to ensure that Modelo-brand products would remain viable competitors in the U.S. beer market, two people familiar with the matter said March 8.


AB InBev rose 0.2 percent to 76.65 euros at 9:04 a.m. in Brussels trading. Constellation fell 0.2 percent to $48.25 in New York yesterday, while Modelo was unchanged at 112 pesos in Mexico City.

Stock Moves


Laura Vallis, a spokeswoman for Leuven, Belgium-based AB InBev in New York, and Angie Blackwell, a Constellation representative, declined to comment on the prospects for settlement. Jennifer Shelley, a Modelo spokeswoman, and Gina Talamona of the Justice Department, also declined to comment.


The Justice Department will probably demand in the consent decree that Constellation make its commitments binding to invest in the expansion of the Piedras Negras plant, said Sandeep Vaheesan, special counsel with the American Antitrust Institute and author of a white paper recommending that the transaction be blocked. The department will also probably insist Modelo transfer to Constellation employees with marketing, distribution and production experience in the beer market, Vaheesan said.


“The Justice Department probably wants to make sure that Constellation, which has been principally focused on wine and spirits, can fill the shoes of Modelo, which is a brewer,” Vaheesan said.




Global companies eye stake in Original Choice maker


Source: Times of India

Boby Kurian

Apr 4, 2013


Three global spirits companies have evinced preliminary interest to buy a large stake in Bangalore-based John Distilleries, makers of Original Choice, which is among the top six Indian whiskey brands.


Family-owned Scottish distiller William Grant & Sons, Thai Beverage Public Company (ThaiBev) and Beam Inc have signed non-disclosure agreements ahead of starting formal talks, said banking sources familiar with the matter.


John Distilleries mandated Morgan Stanley to find a foreign strategic partner, who could emerge as the largest shareholder, in a deal pegging the enterprise value of the company at Rs 900 crore.




GS survey bullish on the US consumer, especially at the high end


Source: Goldman Sachs

Apr 4th


US consumer sentiment and spending intent continues to rise

We conducted our regular quarterly survey of 2,000 US consumers, a data series that dates to 2005. The survey was in the field in mid-late February, subsequent to the 2% payroll tax hike, and incorporates the impact of delayed tax rebates and higher gasoline prices. Despite headwinds, consumers reported continued improvement in sentiment towards the economy and the highest intent-to-spend levels since the financial crisis.


Balance sheets bolster consumers; a lower savings rate may help offset higher taxes in 2013

Our survey suggests three reasons why the savings rate may fall in 2013, buoying consumer spending and potentially fully offsetting the impact of higher taxes: (1) consumers reported an increase in credit card debt this quarter, (2) those with jobs were most inclined to re-lever their balance sheets (and the economy is currently creating jobs at a pace of two million annually), and (3) for the first time since the financial crisis, more consumers thought their home value was rising rather than falling.


The delta between high- and low-income households has widened

While an improved consumer outlook was universal in the survey, it was more pronounced amongst high-income households (over $90K) relative to lower-income households (under $50K); the delta between these two groups in our survey hit a new high. At the category level, our survey suggests Travel/Entertainment and Accessories as the most over-indexed to high-income households. We also highlight the following 11 stocks which have high-end exposure and are Buy-rated: BLMN, EL, KORS, PNRA, SBUX, TSLA, TFM, TUMI, VAC, WFM, WYN.


Consumers demand for Autos and Accessories rising

In terms of sectors, the greatest increase in demand versus a year ago in our survey was in Autos. Our Auto analyst Pat Archambault believes this dynamic is likely to persist for several years as SAAR normalizes after the crisis. He highlights F as the best way to prosecute this theme.


We also highlight Accessories (i.e., jewelry, handbags) where demand is rising at an increasing rate in our survey. Our Specialty Apparel analyst Lindsey Drucker Mann believes branded accessories are in a robust growth cycle and highlights KORS and TUMI.




Gunmaker Sues Liquor Co. Over Tommy Guns Vodka


Source: Law 360

By Bill Donahue

April 04, 2013


The company behind the famed Thompson submachine gun, better known as the Tommy gun, sued an Illinois liquor maker last week for selling a brand of vodka under the trademarked gun name.


New York-based Saeilo Enterprises Inc. still produces and sells the gun, which rose to infamy as the weapon of choice for Prohibition-era mobsters and has long been a staple of the Hollywood arsenal. On March 27, it said Alphonse Capone Enterprises Inc. has been trying to tread on that fame by selling a product called Tommy Guns Vodka.


“Defendant’s unauthorized use of the Tommy gun marks is … willful and has been done with the intention of trading upon the valuable goodwill built up by Saeilo in its long-used and trusted Tommy gun marks,” Saeilo says. “Defendant intended to confuse, cause mistake or deceive consumers.”


Saeilo’s suit also claims that Tommy Guns Vodka, which comes in a glass bottle shaped like famous submachine gun, also infringes the company’s trade dress rights to the Tommy gun.


In total, the 10-count complaint against Alphonse Capone Enterprises lists claims of infringement, dilution, false designation of origin and trade dress infringement under the federal Lanham Act, state-law claims of infringement and deceptive practices, and common law unfair competition and and infringement.


The gunmaker wants a permanent injunction barring Tommy Guns Vodka from store shelves, as well as an award of damages, attorneys’ fees and costs.


It wasn’t clear at press time whether the vodka was still being sold. A company website for Alphonse Capone Enterprises, which appeared to be updated infrequently, said the vodka was launched in January 2005. The company couldn’t be reached for comment.


Saeilo has been aggressive in defending its control of the Tommy gun name and look. It sued a company last month for selling toy replica Tommy guns that bore the name, and hit a similar company with a case over toy guns in late 2011.


The case filed in March is still pending; Saeilo eventually dropped the earlier suit.


Saeilo is represented by Boris Umansky of Dennemeyer & Associates LLC.


Counsel information for Alphonse Capone Enterprises wasn’t immediately available.


The case is Saeilo Enterprises Inc. v. Alphonse Capone Enterprises Inc., case number 1:13-cv-02306, in the U.S. District Court for the Northern District of Illinois.




Pernod Ricard pockets £108m in Chivas dividends


Source: The Scotsman


5 April 2013


CHIVAS Brothers, Scotland’s second-largest whisky distiller, has paid dividends worth a total of £108 million over the past 18 months to French parent company Pernod Ricard as demand from emerging markets continues to drive Scotch sales.


The Paisley-based producer – which makes whiskies including Chivas Regal, the Glenlivet and Royal Salute – toasted soaring sales and profits in the year to 30 June, according to accounts filed at Companies House.


The latest financial figures cover the period before a wider slowdown in the growth of exports reported earlier this week by the Scotch Whisky Association (SWA) trade body.


Chivas Brothers – which also owns whisky labels such as 100 Pipers, Passport and Something Special – posted a 17 per cent rise in pre-tax profits to £201.9m on the back of an 18 per cent rise in sales to £610.1m.


Growth in its Scotch business out-stripped that for Pernod Ricard as a whole in 2011-12. The Paris-listed group – which also owns brands including Absolut vodka, Beefeater gin and Jacob’s Creek wines – reported a 9 per cent rise in profits to ?2.1 billion (£1.8bn) on the back of an 8 per cent increase in sales to ?8.2bn. In February, Pernod Ricard warned of slower growth in Scotch sales in Asia during its current financial year, following the handover of political power in China and structural changes in the South Korean market.


No-one from Chivas Brothers was available to give an update on current trading yesterday, but its accounts revealed that the subsidiary has continued to pay hefty dividends to its parent.


A total of £23.6m was paid in the year to 30 June, with the notes to the accounts showing that a further ?69.8m was paid in January and monthly dividends have already totalled £24.9m so far in its current ­financial year, exceeding the previous year’s total.


The accounts showed that the company had also reached an agreement to fund its pension scheme, with a one-off payment of £60.5m and an asset-backed funding structure secured against some properties.


News of the payouts comes just a day after larger rival Diageo – Scotland’s biggest distiller and owner of the Bell’s, Johnnie Walker and Talisker brands – announced that it will build a £50m “super-distillery” near ­Alness in Easter Ross.


The facility – which will become Scotland’s largest malt ­distillery, capable of producing 13 million litres of spirit each year – will dwarf Diageo’s 10.2m-litre Roseisle site, which opened in 2010, and Pernod Ricard’s Glenlivet development, which has been expanded in recent years to produce ten million litres. Alan Gray, a whisky analyst at Edinburgh-based investment software firm Sutherland’s, said large companies such as Diageo and Pernod Ricard were investing in production to meet demand in five-to-ten year’s time.


Export figures from the SWA showed that the volume of whisky sent overseas fell by 5 per cent year-on-year in 2012, which was blamed on the slowdown in the eurozone and changes to duty levels in France. Demand from emerging markets continued to grow.




Diageo’s open offer for United Spirits shares to start on April 10


Source: Economic Times

By Reuters

5 Apr, 2013


UK drinks group Diageo’s mandatory tender offer to buy up to 26 per cent of shares in United Spirits will start on April 10 and end on April 26, a manager for the deal said on Friday.


The price for the tender offer to United Spirits shareholders will remain at Rs 1,440 ($26) a share, JM Financial BSE 1.80 % said in a notice to the Bombay Stock Exchange. United Spirits shares were trading at Rs 1,841 on Friday.




Brits are biggest in-flight boozers


Source: the drinks business

by Patrick Schmitt

4th April, 2013


British air passengers have been voted the heaviest drinkers according to a survey of 700 international cabin crew by Skyscanner.


54% of Brits begin their holiday with a drink in the airport or onboard a flight.


Holidaying Brits beat the Russians into second place according to the travel site, which also polled UK passengers for their reaction to the concept of alcohol-free flights.


According to Skyscanner research, over half of Brits admit to starting their holiday with a drink either in the airport or onboard the plane.


However, 41% of respondents said they would book an alcohol-free flight should it be offered – with a quarter of those saying that this was to avoid the risk of sharing a plane with drunken passengers.


The survey followed a suggestion in November last year by Russian officials to ban vodka on some flights after a report by Russian national carrier Aeroflot identified over 1,000 incidents of drunk passengers being abusive, attacking the crew and fellow passengers and even trying to get inside the cockpit.


Interestingly, the Skyscanner survey also revealed that Brits aged 18-24 were biggest supporters of an in-flight alcohol ban, while travellers from the North East of the UK were most opposed to introducing such a restriction.


Commenting on the findings, Skyscanner’s Victoria Bailie said, “Although British and Russian travellers might be the biggest on-board drinkers, these results are a clear sign that the popularity of alcohol-free flights is on the rise.


“It seems that travellers would prefer to forgo their favourite tipple rather than spend several hours sitting next to someone who has had one too many,” she added.


The survey failed to flag up the fact that Britain’s biggest drinkers are likely to booze more heavily before boarding the plane should an in-flight ban be imposed.




United Kingdom: Street disorder drops after Ipswich bans super-strength alcohol


Police say campaign stopping sale of strong cider and beer is improving safety


Source: The Independent

Martin Hickman

Thursday 04 April 2013


An East Anglian town has seen a dramatic fall in street disorder since most of its shopkeepers banned the sale of super-strength alcohol. Suffolk police said there had been a 49 per cent reduction in “street drinker events” in Ipswich during the first six months of the voluntary Reducing the Strength campaign.


The experiment was launched by police and the Co-op in September amid concern at the behaviour of itinerant drinkers intoxicated by the likes of Tennent’s Super and Carlsberg Special Brew.


At the time, the Government was backing plans for a minimum price for alcohol to stop supermarkets and  off-licences selling ultra-cheap strong cider and beer. Although the Coalition has reportedly since ditched its national plan, Ipswich is half-way through the first year of its local initiative.


At its outset, 53 stores halted the sale of cheap beers, lagers and ciders with an alcohol volume of at least 6.5 per cent. Now, 80 shops are taking part including Tesco, Debenhams, M&S, BHS, Waitrose, Sainsbury’s and Aldi, equating to two-thirds of the town’s 122 stores.


Updating the public on progress, Suffolk police said that between last September and this March the public had reported 94 “street drinker events” to police, compared with 191 events during the same period in the previous year, a drop of 49.2 per cent.


Local businesses have also reported positive effects, with surveys revealing a 20 per cent fall in the number of people stating they witnessed “a high level of street drinking around their premises.” But there was no change in the number of reported crime and anti-social behaviour outside stores owned by the Co-op. Police said that was against a background of falling incidents of crime and anti-social behaviour across the town.


Tim Newcomb, Assistant Chief Constable at Suffolk police, said: “We wanted to reduce the number of stores selling these products and to reduce the amount of crime and anti-social behaviour occurring in and around  off-licensed premises in the town.


“We are far from being able to say that we have fully achieved these aims, but we can say that we are seeing some clear improvements and that the campaign is helping us move towards an even safer town.


“Our results directly related to this campaign in relation to crime and ASB [anti-social behaviour] are limited at this point, but are set against the backdrop of fantastic work carried out by police and partners to tackle issues connected with street drinking in Ipswich. Reducing the Strength will add to these results and will help in providing these vulnerable people with routes out of their chaotic lifestyles.”


The police praised the “fantastic support” independent and national retailers had given the scheme, adding that many had shared its view that removing the products would help the community.


Assistant Chief Constable Newcomb added: “There are still a third of these stores in Ipswich that are continuing to sell these items however, and we will now work with these businesses, along with our partners, to further discuss the benefits of the campaign.”


A significant number of police forces and public-sector agencies across the UK have been in contact with Suffolk police to discuss the campaign, which has the backing of Ipswich Borough Council, Suffolk County Council and NHS Suffolk.




Australia: Industry slams rehashed AIC figures on societal costs of alcohol


Source: The Shout

By Amy Looker

Fri, 05/04/2013


A new report on the costs of alcohol misuse released by the Australian Institute of Criminology (AIC) is based on flawed research, according to two leading industry associations.


Both the Australian Liquor Stores Association (ALSA) and the Australian Hotels Association (AHA) have fired back in response to the AIC study released earlier this week, which ALSA and AHA say is an update of the 2008 Collins & Lapsley report that has since been discredited by leading international economist, Dr. Eric Crampton.


Crampton’s critique of the Collins & Lapsley methodology found that the estimated $15 billion social cost of alcohol misuse per annum was grossly overstated and estimated the real cost to be no more than around $3.8 billion per annum.


According to ALSA’s chief executive, Terry Mott, the AIC report states that over $7 billion of consumers’ money is already collected every year in alcohol taxation, which he says is around double any realistic estimate as quoted by Crampton & Burgess at approximately $3.8 billion.


“The economic cost modelling used in the Collins & Lapsley study were not meaningful, had been shown to be flawed and were not based upon standard economic models,” Mott said.


He added that the focus should remain on creating meaningful debate and developing targeted interventions for high-risk groups, not simply adding another overall tax on all consumers.


“The goal should be to change the behaviours of individuals who drink to get drunk, which is why ALSA also support DrinkWise – a not-for-profit, independent research and social change agency funded by the Australian alcohol industry, that is dedicated to building a safer drinking culture in Australia.”


AHA’s national chief executive officer, Des Crowe, said the hotel industry is also concerned by the AIC’s use of what it describes as “flawed” research.


“There are both costs and benefits of consuming alcohol,” Crowe said.


“Until a more balanced view emerges from the research community that recognises this reality, cost of harm studies should not be used by policy makers to justify further regulation or intervention in the hotel industry.”




Indulge in China’s Latest Export


Source: WSJ


Apr 4th


There are still a few wine-producing countries left on the map that command genuine novelty value. China may boast the world’s fifth-largest vineyard area and a thirsty domestic population that consumes nearly all of its wine, but in fine-wine circles, its presence in Europe is still headline news. True to form, when Britain’s oldest wine merchant, Berry Bros. & Rudd, announced last month that they were stocking four wines from Changyu, China’s largest and oldest winery, a slew of articles appeared detailing this vinous curiosity.


Actually, the rebirth of Chinese fine wine has been a few years in the making. In 2011, I had a first taste: the 2009 Cabernet Sauvignon blend by He Lan Qing Xue. Made in Ningxia, a small, landlocked province in Central China, it won the best red Bordeaux varietal over £10 at the Decanter World Wine Awards. I thought it was a reasonable effort, but certainly not something I would stock my cellar with just yet. So when I heard that Ningxia’s latest export-Château Changyu Moser-was going to be released in London at £39, or ?46, a bottle, my curiosity was piqued.


Armed with a map of China’s wine regions and an open mind, I trotted off to the tasting, which by coincidence landed on the vernal equinox-an appropriate time to challenge my taste buds and try something new.


China has been producing wine of one sort or another since the early days of the Tang Dynasty (around 625). But its modern incarnation dates back to the late 19th century, when Zhang Bishi, a government officer, established the Changyu winery on the Shandong Peninsula. So good were his wines that “The Wine Opus” notes that they received four gold medals at the 1915 Panama-Pacific International Exposition in San Francisco. Today, the Yantai Changyu Group boasts a collection of wineries dotted around China, complete with uncanny replicas of European châteaux.


Château Changyu Moser, an impressive looking property that wouldn’t look out of place on the banks of the Gironde, is one of its best. Their Moser XV, a blend of 90% Cabernet Sauvignon and 10% Merlot, is made in partnership with Austrian wine producer Lenz Moser.


“Against what we have tasted out of China before, it is clearly a big leap up,” says Mark Pardoe, Berry Bros. & Rudd Master of Wine. “It’s a novelty value in that it is something interesting coming out of China but it could be the first stirrings of quite an important plan. If they think they can do this well, they will do it and almost nothing can stop them.”


The wine in question had none of the off-notes or unusual tastes one often associates with new wine regions. It had a nose of ripe fruit and a recognizable structure. At the back of the throat, it left a rather stringent, bitter flavor-an almost green pepper character. This is probably due to the ripeness of the grapes, which I suspect they will iron out in a few vintages.


The three ice-wines the company produces under the Changyu Golden Valley label did more to justify their steep price tag. The aromatics were strong, the fruit was very correct, the aroma profile was as you would expect, but the Gold Diamond fell away a little on the palate.


To compete viticulturally with its international counterparts, China still has a long way to go. Indeed, I could list dozens of wines that I would prefer to drink at the same price. But given it’s the first glimpse of what this vast country can produce, it’s a pretty competent effort. Where they go from here will be fascinating to watch.




New Zealand investors acquire Prophet’s Rock winery


Source: DBR

05 April 2013


A group of New Zealand investors having viticulture interests in the Central Otago region have purchased Prophet’s Rock, a Central Otago-based boutique winery, for an undisclosed amount.


With the acquisition, the winery is set for expansion into the offshore markets.


Founded in 1999 by Mike and Angela Mulvey, Prophet’s Rock produced its first wine in 2005. The winery is mainly known for its Pinot Noir, Dry Riesling and Pinot Gris wines, which are produced by Prophet’s Rock winemaker Paul Pujol from an estate vineyard located in the Pisa sub-region of Central Otago.


Under the acquisition deal, Pujol will become the general manager of the winery, besides handling wine making duties.


Pujol said the acquisition creates new opportunities for the winery, as they can now source grapes from an additional Bendigo vineyard in Central Otago.


“The investment stemming from the purchase means the winery can fully realize its potential,” Pujol added.


“It enables us to bring this second vineyard fully on-stream and gives us the critical mass to expand distribution further into offshore markets.”




German wine stocks at all-time low


Source: Harpers

Written by L’re Burger   

04 April 2013


German wine stocks are at their lowest ever levels since reunification, with high demand also driving up prices.


With an annual production of 9-10 million hl per year, German producers are already selling everything they produce within a year of harvest, said Steffen Schindler, marketing director at the German Wine Institute.


Prices rose in 2010 when only 7.1 million hl were produced following a poor harvest, and remained at the same level in 2011 and 2012 despite production returning to normal levels.


High domestic and international demand, coupled with a run of good vintages, has allowed German wine producers to maintain their prices, he said.


“In the past we used to have two or three bad vintages a decade, and that’s no longer the case. The quality has gone up for even entry-level wines and they’re now starting to fetch the high price these wines deserve.”


Schindler said Riesling has succeeded in completely changing the image of German wines, with the wine industry now considering it as Germany’s key premium wine variety. The rise in popularity of Riesling has led to increased interest in other German varieties, he added.


Germany is also now the world’s third-biggest producer of Pinot Noir, thanks to ideal growing conditions, the climate, its ancient German terroirs, old bush vines and traditional winemaking skills.


“Germany has established itself as Burgundy’s key competitor as a world-class Pinot Noir producer,” said Schindler.


Germany now exports up to 1.3 million hl of wine a year and is hopeful of gaining further rises in its export prices.


Its key export markets are the US, Netherlands, the UK, Norway and Russia, but there is also an increasing demand for German wines in Hong Kong and China.


The German Wine Institute hopes to capitalise on Germany’s strong affiliation with Asian cuisine as part of its ongoing marketing strategy and will be exhibiting at UK consumer shows later this year.




Hugh Johnson cellar to go under the hammer


Source: Decanter

by Chris Mercer

Thursday 4 April 2013

First-growths dating back more than 50 years and a large selection of vintage German wines are among a host of bottles to be auctioned from Hugh Johnson’s cellar.


Johnson said that it was ‘agony’ deciding which bottles to part with for the auction, which will take place on May 16 at Sworders Stansted Mountfitchet salerooms, in north Essex.


The sale, which could raise tens of thousands of pounds, comes as a result of Johnson and his family selling their home of the past 40 years, Saling Hall, also in Essex.


The Elizabethan manor house has five cellars, which Johnson has taken delight in filling with top wines from the 20th Century, including some ‘real gems’.


A provisional auction list seen by reveals a series of first-growths and other top Bordeaux from down the ages, including Latour and Y’Quem 1945, as well as Latour 1937. There is also at least one bottle of Latour 1961; six bottles of the same vintage recently sold for £28,000 at an auction of part of the UK Government’s wine cellar organised by Christie’s.  


There’s a treasure trove of great wines from beyond Bordeaux, including a magnum of Krug Champagne from 1971, three 1830 Malmseys – regarded as a signature vintage – and a large selection of vintage German wines, as well as Burgundies, Spanish and Italian.


Highlights from Johnson’s Burgundy collection include two vintages of DRC Grand Echezeaux, two bottles of La Tache – 1988 and 1999 – and a 2000 Leflaive Chevalier Montrachet.


‘For me, one of the great joys of life is drinking vintage German wine,’ Johnson told this week. He highlighted a strong showing of Scharzhofbergers, largely from Egon Muller, and an assorted collection of wines from Robert Weil, set to include Riesling and Riesling Eiswein.


‘This is the majority of my cellar but by no means the whole thing. There’s nothing [on the list] that I would be ashamed of,’ said the Decanter columnist, author and gardener, who is downsizing his cellar as part of a move to London to be nearer his children and grandchildren.


‘We’re trying to be realistic about what we would actually drink in the next few years.’

The present auction list remains in draft form, but is set to have around 318 lots. Precise details of bottle numbers are not yet available for all the wines, but lots are likely to be bottles rather than case loads.   




Bordeaux 2012: Chateau Raymond Lafon not to release 2012


Source: Decanter

by Panos Kakaviatos

Thursday 4 April 2013


Chateau Raymond Lafon has joined Chateau d’Yquem and Chateau Rieussec in announcing that it will not make a 2012 vintage wine.


Lafon, an unclassified Sauternes producer, told in the build-up to en primeur that a dry September had prevented development of botrytis – the so-called noble rot – which naturally concentrates grape juices whilst imparting spicy flavours that are characteristic of Sauternes.


Chateau co-owner Jean-Pierre Meslier explained that the harvest was too small, describing it as ‘fine and elegant’, but not as ‘concentrated as normal.’


The estate harvested with about 114 grams of residual sugar instead of the chateau’s habitual 130 to 140, he said.


‘When rain fell later in the month, botrytis spread, but more rain than needed in October compromised pickings.’


The best grapes will make ‘an excellent’ second wine: ‘Les Jeunes Pousses de Raymond-Lafon,’ Meslier added.


The last vintage that Chateau Raymond Lafon did not produce any wine was 1974.




Bill Koch’s Bad Trip With Counterfeit Wine Is Cautionary Tale For Collectors


Source: Forbes

Apr 5th


On the evening of Oct. 27, 2005, William I. Koch, the billionaire coal and petroleum magnate, attended an invitation-only, haute cuisine dinner and wine tasting at Daniel Restaurant in New York City, owned by the famed French chef, Daniel Boulud. It was a festive and highly exclusive event, sponsored by Scarsdale, NY-based Zachys Wine Auctions, to promote a sale on the following two days titled, “Over 17,000 Bottles of Greatness.” At the dinner, which according to the invitation would offer “a bird’s eye view of collecting at the high end,” the wine offerings included some of those coming up for auction. Among them were a 1947 Château Latour, and a 1950 Château Latour-wines that could fetch about $10,000 at the sale.


Koch didn’t attend the auction but sent a wine consultant, acting on his behalf, to purchase 2,669 bottles of wine at a total cost of $3.7 million. In the process the connoisseur, who is #329 on the Forbes Billionaires list, added to his collection some fine trophy wines that lived up to the catalog’s billing of “the best of the best.” What he didn’t realize at the time was that he had also acquired 24 fakes.


One was a magnum (a 1.5-litre bottle) of 1921 Château Petrus for which Koch paid $29,500 at the Zachys auction. It turned out to be a deftly assembled fake, manufactured by a former perfumer who went into the wine counterfeiting business. His recipe: add fragrance and flavor to 1957 Château Petrus; re-bottle and re-cork; then top it off with a capsule and a custom-manufactured label. Voila!


That bottle turned out to be a smoking gun in a case on trial in Manhattan federal court in which lawyers and witnesses are duty bound not to drink the evidence. It pits Koch against another avid wine collector: onetime-billionaire Eric Greenberg, who was the consignor of all the wine in the Zachys sale. The catalog did not identify hm, but said he was “incredibly energetic,” and that he amassed his collection “with tremendous thought, energy and great knowledge of wine.” Koch, who could relate to all of this, assumed he was a kindred spirit.


Five years into a lawsuit against Greenberg, he has a different opinion. The case, to recover $355,810, has consumed millions in legal fees. For Koch, it’s largely a matter of principle. Greenberg, the testimony shows, had tried first to sell part of his collection through Sotheby’s and Christie’s auction houses. Both turned him down because they doubted the authenticity of some of the items, which came from sources that they recognized as counterfeiters. In the suit, Greenberg contends that he did not know any of the bottles at issue were counterfeit; and that besides, Koch could have determined their authenticity if he had inspected them before the auction.


Ultimately the jury will decide, but meanwhile the case is a cautionary tale for other collectors. For many collectibles, whether baseball memorabilia, vintage designer handbags, antiques, or minerals, counterfeits are rampant. Collectors can learn some cheap lessons from the negative-and positive-experiences this billionaire described in his court testimony this week.


1. Be passionate. People collect for a variety of reasons. Koch, who collects many other things besides wine, testified, “I collect what I love, what makes me feel good, gives me a great sense of peace and enjoyment. Then I collect things that I think are extremely historical, things that I can look back and say this was part of history.” For example, he owns the only picture of Billy the Kid, Jesse James’s gun and the gun that killed Jesse James.


2. Curb your compulsions. Koch rarely sells any of the items in his collections. “My wife calls me a hoarder because I won’t get rid of the stuff,” he said. He has this trait in common with many collectors, and with some people, it can reach extremes. The late psychoanalyst Werner Muensterberger serves up some pathological examples in his book, “Collecting: An Unruly Passion” (Princeton University Press, 1993). They include Thomas Phillipps, a 19th-century British book collector who abandoned his family, then made financing his insatiable habit the main criterion in courting a second wife. Muensterberger, who collected African art, believed that the pursuit of objects helps compensate for deep-seated trauma, anxiety or unfulfilled childhood needs.


3. Become an expert. With wine, in particular, it’s enormously difficult to distinguish the genuine from the fake. Interestingly, the most reliable sign is not the taste, which can vary depending on everything from how the wine has been stored, to the chemistry of the drinker’s saliva. Packaging is often a more reliable indicator; experts pay particular attention to the label and the cork.


Hiring experts to advise you is the next best thing to becoming one yourself. But hiring a pro who has a financial stake in helping you can be problematic. For example, evidence at the trial showed that the consultant who bid on Koch’s behalf at the Zachys sale was paid based on a percentage of the auction sale price.


Although the potential conflict has not been discussed in the testimony, this gave him an incentive to spend money, rather than rule out certain purchases. Neither he nor Koch inspected the wine, although the auction catalog clearly gave them the right to. That could come back to bite them since this detail is a key part of Greenberg’s defense.


4. Inquire about provenance. In the most literal sense, this refers to previous owners of whatever you’re buying. With some items, it adds to their cachet-as it did with Andy Warhol’s cookie jars, Jacqueline Kennedy’s simulated pearls and Rusty Staub’s game-worn warm-up jersey. With wine, provenance goes beyond previous owners to include “how the wine was kept over the years,” Koch noted. “That’s highly important because wine can deteriorate if it’s not kept properly.”


Likewise, if you find out that the item has passed through the hands of a known counterfeiter; a reseller known to have dealt in counterfeit goods; or a collector who’s been duped, that detracts from provenance. Generally speaking, the rarer the item, the more likely the one you have come across is a fake. The magnum of 1921 Château Petrus is a great example of that.


5. Look past the puffery. Auction catalogs, especially high-end ones, are masterfully written. Wine descriptions may include what are called “tasting notes”-highly poetic language by a wine reviewer. It’s there to entice you, but far more important is what the entry says (or doesn’t say) about the condition of what you’re buying. For example, 12 bottles of wine sold together as an auction lot with the description “two water-stained labels, one corroded capsule, one depressed cork,” signals a relatively undesirable (though more affordable) purchase. “Bin-soiled and nicked label” detracts from the value of the wine, while “fully branded cork” adds to it.


6. Read the fine print. Not surprisingly, the lawyers have a hand in writing auction catalogs, too. They are responsible for the very unpoetic, prefab language known as boilerplate. It’s written to protect the auction house against lawsuits by consumers. Unless the auctioneer has committed fraud, the legal lingo you find under a heading like, “Conditions of sale and limited warranty,” will generally get off them off the hook. Words to the wise: By agreeing to buy something “as is,” you accept all its warts.




Karin, we wish you well!


Grocery Manufacturers Association Appoints Karin Moore Vice President and General Counsel


Source: WSWA

Apr 4th


Grocery Manufacturers Association (GMA) President and CEO Pamela G. Bailey today announced the appointment of Karin F.R. Moore as vice president and general counsel.


“I am pleased to welcome Karin to the GMA team,” said Bailey.  “Her legal skill and trade association management experience make her the logical choice for this position, and I am certain that she will provide great value to GMA and its member companies as we advance the association’s member-driven agenda.”


Ms. Moore joins GMA from the Wine & Spirits Wholesalers of America (WSWA) where she was vice president and co-general counsel.  At WSWA, her responsibilities included coordinating the association’s national litigation strategy, advising on regulatory issues facing wholesalers at both the state and federal levels, and serving on WSWA’s senior management team.


Prior to joining WSWA, Moore was a counsel with O’Melveny & Myers’ Antitrust and Criminal Defense practice groups, where she focused on antitrust litigation, civil and criminal antitrust investigations, and federal and state cartel class actions. Prior to O’Melveny, she held a variety of positions with the U.S. Federal Trade Commission’s (FTC) Bureau of Competition, including counsel to the director and staff attorney with the Anticompetitive Practices Division. She holds a law degree from George Mason University School of Law and is vice-chair of the American Bar Association Section of Antitrust Law’s Trade, Sports and Professional Associations Committee.


“GMA represents many of the world’s most iconic brands and leading companies. I am honored to have the opportunity to serve the food, beverage and consumer products industry,” said Moore.   “I look forward to working with Pam Bailey, the GMA staff and its members to promote pro-growth policies and advocate for responsible public policy solutions that will allow the industry to continue to provide consumers around the world with safe, healthful, affordable products every day.”


Ms. Moore will report to GMA President and CEO Pamela Bailey and will serve as a member of the GMA Senior Leadership Team.  In her new role, she will direct the association’s federal and state litigation activity and provide legal counsel on a host of issues.  She will assume her new post on April 16.




Rite Aid comps down in March


Source: RT

By Alaric Dearment

April 4, 2013


Same-store sales at Rite Aid decreased 2% in March, including a 3.8% increase in same-store sales on the front end and a 4.5% decrease in pharmacy sales.


The 4,621-store chain reported total sales for the month of $1.939 billion, a 2.5% decrease compared with $1.989 billion in March 2012, while same-store prescription count increased 0.3%.


The company said that of the 3.8% increase in front-end same-store sales, 3% came from a shift in timing of Easter, which fell on March 31, as opposed to April 8 last year.


Investment firm Guggenheim Partners maintained its “Buy” rating on Rite Aid’s stock, saying it expected the company to post strong and above-trend growth in EBITDA in its fourth quarter 2012 earnings, which it will report next Thursday. Guggenheim analyst John Heinbockel noted that script count was below the 1.5% recent trendline, and the reason was unclear but appeared to be due to a weakening of the economy, but the firm expects the meaningful generic drug benefit to GM to persist into the first quarter of fiscal year 2014.




Restaurants poised for spring SSS inflection; upgrade PNRA / EAT


Source: Goldman Sachs

Apr 4th


Upgrade two more stocks ahead of a potential spring inflection

Based upon improving consumer sentiment, continued job/wage growth, and easier upcoming SSS compares, we upgrade two Restaurant stocks – PNRA and EAT – heading into a potential spring SSS inflection. A primary basis for our more bullish stance is the result of our latest survey of 2,000 consumers. It was completed mid-late February, thus incorporating the impact of the 2% payroll tax hike, higher gas prices, and delayed tax refunds. Despite these headwinds, consumers reported increased optimism and intent to spend, especially among high-income households (our companion report from today is Bullish on the US consumer, especially at the high end).


PNRA (CL-Buy): A preeminent growth story that has lagged

We upgrade PNRA to Buy and add the shares to the Americas Conviction List with 30% upside to our $215, 12-month price target. PNRA has a strong unit growth trajectory, SSS are solidly in the mid-single digits, margins are ramping, and FCF deployment is increasingly robust. A spring traffic inflection driven by easier compares, a new ad campaign, and new products may serve as a catalyst after a period of underperformance.


EAT (Buy): Solid traffic growth is the last piece of the puzzle

We upgrade EAT to Buy with 17% upside to our $44, 12-month price target. We have appreciated its cost cuts, FCF deployment, and international growth and believe that solid traffic growth may serve as the last key piece of the puzzle. It is accelerating remodels, something that is showing up in our survey as significantly improved brand scores. We believe this along with easier compares and new product launches will serve as a catalyst.


DPZ (Buy): Remove from Conviction List after outperformance

We remove DPZ from the Americas Conviction List, as the shares have approached our prior price target. We retain our Buy rating, as we believe DPZ’s long-term fundamentals and growth potential remain intact.

Other key brand-specific findings in our survey


SBUX – Starbucks rose to the highest scoring brand in our survey driven by higher “likelihood to recommend” scores and improved value scores.


CMG – We believe Chipotle’s “cool factor” may be wearing off as our survey suggests lower conversion scores among younger age cohorts.

We revise select estimates and price targets across coverage.


We also revise the P/E-based portion of our price target methodology.




Pennsylvania: City considers hiking liquor-drink tax to 15 percent




April 4, 2013


Need a reason to drink? How about improving the futures of Philadelphia’s school kids?


Mayor Nutter and City Council are rarely on the same page these days, but the possibility of increasing the “liquor by the drink” tax to help pay for the School Reform Commission request last week for $60 million seems to be gaining traction on both sides.


City Council President Darrell Clarke has pledged support for increasing the tax, which now adds 10 percent to your bar tab (on top of the sales tax) and sends it to the schools. Nutter said Thursday that it’s an option his administration is considering.


In 1994, then-Councilman Nutter voted in favor of creating the tax, which now brings in more than $45 million per year.


“President Clarke and I have talked about that and I am certainly interested in that kind of proposal, but my track record on that one is pretty clear,” Nutter said. The 1994 bill “was a tough vote for a lot of folks but I thought it was the right thing to do then and it’s certainly something that we should explore now.”


Clarke spokeswoman Jane Roh wrote in an email that the Council president “supports increasing this tax to bolster an annualized revenue stream for the schools.”


Pat Conway, president of the Pennsylvania Restaurant and Lodging Association, said that while businesses don’t like the tax, it’s the customers who usually absorb its cost.


“It would be a tough pill to swallow for restaurants and taverns and for the entire hospitality industry, but it’s actually more of a consumer issue,” Conway said.


The possibility of increasing the tax by half (to 15 percent per drink) has been floated. That’s no silver bullet cocktail shaker for fully funding the schools’ request, so Council and the mayor would have to find money in other places to reach the $60 million the schools say they need to plug their enormous budget gap.


Nutter supports funding the request but has been elusive as to how he wants to get that done. On Thursday he addressed criticism that his administration hasn’t yet presented a plan, saying he wants to first develop one with Council.


“We don’t have a plan today and we certainly don’t have all the answers today, and we don’t have to have a plan and all the answers today. Our budget process, at least under the Charter, is completed by the end of May,” he said.


Some in Council, including Clarke, have not committed to providing the full $60 million, arguing that after two years of city property-tax hikes for the schools, it’s Harisburg’s turn.


Nutter, however, said Thursday he thinks Philly needs to show its commitment first to get more money out of the state.


“It would put us at that much worse of a situation from a discussion or negotiation standpoint to somehow seek additional funding from the Commonwealth of Pennsylvania . . . while some might suggest that the city would not be putting dollars on the table,” he siad. “I have to reject that kind of strategy.”




Kentucky: Beshear signs bill lifting Prohibition-era ban


Source: WDRB

Apr 04, 2013


Gov. Steve Beshear has signed legislation lifting a Prohibition-era ban on the sale of alcohol at restaurants, bars and retail stores on Election Day.


The House and Senate voted overwhelmingly last month to allow alcohol sales during hours that polls are open.


Kentucky and South Carolina are the only two states that have such bans in place. In the past five years, similar bans have been lifted in Delaware, Idaho, Indiana, Utah and West Virginia.


Beshear signed the Kentucky legislation on Thursday.


Election Day alcohol was one of a handful of provisions in the legislation. Beshear touted the legislation Thursday as a measure that modernizes the state’s liquor laws and makes it easier for the alcoholic beverage industry to do business in Kentucky.


Liquor Industry News 4-4-13

April 4, 2013

Franklin Liquors

Thursday April 4th News

U.S. Company on How to Go Broke Selling Vodka in Russia


Source: Bloomberg

By Beth Jinks

April 04, 2013


Going broke while dominating vodka sales in Russia and Poland may seem tough to do. A company founded by a Florida golfer, listed on Nasdaq Stock Market and until recently based in New Jersey, is almost there.


Unable to repay $258 million in bonds due last month, Central European Distribution Corp. (CEDC), which owns vodka brands including Bols, Zubrowka and Parliament and once imported Dom Perignon to Russia, is preparing to file for bankruptcy. Creditors will vote by April 4 on a restructuring plan that would hand CEDC to Russian billionaire Roustam Tariko, solidifying his control of the distiller and distributor he’s toyed with for years.


The company’s unlikely troubles show how timing and local knowledge are crucial. After almost two decades of success in Poland, CEDC expanded into Russia via acquisitions (CEDC) just as Poles began drinking less vodka and the Russian government raised taxes and costs to discourage alcohol consumption. The global financial crisis, a 37 percent collapse in Russia’s currency, and accounting errors that followed didn’t help either.


“If we had to do it over, we probably should have bought one company to see how it went, rather than buying three within six months,” CEDC co-founder William V. Carey, who resigned in July as chief executive officer, said in a phone interview from Warsaw, where he still lives. Russia’s “new regulations weren’t there when we invested, making it much more difficult to manage growth and profitability over the last three years.”


Cattle V. Beer


Carey, 48, a University of Florida economics graduate, had moved to Poland after unsuccessfully pursuing professional golf. He set up a company in 1990 exporting cattle, soon shifting into the more lucrative business of importing beer to Poland from brewers including Anheuser-Busch and Foster’s Group Ltd.


CEDC listed on the Nasdaq in 1998 after an initial share sale that funded expansion into wine and other liquor distribution, according to its website. It began manufacturing with the company’s 2005 takeover of a distillery and Polish vodka brand Bols. While its operational base was in Warsaw, CEDC maintained official headquarters in Mount Laurel, New Jersey, to manage its U.S. listing until closing the small office just weeks ago.


Revenue peaked at $1.65 billion in 2008, the year Carey bet heavily on Russia, acquiring stakes in three other liquor groups within months, and agreeing to buy the rest over time.


Spending Spree


Carey spent about $1.2 billion in cash, stock and other securities to acquire Russian Alcohol Group, the largest vodka producer in Russia with brands including Green Mark and Zhuravli; Copecresto Enterprises Ltd., owner of Parliament, a top-selling vodka; and the Whitehall Group, an importer of premium drinks to Russia including Moet champagne and Hennessy cognac.


Then the party stopped. As global debt and equity markets reeled and the ruble plunged, drinking habits were also changing. Russians consumed 17 percent less vodka in 2011 than they did in 2008, while Poles cut back by 7.7 percent, based on volume sales compiled by International Wine & Spirit Research, known as IWSR.


Poles developed a taste for wine, beer, whiskey and lower- alcohol flavored vodkas. Much of Russia’s decline was driven by the Vladimir Putin-led government’s efforts to restrain alcohol consumption by raising taxes and prices, controlling raw- material supplies, curbing sales and banning advertising — market changes that boosted costs more than fourfold, Carey said. It drove more Russians to the black market where as much as half of the vodka consumed there is purchased, IWSR estimates.


Restating Earnings


The company reported a loss of $1.3 billion for 2011, writing down $1.06 billion in goodwill and brand value. Last year CEDC restated exaggerated earnings (CEDC) for 2010 and 2011, blaming managers at its Russian unit for failing to fully account for customer rebates, and replaced the executives.


At its peak in July 2008, CEDC shares (CEDC) traded at more than $75, giving the company a market value of $3.48 billion. Today they trade around 30 cents, and the company has about $1.38 billion of debt (CEDC). Along the way, CEDC lost the right to import drinks to Russia from LVMH Moet Hennessy Louis Vuitton SA. (MC)


“They did too many acquisitions at the same time,” Moody’s Investors Service analyst Paolo Leschiutta said in a phone interview from Milan. “There was increasing competition in Poland, which was a distraction for the management because they focused more on Russia, and they didn’t realize that they were losing market share in Poland.”


Poised to Rule


Meanwhile, Tariko, who parlayed his Russian Standard premium vodka brand into a banking empire, has positioned himself to take ownership (CEDC) of CEDC. He’s been investing in the company’s troubled debt and stock since 2011, and through his Roust Trading Ltd. unit spent more than a year negotiating –and renegotiating — rescue offers.


Last month he won support from some CEDC bondholders and the company’s board (CEDC) for a revised restructuring plan, in which he would take ownership, forgive debt owed to Roust and partially repay other creditors in part with cash and new bonds. Tariko was named CEDC chairman after Carey left, and in September became interim president. By the end of 2012, he had operational oversight.


A rival bid led by fellow Russian billionaire Mikhail Fridman’s A1, CEDC shareholder and bond investor Mark Kaufman and SPI Group, which sells Stolichnaya vodka, was withdrawn last week, leaving Tariko’s plan unchallenged. He still needs overwhelming creditor support and a U.S. bankruptcy court to agree to his offer. Kaufman, who nominated Carey to return to the CEDC board, sold his Whitehall Group to the company in 2008.


Less Than Successful


“Very few people have been successful in the Russian alcohol business,” Kaufman said by phone before his rival consortium’s bid was withdrawn. “CEDC had a very successful business in Poland, but it’s not the same as Russia.”


Carey, who is working on a new business he declined to discuss, said he’s unlikely to tackle the Russian market any time soon.


“After living in Eastern Europe for 23 years, I’d certainly never say never — but I would prefer further west,” he said.




Beam liquor company aghast over Kraft copycat ad campaign


Source: Chicago Business Journal

Lewis Lazare

Apr 3rd


A juicy marketing catfight could be brewing between Deerfield, Ill.-based Beam Inc. and Northfield, Ill.-based Kraft Foods Inc. Both companies, it turns out, are releasing ad campaigns with the same beefcake actor, Anderson Davis, doing a similar s–y shtick in both.


Only problem is Beam, the spirits and liquor company, and its ad agency, Havas/Chicago, first developed the effective shtick a year ago.


That is why Beam (NYSE: BEAM) and Havas are rushing to release later today their newest Sauza Tequila ad campaign with a new lifeguard character.


The speeded-up release of the Sauza video comes after Beam discovered on Monday that – much to its surprise – packaged foods behemoth Kraft Foods (NASDAQ: KRFT) was unveiling this week a Zesty Italian dressing campaign from Being/Los Angeles (a unit of TBWA) that is startlingly, shockingly similar to the hugely successful Sauza campaign released last year.


That original Sauza campaign from Havas, which featured an online video of a sultry fireman (portrayed by Thomas Beaudoin) making a margarita with Sauza Tequila, went on to become one of the most-watched videos on YouTube in 2012 – getting more than 10 million views.


The new Sauza campaign that will break later today is in a similar vein, a Beam spokeswoman said, but uses a different actor playing a lifeguard. That actor is Anderson Davis, the very same chiseled actor who is featured in Kraft’s new “Let’s Get Zesty” campaign.


A Beam spokeswoman this morning maintained that no one at Beam or Havas was informed that Davis was also doing the Kraft campaign in which he plays a similar s– symbol selling salad dressing with ad copy that includes the same kind of overtly s—-l innuendo that made the original Sauza video such fun to watch.




2012 was the year of the India Pale Ale. and its momentum has continued in early 2013


Source: GuestMetrics

April 5th


According to GuestMetrics, based on its database of POS sales in restaurants and bars, India Pale Ale displayed the strongest growth and market share gains of all the various types of beer last year in the on-premise channel.


“Of the over 25 different types of beer classifications we have in our system, India Pale Ale displayed the strongest unit growth in 2012 at +39% compared to the prior year, and in terms of share of the overall beer category, also displayed the largest gain at about 55 basis points,” said Bill Pecoriello, CEO of GuestMetrics LLC.  “While IPA is still quite small at just 1% of all beers sold in on-premise, our data indicates thus far in 2013, India Pale Ale’s strength has actually picked up some additional strength, growing units at 40% compared to the prior year, and achieving around a 70 basis point share gain.”  Based on data from GuestMetrics, the IPA brands with the largest share gains last year were Widmer Broken Halo IPA, Lagunitas India Pale Ale, Sierra Nevada Torpedo Extra IPA, and Ballast Point Sculpin.


“At the other end of the spectrum are the Pale Lagers, which are the largest of the different beer types with a 33% share of all beers sold.  Pale Lagers saw unit sales contract by 5% in 2012 compared to the prior year, and as a result, experienced by far the largest share loss at about 170 basis points in 2012,” said Peter Reidhead, VP of Strategy and Insights at GuestMetrics.  “Additionally, in analyzing the quarter of 2013, the picture does not appear to be improving for Pale Lagers, with units contracting 6.2% against prior year, and the share loss accelerating slightly to 180 basis points.”  Based on data from GuestMetrics, the Pale Lager brands with the largest share loss last year were Miller Lite, Bud Light, and Budweiser.


“It’s important for restaurant and bar operators to understand the rapidly changing dynamics in the beer category to ensure their offerings are on-trend and optimize sales and profits,” said Brian Barrett, President of GuestMetrics. “While it’s important to have a balanced offering that includes mainstream beers, the strong growth in India Pale Ale and the other ales should prove to be a positive, particularly given the difference in pricing.  The average Ale is priced at $5.62 versus $4.51 for the average Lager, and the pricing specifically for an IPA is even more favorable, at $5.88.”




Washington: Liquor control board wants to prevent marijuana consumption in bars


The Washington State Liquor Control Board wants to pass new rules preventing marijuana use by customers in businesses with liquor licenses.


Source: Puget Sound Business Journal

Valerie Bauman

Apr 3rd


The Washington State Liquor Control Board voted Wednesday to create rules that would prevent marijuana from being consumed in bars or restaurants with a liquor license.


With Washington state voters passing Initiative 502 legalizing marijuana, The Associated Press reported that two businesses in Tacoma and Olympia have allowed customers to consume marijuana on the premises.


The rules under I-502 provide for a $103 fine for any person who pulls out marijuana or marijuana-infused products and uses them in public. But laws do not address penalties for businesses that let customers use marijuana.


“It is important that the board clarify now that consuming marijuana in a state liquor-licensed establishment is not acceptable,” said Board Chair Sharon Foster in a statement. “Public consumption of marijuana is clearly illegal under Washington’s new law.”


The board also raised questions about what public risks could result from mixing alcohol and marijuana.


The board is taking public comment on the new rules, but won’t file a draft until May 22. A public hearing will follow June 26, with a final decision on rules by July 3.




United Kingdom: Children as young as SEVEN are being admitted to hospital with alcohol addiction


Source: Daily Mail

By Anna Hodgekiss

Apr 2nd


380 children aged 10 or under treated for intoxication over four year period

Figures are likely to be higher as 67 NHS trusts did not supply information

One seven-year-old boy treated was deemed to be ‘addicted’ to alcohol

Affected children often come from homes where alcohol already a problem


Children as young as seven are being admitted to hospital with alcohol problems, an investigation has found.


Shocking new figures have revealed dozens of under-10s have been hospitalised suffering from mental and behavioural disorders due to alcohol use.


A Freedom of Information request to all of England’s 166 NHS hospital trusts revealed a total of 380 children aged 10 or under were treated for alcohol intoxication between 2008 and 2012.


Worryingly, 67 of the trusts approached either failed or refused to the Freedom of Information request, meaning the figures are likely to be even higher.


The most alarming incident was that of an intoxicated seven-year-old boy said to be ‘addicted’ to alcohol who was treated at a hospital in Sussex.


The Brighton and Sussex University Hospitals NHS Trust described his diagnosis as ‘alcohol intoxication’ and the reason for his attendance as ‘alcohol related’.


‘The primary diagnosis was a mental and behavioural disorder due to acute intoxication with alcohol,’ a report said.


For patient confidentiality reasons, the trust would not divulge any other detail except to state he was admitted to hospital in 2008.


In another case, a 10-year-old boy was admitted to a hospital in Devon after drinking so much he collapsed.


Meanwhile, at least 25 girls and boys aged between seven and ten were taken to hospital in England between 2008 and 2012 to get help for an alcohol-induced disorder.


And hundreds more children were rushed to A&E because they were drunk, though not necessarily suffering from an ongoing issue with alcohol.


In some of the cases it is likely the alcohol was consumed accidentally, although the data held by hospitals does not always specify this.


In one worrying example of child neglect, a two-year-old boy was rushed to a hospital run by Peterborough and Stamford Hospitals NHS Foundation Trust last year after accidentally drinking vodka.


And in another case, a baby who hadn’t even turned one was hospitalised in Gloucestershire after sustaining a head injury while intoxicated with alcohol.


The research, by the Ferrari Press Agency, revealed all five of the worst-hit hospital trusts were in the south of England – with the Royal Berkshire NHS Foundation Trust topping the list.


A total of 46 drunk children aged ten or under were rushed to A&E at the Royal Berkshire Hospital in Reading between 2008 and 2012.


Two of these – a nine-year-old girl and a ten-year-old boy – were admitted as in-patients to receive treatment for an alcohol-induced mental and behavioural disorder.


Nick Barton, chief executive of the charity Action on Addiction, said children who suffered from alcohol problems were likely to have an alcoholic parent.


He said: ‘Children who grow up in homes where their parents have alcohol and drug problems are seven times more likely to develop substance misuse problems themselves.


‘A recent study indicated that 22 per cent of children live with a parent who drinks hazardously.


‘A particularly worrying finding was the lack of awareness among parents about the effects of their drinking on their children.


‘These children are at risk in a variety of ways, from disruption of family life, social isolation and a threat to safety as a result of parents’ alcohol related behaviour, to the accessibility of alcohol. Often they assume the parental role.’




When It Comes to Curbing Drinking, College Students Do Listen


Source: Time

By Maia Szalavitz

March 29, 2013


One of the more effective ways to reduce excessive drinking in college is also the most obvious – talk to freshman before they set foot on campus.


It turns out that discussing drinking in any way, including why some teens drink while others abstain, as well as the potential dangers of over-indulging, during the summer before students start school can both reduce the odds that light drinkers will escalate their alcohol intake, and increase the likelihood that already heavy-drinking teens will cut down or stop, according to new research.


Rob Turrisi of Penn State University and his colleagues surveyed 1,900 students and their parents just before the teens started college and again during the fall of their freshman and sophomore years.  Their parents agreed to be randomized into one of four groups.  One group used a handbook provided by the researchers to guide discussions, which occurred before freshman year, with their teens about drinking. The conversations were designed to be casual and nonjudgmental, with the parents providing accurate information about the reality of underage drinking and its risks, such as alcoholism and alcohol poisoning.


“The materials are designed for parents to pick and chose what they think is most important and what they think they can do best, given the individual relationship they have with their sons or daughters,” says Turrisi, “It respects the individuality and  uniqueness of each relationship.  That said, it will differ from family to family.” Some of the topics included why some teenagers drink while others abstain, alternative ways of getting the effects people seek from alcohol, as well as parents’ own drinking habits that served as models for responsible alcohol consumption.


Another group did the same thing, with some additional “booster” discussions later on. The third group didn’t start the discussion until after the students had already begun school and the fourth was a control group where parents were not instructed to take any particular action.


Before starting college, 51% of the students were nondrinkers, defined as not having had a drink in the past month, while 30% reported drinking heavily on some weekends and 15% drank moderately on weekends. Only 5% were frequent, heavy drinkers. But after 15 months of college – when most of the students would still not be of legal drinking age – only 25% were nondrinkers and 29% had become heavy drinkers.


Turisi and his team found, however, that the discussions about alcohol seemed to have some effect in curbing drinking habits, especially among students that started college as heavy drinkers. But timing was everything. If their parents talked to them about things like why people drink and substitutes for drinking before they left for school, they were 20 times more likely to transition to a more healthy drinking pattern-including nondrinking- than they were to stay heavy drinkers 15 months later.


In fact, the study found that the talks were only effective if they occurred before the students left for school – having a talk after college started was no more effective than doing nothing and adding “booster” conversations didn’t improve the results either. (A previous study of the same intervention suggested that additional discussions could help in reducing drinking and showed no evidence of harm.)


“By parents doing the intervention [before college], their young adult children are less likely to transition to high risk or heavy drinking groups while at college,” says Turrisi.  “Young adult children who have already started high risk or heavy drinking are more likely to transition out of these groups while at college.  In both cases, risk dramatically goes down,” he says.


Turrisi believes that the discussions can impact heavy drinkers because the conversations provide an opportunity for parents and their teens to better understand why the teens drink, and, if the alcohol is a coping mechanism for stresses or painful experiences, how they can find healthier ways of handling these pressures. “The heavy drinkers can explore the motivations they have for drinking,” he says.


The benefit of dialogue is that it provides an opportunity for understanding, and that connection alone can have a positive impact on reducing harmful behaviors such as underage drinking. Talk may be cheap, but it can also be pretty powerful.


The research was published in the Journal of Studies of Alcohol and Drugs.




Mixologist Tony Abou-Ganim’s new book shows vodka in a new light


Source: Las Vegas Weekly

Sabrina Chapman

Apr 3, 2013


“In a way, we are all magicians. We are all alchemists, sorcerers and wizards. We are a very strange bunch. But there is great fun in being a wizard.”


That Billy Joel quote, printed in Tony Abou-Ganim’s new book Vodka Distilled, feels especially fitting in the mixologist’s Las Vegas home. Walking through the house is like following a yellow-brick road of booze. Closets are filled with liquid treasures: homemade limoncello, Tito’s vodka, a rare bottle of Absolut Elyx that hasn’t been publicly released yet. Instead of spices, a kitchen cabinet has rows of bitters. Antique glassware and mixing spoons are in the living room, and there’s a freezer in the garage dedicated to Abou-Ganim’s unique process of cultivating ice. (Next time you see him, ask about the chain saw in his backyard.)


Abou-Ganim eats, drinks and lives as a wizard of booze, taking pride in dispelling the smoke and mirrors of his craft. “I write a lot for the consumer. Within the consumer world, we drink a lot of vodka but don’t know why we drink certain vodka or stop to evaluate and better appreciate it,” Abou-Ganim says.


Vodka Distilled does just that. It breaks down one of the most popular spirits on the planet with a wealth of information, 28 recipes and an analysis of 58 featured vodkas. Once you understand vodka and can identify flavors and nuances, tasting and identifying the layers of other spirits becomes so much easier. “I admit that it takes practice to exercise and fine-tune those tasting muscles, but anyone with a sense of smell and taste can find the experience revealing,” Abou-Ganim says.


“Taste and Tasteability,” a chapter Jane Austen would certainly enjoy, is a how-to for vodka tasting. And details such as glassware, tasting notes and palate cleansers are also covered in the new book.


“Through deeper knowledge comes better enjoyment,” Abou-Ganim says. “I’ve fallen in love with vodka again.”




Judges Bring Spirit to International Competition


Source: Fairplex

Apr 2nd


A panel of judges representing expertise at every level of the consumer spirits marketplace is preparing to put its palates to the test when the seventh annual Los Angeles International Spirits Competition gets under way in May.


Joining this year’s eclectic council are Tadeusz J. Dorda, Brian Bowden, Chris Snyder and Jessica Gelt. Dorda is chairman, chief executive officer and majority shareholder of Podlaska Wytwórnia Wódek “Polmos” S.A., the historic distillery in eastern Poland that owns and produces Chopin Vodka. A champion of authentic Polish vodka, Dorda is working steadfastly to change Western perceptions of a spirit that is far more complex, with many more subtleties in taste and quality, than is widely recognized. Bowden, vice president Spirits, Beer, Beverages & Tobacco, GMM New Markets for BevMo!, has more than 32 years of experience in the beverage industry in all departments: wine, beer and spirits. He has worked in the retail side of the industry as well as sales.


Snyder is president of TAPS Fish House & Brewery and The Catch Restaurant. Under his leadership, the restaurant’s revenues grew from $5 million to nearly $10 million in annual sales. Gelt is a food and nightlife writer for the Los Angeles Times. She has reported extensively on cocktails and cocktail culture. Her cocktail recipe column, “Destination: Cocktail,” runs twice a month in the Saturday section of the paper.

The competition, May 20-22, is led by Chairman Dana Chandler, vice president and general manager of Chopin Vodka. Chandler has spent 30 years in the wine and spirits industry.  Beginning with Gallo Wine and Kendall-Jackson, he has held a succession of wholesaler and supplier positions managing all channels of business, including on-premise, off-premise, chains and clubs.


“I am truly excited to be this year’s Honorary Chairman of the Los Angeles International Spirits Competition.  Fairplex has a long tradition of wine and spirits competition excellence that we intend to build upon with this year’s event,” said Chandler. “We have assembled a best of class judges panel featuring buyers, owners and representatives from all aspects of the spirits industry including distribution, retail, on-premise, production, mixology, design and media. This diversity will bring balance, focus and growth to our tasting. Our goal is to build the LAISC into the best, largest and most prestigious spirits competition not only California but the U.S.”


The judging panel also includes:

.         Kevin J. Johnson, vice president of the Golden State Chain Division at Southern Wine & Spirits.

.         Josh Wand, founder and motivator-in-chief of BevForce, a boutique recruiting and staffing agency that specializes in hiring strategies and organizational structuring for beverage companies.

.         Michael Nemick, a restaurant veteran and well-traveled foodie. He is a managing partner in red clay industries, a cocktail consulting and hospitality organization and is currently working as a managing sommelier at West Hollywood restaurant Sirena.

.         Ryan Steely, a creative design entrepreneur working with leading brands in the alcohol industry.

.         Toshio Ueno, a Master Sake Sommelier & Shochu Sommelier, Jizake Educator.

.         Tricia Alley, director of mixology for Southern Wine & Spirits, Southern California, United States Bartenders Guild Los Angeles Chapter President

.         Tim Moore, vice president Central Coast Branch Manager Young’s Market

The competition is accepting entries through April 15. For more information,


The public will have its first opportunity to taste the award winners at Cheers – L.A.’s Wine, Spirits, Beer & Food Festival, celebrating all the winners of the Los Angeles International Wine, Spirits, Beer and Extra Virgin Olive Oil competitions. Enjoy the fun June 22 at Fairplex. For tickets,




California wines pour on the marketing


Source: China Daily

By Yu Wei in San Francisco (China Daily)

April 3rd


A brand-awareness campaign in China by California wine makers will meet the palates of local oenophiles next week when a bottle-bearing trade delegation from the state visits Beijing and other cities.


The Wine Institute, a San Francisco-based group that promotes California’s wine industry, will host a “master class” to educate Chinese consumers about vintages produced in the state, part of an April 8-15 trade and investment trip led by Governor Jerry Brown.


“The Chinese mainland is now the fifth-largest export market for California wines and has been considered a very high-priority market for California vintners,” said Linsey Gallagher, international marketing director for the Wine Institute.


US wine exports, 90 percent of which come from California, reached a record $1.43 billion in sales last year, a 2.6 percent increase from 2011. It was the third straight year of increases, according to the Wine Institute. On the Chinese mainland, 2012 sales of American wine totaled $74 million, up 18 percent from the previous year.


California, with over 3,600 wineries and 4,600 wine-grape growers, shipped 18 million liters of its many varieties to China last year. The state’s wine shipments to the Chinese mainland have been on a decade-long upswing, starting from a modest $3.4 million in sales in 2002, Gallagher said.


A number of red and white wines from California are popular in China, including Zinfandel, the state’s signature varietal.


“The quality, diversity and value of California wines are our strength in the fast-growing and increasingly important China market,” Gallagher said.


To promote the industry and its output, the Wine Institute is in the final leg of a three-year brand-awareness and advertising campaign in China. The effort involves frequent trips by representatives of California wineries along with wine tastings.


The reputation-building drive by California officials and wine makers faces some hurdles. There is a perception among Chinese consumers that wines from the state are often overpriced and of low quality.


The Wall Street Journal recently quoted a San Francisco-based vintner as saying that he has heard such complaints while attending wine events in China. He told the newspaper that this is due to vendors flooding the Chinese market with cheaply made wine and selling it at inflated prices.


The Wine Institute’s Gallagher defended the value of California wines sold in China.


“California wines offer great value at all price points, despite the tariffs and taxes that are levied on imported wines in China,” she said. “In our experience, the California wines that are available in the China market are very high-quality and reasonably priced as compared with our competition.”


The value proposition for wine in China has to factor in the young, fast-growing character of the market, said David Duckhorn, president of Via Pacifica Selections, a wine distributor based in Napa, a center of California wine production. Wine-drinking is relatively new in China, and middle-class consumers are still working out their tastes and preferences.


“Historically, there was not enough information about wine in the market and consumers were paying prices that were unreasonable for the wine quality. This was true for wines from all regions, not just California,” Duckhorn said, adding that he saw as many examples of overpriced French wine as overpriced California wine.


Now, with Chinese consumers sharing opinions on social media, he said, there’s greater sophistication in the market and an understanding of how imported wines are priced, such as the impact of shipping costs and import tariffs. Many wine drinkers in China have developed a personal price range for their purchases, the wine company executive said.


“In general, I have not seen ‘poor-quality’ wine prevalent in the market – overpriced, yes, but not necessarily poor quality. The value just wasn’t in line with the quality at all price points, but it is getting there quickly,” Duckhorn said.


He founded Via Pacifica in 1998 to import and distribute wines in the US market. After some exploratory sales to China two years earlier, the company in 2008 opened an office in Shanghai, focusing on importation and distribution of California wines for the burgeoning Chinese middle class. It now has an office and warehouse in four Chinese cities and employs 18 people.


Currently, Duckhorn’s company sells about 75 individual wine products – 80 percent reds, 20 percent whites – from 10 producers. “Our sales have increased steadily since 2006 and exceeded 25 percent growth from 2011 to 2012,” he said.


Most of the wines Via Pacific sells to Chinese are in the middle of price range, according to Duckhorn. About half retail in China for $16 to $32 a bottle, about 40 percent are priced at $32 to $160, and 10 percent are listed at $160 or more.


According to International Wine & Spirit Research, a UK-based research and data provider, Chinese drank 2.17 billion bottles of wine last year, 2.7 times the consumption level in 2007. By 2016, the organization forecasts, Chinese will consume 3.02 billion bottles.


On Monday, China Foods Ltd, part of State-owned food conglomerate Cofco, said it will spend about $20 million to buy two or three wineries in Australia and the US in hope of increasing its wine sales and beating back competition from imports. Managing Director Luan Xiuju also said the company is in talks with two leading international wine dealers to become their exclusive brand representative and distributor in China.


China Foods already owns two wineries abroad: Chateau Viand in Bordeaux, France, and Bisquert in Chile. Sales from its wine-importing business were less than $15 million last year.


According to a report by Netherlands-based Rabobank Group, wine imports to China surged to 1.4 billion liters in 2011 from fewer than 400 million liters in 2004, with France the largest exporter.


Although consumers in China are more accustomed to beer and traditional baijiu, “they are open and earnest in their desire to learn and try our wines”, Duckhorn said.


The biggest challenge, however, is educating potential wine aficionados so that they make informed buying decisions, he said.


“We work very hard to make consumers feel OK in making their buying choice – for any occasion. If a consumer wants a bottle to share with friends at home, it is different than buying a wine to give as a gift for your boss.


“We want consumers to have the confidence that what they are buying and drinking is right for the situation. The worst thing we can do as an industry is to ‘elevate’ wine into a special-occasion drink. Wine is meant for everyday consumption as part of a healthy lifestyle.”


Yuan Yuan, marketing director at Shanghai Hitrust Imported Food Trade Market Co, a wine importer, said one of the most popular California wines in China is Carlo Rossi, made by Ernest & Julio Gallo Winery. She attributes this to the marketing strategies of Gallo’s Chinese partner, Nanpu Food Co.


“In addition to Carlo Rossi, Napa also has some reputation in China,” Yuan said, referring to the famous wine-growing valley in Northern California.


Still, she said, many Chinese haven’t caught on the idea of the US as a major wine-producing nation.


In late March at the Chengdu Food and Drinks Fair, a major annual showcase in southern China for wine and spirits, there were more people packed into the room where French wines were presented than in the one for American wines, Yuan said.


“Although nowadays the quality of French wines varies widely, our distributors still tend to choose them to promote because it’s relatively easy,” she said.


But Yuan considers wine from the United States to have many favorable qualities, such as the absence of an aftertaste found in some French wines.


“Wine-drinking should be fun, easy and relaxing,” she said.




Wine business Truett-Hurst plans $43 million IPO


Source: San Francisco Business Times

Steven E.F. Brown

Apr 3rd


Truett-Hurst Inc., a Healdsburg wine business, registered with regulators for an initial public offering worth up to $43.5 million.


The company plans to offer 2.25 million shares itself, while some of its existing shareholders will also sell 652,557 shares, keeping those proceeds for themselves.


WR Hambrecht, Sidoti & Co. and CSCA are underwriting the offering.


Phillip Hurst is president and CEO of the business, which plans to list itself on the Nasdaq Capital Market using the symbol THST.


Truett-Hurst describes itself as a “Super-premium and Ultra-premium wine sales, marketing and production company.”


The business plans to disrupt the “oligopoly” of a few producers who dominate California’s wine industry. It sells wine direct to consumers through its own tasting rooms and wine clubs, and it also has a stake in an Internet wine retailer, Wine Spies LLC, which holds short “flash” sales.


The company also sells through four labels of its own — Truett-Hurst, VML, Healdsburg Ranches and Bradford Mountain.


Truett-Hurst plans to spend money from this offering paying down its debt.


Like every business in the wine industry, Truett-Hurst faces “significant competition which could adversely affect our profitability.”


In the fiscal year ended June 2011, Truett-Hurst lost $820,815, but it recorded a profit of $26,462 the following fiscal year, after its sales more than doubled from 2011’s $5.4 million to 2012’s $12.7 million.


As of Dec. 31, the company had accumulated a deficit of $3,087,000. That’s how much money it has lost or written off since it started.




Treasury Wine Lifts 2008 Grange Price 15% as China Demand Rises


Source: Bloomberg

By David Fickling

April 03, 2013


Treasury Wine Estates Ltd. (TWE), the world’s second-biggest listed winemaker by revenue, lifted the price of its premium 2008 Penfolds Grange vintage by 15 percent as growing Chinese demand for high-end wines outpaces supply.


The rise to a recommended retail price of A$785 ($821) a bottle will be the second for 2008 Grange in four months. It puts the 2008 vintage, on sale in May, 26 percent above the price of Grange’s 2007 output, Sandy Mayo, global brand business director for Penfolds, said in an interview.


Treasury Wine is hoping to boost sales to about 60 cities in China within five years from less than 16 at present as it tries to capitalize on Asia, its fastest-growing and highest- margin market. Treasury is allocating a larger share of its 7,000 case to 9,000 case production of the high-end wine to China, amid strong demand for a label produced in the year of the Beijing Olympics and ending in the auspicious number eight.


“For premium wine around the world, there’s an equalizing of supply and demand and particularly in premium wine,” Mayo said by phone.


Global stocks of wine declined by nearly four billion liters between 2006 and 2011 to at least a 10-year low, according to an October report by Rabobank International, reversing a glut that’s weighed on industry prices.


The recommended retail price for Grange, which sellers aren’t obliged to match, was A$625 for the 2007 vintage. For the 2008 produce it was first marked at A$685 in January.


The second price increase was applied in response to increased interest from wholesalers and consumers, Mayo said. The 2008 vintage last month scored the maximum 100 points in a review by Robert Parker’s Wine Advocate magazine.


Treasury Wine shares closed up 1.2 percent in Sydney, capping a 38 percent rise over the past year that’s outpaced the 14 percent gain in the benchmark S&P/ASX 200 index.




Rhône Valley wine exports hit new high – figures (Excerpt)


Source: Just-Drinks

By Stuart Todd

3 April 2013


Wine exports from France’s Rhône Valley last year have built on 2011’s record high, according to recently-released figures.


Trade body Inter-Rhône said earlier this week that exports in 2012 were up by 5.5% in volumes and by 10% in value terms. Shipment volumes, which exceeded 900,000 hectolitres, represented 31% of the region’s volume sales. The remaining 69% was sold domestically.




In-Depth Tastings Flow Like Wine at Society of Wine Educators Annual Conference


Source: Balzac

April 3rd


Three-day event features internationally known speakers on a wide-range of topics


The Society of Wine Educators (SWE) will present an impressive lineup of in-depth classes for wine devotees at its 37th annual conference, to be held July 31 through August 2, 2013 at the Renaissance Hotel at SeaWorld in Orlando, Florida. Guided tastings will present wines and/or spirits from at least 15 different countries and 42 wine regions from around the world. Among the instructors teaching the sessions will be 21 Certified Wine Educators, 6 Master Sommeliers and five Masters of Wine.


The SWE annual conference is the country’s most comprehensive wine education event, offering a full spectrum of opportunities for wine educators, culinary students, sommeliers and general enthusiasts who seek to deepen and expand their knowledge about wines and spirits, and meet others who share their passion. Registration for the conference opened April 1st. A full list of sessions and speakers is available on the SWE website,


The concentrated three-day conference schedule will feature more than 60 sessions, as well as an International Wine and Beer Tasting, wine pairing events and networking opportunities with top educators in the field. Many of the presentations at the conference are one-of-a-kind opportunities. “You might never have the opportunity to taste these wines anywhere, unless you go there [to the source],” says Bill Whiting, CSW, Education Director for Banfi Vintners. “You might have to even spend hundreds or thousands of dollars to do so. And you get all that here, at the Conference.”


Now in its 37th year, the SWE annual conference has long been known among educators as an unusually rich resource in the world of wine and spirits. “It is an enormous amount of information and education, in a very small period of time,” said Linda Lawry of International Wine Center (NYC). “It’s very concentrated. There is nothing else like it.”


The Society of Wine Educators is the leading international organization of professionals dedicated specifically to wine and spirits education. It offers several highly-regarded certification programs for professionals in the wine and spirits industry, and its annual conference is the most comprehensive wine education event in America. Exams and seminars are offered throughout the USA and internationally. For more information, please contact: or call 202-408-8777.




Russian Standard Vodka Announces the Appointment of Mike O’Connell as Vice President On Premise National Accounts


Source: Russian Standard

Apr 3rd


Russian Standard Vodka, World’s Number One Premium Russian Vodka, announces the appointment of Mike O’Connell as Vice President, On Premise National Accounts. In this role, Mike will be responsible for the development and execution of the critical strategy and business development in National Accounts. Mike will report to John Palatella, Senior Vice President of Sales.


Mike is an industry veteran with more than thirty years of experience in both distributor and supplier management.  Mike joins us from The Patron Spirits Company, where he spent the last 7 years as their VP of National Accounts and was the architect of their award winning program.  Prior to Patron, Mike spent 12 years at Allied Domecq including 7 years on their National Accounts team.







Apr 3rd


Hundreds of professionals from the wine and spirits industry will honor Robert Furniss-Roe, president of Bacardi U.S.A., Inc., with the Samuel Bronfman Memorial Award at UJA-Federation of New York’s Wine & Spirits Division Reception on Thursday, June 20, 2013, at The Pierre in New York City.


A prominent member of the wine and spirits industry, Robert Furniss-Roe is being honored for his achievements as a businessman and his outstanding generosity in the philanthropic world.


Robert Furniss-Roe has been with Bacardi for nearly 25 years. Since 2011, he has been responsible for the operations of the company’s largest region as president of Bacardi U.S.A., Inc. He had previously held a variety of international executive management positions, including regional president for Latin America, regional president for Europe, and vice president of global sales. Prior to joining Bacardi, Mr. Furniss-Roe served in marketing roles at Dunhill, L’Oréal, and JPA. He holds a master’s degree from Oxford University.


UJA-Federation of New York’s Wine & Spirits Division brings together exceptional individuals working in the industry who are committed to their careers and passionate about philanthropy. Since 1965, the Division has honored leaders in the wine and spirits field with the Samuel Bronfman Memorial Award, which was created to commemorate Bronfman’s legendary professional accomplishments and dedication to improving the lives of others.


Previous honorees of the Samuel Bronfman Memorial Award include Bill Newlands of Beam Inc., Mel Dick of Southern Wine & Spirits of America, and Charles Merinoff of the Charmer Sunbelt Group.


Funds raised will go to UJA-Federation’s annual campaign that helps sustain a network of nearly 100 health and human-service agencies in New York, in Israel, and around the world.




Tennessee: Wine bill held up in Senate


Debate sets framework for next year


Source: The Tennessean

Apr 2, 2013


Wine-in-grocery stores legislation was given another chance Tuesday after what was thought to be the last vote on the matter for the year.


But prospects for its passage in 2013 remain slim.


Members of the Senate Finance, Ways and Means Committee will hold one final vote on a measure that would let voters decide through local referendums whether to let their grocery stores sell wine. Senate Bill 837 will be placed at the end of the committee’s last calendar before they adjourn for the year.


The House Local Government Committee voted down the measure last month, effectively killing the bill for the year in that chamber. House leaders have resisted pressure to revive the legislation.


But supporters of the bill have been working to keep the measure alive in the state Senate in the hope of setting the table for debate on wine-in-grocery stores legislation next year. If the bill passes the Senate Finance Committee this year, it could be taken up on the Senate floor next January, putting pressure on the House to act.


Those plans were dealt what at first appeared to be a decisive blow Tuesday, when committee members split 5-5 on the bill, preventing it from advancing. But within hours, state Sen. Douglas Henry, D-Nashville, had joined with the five supporters to request a new vote.


Henry had abstained earlier, saying he objected to a provision that would have let liquor stores open on Sundays. The measure’s sponsor, state Sen. Bill Ketron, agreed to strike the language.


“It’s like momentum in a ballgame,” the Murfreesboro Republican said. “We want momentum for when it comes up in January.”


Already, wine-in-grocery stores has advanced farther in the state legislature this year than many expected before the session began. Lawmakers have been filing bills to permit grocery store wine sales for decades, but until this year, no committee in recent memory had voted for the measure.


The bill has moved ahead by the slenderest of margins, and as it has progressed, senators have used it as a framework to discuss some of the most extensive revisions to Tennessee liquor laws since lawmakers approved sales of liquor by the drink in the late 1960s.


“I think there’s been huge strides,” said Jarron Springer, president of the Tennessee Grocers and Convenience Store Association. “Overall, it’s a very positive year, but it’s a result-driven world. Ultimately, we want to see this pass.”


In addition to Sunday sales, they have considered lifting restrictions on what liquor stores can sell. Another bill in the legislature would let liquor stores own more than one location.


The concessions have not been enough to bring liquor store owners to the table. But they signal progress, said Senate Majority Leader Mark Norris, R-Memphis.


“We should go ahead and take some definitive action, to send a signal to our constituents that we value their input,” he said. “This may not be completely, precisely correct, yet, but I think it’s getting there.”




Pennsylvania: OFF THE FLOOR: Gov tells lawmakers, donors that liquor privatization’s vital to his re-election


Source: Capitolwire

By Peter L. DeCoursey

April 3rd


Gov. Tom Corbett is making an interesting pitch to Senate Republicans on liquor privatization: he says he needs it to ensure his re-election.


That is a remarkably honest and plaintive admission, and maybe an over-optimistic assessment of that issue and its potential.


But that assessment, first evangelized by House Majority Leader Mike Turzai, R-Allegheny, now has become an article of faith for Corbett. So that notion is now a frequent comment he makes both to donors, who ask him how he will turn around his poll numbers, and to GOP senators, who are wary of doing much with liquor privatization.


While it is unusual for a governor to admit he is weak and needs the legislative equivalent of a long, long touchdown to win the game midway through his term, the fact is that everyone can read his historically bad polling numbers. Everyone already knows he is weak. And everyone knows he needs to do something to turn that around.


So it is smart for him to frame the “How I Will Win” narrative around some achievement that will be difficult but is possible. For one thing, it gives him a comeback narrative to sell to the Republican Governors Association, whom he still needs to give him $10 million.


Also, this is a way for him to let the Senate GOP leaders know: we ain’t finishing the budget without doing something that privatizes liquor.


What might that be? Well, Senate GOP leaders are quietly suggesting that a major problem they have with the House bill is that its beer provisions have left the distributors and others somewhere between cold and unenthused.


So one likely Senate move would be to simply leave beer out of the equation.


“Beer is a private industry already,” said Senate Appropriations Committee Chairman Jake Corman, R-Centre. “Liquor is not. So if we are going to privatize something, I am not sure why beer is in there.”


Based on that comment, widely echoed among Senate leaders, and the key chairman, Sen. Chuck Mcilhinney, R-Bucks, it seems as if the Senate may move a bill to sell the state liquor wholesale operations and to move towards replacing public stores with private stores, as long as the rural communities experience no loss in service.


If the Senate passes a bill that does that, it will mean one of two things: either they really do want to leave BeerWorld out, or that they are telling BeerWorld: “Somebody is going to get permits to sell wine and liquor. If you want them, tell us, otherwise you aren’t getting them.”


So it is not clear to me, and may not be clear to the Senate GOP leaders, whether they are actually leaving beer out of the bill, or just administering reality therapy to BeerWorld.


Either way, Corbett and the House win. If the Senate can pass out a bill that gets rid of most of the state stores soon – how to ensure rural service is still an unresolved issue – and sells the wholesale system, Corbett and Turzai declare victory and will have passed historic change.


Which the Senate GOP is beginning to realize. Corman commented: “I think we have some guys in our chamber and our caucus, including me, who don’t want to be on the wrong side of history on this.”


But if that happens, does it, as Corbett and Turzai believe, mean the governor will win re-election?


Well, Corbett’s biggest problem is that women voters in both parties and among independents have lost confidence in him. And while women favor privatization, it does not seem to be a life-or-death issue for them.


But on the other hand, what Corbett has to sell is: “I put government back in its place. As attorney general, I got government out of campaigns. Then as governor, I got it out of the way of jobs, cutting $1 billion so I could reduce business taxes so businesses could grow jobs. And I am working to get private business into the Lottery, to get more funds for our seniors and get the state out of the liquor business, and put $1 billion into smart public education investments.”


Now you can argue with all or any of those statements. But the fact is Corbett has stood for the idea that business is better than government, and does almost everything better than government and his job is to get government out of the way of jobs and taxpayers.


And wine and spirits for sale in Wegmans and Costco is a potent symbol of that argument.


So liquor privatization could be helpful because it is a simple and, compared to his other policies, less controversial symbol of Corbett’s mantra: less power and sway for government, more for the more effective private sector.


But at the end of the day, privatization is only a nice new way to illustrate the argument about “government v. private sector” that Corbett has been waging, and losing, for two years, so far. But it gives his “I trimmed government back” narrative a nice closing kick, which it desperately needs right now.




Maryland: Auditors find widespread problems at Balto. liquor agency


Applications not checked thoroughly and complaints not dealt with properly


Source: The Baltimore Sun

By Ian Duncan

April 3, 2013


State auditors found widespread problems at Baltimore’s liquor agency in a review made public Wednesday, accusing regulators of failing to follow state law in awarding licenses, prematurely closing 311 complaints and handling inspections inconsistently.


The Baltimore Board of Liquor License Commissioners failed in some cases to document whether bars were being opened far enough away from schools and churches, the auditors said. They concluded that the work of 14 full-time and five part-time inspectors employed at the time of the review could be done with just six workers.


The board did not keep investigative records on half the 311 complaints reviewed by the Office of Legislative Audits. And while some establishments were subjected to numerous routine inspections, others never received a visit, according to the report.


Samuel T. Daniels Jr., executive secretary of the agency, said his organization runs on an “obsolete system that does function and functions far better than the suggestion of dysfunction that the audit report finds.”


The board consists of three appointed commissioners and an agency that handles day-to-day work.


“The problem with the audit and auditors, they want to see every conceivable piece of paper, and if they don’t there’s the implication … it never existed, it wasn’t done,” Daniels added.


The auditors recommended 24 fixes. Legislative auditor Thomas J. Barnickel III said in an interview that the board should put written procedures in place and better record its actions so managers can check the work of employees.


“There’s a number of issues that they need to address to make sure that they’re accomplishing their mission,” Barnickel said.


Steve Fogleman, chairman of the liquor board, said that it has relied on informal institutional knowledge, but will work to publish policies and guidelines in response to the audit. He said it could take up to two years to carry out all the auditors’ recommendations.


“We certainly weren’t aware of the exact magnitude” of the problems, Fogleman said. “The liquor board relies on antiquated technology, they have relied on oral history . and have not written down specifics on what inspectors need to do.”


The result, according to the auditors, is a lack of consistency in the way the board sets about its work.


For example, 96 license holders were inspected eight or more times in a single year, the auditors reported, but 202 were not inspected at all, and no inspector regularly met an internal target of four inspections a day. They found reports dating back to 2007 that had never been filed.


The liquor board is a state agency and not directly controlled by city authorities, but it gives revenues from fees and fines to the city, and the city’s budget funds its operations.


In their response to the auditors, liquor agency officials said some problems could not be fixed without more funding, and Fogleman said in an interview that tight funding had forced the agency to lay off staff in the time since the audit was conducted.


Ryan O’Doherty, a spokesman for Mayor Stephanie Rawlings-Blake, said the board should make better use of the money it has.


“We are hopeful that the board will work quickly to address the audit findings – especially the findings that make clear that the issue is not a lack of city funding, but wasted staffing resources,” he said.


Fogleman disputed the auditors’ conclusions on staffing numbers, saying that Baltimore residents are very demanding of liquor inspectors, regularly bringing up issues at community association meetings and filing 311 complaints.


“The citizens of Baltimore require the services of the liquor board more than they ever have – there’s so much more than these routine inspections,” he said.


But the auditors found problems there, too. They wrote that board staff did not always document the results of complaints. In half of the 311 complaints they checked, auditors found no evidence of an investigation.


“Our review also disclosed that BLLC often closed cases in the 311 System prior to performing an investigation of the complaints,” the auditors added. The report said the agency closed some complaints because the issue had not been tackled promptly and officials did not want city statistics to reflect poorly on them.


Auditors did find a bright spot: “The Board appeared to assess fines to licensees in a consistent manner based on the violation types.”


Not all violations were handled at regular board hearings, however. The auditors reported that in some cases, agency staff would deal with problems in closed-door meetings.


“The legality of their use is questionable since they were not addressed in State law,” the auditors wrote of those meetings.


Sen. Verna Jones-Rodwell, a Democrat who is chair of the Baltimore Senate delegation, said city senators have been aware of the problems identified in the audit for some time. “They are bad and they’re significant,” she said.


Now that the full report has been released, she said, the delegation will again review the audit. She said that if senators determine a legislative fix is needed, there may still be time to act before the legislature adjourns Monday night.




United Kingdom: UK pub industry craves parity over tax


Source: FT

By Duncan Robinson

Apr 3rd


George Osborne is rarely cheered when he enters a room. But one such exception occurred last week, when the chancellor turned up to a shindig held by the British Beer and Pub Association, following his decision to cut duty on beer.


“People spontaneously cheered when he walked in,” said Brigid Simmonds, chief executive of the lobby group. Mr Osborne then drank a pint of slightly-less-heavily-taxed-than-last-week Spitfire, and left after 20 minutes.


His Budget move to axe the “beer duty escalator”, which increased the tax on beer by 2 percentage points above inflation each year, had made him a popular man in the pub industry – no mean feat for a chancellor. His predecessor, Alistair Darling, faced a campaign to ban him from every pub in Britain when he first introduced the escalator policy.


Even though Mr Osborne’s reversal of the escalator only cut the duty on a pint by 1p, it has been welcomed by pub operators that were expecting an automatic 5 per cent rise.


“It’s not before time,” says Ted Tuppen, chief executive of Enterprise Inns, which owns 6,000 pubs across the UK. He points out that the tax on a pint has risen more than 40 per cent in the past five years.


Some industry watchers are critical, however. “It’s a gimmick,” says one analyst, pointing out that Mr Osborne also increased the duty on wine and spirits heavily – adding 10p and 38p respectively to the tax on 75cl bottles. “While the supermarkets keep selling cheap booze, the high street drinking emporium will struggle,” the analyst warns. A typical pint costs £3 in a pub – with around a third of this going on tax – compared to barely £1 in a supermarket.


But, gimmick or not, most analysts expect the industry to pass the duty saving straight to consumers – as some pubcos, such as Enterprise Inns, have already promised to – in an attempt to get them back into pubs.


Britain’s pub industry has floundered in the past decade, as people have drunk gradually less outside the home. The total volume of beer sold in pubs has fallen by a fifth since 2008. A combination of the smoking ban, the escalating price of beer outside of supermarkets, and people drinking less proved too much for many in the industry – putting nearly 10,000 pubs out of business over the past decade.


Punch Taverns and Enterprise Inns, the two largest pub groups in the UK, have both flirted with disaster since the onset of the financial crisis, because of their large debt piles. Many independent landlords, meanwhile, have been drowned in rising utility bills. Even national chains, such as JD Wetherspoon, have struggled to maintain margins in the face of rising costs.


The industry has not provided investors with much cheer either.


Shares in Marston’s, which has 2,000 pubs across the UK, are still priced at less than half their pre-crisis peak. Enterprise Inns’ share price quadrupled over 2012 but it still trades at around a third of its net asset value, suggesting investors are yet to be convinced by its potential for growth. Punch, meanwhile, is still embroiled in a tug of war with its bondholders as it tries to restructure its debt – with some bondholders spurning the company’s latest offer only last week.


A marginally cheaper pint appears unlikely to act as a cure. “It won’t in itself have a huge effect,” says Tim Martin, chairman of JD Wetherspoon. “Every little helps, as they say. But, in and of itself, a 1p reduction does not make much difference.”


Nevertheless, this minor breakthrough on the duty escalator has rekindled some hopes of turning a long-held industry pipe dream into a reality: tax parity with the supermarkets.


“It is certain to happen at some point,” insists Mr Martin. “Pubs employ so many more people per pint or meal than a supermarket. The economics will drive a chancellor and a government towards the job-creating option.”


Mike Tye, chief executive of Spirit Pub Company, which has 1,200 pubs across Britain, has also called on the government to equalise taxes on food.


“We are disadvantaged on food versus supermarkets, where there’s no VAT on ready meals. It penalises people who don’t have a lot of money and want to have a treat.”


Not everyone in the pub sector is hopeful of a breakthrough, though. Will pubs be on a level tax pegging with supermarkets any time soon? “Not a chance,” says the chief executive of one major pub chain.


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