Archive for the ‘Wine Education’ Category

Liquor Industry News 6-24-13

June 24, 2013

Franklin Liquors


Monday June 24th 2013


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


Source: GuestMetrics

Jun 23rd


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


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


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


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


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


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


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




Darden: Major brands see 4Q sales turnaround


Source: NRN

Erin Dostal

Jun. 21, 2013


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


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


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


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


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


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


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


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


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


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


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


Same-store sales swing positive


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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




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


Source: Goldman Sachs

Jun 21st


What’s changed

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




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


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


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



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


Key risks

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




Why Alcohol Labels Are More Important Now Than Ever


Source: Huff Post



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


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


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


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


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


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


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


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


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


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


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


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


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


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


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




Why She Drinks: Women and Alcohol Abuse


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


Source: WSJ


Jun 21st


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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




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


Source: Just-Drinks

By Andy Morton

21 June 2013


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


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




Wells Fargo’s Weekly Economic & Financial Commentary


Source: Wells Fargo

Jun 21st



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

.         Core consumer prices increased more than expected in May.

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

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

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

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

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



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

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

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

.         The services PMI also surprised to the upside.

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


Point of View

.         Interest Rate Watch

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

.         Credit Market Insights

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

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




News From TTB


Source: TTB

Jun 21st




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


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


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


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


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


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


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


Where:        To find more information and to register, please




Beer Institute: Warehouse Fees Raise Costs for Metal Consumers


Source: WSJ


Jun 21st


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


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


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


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


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


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


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


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


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


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


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


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




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


Source: Consumerist

By Mary Beth Quirk

June 20, 2013


Would you like some booze with your painkillers?


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


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


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


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


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


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




Wine producers go hi-tech to outsmart fraudsters



June 23rd, 2013


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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




Wine-tasting: it’s junk science


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


Source: The Observer

David Derbyshire

Saturday 22 June 2013


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


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


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


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


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


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


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


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


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


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


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


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


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


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


The tasters were fooled.


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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




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


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




Highs and (Rare) Lows in Restaurant Wine Prices


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


Source: WSJ


Jun 21st


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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




Five men in court for stealing Bordeaux ‘to order’


Source: Decanter

by Sophie Kevany in Bordeaux

Sunday 23 June 2013


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


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


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


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


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


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


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


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




Aldi Australia to venture into online liquor sales business


Source: DBR

24 June 2013


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


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


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


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


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


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


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




Tesco chief’s basket of problems fills up


Source: FT

By Andrea Felsted, Senior Retail Correspondent

Jun 21st


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


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


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


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


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


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


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


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


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


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


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

Mix is changing across Tesco outlets


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


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


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


Nevertheless, Mr Clarke must now deal with the consequences.


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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




Tim Martin tops list of pub industry’s most influential


Source: MA

By Rob Willock



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


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


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


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


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


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



Florida: Craft brewers clash with Big Beer lobby


Source: Tampa Bay Tribune


June 22, 2013


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


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


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


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


The battle ended in a stalemate – for now.


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


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


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


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


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


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


That system is what Mitch Rubin wants to preserve.


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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




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


Source: The Spokesman-Review

Tom Sowa

Jun 22nd


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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




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


Do public employees have different rights to free speech?



Melissa Daniels

Friday, June 21, 2013


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


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


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


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


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


Proposed column on liquor laws


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


Court rulings on the matter


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


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


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


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


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


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


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


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


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




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


Source: Daily Mail

Jun 21st


Alcohol in the UK 43% above the European Union average

Pub campaigners blame high taxes taken by the govermnment

Tobacco 94% more expensive than average across the EU

Norway most expensive for food and drink and Macedonia the cheapest


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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

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Liquor Industry News 6-21-13

June 21, 2013

Franklin Liquors


Friday June 21st 2013



Rhode Island: Tax changes affecting alcohol sales in R.I. won’t have immediate impact on consumers


Source: Providence Journal


21 June 2013


The good news is there’ll be no sales tax on wine and spirits, which puts Rhode Island liquor stores in a better position to compete with stores in neighboring Massachusetts.


But wait – there are lots of moving parts.


Rhode Island, unlike Massachusetts, will still have a 7-percent sales tax on beer. And the sales tax on wine and liquor won’t drop to zero until Dec. 1.


Meanwhile, the excise tax on beer, wine and liquor – paid by distributors and passed on to retailers – will go up on July 1, potentially adding a few pennies, sometimes more to purchases if retailers don’t eat the difference.


What does it all mean?


For starters, it means there will be no immediate relief for customers at Rhode Island liquor stores. In fact, it might be just the opposite. But most retailers and trade associations were cautiously optimistic Thursday that the alcoholic beverage tax changes proposed by legislative leaders this week will be good for their industry, even if the plan is far from perfect and is, as offered, only temporary.


“In the short term, from July until December, we’re going to be at even more of a disadvantage with Massachusetts,” said Brian A. Goldman, a lobbyist for the Rhode Island Alcoholic Beverage Wholesale Dealers Association. “Come Dec. 1{+s}{+t}, we think there’s going to be a real plus. There is a psychological aversion to paying the sales tax, and we’re hopeful that when Dec. 1{+s}{+t} rolls around that Rhode Islanders are going to know that they don’t have to pay a sales tax on wine and distilled spirits. And they’re hopefully going to stay in Rhode Island and buy their alcohol and then while they’re at the stores, buy other things.”


The proposed changes, part of an $8.2-billion state budget that legislative leaders unveiled this week, represent what Rep. Jan P. Malik, a Warren Democrat and liquor store owner, describes as a compromise. Malik, long an opponent of the sales tax, said the goal was to help liquor stores without taking tens of millions of dollars out of the state’s revenue stream.


The sales tax on alcohol sold at liquor stores brought $24.3 million into state coffers during 2012 – too much to do away with, legislative leaders said. The proposed changes, by contrast, are expected to cost the state $1.2 million during the fiscal year that begins July 1, assuming no increase in sales volume.


Malik acknowledged there will be short-term pain from July through November, as the increased excise taxes take effect, but he said the proposal – which also eliminates the minimum markup on alcoholic beverages, providing another tool that Massachusetts liquor stores already have – will allow Rhode Island stores to compete once the sales tax is eliminated.


“The moral of the story is the consumer’s going to win,” he said.


His reasoning: While raising the excise tax adds pennies to the gallon, eliminating the sales tax takes dollars off the end price. For instance, he said the excise tax on a 750-milliliter bottle of wine would rise from 22 cents to 28 cents – an amount he can absorb. But if that bottle retails at $19.99, taking away the sales tax saves the consumer $1.40. If it’s an expensive bottle – say $90 – it saves the customer $6.30, he said.


He also said the price of beer, still subject to the sales tax and also subject to the increased excise tax, would barely change, because the higher excise tax on a case would be about 8 or 9 cents.


While Malik and others said the changes would help Rhode Island stores compete with stores in Massachusetts, they stressed that it would give Rhode Island stores a big advantage over those in Connecticut, which has a 6.35 percent sales tax and excise taxes that are similar to those proposed for Rhode Island.


Still, not everyone was pleased with the changes, which go before the full House – along with the rest of the proposed budget – on Tuesday.


Jay Hibbard, vice president of government relations for the Distilled Spirits Council of the United States, said his group is concerned about the plan to immediately raise the excise tax while delaying the sales tax elimination until Dec. 1.


“We would look at that as very inequitable and nothing more than a straight-up money grab by the state,” he said. “The reasoning that we’ve heard back is ‘Well the state needs money,’ and we may be sympathetic to their plight, but we don’t think we should be the ones bailing out the state. If you’re going to offer relief, then make it equitable relief, and that is, when you increase the excise tax, eliminate the sales tax.”


While some aspects of the plan have different start dates – July 1 for the excise tax increase and Dec. 1 for the elimination of the sales tax and the minimum markup – all three changes would expire on March 31, 2015, at which point state officials say they would study the impact.




Wine and Beer: Nielsen Data Analysis: Wine Dollar Sales +4.3% YoY; Beer Trends Remain Challenged


Source: CITI

Jun 20th


Wine Category Dollar Sales Increase MSD – In the four-week period ended June 8, 2013, wine category dollar sales increased 4.3% YoY (and +5.2% in the past 12 weeks), while volume sales were up 1.2% YoY (and +1.9% in the last 12 weeks). Also of note, in the period we saw a category-wide increase in promotional spending (+2.1 pts YoY) as well as category-wide pricing increases (+3.1% YoY).


STZ Wine Sales Increase 3.2% YoY – STZ’s dollar sales grew 3.2% in the period (and are up 4.7% over the last 12 weeks), while volume sales increased 4.2% (and +5.3% over the last 12 weeks). STZ’s portfolio-wide pricing was down 1.0% in the period (and down 0.6% over the last 12 weeks), while promotional spending was down for the eighth consecutive period (-0.1 pts YoY).


Beer Category Volumes Continue to Decline – Beer category volumes fell 1.9% YoY (on a +2.2% comp), marking fourth consecutive month of declining volumes. Dollar sales increased 0.4% YoY (on a +5.1% comp), and would have been flat excluding sales of ABI’s new Budweiser Black Crown offering. Price/mix added 2.3 pts to dollar sales growth (and 2.3 pts over the last 12 weeks), while promotional spending was down in the period (-1.5 pts YoY, vs. -2.2 pts over the last 12 weeks).


MillerCoors Trends Remain Challenged – TAP’s MillerCoors JV dollar sales were down 3.3% YoY (and -2.4% over the last 12 weeks), the fourth consecutive month of declining sales. Notably, Coors Light dollar sales (-0.5% YoY) were down for the first time since 2011, while declines continued for Miller Lite (-7.4%), Miller High Life (-6.7%) and Keystone Light (-6.1%). Promotional spending was down 1.8 pts YoY while pricing was up 1.5%.


Crown Imports Dollar Sales Increase Ahead of the Category – Dollar sales for STZ’s Crown Imports business were up 6.1% YoY in the period (and +4.2% over the last 12 weeks). Meanwhile, volumes also increased 6.1% YoY (vs. +3.9% over the last 12 weeks) as the company saw no benefit from price/mix. A modest decline in dollar sales for Pacifico was offset by double-digit growth for Modelo Especial and low-single-digit growth for Corona Extra and Corona Light.


SAM Pricing Drives Outperformance – Driven by a modest 0.4% increase in pricing, SAM’s beer dollar sales increased 14.0% in the period (vs. +12.8% over the last 12 weeks) on an easy comp (sales were down 1.4% in the year-ago period). Dollar sales growth was led by the Boston Lager brand (+9.4%) and by the Samuel Adams seasonal offerings (+17.4%), and came despite a 0.5 pt YoY decrease in promotional spending. Total-company dollar sales (including cider and FMBs) were up a robust 37.2% YoY.


BREW Posts Solid Growth – BREW grew dollar sales 11.8% YoY (vs. +12.0% over the last 12 weeks), driven by strong results for the Redhook Long Hammer IPA offering (+16.9%), the Kona Longboard Island Lager brand (+14.9%) and the Redhook seasonal offerings (+11.4%). While promo was down 1.3 pts, pricing once again lagged the category, down 0.3% YoY.




US Beer – Nielsen Data


Vol stays weak, price/mix solid in May/June

Source: UBS

Jun 20th


US beer sales +0.4% in four weeks to 8 June y/y (vs last 12 week +0.5%)

Nielsen off-trade data for US beer shows market volume -1.9% for the 4 weeks to 8 June, lapping a tough comp of +1.9%. This is basically in line with the last 12 week volume decline of -1.8%, although below the 52 week +0.2%. Given some fears that Memorial Day trading was weak on poor weather this performance for the period looks reasonable. Price/mix grew +2.3% for the 4 week period y/y, in line with the 12 week and above the 52 week trend of +2.1%. Promotional activity continued to drop significantly for the market (-110bps in the month y/y).


ABI gains share vs. MillerCoors, but does not pull back as much on promo

ABI volume was weak falling -3.7% y/y (but ahead of -4.1% last 12 week trend), gaining share from MillerCoors after three consecutive months of share losses. MillerCoors saw volumes -4.8% y/y (12 week -3.8%). ABI price/mix growth of +1.4% was a touch above its 12 week trend of +1.3% and a touch below MillerCoors +1.5% y/y for the 4 weeks. ABI sales fell -2.3% y/y for the 4 weeks, outperforming MillerCoors -3.3%. Within premium light, Bud Light volume fell -3.2% y/y, below Coors Light -1.5%, but much better than Miller Lite (-8.7%). Bud Light Platinum held 1.1% market value share in line with last 12 weeks. ABI’s reduction in volume promo activity for the month is -30bps vs MillerCoors -160bps. Crown (STZ) volume grew +6.1% for the month y/y with +0% price/mix y/y. Heineken volume grew +6.2% (driven by Dos Equis) with price/mix -1.4%.


Next catalysts: MillerCoors seminar on 20 June

SABMiller co-hosts its MillerCoors divisional seminar on 20 June and will report its Q1 IMS on July 25. ABI will report its H1 results on 31 July.




GS Research – Americas: Beverages: Nielsen Notables: Blame the weather (again) for soft beverage data


Source: Goldman Sachs

Jun 20th


Poor weather leads to soft LRB sales, down -2.1%

For the 4 weeks ending June 8th (includes Memorial Day weekend), LRB sales in AOC (excludes c-store) declined -2.1%, on -1.0% volume and -1.2% price. KO LRB sales decline -2.0%, driven entirely by volume. PEP LRB sales declined -2.6%, on -4.0% volume and +1.5% price. DPS LRB sales decelerated to -4.2%, on -4.8% volume and +0.6% price/mix, as non-carb portfolio weakness (sales down -5.9%) was a headwind.


CSDs continue their trajectory, down -3.6%

CSD sales continued their uninspiring trends, with industry sales/volume down -3.6%/-4.9% as poor weather for Memorial Day weekend likely hampered growth. KO CSD sales declined -2.4% on -3.3% volume drag and +1.0% price/mix realization. PEP CSD sales declined -3.7%, on -4.7% volume and +1.1% price/mix. Volume was slightly stronger than recent trends (32-wk avg -5.3%), aided by less pricing. DPS CSD sales declined -3.6% on -4.4% volume.


Energy category slightly slower against tough year-ago comp

MNST energy sales outpaced a slower energy industry, up +3.2% against a tough +29.5% year ago comp (industry up +1.8% this period). Total company MNST sales increased +4.6% this period (likely including Peace Tea and Muscle Monster). Red Bull sales grew +5.7% this period, and both RB and MNST gained sales share (+160bp, +49bp respectively). We note that for energy drinks, AOC is a smaller channel than c-store.


Beer sales soft at +0.4% as weather weighs on industry

Beer industry sales were up +0.4% this period, a deceleration against a slightly tougher comp than last month. Poor weather was likely a contributor to volume weakness, down -1.9%. TAP sales were down -3.3% on -4.8% volume. Two-year stack sales and volume trends improved nominally, but performance was muted by declines in Miller family of brands. Including non-beer sales (Redd’s Apple Ale) TAP sales declined -2.3%. SAM beer sales grew +14% as Boston Lager sales grew +9.4%. Inclusive of non-beer, SAM sales grew +35.1%. STZ beer sales increased +6.1%, entirely driven by volume and lapping a tougher comp. Modelo Especial continues to perform well, up +24.7%.




Pennsylvania needs to get out of the retail and wholesale booze trade if it’s going to privatize


Source: Patriot News

By David Ozgo

Patriot-News Op-Ed

June 19, 2013


The citizens of Pennsylvania are engaged in a healthy debate over whether or not the commonwealth should privatize wine and spirits sales.


To most Pennsylvanians privatization means the ability to purchase wine and spirits in something other than a state-owned and operated package store. To the typical shopper, retail privatization is the most visible aspect of privatization – but not necessarily the most important.


The Distilled Spirits Council is the national trade association representing suppliers of distilled spirits products sold in America and has never taken a position on privatization.


However, if Pennsylvania policymakers move forward with privatizing retail sales, we feel it is imperative they must also privatize the wholesale tier.


While not glamorous, wholesaling is an important business function.


In privatized states, wine and spirits wholesalers are responsible for warehousing, inventory control, freight transportation, execution of sales and promotional strategy among other duties. These functions are invisible to most consumers, but in an age where profit margins are thin, business operations require precise timing and efficiency.


Right now the Pennsylvania Liquor Control Board acts as the wine and spirits wholesaler and some privatization plans would leave wholesaling as a state function. Could the board expand its current wholesaling operations to service the increased number of outlets that would exist after privatization?


Let’s consider the current situation.


In privatized states wholesalers provide delivery to all outlets that sell wine and spirits – whether package store, grocery store, tavern or restaurant. But, in Pennsylvania, the liquor regulatory agency delivers only to the roughly 600 package stores operated by the state.


There are around 15,000 restaurants that have wine and spirits licenses that do not get delivery services and must go to state stores to purchase wine and spirits. The board puts the commonwealth’s hospitality industry at a competitive disadvantage vis-à-vis surrounding states by not offering this vital service. Compared to private wholesalers in other states, the board only services 4 percent of outlets statewide.


While the board acts as the wholesaler in Pennsylvania, in fact it has outsourced most of the core wholesaling functions to private operators. Both warehouse and freight transportation have long been contracted to private firms. And, recently, the board turned inventory control over to wine and spirits suppliers when it went to a “bailment” system. There is nothing wrong with outsourcing.


That said, outsourcing is an admission that someone else can do it better. Having outsourced all key functions of wholesaling, the board now acts as an expensive middleman, adding little value to the wholesaling equation.


According to the 2011 report “Liquor Privatization Analysis” conducted by the PFM Group, the board spent $34 million on freight transportation alone in fiscal 2009-10 – an average of $54,000 per outlet served. But, keep in mind that the Liquor Control Board only services state stores. Delivering large quantities of product to a limited number of outlets is the easy part of wholesaling.


Logistically, it is fairly easy to move large case quantities to a limited number of stores. It costs almost the same amount to deliver 100 cases of wine and spirits to a store as it does a single case to a restaurant. The major freight components are the cost of the truck and the driver’s time en route.


What happens in a privatized market when the number of stores doubles or triples? Assuming that there is currently 25 percent excess capacity in the wholesale system, a generous assumption, it would cost the state an additional $54 million annually in freight transportation alone to service a total of 1,800 retail outlets.


This still would not bring crucial service to the 15,000 restaurants that now must have employees trek to state stores. Under the current PLCB wholesale system it would cost $770 million each year to service these stores. Even if economies of scale could be found, total costs are likely to be in the hundreds of millions.


Clearly, the Liquor Control Board would look to the legislature for additional fee authority if it had to expand wholesale operations or the state would have to accept reduced profits if the agency had to service more accounts.


The legislature should not have to find these sums, nor should consumers have to pay the bill. In addition to avoiding new expenditures, the state would reap one-time wholesaler licensing fees of an estimated $573 million if wholesale operations were privatized.


A modern hospitality industry demands a high level of service in a cost efficient manner. If the commonwealth of Pennsylvania wishes to privatize the sale of wine and spirits, wholesaling should be privatized as well.


David Ozgo is Chief Economist for the Distilled Spirits Council of the United States (DISCUS) in Washington, DC.




Ruvo’s Southern Wine prevails in lengthy legal fight over wine sales


Source: Las Vegas Sun

Tiffany Brown

Thursday, June 20, 2013


Larry Ruvo has something to toast to. His decade-long legal crusade is coming to a close in his favor.


A jury on Thursday found that Orange County, Calif., resident Guy Azera knowingly stepped on liquor distributors’ toes when he started selling upscale wines and champagnes in Nevada.


The jury found Azera owes $267,750 in damages as well as punitive damages.


Azera muttered, “Unreal,” moments after the verdict was read.


Ruvo, senior managing director for Nevada’s arm of Southern Wine & Spirits of America, launched the suit in 2002 accusing Azera’s company, Chateau Vegas, of violating his exclusive deal with select champagnes.


Years later, plaintiffs dragged in Azera’s Orange County company, Transat Trade, and moved to stop Azera from selling certain Bordeaux wines in addition to the champagnes.


Southern Wine was eventually awarded its exclusive rights in District Court in 2008 and the Nevada Supreme Court upheld the decision in 2011.


During the trial Azera’s attorney Duane Frizell painted Southern Wine as a gorilla trying to squeeze the small businessman and cut out the competition. During the trial, Frizell showed a slide with a photo of a frightened man being gripped by a gorilla.


Ruvo’s attorney, Leif Reid, contended that Azera schemed to undercut the competition by ignoring the law. Reid showed slides of people plugging their ears and putting their heads in holes ostrich-style.


“It’s just been a smear campaign,” Frizell said.


Frizell argued that until the court awarded exclusive rights to Southern Wine, everyone was at a loss as to what the law was, including the Department of Taxation.


Azera kept in close contact with the department, Frizell said.


“Would a person who disregards the law be calling the Department of Taxation and sending letters and trying to find out what his rights were? Is that someone who’s just going to disregard the law?” Frizell asked during closing arguments.


The extensive legal clash has been a tremendous burden on Azera’s time, energy and business, Frizell said.


Azera was born in the Bordeaux region of France and learned the wine business by working in his family’s restaurant. He started Transat Trade in California after immigrating to the United States and decided to open Chateau Vegas in Las Vegas after several local buyers asked him to sell to them.


The defense cast Southern Wine as the out-of-state big business by trumpeting that Southern Wine is based in Florida. While Azera lives in Orange County he spends two to three days a week in Las Vegas, Frizell said.


Ruvo’s attorney, Reid, told the jury that both big and small businesses have rights.


Also working the local angle, Southern Wine employees packed Wednesday’s trial.


Reid attempted to tell the jury that Las Vegas residents were watching, gesturing to the crowd, but the judge ruled the statement out of line.


Maison Marques & Domaines, a Cristal distributor, is also named as a plaintiff in the suit and will get a $69,000 cut of the damages plus punitive damages.


The jury will meet Tuesday to hash out how much Azera must pay in punitive damages for fraud, oppression or malice.




Molson Coors Canada wins injunction in tussle with Miller


Source: Reuters

Thu, Jun 20 2013


The Ontario Superior Court on Thursday granted Molson Coors a temporary injunction that prevents Miller Brewing Co from ending a license agreement with Molson’s Canadian arm before a trial scheduled for December.


In February, Miller, a subsidiary of SABMiller Plc, had announced that it planned to end the deal with Molson Coors Canadian arm as it believed its partner was not doing enough to promote Miller brands in Canada. Molson Coors in turn filed a lawsuit seeking to prevent the termination of the license agreement.


Miller had provided Molson with a notice of termination in January, and it had been aiming to end the agreement on July 22.


Miller said on Thursday it was disappointed with the court’s decision, but said it remains confident in its position ahead of the trial. A spokesman for Molson was not immediately reachable for comment.


“We remain firm in our expectation that the Court will agree that we adhered to the terms of our Canadian license agreement when we exercised our right to terminate,” said Stephen Rogers, Miller Brewing Co’s legal counsel.


The legal tussle is not expected to have an impact on the partnership between the two companies in the United States. The U.S. beer market is currently dominated by the world’s largest brewer, Anheuser-Busch InBev, and MillerCoors, a joint venture between Molson Coors and SABMiller.


Miller said it remains committed to the Canadian market and Miller trademark brands will continue to be available in Canada.


The company said it will continue to prepare for a seamless transition, in the event that it wins the trial on the matter.


The court case between the two sides is Molson Canada 2005 V. Miller Brewing Company, in the Superior Court of Justice-Ontario, CV-12-470589.




Pflanz named chief of Rémy Cointreau (Additional Coverage)


Source: FT

By Scheherazade Daneshkhu in Paris

Jun 20th


Rémy Cointreau named finance director Frédéric Pflanz as its new chief executive, to replace Jean-Marie Laborde, 65, who will retire from the French spirits group in September after streamlining the business and pushing it upmarket.


Mr Pflanz, who also became chief operating office last December, joined Rémy in 2010 after an 18-year career at L’Oréal, the French cosmetics group, culminating in his appointment as head of finance for consumer products worldwide.


Like Mr Laborde, he comes from outside the Hériard Dubreuil family which is the controlling shareholder of a company whose signature Rémy Martin cognac dates back to 1724.


The announcement comes as Rémy faces slowing sales in China, where it derives 40 per cent of its operating profit through cognac sales.


Mr Laborde said last month that the Paris-based group expected “a lacklustre first half in China and its impact will be felt by the company”. But he foresaw “a significant improvement” in the second half of the year.


Mr Laborde will reach the company’s mandatory retirement age at the end of next month, but his contract was extended until after the September 24 annual meeting at which Mr Pflanz’s nomination will be submitted to shareholders for approval. Mr Pflanz, 44, is due to take up his new post on October 1.


In his nine years as chief executive, Mr Laborde oversaw a quadrupling of the group’s market value, from ?1.1bn to ?4.3bn. He worked in senior positions at Rémy’s larger French rivals – Pernod Ricard and Moët Hennessy, which is part of LVMH, the luxury goods group.


His strategy has been to streamline and move the portfolio upmarket by selling underperforming and low profit-margin brands, including its Charles Heidsieck and Piper Heidsieck champagnes. He has also exerted greater control over distribution.


That strategy and superior profits growth have led to a re-rating of the shares which now trade at a 40 per cent premium to the European beverages sector, on 23 times forecast earnings.


Of the 40 brands that Rémy possessed when he joined in 1994, only eight remain, each with international potential, including Bruichladdich, the single malt whisky acquired last year. However, some analysts believe Rémy risks becoming over-reliant on cognac and on China.


“Jean-Marie has been instrumental in building Rémy’s strong position, especially in Asia, where he was brave enough to change distribution back to a company-owned model and to invest heavily for growth,” said Ian Shackleton, analyst at Nomura.


“Frédéric takes over when there are some new challenges in China, with a slowdown in momentum likely to be a factor for some quarters, which creates increased pressure to widen both geographical presence as well as the brand portfolio.”


Rémy last month reported an 18 per cent rise in full-year net profit to ?130m in its financial year to March 31. Sales, at ?1.2bn, were 16 per cent higher than in the same period the year before, or 9 per cent on a like-for-like basis.


Asia-Pacific accounted for 40 per cent of sales, while 33 per cent were in the Americas, which has benefited from a significant recovery.




BrewDog launches another fundraiser


Source: Herald Scotland

Tim Sharp

Friday 21 June 2013


FORMER ScottishPower chief executive Philip Bowman has emerged as a shareholder and adviser at ambitious Aberdeenshire brewer BrewDog as the company asked investors for another £4 million in a fundraising that values the company at more than £100m.


The craft beer company wants to invest £1.6m in increasing capacity at the Ellon brewery it opened earlier this year from 70,000 hectolitres a year, the equivalent of 21 million bottles, to 500,000 hectolitres.


Its plans also include a £1m brewing academy in London.


The move comes two years after the company behind drinks such as Punk IPA and 5am Saint raised £2.2m through its online crowd-funding scheme to back the building of a new brewery in Ellon.


This time, the Equity for Punks scheme will offer 42,000 shares at £95 each, equivalent to 3.9% of the expanded company.


This values the company at £103m, some 211 times last year’s pre-tax profit.


BrewDog co-founder James Watt said: “We love the fact that we are funded by the people who buy our beers.”


He insisted the valuation put an appropriate price on the company, which he said had posted a profit of £300,000 in each of the last two months after benefiting from the increased capacity and efficiency of its new plant.


This, he said, would bring earnings for 2014 close to £4m, against the pre-tax profit of £486,000 posted in 2012.


He added that this suggested the valuation implied by the share issue was 20 to 25 times earnings, in line with established drinks companies such as Diageo, but for a business that was expanding more rapidly.


Mr Bowman runs engineering conglomerate Smiths Group. Previously he was chief executive of Glasgow-based ScottishPower and oversaw its sale to Spanish utility Iberdrola in 2006.


But he has a background in the drinks industry, having been chief executive of drinks company Allied Domecq, until its sale to Pernod Ricard, and worked for Bass, as well as serving as a non-executive director of Edinburgh brewer Scottish & Newcastle.


He said: “Not often do you come across a team that displays such strong entrepreneurial flair with the skills and drive to challenge the status quo in an industry increasingly dominated by global brands and companies.


“BrewDog is a real innovator – a combination of brewing differentiated beers that have real taste combined with quirky and memorable marketing. Great news for Scotland and for beer drinkers everywhere.”


Mr Watt said Mr Bowman was acting as an advisor but might eventually become a non-executive director.


Mr Bowman acquired a near 2% holding after a share sale by BrewDog co-founder Martin Dickie at the end of last year.


The prospectus for the share issue shows that he paid £221,000 for 15,000 “A” shares in BrewDog, although a £100m valuation for the company would mean this stake was worth nearly £2m.


If the share sale is fully subscribed, Mr Watt will retain 37.1% of the company and Mr Dickie 32.5%. Mr Dickie said he reduced his holding after deciding to get married and build a house.


The pair continue to plan for an eventual flotation of the company, perhaps in four to five years, but Mr Watt said this was a “long term ambition” that would only be realised once the business was scaled up.


BrewDog plans to add another 30 people to its 80-strong workforce in North East Scotland over the next 12 months. Overall employee numbers currently total around 200.


Mr Watt said: “It is a pretty good story for providing employment in a recession and a pretty good story for British manufacturing, which constantly gets knocked.”


The closing date for the share offer is January 22.




Ferocious fungus imperils future of British gin and tonic


‘I’ll have mine with a twist of Phytophthora austrocedrae, my good man’


Source: The Register

By Rik Myslewski

21st June 2013


Juniper berries, the crucial ingredient in the quintessential British distilled spirit, gin, and thus critical to the revered pick-me-up, gin and tonic, are under attack.


“Juniper is in serious trouble,” a spokeswoman for Plantlife Scotland told The Telegraph on Wednesday. “One of only three native conifers in Britain, not only does it face a new deadly fungal disease, Phytophthora austrocedrae, it has also disappeared from over one-third of Britain where it was previously found.”


According to Plantlife’s Tim Wilkins, many southern English counties had lost 60 to 70 per cent of their populations of juniper before the heroic efforts of that organization began to bring it back from near extinction. But that progress is now threatened by Phytophthora austrocedrae.


Not only are about 45 per cent of Scottish juniper bushes at risk of being destroyed by the fungus, The Telegraph reports, but much of the existing stock is suffering from old age, and others bushes are being dispatched by “booming rabbit and vole populations.”


Should the juniper bush disappear from Blighty, however, you’ll still be able to pick up a bottle of Gordon’s for a weekend romp with the boys – most commercial gin is formulated these days with berries procured from Eastern European suppliers.


But the loss of British juniper should not be taken lightly. Not only would it weaken the worldwide genetic stock of the blessed berry bushes, thus leaving existing sources perhaps more susceptible to future infestations, but also it would be a cultural blow to a country which has had a long – albeit sometimes tumultuous – relationship with the national spirit.


In the first half of the 18th century, in fact, gin was – as one wag here at Vulture Annex put it – “the crack of its time.” During the Gin Craze, it has been estimated that the average Londoner downed between 50 and 60 liters of “Mother’s Ruin” per year.

The first Gin Act was passed in 1736 in an effort to stem the torrents of gin flowing down the gullets of Londoners. Unfortunately, it had an effect much like what the US experiment with Prohibition did nearly two centuries later – it drove the manufacture of gin underground.


A second try to stop the tsunami of the cheap intoxicant was made in the Gin Act of 1751, but it wasn’t until decades later – the Sale of Beer Act in 1830, which removed the tax on beer – that the scourge of what dry moralists blamed for misery, poverty, prostitution, murder, theft, and worse, began to wane.


Today, gin has lost its crack-like rep in the UK, and is even famously beloved by the royal family. Now that “this royal throne of kings, this sceptred isle, this earth of majesty, this seat of Mars, this other Eden” has learned to drink, as the interminable beer commercials in the States say, “responsibly”, it would be cruel of Mother Nature to strip it of the berries that make a cool G&T such a blessing.




Philippine brand to overtake Bacardi as world’s largest rum


Source: The Spirits Business

by Becky Paskin

21st June, 2013


Philippine rum brand Tanduay could overtake Bacardi as the world’s largest rum brand by next year, as it launches in the US this summer.


Tanduay Asian Rum could break Bacardi’s hold on the international rum market by next year


Currently selling 19.6m nine-litre cases annually in regional markets, Tanduay has recently been positioning itself as a global rum brand, with its eyes now firmly set on the US’ untapped potential.


A successful launch in the States, where rum sales increased 1.5% by volume in 2012, led by super-premium brands, could see Tanduay overtake Bacardi – which shifts 19.8m cases – as the number-one selling rum in the world.


“As we began to lay the groundwork for making Tanduay a global brand, it was clear that the United States was an important, yet untapped market,” said Lucio K. Tan Jr, president of Tanduay Distillers Inc.


Tanduay Distillers has partnered with marketing consultancy firm Brand Action Team, Beacon Beverage Imports and MHW to lead the introduction of Tanduay to the US.


The brand will lead with Silver Tanduay and Gold Tanduay this summer in select markets.


“Tanduay is a true Asian jewel,” said Steve Raye, managing partner of Brand Action Team. “With more than 160 years of heritage pleasing rum lovers around the world, Tanduay is ready to hit the US market. This is a brand that US consumers are going to love, and we’re thrilled to bring this award winning rum to America.”


MHW will be responsible for the administrative, regulatory compliance, transportation, logistics and other services related to the import and physical distribution of Tanduay in the US.




Mixed reviews of Vinexpo 2013 as Beynat bids farewell


Source: Drinks International

By Hamish Smith

20 June, 2013


Exhibitors offered a mixed appraisal of Vinexpo 2013, the last Bordeaux show of Robert Beynat’s reign as CEO.


The show, which today closed its doors for another two years, attracted an estimated 48,800 visitors from 148 countries.


Thomas Seiter, international director of H Mounier, said his company’s expenditure had amounted to about ?100,000 and doubted that attending the show was profitable.


“Vinexpo Bordeaux is 90% PR,” said Setier. “There is a reason why the big names are not here: Cognac’s big markets are in Asia. If I have to spend money it would be at Vinexpo Hong Kong, which is more business orientated. We do generate contacts here but the new business does not cover the costs.”


Chateaux & Terroirs managing director Frederic Raynaud said “the best show in Europe is Prowein” and added he plans to scale back the size of his stand next time, in favour of the German show because “Vinexpo is expensive”.


He added: “People say that you do business at Prowein and at Vinexpo you just party.”


Beynat rejected exhibitors’ criticism that French brands now attend the show for social and political, not business reasons.


He said: “It’s nothing to do with diplomacy and politics. Vinexpo Bordeaux has never been a fair – it’s a place to prepare business for the next year – to speak about strategy, bottle labels and vintage. Without Vinexpo there is nothing.”


The 65-year old will leave his role before the 2015 edition of the show after 30-plus years at the helm. He is mooted to be taking up a role in Asia where the show is rolling-out from Hong Kong to incorporate events in Beijing and Tokyo.


He added: “If you do not exhibit at the Bordeaux show you cannot exhibit at the Hong Kong show. Bordeaux will always be the mother show.”


Jan Pettersen, managing director of Fernando and Castilla offered a more positive assessment of the 2013 show: “We have been coming to Vinexpo since 1983. The number of international visitors [this year] is impressive.”


About 40% of visitors came from outside France this year, organisers said.




Chinese face suspicion in French wine world


Source: FRANCE 24

Jun 20th


Amid dozens of tradeshow stands at this year’s Vinexpo fair in the southwest city of Bordeaux, one in particular stands out. Inside its imperial-red folding screens, the Yunnan Red Château & Wine stand visitors are tempted to savour a “taste of the East”. Tiana Wu, a young woman who has worked for the vineyard based in southern China since 1997, tips a bottle of red that is adorned with fine Oriental motifs and calligraphy. But two perplexing words stand out on the otherwise harmonious label: “French wild”.


Wu has trouble explaining what the term means. The wine’s grapes grow and are harvested in China. They are also pressed and bottled there. Does the taste recall French wines from a certain region? The talkative saleswoman admits she is not sure.


What is sure is her enthusiasm for French “vin” and the wine-rich region that hosts Vinexpo – the world’s largest annual tradeshow of its kind. “We would love to buy a wine property in France,” Wu says of her company. “But first we have to test out products to see if they are compatible with European tastes.”


Yunnan Red Wine & Castle is just one of several Chinese wine companies trying their luck on the French market. Since 2011, China has set out to become one of the world’s top wine producers and has already made inroads in France by buying up close to a dozen properties in the last few years. But like the supposedly Eastern-flavoured bottle that promises a hint of France, the sudden mélange has left many perplexed.


Not striving for excellence


Stéphane Derenoncourt, a French oenologist and successful wine consultant, is one of the Bordeaux locals watching the Chinese craze for wine with amazement.


Derenoncourt says he receives at least two requests for his expertise from Chinese companies every week, but has started turning the majority of them down.


“I get the sense that in reality there is little interest in China for wine culture. Wine has become interesting as a symbol of prestige, but few actually care about the taste,” he lamented, adding that he considered the phenomenon to be “a little disturbing”.


He is convinced that the recent Chinese tide in the region is mainly motivated by the prospect of business profits, not the pursuit of excellence in the field. An interest in cultivating and improving wine production – a trait among Japanese and Americans who have invested in Bordeaux in the past – seems to be largely missing this time around.


According to Olivier Poels, deputy editor of the specialised monthly magazine “Revue du vin Français”, Chinese investors are seeking a rubberstamp of French expertise and prestige to inflate the price of their bottles. The wine expert says this trend is particularly disconcerting because many Chinese-made wines are sold at prices far too elevated for their mediocre quality.


‘Used to a more subtle approach’


Chinese wine producers are in a hurry, says Edouard André, the director of Asian sales for an upscale wine estate in the region. “The investors want to acquire a vineyard with a recognised name. Even a small castle is interesting to them provided it has a name that can be easily branded, like ‘Lafite’,” he noted.


“People in Bordeaux are used to a more subtle approach,” André added, in reference to the blunt, and often financially unrestrained, approach of many Chinese investors. “They simply lay down their cheque book on the table and say ‘how much’?”


A case in point is the purchase of the Château de Gevrey-Chambertin  – one of France’s most prestigious brands in the Burgundy region – by a Chinese group one year ago. The 8-million-euro sale caused consternation among wine growers, since the property had been previously estimated at 3.5 million euros, or less than half of the sale price.


Keeping it French


But unlike others, André welcomes the interest of Chinese investors in the region, which he says can only translate into a boon for the Bordeaux name.


“We welcome them with open arms, and claims that the Chinese will somehow spoil the identity of Bordeaux’ castles is simply unfounded,” he said.


He points to the Chinese food industry giant Cofco, which bought a 20-acre vineyard in the Château de Viaud, located on the sought-after wine appellation Lalande de Pomerol, in 2011. Since the acquisition Cofco has continued to work with the same oenologist employed by the previous owners.


The Chinese-owned company Moutai has adopted a similar approach since it bought the Château Loudenne three months ago.


“Its wonderful that France can capture the imagination of the Chinese, who want to come to our country to learn our savoir-faire,” says Melanie Tesseron, the owner of Château Pontet-Canet, another prestigious brand.


Challenging the image of unfeeling businessmen, she sees the Chinese as “romantics” of wine and viticulture.


Whatever image finally sticks in the world of winemaking, the French will have to get used to China’s presence. In 2011 the Asian giant became the eight largest wine producer in the world, and the top importer of Bordeaux wine.




A Marriage Made in Bubbles


Source: WSJ


Jun 20th


‘What is good today is that Champagne is an accessible luxury.’


THE MATRIMONIAL CUSTOM of toasting a bride and groom with a glass of Champagne is perhaps the most appropriate of all. For when you pop the cork on a bottle of Champagne, you are enjoying the fruits of a complex marriage: a union of black grapes and white grapes, sourced from many different villages from several different years. It is also an alliance between the grower who owns the vineyards, the house that buys their grapes and the chef de garde (winemaker) who blends everything together. If one of these relationships breaks down, the chain is broken and the marriage hits the rocks.


For the past 15 years, Pol Roger’s president, Patrice Noyelle, has kept this partnership healthy. The former mayor of the Burgundian village of Solutré-Pouilly, who took over, in his words, “a beautiful Champagne house with enormous fame” but one that needed modernizing, recognized the importance of the interwoven network of relationships that go into producing great Champagne.


“When I was in Burgundy I was among the growers all the time,” he says. “Coming into Champagne, this was very helpful to me. It’s about human relations.” So he cultivated relationships with farmers in the Champagne villages that mattered, bought the right grapes from the right plots and hired the best people-in 1999 persuading Dominique Petit, chef de garde at rival Krug, to come and work for him.


The strategy has paid off. When the British royal household needed Champagne for the marriage between Prince William and Kate Middleton in 2011 it was to Mr. Noyelle they turned. “I was asked to say nothing,” he says. “The order was for bottles and I said no! It will be so much better in magnums. I married all my children in magnums. So they said, well, just divide the order by two.”


Now his marriage to Pol Roger comes to its natural end. Next week, at a board meeting in Épernay, Mr. Noyelle, 67, will finally step down, handing over control to his export manager, Laurent d’Harcourt, who takes over at a good time for the house.


Champagne is also in a good place. The 2002 vintage, released this year, has been lauded as one of the best in recent years and the 2012 growing season has produced the best grapes Mr. Noyelle says he has ever seen. “To me, 2012 is the best vintage I’ve done in the last 15 or 16 years,” he says. “I think 2012 could be better than 2002 because the fruits are riper-phenolic ripeness.”


One of the major challenges facing Mr. Noyelle’s successor will be production. As the Champagne region is a delineated appellation within a limited geographical area, they cannot grow more grapes. “If Champagne is becoming rare, if it’s becoming too expensive, we are going to lose touch with the customers that are drinking Champagne on a regular basis,” says Mr. d’Harcourt. “What is good today is that Champagne is an accessible luxury for everybody.” Indeed, in real terms, it is cheaper than it was 100 years ago.


But, as every Champagne insider will tell you, if you want the most for your money, you should be buying magnums. “It usually tastes fresher and finer,” Mr. Noyelle insists. “Always,” buy magnums, he continues. Especially when one is celebrating a wedding.




Trail of thefts followed Napa wine executive


Source: Press Democrat


Thursday, June 20, 2013


Friends of Chris Edwards describe the Napa man as a friendly, thoughtful guy who was always there when they needed him.


But interviews and public records reveal a side of Edwards that few knew before the wine executive was accused this week of embezzling $900,000 from his employer.


In 1993, Edwards was convicted of multiple counts of larceny in North Carolina, for amounts exceeding $200, according to public records. Then, as an executive at the wine company New Vine Logistics in 2005, he was accused of depositing three of the company’s checks, totaling about $1,300, into an account in his name, according to the Napa County Sheriff’s Office.


On Monday, after a two-month investigation by the FBI, Martin Christopher Edwards, who went by “Chris” in Wine Country, was accused of siphoning money from The Wine Tasting Network, a subsidiary of


Now, the company has shuttered its Napa direct-to-consumer wine shipping office and shifted those operations to Chicago, a company spokesman confirmed.


And Edwards is on the lam, after failing to appear Monday for a hearing at U.S. District Court in San Francisco, according to the FBI. Friends and former colleagues said they’re concerned for his whereabouts, even as they take in the shock of the recent news.


“We’re stunned … and I think it’s a sad state of affairs,” said Joe Waechter, CEO of WineDirect, who worked with Edwards when WineDirect bought a fulfillment company that was affiliated with Wine Tasting Network.


“I’ve worked in a lot of different industries, and I’ve come across folks taking office equipment home, or a computer, even. I’ve come across people raiding the petty cash drawer,” Waechter said. “The reason I’m stunned is I’ve never come across this, other than what I’ve seen on TV.”


Attempts to reach Edwards by phone, email and social media were unsuccessful.


Deb Stallings, a member of the Napa Valley Unity League and a close friend of Edwards, depicted him as a man who wanted to make the world a better place. He helped organize the Napa Valley Academy Awards, a fundraising event that aims to help victims of AIDS and cancer, and the Napa Valley AIDS Walk. Although he was involved with the fundraisers, he wasn’t in charge of accepting donations or depositing money, Stallings said.


“He was one of my very best friends,” said Stallings, who has known Edwards for a decade. “He was just a geek … He was this big old goof, and he has a goofy laugh.”


Stallings described Edwards as a smart, politically savvy man who recommended management books like “Who Moved My Cheese?” and who read poetry at her wedding. She had met up with Edwards and several other friends nearly two weeks ago for dinner, and everything seemed fine, she said.


“A week later, my phone starts blowing up,” Stallings said. “It’s Pride Week in Napa Valley now. We’re together a lot right now, and it’s on people’s minds that one of us is missing.”


Reached by phone, Scott Butler, Edwards’ partner, said he was blindsided by the news, but said he could not comment further without a lawyer.


Edwards ran unsuccessfully for Napa City Council about a decade ago. During the campaign, details emerged about the larceny convictions in North Carolina, Stallings said. She and other friends confronted him to find out what happened.


“He said he was married to a woman that had written bad checks, and that made sense,” Stallings said. “I didn’t lose sleep over that, because it made sense.”


Around that time, Edwards was a senior manager at New Vine Logistics, a wine industry fulfillment house. A coworker from New Vine filed a complaint with the Napa Valley Sheriff’s Office in 2005 about how Edwards was handling the money.


“Somebody at the business where he was working had noticed they were missing checks that should have been made out to the business,” sheriff’s Capt. Tracy Stuart said. “All three checks had been made out to the business, and had been deposited into an account belonging to Martin Edwards.”


The checks were for $332.41, $740 and $270, Stuart said. New Vine executives had wanted to consult with lawyers before filing charges, but never followed up to prosecute, Stuart said.


“Most people are just interested in getting their money back, so a lot of times on embezzlement cases they’ll start with us and then resolve it themselves,” Stuart said. “Unfortunately, that lets a lot of people not have criminal records that deserve them.”


That same year, Edwards moved into a management position at Wine Tasting Network, also known as, according to his LinkedIn profile.


Representing, Edwards sponsored events in the wine industry including seminars run by the Wine Industry Symposium Group, said Kathy Archer, president of the group.


“I’m very saddened by it. I just thought he was doing very well with his business,” Archer said. “We were asking, ‘What happened? He seems to be out of touch lately.’ It just was not what I thought … I just thought he was a very nice person.”


The federal indictment by the U.S. Attorney’s Office states that from May 2010 through December 2012, Edwards devised a scheme to defraud, which owns The Wine Tasting Network, out of about $900,000. Prosecutors allege that Edwards created a fictitious company, called ‘Dufrane Compliance Trust,’ a company that provided regulatory compliance services to the wine industry. They allege that Edwards emailed requests for payment to Dufrane, and then used the money to pay personal expenses including a $40,282 check paid to Weatherford BMW, a $24,000 check paid to Coles Law Firm, and a $25,000 check paid to cash. He was accused of 23 counts of money laundering, wire fraud and mail fraud.


Joseph Pititto, spokesman for, said the company would not comment on legal matters. But he confirmed that Wine Tasting Network’s operations were moved to Chicago and out of Napa.


“It is being run by the gourmet food and gift baskets segment,” Pititto said.


WineDirect, the company that bought wine fulfillment company WTN Services from in 2011, was not impacted by the embezzlement charges, Waechter said.


Queen of the Valley Medical Center in Napa, which was a beneficiary of the Napa Valley Academy Awards event that Edwards helped organize, was not concerned about the possibility that funds may have been mishandled, said Vanessa DeGier, spokeswoman.


“He’s one of many who helped support the fundraiser,” DeGier said. “As far as I can tell, I don’t think there’s any kind of connection with the money raised for this event. I don’t think he was the money handler.”


Late Thursday, FBI officials confirmed that Edwards had not yet been taken into custody.


“None of us are all good, and none of us are all bad, and I have to say I only know the good parts of Chris,” Stallings said. “Hopefully he knows that there are people here who are certainly disappointed, but still love him, and want what’s best for him. He’s on all of our minds.”


News researcher Janet Balicki contributed to this report.




Truett-Hurst, Inc. Announces Pricing Of Initial Public Offering


Source: Street Insider

June 19, 2013


Truett-Hurst, Inc. (“Truett”) today announced the pricing of its initial public offering of 2,700,000 shares of its Class A common stock at a price to the public of $6.00 per share.  The shares will be listed on the Nasdaq Capital Market beginning on June 20, 2013 and will trade under the symbol “THST.” The offering is expected to close on June 25, 2013.


Truett intends to use the net proceeds from the offering to pay down amounts owed under its credit facility, for working capital, capital expenditures, hiring additional personnel and for general corporate purposes.


W.R. Hambrecht + Co., LLC is leading the offering, which was made through its OpenIPO auction-based process that opens participation to all investors.  CSCA Capital Advisors, LLC, Feltl and Company, Inc. and Sidoti & Company, LLC are serving as co-managers for the offering.


The registration statement on Form S-1 relating to these securities has been filed with, and declared effective by the Securities and Exchange Commission.  The offering of these securities was made only by means of a written prospectus forming part of the effective registration statement.  Copies of the preliminary prospectus related to the offering may be obtained from WR Hambrecht + Co at (415) 551-8606 or by




Francois Lamarche dies in tractor accident


Source: Decanter

by Jane Anson in Bordeaux

Thursday 20 June 2013


Francois Lamarche, winemaker and owner of Domaine Lamarche in Burgundys Vosne-Romanee, died on Tuesday afternoon following a tractor accident at his family’s holiday home in Baudrieres, also in Burgundy.


It is understood the tractor rolled into a lake on the property, trapping the 69-year-old Lamarche underneath.I


Domaine Lamarche makes 14 separate wines, including the monopole La Grande Rue, and three other Grands Crus in Clos de Vougeot, Grands Echezeaux and Echezeaux, over 28 acres in total. The family has made wine in Vosne since the 18th century, with François taking over from his father in 1985.


For the last few years, François has been running the property with his daughter Nicole, sister Genevieve and niece Nathalie.


‘Above all else, he loved the vines, and was truly passionate winemaker,’ his wife Marie-Blanche said yesterday.


‘His contribution to the estate was immeasurable, particularly in getting La Grand Rue recognised as a Grand Cru in 1989’, Tim Atkin MW told


‘The wines are among the best of the region, and his work will be ably continued by Nicole and Nathalie.’




The Sport of Sommelier


Film ‘Somm’ Explores the Pursuit of a Wine Profession


Source: WSJ


Jun 20th


I spent the opening minutes of the movie “Somm” trying to imagine its producer in a Hollywood pitch meeting. “It’s a buddy picture: There are four guys and a lot of drinking-well, actually, spitting-kind of like ‘Sideways’ meets Seth Rogen without any gratuitous nudity, betrayal, rolling of cross-joints or throwing up.”


Actually, it’s no such thing. It’s a documentary film about four friends in the wine business who spend a great deal of time holed up in hotel rooms, apartments and cars quizzing one other with flash cards about regions and grapes and seemingly thousands of arcane wine facts. There is lots of wine drinking but even more spitting, because they all aim to be master sommeliers.


Master sommelier is a title that has been earned by fewer than 200 wine professionals in the world. It is granted by the rather grandiosely titled Court of Master Sommeliers and requires a grueling three-part exam. There’s a “theory” test that covers all kinds of wine facts; a service exam wherein the candidate actually waits on a table of judges; and a blind tasting of six wines, three red and three white, that the candidates are expected to identify-from the country to the region, the subregion, the grape and the vintage. Some would-be masters take years to pass all three parts, and some candidates end up retaking the tests several times (as does one of the candidates in the film.)


The movie, which opens Friday night in New York, was filmed over the course of three years on a decidedly un-Hollywood budget “closer to $50,000 than $1 million,” said writer-director Jason Wise. A lot of the action takes place in California; in fact, all four of the sommeliers were California-based when the filming began, though sommelier Dustin Wilson has since moved to New York after landing a job as the wine director of Eleven Madison Park.


I sat down with Mr. Wilson recently to discuss the film, his friends and their quixotic quest. My first question, after seeing how much time, effort and money Mr. Wilson put into his quest for the master sommelier title, was: Why? (Spoiler alert: I’m going to give part of the movie’s ending away and reveal that Mr. Wilson does, in fact, become a master, though not all his friends do.)


The 33-year-old Mr. Wilson, a low-key and serious fellow, had clearly been asked this question many times. One reason, he said, was that it led to his current position. “I don’t think I could have scored this job without it,” he said. Another was that being a master sommelier put him on the map, or at least “it gets your foot in the door.”


Surely, I said, there are easier ways of landing such a position-such that don’t require several thousands of hours of studying and a good part of one’s life. (Mr. Wilson said he spent three to four hours a day studying-and eight hours a day when he was off from his job-for five months.) Mr. Wilson said he was simply compelled by the quest: “I’m a competitive guy.”


The same could be said of Mr. Wilson’s friends and co-stars: Brian McClintic, D’Lynn Proctor and Ian Cauble. Mr. McClintic observed at one point in the film that highly competitive people “tend to find their way into the sommelier field.” And no one is more clearly intent on winning the master sommelier title than Mr. Cauble, who seems to exist in another dimension from his friends-some of whom even talk about having to “get away from Ian for a while,” as he’s just so intense.


In one scene, Mr. Cauble is shown describing a wine that he’s tasting to Mr. Wilson, but he’s not really talking; instead, it’s more like he’s in a word-rich trance: “A white wine, clear, star-bright, light straw color, medium concentration of color, lime candy, lime zest, crushed apples, under-ripe melon, green melon, green pineapple.” He draws a breath-and then a few more paragraphs of words tumble forth. Mr. Wilson sits across the table with an impassive look.


There is a lot of that sort of talk in the movie; in fact, it might sound like a parody of winespeak to a nonprofessional, but it’s delivered far too seriously for any comedic effect. (There’s not a lot of levity to be found in the master sommelier quest.)


I’d actually been hoping to see more of what the sommeliers actually do in their real life, at work in restaurants, but they’re mostly depicted bent over spit buckets or flash cards. (When I mentioned this to Mr. Wise, he said that he’d wanted to film in restaurants but that it would have been too awkward and expensive.)


In fact, Mr. Wise hadn’t actually intended to film a group of sommeliers at all. He had just wanted to make a movie about people who were “obsessive in some way.” But he had found few people who were really willing to dedicate themselves so completely to an ideal or a project until he met this group of friends.


While Mr. Wilson said he hoped “Somm” would reveal that sommeliers did more than “show up at a table dressed in a nice suit,” Mr. Wise said he hopes the movie will reach beyond wine to tell a story-of friendship and the nature of competitiveness, and also that it “isn’t mean about wine, like ‘Sideways.'” (We both agreed “Sideways” was a mean movie.) In fact, Mr. Wise managed all three. I just wish there had been fewer flashcards.




Diageo advisers on alert as new general counsel takes reins



Alex Newman

21 Jun 2013


Drinks giant shakes up legal team after splitting Europe operations


Diageo has appointed Siobhan Moriarty as its new general counsel, replacing current global legal chief Tim Proctor, who is retiring after 13 years in the role.


Moriarty, who was previously European GC at the drinks giant, will formally step into the top legal role on 1 July, following a transition period that began in January.


One of the largest corporates in the FTSE 100, Diageo counts Smirnoff, Jose Cuervo and Guinness among its brands.


Other senior changes to the in-house legal team include the internal promotions of David Harlock to GC for Africa, Turkey, Russia & Eastern Europe and Catriona Macritchie as GC of Western Europe, following the company’s split of its European operations.


Diageo declined to comment on whether the in-house changes would result in a review of its legal advisers.


The company last conducted a formal review of its external advisers in 2009, which saw CMS Cameron McKenna win a spot as a preferred firm for commercial work across continental Europe.


Slaughter and May is Diageo’s main corporate adviser in the UK, while other UK firms the company works with include Addleshaw Goddard, Pinsent Masons, Maclay Murray Spens, Morton Fraser and SJ Berwin.


Sullivan & Cromwell is Diageo’s main counsel on US corporate matters, while, according to data provided by Mergermarket, other advisers to Diageo include Baker & McKenzie, Orrick Herrington & Sutcliffe, Ireland’s William Fry and South African outfit Bowman Gilfillan.


One partner who regularly advises the company said: “We take nothing for granted; Diageo works with a large number of law firms and we’d like to think we’d remain an adviser, but Siobhan has to establish strong relationships with her external advisers and work out what works best for her.”




Kroger remains model of consistency


Source: RT

By Mike Troy

June 20, 2013


Kroger trounced first quarter sales and profit forecasts, posting a 3.3% gain in identical store sales that drove a 92 cent a share profit.


Total sales increased 3.4% to $30 billion and the 3.3% gain in identical store sales was well ahead of analysts’ forecast of 2.8% growth. It was the company’s 38th consecutive quarter of positive identical store sales growth. Net income increased 9.6% to $481 million which translated to per share profit of 92 cents that was four cents better than the 88 cents analysts’ forecast.


“Kroger achieved strong sales and record earnings per share for the quarter, and our customers’ positive view of us continues to improve,” said Dave Dillon, Kroger’s chairman and CEO. “This is because of our continued focus on the Customer 1st strategy. Our first quarter results give us the confidence to raise our guidance for the year.”


Looking forward, maintained its fuel year identical store sales forecast of an increase in the range of 2.5% to 3.5%, but modestly elevated its full year profit forecast range to $2.73 to $2.80 from an earlier forecast of $2.71 to $2.79.


The company said its strong financial position allowed it to return more than $1.3 billion to shareholders through share buybacks and dividends over the last four quarters and during the first quarter, Kroger spent $146 million to buy back 4.5 million shares. It also invested $646 million in capital improvements during the quarter, up from $557 million for the same period last year. Full year capital investments are expected to range from $2.1 to $2.4 billion.


Kroger ended the quarter with 2,419 supermarkets and multi-department stores in 31 states under two dozen local banner names including Kroger, City Market, Dillons, Jay C, Food 4 Less, Fred Meyer, Fry’s, King Soopers, QFC, Ralphs and Smith’s. The company also operates 784 convenience stores, 322 jewelry stores, 1,182 supermarket fuel centers and 37 food processing plants in the U.S.




Rite Aid improves profits as sales slip


Source: RT

June 20, 2013


Rite Aid reported profits for the third consecutive quarter, as it launched the largest extension to date to its loyalty card program and continued growing the latest iteration of its new store format.


The company announced Wednesday the launch of Wellness65+, an extension to the Wellness+ loyalty program aimed at elderly customers, amid sustained growth in the program overall. At the end of first quarter 2014, Wellness+ counted about 25 million active members, defined as those who use their cards at least twice over the past 26 weeks. Members accounted for 77% of front-end sales and 70% of prescriptions filled, both indicating growth over first quarter 2013, while the number of Gold and Silver members, the program’s most frequent users, increased by 4%.


Poly-chronic patients, who are those with multiple chronic conditions, are among Rite Aid’s most important customers, and most of them tend to be elderly. “We think Wellness65+ will give seniors a compelling reason to become loyal Rite Aid customers,” president, chairman and CEO John Standley said in a conference call with Wall Street analysts to discuss the results.


COO Ken Martindale said that the company was working on modifying workflows and building Wellness65+ into the daily activities of employees, with pharmacists as the primary staff engaging with patients, but it was not anticipated that the program would create much extra work overall.


Enrollment in Wellness65+ includes an expanded consultation with the pharmacist, and pharmacist-patient consultations in general also have seen growth, as the company registered a 68% increase year-over-year in medication therapy management sessions. While MTM is not a significant contributor to revenue, Standley highlighted its ability to improve health and lower healthcare costs.


The company has also pushed forward with its expansion of the Wellness store format, converting 108 stores to its latest iteration, dubbed Genuine Well Being and originally showcased last year in a Lemoyne, Pa., store. Currently, 905 of the chain’s 4,615 stores have been converted to Wellness stores, with the goal of having about 1,200 converted by the end of fiscal year 2014. Front-end sales at Wellness stores are about 3.5% higher than non-Wellness stores, while pharmacy sales have not tracked as high, but are still positive.


More than 1,500 Wellness Ambassadors – specially trained staff who man the aisles with tablet computers to provide information on health and wellness products and serve as a “bridge” between the front end and the pharmacy – have been hired. Martindale said Wellness Ambassadors also were important for serving as a bridge between the store and the overall community and would play a critical role in pushing Wellness65+.


Wellness65+, Martindale said, would give customers “a pathway for building strong relationships with our associates and understanding how the Rite Aid experience goes far beyond filling prescriptions.”


For the quarter, the company reported sales of $6.3 billion, compared with $6.5 billion in first quarter 2013, with the decrease resulting largely from new generic introductions. Same-store sales decreased by 2.5% for the same reason, including a 3.8% decrease in pharmacy sales and a 0.4% increase in front-end sales. Same-store prescription count decreased by 0.1%, and the company noted that it had maintained about 75% of prescriptions from last year’s Walgreens-Express Scripts dispute. Prescription sales accounted for about 67.5% sales overall. Profit for the quarter was $89.7 million, compared with a $28.1 million loss in first quarter 2013.


The company expects fiscal 2014 sales of between $24.9 billion and $25.3 billion and profit of between $22 million and $162 million, as well as same-store sales 0.75% lower or 0.75% higher than fiscal year 2013.




Tennessee: Big Changes Could Be Coming To TN Bars On July 1st


Source: News Channel 5

by Chris Cannon

Jun 19th


Patrons of Tennessee restaurants that serve house-infused alcoholic beverages may not be able to purchase those drinks when the state starts enforcing a 2006 law next month.


The law prohibits restaurants from infusing alcohol with food products. It states that is a practice that can only be performed by a licensed distillery.


“They’re interpreting it to mean if you are a restaurant you can’t put fruit in vodka and infuse the flavor. And we just think that’s wrong,” according to Will Cheek, a food and beverage law expert.


Cheek contends the intention of the law was not to ban restaurants from taking part in the popular infusion method.


However, new director of the Tennessee Alcoholic Beverage Commission plans to start enforcing the law, as the state interprets it, on July 1st.


Cheek has been in contact with his clients across the state who serve infused alcohol.


“So, everybody we’ve talked to, we’ve said, go ahead and phase it out,” Cheek said.


That means infused vodka, whiskey, even drinks like Sangria could disappear from drink menus across the state.


“We’re fighting this and we’re hoping the ABC will not enforce the law, to give us some time to talk to them about it, but right now they’ve said they’re going to enforce it starting July 1st,” said Cheek.


As he sees it, Cheek said this law will also crack down on pre-mixed drinks, or any other drink that is mixed and stored for any amount of time afterwards.


The attorney said the enforcement of the law could have an impact on tourism in Tennessee. Cheek contends the state is becoming known for high-end food and cocktails.


“So we’re going to lose some of the coolness factor that Tennessee’s had,” Cheek said.


Cheek said he, and others affected by this law, plan on taking the issue to Tennessee’s Capitol Hill.


“We’re working with the legislature, and we’re discussing with legislators changing the law to make it clear that you can pre-mix and infuse if you’re a restaurant.


However, it could be Spring of 2014 before any changes to state law could come about, until then, if enforcement is held up, infused drinks in Tennessee’s liquor by the drink establishments will end on July 1st.

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Liquor Industry News 6-20-13

June 20, 2013

Franklin Liquors


Thursday June 20th 2013

Massachusetts: Councilor Files Bill to Uncap Liquor License Restrictions in Boston


Source: Boston Magazine

By Steve Annear

June 19, 2013


Boston City Councilor Ayanna Pressley thinks the state’s liquor laws are extremely outdated.


“State control over liquor licenses was a result of [a] Prohibition-era frenzy about alcohol, and a power struggle between Yankee legislators and Irish-dominated local governments,” Pressley said in a petition filed Wednesday to reestablish the distribution of licenses in the city. “Those conditions no longer apply, yet these restrictions are still in effect.”


Calling for drastic changes on the limited number of licenses Boston is allowed to award restaurants looking to serve alcohol to customers, Pressley submitted a home rule petition that she spent one year crafting. Pressley filed the bill with the state legislature in an effort to attempt to put the responsibility of determining the number of liquor licenses the city can have in the hands of Boston’s licensing division.


Currently, Boston has a cap on the number of licenses it can distribute to business owners. This can lead to restaurateurs charging upward of $400,000 to transfer a license to a new business owner if they decide to close.


Boston’s cap is set at 650 full liquor licenses and 320 wine and malt beverage licenses. “The unnecessarily high cost of doing business makes it difficult for entrepreneurs-particularly small [and] local, minority, and women-owned business enterprises-to bring innovation to the cultural, arts, and culinary arenas,” Pressley said in her proposal. “It unduly burdens entrepreneurs who wish to open small neighborhood establishments, who in some estimates rely on alcohol sales for up to a quarter of their revenue.”


Because state law ties the number of licenses a city or town can have to a community’s overall population, pursuing a business venture can become costly in a place like Boston, and deter a neighborhood from expanding or bringing in new clientele. It can also lead to restaurants seeking other locations, like Cambridge or Somerville, where obtaining a license is less costly based on more availability.


“The time for legislative action is now; cities should have control over the alcohol licensing process,” Pressley said. “It’s time for us, not the state, to determine how to economically revitalize our neighborhoods.”


Pressley said some neighborhoods are over-saturated with licenses, like the North End, while others-such as “communities of color”- barely have any, with a scant chance of receiving them anytime soon based on the outlandish costs to obtain one from a previous holder.


Pressley’s proposal would not only lift the state’s cap, but it would allow more prospective restaurants to seek a license, and eliminate the transfer of licenses out of empowerment zones, urban renewal districts and transit oriented developments, so they would no longer cost hundreds of thousands of dollars to procure in the event that an owner closes up shop and decides to sell off a license. Instead, licenses would have to be returned to the city, so they could award them accordingly.


To meet the demands of current license holders, who Pressley worked closely with to craft the home rule petition, they would be “grandfathered in” and retain the ability to sell their license in the future.


Michael Nichols, a candidate for City Council, said he helped weigh in on the draft legislation during the yearlong study on how to improve the liquor license situation in the city, adding that Pressley’s proposal would drastically open up channels of private investment and economic revitalization in every interested neighborhood.


“More restaurants or bars may not be right for every area, but returning the regulation of liquor licenses to the city would enable who knows Boston best-our local government and our neighborhoods-the opportunity to revitalize business districts. It is unquestionably the right policy,” Nichols said.



May, 2013, Control State Results


Source: NABCA

Jun 19th


During May, nine-liter spirits case sales in the control states were up 2.2% compared to a tough comparable 2012 period. Note, however, that sales during May this year benefited from five Fridays versus four during last year’s May. Rolling-twelve month reported volumes grew at 2.5%, down from April’s 3.2%. Alabama, Idaho, Montgomery County Maryland, Michigan, Mississippi, North Carolina, Ohio, Oregon, Utah, Virginia, and Vermont reported monthly growth rates exceeding their twelve month trends.


Control state spirits shelf dollars were up 5.4% during May while also trending at 5.4% during the past twelve months. Alabama, Idaho, Montgomery County Maryland, Maine, Michigan, Mississippi, North Carolina, Ohio, Oregon, Utah, and Virginia reported growth rates exceeding their twelve month trends.


Price/Mix for May increased to 3.2% from April’s 2.6%. The NE control states-Maine, New Hampshire, and Vermont-reported 5.0% that exceeded the other control state regions.


During May, Irish Whiskey, with 0.8% share of the control states spirits market, was the fastest growing category with 17.0% growth reported and a twelve month growth trend of 17.5%. Vodka, with 34% share, grew during the same periods at 2.9% and 3.6%. During May, Canadian Whiskey, Cordials, Domestic Whiskey, Gin, Scotch, and Tequila grew at rates that exceeded their twelve-month trends.


May’s nine-liter wine case sales growth rate grew 1.1%. Pennsylvania, New Hampshire, Utah, Mississippi, Montgomery County Maryland, and Wyoming reported -0.8%, 2.9%, 6.9%, 3.0%, 4.0%, and 7.2%, respectively. May’s rolling-twelve month wine volume growth, 4.4%, is down from April’s 5.0%.




Quick Note – Spirits: US NABCA data point – Price/mix continues to be strong


Source: Nomura

June 20, 2013

Ian Shackleton – NIplc


Price/mix remains strong

NABCA (which accounts for 20% of industry volumes) released US spirits data for May. Price/mix for May was robust at +3.2%, better than April +2.6% and broadly in line with March +3.5%. This is consistent with the latest AC Nielsen US spirits data for four weeks up until 25 May where pricing was up +3.9%, suggesting a more rational pricing environment. This is consistent with the Nielsen data, which shows improvement in price/mix for most companies. NABCA does not disclose price/ mix by company.


Softer volumes but underlying trend still robust

Reported industry volumes were positive at +2.2%, despite very strong comps (+11.0%) and better than ytd +2.0%. However there was some benefit from an extra Friday in this data v the comp; we believe that, adjusting for this, volumes would have been flat to slightly up. However, we still see the underlying volume trend in the US growing at +2-3% (year to date NABCA +2%).


Company performances

Diageo volumes (reported) were -3.1%, and behind the industry at +2.2%, similar to the trend seen in AC Nielsen US spirits data, where Diageo is also outperforming on pricing but at the expense of some volume loss. However, in its Q3 to March, as reported, N. America revenues grew overall by over 8%, which implies a better overall performance than that shown by Nielsen or NABCA. Pernod volumes were -0.9%, Brown Forman +0.7%, Beam -0.6%, Davide Campari +3.6% and Remy +0.1%.



On calendar 2014E P/E, Diageo (Buy) trades at 16.2x, in line with Pernod (Neutral) and spirits average 17.4x. Within the spirits space, we prefer Diageo given its valuation, as well as the substantial exposure to the US and wider geographical exposure in emerging markets and lower exposure to China. US accounts for c40% of Diageo profit, c25% of Pernod, while China accounts for c33% of Remy, c16% of Pernod and Diageo under 1%.


Next news

Pernod hosts its Europe divisional investor call on 25th June.



?   Total industry volumes were positive at +2.2% (reported), giving MAT +2.5% and ytd +2.0%.

?   Diageo volumes were soft at -3.1%. Key brands: JW Black +4.1%, JW Red +8.9%, Smirnoff -0.7%, Captain Morgan -5.3%, Bailey’s -4.2%.

?   Pernod volumes were slightly negative at -0.9%. Key brands: Chivas -1.3%, Jameson +20.5%, Absolut -2.2%.

?   Brown Forman volumes were positive but lagged the industry at +0.7%. Key brands: Jack Daniel’s +1.1% and Southern Comfort -6.8%.

?   Campari volumes were strong at +3.6%. Key brands: Skyy vodka -1.4%, Wild Turkey +1.9%; Wild Turkey American Honey was +26.1%.

?   Remy volumes were flattish at +0.1%.

?   Beam volumes were weak at -0.6%.




Diageo’s Walsh named Compass chairman


Source: Reuters

Jun 20th


Compass Group (CPG.L: Quote, Profile, Research), the world’s biggest caterer, named outgoing Diageo (DGE.L: Quote, Profile, Research) chief executive Paul Walsh as its new Chairman on Thursday, to help drive the firm’s overseas expansion.


Walsh, who will be replaced at Diageo by Ivan Menezes on July 1 after some 13 years with the drinks group, will join Compass as a non-executive director next January and will become chairman on February 6.


Walsh will replace Roy Gardner, who is retiring.


Compass operates in some 50 countries and serves 4 billion meals a year at locations ranging from schools and hospitals to offshore rigs and the Wimbledon tennis tournament.


The group is targeting growth in its core North American business and in emerging markets, and said Walsh’s experience in international expansion would benefit the firm in its aims.


In May Compass posted an 8 percent rise in first half underlying pretax profit to 611 million pounds and said it was upbeat on its prospects for the full-year.




Rémy Cointreau Appointment



Jun 20th


On 4 June 2013, the Board of Directors of Rémy Cointreau SA (Paris:RCO) renewed the term of office of Jean-Marie Laborde as Chief Executive Officer from 27 July 2013 to 30 September 2013.


On 24 September 2013, a proposal will be put to the Board of Directors to appoint Frédéric Pflanz as Chief Executive Officer of Rémy Cointreau SA with effect from 1 October 2013.


Having joined the Group in 2010 as Chief Financial Officer, Frédéric Pflanz has, since December 2012, also acted as Chief Operating Officer of the Group, alongside Jean-Marie Laborde.




NOMURA CONSUMER: C&C, Remy (Excerpt)


Source: Nomura

Jun 20th



Buy, TP Eur 6.40, Ed Mundy


The Nielsen data shows share loss. We know that. Having spoken recently to the company we still feel confident that the US Cider business can grow 20% plus, that the Irish cider business will show good growth as they integrate Gleesons, and once again the market will be surprised positively. The recent pullback in the stock is unquestionably a buying opportunity. Current 2014 EBITconsensus Eur132m and expect guidance range to be given on 3 July with Q1 results (anticipated to be soggy at this point, so am not inclined to avoid into the print).


The Magnificent Mundy met with C&C IR in Dublin while I was gallivanting around the USA.  The company sees consensus EBIT for F14 EUR 132m. We would expect an EBIT range for F14 to be given on 3 July with the Q1 release.  Specifically on Q1 results. Specifically on Q1 – weather has been tough (esp March) in UK and ROI but weather has been better into May and continued in June.


On USA – the company confident can generate 20% volume growth for Vermont for F14. Integration issues now behind. Company not chasing volume growth. Sellside sentiment is now very negative and while this is a ‘show me the money’ scenario, the risks feel to the upside. 20% is not heroic and this is NOT the key driver of earnings. Suspect better data in the coming months, doubling of Vermont capacity, and the investor event in November will make the balance of this year more encouraging.


On ROI – a lot going on with headcount reductions as co generates synergies post Gleeson and business moves from the BA to Easyjet model. Good people in Gleeson, focus now on integrating the business and growing profits. ROI in a good position to grow.


On Tennent’s UK – more of the same. Good earnings visibility here.


And last but not least  – UK cider – off-trade remains tough however not important for profits. Cost savings programme on-going. Paolo Mortarotti now in charge of UK cider, with both Shepton brands and Magners. Greater focus on growing the legacy Shepton brands.




Reduce TP Eur 82, Lord Shackleton


New CEO announcement, not a surprise but may not be seen as a positive. Co announces that CFO Pflanz will take over as CEO in September following the retirement of current CEO Laborde. This had been potentially flagged at end of 2012 when Pflanz was moved up to COO; however, we remain slightly surprised by this move as Pflanz only came into the spirits business in 2010 when he joined Remy from L’Oreal and does not have much background in the industry, whereas Laborde was an industry veteran having worked at Moet-Hennessy and Pernod before Remy.


We continue to be nervous that newsflow on China spirits (est a third of profits) will continue to be weak here for the rest of 2013 – May cognac shipment data released a few days ago was weak ( total volumes -11% with Asia -15%) – and we see some pressure on FY14 estimates (NE 3.54 v cons 3.64). Valuation 2014 PER 21.4 v spirits ave 17.4x.




Olympics chief hits out at Diageo in row over ban on drink ads


Source: Irish Independent

Cliona Foley

20 June 2013


Olympics boss Pat Hickey lashed out at the manufacturers of Guinness yesterday, saying the company had “no interest” in Ireland.


His attack came in the wake of the drinks giant having to deny a ban on drinks sponsorship could ultimately lead to a reduction in its operations here, despite a warning from its Irish chief at the weekend.


But sports bosses warned the ban of alcohol sponsorship of sports events will result in Ireland and the provinces losing more of rugby superstars to foreign clubs.


Mr Hickey, the Olympic Council of Ireland president, hit out at Diageo in the wake of its strong opposition to the proposed ban on alcohol sponsorship.


Speaking at the Oireachtas Committee on Transport and Communications, Mr Hickey said it wasn’t the position of a multinational company to tell elected officials what to do.


“I thought it was an absolute disgrace to read a report of an international company, Diageo, making an attack on the Irish Government and the Irish State about how they should conduct their business and investment, etc,” he said.


“This is a multinational that has no interest whatsoever in Ireland except they happen to have a product beginning with ‘G’ and they promote that in Irish pubs just to get bigger profits around the world.


“The Government should not accept that kind of carry-on from a multinational,” he added.


Mr Hickey said his views were a personal remark and the International Olympic Committee did not take alcohol sponsorship of any kind.


But Irish Sports Council (ISC) chief executive John Treacy warned that Ireland and the provinces would lose more of rugby superstars to foreign clubs, if the Government goes ahead with its plan to ban alcohol sponsorship from sport.


“Our (Sports Council) budget is ?42m. If you take ?30m (in sponsorship) out of the system it will make a major impact on some of these sports,” the 1984 Olympic silver medallist said at the Oireachtas committee.


And Irish Sports Council chairman Kieran Mulvey agreed, asking: “If we withdraw (drinks) sponsorship in that kind of one fell swoop then is the State going to put the replacement money into the IRFU and FAI and other sporting organisations?


“The answer is it’s not.”




Hogan: Government won’t be dictated to by advertisers in booze sponsorship ban


Source: Irish Independent

Fionnan Sheahan

19 June 2013


Environment Minister Phil Hogan says the Government will not be “threatened” by any company into watering down their ban on alcohol sponsorship of sports events.


The minister’s comments follow opposition from the manufacturers of Guinness to the proposed ban on alcohol sponsorship.


Drinks giant Diageo has denied a ban on drinks sponsorship could ultimately lead to a reduction in its operations here, despite a warning from its Irish chief at the weekend. Diageo, which owns Guinness and controls 40pc of the market, told a Sunday newspaper that a clampdown on sponsorship might force the company to reduce spending in future.


Mr Hogan said the issue of alcohol sponsorship is being discussed within the Government.


“I don’t think the Government will be threatened by individual company,” he said.


The minister said Diageo was already consolidating its business in the country.


Health Minister Dr James Reilly said he stands firmly by his belief the Government should separate sponsorship from alcohol.




MillerCoors to drop “non-core” economy labels, glass bottles (Excerpt)


Source: Just-Drinks

By Andy Morton

19 June 2013


MillerCoors is to shake-up its low-margin beer category as it plans to dump its non-core brands and heavy glass packaging.


The Molson Coors and SABMiller US JV did not specify which labels will go, but said the move will allow it to focus on other economy brands such as Keystone Light and Milwaukee’s Best Light. The company will also expand the Coors Miller High Life and Hamm’s brands, it said during an investors day call yesterday (18 June).


“Our mantra is simplify and amplify,” said MillerCoors’ president & CEO, Tom Long. “This is a great opportunity for us to reduce costs and inefficiencies in our network, and one way of doing that is by eliminating the non-core SKUs.”




United Spirits: Volume growth under pressure


Source: ET

By Ranjit Shinde

20 Jun, 2013


United Spirits, the nation’s largest spirits maker, has been on investors’ radar for some time now. The stock has gained over 30% in the past three months due to expectations of strong synergies after its deal with the UK-based Diageo.


While Diageo’s acquisition of a controlling stake in United SpiritsBSE -0.85 % last November is likely to benefit the company in the long run, the operating woes in the near term will impact its financial performance.


Its March quarter results continued to show pressure on volumes due to a lower offtake in Tamil Nadu. This, together with volatile prices of extra-neutral alcohol, will limit the extent of revenue growth and improvement in profitability.


United Spirits’ volume growth has slowed since the December 2011 quarter following a shift in the policy of spirits distribution in the southern state of Tamil Nadu.


The state’s contribution was estimated to be over 5% to total sales volumes before the change in the policy.


After the new policy was implemented, the growth in volumes fell to less than 5% from above 10% earlier. During FY13, volumes grew by 3%. The company has lost 13% market share in Tamil Nadu so far with a 15% drop in volumes in FY13 over and above the 22% fall in the previous year.


The management does not expect any major changes in the scenario in the near term. This means the overall volume growth may be under pressure even if the company improves volumes of its strategic brands.


On the positive side, the company is on course to gradually improve profitability.


Even though the FY13 operating margin fell 50 basis points to 11.2%, margin for the fourth quarter expanded by 90 basis points to 10.3%.


Besides, interest outgo reduced to Rs 157 crore during the March quarter compared with Rs 163.6 crore a year ago.


The volatility in the price of extra-neutral alcohol, a major input, will be crucial for the operating profitability of the company in the coming quarters apart from the growth in sales volumes.


The company reported net loss for FY13 due to higher foreign exchange loss. Hence, the price-to-earnings ratio will not be meaningful to evaluate the stock. It has increased substantially in the past three months on likely synergies from the Diageo deal.


But, investors need to wait to see signs of major improvement in the company’s performance before making fresh investments.




Hermès challenges LVMH’s ‘illicit’ stakebuilding (Excerpt)


Source: FT

By Scheherazade Daneshkhu in Paris

Jun 19th


Hermès International, the Paris-based luxury goods group, has stepped up the pressure on LVMH, its unwelcome shareholder, by filing a legal compliant aimed at nullifying the derivative contracts that allowed its larger rival suddenly to take a 12 per cent stake.


The maker of silk scarves and Birkin bags has gone on the legal offensive since last autumn, arguing that LVMH’s stakebuilding was “illicit”.


Hermès said on Wednesday that it had lodged a complaint with the Paris commercial tribunal, “with the aim of nullifying the equity swaps used by LVMH to acquire 12 per cent of Hermès’ capital. Hermès has always considered these swaps as having an illicit reason and as an instrument for fraudulent behaviour.”




FDA grants E. & J. Gallo Winery’s request to use color additive in distilled spirits


Source: Agra-Net

Wednesday June 19 2013


E. & J. Gallo Winery, a Modesto, Calif.-based winery, has received the green light from FDA to use mica-based pearlescent pigments in distilled spirits. The ruling goes into effect on July 15.


In March 2012, FDA announced in the Federal Register that Gallo was seeking permission to use mica-based pearlescent pigments prepared from titanium dioxide and mica in distilled spirits containing between 18-23% distilled alcohol by volume but not including distilled spirits containing more than 5% wine on a proof gallon basis.




Eighteen Beverage Licensees Honored at ABL Conference


Source: ABL

June 19, 2013


On June 10, 2013, American Beverage Licensees (ABL) presented the 2013 Brown-Forman Retailer of the Year Awards in Washington, DC.  Eighteen beverage licensees were recognized for their hard work, success and commitment to the retail beverage alcohol industry by ABL President Chuck Ferrar and ABL Conference Chairman David Jabour.  This is the eleventh year Brown-Forman, a leading distilled spirits company, has sponsored the awards.


“Those we are honoring have been leaders in advocacy, business practices, or their state associations,” said Jabour upon presenting the awards.  “They are the shining stars of independent retailers, upholding tenets of responsible service and sales, and community engagement.”   The 2013 winners include:


Wilbur’s Total Beverage,  Fort Collins, CO

Doc’s Eastside Discount Wine & Liquor, Laurel, MD

Boluldercrest Package Store, Atlanta, GA

The Office Lounge & Liquor Store, Livingston, MT

Crehan’s Irish Pub, Belleville, IL

Joe Canal’s, Bellmawr, NJ

Grand & Western Liquors, Chicago, IL

Newkirk Station Liquors & Wines, Brooklyn, NY

Bedrock Liquors, Lafayette, IN

The Vineyards Wine & Spirits, Middletown, NY

Liquor Barn, Lexington, KY

Bottles Beverage Superstore, Mt. Pleasant, SC

B.K. Miller Meats & Liquors, Clinton, MD

Kings Liquor, Fort Worth, TX

Frank’s Den, Glen Burnie, MD

The Village Supper Club, Delavan, WI

Debucas Wine & Liquors, Raynham, MA

Four Winds Liquor & Lounge, Cheyenne, WY

“It is always inspiring to honor successful, compelling entrepreneurs and their businesses,” said John D. Bodnovich, ABL’s Executive Director.  “It is important to recognize independent retailers and what they stand for.  They represent the face of the beverage alcohol industry to their customers, and we are proud to work with Brown-Forman to praise them and their achievements each year.”


The Brown-Forman Retailer of the Year Awards have been presented annually to beverage licensees selected by ABL’s state affiliates.  These beverage retailers, the last to handle licensed products before they reach consumers, work tirelessly to make the American beverage alcohol marketplace the most diverse in the world, offering tens of thousands of products to their customers.  They also provide unique and memorable settings for nearly every social occasion imaginable.


Beverage retailers are also important members of their communities, supporting 1.4 million well-paying jobs and actively engaging in their communities by supporting local charities, participating in local government, and reaffirming their commitment to the safe and responsible sale of beverage alcohol.




ABL Applauds Introduction of Estate Tax Repeal Legislation


Source: ABL

Jun 19th


Bill with bipartisan support would protect family-owned businesses

America’s beer, wine and spirits retailers, many of whom are multi-generational family businesses, applauded the re-introduction today of the Death Tax Repeal Act of 2013 (S. 1183, H.R. 2429).  The legislation, introduced in the House and Senate, would fully repeal the federal estate tax or, as it is commonly known, the death tax, a goal that ABL and its members have long supported.


With a host of bipartisan cosponsors, Senator John Thune (R-S.D.) and Representative Kevin Brady (R-Texas) introduced their bill to put an end to a punitive tax on family businesses that arrives with the death of an owner.  The bill is almost identical to legislation introduced in the 112th Congress that garnered the bipartisan support of 223 Representatives and 38 Senators.


“ABL will continue to actively engage with members of Congress on the estate tax, working toward the association’s long-stated goal of permanent repeal,” said ABL Executive Director John Bodnovich.  “We took a step forward last year to stave off devastating automatic estate tax increases, and we are now ready to take the next step to protect family-owned American businesses.”


Last year, ABL supported the provisions in the American Taxpayer Relief Act of 2012, including a $5 million estate tax exemption, indexed for inflation, permanent lower tax rates and provisions for spousal transfer and stepped-up basis.


Following the introduction of today’s legislation, ABL sent letters of support to both Representative Brady and Senator Thune, noting that their efforts “will help multigenerational bars, taverns and package liquor stores keep their identities as truly local small businesses, and help them grow to meet their customers’ needs.”


As a member of the Family Business Estate Tax Coalition (FEBTC), ABL also cosigned letters to each of the sponsors, thanking them for their leadership on this issue.


For more information about repealing the federal estate tax, visit




New Organization Gives Voice to Interests of Wine Consumers


Newly launched American Wine Consumer Coalition (AWCC) arises from the frustration of consumers and their Interests being ignored by lawmakers and alcohol industry


Source: PR Web

Jun 19th


Lawmakers, the alcohol trade and the media are not accustomed to hearing from the consumer when issues of access to wine are discussed and that needs to change.


Given the lack of representation of wine consumers, it should be no surprise that when states revise their laws concerning access to wine, beer and spirits, consumers are left out of the conversation. Meanwhile, new laws and regulations represent the interests of the alcohol beverage trade, not the consumers. Today, with the founding of the American Wine Consumer Coalition (AWCC), wine consumers are given a voice.


The AWCC website is located at:


The American Wine Consumer Coalition is a non-profit 501c4 organization dedicated to representing the interests of the nation’s wine consumers in state houses, on the federal level, and with state alcohol regulatory commissions-all institutions where consumers have never before had representation nor a voice in deliberations concerning consumer access to wine. Additionally, the AWCC provides its members with a variety of benefits to aid them in their wine appreciation and education, from discounts on wine education, wine journals and wine accessories to access to wine events across the country.


“In 2011 Congress held hearings on a bill (HR 1161) that, if passed, would have fundamentally and negatively impacted consumer access to wine, yet not a single consumer was invited to testify before Congress,” notes AWCC President David White. “While this was not the first nor the last time those most impacted by these kinds of deliberations were shut out of the conversation, this is when it became clear to a number of wine consumers across the country that their voice is ignored, and that something needed to change.”


Today, numerous states block consumer access to wine and the ability of consumers to enjoy a simple bottle as a result of a variety of archaic and protectionist laws that serve special interests, but not the basic interests of wine consumers:


11 states still ban their residents from having wine shipped to them from out of state wineries.


36 States still ban their residents from having wine shipped to them from out of state retailers


17 States still ban its residents from buying wine in grocery stores


4 states ban the purchase of wine on Sundays


2 States control the sale of wine, rather than allowing its residents to buy their wine in a free and open marketplace


15 states ban their residents from bringing a bottle from home into a restaurant.


Among the issues that are high on the AWCC’s agenda are legal consumer access to wine via direct shipment, grocery store wine sales and privatization efforts that take the government out of the business of selling wine and putting it into the hands of the much more responsive free market.


“Lawmakers, the alcohol trade and the media are not accustomed to hearing from the consumer when issues of access to wine are discussed,” said White. “That needs to change. It’s simply irresponsible and unfair to continue down the road of ignoring wine consumer interests and looking out only for those members of the industry who have long gamed the system in their favor.”


Wine Consumers across the country can learn more about the American Wine Consumer Coalition at its website: An annual membership brings with it the knowledge that a real voice for wine consumers is being supported as well as a number of benefits that will aide wine lovers in their wine appreciation. Annual consumer membership is $35.00.




Chateau Ste. Michelle’s 2012 Riesling a record 1.2 million cases (Excerpt)


Source: Great Northwest Wine

By Andy Perdue

June 18, 2013


Already the world’s largest producer of Riesling, Chateau Ste. Michelle stepped up its game in 2012 to craft more Riesling than ever.


In fact, Washington’s oldest winery made a cool 1.2 million cases of Riesling from last fall’s record harvest.


“That’s a lot of Riesling,” said Bob Bertheau, Chateau Ste. Michelle’s head winemaker.


Here’s how Chateau Ste. Michelle’s Riesling breaks down in 2012:


Riesling, Columbia Valley: 898,000 cases

Harvest Select Riesling, Columbia Valley: 210,000 cases

Dry Riesling, Columbia Valley: 80,000 cases

Eroica Riesling, Columbia Valley: 31,000

Cold Creek Riesling, Columbia Valley, 4,600 cases


That’s 1,223,600 cases of Riesling. And this does not include 70,000 cases just released under the nationally distributed Anew Riesling or anything from Snoqualmie Vineyards or Columbia Crest, which last year combined for another 100,000-plus cases of wine.




New investor group acquires Rotta Winery in California


Source: DBR

20 June 2013


A new investor group comprising wine entrepreneur Jason Shorrock, the founding Giubbini family, and a private investor have acquired Rotta Winery of California for an undisclosed amount.


The purchase includes 35-acre estate winery and vineyards, the tasting room and the business, and the winery will now be operated as Rotta Winery LLC.


Located in Templeton, California, Rotta Winery is known as one of the major direct-to-consumer focused wineries in the Paso Robles area.


Established in 1908, the winery produces ultra-premium wines from grapes grown on its 20-acre vineyards containing Cabernet Sauvignon, Cabernet Franc and Zinfandel, and grapes purchased from local growers.


Shorrock, who will serve as managing partner of the new business, said Rotta’s distinction as the oldest, continuously operating winery in the Paso Robles, its prime west side location and its heritage attracted them to this opportunity.


“Rotta’s reputation for premium quality wines coupled with a history rooted in family traditions offer the authenticity that wine consumers are increasingly looking for in a wine brand,” Shorrock added.


“Our focus will be to tell the many stories that have not been told yet, with the goal to make Rotta one of the true thoroughbreds of the AVA.”


Rotta Winery owner and winemaker Mike Giubbini, who will work with Shorrock, said the wine business today requires marketing and financial resources that, as a small winery, Rotta was no longer able to afford on its own.


“I believe that Jason Shorrock is the right person to take Rotta to the next level. After building his career at the LVMH Group (Moet Hennessy Louis Vuitton) and discovering the potential of Paso Robles during his stint as General Manager at JUSTIN Vineyards & Winery, Jason has the credentials to successfully lead Rotta into its next era,” he added.


Henberger served as exclusive advisor to the Giubbini family in the transaction.




Burger Chain Johnny Rockets Sold To Sun Capital Unit


Source: Law 360

By Jeff Sistrunk

Jun 19th


A Sun Capital Partners Inc. affiliate has purchased 1950s-themed burger chain Johnny Rockets Group Inc. for an undisclosed amount, the private equity firm said Wednesday.


Florida-based Sun Capital said it reached a deal this month to buy the 300-location chain from Virginia-based Red Zone Capital Management LLC, the private equity firm co-founded by billionaire Washington Redskins owner Daniel Snyder.


Terms of the deal were not disclosed.


Johnny Rockets spokeswoman Cozette Koerber said investment bank North Point Advisors first met with Red Zone and Johnny Rockets in October and initiated a sales process shortly thereafter.


“We had a lot of interest, and lot of presentations, and we’re thrilled by the deal with Sun Capital,” Koerber said.


Kenneth Alberstadt of Akerman Senterfitt LLP, who served as lead attorney for Red Zone, said his firm was equally excited about the successful transaction.


“We were thrilled to be part of Red Zone’s success with Johnny Rockets and to complete another significant transaction in the restaurant space, where Akerman remains intensely focused,” Alberstadt said.


Johnny Rockets, which is headquartered in Aliso Viejo, Calif., has 300 corporate and franchise-owned restaurants in 30 states and 16 countries. The chain generates annual revenues of more than $300 million.


Koerber said Sun Capital had expressed an interest in continuing Johnny Rockets’ trend of domestic and international expansion.


“They look at us as a growing company, and they’ve encouraged us to continue that pattern of growth,” Koerber said.


Red Zone bought Johnny Rockets in February 2007. The acquisition came on the heels of other high-profile endeavors undertaken by Snyder, including the July 2006 launch of three sports radio stations in Washington and an ill-fated 2005 investment in amusement park company Six Flags Entertainment Corp.


Sun Capital, a privately held investment firm focused on leveraged buyouts, equity, debt and other investments, is no stranger to the food service industry. Other restaurant chains in the firm’s portfolio include Captain D’s, Fazoli’s, Boston Market and Friendly’s.


Red Zone is represented by Akerman Senterfitt LLP. North Point Advisors served as financial adviser to Red Zone and Johnny Rockets.


Counsel information for Sun Capital was not immediately available.





Nebraska: A Dry Reservation Clashes With Its Liquor Store Neighbors


Source: NPR

June 19, 2013


At the Pine Ridge Reservation just outside the town of Whiteclay, Neb., an upside-down American flag flies on a wooden pole next to a teepee. About 60 people gathered here Monday to protest as beer truck drivers unloaded cases into a Whiteclay liquor store a few hundred yards away.


Whiteclay has one paved street and four liquor stores. Alcohol is banned on Pine Ridge, but alcoholism is rampant here and the unemployment rate hovers around 80 percent. The town sells the equivalent of about 5 million cans of beer annually – mostly to impoverished tribal residents. Homeless Native Americans who drink and sleep in Whiteclay can outnumber town residents.


The protesters want to block further alcohol deliveries, and are using blockades and marches like this to try to curb beer sales.


A Protest Escalates


Oglala Sioux Tribal President Bryan Brewer is among the protesters. “As leaders we should be ahead of the people,” he says. “We need to support our activists who are stepping up and confronting this issue.”

Beer delivery truck drivers wait in Whiteclay on Monday as protesters block their way. Liquor stores in the town sell millions of cans of beer annually to residents of the reservation.


Sheridan County Sheriff Terry Robbins confronts the blockade, and Brewer steps up. He says the beer trucks “are not going in today. … Any other day, but not today.”


“Yes, they are,” the sheriff replies.


“I’m sorry, but they’re not,” Brewer says. “Don’t argue with me.”


Brewer is ultimately arrested. As the crowd resists, an officer puts a stun gun to a protester’s neck, and the conflict quickly escalates into shouting and shoving.


Brewer remains calm and tries to pacify those around him. He is charged not for blocking traffic, but for an outstanding warrant on a bad check. Jamian Simmons, the county prosecutor, says the charges were dropped once Brewer made good on the check.


While Monday’s conflict passed without major violence, Simmons says that wasn’t the case during a similar blockade last month.


“[The protesters] used axes and sledgehammers to smash up the [delivery] trucks,” she says. “There were threats made to the drivers that if they came back to Whiteclay, they would be killed. Individuals were flashing knives.”


Protesters argue that attacking delivery trucks is not an act of violence. They also accuse a liquor store owner of arming local thugs with baseball bats to intimidate them. Store owners and beer distributors refused to comment for this story.


Protests against alcohol deliveries are a recurring event in Whiteclay. Authorities have accused the protesters of vandalizing beer trucks, while activists say a liquor store owner has hired people to intimidate them.


Putting Prohibition To A Vote


As the protest on the Whiteclay-Pine Ridge border continues, the tribal council approved a permanent checkpoint at the border to try to stem the flow of liquor onto the reservation.


But the council is also putting prohibition itself up for a referendum. Council member Robin Tapio backs efforts to legalize alcohol here. “Alcohol is a choice that we make,” she says. “So I did not support the [protest] up there because I just don’t feel it’s right.”


Protest leaders like Olowan Martinez harshly criticize council members who want to allow alcohol on the reservation. “They’re cannibals because they want to profit,” she says. “They want to gain something off of the misery of their own. To me that’s a form of cannibalism.”


Strong words that underscore the strong feeling here. Following council president Brewer’s arrest, Martinez and others maintained the blockade and the beer trucks eventually turned away.


Protesters may have won the battle this week – but the beer trucks are likely to roll into Whiteclay again, and this conflict shows few signs of ending soon.




Washington: Men charged with stealing $16,000 of liquor since privatization


Source: Komo News

By Michael Harthorne

Jun 19, 2013


According to the King County Prosecutor’s Office, four young men wasted no time taking advantage of privatized liquor sales, stealing nearly $16,000 worth of hard alcohol starting the day after it became available in grocery stores.


The Prosecutor’s Office has charged 21-year-old Charles Askew of Tacoma, 21-year-old Devonte Jack of Kent, 20-year-old Darren Dean of Renton and 22-year-old Blake Kirvin of Seattle with conspiracy to commit organized retail theft in connection with at least 16 cases of shoplifted liquor.


According to probable cause documents, a loss prevention manager at Albertsons has been collecting cases involving the four men, along with a fifth named Dirkston Gonzales, that occurred throughout King, Pierce and Snohomish counties since June 2012.


The first theft for $300 was reported June 2, 2012 at a Top Foods in Federal Way, only one day after private liquor sales started.


According to probable cause documents, Askew, Jack, Gonzales and Dean were arrested following their second theft of $1,010.66 worth of liquor from the same Top Foods June 3, 2012. Officers reportedly found 16 bottles of stolen liquor and two stolen guns in the Tahoe being driven by the men.


Surveillance footage showed all four men seemingly nonchalant about the theft and not caring if they got caught, according to the documents. And, Gonzalez reportedly admitted to stealing the liquor.


Only a month later, the men were back at it, stealing $454.89 worth of liquor from an Albertsons in Tacoma, according to the probable cause documents.


Eleven thefts followed over the next two-and-a-half months, with the men reportedly hitting Albertsons, Safeways and QFCs in Redmond, Maple Valley, Sammamish, Mercer Island, Woodinville, Duvall and Mountlake Terrace.


According to probable cause documents, the men would steal dozens of bottles of liquor at a time. The largest reported theft was worth $3,764.


On Sept. 22, 2012, officers stopped Kirvin, Jack and Gonzales on their way out of a Mill Creek Safeway. Kirvin and Jack had liquor bottles concealed on them and Gonzales had dropped a basket of unpaid-for alcohol near the store’s door, according to probable cause documents.


The three men were arrested, and the Tahoe was again searched, reportedly revealing 74 bottles of liquor.


A final theft of $420.19 worth of liquor was reported at an Issaquah Safeway Oct. 19, 2012 involving Gonzales and two unidentified men.


All four men being charged with the liquor thefts have prior convictions.


Askew was previously convicted for criminal attempt and theft.


Jack has eight prior convictions for theft, vehicle prowl and obstructing a police officer.


Dean has prior convictions for carrying a concealed pistol, malicious mischief, criminal trespass and theft and has had five warrants issued for his arrest since 2012.


Kirvin has prior convictions for firearm possession, controlled substance violation and resisting arrest. He has had three warrants issued for his arrest since 2009.


The four men are scheduled to appear in court June 27.


Gonzales is already being charged for other crimes in Kitsap County. His alleged involvement in these liquor thefts was being rolled into that case.




China: Thanks to a new trade deal, China could up its tequila intake by 2400% in five years


Source: Quartz

By Roberto A. Ferdman

June 19, 2013


Chinese consumers love luxury products, but they drink crummy tequila. At least until now. Earlier this month, China’s President Xi Jinping and his Mexican counterpart Enrique Peña Nieto signed a bilateral trade agreement that will allow Mexican imports of 100% agave tequilas (Spanish link) into China for the first time since 2008.


China banned high-end tequilas in 2008 because of the relatively high methanol levels found in tequila made with 100% agave (methanol is a small byproduct of the agave distillation process). It was part of a bigger legislative move to address the rising incidence of methanol poisonings in the country, many of which had been caused by the consumption of fake alcohols, often made with toxic amounts of methanol. The country has, however, continued to let in lower-end tequilas, or tequila mixtos, which only contain 51% agave, and therefore less methanol.


The influx of high-end tequilas into China could be a big win for the Mexican tequila industry, which has failed to penetrate the Chinese market partly because its consumers aren’t aware of the product. At the moment, China imports less tequila than any other major spirit. “Most people don’t even know what tequila is, and that’s a big problem,” Patricio de la Fuente Saez, managing director of Hong Kong-based wine importer Links Concept, told Quartz. Chinese consumers tend to go for luxury goods that boast global prestige, director of corporate communications at Patron Greg Cohen told Quartz. They appreciate “quality” and “sophistication,” he says.


With a little consumer education, Chinese drinkers could become prime targets for the beverage. According to Patron’s Cohen, Chinese tourists are already plucking high-end tequila from duty free shelves abroad. “Our duty free partners have told us that Chinese tourists are a huge part of our consumers.” Chinese drinkers are also fans of hard liquor, which makes up 60% of the country’s alcohol consumption. Ninety-five percent of that hard alcohol intake is baijiu, a locally distilled white spirit that, like tequila, is consumed in a shot.


Despite the long-held ban on high-end tequilas, low-end tequila exports to China have grown more than four-fold since 2008. And there’s more room to grow. The country still only imports a modest 400,000 liters of tequila a year, but the president of Mexico’s national tequila industry chamber Francisco Soltero believes they will grow to 10 million liters in five years, assuming China’s wealthy latch on to 100% agave.


In that scenario, China would go from being the world’s 23rd largest tequila importer to its second largest in five years. And tequila would supplant whisky and cognac (brandy) as China’s hard alcohol of choice.


Even then, China would rank far below the world’s biggest tequila guzzler: the US. Americans bought $625 million in Mexican tequila last year, nearly 400 times as much as China. Even quintupling China’s tequila imports would only amount to a fraction of all those American tequila shots.




Smoking: Plain packaging war smoulders


Source: FT

By Rose Jacobs

Jun 19th


When James Reilly, the Irish health minister, announced in May that he would introduce legislation next year requiring that cigarettes be sold in packets bearing no more decoration than a brand name and a health warning, stocks in tobacco companies stumbled. This was despite the fact that Irish smokers contribute just a tiny fraction to the industry’s revenues.


Yet supporters of such a law say this was the rational market recognising what antismoking groups have been arguing for years – well before 2012, when Australia introduced the world’s first plain-packaging law – that standardised packets would significantly reduce the number of people who take up smoking, continuing a drive that television and radio advertising bans started several decades back, and which public health advocates say has saved millions of lives.


But the tobacco industry is adamant that the law will have little impact on the incidence of smoking – and might even increase tobacco use, since plain packaging is likely to reduce pricing power.


Moreover, the industry’s executives and lobbyists insist, plain packaging will make life easier for black-marketeers, providing oxygen to a seedy network of smugglers, robbing government coffers of duties and endangering smokers by allowing unregulated counterfeit products to seep into the market.


The world’s four biggest tobacco companies – British American Tobacco, Imperial Tobacco, Philip Morris and Japan Tobacco – challenged the Australian law domestically, and lost. Philip Morris is pursuing a separate case in Hong Kong, and Ukraine and Cuba are battling the legislation through the World Trade Organisation. But whereas some countries, such as New Zealand, are awaiting the outcome of the WTO challenges before following in Australia’s footsteps, and others, such as the UK, have indicated plain packaging is not a priority, Mr Reilly’s decision in Ireland shows that legal wrangling might not stem the tide of countries deciding to follow suit.


The appeal of standardised packets, says Mark Costigan, the Irish health minister’s spokesman, is that while smoking bans in bars, restaurants and workplaces have had quick and demonstrable success in reducing second-hand smoke exposure, plain packaging offers a chance to chip away at the stubbornly steady number of young people who continue to smoke.


There is not yet strong evidence from Australia that standardised packets reduce smoking, but Deborah Arnott at Ash, the UK antismoking group, argues it is early days yet. “Fifteen- and 16-year-olds have had 14 years of seeing cigarette packs. The impact will grow over time.” Moreover, evidence linking advertising and smoking incidence is abundant. A 2008 report from Cochrane, a scientific review group, looked at nine studies measuring the relationship and found that “non-smoking adolescents who were more aware of or receptive to tobacco advertising were more likely to become smokers later”. And in the US, the number of Americans who smoke nearly halved in the three decades following a 1970 ban on cigarette advertisements on TV and radio advertising.


Of course, other measures also contributed to that decline, and governments facing the steep costs associated with nearly 6m smoking-related deaths a year – forecast to rise to 8m by 2030 – are considering all the levers. The European Parliament is weighing the adoption of an updated Tobacco Products Directive that would not impose plain packaging but instead increase the size of health warnings, ban flavoured tobacco and prohibit products with higher-than-average toxicity or addictiveness. Private insurers, meanwhile, have long offered monetary incentives for customers to give up smoking, in the form of lower rates.


Martin Deboo, a tobacco analyst at Investec Securities, argues that the best way to reduce smoking is to increase the price of tobacco products. But in countries such as the UK, that measure is reaching its upper limit.


That might leave public health authorities in developed countries scrambling for new ideas, and balancing health with civil liberties as they weigh bans on smoking at home, for example, or when children are in the car.


But the developing world, which is home to the majority of the world’s 1bn smokers, has more room for improvement. “Smoking rates will go up as incomes go up, and you’ve got this industry promoting its product very heavily … in the countries where incomes are rising rapidly,” says Ms Arnott. “That’s where the battle will be fought.”

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Liquor Industry News 6-19-13

June 19, 2013

Franklin Liquors


Wednesday June 19th 2013

Biodynamic ROOT Day

STILL A Great Night To Dring Wine And Watch Bruins!!


Pennsylvania: McIlhinney Plan Makes Major Changes to Liquor Bill


Source: Politics PA

Written by Carl Feldman, Contributing Writer

Jun 18th


If you can’t beat ’em, undersell ’em.


Senator Chuck McIlhinney (R-Bucks) unveiled his amendments to Senate Bill 100 Tuesday, making substantial changes to the law passed last March by the House.


His plan would not immediately sell off the Commonwealth’s 621 retail stores. Instead, he would create new licenses and allow other retailers to compete with the state stores.


Closure those decisions will be left up to the Liquor Control Board who over the next two years could determine which stores to close based on their sustainability.


“The only formula for cutting stores is the LCB determining if the private sector fills the demand,” said McIlhinney, who chairs the Senate Law and Justice Committee.


McIlhinney said he differed from Governor Tom Corbett and House Majority Leader Mike Turzai – who wanted the state system to be sold immediately – because he believes Pa. can get more for its money. He previously said he would have voted against HB790, the House’s liquor bill.


He had backup.


“If we were board members of a corporation with those valuations at that price our stockholders would sue us,” said Senate President Pro-Tempore Joe Scarnati (R-Jefferson).


Scarnati and McIlhinney said that the system may be worth far more than the current estimated $550 million, given the amendment’s provisions for the continuation of the state liquor wholesale system for the next two years.


McIlhinney’s proposal also does away with bidding for state liquor licences. The new legislation provides for the payment of an annual fee paid by the licence holder which varies depending on the services the license holder is licensed for.


The new licensing fee regimen makes it $8,000 for a wine and spirits license, $4,000 for wine or spirits, and $2,000 for specialty spirits.


“We heard most from existing licence holders and hear most about maintaining the value of their licence,” he said.


With the price of a liquor license bidding up into the hundreds of thousands in some locations, the new fees in many places will be a major drop in cost. McIlhinney said that those lost revenues will be recouped by increased sales.


Store hours would increase from the current closing time of 9pm to 11pm and would be able to be open on Sundays. Sales in grocery stores would be permitted, and could be purchased at any register, but the store must continue to have a license for consumption and seating accommodations. There is package reform allowing for restaurants, hotels, and eating places to sell up to four six packs, or two twelve packs.


The amendments would also eliminate the Johnstown Flood Tax, the 18% tax on all wine and liquor sales and put all excess revenue from the previous year into a fund for property tax freeze on senior citizens.


When asked if he had the votes needed to pass through the Senate, McIlhinney responded, “I have enough votes to get it out of my committee.”


Senate Majority Leader Dominic Pileggi (R-Delaware) said they did not currently have the 26 votes needed to pass the Senate but did offer his support.


“Senator McIlhinney has done a great job and this is an excellent starting point.”


This sentiment was echoed by Governor Tom Corbett in a statement released after the press conference.


“Senator McIhinney’s legislation is another important step in giving Pennsylvanians what they want: choice and convenience,” he said.


If Senate Republicans want to deliver a bill to the governor’s desk before the summer recess though they will need to work quickly. Only 12 days remain in the current session.


Senate Democrats remain unified in their opposition to the Republican’s plan in a statement from Senator Jay Costa’s (D-Allegheny) office, also released in response to McIlhinney’s announcement.


“The plan offered by Senator McIlhinney confuses the issue and raises significant questions about lost revenues and wine and spirits expansion into to tens of thousands retail outlets without control,” he criticized.


Costa wasn’t alone. Capitol police had to empty the room prior to the event and agreed to readmit only 10 of the UFCW 1776 workers who sought to protest the measure. The union represents state store employees.


McIlhinney also took a shot from Matt Brouillette, President & CEO of the conservative Commonwealth Foundation think tank and a strong supporter of privatization.


The plan, “falls short in delivering the convenience, selection, and pricing that Pennsylvanians demand,” Brouillette said.


“His proposal, which keeps the state-owned and operated liquor stores as well as the government-run wholesale monopoly of wine and spirits cannot be considered privatization.”




Pennsylvania: Highlights of Sen. Chuck McIlhinney’s liquor privatization plan


Senate liquor plan Sen. Chuck McIlhinney, R-Bucks, describes how his liquor privatization proposal would generate money for the state.


Source: Patriot News

Jan Murphy

June 18, 2013


Sen. Chuck McIlhinney, R-Bucks County, unveiled a liquor privatization plan today that would allow beer distributors to sell six-packs and the 14,000 current licensed establishments the opportunity to buy expanded permits to sell wine and/or spirits.


It also proposes directing money made off these changes to freezing senior citizens’ property taxes, funding rape crisis and domestic violence programs, and establishing a Safe Ride Home grant program.


McIlhinney was joined by Senate Republican leaders in announcing the plan at a Capitol news conference. Senate Majority Leader Dominic Pileggi, R-Delaware County, admits the Republicans lack the 26 votes needed to pass the plan out of the Senate now but will work on rectifying that.


The following are some highlights of his plan:


Allow delis and eateries to get a licenses to sell up to 4 bottles of wine for off-premise consumption and sell wine for on-premise consumption.


Allow beer distributors to obtain licenses to sell wine and/or spirits in any quantity or size.


Allow restaurants and hotels to obtain permits to sell up to four bottles of wine and up to two bottles of spirits.


Allow for specialty shops to open selling one specific kind of spirits.


Sets annual license fees of $2,000 for specialty shops; $4,000 for wine or spirit licenses and $8,000 for wine and spirit permits. There would be no upfront fee.


Establish consistent hours for liquor sales from 8 a.m. to 11 p.m. and Sunday hours.


Allow restaurants, hotels and delis to sell up to four six-packs or up to two 12-packs.


Allow for direct shipment of wine to people’s homes.


Eliminates the 18 percent Johnstown Flood tax on wine and spirits.


Requires the PLCB to order whatever product a license holder wants.


Removes the requirement for grocery stores that have a restaurant license to maintain a separate checkout for beer, wine or spirit purchases.


Gives an 18 percent discount on wholesale wine and spirit purchases to licensed establishments, allowing them to sell those products at a lower price than state stores.


Authorizes the PLCB to close state stores not deemed profitable over the next two years when a study would be done to evaluate the impact of divestiture of the wholesale and remaining retail system on the commonwealth’s finances.




Beverages: Keeping an Eye on CPI


Source: CITI

Jun 18th


Alcoholic Beverage Prices Were Up Again – The CPI for Alcoholic Beverages (Off-Premise) increased 1.2% in May, and has shown a ~1% increase for thirteen consecutive months, dating back to May 2012. The CPI for Alcoholic Beverages (On-Premise) increased 2.2% this month, down from the 2.6% increase seen in the previous month. The CPI for Beer (Off-Premise) increased 1.3% this month, just below the 1.4% increase seen in the prior month. The CPI for Spirits (Off-Premise) was up 1.2% this month, above the 0.9% increase seen in April. The CPI for Wine (Off-Premise) increased 1.0% in May, below the 1.3% increase seen in April.




MillerCoors Updates Earnings Outlook, Mix Aims


Source: Stifel

Mark D. Swartzberg

Jun 19th


In its analyst meeting Tuesday afternoon, MillerCoors (42% owned by Molson Coors, 58% owned by SABMiller) upped its view of anticipated revenue and EBITA growth over the next three to four years, saying it targets volumes averaging flat to down 1% annually (was down 1%-2% annually), revenue per barrel averaging up 2%-4% annually (was up 2%-3%), and EBITA margin expanding 30-60 bps annually (was up 25-50 bps annually).


We consider management’s revenue outlook sound since the price/mix assumption is supported by ABI’s aims and effectiveness and the volume target anticipates continuing contraction of share in a category we expect to be flat to slightly up. We also continue modeling weaker volume this year – down 2.5% – given 1H trends and 2H comparisons and reiterate our 12 month target of $60 per share.


The company emphasized plans to defend share, mainly by moderating declines of Miller Lite, sustaining growth of Coors Light, and increasing mix of Blue Moon, Leinenkugel, Redd’s, Third Shift, and other above-premium brands.


Management also plans to extract costs from its economy portfolio by eliminating non-core brands and reinvesting behind core economy brands (e.g. Keystone Light, Miller High Life). Additionally, PET packages will be rolled out in place of glass for large-format singles, reducing breakage and freight costs (a case of 40oz PET bottles weighs 12lbs less than glass).


Our Molson Coors estimates are in-line with MillerCoors management’s revenue view, and we anticipate the equivalent of approximately $0.08-$0.12 more annual EPS than that implied by MillerCoors’s management’s margin outlook, or 2%-3% of our 2014E EPS. We leave our estimates unchanged given the size of the difference and potential upside from other sources (e.g., wholly-owned cost-cuts announced last week, slightly ahead of our model).


We reiterate our Buy rating and $60 price target (13.0x 2014E EPS of $4.36). TAP shares are at a larger discount than usual to their Staples peers (e.g. P/E relative to the S&P 500 Consumer Staples Index reflects a 12-16% discount to the three-year, five-year median), and we view deleverage and continuing improvement in Europe (volume positive year-to-date through April, likely through May too) as catalysts for the shares.


Target Price Methodology/Risks


Our 12-month target is $60 per share, or 13.0x 2014E EPS of $4.36.


Risks. Canada lost share to value brands in 1Q and was weak in April. We believe our reduction of Canada volume and profit estimates after 1Q reflects this pressure, but it could be greater than anticipated.




SABMiller to get bite of Kopparberg Brewery apple


Source: BD Live

by Zeenat Moorad

18 June 2013


SABMILLER, the world’s second-largest brewer by volume said on Tuesday it had entered into a co-operation agreement with Kopparberg Brewery for the long-term licensing of Kopparberg cider products.


This is in line with the global brewing giant’s aim to grow its categories, particularly in developing markets.


“All Kopparberg cider products, including Pear and Naked Apple, will be available for distribution, and the co-operation will take place in various markets where Kopparberg does not have an existing interest,” SABMiller said.


Sweden-based Kopparberg Brewer distributes to more than 40 countries worldwide.


“As one of the largest cider producers in the world, I see this collaboration as something very positive and I am confident that together with SABMiller will continue to develop the cider market in the world,” Kopparberg Brewery CEO Peter Bronsman said.


The first SABMiller operation to sign a local distribution agreement is Australia, and others will follow in the coming months, the maker of Miller Lite, Grolsch and Peroni said.


The Kopparberg brand is already available in South Africa.


Cider of Sweden South Africa, which trades as Kopparberg South Africa is the official distributor of Kopparberg in the country.


“We launched two of the variants in Johannesburg and Cape Town. We are about to launch into KwaZulu-Natal,” Kopparberg South Africa general manager Gavin Schorn said.


In May, SABMiller said it would continue to develop and differentiate its beer and soft drink brand portfolios, “leveraging local insights to bring the right products to each market and capture value”.


As tough economic conditions prevail in the mature beer markets of Europe and the US, SABMiller reported a 10% increase in group revenue to $34.5bn for the financial year to March 31, benefiting from African and other emerging markets where it earns about 75% of its profit.


Earlier in 2013, its Chinese joint venture, China Resources Snow Breweries agreed to buy the brewery of Chinese beer maker Kingway for $864m (R7.6bn).


The deal, which included Kingway’s production and sales business, as well as seven breweries is meant to bolster CR Snow’s market position in the booming Guangdong region and add scale and market presence in other cities.




Quick Note – Molson Coors (TAP US, Buy) – Raised guidance from MillerCoors


Source: Nomura

June 19, 2013


European Beverages

Stock Rating: Buy

Target Price: USD 61.00

TAP.N (USD 49.99)

Ian Shackleton – NIplc


The message from the MillerCoors investor day was similar to that from MolsonCoors’ own event last week – cost cutting/margin targets ahead of our estimates, a strong message on investing in innovation and brands, a business model which is adapted for the “small is beautiful” trend in beer, an upbeat management team. Although Q2 volume is likely to be weak, both for MillerCoors as well as for MolsonCoors, we continue to believe that our FY13 EPS estimate looks robust. We continue to see a story where the shares can rerate from current 11.4x FY14 PER towards 14x, still at a discount to the beer average of c.16x; this supports our TP of USD61.


Positive tone from MillerCoors investor day

MillerCoors (joint venture between SABMiller and MolsonCoors) hosted its US investor day in New York yesterday evening. Although the basic planks for growth are very similar to those set out in the last investor day in December 2011, the mood from within the company has changed remarkably, which would appear to reflect a much improved Q1 performance, ahead of competitor AB Inbev, and not far behind the total US beer industry. For SABMiller US now represents c.12% of EBIT, but for MolsonCoors it was 46% of EBIT in 2012


Guidance revised upwards

MillerCoors has revised up some of its three-year medium-term guidance; it now expects volumes to be flat to -1% (v previous negative

-1-2% in short term); price/mix +2-4% (v previous +2-3%) and margin guidance now +30-60% pa (v previous +25-50bp). In December 2011 the company described the industry as facing a “volume challenge like never before” and particularly mentioned the threat from other alcohol (wine and spirits); now the company expects beer industry volumes to be flat to slightly up but with the company losing some share due to its mix. For cal 2013 we assume MillerCoors volume declines -0.4% v a flat market, price/mix +3% (midpoint of new guidance) and margin growth of 20bp (now looking very conservative below the medium-term range).


Cost savings programmes evolving

Since its formation in 2008, some $900m cost savings have been achieved, with $127m in the last five quarters. Integration of IT systems (from legacy Miller and legacy Coors) is still a factor but company emphasised further saving programmes on energy, standardisation of packaging and on logistics. At its own investor day last week, MolsonCoors set cost savings targets for its 100%-owned businesses; excluding Millercoors, co is targetting USD40-60m pa over five years (total USD200-300m) with a runrate at the top of this range over the first three years (say USD50-60m). Including the share of Millercoors, this means that in years 1-3, the total savings should be at least USD60-70m pa, well ahead of our modelling. Co accepts that some of this will be reinvested; the historic reinvestment rate was c.60% and we think it should be similar in future. However, this does indicate 40% will fall to the bottom line. These programmes start in 2013, and we believe that the benefit will build over the quarters (Q1 had minimal benefit).


Wholesaler and customer relationships building

The company remains committed to working through third-party wholesalers in the US. Company indicated a new working relationship with its top seven wholesalers (accounting for 17% of volumes), as well as a new customer focus on independent small formats where competitor AB Inbev has traditionally been strong.


Increasing focus on above-premium

In 2012 above premium accounted for 7% of MillerCoors volumes v 30% for the industry, with 5% in craft v industry 9%, 2% in imports v industry 13% and under 0.5% in speciality v industry 8%. However, with the Tenth and Blake separate sales structure now in place for c three years, we see this helping improve the weighting to above premium, with company aiming to be more in line with the industry by 2016.  Key drivers here will be key brand Blue Moon (now nearly 2m barrels), Leinenkugel, Crispin cider, Peroni import beer and Batch 19. However, company is also now developing more “mass” brands like Redds and Third Shift which tend to price index at 100-150, whereas much craft indexes over 150.


Premium light – aim to keep overweight position

With 57% of volumes in premium light v industry at 35%, company will seek to remain overweight in this segment as it overindexes in profit (63%). Miller Lite has continued to decline especially in the ontrade where it is traditionally strong (29% of volumes); however, Coors Light is aimed to grow current share from 8.2% to 10% of total market.


Economy – reducing SKU’s

With 31% of volumes in economy v industry 24%, company aims to reduce SKU’s where it has 3x more than AB Inbev but 30% less overall sales. Company will seek to simplify its portfolio over the next three years.




Quick Note – Carlsberg (CARLB DC, Buy) – Innovation / R&D investor event


Source: Nomura

June 19, 2013


European Beverages

Stock Rating: Buy

Target Price: DKK 720

CARLb.CO (DKK 512)

Ian Shackleton – NIplc


Despite the recent weakening of the RUB vs Euro (potentially taking c.1% off EPS), we see FY13 guidance of EBIT before special items of “around DKK 10bn” as still realistic. We believe that current trading has been mixed in Q2 given poor weather in parts of Europe (GB and France, although better weather in Scandinavia and Russia) as well as continued volatile Russian beer production data in early Q2. Although we see scope for a re-rating of the shares as concerns over Russia abate, it may be that Q2 reporting (due 21 August) is not a key catalyst.

Valuation – 2014 PER 12x v sector ave16x


The company hosted an investor event in Copenhagen yesterday on its innovation and R&D (research and development) activities. Since the appointments of CEO Rasmussen ex-Gillette and CMO ex-Coke, we have seen company brand marketing skills at the more advanced end of global beer. This genuinely does appear to be driving market share gains now across Europe, as was visible with recent Q1 results. We believe that innovation is a key element of the company’s ambition to be the fastest growing global beer company over the medium term. With integrated research, development and commercial innovation capabilities in place, we see the company pursuing an ambitious innovation agenda, with a strong innovation pipeline to capture future growth opportunities.


Innovation in beer lags other FMCG

Currently Carlsberg’s innovation rate is approximately 10pc of net sales over the past three years. Within the group, we see a higher innovation rate in E Europe vs W Europe.  The company sees an opportunity to close the gap on innovation vs other FMCG companies, with an objective to reach 15pc over the medium term.


Innovation – a key priority for Carlsberg

The company has integrated research, development and commercial innovation capabilities. Since the establishment of a Group Sales, Marketing and Innovation function a few years ago, we detect a more collaborative approach to innovation. We believe this is starting to result in some interesting moves in innovation, with the company able to move more quickly on innovation vs several years ago. The company is building a new development centre which will be opened in q1 2014. This should lead to a faster roll-out of innovation.


Importance of craft in innovation

We see a key challenge for global brewers is to get to grips with a “small is beautiful” approach after many years of focus on efficiency gains from scale. Carlsberg would consider that 25 of its 500 brands could be viewed as craft by the consumer. With its strong focus on local brands, as well as some global brands, we see Carlsberg in a strong position to navigate some of the challenges here.


Scientific approach to return-on-marketing investment

The company is rolling out a more scientific approach to analysing drivers of volume growth, with an overall aim to embed a culture of ROI decision-making for above-the-line (ATL) and below-the-line (BTL) marketing. ROMI (used by several FMCG companies) is currently being piloted in a few markets and being rolled out across the group.  Under ROMI, c.70pc of brand marketing spend is captured although a lower amount of trade marketing. The company believes that ROMI can improve ROI by 20pc by fine-tuning brand investments.


Brand drill-down

The company has five global brands (Carlsberg, Tuborg, Somersby, Grimbergen, and Kronenbourg 1664) which it manages centrally and 495 local brands managed locally. The company provided examples on where it is succeeding with brands:


Examples of recent speciality innovation:

– Somersby cider – core range of apple, but company is considering innovation beyond apple variants including fruit flavours. Somersby has been rolled out to 35 markets now. In 2012, Somersby grew 77pc globally.

– Carlsberg Citrus – lower strength beers are growing in the UK market (2.8pc abv) with premium pricing. Co has taken a 19pc share of low abv beer in nine weeks in the UK. This brand took less than six months to develop.

– Radler – we would see Radler as a powerful recruitment tool for females and young adults. The brand carries a higher margin vs mainstream beer. The company has rolled out Radler in nine markets, and sees an opportunity to expand out of lemon into orange and grapefruit.

– Seth and Riley’s Garage Hard Lemonade – the company developed this brand in Sweden, now being rolled-out across five markets. The brand grew 42pc in 2012.

– Skoll by Tuborg – the company has developed a new generation of beer mixes including vodka and citrus beer, with strong on-trade presence in parts of Scandinavia. Took 15 months to develop


Celebration platform:

– Grimbergen (Abbey beer)- commands a 250+ price index vs mainstream beer. The brand is in 30 markets with 31pc revenue growth in 2012.

– “Raw” (non pasteurised, non filtered beers) – the company sees the freshness segment as another area of growth, to address the needs for fresh products. Initially, this was developed with the Baltika brand in Russia, however non-pasteurised brands are now rolled out in seven markets.

– Provenance platform – eg Czech beer Zatechki Gus.Originally rolled out in Russia, now in four markets with further expansion plans. Provenance is a key growth area in E.Europe.

– Jacobsen craft beer. Launched in three markets. 54pc growth vs 2010. Price index 300+ vs mainstream. The company is in particular targeting the meal occasion.


Experience platform:

– The company is focused on ensuring consistency of draught product at the point of sale. The company has developed a proprietary one-way PET DraughtMaster keg system (10-20 litres) with a 31 day shelf-life (vs traditional keg 5 days). The DraughtMaster system is currently rolled out in Italy first and is being trialled in 17 markets. Over the medium term, we believe the company could roll it out to markets where it does not have assets or infrastructure.




American Beverage Licensees Conference Brings Industry Together


Alcohol Retailers Meet with Members of Congress, Industry in Washington, DC


Source: ABL

Jun 18th


Beer, wine and spirits retailers and members of the alcohol industry from across the country gathered at the American Beverage Licensees Annual Conference June 9-11 to hear from public officials, industry leaders and an array of experts on policy and business issues facing beverage retailers.  


Congressman Tom Petri (R-WI), Chairman of the Subcommittee for Highways and Transit of the House Transportation and Infrastructure Committee, delivered a keynote address covering a wide array of topics including the current state of politics in Washington and business before his subcommittee, including highway safety policy, the costs involved with transportation reauthorization and new technologies being developed for use in automobiles.


A series of panel discussions provided attendees with opportunities to hear from more speakers than ever before at an ABL conference – 25 speakers and sponsors in all over a 1 ½ day program.  The Alcohol Industry Leaders panel featured CEO’s from the industry’s leading trade associations.  Dr. Peter Cressy, President & CEO of the Distilled Spirits Council of the United States; Joe McClain, President of the Beer Institute; Craig Purser, President & CEO of the National Beer Wholesalers Association; and Craig Wolf, President & CEO of the Wine & Spirits Wholesalers of America addressed federal and industry issues facing their members and suggested ways in which they thought the industry could work cooperatively to address shared concerns.


The Political Reporters panel featured 4 journalists who cover politics and government in Washington, DC.  Tory Newmyer of Fortune, Anna Palmer of Politico and Pete Schroeder of The Hill talked about current issues before Congress and in the media, and provided insights on how journalists cover politics and lobbying.  The panel was moderated by Mike Melia, Senior Broadcast Producer of the PBS NewsHour.


On another panel, Craft Producers shared their insights on their businesses, their relationships with retailers and where they see the future of craft products.  Bill Butcher, Founder of Port City Brewing; Rob Deford, President of Boordy Vineyards; and Wes Henderson, COO of Angel’s Envy Bourbon, spoke candidly about the challenges they’ve faced in getting their businesses to where they are today, and the opportunities they see for future growth including trends such as session beers, retro spirits recipes and regional definitions of American wines.


Individual educational speakers also conducted seminars throughout conference.  Former law enforcement officer Bill Georges provided his perspective on the current state of the fight against drunk driving, which was especially topical following the National Transportation Safety Board’s recommendation on May 14 to lower the legal BAC limit to .05%.  Martin Johnson, a retired detective and Department of Homeland Security educator, spoke on how licensees can prevent the successful use of false identification within their establishments.  Later, Neil Trautwein, Vice President and Employee Benefits Policy Council at the National Retail Federation, discussed the impact of the Affordable Care Act on small business owners and retailers.


Updates on ABL’s federal affairs effort by ABL Executive Director John Bodnovich; a seminar on grassroots lobbying by Adrian Hunte of the Hunte Law Group; and a presentation on the economic impact of direct retail alcohol sales by economist John Dunham of John Dunham & Associates added to conference’s emphasis on policy issues and information.


Building on the knowledge they gained during the conference program, ABL members and conference attendees took to Capitol Hill on June 11 to meet with members of Congress and their staff.  Over forty meetings with Congressional staff and members took place, concluding with a reception on Capitol Hill.


“With the conference coming to Washington for the first time, the emphasis was ABL’s mandate to speak for retailers on alcohol and small business issues,” said John Bodnovich, ABL’s Executive Director.  “Focusing on the positive aspects of the beverage alcohol industry, we brought the message of America’s beer, wine and spirits retailers to the nation’s capital.”


The conference also offered the opportunity to learn about products and network with other retailers and members of the industry.  A reception sponsored by the National Association of Beverage Importers, breakfasts by Beverage Media and Proximo Spirits, and the MillerCoors annual luncheon brought conference attendees together.  The International Bottled Water Association provided attendees with bottled water to keep them refreshed throughout the conference.


ABL and its members were afforded the opportunity at the conference to recognize retail and industry leaders in two unique ways.  Honored for their excellence in retailing, ABL was proud to recognize the Brown-Forman Retailers of the Year during the conference general session.  Nominated byABL’s state affiliates, the Retailer of the Year awards recognize those dedicated small business owners who serve as the face of the industry to millions of Americans.  


The ABL Top Shelf Award Banquet, sponsored by the Distilled Spirits Council of the United States, served as a fitting end to the conference, with the 2013 ABL Top Shelf Award being presented to Craig Wolf, President and CEO of the Wine & Spirits Wholesalers Association for his outstanding work for the industry and his service to the country in the United States Army Reserve.  During a pre-dinner reception, over two dozen craft distillers from across the country conducted a tasting of their products.  




Sonoma County grape value jumps 41% in year




Monday, June 17, 2013


A strong grape harvest and growing demand for young vines boosted Sonoma County agriculture above $821 million in value in 2012, a 41 percent increase over 2011, according to a new report from the county agricultural commissioner.


The jump was driven largely by a record year for wine grapes, with 267,000 tons worth almost $583 million, an increase of 60 percent over 2011, which was considered a poor year.


“We’re in a recovery phase after 2010 and 2011 were so low … everyone’s feeling good,” said Karissa Kruse, president of Sonoma County Winegrowers.


Sales from plant nurseries jumped about $9 million in 2012, to $33.5 million. That was driven by huge demand for grape vines, both rootstock and varietals for grafting, a potentially lucrative new market for the county.


Santa Rosa’s Novavine has nearly doubled its sales in three years, from 3.5 million vines to about 6.5 million this year and next, CEO Jay Jensen said. Even after expanding its facilities, the company is sold out for 2014 and is accepting orders for 2015.

“It goes back to the recession,” he said. “A lot of vineyards and large operators just didn’t do plantings,” resulting in huge pent-up demand.


Now that the economy is turning around, and a longstanding surplus of bulk wine for value-priced labels is used up, producers nationwide are in a frenzy of replanting, and some are setting up large new vineyards for bulk-wine production, he said.


Sales are particularly strong in Texas and the Mid-Atlantic, though the company is shipping as far as China, he said.


Agricultural Commissioner Tony Linegar will present the annual crop report to the supervisors todayTuesday. He said the numbers in the report probably represent the new status quo for the Sonoma County’s agriculture sector for years to come.


After years of growth in vineyard acreage, the amount of easily planted land is used up, he said. The acreage probably will stabilize a bit above 60,000. It was just over 59,000 in 2012 and hit a high of around 63,000 before the recession, a number that growers agree is probably close to the upper limit of the county’s available vineyard space.


Troubled older farm sectors, such as the once powerful apple and dairy sectors, seem to have reached a stable floor after years of decline, Linegar said. Farmers in both categories have been selling into niche markets, including the increasing demand for Sonoma County apples in hard cider production, and tapping into the value-adding power of the organic label.


“We do have to have more specialized, more boutique, high-end products to make it profitable to farm,” he said, now that bulk production of staples such as milk and apples has moved to other regions and overseas.


Apple farmer Lee Walker concurred. About three years ago, he decided to close his family farm near Graton but then agreed to give it one last chance, focusing on sales of fresh apples to high-end markets and direct to consumers. That strategy worked surprisingly well and kept the business open, he said, particularly because Sonoma County’s signature variety, Gravenstein, has become a high-demand specialty crop.


Economic analysts say the crop report understates the overall value of agriculture to the economy. Ben Stone, Executive Director of the Sonoma County Economic Development Board, said agriculture probably accounts for about a third of the $18 billion in economic activity every year if you consider the secondary effects of wine production, which is considered manufacturing, tourism and the ripple effects on the retail trade.


The Sonoma County Farm Bureau, the Winegrowers and the Sonoma County Vintners are working on a report to more accurately determine the value of farming to the county economy, said Lex McCorvey, executive director of the farm bureau.


“The value of crops produced is only the tip of the iceberg,” he said. “When made into wines, cheeses or other consumer products, our diverse crop base actually generates billions of dollars and creates thousands of jobs in Sonoma County.”




Frescobaldi releases wine made by prisoners


Source: the drinks business

by Lucy Shaw

3rd June, 2013


Prominent Italian wine producer Frescobaldi has partnered with a group of prisoners on a tiny island in the Tuscan Archipelago on a white wine project.


Having planted vines on the island a number of years ago, inmates of the remote penal colony of Gorgona have made 2,700 bottles of Frescobaldi per Gorgona DOC, a Vermentino and Ansonica blend.


The vines are planted in a corner of the island to the north of Elba, where Napoleon was exiled by the British.


Despite their hard graft, the prisoners will not be allowed to drink the wine, which will instead be sold to restaurants and bars around Italy.


Thirteenth generation family member and the company’s vice president Lamberto Frescobaldi, who worked on the project, describes the wine as “intense, with a marvellous character.”


The Frescobaldi family, one of Italy’s oldest and most respected wine dynasties, were hands on throughout the project, offering the island’s 50 inmates advice on planting, picking and winemaking techniques.


Marchesi de’Frescobaldi is the first company take part in a scheme launched last year in which businesses invest in the island to give prisoners skills that will help them get a job after they’re released.


In addition to winemaking, the prisoners work on a farm producing cheese and olive oil.


The project was welcomed by Anna Maria Cancellieri, the Italian minister for justice, who said it could be replicated at other prisons.


“Initiatives like this have a constructive effect on inmates, allowing them to specialise in an area of work that will be useful to them once they leave prison.


“For prisoners who do not find work, the rate of repeat offending is 80%,” she said.


Italian prisons are the third most overcrowded in Europe after Serbia and Greece.


“We need to go ahead with this model because we want to show the world that Italy’s prisons are worthy of a civilised country,” Cancellieri added.


Many Italian islands have been used as prisons in the past, both for political prisoners and common criminals. Gorgona is one of the few still in operation.


Public access to Gorgona is forbidden without special permission and boats must keep 1,600ft from the shore.




Marciano Brothers And Christian Navarro Announce Purchase Of Legendary Wine Business Wally’s Wine & Spirits


Fashion leaders and wine connoisseurs purchase Los Angeles’ beloved wine and spirits business from retiring founder Steve Wallace


Source: PR Newswire

June 18, 2013


Maurice and Paul Marciano, brothers and co-founders of global denim lifestyle brand GUESS, together with renowned wine personality Christian Navarro,  announced their purchase of Wally’s Wine & Spirits, the world-famous wine and spirit merchant in West Los Angeles from acclaimed founder, Steve Wallace. Opened in 1968, Wally’s is the largest retailer of wines and spirits in Los Angeles and has become an institution for wine collectors around the globe.  


The partners purchased the business and its assets from retiring founder, Steve Wallace. Maurice Marciano explained, “My brother Paul and I have been buying wines from Wally’s for twenty years, dealing extensively with Steve and Christian. When we heard that Steve was thinking of retiring, we immediately contacted him and expressed our interest in purchasing the business, but only on the condition that Christian would remain in a leadership role.” As part of the acquisition, Christian Navarro has been appointed president. Wally’s Wine and Spirits will maintain its well-known name and service.


“Steve built Wally’s into the institution it is today through his commitment to customer service and an absolute belief in product,” said Paul Marciano. “That focus on offering the best product with the best knowledge has garnered him the trust of thousands of discerning customers around the world and is something my brother Maurice, Christian, and I are absolutely committed to protecting and building upon into the future.”


Maurice and Paul Marciano are wine connoisseurs with a specific passion for wines from Bordeaux and Napa Valley.  Maurice Marciano recently purchased a boutique winery in Napa Valley where he  produces a Bordeaux-style red wine.  His first release will be a 2012 vintage that is expected to debut in 2014.




BJ’s marks 200th club opening


Source: RT

June 18, 2013


BJ’s Membership Club is celebrating its 200th store opening with its latest location at 5200 Red Tip Road in Fayetteville, N.C. The club will feature a fresh bakery, BJ’s Cafe, deli, optical services, rotisserie chicken, tire center, gas station and Verizon Wireless Kiosk.


In recognition of the 200th store opening, BJ’s will host grand opening celebrations from Friday, June 21 through Sunday, June 23. The events will be open to members as well as the public. BJ’s will have a variety of foods and beverages for people to sample, Kellogg’s Tony the Tiger and Toucan Sam will be on hand, as will balloon artists and face painters. BJ’s will also give away reusable shopping bags while supplies last and provide information about the club’s selection of organic and all-natural foods.


“An important part of our company is giving back, and BJ’s takes great pride in being a good corporate citizen and supporting the communities in which we live and work,” said Fayetteville GM Jerry Bullock. “We take our responsibility to our new neighbors, who make up this great city, very seriously and look forward to becoming part of the fabric of Fayetteville.”


The new club has also partnered with the VanStory Hills Elementary School as part of BJ’s Adopt-a-School program. The school will receive a $1,000 donation to enhance educational programs and curriculum objectives, a shopping cart full of items from the school’s wish list valued at $1,500 and a free membership.  


Additionally BJ’s has joined with Feeding America to provide wholesome and nutritious unsold food to food banks throughout the company’s 15-state footprint. The Fayetteville Club will donate its unsold food to the Second Harvest Food Bank of Southeast North Carolina, and to kick off the relationship, BJ’s is presenting the food bank with a $2,500 donation.


BJ’s also is providing $2,500 gift card to the USO of Fayetteville to help support the Airport Travel Center, which every month serves more than 3,000 troops and families who are leaving or arriving to the area.


Lastly, BJ’s is donating $2,500 to the Junior League of Fayetteville to sponsor the league’s annual fundraiser – the Holly Day Fair. The funds raised by the event supports the league’s child mental health programs.


The Fayetteville Club joins eight other BJ’s Clubs throughout N.C. The club will open Monday through Saturday, 9 a.m.-10 p.m. and Sunday, 9 a.m.-8 p.m.


BJ’s operates 200 warehouse clubs and 113 gas stations in 15 eastern states.  




Virginia: Va. alcohol regulators make moonshine bust


Source: Times Dispatch

June 18, 2013


More than 300 gallons of moonshine has been seized from the home of a Pittsylvania County man, according to the Virginia Department of Alcoholic Beverage Control.


Besides the illegal spirits, ABC agents and Pittsylvania County Sheriff’s Office deputies also found 18 weapons and cash during the raid Monday at the home of Ronald Way Bray.



The ABC’s special agent in charge, Kyle Blanks, said undercover operatives purchased moonshine from the 63-year-old Bray in the months leading to the bust, which yielded 339 gallons.


Media reports said the seized moonshine was packaged in 1-gallon containers similar to milk jugs. The raid occurred in a rural neighborhood.


“Moonshine isn’t limited to the back woods,” Blanks said in a news release. “We’ll continue to follow up on illegal whiskey leads wherever they take us in the commonwealth.”


Officials said they will seek charges against Bray that include the illegal sale of alcohol and possession of untaxed liquor, among other counts.


A telephone listing could not be found for Bray.






Source: DISCUS

Jun 18th


Higher sales and hospitality taxes included in the state budget will harm local businesses and send consumers into New Hampshire, according to the Distilled Spirits Council (DISCUS), which today urged Governor LePage to veto the bill on behalf of the state’s significant hospitality community.


“By raising additional taxes on Maine consumers, legislators are treating the hospitality industry like a virtual ATM,” said DISCUS Vice President David Wojnar, noting that Maine spirits consumers already pay more than their fair share of taxes.  “These tax hikes strike right at the heart of hospitality businesses and we strongly urge Governor LePage to reject any bill that would further punish the hospitality industry which is only now regaining a foothold after the recession.”


Increasing the General Sales Tax rate from 5% to 5.5% (impacting all beverage alcohol) and hiking the Rooms & Meals Tax from 7% to 8% will simply add to the already burdensome spirits tax rate in which 67% of the typical purchase price for a bottle in Maine already goes to taxes of some kind. Maine currently has the 9th highest spirits tax rate (total tax burden) in the country, according to DISCUS.


“Increasing taxes on the hospitality industry at this point will only drive more customers across the border into New Hampshire,” Wojnar said, pointing out that Maine competes with New Hampshire on price.  He noted that New Hampshire’s total spirits tax burden is 59% — or eight points less than Maine’s high rate.   


Wojnar also said the tax hikes would harm Maine’s craft distilling industry made up of a growing list of seven small producers.


“The hospitality industry is the backbone of Maine’s economy,” Wojnar said. “It’s our hope that Governor LePage will veto any additional taxes that would negatively impact hospitality businesses, employees and their customers.”




United Kingdom: Hi-Spirits Named Most Innovative Supplier by JD Wetherspoon


Source: Hi-Spirits

Jun 18th


Hi-Spirits has been named Supplier of the Year for Innovation by JD Wetherspoon, one of Britain’s biggest managed pub operators.


Jeremy Hill, chairman of Hi-Spirits, was presented with the prestigious accolade by Wetherspoon’s commercial director Paul Hine at the pub group’s annual supplier awards ceremony. The company, which operates around 900 pubs, singled out Hi-Spirits from its wide range of food and drink suppliers in recognition of the high levels of brand support Hi-Spirit’s provides.


“Wetherspoon’s is recognised as being at leading edge of innovation in the UK pub sector,” said Hill, “and is regularly first-to-market with new products and serves. The Wetherpoon’s team rightly expects its suppliers to be at top of their game, and so we’re delighted to have been recognised with this award.”  


Wetherspoon pubs stock a range of products supplied by Hi-Spirits, including Buffalo Trace Bourbon, which is a ‘house pour’ across the entire business.

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Liquor Industry News 6-17-13

June 17, 2013

Franklin Liquors

Monday June 17th 2013


Diageo chief set to be next Compass chairman


Boss of Guinness and Smirnoff firm tipped for top job at Surrey-based services firm which made £1.1bn last year


Source: The Guardian

Sunday 16 June 2013

The long-serving boss of the Guinness and Smirnoff firm Diageo is reportedly in line to claim one of the top leadership jobs currently up for grabs in the FTSE 100.


Paul Walsh, who is stepping down at Diageo this summer after 13 years at the helm, is reported to be the next chairman of the catering and services multinational Compass.


The role, which is currently held by Sir Roy Gardner, is one of a number of top-flight vacancies that also include Lloyds Banking Group, WPP, Centrica and GlaxoSmithKline.


The Sunday Times said Walsh’s likely appointment at Compass would boost its international expansion prospects as he has overseen deals in Turkey, Brazil, India and China. Under his watch at Diageo, the firm’s market value has grown by about £30bn, helped by deals such as its acquisition of the Seagram drinks empire.


Ivan Menezes will take over as chief executive at Diageo from 1 July, though Walsh will remain for a year’s transition period.


Walsh began his career with Grand Metropolitan in 1982. The drinks firm merged with Guinness in 1997 to create Diageo.


The Surrey-based Compass, which handles catering at major sporting events such as Wimbledon and the Cheltenham Gold Cup, made profits of £1.1bn in the year to last September.




Bernard Arnault still wealthiest wine owner in France


Source: Decanter

by Jane Anson in Bordeaux

Saturday 15 June 2013

Bernard Arnault of LVMH – owner of Hennessy, Moët et Chandon and Chateau Yquem – continues to head up the list of wealthiest wine owners in France, according to the second annual roundup published in Challenges magazine this week.


His fortune is listed at ?1.5 billion, a slight rise from last year due to the appreciation in the value of his vines. Arnault (through LVMH) also owns half of Chateau Cheval Blanc with his friend and business associate Albert Frère, the wealthiest man in Belgium.


The Castel family, headed up by Pierre Castel and owners of Castel Freres and 50% of Chateau Beychevelle, Chateau Beaumont, négociant company Barrière Frères and wine merchants Nicolas is listed in second place, with a fortune of ?875 million.


Coming in third is Frédéric Rouzaud of Champagne Roederer, owner of Chateau Pichon Longueville among others, with an ?800 million fortune, just in front of Philippine de Rothschild of Mouton Rothschild with ?750 million.


Francois Pinault of Chateau Latour, Chateau Grillet and Domaine d’Eugénie comes in sixth at ?700 million, with fellow First Growth owner Corinne Mentzelopoulos of Chateau Margaux at number 6, with an estimated fortune of ?600 million.


The rest of the top 10 places go to Christian and Jean-Francois Moeuix (counted together, although their companies are in fact separate) with ?550 million, Bernard Magrez of Chateau Pape Clement with ?525 million, and Michel Reybier of Cos d’Estournel with Benjamin de Rothschild, of Chateau Clarke, each listed with a fortune of ?450 million.


Each owner within the top 10 has seen a rise in estimated net worth over the past 12 months, due to the rises in land values seen in their appellations.


The Challenges article lists the top 50 wine-related fortunes, and other notable figures include Gerard Perse of Chateau Pavie at 12 (?375 million), Jean-Hubert Delon of Léoville Las Cases at 14 (?320 million) and Jean-Michel Cazes of Lynch Bages in 20th spot (?260 million).


Baron Eric de Rothschild of Chateau Lafite Rothschild makes an appearance at number 24, alongside both Jean Merlaut of Gruaud Larose and Martin and Olivier Bouygues of Chateau Montrose, all with an estimated net worth of ?260 million.


At the lower reaches of the Top 50 come Daniel and Florence Cathiard of Smith Haut Lafitte at 45 with ?170 million, and Didier Cuvelier of Léoville Poyferré at number 50 with a mere ?145 million.




Total compensation for Constellation CEO exceeds $8 million in 2013


Source: Rochester Business Journal


June 14, 2013


Constellation Brands Inc.’s president and CEO saw a slight drop in his base salary in fiscal 2013 over fiscal 2012.


Robert Sands earned a base salary of $1.19 million in fiscal 2013, down from $1.20 million the previous year. Including other pay, such as stock awards and non-incentive equity plan compensation, Sands total compensation in fiscal 2013 was up to $8.01 million, from $7.71 million the prior year, filings with the Securities & Exchange Commission show.


Salaries of top executives at Victor-based Constellation Brands were included in a filing for the company’s annual meeting, which will be held at 11 a.m. Wednesday, July 24 at the Callahan Theater at the Nazareth College Arts Center.


Constellation Brands’ fiscal 2013 year ended Feb. 28.


Pay for other executives are below:


Richard Sands, chairman of the board: base salary of $1.16 million, down from $1.18 million the previous year. Including other compensation, total compensation was $6.36 million, down from $6.69 million in fiscal 2012;


Robert Ryder, executive vice president and chief financial officer: base salary for fiscal $582,442, down from $589,725 a year prior. Including other compensation, total compensation was $2.66 million, up from $2.57 million in fiscal 2012;


John Wright, executive vice president and chief operating officer: base salary of $578,962 in fiscal 2013, up from $570,702 in fiscal 2012. Including other compensation, total compensation was $2.66 million, up from $2.40 million in fiscal 2012;


Keith Wilson, executive vice president and chief human resources and administrative officer: base salary of $531,600 in fiscal 2013, down from $538,247 in fiscal 2012. Including other compensation, total compensation was $2.43 million up from $2.34 million the prior year.




Diageo boss under fire over drink sponsor row


Source: Irish Independent

Thomas Molloy

17 June 2013


THE country’s largest drinks company has warned that a ban on drinks sponsorship could ultimately lead to less investment here.


Diageo, which owns Guinness and controls 40pc of the market, said a clampdown on sponsorship might force the company to reduce spending in future.


A spokesman for the company insisted the drinks company “wants to be able to continue with further investments in the future, but to do so requires a sustainable environment in which to promote our Irish-manufactured products responsibly”.


Diageo is currently spending ?153m on new plant at the company’s headquarters in Dublin’s St James’s Gate.


The comments came after the head of Diageo’s Irish operations said that the company did not have to brew Guinness or make Baileys in Ireland.


David Smith dismissed proposals to ban alcohol companies from sponsoring sport and cultural events as “political headlines” that could lead the company to scale back spending here.


“If our Irish business is diminished by this, there is less need to invest,” Mr Smith told a Sunday newspaper.


The comments were sharply criticised by communications specialist Terry Prone, who said it was “outrageous” for Diageo to suggest that the ban on drinks sponsorship was a “political headline”.


“I find that frankly outrageous,” she told RTE’s Marian Finucane show.


“For a drinks company to suggest that this is a political issue is very clever spinning…”


Director general of the Law Society, Ken Murphy, called on the Government to insist that visiting dignitaries are not photographed with a pint of Guinness, which generates free publicity for the company.


“One political thing that could be done in relation to Diageo is the next time a head of state comes, they should not be photographed for the world’s media in the greatest PR (public relations) coup ever,” he said.


“Queen Elizabeth and Prince Philip at 10 in the morning had to stand and admire a pint of Guinness.”


The company rejected proposals from Junior Health Minister Alex White to ban drinks sponsorship, but said it remained committed to working with the Government to “find the effective solutions to reduce alcohol misuse further”.


The comments come as opposition to the drink sponsorship ban continues to mount.


Some health campaigners say a ban would help reduce underage drinking and break the link in people’s minds between sport and alcohol.


Opponents say there is little evidence that a ban works, and claim that many sporting events would have to be cancelled if sponsorships were removed.


A draft report by an Oireachtas committee says the ban is not merited, and the country’s main sporting organisations would suffer financially.


Diageo is one of the country’s biggest advertisers and employs around 1,500 people in Ireland.


A ban on sponsorship would come at a difficult time for the company, which is struggling with falling sales in Ireland and the rest of Europe as drinking habits change, the recession bites and people become more worried about their health.




Beer Bellies Are a Myth


Source: TIME

By Matt Peckham

June 13, 2013


Consider the cliché: a darkened room, a bleary-eyed middle-aged man collapsed into a couch, beer in hand, TV-flicker illuminating his sallow stubbled face, and a stomach threatening to escape from his pants like a giant mutant amoeba.


Blame that belly on the beer? Not so fast. According to University of California Davis food science professor Charles Bamforth, the colloquial notion of the beer belly – that beer somehow uniquely targets the gut – doesn’t jibe with medical science.


“The beer belly is a complete myth. The main source of calories in any alcoholic beverage is alcohol,” Bamforth told Popular Science. “There’s nothing magical about the alcohol in beer, it’s just alcohol.”


Alcohol doesn’t have V.I.P. dibs on abdominal fat in other words (any more than spot exercises like sit-ups burn stomach chub), it’s just another ingredient in your caloric regimen, though Bamforth notes that in cases of excessive alcohol consumption (read: abuse) you can develop something called ascites: a buildup of fluid around your abdomen that can cause distension of a sort, though in that case it’s likely related to actual liver damage.


So where did this idea that beer consumption spawns belly fat come from anyway?


Massachusetts General Hospital alcohol researcher Dr. Aliyah Sohani suggests it may have to do with serving sizes: Both cans and bottles of beer average 12 ounces, while your average glass of wine contains five and your average shot glass is just 1.5 ounces.


“You are drinking it in more quantities than wine or liquor, so you tend to have more caloric intake,” says Sohani. “You are talking about a difference between several hundred calories a night and a couple hundred.” Follow the logic here and if the average lush consumed wine in greater quantities than beer, the colloquialism would be “wine belly” (though hello alliterative fizzle).


No, that doesn’t mean anyone’s green-lighting your nightly keg stands – alcohol is a calorie-dense compound, after all – it’s just that those extra belly rolls are as likely to come from any calorie-dense source as your favorite brew.




Alcohol ads push underage girls to drink more, research finds (Excerpt)


Source: Globe and Mail


Thursday, Jun. 13 2013


A woman in a tight T-shirt holds a cup in front of her chest as she pours a beer in a TV ad. Her face is cut out of the shot. In another beer commercial, there is a closeup on a woman’s torso from behind as she dances at a party. Next to a bottle of tequila, a man embraces a woman, lifting her up with a smile on his face.


These images of sexually attractive, popular women associated with alcoholic beverages are not meant for women as young as 13. But underage girls see them, and the exposure to advertising is having an adverse effect on their health. That’s the argument made in an editorial published on the Canadian Medical Association Journal website on Monday by senior associate editor Dr. Ken Flegel.



NABCA Legislative Update: May 11, 2013-June 14, 2013


Source: NABCA

Jun 14th


Click Here to View Legislative Update by State


Click Here to View Legislative Update by Category


Click Here to View Update on Regulations



Wine fund market brought to its knees


Source: FT

By Ellen Kelleher

Jun 16th


It is difficult to turn a profit on bottles of bordeaux and burgundy when the outlook for sought-after vintages looks bleak at best. And it is more challenging still if you run an open-ended wine fund, as evidence emerges that this niche investment sector is floundering.


Just ask Andrew Davison, founder of the Vintage Wine fund, a Cayman-based investment vehicle once boasting as much as ?110m in assets at its 2008 peak. It is to be wound down at the end of the month after being hit by dismal performance, forced sales and a spate of redemptions.


“The wine market is dead. It could take years for this market to recover,” says Mr Davison. “I think you have to ask whether open-ended structures are suitable for these sorts of illiquid investments. There’s also a danger that wine funds can get too big. When you allow investors to come in and exit on a regular basis, you get huge outflows when things go bad.”


The closure of one of Europe’s oldest wine funds is not a lone example of why gaining exposure to this sector can turn into a cautionary tale.


The industry took another hit this month when the UK’s Financial Conduct Authority announced that wine funds listed in London – which are unregulated collective investment schemes – must not be marketed to retail investors of limited means.


The demise of the Vintage Wine fund also comes as the Luxembourg financial regulator is forcing Nobles Crus, once the world’s largest registered wine fund worth as much as ?109m, to bar its investors from withdrawing their money. It can no longer sell its shares after running out of cash.


The decision by the Commission de Surveillance du Secteur Financier to “temporarily suspend all redemptions and subscriptions” in Nobles Crus came late last month after Elite Advisers, the fund’s managers, admitted they did not have enough cash to meet redemptions.


The fund revealed the news in a letter sent to investors.


“Nobles Crus now finds itself confronted with a few requests from large institutional investors for redemptions involving considerable sums of money,” wrote Miriam Wilson and Michel Tamisier, general partners at Elite Advisers in a letter dated May 31. “Currently, Nobles Crus does not have the necessary liquidity to honour these requests.”


The gating of the fund follows a long spell of criticism of its practices. The valuation system Nobles Crus employs continues to come under attack from other wine fund managers, who tend to rely on Liv-ex prices as a benchmark for their portfolios, but have not reported consistently strong returns.


Rather controversially, the managers of Nobles Crus opt not to use Liv-ex. Their reasoning is that its coverage of the rarer vintages in which they invest is “patchy and inconsistent”.


Andrew della Casa, director of the $55m Wine Investment fund, which only invests in bordeaux, adamantly disagrees with the decision: “We do believe the best practice is to use Liv-ex. If Liv-ex isn’t covering your stocks, then they aren’t liquid enough to be considered in the portfolio.”


While many wine funds took a beating in recent years, especially after the Chinese pulled out of bordeaux in 2011, the Nobles Crus fund, which launched with just ?2m in assets at the start of 2008, did not. In 2008, the fund returned 20.4 per cent; in 2010, 13.4 per cent; And in 2012, the fund returned 8 per cent despite meeting millions of euros in redemptions.


Envious rivals argue that most of the fund’s profits have come from unrealised accounting gains on inventory, not from actual sales of wine. They say that a number of the bottles in the Nobles Crus portfolio are freely available at cheaper prices elsewhere.


Mr Tamisier vigorously defends the fund’s valuation methods.


“Our 2001 valuation of Cheval Blanc 2000 included observed market prices from the UK of ?789 per bottle, but up to ?1,525 per bottle from a Hong Kong auction house,” he told FTfm.


Wine funds remain exclusive. There are no more than 20 registered, with most concentrated in Europe and a select few in Asia and the US. Even the most established have not been in existence for more than 10 years.


Justin Gibbs, co-founder of Liv-ex, says: “Wine funds are still a game in their infancy.”


But the market holds appeal, especially for wealthy Chinese, who just a few years ago were responsible for driving the price of fine French wines to record highs.


According to Mr Gibbs, the performance of wine, which is worth about £6bn per year as a global market, has been “very lacklustre” since June 2011, when the market turned after a strong two-year run. The best bordeaux vintages tend to fare better than burgundy, but on the whole the market remains weak.


In a note to investors, Mr della Casa, described last year’s en primeur season, which involves purchasing wine while a vintage is still in a barrel, as “generally disappointing”.


He blamed poor sales on the high release prices French chateaux demand.


Mouton Rothschild emerged as the strongest of the young wines, with price increases of around 1.5 per cent on average across vintages. Château Margaux was up a bit as well, while Château Lafite was broadly flat.




Attack on Chinese students overshadows Vinexpo opening


Source: Decanter

by Jane Anson

Sunday 16 June 2013

Stéphane le Foll, French agicultral minister, called an attack on six Chinese students, on the eve of the Vinexpo opening, ‘inadmissable’ and ‘xenophobic’.


The attack came in the early hours of Saturday morning, on six Chinese oenology students studying at Chateau La Tour Blanche in Sauternes.


They were in their apartment, in the village of Hostens when a small group of French men who had earlier received a warning from police to quieten down a party forced their way in.


One student was taken to hospital with facial injuries from a bottle being thown at her.


The attack is assumed to have been because the men believed the Chinese students had reported the party to the police.


Speaking at the opening of Vinexpo, Le Foll condemned the attack, joining demands from the Chinese embassy in Paris to bring the perpetrators to justice to ensure the safety of Chinese students in the country.


The timing is particularly unfortunate as the wine industry focuses its attention on Bordeaux for the 17th edition of Vinexpo, the biannual fair started in 1990 by the Bordeaux Chamber of Commerce, and now grown to the world’s largest wine trade fair, with 2400 exhibitors and 46,000 visitors from 120 countries.




Vinexpo opens its doors to 48,000 visitors


Source: Harpers

Written by Erin Smith

Sunday, 16 June 2013


The international global event Vinexpo 2013 opened its doors today, for the next five days, exhibiting over 2,400 wine and spirit producers, representing 45 different countries and attracting over 145 different nationalities to Bordeaux, France.


The international global event Vinexpo 2013 opened its doors today, for the next five days, exhibiting over 2,400 producers, representing 45 different countries of the wine and spirits world and attracting over145 different nationalities in Bordeaux, France.The bi-annual event is anticipating over 48,000 visitors this year. The venue’s focus this year appears to be a great opportunity for producers to showcase new packaging concepts, including innovative closures and smaller single serving containers, such as 20-cl wine bottles or cans.


The exhibition is expected to connect producers with global distributors, wine stores, merchants and importers with an anticipated high volume of Asian visitors at this year’s show.


Vinexpo also has an extended spirits section this year with designated areas dedicated to Cognac, vodka, rum, whisky, gin, sake, grappa and tequila.


Key themes to be discussed this year include online wine sales, global wine distribution, the potential of the Chinese and Asian wine markets as well as decode the latest trends including low alcohol wines and lighter styles of wine and a key focus on rose wines.


“Tasting by Vinexpo” which attracted one in four visitors when launched in 2011 will again be a highlight of the show.  The events will take place in several rooms in the Halls 1,2 and 3 hosting over 80 meetings, tastings, and conferences throughout the five-day affair.


Stéphane Le Foll, the French Minister of Agriculture, officially opened Vinexpo today at 14:30pm.




New dating site launched for wine lovers


VineaLove, which was founded by a French former wine journalist, may help you find your vino-sipping soulmate.



By Victoria Taylor

Sunday, June 16, 2013


Wine aficionados seeking a special someone to split a bottle with now have their own online dating website.


VineaLove, the brainchild of former wine journalist Françoise Pauly, officially launched on Sunday at Vinexpo in Bordeaux, France.


“About two months ago, I just woke up with this thought that there wasn’t a dating website for wine lovers,” she said in an interview with the Daily News. “I know there are dating websites for everybody else from geeks to heavy metal fans, so obviously there’s a need for a one for wine lovers.”


So Pauly, who founded a wine-related job site in 2003, and her 25-year-old daughter Roxane Brooke started working on VineaLove, which will eventually transition into a paid networking site for wine enthusiasts looking for love or companionship.


The first 1,000 users who register on the new site will get a free membership. Pauly said they haven’t nailed down a monthly membership fee for those who sign up after that, but it will likely be about $20 in the U.S. and vary by country.


Pauly said subscriptions were coming in from all over the world before the site even launched, with men and women of a range of ages registering from places like India, New Zealand and Morocco.


“When people like wine, they love wine,” she said. “It’s a real passion.”


English, French, Japanese, Italian and Turkish versions of the site are currently online, and editions in other languages are forthcoming.


Pauly said she would like the site to also be an international platform for oenophiles. In your profile, you reveal whether you are looking for a relationship, friendship or business connection, and whether you are single or in a relationship. Users can contact each other individually, or discuss their favorite vineyards and kinds of grapes with other wine connoisseurs on the forum. There will also be VineaLove meet ups and events in major U.S. cities.


“What wine people love more than drinking wine is talking about it,” Pauly said.




Constellation Brands’ Chris Fehrnstrom Elected as Board Chairman of Wine Institute


Source: WSJ

Jun 14th


Constellation Brands, Inc. (NYSE: STZ and STZ.B), a leading beverage alcohol company, announced today that Chris Fehrnstrom, chief marketing officer, Wine and Spirits division, has been named Chairperson of Wine Institute’s Board of Directors.


“The California wine industry is exciting, and rapidly evolving,” said Fehrnstrom. “Our passion for this industry is unwavering and Wine Institute represents California’s wine interests to policymakers with the goal of increasing exports. We take great pride in the quality of our California wine, which is a great example of the best American-made products.”


“Our high quality grapes and production of world-class wines is a signature California industry that contributes billions of dollars to the local, regional and national economies,” said Jay Wright, Constellation’s president, Wine and Spirits division.  “We are proud that Chris has been chosen by his peers to work on behalf of Wine Institute with wineries, communities, partners and elected officials throughout the state to positively impact this important industry.”


“Chris is widely respected because of his hard work and dedication to the California wine industry,” said Robert P. (Bobby) Koch, president and chief executive officer of Wine Institute.  “His passion, strong industry relationships and understanding of the legislative, regulatory and economic challenges that our members face make him a natural leader. He will continue to drive Wine Institute’s mission to initiate and advocate for public policies that enhance the ability to responsibly produce, promote and enjoy wine.”


Fehrnstrom also praised outgoing Chairperson Kathleen Heitz Meyers. “Kathleen exemplifies all that is good about the California wine industry and I would like to congratulate her on her steadfast service.”


California is the nation’s top winemaking state, producing 90 percent of U.S. wine, and the 4th largest producer worldwide after France, Italy and Spain. Constellation has a strong presence in this important region including our Robert Mondavi, Clos du Bois, Ravenswood, Simi, Franciscan Estate, Wild Horse and Woodbridge wineries. Because of this presence, Constellation has had a longstanding relationship with Wine Institute.


Fehrnstrom has been with Constellation since 2002, first serving as senior vice president of marketing and then president for the company’s former luxury division, Icon Estates.  He then became president of Constellation’s super-premium business before advancing to chief marketing officer for Constellation Brands worldwide in 2009.  Prior to joining the company, Fehrnstrom held key roles at the former as well as Domaine Chandon and E. & J. Gallo Winery.




Sweden rejected wine for being ‘better’ than samples


Source: UPI

June 14, 2013


A Swedish alcohol supplier said the country’s state-run liquor monopoly sent back 6,000 bottles of a Spanish wine because it tasted better than the samples.


Kare Hallden, chief executive officer of alcohol supplier Spruce Up, said state-run liquor store monopoly Systembolaget chose to stock Spanish albarino wine Fulget after choosing its samples over 50 competitors in March, The reported Friday.


However, Hallden said the store sent the 6,000 bottles back to the company in May because the wine delivered was “clearly better” than the March samples.


“I believe that taste-wise it is exactly the same wine,” Hallden told the Livets Goda wine magazine. “Systembolaget, on the other hand, believes that the wine that has been delivered to the stores is much better than that which won the tender in the beginning of the year.”


Systembolaget spokesman Lennart Agen said Hallden’s statements aren’t entirely true.


“We never said it tasted better. We’ve said it tasted different. It is simply a different wine,” Agen said. “Whether the wine that was delivered tasted better or not is his value judgment.”


Spruce Up said it is being forced to pay the cost of returning the bottles, losing tens of thousands of dollars in the process.




Rolland: En primeur is a ‘game’


Source: the drinks business

by Lucy Shaw

14th June, 2013


Bordeaux’s leading consultant, Michel Rolland, has admitted that the process of en primeur tastings and the resulting scores is a risky “game” for consumers.


Michel Rolland has admitted that the en primeur tasting and rating process is a risky “game” for consumers


Speaking to the drinks business this week at the UK launch of his new Spanish wine project, R&G, Rolland said: “You only get to the truth of a wine when it’s in the bottle, before that it’s a sort of game where the consumer can win or lose.”


Rolland was scathing about wine writers’ ability to accurately access en primeur samples, claiming that 99% of professional tasters get it wrong.


“Saying you know what a wine is going to end up like when you taste it after six months in barrel is like having baby twins and saying one is going to be a lawyer and the other a doctor – it’s impossible to know at such an early stage,” he said.


Despite this, Rolland doesn’t believe the en primeur tastings take place too early, as he doesn’t feel critics’ scores carry much weight.


“I don’t think scores are that important – if you look at the world’s top tasters, most of their scores are in alignment and people only care about the first, second and third growths anyway,” he told db.


Rolland praised Robert Parker’s provisional in barrel scores as he feels the truth of a wine can only be known after it’s been bottled


He did however concede that US critic Robert Parker got it right by offering a provisional score while the wines are in barrel and a definitive score when they’re bottled.


“Giving a range, such as 89-92 points, while a wine is in barrel helps account for the element of doubt that remains until the wine is bottled – you can never know the truth until then,” he said.


As Jean-Michel Laporte of La Conseillante explained to db earlier this week, Rolland said that the only difference between his en primeur samples and the final wines is the fact that he doesn’t add any pressed wines (as opposed to free run juice) to the samples.


“Most wines end up with around 10% of pressed wine in the final blend but we can’t put this into the en primeur samples as it’s too harsh and tannic and we have to show a drinkable wine that people are able to understand,” he said.


“You have to take care of some of the details without changing the fundamental character of the wine,” he added.


Rolland, who recently sold his family-owned Pomerol estate Le Bon Pasteur to Chinese businessman Sutong Pan, consults for wineries all over the world.


In terms of China’s winemaking potential, Rolland, who consults for the country’s biggest food manufacturer – Cofco – on its local and imported wines, believes China’s biggest handicap is its climate.


“From what I’ve seen, China’s climate is too prone to extremes ­- it gets too hot in the summer, too cold in the winter and when it rains it pours but I believe the greatest terroirs in China are yet to be discovered,” he said.




Stalking a Wine for All Seasons


Source: WSJ


Jun 13th


WHETHER IT’S RAISING an umbrella to avoid a midsummer soaking, braving unseasonal wind in August or enjoying a late-summer heat wave, Europe’s unpredictable weather never fails to fascinate.


Of course, one of the advantages of living in a climate constantly on the move is that it lends itself to interesting wines. Such is the diversity of the weather here that the growth cycle of the vine changes every year, giving each vintage its own particular characteristics.


So it follows that when it comes to stocking up the cellar for the summer months, an eclectic choice of wines is required to cope with every eventuality. One could argue that during June, July and August it is best to turn to the Northern Hemisphere, where wines are naturally more taut, high in acidity and low in alcohol, rather than the Southern Hemisphere, where they possess more lively and riper fruit.


As the temperature rises, our taste buds crave crisp, dry white wines whose acidity sends a dance of electricity across the palate. This is where Germany excels, producing truly great wine made from the Riesling grape variety that offers a vast array of flavors. It’s a common misconception that Germany only produces sweet Riesling. In fact, it also produces some of the best dry white wine in the world-frequently sold at very affordable prices.


Out of the country’s many regions, my favorite three are the Mosel, Rheingau and Pfalz, which all produce their own distinctive styles.


Riesling from the steep sides of the Mosel Valley can smell of fresh apple, peach, apricot, elderberry, aniseed and quince. These are some of the most elegant and well-made wines in the world. Producers to look out for include Fritz Haag, Joh. Jos. Prüm, Dr. Loosen, Willi Schaefer, Egon Müller and Dr. H. Thanisch.


Further east, in the Rheingau, Pinot Noir-or Spätburgunder, as it is known locally-also thrives. Producers such as August Kesseler make world-class examples that can smell of damson and spice, with a refreshing, mineral length. These pair well with heavy, barbecued meats or lamb cutlets and couscous salad. Producers to hunt down include Schloss Johannisberg, Künstler, Robert Weil and Josef Leitz.


Austria, too, is starting to export some interesting Pinot Noirs, one of which I have highlighted in Drinking Now (below).


The Pfalz covers an enormous area to the east of the Rhine. Here, the Rieslings tend to have strong aromatics and more body, and can be aged for many years. Dr. Wehrheim, Dr. von Bassermann-Jordan, Josef Biffar and Reichsrat von Buhl are among the highlights. Reichsrat von Buhl also produces a sparkling wine known in Germany as sekt. It has a scintillating aroma of green apple, lemon and lime, and a sherberty acidity that makes it a razor-sharp, invigorating aperitif. But don’t be afraid to serve it with food; its attractive acidity makes it an ideal pairing with oily fish such as salmon, mild cheeses like Gouda or mozzarella or vegetarian pasta dishes.


No summer selection is complete without mentioning Beaujolais, the red wine made from the Gamay variety that is perfect for summer drinking. In France’s Beaujolais region, the 10 cru villages (St.-Amour, Juliénas, Moulin-à Vent, Chénas, Fleurie, Chiroubles, Morgon, Régnié, Brouilly and Côte de Brouilly) produce wines that have the complexity and nuanced character of the Old World, but whose prices haven’t risen too far yet.


These fragrant wines can be anything from light and fruity to something a little more complex. They all share one thing in common: They are eminently drinkable. Perfect for the home rack, they can pair with pretty much anything. Slightly chilled with fish dishes, decanted with roasted poultry, as an accompaniment to steak or cold meats and salad. A trio of outstanding vintages (2009, ’10, ’11) has produced wines that are perfumed, ripe and wonderfully easy to drink. Alain Chatoux’s wines are immediately attractive. Thibault Liger-Belair, Jean-Paul Dubost, Olivier Merlin and Bernard Métrat are all wines to look out for.




Safeway: rump stake


Disposals leave US grocer ripe to be taken private


Source: FT

Jun 13th


Tidy shelves make for easy shopping. This helps explain why Safeway, the supermarket chain, sold its Canadian stores. The US business that remains is that much easier for would-be acquirers to drop into their basket. If the deal also maximises the value of Safeway’s parts, so much the better.


On Wednesday, Safeway announced the sale of operations in the frozen north to Empire Company, parent of the Sobeys chain, for C$5.8bn. It is a transformative deal for Sobeys, its aggregate valuation doubling and its store base in western Canada fortified. Empire investors have cheered, sending its shares up more than a tenth. For its part, Safeway shares are up just under a tenth to $25 per share.


The sum-of-the-parts arbitrage for Safeway is straightforward. The sale price represents 11 times cash flow, while Safeway as a whole trades at just 5 times. Even after taxes, the effective multiple paid still exceeds 7 times (do not worry, Empire shareholders – with synergies your effective multiple slips to under 8). And earlier this year, Safeway floated a portion of its Blackhawk subsidiary, a gift card network, in an IPO. With interest in alternative payments running high, it trades at 13 times cash flow. Both of these divestitures establish real market values for valuable subsidiaries – value the market ignores when trapped within the US grocery operation.


There is the worry that with its crown jewels stripped, what remains of Safeway, in all its ugliness, will be laid bare. Yet, while it is a rump, Safeway is at least a simplified rump – basically just a US-based grocer. And it is perfectly moulded to be taken private. If the US portion of Safeway could be acquired at 6 times cash flow, then that, along with the proceeds from the Canadian divestiture and its share of Blackhawk, could be worth above $35 per share – a level Safeway shares have not touched since early 2007.




Hypermarkets suffer midlife crisis


Source: FT

By Scheherazade Daneshkhu in Paris and Andrea Felsted in London

Jun 16th


Miniskirts and the beehive were all the rage, The Beatles topped the charts, push-button telephones were launched – and the first hypermarket was born.


“The Times They Are a-Changin’,” sang Bob Dylan in 1963, the year that Carrefour’s new “everything under one roof” concept opened the doors to a revolutionary new way of shopping.


An excited crowd of 2,500 people poured into the store at Sainte-Geneviève-des-Bois, 20km south of Paris on June 15 to experience the novelty of buying groceries, fresh food, DIY and clothes in a shop three times bigger than the norm.


Self-service, free parking and an on-site petrol station – at the height of the car-buying boom – proved enormously popular and the shelves had to be restocked several times a day.


“I was immediately struck, and even intimidated, by the size of the shop – there were thousands of products everywhere,” recalls Alice, one of the shop’s early cashiers, in a set of anecdotes collected by Carrefour for the anniversary. “Moreover, it was the big store everyone was talking about; people came from all over Île-de-France by car to do their shopping here.”


According to Andrew Seth, author of The Grocers and Supermarket Wars, the early hypermarkets “satisfied a very primary need, which was one-stop shopping. It was just marvellous because people had been used to having to run round six stores, and suddenly there was this wonderful advantage of being able to do everything at one till.”


However, like many 50-year-olds, the hypermarket is going through “a midlife crisis” in the words of Georges Plassat, Carrefour’s chairman and chief executive, who has been battling poor performance at the world’s second -largest retailer by sales after Walmart of the US.


When petrol prices were low in the 1960s and early 1970s, families thought nothing of driving 40km for the convenience of stocking up on everything from tomatoes to tennis rackets. Today, shoppers have many more alternatives to the vast stores on the edge of town, and industry figures show that many are moving to other formats.


Competition has also intensified. Many of the hypermarkets staples, such as consumer electronics, have migrated from supermarket shelves on to shoppers’ laptops, with online transactions now accounting for about 10 per cent of total retail sales in the US and UK. In France, other groups such as Leclerc, Auchan and Casino have been snapping at Carrefour’s heels.


Leclerc, which has smaller hypermarkets than Carrefour and consistently low prices, overtook Carrefour in France for the first time in May in terms of market share, according to Kantar, the market research group.


The economic downturn has also transformed shopping habits. In an effort to avoid temptation, many with strict budgets are staying away from the big stores altogether and so-called hard discounters, such as Aldi and Lidl, which tend to have smaller stores often closer to town centres, have proved a more attractive alternative. In the year to May 12, Aldi’s sales rose 30 per cent year-on-year, while Tesco’s rose just 2.4 per cent, according to Kantar.


Clive Black, analyst at Shore Capital in the UK says hypermarkets have to “find a new relevance. That is something that retail managements all over the world are trying to grapple with”.


The problem is most pronounced in the US and continental Europe where hypermarkets can exceed 200,000 sq ft – the size of two-and-a-half football pitches. Some groups have reduced space by selling it off or renting it out; others have tried to “reinvent” the hypermarket as Carrefour tried and failed to do three years ago with its Planet concept, adding beauty areas, crèches and sushi stands to the mix. In the UK, Tesco has acquired Giraffe, the family-friendly restaurant group, and bought a stake in the Harris + Hoole coffee chain, in an effort to make its stores more inviting.


Though hypermarkets in developed markets are struggling, the story is different in Asia and Latin America where sales are growing at a rapid pace, helped by emerging middle classes, rising car ownership and bigger families than those in the west.


According to Planet Retail, sales at superstores and hypermarkets are set to increase by 4 per cent in North America between 2011 and 2016, with just 2 per cent growth in western Europe. But, they are forecast to rise 7.5 per cent in Latin America and 9 per cent in Asia.


However, even in France, 1m people visit a Carrefour store a day and 90 per cent of the population go to one of the country’s 1,900 hypermarkets at least once a month.


At Sainte-Geneviève-des-Bois, the Carrefour is three times bigger than it was in 1963 – 8,000 sq m – and receives 1.7m customers a year.


Nevertheless, the golden age of the hypermarket in advanced economies is over, as it struggles to find a place in a world where an iPad mini is more fashionable than a miniskirt.


While talk of the death of supercentres and large hypermarkets invoked by critics may be premature, they “undoubtedly have got a health warning hanging over them”, says Mr Black.




New York introduces legislation to ban use of polystyrene


Source: NRA

June 14, 2013


Local lawmakers in New York City have introduced legislation that would effectively ban the use of polystyrene packaging at restaurants and other foodservice outlets in the area.


The legislation, introduced June 12 into the City Council by members Lewis A. Fidler, Vincent J. Gentile and Letitia James in conjunction with Mayor Michael Bloomberg, would prevent operators from using the plastic foam packaging at fullservice and quickservice restaurants, cafes, delicatessens, coffee shops, grocery stores, vending trucks or carts and cafeterias.


Mayor Bloomberg initially proposed the ban during his State of the City address in February.


If passed, the regulation, which would be enforced by the city’s departments of health and consumer affairs, would take effect July 1, 2015. According to the proposed bill, operators who do not comply with the rule would face fines of $250 for the first violation, $500 for the second and $1,000 for the third. Manufacturers of polystyrene packaging also would be subject to financial penalties.


City Councilman Peter Vallone urged the city to reconsider the proposed ban, saying it would “cost businesses, consumers and taxpayers millions of dollars as well as threaten jobs in the restaurant industry” and other businesses.


He asked the mayor to work with the council on other options, including recycling. “Foam can and should be recycled,” he said. “I urge the mayor to work with the council to explore this option instead of a ban.”


The National Restaurant Association, which supports the increased use of sustainable packaging, said it would appreciate the opportunity to work with the city on developing a plan that is feasible and cost-effective for the industry and consumers.


“It is important to note that in some cases, a suitable supply of alternatives to polystyrene foam packaging does not exist or is prohibitively expensive,” said Scott DeFife, the NRA’s executive vice president of policy and government affairs. “This ban could create a great burden for restaurants, more than 90 percent of which are small businesses, if those concerns are not addressed.”


DeFife pointed out that some alternative packaging sources have their own impact on the environment due to the energy and resources required to make them. In other cases, he said the infrastructure for recycling or composting doesn’t exist or can’t meet the demand.


“This is an area where incentives may work better than prohibitions,” he said.


A recent study conducted by MB Public Affairs on behalf of the American Chemistry Council found that a polystyrene ban would likely increase the operating costs of the city’s restaurants and other small businesses since alternative packaging is often more expensive. It also is not as effective in keeping food hot or cold, the study found.


“For a restaurant – especially a small, neighborhood business – mandating a switch to a higher-priced alternative for basic supplies can have a serious effect,” said Andrew Moesel, spokesman for the New York State Restaurant Association, when the report was issued in March. “These are businesses that are absorbing higher food and energy costs, and are under pressure from a struggling economy that leaves less money in people’s paychecks. It’s one more thing to add to the headwinds they are facing.”


The study said a polystyrene ban, if enacted, could end up costing businesses, consumers and tax payers nearly $100 million a year.


Lynn Dyer, president of the Foodservice Packaging Institute said government limits on packaging options is not good public policy.


“Businesses should be allowed to select packaging based on its own merits of product performance, suitability, price competitiveness and impact on the environment,” she said. “A free marketplace helps to keep costs down and drive innovation.”


Dyer added that she hoped the city would “refocus its efforts on increasing recovery of all foodservice packaging instead of decreasing packaging options for foodservice operators.”




Pennsylvania: Corbett to nominate former Congressman Tim Holden to LCB


Source: Lebanon Daily News



A Schuylkill County Democrat who represented Lebanon County in Congress may find a seat on the Pennsylvania Liquor Control Board.


Gov. Tom Corbett announced Thursday he will nominate Tim Holden to post.


The governor also said he will nominate Pennsylvania Superior Court President Judge Correale F. Stevens to fill the vacancy on the Pennsylvania Supreme Court, Sean Logan to the Turnpike Commission and Gladys M. Brown to the Public Utility Commission.


Nominations for the Supreme Court, Liquor Control Board and Turnpike Commission require a two-thirds vote in the state Senate. The Public Utility Commission requires a majority vote by the state Senate. Corbett plans to submit the nominations to the state Senate on Friday. Holden, of St. Clair, served 10 years in Congress representing Lebanon, Berks and Schuylkill counties, as well as parts of Perry and Dauphin counties, but his political career was cut short by the redistricting after the 2010 U.S. Census. Gone was the 17th U.S. Congressional District and, Holden, who had represented Lebanon County since 2003.


Put in its place were the 6th Congressional District represented by Jim Gerlach and the 15th Congressional District represented by Charlie Dent.


Holden then lost in the 2012 primary to Scranton attorney Matt Cartwright in his new district, where he was a virtual unknown to 80 percent of the population. A graduate of Bloomsburg University, Holden worked as a probation officer, real estate agent and insurance broker before becoming sheriff of Schuylkill County for seven years, all prior to his election to Congress. During his tenure in Congress, Holden was a member of various agriculture, transportation and infrastructure committees.


“These four individuals reflect the qualities and qualifications that transcend political labels and uniquely suit each one for the positions of public trust for which they have been selected,” Corbett said in a news release.


Stevens, of Sugarloaf, Luzerne County, has served as president judge of the state Superior Court since 2011. He has been a member of the Superior Court since 1998.


A graduate of Penn State University and the Dickinson School of Law, Stevens served as a judge of Luzerne County Court of Common Pleas, district attorney of Luzerne County, as well as serving four terms as a member of the House of Representatives and solicitor for Hazleton City and Hazleton Authority. Stevens teaches criminal justice and government courses at Penn State-Hazleton, as well as continuing legal education for state and local bar associations. He has received numerous civic awards and was honored by the Dickinson Law School Alumni Association for his service in the judiciary.


The Supreme Court seat became vacant with the resignation of Joan Orie Melvin in May. Stevens, if confirmed, will serve until January 2016, with the election to fill the vacancy permanently taking place in November 2015.


Logan, of Monroeville, Allegheny County, is a former state senator and currently serves as the director of the Convention and Visitors Bureau of Greater Monroeville.


Prior to joining the visitors bureau in 2013, Logan was vice president of community relations at the University of Pittsburgh Medical Center. A graduate of the University of Pittsburgh, Logan also served as mayor of Monroeville. During his tenure with the state Senate, representing Allegheny and Westmoreland counties, Logan served as minority chairman of the Law and Justice Committee and as a member of the Appropriations Committee.


Brown, of Harrisburg, has served with the Democratic caucus of the state Senate since 1991 and presently holds the position of deputy chief counsel. After earning her bachelor’s degree and law degree from the University of Pittsburgh, Brown served as a law clerk to retired U.S. District Court Judge Paul A. Simmons in the Western District of Pennsylvania. She has also served as assistant counsel for the Bureau of Professional and Occupational Affairs in the Department of State.


Among her areas of legal experience, Brown has worked on public utility law, helping to draft major pieces of legislation, including electric competition, telephone and natural gas deregulation.




Maine: Hospital debt payment bill heads to Gov. LePage


Source: AP

Jun 14th


Maine lawmakers gave final approval on Thursday to a plan to renegotiate the state’s liquor contract to pay its hospitals’ years-old debt of hundreds of millions of dollars for Medicaid services – one of Gov. Paul LePage’s top priorities.


Lawmakers in the House and Senate unanimously approved the bill, which no longer is tied to a proposal to expand Medicaid to 70,000 Mainers. Its passage is a major victory for the Republican governor working with Democratic majorities in both chambers.


“Our hospitals are key to the health of our community, and this final payment makes good on the lifesaving work that our nurses and doctors do for Maine families,” said Rep. Margaret Rotundo, a Lewiston Democrat. “Paying back the hospitals is not a partisan issue, and I strongly suspect that all of us are very pleased to be able to vote affirmatively in support of our hospitals today,” she said.


Under the proposal, sponsored by Republican Sen. Patrick Flood of Winthrop, the state’s share of $183.5 million would be covered using bonds, which would be paid off with anticipated revenues from a restructured, 10-year liquor contract. That would trigger a federal match to complete the payment.


LePage’s previous effort to pay back the hospitals fell short last month after Democrats tied it to a proposal to expand Medicaid under the federal health care overhaul, which the governor opposes.


Democrats said the two bills belonged together because accepting federal funding to cover more Maine families would help reduce hospital charity care costs, which are passed on to all Maine taxpayers.


But LePage, who campaigned on the hospital debt issue when he ran for governor in 2010 and has made repayment a top priority since taking office, vetoed the measure and re-introduced the hospital bill on its own.


Lawmakers approved a separate bill Thursday night to expand Medicaid, also sending that measure to LePage.


Hospital officials said being paid what they’re owed will allow them to invest in equipment and their facilities, pay off loans, replenish savings and pay vendors on time.


“I’m not sure I thought today would ever happen, but I am very, very pleased and thankful it is here today,” said Sylvia Getman, CEO of the Aroostook Medical Center in Presque Isle, which is owed about $12 million.


Not being paid by the state has forced hospitals to put off buying new equipment, restrict travel and hiring, freeze salaries and borrow money for equipment and projects.


They’ve also had to pay higher interest rates on loans because their credit ratings were downgraded by credit rating agencies, said Derrick Holland, chief financial officer for Eastern Maine Healthcare Systems, whose seven hospitals serving the northern two-thirds of the state are collectively owed $111 million.


“This is not a windfall for the hospitals,” Hollings said. “Quite frankly, there’s a lot of mopping up cleanup work that needs to be done to repair the damage that was a caused as a result of not being paid.”


Lawmakers on Thursday emphasized the bipartisan support behind the liquor contract proposal, which includes the renegotiation of the prices of some brands to compete more aggressively with New Hampshire liquor sales.


“It’s really good to see the hard work of both side of the aisle working together on this bill bringing this forward and bringing really good, strong support to this bill in a bipartisan fashion,” House Republican Leader Kenneth Fredette of Newport said before Thursday’s vote.


The bill’s passage also could mean the release of some unissued bonds that already have been approved by lawmakers and voters. LePage has said he won’t sign off on $105 million in public improvement bonds until lawmakers agree on how to pay back the state’s hospitals. Democrats say the governor is holding the bonds hostage, putting jobcreating road construction projects on hold.


Lawmakers say the state will save $5 million if it completes the payments before Oct. 1.




Nevada: Billboard for alcohol not funny to some


Source: News 3

by: Sandra Gonzalez



A billboard that was probably meant as a joke turns out is no laughing matter to some. It’s an ad for alcohol from a popular liquor company, but the attempt at humor isn’t very funny to some people.


The billboard is for Lee’s Discount Liquor, and its message is: “Alcohol is cheaper than therapy”.


Mother, Lourdes Mansouri’s mouth dropped when she read this billboard.


“Putting a sign that alcohol is cheaper than therapy. Unbelievable that’s what I say. It’s unbelievable,” Mansouri said.


She says close friend of hers died as a result of a drunk driver.


“She was a mother of three and she died in a crash accident and she was on her way to work at three in the morning, and she got killed by a drunk driver, so i don’t think alcohol is cheaper than therapy, I don’t think so,” Mansouri said.


Public relations consultant Ira David Sternberg drove past the billboard and found himself doing a double take. Sternberg tells us the billboard probably wasn’t intended to make light of the situation, but the message fell short. Perhaps he says another set of eyes should have been called in before it went on the billboard.


“It shouldn’t come from a retail operator kind of product. It really should come from someone else, a comedian talking about his history in therapy for example. That could be funny. But not when you’re selling the product,” Sternberg said.


So many people were outraged, that a national petition was started on The petition urged the owners of Lee’s Discount Liquor to remove the billboard saying it’s a socially irresponsible message model to everyone.


But not everyone was offended.


“I think it’s entertaining and humorous. I do believe it to some degree, because therapy is very expensive now and alcohol is very cheap,” said Jonathan Sims.


“It’s way cheaper. Go buy me a bottle. Ain’t got to worry about no damn therapy, especially dealing with my crazy kids,” said Booker Payne.


One woman says the sign while not humorous is sadly true.


“It’s sad because a lot of people are addicted to alcohol and it takes an awful lot of treatment to try to get them off it, and often you can’t get them off it,” said Elspeth Fyfe.


News 3 spoke to the company’s owner, who told us the billboard will be taken down next week.




Wisconsin: Green Bay liquor store owners get jail time in fraud


Source: PostCrescent

Jun. 14, 2013


The former owners of a liquor store on Green Bay’s northeast side will serve jail time as well as probation for running a food stamp fraud operation out of their store.


“The system was designed to help people, and you were entrusted with this,” Brown County Judge Tammy Jo Hock told Gurnek and Gurdeep Basanti, owners of the former Beach Road Liquor, 1020 N. Irwin Ave. “This was a complete violation of that trust.”


The Basantis let customers buy liquor and cigarettes with their county-issued “Quest” cards, which is a forbidden use under the food stamp rules, court records say. They also would, with the cooperation of some of their food stamp customers, double-charge them and then pocket the extra cash, and use their customers’ cards to make purchases for the store.


Gurnek Basanti, 56, directed his wife to do the deeds, mostly because he was seldom in the store because of a separate job he had as an independent contractor dump truck driver, said Basanti’s lawyer, Michael Hart.


That made Gurnek Basanti more culpable, but the operation still shouldn’t result in jail time, Hart argued.


“On the street, this is an acceptable way of doing business,” Hart said. “Customers seem to expect it; they come to a business and ask if they do business this way, and I don’t know whether they were afraid of losing that customer’s business or hoped to score, but they engaged in the practice and it gained steam.”


Gurdeep Basanti may have done most of the illegal transactions, but it was at her husband’s directive, said her lawyer, David Garaghty.


“Hypothetically, if he had said no, I think it wouldn’t have happened,” said Garaghty, also asking for no jail time.


Hock rejected both arguments.


“They were an arm of this (food stamp) program,” Hock said. “There were numerous transactions . When the search warrant was executed, 15 Quest cards were recovered, one on Mrs. Basanti’s person and 14 in the store. He (Gurnek Basanti) admits they continued out of pure greed.”


In sentencing Gurnek Basanti, Hock ignored Hart’s request for no jail time and also a prosecution recommendation for 90 days in jail and instead gave him six months in jail, along with two years probation.


Hock also rejected a joint recommendation of no jail time, just community service, plus probation for Gurdeep Basanti and gave her the same sentence as her husband’s.


The couple already paid restitution of $825, the only figure assessors could come up with without guessing, according to Assistant District Attorney Beau Liegeois, so Hock ordered no restitution but observed the fraud amount likely was much higher.


The couple’s daughter, Simarjot Basanti, 26, was implicated in the scheme but was only charged with a single misdemeanor count of fraudulently using someone else’s card to make a $27 purchase. This time Hock followed the joint recommendation and issued a sentence of one year probation and 50 hours of community service.


The Basantis have since been running a Dollar Store out of their previous liquor store, having lost their liquor license following their August arrest. They aren’t authorized to accept Quest cards at that store and are forbidden, as condition of their probation, from possessing another person’s card.




Edelman issued a corrected version of this release




Craft distillers celebrate new opportunities for growth


Source: Edelman

June 13, 2013


Florida Governor Rick Scott has signed into law a bill that redefines business for state alcohol manufacturers. HB 347/SB 642 set a precedent for the alcohol industry that has not been seen in the state since the days of prohibition. GrayRobinson government relations attorney Jason Unger and alcohol industry attorney Richard Blau represented the Florida Craft Distillers Guild in amending outdated legislation.


“There are several sets of interests that have to be taken into account when drafting alcohol legislation, which makes it one of the trickiest industries to represent from a legal perspective,” said Blau, the chair of GrayRobinson’s national alcohol beverage and food law practice. “You have stakeholders with concerns in the public safety and health and wellness sectors, while also having to consider implications at a political and economic level. The fact that this bill was able to pass in its first session, with little to no opposition on the voting floor, is truly extraordinary.”


“From a legislative standpoint, we were able to work with key legislators and leaders in the alcohol industry to pass a bill that everyone could support,” said Unger, the lead lobbyist on the effort out of GrayRobinson’s Tallahassee office.


In recent years the state has seen a growing number of craft distilleries that invite the public to tour their facilities and sample their product. However, unlike wineries and breweries, Florida law prohibited these distilleries from selling manufactured products on site. The product would have to be shipped off to a wholesaler or distributor for purchase. With the passage of HB 347/SB 642, championed by Representative Ronald Renuart and Senator Alan Hays, these distilleries can now sell products as part of this offering.


Philip McDaniel, chairman of the Florida Craft Distillers Guild and owner of the St. Augustine Distillery currently under construction in St. Augustine, Fla., predicts that the number of distilleries across the state could grow from 15 to anywhere between 35 and 50 over the next decade as a direct result of this new legislation.


“For us, the most exciting part of this is that we can now complete the customer experience,” said McDaniel. “When customers tour our distilleries they build up anticipation to try the product and want to take home a memory of the experience.  When we’d have to say ‘I’m sorry, we can’t sell you a bottle’ at the very moment they’re eager to purchase, well, it’s just creates a negative customer experience.”


McDaniel has plans for the future of St. Augustine Distillery now that the law will take effect July 1. In addition to a gift shop that sells bottles of the artisan crafted bourbon, gin, vodka and rum, there will be a small screening room that shows a documentary about the distiller’s relationship with local farms. The distillery is located just off of the trolley route located in the heart of St. Augustine’s historical tourist district and McDaniel is hopeful that a vast majority of these patrons will enter his doors.


“Florida has some of the best agriculture in the world, especially when used as a value added component for alcohol manufacturing. We have one of the largest sugar cane crops in the nation and a variety of fresh fruits to flavor our liquors, wines and beers,” said McDaniel. “This legislation will allow Florida distillers to capitalize on our unique location and build a global reputation bringing new visitors to the state because, quite simply, they can’t find this experience anywhere else.”


JoAnn Elardo, owner of Cape Spirits in Cape Coral, Fla., can finally hire the help she needs to offer tours due to the added revenue the distillery will bring in from alcohol sales. Cape Spirits manufactures Wicked Dolphin Rum.

US Spirits: NABCA Conference Call – Spirits growth solid, but moderating


Source: UBS

Jun 13th


NABCA expects c3% volume growth and c5% value growth for 2013E

UBS hosted a conf call with NABCA (Control States cover 22% of US volumes). 2013 outlook remains solid with NABCA expecting c3% volume growth and c5% US$ value growth for US spirits. However, this is a moderation from the current 12 month rolling trend of +3.2% volume and +6.1% value growth up to April. The moderation in volume growth of the last 3-4 months could be linked to the economy and tough y/y comparables. NABCA expects May volumes to increase by +1.9-2.0% y/y against a very tough comparable of +11%.


Premiumisation and price increases remain a focus for the industry

Ultra premium continues to drive the fastest growth in the market of +10% (though moderating from +12% two years ago), with Super Premium and Premium picking up from +5% to +6% and Value slowing from +4% to +3%. NABCA believes that most spirits companies are looking to take price where they can.


Innovation expected to remain a focus, across all beverage alcohol

NABCA expects continued momentum for bourbon flavour innovation (though not to the extent of vodka). New vodka launches continue maintaining high competition in the category (Burnett’s Vodka by Heaven Hill is a #4 brand in the Control States, New Amsterdam vodka by Gallo is one of the fastest growing brands). NABCA sees the spirits industry embracing craft distillers more than in beer. Beer innovation is expected to continue to pick up, even though NABCA has seen only minor impact from hybrid products on spirits to date.


Comfortable with 2013E forecasts for US spirits, though upside unlikely

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




MillerCoors boss welcomes beer battle with Constellation Brands (Excerpt)


Source: Just-Drinks

By James Wilmore

13 June 2013


MillerCoors’ boss has revealed he is “looking forward” to competing with Constellation Brands in the US beer market and does not fear new rivals.


Tom Long, president & CEO of the Molson Coors and SABMiller JV, admitted that brands such as Corona, which Constellation now has the sole US rights to, are “very powerful in certain parts of the country”.  “I’m sure they (Constellation) will be seeking to be more aggressive,” Long told Bloomberg TV today (13 June).




Ill. law to force Busch to sell beer distributor stake by 2015


Source: Chicago Tribune

By Emily Bryson York

June 13, 2013


It’s official: Anheuser-Busch will have to sell its stake in City Beverage, the brewer’s largest local distributor.


Gov. Pat Quinn signed HB2606 into law Thursday afternoon. The legislation reinforces the state’s three-tier system, which requires the manufacture, distribution and retail sale of alcohol be split among  three business interests. Most states have had similar systems in place since Prohibition.


Anheuser-Busch, owned by Leuven, Belgium-based Anheuser-Busch InBev, has until Jan 1, 2015, to sell the stake.


BDT Capital, an investment firm owned by Byron Trott, owns the remainder of City Beverage.






Thirty-nine Wines Receive Highest Accolade and Are Awarded The Chairman’s Trophy


June 13, 2013


Ultimate Beverage Challenge® (UBC), is proud to announce the results of the annual Ultimate Wine Challenge® (UWC) held at Astor Center in New York City on June 3-7, 2013. With a record 800+ wine entries this year – up 10% over last year – 39 superior wines received the highest score in their category and were awarded the Chairman’s Trophy. Scores of wines were named Finalists and many rated “Great Values” based on their score-to-price relationship, which shows that a great tasting wine doesn’t have to cost a fortune. All wines rated 80+ are listed in the results and all wines rated 85+ include tasting notes.


Full results available at


UBC founder/Judging Chairman F. Paul Pacult, UBC partner/Judging Co-Chairman Sean Ludford and 15 of the world’s foremost wine buyers, authors, journalists and sommeliers, including six Masters of Wine, tasted, assessed, debated, reviewed and scored the entries using UWC’s innovative multi-round judging system and the consumer-friendly 100-point rating scale. In accordance with UWC service policy, all wines were judged in appropriate fine crystal glassware and grouped in small flights of 3 to 7 wines according to grape type, region and price. The judges did not know the identity of any of the entered wines in order to ensure unbiased evaluations.


UWC 2013 judges were: Christy Canterbury, MW; James Conley; Mary Ewing-Mulligan, MW; Doug Frost, MS, MW; Debbie Gioquindo; Mary Gorman-MacAdams, MW; Ed McCarthy; John McClement; Jean K. Reilly, MW; Jack Robertiello; Patricia Savoie; Jennifer Simonetti-Bryan, MW and Tara Q. Thomas.


Said Pacult of UWC 2013, “The dramatic increase in participation again this year from wine producers from five continents serves as a clear affirmation of Ultimate Beverage Challenge’s meticulous detail to methodology, recognized authority and uncompromising integrity. In short, everything we do, every system we’ve created, is geared to showcase each wine’s virtues.”


Top scoring wines will be published in the Ultimate Beverage Challenge 2013 Guide to the World’s Best Wine & Spirits in Beverage Media (October 2013 issue), which goes out to 60,000+ beverage alcohol buyers in the United States.


For downloadable, behind-the-scenes images of UWC, go to:




New York wine collectors sue Charlie Trotter, accusing him of selling a counterfeit bottle of wine


Source: Chicago Tribune

By P.J. Huffstutter

June 13, 2013


The famed Chicago chef Charlie Trotter has been sued for allegedly selling two wine collectors from New York a big, bogus bottle of wine.


According to a lawsuit filed Thursday in federal court in Chicago, Bekim and Ilir Frrokaj paid more than $46,200 last June for what they thought was a magnum of 1945 Domaine de la Romanée-Conti from Trotter’s Michelin-starred restaurant.


Trotter closed his restaurant last August, citing a desire to travel and to study philosophy, and as part of the closure made plans to sell thousands of bottles from his restaurant’s wine collection. This drew interest from wine aficionados who admired the restaurant’s collection of Bordeaux and cabernets.

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“During dinner, Charlie Trotter and the sommelier explained the rarity and value of the DRC magnum to Benn and Ilir,” according to the court filing. “Charlie Trotter and the sommelier also spoke about wines from the Domaine de la Romanée-Conti estate and how those wines are some of the rarest and most valuable in the world.”


But the Frrokajs contend this was not true, and that it was only when they tried to have the bottle insured that they learned from a consultant that it was counterfeit.


Trotter could not immediately be reached for comment. It was not immediately clear whether he hired a lawyer for his defense.


According to the complaint, when consultant Maureen Downey met with estate co-owner Aubert de Villain, he stated “Domaine de la Romanee-Conti only produced small yields in 1945 and as a result did not produce any large format magnum-size bottles.”


The lawsuit accuses Trotter and his former restaurant of violating federal and state consumer laws, and seeks $75,000 in damages. Efforts to recover without going to court proved unsuccessful, the plaintiffs’ lawyer John Auchter said Thursday.




Will More Collectors Turn Wine Into Cash?


Source: Forbes

Jun 12th


Selling art is pretty hard and pretty expensive. Finding buyers can be tough, particularly for expensive works, and US collectors that do sell works pay a higher rate of capital gains tax than they would on most assets.


So it’s understandable that more collectors today use their art collection as collateral for loans instead. In fact, 41% of  collectors surveyed in Deloitte’s 2013 Art and Finance Report say they’d consider art-secured lending.


But what about wine? Yesterday, Bloomberg’s Miles Wiess reported that Goldman Sachs had advanced a loan to a former senior director, Andrew Cader, backed by 15,000 bottles of fine wine, mostly first growth Bordeaux and grand cru and premier cru Burgundies.


It has already spawned a lot of groan-worthy headlines about wines and liquid assets, but will this news encourage more wine collectors to follow in Cader’s footsteps?


Although individuals can get already loans using a wide range of esoteric assets from jewellery to antiques as collateral, as Bloomberg reports, speciality lenders have been less keen on wine-secured loans, allegedly because of concerns about fakes.


Nevertheless, there seems to be decent interest from borrowers, which is why some lenders do it. Bordeaux Cellars, a specialist wine lender in London, currently charges borrowers 15% per year for loans of 12 to 18 months secured against wine collateral. However, Bordeaux Cellars will only lend up to 35% of the value of the wine used as collateral. That’s considerably less than the amount of cash that lenders are typically prepared to advance against art collateral, usually up to 50% of the value.


Borro will also give you a short-term loan on your wine collection, but for a price -over 35% on an annualized basis.


However, art-secured loans don’t come cheap either. There are private banks that will advance loans at reasonable rates if clients can also show that they have top-notch credit and other assets at their disposal. However, there are plenty of other lenders that will advance smaller amounts to anyone with the right collateral, as long as they’re prepared to pay eye-watering interest rates.


On some levels, wine should be a more compelling form of collateral compared to things such as art or antiques or jewelry, where valuation is even more subjective. You can actually find a market price for many top-tier Bordeaux, for example, on the Liv-Ex wine exchange in London. And there are plenty of concerns about forgeries and fraud in the art market too.


So it will be interesting to see if, and how, opportunities for collectors to take out wine-secured loans actually grow.




Had enough of the stock market? Try investing in wine


Source: Fox News

By Tracy Byrnes

June 12, 2013


More and more people are buying wine, not just for pleasure, but as an investment.


Even Goldman Sachs was willing to accept almost 15,000 bottles of fine wine as loan collateral from a former high-ranking executive, according to a regulatory filing last month.


Wine lovers and Wall Street pros see the value and want to invest. So it’s no surprise a wine investment fund would surface. The Bottled Asset Fund (BAF), launched in 2010, is the world’s first Italian-focused fine wine investment fund.


The market for Italian wine is growing globally, with export markets, like Asia, driving up value. Hence, the BAF currently is projected to return profits to its investors, net of fees, of over 30 percent. Can’t even get close to that investing in the stock market these days.


Most recently the fund bought the historic collection of Biondi-Santi Brunello di Montalcino valued at $5 million. The Biondi-Santi estate is widely recognized as the creator of Italy’s most important wine, Brunello di Montalcino, and, more importantly, it introduced wines for long-term aging to the Italian wine culture.


This 7,000-bottle acquisition spans 1945 to 1975 and includes hundreds of bottles of the cult 1955 and 1964 vintages, representing a unique addition to the BAF portfolio.


And with so much interest from investors, the fund’s management company, Vino Management Corporation, plans to launch another fund by the end of 2013, with the goal to commit $25 million.


So you want a piece? Current minimum investment is about $50,000, according to Sergio Esposito, the fund’s director who has been in the Italian wine business for over 30 years.


He is also the founder of Italian Wine Merchants in Manhattan, one of the most thorough Italian wine stores in the country.


So if the stock market volatility is keeping you up at night, maybe investing in the BAF would be a better option.


Don’t have the money? Then just have a glass of wine before bed.


Cent’ Anni




Buyers out in force for 2013 coastal varieties


Source: Western Farm Press

Greg Northcutt

Jun. 12, 2013


More 2013 wine grapes from California’s coastal regions are trading hands in the spot market than from the interior valleys.


“That’s mildly surprising,” says Jeff Bitter, vice-president of operations for Allied Grape Growers, Fresno, Calif., a marketing cooperative with nearly 600 grower-members in the state’s major grape regions “Last year Central Coast and North Coast growers harvested such a huge crop that demand for their grapes this year wasn’t expected be so strong so early in the season, but it is.”


One reason for the increased interest in Coastal grapes is the limited availability of Central Valley grapes. Much of this year’s production there is still covered by multi-year contracts negotiated when recession-battered consumers drove up demand for the lower-priced wines made from interior-grown grapes.


Now, with the economic outlook beginning to improve, consumers are beginning to trade up when they go wine shopping.


“The real hot spot in the wine market right now are bottles priced in the $13 to $18 range,” Bitter says. “That seems to be generating interest in grapes from most Coastal areas except for the ultra-premium regions. Higher-priced Napa Valley Cabernet Sauvignon and Sonoma County Pinot Noir are still in strong demand, too. However, buyers seem more interested in purchasing great quality coastal fruit so they can average down the grape cost of their higher-end programs, rather than purchasing additional high-end fruit.”


While the prices growers are getting for their 2013 grapes are below historical highs in many cases, they’re still at economically sustainable levels for most varieties grown in the state, not just the Coastal regions, he reports.


Red varieties, in general, have maintained the strong prices they commanded last year, Bitter notes. “Across the board, Cabernet Sauvignon, Pinot Noir and Petite Syrah, at least as a blender, seem to be doing very well,” he says. “Growers with any or all of those varieties have plenty of buyers knocking at their doors.”


Multi-year contracts are common in the Coastal areas. That includes the white varieties, with the highest prices being offered for Pinot Grigio, Sauvignon Blanc and Chardonnay, Bitter adds.


Given last year’s high-tonnage Chardonnay production, he wasn’t expecting the strong interest in the variety this year. In the past, a big Chardonnay crop one year, typically, has been followed by a steep price decline the next. In fact, the Chardonnay market did soften at the end of last year’s harvest. “Since then, it’s bounced back and is now healthy and stable,” Bitter says.


Last year’s big crush in the Lodi-Clarksburg area of the San Joaquin Valley has observers guessing about the likely size of this year’s harvest. Most expect production to the vines use this season to recover. However, good bunch counts and vine growth early this season show promise of another sizeable crop, he reports.


Meanwhile, vineyards in the Central Valley south of Lodi could be poised for a jump in production this year.


In 2012, while growers in other part of the start saw double-digit increases in production, the Central Valley crop was only about four percent bigger than an average crop


“So, it’s possible, maybe even likely, that we’ll see a good strong increase in the size of  the Central Valley crop this year, while production elsewhere is down due to a large crop last year,” Bitter says.


The unseasonably warm weather that has characterized this season and advanced development of the 2013 crop throughout California’s wine grape areas could be setting the stage for strong production next year. As he points out, fruit bud differentiation for one year’s crop occurs during the previous May and June. By that measure, this year’s weather is favoring a good bunch count for the 2014 crop.


In the meantime, though, forecasts are calling for a hot summer. High temperatures combined with reduced deliveries of surface water this year and the costs of pumping water from the ground could force growers to cut back on their irrigations. And that, Bitter says, coul result in growers harvesting a smaller crop than the one now developing on their vines.




2013 ‘a vintage to remember’ say New Zealand winemakers


Source: Decanter

by Richard Woodard

Thursday 13 June 2013

Winemakers in New Zealand are hailing the 2013 vintage as ‘one of the best in history’, with a record harvest 28% bigger than last year’s crop.


New Zealand Winegrowers CEO Philip Gregan described the summer as ‘outstanding’ with ‘near-perfect conditions for growing grapes’.


‘The result is that we expect the 2013 wines to be vibrant, fruit-driven and complex expressions of our diverse grape-growing regions – 2013 looks set to be a vintage to remember.’


Nearly 350,000 tonnes of grapes were harvested in 2013, a record volume up 5% on 2011 and 28% bigger than last year’s small crop, which left New Zealand short of wine to feed its expansion plans.


Key region Marlborough and key grape variety Sauvignon Blanc both had good years, with volumes up 33% and 26% respectively, while the Pinot Noir crop was 36% bigger than in 2012.


‘The small 2012 grape crop left the industry unable to meet continuing strong consumer demand in established and new markets,’ said Gregan.


‘Winemakers will welcome the more normal 2013 harvest as the better balanced supply will facilitate renewed export growth in the year ahead.’


Premium winery Villa Maria described the quality of Marlborough fruit as ‘exceptional’ with Chardonnay an early highlight, but reserved its highest praise for Hawke’s Bay.


Claiming that the area’s 2013 harvest was ‘remarkable’ and would ‘go down in history’, the company said: ‘We have never seen everything look so pristine and the flavours were amazing.’


Flavours were so pure and clean that variations between soil types and individual clones were apparent, with Merlot described as ‘a real stand-out’.




Bordeaux 2012 hamstrung by ‘insufficient price cuts’


Source: Decanter

by Sophie Kevany in Bordeaux

Thursday 13 June 2013

An official summary of Bordeaux’s 2012 en primeur campaign shows the average price cut on all 344 wines released was 7.6%, compared to the 2011 vintage.
Despite early hopes that sales would be spurred by significantly lower pricing from Bordeaux’s five first growths, which were down 33% on the previous year and sold well, overall public demand was generally very poor.


The new figures, produced by Bordeaux-based wine brokerage house Tastet Lawton – which is widely respected for its hard data on primeur campaigns – also show 2012’s pricing was an average of 30% higher than the most recently affordable vintage of 2008.


‘The two big problems for the 2012 campaign were insufficient price cuts and too many wines on the market,’ Tastet Lawton’s managing director Erik Samazeuilh


Samazeuilh said the number of brands released as en primeur should be closer to the 1995 figure of 235 and that wines with little resale margin, such as the Cru Bourgeois, were crowding the market. ‘Only the Grands Crus and their like should be on the market as en primeur,’ he said.


He added that Bordeaux’s negociants were now carrying unwieldy amounts of stock, made up of about two thirds of the unsold 2012 vintage, large quantities of unsold 2011 and some unsold 2010.


On a slightly more upbeat note, Samazeuilh said next week’s Vinexpo wine trade fair might bring some demand for the 2012s, especially with 2013 vintage currently mired in bad weather, and at least three weeks behind schedule.


Some commentators believe traditional en primeur buyers in the US and UK have lost interest in buying Bordeaux’s primeurs following price inflation for the 2009 and 2010 vintages, driven by demand from new buyers in China and Hong Kong.




Burgundy’s Les Saint Georges applies for promotion to Grand Cru


Source: Decanter

by Panos Kakaviatos

Thursday 13 June 2013


A group of vintners from Burgundy’s renowned Nuit Saint Georges appellation is applying to have its Les Saint Georges vineyard promoted from premier cru to grand cru status.


Thibault Liger-Belair, who owns more than 2ha of the 7ha vineyard, is one of a team of producers preparing the application to France’s appellations authority, the INAO.


The INAO now needs a ‘cahier de charges’ specifying terroir and soil characteristics, yields, planting conditions, harvesting methods and historical justifications for such a promotion.


INAO office manager Eric Vincent told that after detailed examinations of the terroir, the application would be forwarded to INAO headquarters in Paris.


Les Saint Georges is one of 41 premiers crus of Nuits Saint Georges but has long been considered the very best terroir of the region, which has no grand crus.


Liger-Belair, who has teamed up with Gregory Gouges of Domaine Henri Gouges, Erwan Faiveley of Domaine Faiveley and Philippe Chezeaux of Domaine Chevillon-Chezeaux, among others, told the promotion would ‘repair a historical anomaly’ in that the original decision was taken in a specific economic and political environment.


He said Les Saint Georges could have been classified as grand cru, but its candidacy was not submitted because the then owners, ‘in a time of economic crisis’, wanted to avoid paying the higher taxes that grand cru vineyards were liable to.


Liger-Belair is ‘aware’ of doubts about the initiative, including those of his cousin Louis Michel Liger-Belair, who is president of Burgundy’s grand cru union and who runs Domaine du Comte Liger-Belair in Vosne Romanée.


One concern, according to Thibault Liger-Belair, is that such a promotion may lead to further promotions and open a Pandora’s Box, ‘diluting’ the meaning of grand cru.


Frederic Mugnier of Jacques Frederic Mugnier, who owns Clos de la Marechale vineyard in Nuits Saint Georges, said that the end result would be creating possibly a new ‘super grand cru classification for the original grands crus.’


But Thibault Liger-Belair does not share such concerns. ‘Burgundy has evolved and nothing is fixed,’ he said. ‘We must remember that the Cote de Nuits gets its name from Nuits Saint Georges.’




DSWE Appoints Francesco Giovannetti Director of Strategic Sales and Branding


Source: DSWE

Jun 13th


Domaine Select Wine Estates, a Manhattan based wine & spirits import and distribution company, announces the appointment of Francesco Giovannetti as Director of Strategic Sales and Branding.  Mr. Giovannetti joined DSWE as Portfolio & Key Account Development Specialist in 2012 and has worked with closely with both the DSWE producers and sales teams in account and brand development.  As Director of Strategic Sales and Branding, Mr. Giovannetti will continue to report to Founder & CEO Paolo Domeneghetti and will work directly with Executive Vice President Joseph LoSardo relative to sales planning & execution for the portfolio on a national level.




American Beverage Licensees Elects New Officers


On-Premise Retailer Harry Klock of Montana Elected 6th ABL President


Source: ABL

Jun 13th


The Board of Directors of American Beverage Licensees (ABL) elected Harry Klock, owner and operator of Stockman Bar in Harlowton, Montana, as ABL President at its meeting on June 9, 2013. Klock will represent the trade association’s nearly 20,000 members for a two-year term, leading the national beverage alcohol retail community and working with ABL’s staff on issues affecting its membership.


Previously an ABL Vice President, Klock served Montana as an assemblyman in the Montana House of Representatives from 2005-2012, where he sponsored bills concerning small business and healthcare regulations.  A former President of the Montana Tavern Association, Mr. Klock and his family operate Klock Land and Livestock.


“I am proud and excited to serve as President of American Beverage Licensees,” said Klock. “We face new and ongoing challenges as independent beverage retailers.  I hope to be a strong voice for the interests of on- and off-premise licensees and small business owners.”


“Harry’s experience as a state legislator will be invaluable as ABL and our members continue to navigate the complex world of beverage alcohol politics and policy,” said ABL Executive Director John Bodnovich.  “I’m looking forward to working closely with him the next two years, as well as with all of our newly-elected and continuing officers.”


Klock is joined in his new role by the officers who comprise ABL’s executive committee. The 2013-2014 ABL Executive Committee includes: Vice President Don Diserens of Alton Sports Tap in Godfrey, IL; Vice President Steve Morris of Jorgenson’s Restaurant & Lounge in Helena, MT; Vice President Paul Santelle of Garden State Discount Liquor in Perth Amboy, NJ; Vice President Warren Scheidt of The Cork in Columbus, IN; Treasurer Ray Cox of Elite Beverages in Indianapolis, IN; and Representative At-Large Bob Sprenger of Bubba’s in Marion, WI.  Outgoing President Chuck Ferrar of Bay Ridge Wine and Spirits in Annapolis, MD remains on the Executive Committee as Immediate Past-President.




Ron Burkle Said in Talks to Buy Tesco’s Fresh & Easy


Source: Bloomberg

By Lauren Coleman-Lochner, Mark Clothier & Leslie Patton

Jun 12, 2013


Billionaire Ron Burkle is in talks to buy Tesco Plc (TSCO)’s unprofitable Fresh & Easy chain in the U.S., according to people familiar with the discussions.


Burkle would use the stores to relaunch the Wild Oats brand, according to the people, who asked not to be identified because the process isn’t public. Jim Keyes, the former CEO of 7-Eleven Inc. and Blockbuster Inc., owns the Wild Oats name and will serve as chief executive officer of a new grocery retail venture with the billionaire, said one of the people. Burkle founded private-equity company Yucaipa Cos.


Frank Quintero, a spokesman for Yucaipa, declined to comment. A Tesco official declined to comment.


Tesco fell 0.4 percent to 342.55 pence at the close of trading in London today.


Fresh & Easy marks Tesco’s second failed international venture after it paid to exit Japan last year. The chain, with about 200 shops in Nevada, California and Arizona, hasn’t made a profit since it was built up from scratch in 2007. Tesco invested about 1 billion pounds ($1.6 billion) in the country before deciding the chain, which targeted urban areas with private-label food, was a drain on earnings and management time.


Chief Financial Officer Laurie McIlwee told journalists on June 5 that Tesco was “in advanced discussions with a number of parties interested in taking over Fresh & Easy in its entirety.” The decision to dump the chain cut Tesco’s profit by 1.2 billion pounds in its last fiscal year, leading to the company’s first annual drop in almost 20 years.

Burkle Investments


Burkle has sought investments and stakes in troubled companies, including a partnership to take over Barneys New York last year. He was also interested in buying part of grocery chain Supervalu Inc. (SVU), people familiar with the matter have said. Eden Prairie, Minnesota-based Supervalu sold some of its banners, including Jewel-Osco and Acme, to a Cerberus Capital Management LP-led team in March.


An entity with Yucaipa’s address has applied to open grocery retail stores, according to the trademark application that was published for opposition on May 21. The owner of the filing is listed as Wild Oats Marketing LLC with Yucaipa’s address of 9130 West Sunset Boulevard in Los Angeles.


Whole Foods Market Inc. (WFMI) bought Wild Oats in 2007. At the time, Wild Oats had 109 locations and annual sales of about $1.2 billion, according to a statement from Austin, Texas-based Whole Foods. Wild Oats, which opened its first retail stores in 1987, is planning a comeback to grocery-store shelves, according to the company’s website. This year, it will sell branded cereals, coffee, dry beans, pretzels and other foods at U.S. supermarkets.




Economist’s Notebook: May restaurant sales dip from record-high volume


Source: NRA

June 13, 2013


In his latest commentary, the National Restaurant Association’s Chief Economist Bruce Grindy analyzes the latest sales results.  Restaurant sales dipped in May from April’s record high volume, but still remain above year-ago levels.  Looking ahead, economic fundamentals continue to point toward a generally positive sales environment in the second half of the year.


Restaurant sales edged down in May from April’s record high volume, according to preliminary figures from the U.S. Census Bureau.  Eating and drinking place sales totaled $45.9 billion in May on a seasonally-adjusted basis, down 0.4 percent from April’s upwardly-revised sales volume of $46.1 billion, which represented a record high.


Despite the May downtick, combined restaurant sales in April and May were nearly $1.4 billion more than the volume registered during the first two months of 2013, when restaurant spending was dampened by the payroll tax hike.


The restaurant industry underperformed in May relative the overall retail sector (excluding foodservice), where sales rose a solid 0.7 percent above its April level.  However, restaurant sales in May stood 4.4 percent above their May 2012 level, which was essentially on par with the 4.3 percent 12-month gain in overall retail sales.


Looking forward, economic fundamentals continue to point toward a generally positive sales environment in the second half of the year.  Job growth – a key driver of restaurant sales – continues to follow a moderately upward trajectory, with monthly gains averaging 175,000 jobs during the past year.


At the same time, consumer sentiment appears to be on the mend, with The Conference Board’s Consumer Confidence Index rising in May to its highest level in more than five years.


For their part, restaurant operators are generally optimistic that sales levels will improve in the coming months.  In the National Restaurant Association’s May 2013 Restaurant Industry Tracking Survey, 41 percent of operators said they expect to have higher sales in six months (compared to the same period in the previous year), while just 10 percent expect their sales to decline.


The 10 percent of operators who think their sales will decline is the lowest reading in 11 months, which suggests that some of the downside risk to the outlook is dissipating.




Lending to Restaurants Picks Up, but Mostly for Big Players


Source: WSJ

By Annie Gasparro

Jun 13th


Banks are lending money at a faster pace to large restaurant franchisees, but mom-and-pop shops with an appetite to expand are still struggling to get the cash.


Loans to franchisees–a key source of funding that helped the likes of Pizza Hut and Applebee’s spread nationwide–fell dramatically during the recession. “Now the credit markets are very active again. It’s a depth and breadth that we haven’t seen in the last few years,” said Dave Farwell, head of franchise financing for RBS Citizens.


Sales are rebounding in the restaurant industry, and interest rates are at historic lows, making both bankers and restaurant operators feel like it’s a good time to grow.


For instance, Border Foods Inc., a top Taco Bell franchisee with roughly 180 total restaurants, recently secured a $17 million line of credit to fund remodels, new site development or acquisitions. The loan is part of a $98 million seven-year senior credit facility.


However, veteran small franchisees are still struggling to raise enough cash just to meet the renovation demands of their parent brands, said Brad Swanson, managing director of KeyBanc’s consumer & retail group.


Whether its remodeling their restaurants, like Wendy’s is asking, or investing in a menu overhaul, like Burger King recently required, its a lot to ask of small businesses.


“There is a population of franchisees who got on board in the ’70s and ’80s when quick-serve and casual dining were really expanding, and they have a handful of units now,” Mr. Swanson said. “For small franchisees like that, a $600,000 to $800,000 remodel is a significant investment.”


Justin Trouard, a single-unit franchisee who opened his first restaurant earlier this year, said he was shocked at how difficult it is for small business owners to even be considered for a modest loan.


“The big banks’ requirements are ridiculous. You have to have 50% of the loan in cash and 50% in collateral,” he said. “At that point, you don’t even really need a loan.”


For a while, all he could find were offers for unsecured loans at interest rates of 15% to 20%. Mr. Trouard eventually received an offer from a local bank using an online matching service called BoeFly, and he recently opened his Dickey’s Barbecue Pit franchise in the D.C. area.


The International Franchise Association says lending to franchisees in general–not just restaurants–will reach its highest level this year since the recession, lending $23.9 billion. However, there’s still an expected shortfall of $2.6 billion between franchisees’ appetite for growth and banks’ ability to meet the demand, the association said.


“We’re seeing definite improvement, but we’re not out of the woods yet,” said IFA President and Chief Executive Steve Caldeira. “Their already thin margins are being squeezed by things like health-care regulations and commodity costs, and it’s making it extremely difficult for small business owners to turn a profit.”


As a result, underperforming locations are selling out to bigger franchisees or being bought back by the parent brands, since they can afford to invest in improvements. Last week, a 40-unit Applebee’s franchisee, RMH Franchise Corp., bid $8.6 million in a bankruptcy auction for 15 Applebee’s locations owned by a smaller Illinois franchisee. The deal needs approval from a bankruptcy judge.


Mr. Farwell, of RBS Citizens, said the parent chains aren’t sorry to see some of the smaller players exit, as they prefer to have more professional franchisees that tend to uphold brand standards better.


“It takes a higher level of sophistication to run these chains than it did a few years ago, so I think the consolidation will continue,” he said.


Krispy Kreme Doughnuts Inc. (KKD), which is returning to new-store growth in the U.S. after a decade-long lull, said it’s looking for multi-brand, experienced franchisees to lead its expansion. “You still may see some smaller players, but we’re looking more for people with more flags in their hat,” said Chief Financial Officer Doug Muir.


However, other brands, like Subway, whose sandwich shops are all franchised, still see an opportunity among new and smaller operators.


Subway tends to attract smaller franchisees since its menu is relatively simple and it requires less capital to open a store. They are even helping franchisees expand. “In 2008, lending tightened up, and it got harder to get access to capital,” Chief Development Officer Donald Fertman said.


To help, Subway began hosting forums for potential lenders, to instill confidence in the brand. “We just held another one recently, and I think it’s helped our franchisees have more success at continuing development than other chains,” he said.


The chain even surpassed McDonald’s in the number of locations it has, now boasting 39,500 worldwide compared to McDonald’s “more than 34,000.”






Heartland distribution center to service company’s central & southern Illinois customers


Source: Respublica

June 13, 2013


Wirtz Beverage Illinois and Wirtz Realty Group, joined by Mayor John Mohr and local elected officials, unveiled the vision of a 50,000-square-foot Heartland headquarters for the beverage company in Lexington, Ill. Standing on 14 acres, the distribution center will serve the central and southern Illinois regions and consolidate smaller facilities throughout the state.


“This marks an important day for Wirtz Beverage as we expand upon the investments we have made in our home state of Illinois,” said Rocky Wirtz, President of Wirtz Beverage Group. “We have been operating statewide for a number of years however these new facilities allow us to better coordinate our logistics, service customers and ultimately be more efficient in growing our business.”


The facility will include 15,000-square-feet of office space and a 35,000-square-foot warehouse, along with 20 truck docks. In addition, the site will serve as the hub for the company’s Heartland sales force, drawing team members from across the region.


“It’s a huge project for the city and it may be the single largest private investment that we’ve seen in many, many years,” Mayor Mohr said. “The folks at Wirtz Realty and Wirtz Beverage have been great to work with and it is no doubt they will be a great benefit to McLean County.  Wirtz Beverage has a strong history of being a community partner, and we welcome its team to Lexington.”


Among those also in attendance at the groundbreaking were Julian Burzynski, Executive Vice President of Wirtz Beverage Group, Anthony Iatarola, Senior Vice President, Wirtz Realty Group, Illinois State Senator Jason Barickman and State Representative Dan Brady.


The Heartland facility is expected to be fully operational by early 2014.






Craft distillers celebrate new opportunities for growth


Source: Edelman

Jun 13th


Florida Governor Rick Scott has signed into law two bills that redefine business for state alcohol manufacturers.  HB 347/SB 642 set a precedent for the alcohol industry that has not been seen in the state since the days of prohibition. GrayRobinson government relations attorney Jason Unger and alcohol industry attorney Richard Blau represented the Florida Craft Distillers Guild in amending outdated legislation.


“There are several sets of interests that have to be taken into account when drafting alcohol legislation, which makes it one of the trickiest industries to represent from a legal perspective,” said Blau, the chair of GrayRobinson’s national alcohol beverage and food law practice. “You have stakeholders with concerns in the public safety and health and wellness sectors, while also having to consider implications at a political and economic level. The fact that this bill was able to pass in its first session, with little to no opposition on the voting floor, is truly extraordinary.”


“From a legislative standpoint, we were able to work with key legislators and leaders in the alcohol industry to pass a bill that everyone could support,” said Unger, the lead lobbyist on the effort out of GrayRobinson’s Tallahassee office.


In recent years the state has seen a growing number of craft distilleries that invite the public to tour their facilities and sample their product. However, unlike wineries and breweries, Florida law prohibited these distilleries from selling manufactured products on site. The product would have to be shipped off to a wholesaler or distributor for purchase. With the passage of HB 347/SB 642, championed by Representative Ronald Renuart and Senator Alan Hays, these distilleries can now sell products as part of this offering.


Philip McDaniel, chairman of the Florida Craft Distillers Guild and owner of the St. Augustine Distillery currently under construction in St. Augustine, Fla., predicts that the number of distilleries across the state could grow from 15 to anywhere between 35 and 50 over the next decade as a direct result of this new legislation.


“For us, the most exciting part of this is that we can now complete the customer experience,” said McDaniel. “When customers tour our distilleries they build up anticipation to try the product and want to take home a memory of the experience.  When we’d have to say ‘I’m sorry, we can’t sell you a bottle’ at the very moment they’re eager to purchase, well, it’s just creates a negative customer experience.”


McDaniel has plans for the future of St. Augustine Distillery now that the law will take effect July 1. In addition to a gift shop that sells bottles of the artisan crafted bourbon, gin, vodka and rum, there will be a small screening room that shows a documentary about the distiller’s relationship with local farms. The distillery is located just off of the trolley route located in the heart of St. Augustine’s historical tourist district and McDaniel is hopeful that a vast majority of these patrons will enter his doors.


“Florida has some of the best agriculture in the world, especially when used as a value added component for alcohol manufacturing. We have one of the largest sugar cane crops in the nation and a variety of fresh fruits to flavor our liquors, wines and beers,” said McDaniel. “This legislation will allow Florida distillers to capitalize on our unique location and build a global reputation bringing new visitors to the state because, quite simply, they can’t find this experience anywhere else.”


JoAnn Elardo, owner of Cape Spirits in Cape Coral, Fla., can finally hire the help she needs to offer tours due to the added revenue the distillery will bring in from alcohol sales. Cape Spirits manufactures Wicked Dolphin Rum.


“Before we were just a name on a shelf,” said Elardo. “Now we have marketing capability. We can make our distillery a destination and put our stamp on our product.”

Rémy Cointreau remains upbeat in the face of China sales slowdown


Source: FT

By Scheherazade Daneshkhu in Paris

Jun 11th


Rémy Cointreau said it expected flat China sales of cognac in the first half of this year, followed by a “significant improvement” in the second half.


Jean-Marie Laborde, chief executive of the French spirits group, said on Tuesday: “I can confirm that the start of the year is soft in China?.?.?.?We expect a lacklustre first half in China and its impact will be felt by the company.”


Mr Laborde was speaking as the Paris-based group reported an 18 per cent rise in full-year net profit to ?130m in its financial year to end-March – slightly below analysts’ expectations.


Sales of ?1.2bn were 16 per cent higher than in the same period the year before, or 9 per cent higher on a like-for-like basis.


Sales to China in the first half of the year were 40 per cent higher than in the same period of the previous year.


Mr Laborde said there had been a sharp slowdown in Chinese demand over the past six months in restaurants and bars for its most prestigious cognacs, including Louis XIII, which retails from about $2,500 a bottle and is often consumed by high-ranking Chinese officials.


Demand from younger Chinese drinkers, who drink less expensive cognac, remained robust, he said. Wholesalers’ cognac inventory levels in China were high after the weaker-than-expected lunar new year, he said, and would take time to run down. He was confident about the medium-term growth outlook for premium spirits.


Premium drinks companies and luxury goods groups have almost all been hit by the country’s economic slowdown and by the new Chinese government’s austerity campaign, which has led to the giving of less expensive gifts and lower spending by state officials.

Rémy, controlled by the Hériard Dubreuil family, makes 40 per cent of its operating profits from cognac sales in China, but said the slowdown was cyclical, not structural.


“Our good results today are, among other things, due to having anticipated the recovery in the US,” said François Hériard Dubreuil, chairman,


Mr Laborde said Rémy was raising its presence and investment in Africa, initially focused on a handful of countries, including South Africa and Nigeria, which he said was a promising market.


Rémy also took an impairment charge of ?15.9m on the value of its 27 per cent stake in Dynasty Fine Wines, the listed Chinese group. Dynasty, which warned in February that it made a loss in 2012 but has yet to publish its results, is valued at ?43m in Rémy’s accounts.


Last month, Pernod Ricard, France’s largest spirits group by sales and maker of Martell cognac, also forecast weaker sales growth in China due to the country’s economic slowdown.




Rémy Cointreau: Consolidated Preliminary Results for the Year Ended 31 March 2013


Source: Herald Online

June 11, 2013


Rémy Cointreau’s (Paris:RCO) sales for the financial year ended 31 March 2013 increased by 16.3% to ?1,193.3 million. Current operating profit was ?245.4 million, a rise of 18.1%, which was a very strong performance given that it was achieved on the back of double-digit growth the previous year. The current operating margin rose to 20.6% despite a further increase in marketing investment.


These results reflect the sales momentum of the Group’s brands in all regions of the world with double-digit growth in Asia and the US. Europe, despite a mixed economic environment, also contributed to this performance.


Net profit rose by 17.7% to ?130.4 million.


The Group’s net financial debt was ?265.5 million even though two acquisitions were completed during the year, and the Net debt to EBITDA ratio remained below 1.


The 2012/13 financial year was marked by:


a strong increase in current operating profit,

double-digit growth in Rémy Martin sales, which went hand-in-hand with strong profitability,

sustained, strong growth in Asia,

a remarkable performance in the US,

the strategic acquisition of Bruichladdich, a single malt Scotch whisky, and

a sound financial position: the Group has ?600 million available in long-term funding


Rémy Martin – Once again, the brand reported a remarkable performance: a 21.5% increase in sales to ?719.8 million and a 25.2% rise in current operating profit to ?216.6 million, under the combined effect of price increases and very high quality innovations, particularly in Asia, as well as in the US where consumer demand was strong. Russia contributed to this substantial growth, as did some Western European countries which are seeing positive trends.


There was a further improvement in the operating margin to 30.1% (29.2% the previous year), despite another increase in marketing investment.


Liqueurs & Spirits – Overall sales in this division were ?239.1 million, an increase of 10.8% compared with the previous year. This performance was all the more remarkable in light of the fact that Europe is the division’s primary market. Cointreau also performed well, not only thanks to the US but also to Western Europe. Despite the continued challenging economic situation in Greece, Metaxa reported growth thanks to Eastern European markets. Bruichladdich, added to this division’s portfolio since 1 September 2012, did not have a significant impact during the period.


Current operating profit declined to ?45.2 million due, as anticipated, to a substantial increase in sales and marketing investment in the divisional brands overall. The operating margin was 18.9%.


Partner Brands – Sales grew by 7.6% to ?234.4 million, together with operating profit of ?3.8 million.


Consolidated results


Sales of ?1,193.3 million represented an increase of 16.3% (up 8.8% organically, with 10.3% organic growth for Group brands).


Current operating profit rose by 18.1% to ?245.4 million (+12.3% organically), with an increase of 20.6% in operating margin compared with the previous year. This performance was achieved thanks to a further significant improvement in gross profit, accompanied by increased advertising and marketing investment to support the brands.


Operating profit was ?237.9 million, after deducting a ?7.5 million charge that primarily included expenses related to the two acquisitions.


Net financial expenses amounted to ?20 million, a significant decline of ?15.3 million which was primarily due to movements in the value of interest rate and foreign exchange hedging instruments.


The income tax charge of ?72 million reflected an effective tax rate of 33.1%, higher than the rate of 27.9% applicable in the previous year.


The share in the loss of associates primarily originated from Dynasty. The Chinese group, Dynasty Fine Wines Ltd, in which Rémy Cointreau holds a 27% stake, issued a profit warning in February 2013 flagging a loss for the 2012 financial year after several years of declining results. Since Dynasty’s annual financial statements were still pending publication at Rémy Cointreau’s balance sheet date, the Group carried out an impairment test on the value of its equity investment, on the basis of which an impairment charge of ?15.9 million was recognised.


The Group’s share of net profit, excluding non-recurring items, was ?151.5 million, an increase of 22.3% compared with the previous year.


The Group’s share of net profit rose by ?20 million to ?130.4 million, an increase of 17.7% after the Dynasty provision.


Net financial debt was ?265.5 million, an increase of ?76.9 million after taking into account the ?167.4 million impact of the two acquisitions completed during the year. The net debt to EBITDA ratio was 0.99. At 31 March 2013, Rémy Cointreau had confirmed financial resources of ?600 million.


Shareholders’ equity was ?1,094.8 million with a stronger balance sheet. Following implementation of the share buyback programme in December 2011 and May 2012, the Group holds 1.4 million treasury shares, accounting for 2.8% of its share capital and valued at ?96.1 million.


During the 2012/13 financial year, the Euro/US Dollar rate was very close to that of the previous year, at USD 1.35/?1 versus USD 1.34/?1. Foreign exchange movements had a positive effect of ?12 million on net profit.


On 10 June 2013, Rémy Cointreau announced that it had signed an agreement with the Nordic group, Altia, in respect of the transfer of Larsen Cognac including the brand, industrial and commercial assets and inventories, to enable the entity to operate as a going concern.


A cash dividend of ?1.40 per share will be put to a shareholders’ vote at the Annual General Meeting to be held on 24 September 2013.




In a worldwide economic environment which lacks visibility, 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, its innovation policy, the dynamism of its distribution network and its strict cost control, and remains confident in its capacity to continue to generate profitable growth over the medium to long term.




Rémy Cointreau: Chinese conundrum


French spirits group needs Chinese cognac drinkers to keep imbibing


Source: FT / LEX

Jun 11th


So how much do you know about the state of mind of Chinese cognac drinkers? And are you confident enough to back your view with cash? If the answers are “plenty” and “yes”, then go ahead and buy shares in Rémy Cointreau, which reported results on Tuesday. Exposure to China’s wealthier consumers has been a boon to Rémy, which specialises in high-end cognac. Profit growth has averaged 20 per cent for the past four years. That is better than rivals have managed, so Rémy’s shares, which were rated in line with Diageo and Pernod Ricard four years ago, now enjoy a premium. They trade on 23 times forecast earnings, against 18 times for the other two.


To maintain that premium – let alone expand it – Rémy has to keep growing. Yet the trend is not encouraging. The change in Chinese leadership, and efforts to rein in gifting, have dented the enthusiasm of buyers of the more expensive cognac brands. Organic sales growth was 9 per cent in the year to March, against 16 per cent the previous year. This year may not be much easier. In April the company told analysts that wholesale inventories were higher than normal. Rémy is confident that demand will return, particularly for drinks bought in bars and restaurants. Still, earnings forecasts for the year to March 2014 have been drifting down, from ?4.30 a share last October to ?3.70 now.


One way to shore things up would be to grow the group’s other brands, which include Mount Gay rum and Cointreau. Profits from these brands fell 14 per cent last year, as the company put money into marketing and absorbed raw material price increases. But it plans to invest. It bought Bruichladdich whisky for £58m last July – its first foray into scotch – and it has the balance sheet capacity for more deals. But all that will take time to show through on the bottom line. For now, it is all about the Chinese cognac.




Edrington Group Ends US Contract with Remy Cointreau (Excerpt)


Source: Wine & Spirits Daily

Jun 11th


Glasgow-based Edrington Group has ended its US distribution contract with Remy Cointreau, effective March 31, 2014, said Remy Cointreau ceo Jean-Marie Laborde in the company’s full year results. Subsequently Edrington, which owns brands such as The Macallan, The Famous Grouse and Cutty Sark, will be setting up its own distribution network in the US. You may recall Remy Cointreau and Edrington Group have been distribution partners in the US since 1999. “It’s an old story, thus, of hatred and love and participation between Remy Cointreau and Edrington,” said Jean-Marie.


He went on to say that he’s not sure whether Edrington’s decision had anything to do with Remy Cointreau’s purchase of Bruichladdich Distillery Company, “but in the US market in any case, the Edrington brands are going to be immediately replaced by our own brands that we bought out within our distillery.”




Diageo plc – Special Call


Source: Seeking Alpha

Jun 10 2013




Welcome, ladies and gentlemen, to today’s Brunch-time Call with the Presidents. [Operator Instructions] Just to remind you, the call is being recorded.


I’m now pleased to hand over to the President, Diageo Latin America & Caribbean, Randy Millian. Over to you, sir.




Diageo Facing Raki Trouble in Turkey After Booze-Ad Ban


Source: Bloomberg

By Kristen Schweizer & Selcan Hacaoglu

Jun 11, 2013


The latest ad for Turkey’s Efes beer features an unmarked brown bottle and the cryptic message: “Even if we don’t see each other, we’ll know.”


The slogan refers to a law signed Tuesday by President Abdullah Gul that bans alcohol ads, limits sales, and would even stop TV viewers from watching Homer Simpson enjoy a Duff beer in Moe’s Tavern, as depictions of drinking on television programs are to be blurred out.


Diageo Plc (DGE) called the law “disappointing” in a statement, and Turkish spirits producer Yeni Raki ran a newspaper ad showing a hand shaking a glass of the drink with the words: “Ads are over. Excuse us.” Turkish winemakers have published notices with text in the shape of a wine bottle condemning the curbs.


The law forbids the sale of alcohol at night and near schools and mosques, going against the secular traditions of the Muslim-majority country of 74 million, where many people drink and women often choose not to cover their hair. Protesters who’ve taken to the streets in recent weeks calling for Prime Minister Recep Tayyip Erdogan’s resignation have denounced the alcohol restrictions, among other grievances.


Erdogan, who has dismissed the protests as the work of extremists, says the law is aimed at improving the nation’s health. As a substitute for the traditional anise-flavored spirit raki, last month he declared ayran, a salty yogurt drink, to be the national beverage.

‘Healthy Generation’


“We did not ban alcohol; we just introduced a new framework,” Erdogan said in Istanbul last month at a conference on tobacco, which he has also targeted. Bans on smoking in coffee houses and restaurants date to 2008, and on May 31, he extended the restrictions to drivers of private cars. “We want to raise a healthy generation,” Erdogan said.


Diageo, the world’s largest distiller of alcoholic beverages, paid $2.1 billion for raki-maker Mey Icki two years ago. The London-based company’s shares fell 5.3 percent through yesterday from May 23, when Turkey’s parliament passed the alcohol-ad ban.


As protests have rocked Istanbul in recent weeks, the Borsa Istanbul National 100 Index has dropped almost 18 percent since May 23. Anadolu Efes Biracilik & Malt Sanayii AS, which produces Efes beer, declined 27 percent in the same period. Turk Tuborg Bira ve Malt Sanayii AS (TBORG), which also produces beer, is down 14 percent.


Turks consume 3.4 liters (0.9 gallons) of pure alcohol per capita annually, or just more than half the global average, according to the World Health Organization. In the U.S, consumption is 9.4 liters; in Britain it’s 13.4 liters. In Moldova, the global leader, it’s 19.2 liters.


Russian Crackdown


A year ago, Russia — with annual consumption of 15.7 liters per capita — began a similar crackdown with higher taxes, limits on where liquor can be sold, and ad restrictions.


Industry regulations in the U.S. only allow ads for spirits when 70 percent of the audience is over the legal drinking age – – TV shows airing after 11 p.m., for instance, or in high-end magazines. Rules for beer are looser.


In India, where alcohol ads have been prohibited for decades, producers have found a way around the ban by promoting other products like soda and bottled water under the same name. Kingfisher beer and Bagpiper’s Scotch Ale, for instance, both sell soda water with logos very similar to their alcohol brands.


“Ad bans are not the way to make people drink less,” said Dominic Lyle, director general of the European Association of Communications Agencies in Brussels. The restrictions are “very much a political move and linked to the views of the government. It’s more about secular versus religious.”


Shifting Tastes


Turkish imports of European liquor declined from 9 million cases in 2002 to 8 million cases last year, although their value more than doubled to 129 million euros ($171 million) as tastes shifted to pricier booze, according to SpiritsEurope, a trade association for distillers. The ban will prevent new products from entering Turkey since they won’t be able to build their brands with ads, according to Paul Skehan, the group’s director general.


“There’s a lot of industry disappointment that this law was rushed through at supersonic speed and there was no consultation of any of the industries affected,” Skehan said.


In a statement, Diageo — home to brands such as Johnnie Walker whiskey and Captain Morgan rum — said it believes a “collaborative approach among the industry, government, and third parties would lead to a better outcome.” The Turkish Association of Advertising Agencies, citing “deep tension” with the government, declined to comment on the new law.


While the curbs will hurt them, liquor producers still have high expectations for Turkey, said Spiros Malandrakis, a drinks analyst at Euromonitor International in London.


“The potential for the market is massive,” he said. “It’s one of the few countries in the region that’s growing, so everyone wants in.”




Beer taxes: Why six-packs are pricier in some states


Source: CNN Money

By Melanie Hicken

June 11, 2013


Every state imposes a tax on beer, but the amount each state charges varies widely.


Buy a six-pack of beer in Tennessee and you’ll pay 66 cents towards state beer taxes. Yet, right across the border in Missouri, the tax drops to mere pennies.


With a state excise tax of 6 cents per gallon of beer, or three cents per six pack, Missouri — home to Anheuser-Busch (BUD) — has one of the lowest beer taxes in the nation.


Tennessee, which happens to be the heart of whiskey country, claims the top spot, due to combined excise and wholesale taxes that push the tax burden for consumers to $1.17 per gallon, or 66 cents per six pack, according to the Tax Foundation’s analysis of beer-specific statewide taxes. In contrast, the state’s taxes on spirits — including whiskey — rank 30th in the nation.


Other states with the highest beer taxes include Alaska ($1.07 per gallon), Alabama ($1.05) and Georgia ($1.01), which charge more than 50 cents in taxes on a six-pack.


Meanwhile, the lowest taxes are in Wyoming, a generally tax-friendly state which levies only two cents in taxes on a gallon of beer or one cent per six pack. Other low beer-tax states include Wisconsin and Colorado, the respective birthplaces of Miller and Coors brews.


Sometimes dubbed “sin taxes,” excise taxes are selective taxes on specific goods and activities, such as cigarettes, gasoline and indoor tanning services. Beyond raising revenue, excise taxes are often aimed at decreasing consumption and paying for government services related to the product. For example, gasoline taxes help fund road and highway repairs.


Beer lovers not only indirectly pay a state beer tax, but they may also face a local excise tax as well as a federal excise tax of about 58 cents per gallon (for large brewers), or about 33 cents per six-pack. All of this is in addition to any state and local sales tax that is charged whether the beer is bought at a grocery store or a favorite pub. And some states tack on case or bottle fees and other special sales taxes specifically targeting alcoholic beverages.


Excise taxes are typically paid by brewers and distributors before the beer reaches store shelves so they won’t show up on a receipt like a sales tax, but consumers still feel their effects.


“A higher tax on beer is going to make for a higher price on beer,” said Scott Drenkard, an economist at the Tax Foundation.


The difference adds up. Buy a six-pack once a week for a year in Tennessee and your purchases will have included around $34 for state taxes. In Missouri, less than $2 in state beer taxes would be included in the same purchases.


While the way Tennessee’s wholesale beer tax is charged is slated to change in July, the tax rate will remain among the country’s highest.


Anti-drunk driving groups and other advocacy groups argue that other states should raise outdated beer tax rates to help reduce consumption and pay for prevention and healthcare programs.


Wyoming, for instance, hasn’t raised its beer excise tax since 1935, two years after the end of Prohibition, while Pennsylvania’s dates back to 1947, according to Alcohol Justice, a self-proclaimed industry watchdog that argues that all state beer taxes are too low.


The brewing industry counters that beer is already one of the country’s most heavily-taxed goods. Including federal and state business taxes, taxes make up 40% of beer’s retail price tag, according to The Beer Institute, an industry trade group. Similar to sales taxes, beer taxes are regressive, meaning that they hit lower and middle-class consumers the hardest, the institute argues.


“This is an invisible tax that consumers don’t know they’re paying,” Beer Institute President Joe McClain said in a March 2013 audio interview posted on the group’s website. “The people who enjoy beer the most, those middle-class Americans, are feeling the bite of that tax more.”




6 Anheuser-Busch Watered-Down Beer Suits Grouped In MDL


Source: Law 360

June 11, 2013


The U.S. Judicial Panel on Multidistrict Litigation on Monday centralized in Ohio six putative class actions accusing Anheuser-Busch Cos. LLC of deliberately overstating the alcohol content of its beers by watering them down, overriding the malt beverage giant’s objections.


The panel sent the litigation to the Northern District of Ohio to be handled by U.S. District Judge Donald C. Nugent, who is already presiding over one of the suits at issue. The five other suits have been pending in California, Colorado, New Jersey, Pennsylvania and Texas federal courts.


AB had fought against grouping the suits into an MDL, arguing that the factual issues in the suits were not complex or numerous enough to warrant centralization because any variance in their products’ actual alcohol conduct from what their labels say is within the range allowed by federal regulation.


But the panel sided with the plaintiffs, saying that “notwithstanding defendant’s apparent acknowledgment of some variance for unspecified products, the alleged conduct primarily at issue – systematic overstatement of the alcohol content – will remain in dispute and will involve complex discovery concerning the calibration of the involved equipment and corporate policy with respect to labeling.”


AB had also argued that centralization wasn’t warranted because there were a limited number of lawsuits and lawyers involved, so they could voluntarily coordinate. The panel wrote, however, that the lawsuits were pending in six geographically dispersed districts and that the overlap in counsel was minimal.


The panel held that the six lawsuits share factual questions arising from AB’s alleged deliberate and systematic practice of overstating the alcohol content on the labels of 11 of its malt beverage products, and that centralization will eliminate duplicative discovery, prevent inconsistent pretrial rulings and conserve resources.


Robert Mills of The Mills Law Firm, who represents some of the plaintiffs, told Law360 on Tuesday that he was pleased the cases had been consolidated and that “an experienced, distinguished judge has been assigned to oversee this important consumer litigation.”


Attorneys for AB did not immediately respond to requests for comment Tuesday.


The proposed class actions all allege that AB deliberately overstates the alcohol content in its Budweiser, Bud Ice, Bud Light Platinum, Michelob, Michelob Ultra, Hurricane High Gravity Lager, King Cobra, Busch Ice, Natural Ice, Black Crown and Bud Light Lime beverages.


The complaints lodged in California, New Jersey and Pennsylvania in February asserted that AB has the means to precisely control the exact alcohol content of its malt beverages to within hundredths of a percent, but it chooses to water down those products in order to churn out more units of beer from the same starting batch of ingredients.


Peter Kraemer, AB’s vice president of brewing and supply, said in February that the claims were completely false and that the lawsuits were groundless.


“Our beers are in full compliance with all alcohol labeling laws,” Kraemer said at the time in an emailed statement. “We proudly adhere to the highest standards in brewing our beers, which have made them the best-selling in the U.S. and the world.”


The plaintiffs are represented by The Mills Law Firm, Bramson Plutzik Mahler & Birkhaeuser LLP, Caroselli Beachler McTiernan & Conboy, and Ronald Frederick & Associates Co. LPA, among others.


AB is represented by Skadden Arps Slate Meagher & Flom LLP and Kasowitz Benson Torres & Friedman LLP, among others.


The case is In Re: Anheuser-Busch Beer Labeling Marketing and Sales Practices Litigation, MDL Number 2448, in the U.S. Judicial Panel on Multidistrict Litigation.




Big Food, Big Soda And Big Alcohol Pose ‘Serious Challenge’ To Health Promotion Says WHO


Source: Newsroom America

10 Jun


The World Health Organization (WHO) says efforts to promote good health are more vital than ever given that non-communicable diseases have overtaken infectious diseases as the leading cause of death, but also warning that they face daunting challenges, including from ‘big business’.


“Today, the tables are turned. Instead of diseases vanishing as living conditions improve, socio-economic progress is actually creating the conditions that favour the rise of non-communicable diseases,” said WHO Director-General Margaret Chan in an address to the 8th Global Conference on Health Promotion, held in Helsinki, Finland.


“Economic growth, modernization, and urbanization have opened wide the entry point for the spread of unhealthy lifestyles,” she stated.


Dr Chan told participants that today, getting people to lead healthy lifestyles and adopt healthy behaviours faces opposition from forces that are “not so friendly.”


“Efforts to prevent non-communicable diseases go against the business interests of powerful economic operators. In my view, this is one of the biggest challenges facing health promotion,” she stated.


“It is not just Big Tobacco anymore. Public health must also contend with Big Food, Big Soda, and Big Alcohol. All of these industries fear regulation, and protect themselves by using the same tactics.”


She said these tactics include front groups, lobbies, promises of self-regulation, lawsuits, and industry-funded research that “confuses the evidence and keeps the public in doubt.”


They also include gifts, grants, and contributions to worthy causes that cast these industries as respectable corporate citizens in the eyes of politicians and the public, she added. They include arguments that place the responsibility for harm to health on individuals, and portray Government actions as interference in personal liberties and free choice.


“This is formidable opposition. Market power readily translates into political power. Few Governments prioritize health over big business. As we learned from experience with the tobacco industry, a powerful corporation can sell the public just about anything,” said Dr. Chan.


“Let me remind you. Not one single country has managed to turn around its obesity epidemic in all age groups. This is not a failure of individual will-power. This is a failure of political will to take on big business.”


Dr Chan also voiced concern about two recent and related trends. “The first relates to trade agreements. Governments introducing measures to protect the health of their citizens are being taken to court, and challenged in litigation. This is dangerous,” she stated.


“The second is efforts by industry to shape the public health policies and strategies that affect their products. When industry is involved in policy-making, rest assured that the most effective control measures will be downplayed or left out entirely. This, too, is well documented, and dangerous.


“In the view of WHO, the formulation of health policies must be protected from distortion by commercial or vested interests,” said Dr Chan.


The week-long conference, co-hosted by WHO and Finland’s Ministry of Social Affairs and Health, will assess achievements and aims for health promotion globally. It aims to address what works and how, identifying options for action, available processes, mechanisms and tools.




Australia: Alcohol Advertising Review Board Releases List of Shame Target Alcohol Ads


Source: Top News

by Prakash Sharma



Alcohol Advertising Review Board has compiled a report listing top 10 shockers. In bid to monitor alcohol advertising, health campaign groups urged the board last year to make a list of nation’s most irresponsible alcohol ads.


The review board listed the advertisements for Budweiser beer on a telephone box outside a school and a range of Jim Beam Racing children’s clothing as the nation’s most irresponsible ads.


The board received nearly 200 complaints in its first year and more than double the complaints were received by the alcohol and advertising industries’ voluntary complaints system.


The board released its first annual report on Tuesday. It revealed fully upheld 104 of the complaints and partly upheld 32. An advertisement for VB is among other advertisements that have been named in the list. The ad shows an image on a Thirsty Camel Facebook page that read, “I wish I could trade in my heart for another liver. Then I could drink more and care less”.


Fiona Stanley, Chairwoman of the Alcohol Advertising Review Board, said it is clear from the findings that the system of self-regulation was a failure.


Professor Stanley said alcohol industry is using creativity as a weapon to disguise people to promote their products. It is shocking and concerning as children and young people should not feel tempted to consume alcoholic beverages because of entangling alcohol advertisements.




Is alcohol advertising harming girls?


Source: The Globe and Mail


Jun. 10 2013


Are the companies who sell alcoholic drinks comparable to cigarette marketers? One doctor thinks so, and is taking the industry to task for the way it advertises to young girls.


In an upcoming editorial in the Canadian Medical Association Journal, released online Monday, senior associate editor Dr. Ken Flegel makes the argument that like tobacco companies, the alcoholic beverage industry has recognized that a good way to increase profits is to target young female consumers – but that this has left adolescent girls, who also see the ads, particularly vulnerable.


“The advertising industry knows very well how to secure new, lifelong clients: Most current smokers began smoking before age 18. The type of alcohol advertising being directed at young women suggests that an attractive body and a successful, trendy life will be the result of using any particular product,” wrote Dr. Flegel, who is also an associate professor of medicine at McGill University and attending physician at the McGill University Health Centre. “.Exposure to advertising on television and in magazines, and use of alcohol have also been shown to have distinctive social and emotional effects on girls compared with boys.”


To illustrate this, Dr. Flegel points to research showing that young girls – at ages as early as 13 – are drinking as much alcohol as young boys are (while suffering, in some cases, worse health effects as a result). He also cites further studies, which have found that adolescent girls are exposed to more alcohol advertising, and that this exposure can be associated with increased consumption.


“Adults, both male and female, should know what they are doing. But adolescents need guidance as to what alcohol is and what it does. They need to be taught that the purpose of advertising is to create a demand where there is no need,” Dr. Flegel writes. “When advertising reaches a vulnerable group, such as adolescent girls, they need to understand what it means to be duped by an adult influence that does not have their interest at heart.”


In addition to putting the onus on parents and doctors to inform young girls about their choices, Dr. Flegel argues that as with tobacco products, health warnings should be required on the packaging of alcoholic drinks. Warnings should also be included in advertising, he wrote.






Source: Public Action Management

By Pamela S. Erickson

Jun 11th


Everyone has a stake in reducing the large number of people who die or are injured on our highways due to alcohol involved crashes.   Almost 10,000 people die every single year from drunk driving.  This is far more than the 6,700 total deaths we have suffered in the two recent wars.  But, to achieve any kind of significant reduction, we must work together with passion and dedication.  My fear is that arguing over the value of a single measure will deter progress that can clearly be made on all the aspects of this issue.


“Please use door at rear of building.”

The site of a recent DUI in Portland, Oregon involving two drunk drivers, one death, serious injuries and substantial property damage.


Here’s the background:

In May of this year, the National Transportation Safety Board (NTSB) recommended that we drop the Blood Alcohol Content assumption for alcohol impaired driving from .08 to .05.  They cite the fact that there were 9,878 alcohol-related traffic deaths in 2011 and that progress on DUI has plateaued since the mid 1990’s.  To be clear, the number of deaths due to alcohol related crashes has continued to decline, but the percentage of all traffic deaths due to alcohol has remained around 31% since the mid 1990’s.


Click here to continue article.




New Zealand: Outstanding summer produces best wine vintage yet


Source: NBR

Wednesday June 12, 2013


Winemakers say the long hot summer has produced one of the country’s best vintages yet.


Grape harvesting has just been completed and the crop is up 28% on 2012 at 345,000 tonnes.


New Zealand Winegrowers chief executive Philip Gregan says the outstanding summer provided near perfect conditions for growing grapes nationwide.


“The result is that we expect the 2013 wines to be vibrant, fruit driven and complex expressions of our diverse grape growing regions,” Mr Gregan says in a statement.


The small 2012 grape crop left the industry unable to meet continuing strong consumer demand in established and new markets.


“Winemakers will welcome the more normal 2013 harvest as the better balanced supply will facilitate renewed export growth in the year ahead,” he says.


Of the key varieties, sauvignon blanc produced the biggest crop with 228,781 tonnes, up 26% on last year, followed by pinot noir with 23, 285 tonnes, up 36% on last year.


Marlborough produced the biggest crop, with 251,680 tonnes harvested, up 33% on the last year.


There is already been a record number of wine shipments made in May.


New Zealand wine is exported to more than 90 countries and annual wine exports are valued at $1.2 billion.




Chinese hygiene department, not tax, is main concern for fine wine shippers


Source: Decanter

by Sophie Kevany in Bordeaux

Tuesday 11 June 2013


Fine wine exporters are unfazed by China’s recent threat to impose an anti-dumping tax on European wine – the real threat, they say, is the Chinese hygiene department.


The department has the right to remove two bottles per case for tests, to determine if it is fit for human consumption. This is a bigger headache for importers of small-volume, high-end wines than a tax that may not materialise.


Exports of fine wine to China are worth millions for merchants and producers, mainly in Bordeaux. However, because the Chinese government already imposes a 48% tax on wine imports, most fine wine shipments destined for China are sent to Hong Kong, a tax-free zone for wines.


The wines then make their way into China via various routes, often circumventing customs altogether.


‘The threats of an anti-dumping tax aren’t a big worry for us,’ Jo Purcell, director of wine merchant Farr Vintners in Hong Kong, told ‘Partly, because it appears to be a bit of political muscle flexing, and partly because the tax, if it materialises, really seems to be aimed at the [lower cost] volume imports that compete with China’s domestic wine industry.’


The real issue, she said, for fine wine shippers is the two bottle per case testing rule, which is, conversely, less of a worry for volume importers and much more of a concern for someone shipping, for example, 12 bottles of Petrus.


Gary Boom, director of London fine wine merchant Bordeaux Index, said the hygiene department rule was the reason his company avoids exporting to China. Instead, Bordeaux Index ships to Hong Kong and the company’s Chinese clients take care of logistics from there.


Boom also said the tax threat was probably only ‘a bit of posturing’ because ‘there are too many people with an interest in importing wine’ in China for it to happen.




Precept Wine buys Yakima Valley ‘Skyfall’ vineyard (Excerpt)


Precept Wine recently acquired a Yakima Valley vineyard, which it named Skyfall, and plans to grow grapes for red wines on the property.


Source: Puget Sounds BJ

By Rachel Lerman

Jun 10th


Precept Wine has acquired 174 acres in the Yakima Valley that it will convert from a partial orchard to a vineyard planted with red-wine grapes.


Seattle-based Precept, a wine producer that operates vineyards across Washington, Oregon and Idaho, bought the land for an undisclosed sum from two brothers named Malli who live in California, said David Minick, Precept vice president of vineyard operations. The brothers owned it for three years, but found it difficult to be absentee owners, he said.


The property is located near Benton City, just south of Red Mountain, and is currently planted with 32 acres of cabernet sauvignon, merlot, Syrah, sauvignon blanc and Riesling grapes. The land also has 66 acres of sweet cherries and 22 acres of other fruit.


During the next three years, Precept will convert the land to more than 100 vineyard acres, keeping about 20 acres of sweet cherries. The company says it will focus on planting and replanting the red wine grapes and also plans to add Chardonnay lots.


“As a company, we have a lot of whites in the ground, so we were looking for more places to do reds,” Minick said.


The land is in a warm spot of the valley, he said, on a bluff above the Yakima River and gets a lot of sun reflection from Horse Heaven Hills on the south edge.


“It will give us the nice acidity the Yakima Valley is known for with the nice tannin structure that the warmer sites will give you,” he said.


The vineyard will be named Skyfall, Minick reports, though he can’t take the credit for the daring name. CEO Andrew Browne thought it up while discussing the many hang gliders who drop off the cliffs above the vineyard to take advantage of the thermal winds.




Naked Wines appoints former Treasury chief winemaker


Source: Harpers

Written by Carol Emmas

Tuesday, 11 June 2013


Naked Wines has appointed former vice-president and chief winemaker for the Americas at Treasury Wine Estates, Matt Parish, as chief winemaker.


His new role will involve advising the company’s increasing number of funded international winemakers and overseeing its new customer-funded winery in Sonoma.


Parish has over 18 years and 25 vintages of global winemaking experience, and has produced a string of 90+ point wines.


Before he joined Treasury Wine Estates he worked in various viticulture and winemaking roles in the US, France, Italy, Spain, Australia and his home country of New Zealand.




HEINEKEN : announces departure of Chief HR Officer


Source: 4-Traders



Heineken N.V. (‘HEINEKEN’) today announced that Michael O’Hare, Chief HR Officer, will leave HEINEKEN and return to the USA in late summer 2013.


Commenting on the change, Jean-François van Boxmeer, Chairman of the Executive Board and CEO of Heineken N.V. said, “This has been a difficult decision for Michael. However personal considerations have led Michael and the family to conclude it is right for them to return to the USA. In the last four years, Michael has played a major role in accelerating our transition to a more performance driven and people-focused company.   Along the way he has evolved our understanding of how the growth of our business is linked to the growth of our people and our culture. We have all benefited from his professional, collaborative approach and it has been a pleasure to work with him.”


Michael will take up a role with a US-based multinational later in the year.


The process of selecting a new Chief HR Officer is underway and an announcement will be made once concluded.




Ruby Tuesday Hires Ex-Darden Executive Burrowes to Head Ruby Tuesday Concept


Source: Dow Jones

By Melodie Warner

Jun 11th


Ruby Tuesday Inc. (RT) named former Darden Restaurants Inc. (DRI) executive Todd Burrowes its chief operations officer and president of the Ruby Tuesday concept as the casual-dining company looks to improve its sales and profitability.


The restaurant operator said Mr. Burrowes has more than 25 years of industry experience and spent the past five years as executive vice president of operations for Darden’s LongHorn Steakhouse brand.


“Todd will be instrumental in leading our efforts to reposition the Ruby Tuesday brand, creating a more lively and approachable guest experience which we believe will provide opportunities to increase our sales and profitability,” said President and Chief Executive JJ Buettgen.


After Ruby Tuesday named a new chief executive late last year, the company sought to refocus on turning around sales at its namesake brand. The company decided in January to close 13 Marlin & Ray’s restaurants, its one Wok Hay location–exiting from both concepts–and also two company-developed Lime Fresh restaurants.


Ruby Tuesday also opted to shut its two Truffles Grill locations in April instead of continuing to market them for sale.


The company in April reported fiscal third-quarter earnings fell 52% as the casual-dining chain was hampered by restaurant closure costs and weaker same-store sales.


Shares closed Monday at $9.61 and were inactive premarket. The stock has climbed 22% so far this year.




It’s time to contact Congress on immigration reform


Source: NRA

June 11, 2013


The immigration debate has hit a critical phase — and restaurateurs are gearing up to make a difference as a bipartisan reform bill moves to the Senate floor for debate.


Debate began in the Senate this week on a comprehensive reform bill authored by the bipartisan “Gang of Eight” senators.


The bill contains three key National Restaurant Association priorities: a clear path to legalization, national implementation of the E-Verify employee verification system, and increased border security that won’t harm legal travel and tourism. A vote on the bill could come before the Senate recesses on June 28.


With a vote imminent — and the nation bordering on its first real opportunity in decades to make  meaningful, bipartisan reforms to a broken system — the NRA is ramping up its efforts to support comprehensive immigration reform.


The NRA is calling on its members to meet, write, or call their lawmakers this month to urge support for bipartisan changes that meet the needs of American businesses and the people they employ. The NRA’s campaign includes a dedicated online resource to keep members informed about the latest developments and put them in touch with members of Congress so they can voice their support for immigration reform. The site


Restaurateurs are also organizing at the state level. In South Carolina, the South Carolina Restaurant and Lodging Association will hold a press conference Thursday that will focus on the business community’s support for and economic benefits of comprehensive immigration reform. Ruben Montalvo, an immigrant from Mexico who owns Cantinflas Restaurant and Bar in Greenville, S.C., will be a featured speaker. Montalvo came to Boston from Mexico in 1986 on a work visa when he was employed by Gillette. After earning an MBA from Harvard Business School, he left his engineering job and decided to become an entrepreneur. He opened Cantinflas, which currently employs 20 people, in 1994.


“At the time, I thought I’d be here for a year,” Montalvo said. “I want to show what can happen when immigrants are given the same opportunities as everyone else. I see challenges in other industries as well as in the hospitality industry.”


The Greenville News published a lengthy profile of Montalvo last year.


“If we did not have the job openings and the demand for labor, these employees would go to Canada or somewhere else,” Montalvo said. “It’s important for employers to be heard on this issue, because we are the ones who see that need for workers.”


The NRA has advocated for comprehensive immigration reform for years. Over the course of the current debate, the NRA has remained in close contact with the senators who authored the bill and the White House. The Association will continue working to strengthen its key legislative priorities, which are:


A pathway to permanent legalization. The NRA believes that productive members of society must be able to work and live in the U.S. in a manner that de-criminalizes and de-politicizes the process and the people.

A national employment verification system. The current patchwork of state and local immigration laws — sometimes inconsistent with each other — exposes employers to unfair liability and an untenable regulatory structure. A more workable E-Verify system would allow restaurant operators to treat prospective employees with respect and manage the application process in a timely and efficient manner. Many in the restaurant industry supported the “Legal Workforce Act” in the last Congress as a model employment verification system. The Legal Workforce Act has recently been re-introduced in the House of Representatives.

Improved border security that encourages legal travel and tourism. Immigration reform must include measures to improve both border security and opportunities for U.S. businesses to encourage legitimate travel and tourism.


“The restaurant industry is an industry of tremendous opportunity, with a workforce of more than 13 million employees that is reflective of America’s diversity,” said Scott DeFife, the Association’s executive vice president for policy and government affairs. “The National Restaurant Association has worked with the Senate’s bipartisan ‘Gang of Eight,’ the Administration, and key House stakeholders on sensible reforms to fix the nation’s broken immigration system. We urge both chambers to continue to move forward and address these important issues.”




The REAL reason middle-class mums love Aldi (and it’s nothing to do with award-winning tea bags and bacon… but everything to do with the booze aisle)


Source: Daily Mail

By Claudia Connell

11 June 2013


Strawberries and cream… bread and butter… tea and biscuits… some things just go together. But cheese and compression bandages? Yoghurt and head torches? Not so much.


Of course, this hasn’t deterred staff at the Walton-on-Thames branch of Aldi from displaying them proudly, side-by-side.


It’s fair to say the shop’s displays don’t make much sense – but then there’s not much about the German discount supermarket that does.


From the bizarre items they stock (‘Would you like a bicycle saddle with your baguette, Madam?’) to the chaotic layout and infuriating lack of assistants, Aldi seems, at first glance, to offer a gruelling shopping experience.


It is certainly a far cry from the glossy Waitrose store I usually frequent.


Yet now seems the time to sweep supermarket snobbery aside and give Aldi a chance.


For last week it emerged as the overall winner in a taste test of own-brand foods conducted by trade magazine The Grocer.


Aldi came out top in 16 categories – more than Waitrose and M&S combined – with gold medals for everything from its bacon to its brioche.


With praise such as this, not to mention bargain prices, it’s no wonder the middle classes are hot-footing it there in droves and that Aldi, which originally targeted more socially deprived areas, is now opening up in Newbury, Winchester, Ely and Cowes on the Isle of Wight.


With no branches near my home in South London, I head off to a store in Walton-on-Thames, the sort of town where ladies lunch and gents play golf.


There, standing out like a sore thumb beneath the shadow of 12th-century St Mary’s church, lies Aldi. It looks like the sort of council-run place where you’d go to get a verruca removed.


The inside isn’t much better, with strip lighting that fails to lift the gloom and piles of stock in the middle of aisles making it hard to navigate my wobbly trolley.


At 9.30am, the twinset and pearl shoppers are nowhere to be seen. Instead, the store is full of pensioners all making a beeline for the famous ‘special buy’ section, where you can get all sorts of strange stuff (such as the aforementioned compression bandages and head torches).


But I have to admit the food is impressive. A 200g punnet of cherries – a fruit that usually costs more than gold – is £1.79, and they look impossibly juicy.


As well as the cherries, there’s English rhubarb for 69p, a pack of four avocados at £1.49 and on-the-vine tomatoes for 69p.


Bagged salad is also good value. A generous bag of baby leaf salad is just 79p, as is the rocket.


There are plenty more middle-class staples available too: brie, Parma ham, chorizo, houmous and fresh pesto are all present and correct in the chiller cabinet.


In most cases, there’s only one type of each – but there’s actually something quite liberating about not having to dither over 16 different varieties.


The choice of teas, coffees and breakfast cereals is similarly limited but includes Diplomat teabags – one of the lines Aldi has just won an award for.


At £1.39 for 60, they’re nearly half the price of the Twinings Everyday Tea I usually drink.


Aldi has also been much praised for its bread and baked goods, and I have to say the range is not only impressive but crazily cheap.


Four delicious-looking all-butter croissants are only 55p, while the gold medal-winning French Marble brioche looks irresistibly fluffy.


All shoppers have their items that they are just not prepared to skimp on – and for me it’s chicken and loo rolls.


At £3.99 for four breast fillets, the chicken is the cheapest I’ve seen for a long time – but it just doesn’t look very nice.


It’s not free-range, and I suspect that by the time it comes out of the oven the pumped-up breast will have shrunk to a bite-size dog treat.


As for the loo roll, well let’s just say I’ve seen sandpaper that looked softer.


I try to remind myself that beggars can’t be choosers, and that while I’m not exactly on the breadline, I could do with trimming back my food bill.


Although I live alone, I spend around £85 on my weekly shop at Waitrose – and that rarely includes red meat or alcohol.


Aldi has been found to be 40 per cent cheaper than Waitrose – and an annual saving of £1,700 isn’t to be sniffed at. That’s two weeks in Spain.


An hour into my Aldi shop, I am beginning to spy the odd well-heeled Surrey wife: their immaculately blow-dried hair, J Brand jeans and Tod’s loafers are a dead giveaway.


However, rather than buying their entire weekly shop at Aldi, they are nipping in for one item. Booze.


Heading to an aisle stacked high with wines, beers and spirits, I feel I’ve uncorked the secret to Aldi’s success.


Alcohol is something that Aldi does well. When their £3.69 Spanish red wine Toro Loco Tempranillo was voted one of the best in the world last year, you couldn’t get it for love nor money. Today they have a supply in but it’s going fast.


I grab a bottle and get chatting to 66-year-old Gillian Jones, who has come straight from her tennis lesson and is still dressed in her whites.


‘I only come in for the gin,’ she tells me. ‘It’s the best I’ve ever tasted, and so much cheaper than brands like Gordon’s.’


She’s right about the gin. In blind taste-tests, Aldi’s Oliver Cromwell London Dry Gin (£9.65) was rated better than brands like Hendricks and Bombay Sapphire, which are twice the price.


For the most part, Aldi sells their own ranges, interspersed with a handful of famous brands such as Haribo and Marmite. They’re also notorious for doing ‘lookalike’ ranges – products cunningly designed to look like well-known brands but at a fraction at the price.


But as I’m not currently in the market for a two-man tent, a catering-sized jar of pickled eggs or a 35-piece set of spanners, I leave the bargain hunters to it and make my way to the tills.


There are only three checkouts and the shortest queue has 14 people in it. When I finally reach the front, the assistant scans my food so fast his hands are a blur.


He stacks it in a huge tower, and even though it’s apparent I’m struggling to keep up, he doesn’t slow down and several items fall to the floor.


Back home, and with my blood pressure restored to its normal rate, I’m keen to see if the taste of these gold medal winning foods makes up for the hassle of buying them.


Things don’t start well with the Diplomat teabags, which produce a weak and tasteless cuppa, although the Belmont Jaffa Cakes are indistinguishable from McVitie’s ones, which are double the price.


The brioche is as delicious as it looks, but I’m disappointed in both the chocolate and the lemon and mascarpone cheesecake that were singled out for praise. To my palate, they taste processed, not homemade.


Just as I am reaching the conclusion that shiny Waitrose is still my true love, I remember the wine and cherries.


I almost want the cherries to be dry and bitter, but they’re sweet and juicy – and the perfect accompaniment to my large glass of Toro Loco Tempranillo, which must be smoothest wine I’ve ever tasted. How on earth can it have cost just £3.69?


Suddenly I’m regretting not having snapped up a whole box of the stuff – and a load of that award-winning gin to boot.


Aldi, I have a feeling I’ll be joining the Surrey housewives and weaving my way – perhaps a little unsteadily – down your aisles once more.




Pennsylvania: Nutter Makes Last-Ditch Push For Increased Liquor Tax To Fund Schools


Source: CBS Philly

By Mike Dunn

June 11, 2013


Mayor Nutter is making a last-ditch effort to get City Council to go along with his plan to hike the liquor tax, as part of the city’s latest school district bailout.


City Council members on Wednesday are expected to give initial approval to the operating budget, and they’ve already approved a new cigarette tax. But they appear unlikely to move on a proposal to hike the liquor-by-the-drink tax from ten to fifteen percent.


Mayor Nutter is still pushing for it. “This week really primarily is the week of action, the week we need actions to be taken,” Nutter says.


Council President Darrell Clarke indicates that the lawmakers are likely to meet the District’s request simply through cigarette and increased revenue collection – not liquor.


“Council is on track to pass legislation that will ensure the $60 million number,” Clarke says.


But that doesn’t satisfy the mayor, who wants the liquor tax hike as well, saying, “The responsible thing to do is provide as much funding to invest in the education of children.”


Clarke believes Council is acting responsibly, and doesn’t appreciate the mayor’s public chiding,


“Council will manage its business internally.”


The mayor, though, isn’t throwing in the towel on his liquor tax proposal. “There’s a lot of time between Wednesday/Thursday,” he says.


Both the cigarette and liquor proposals also require approval of state lawmakers, and the prospects there remain unclear at best.

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Liquor Industry News 6-10-13

June 10, 2013

Franklin Liquors

Monday June 10th 2013

Constellation Brands buys beer business for $4.75 billion


Source: News 10



Corona beer and others will now be imported and sold by a local company. Constellation Brands announced it has officially purchased Groupo Modelo’s U.S. Beer Business from Anheuser-Busch InBev. The total sale is just under $5 billion.


In addition to Corona, Constellation will import, market and sell Corona Light in the U.S. It will do the same with three additional Mexican beers and one beer from China.


The sales means Constellation will have two operations, a beer division and a wine and spirits division.




Pennsylvania: Pennsylvania liquor bill not a certainty


Source: PhillyNow

Jun 7th


The liquor issue in Pennsylvania looked like a shoe-in for Republicans this year.


Until it didn’t.


After years of fights in the Capitol between governmental, union, nonprofit and private groups, many believed the House passage of a GOP-favored vote to privatize the liquor industry was finally ready to sail through the full Legislature.


A confusing piece of legislation, much of the House debate came across as partisan and rushed. There were questions like: What would happen to the 5,000 UFCW state store employees? The revenue the booze business brings into the state? Would an increase in liquor sales put “booze on every block” as some politicians fear? Much of that was overlooked as the bill passed largely along party lines and went to the Senate.


Now, it seems as though an even newer bill will be written and introduced in the Senate, making the Big Change to the PLCB anything but a certainty this year.


That new bill is being written by state Sen. Charles McIlhinney (R-Bucks). As the chairman of the Senate Law and Justice Committee, he’s a key vote on the liquor issue, and many Republicans in favor of privatization believed he’d be a holdout vote. His plan, he said, would be ready in two weeks and less confusing than the current House-approved plan lawmakers are wrestling with. Unlike the current plan, he says, his would give current all license-holders, like bars, restaurants, grocery stores with a restaurant license and beer distributors, the option to expand on the type of liquor they can sell.


McIlhinney’s bill would require a new push, including debates and votes, from the Senate and House. It’s unclear whether Republicans would be able to get that done before the Legislature retreats for its summer recess.


And with any form of privatization, McIlhinney is unlikely to get the 23 Senate Democrats on board with his idea. Democrats have been opposed to the bill since the beginning, being as it would eliminate 5,000 union jobs and obliterate a large source of income from the state government. Like many ideas pushed by Republicans, both in Pennsylvania and nationally, part of the motivation behind liquor privatization seems to be to bleed the government of resources so it can, so to speak, drown in a bathtub.


All polling on this issue for the past 11 years has shown the public ready and willing to privatize the system. That is, until a recent Franklin and Marshall poll released a poll in April showing-for the first time ever-a majority of Pennsylvanians no longer support privatizing the liquor industry.


“When times are tough, it’s hard for anyone to hate on somebody else that’s trying to earn a living,” says State Rep. Brian Sims (D-Philadelphia). “And I think what people realized is that part of this bill is meant to be a union buster . I think people saw there was malice in this bill.”


In the past, Sims has told PW and others that if we were writing the Pennsylvania constitution today, of course we wouldn’t have the state controlling the alcohol business. But here we are-and, he says, the system works.


On the Senate side, members of the Philadelphia delegation agree. “No new people will get hired,” says State Sen. Vincent Hughes (D-Philadelphia). “And at the same time, the 5,000 [UFCW workers], the tax-paying citizens getting benefits, they’re done. They’re out. What happens to them is, they lose a job.”


Oddly, Susquehanna Polling and Research, the Republican-affiliated firm which embarrassed itself with ridiculous Pennsylvania polling numbers during the 2012 election, often showing Mitt Romney leading Barack Obama, released their own poll this week. And-surprise!-they found a majority (55 percent) want to privatize the system.


The Pennsylvania Democratic party released a damning and hilarious statement about the poll.


“Susquehanna Polling & Research is one of America’s worst polling firms and any poll from them should not just be viewed skeptically but laughed off entirely. Their work in 2012 made them a laughingstock and any news outlet that print the results of these polls are doing a great disservice to their audience,” they said.


(Sorry, audience.)


Rather than privatization, Democrats have put their focus on what they call “modernization,” which would allow residents to get liquor shipped directly to their homes, among other things. As state Rep. Daryl Metcalfe (R-Butler) noted at the Pennsylvania Leadership Conference this year, though, Republicans should view any call for modernization as one for the status quo.


Other than the jobs, legislators in less well-to-do parts of the state worry expanding and privatizing liquor sales could have detrimental effects on their communities.


“I’m very fearful of booze on every corner in every community,” adds Hughes. “That would be, for a city that is distressed as Philadelphia is, that has some of the highest levels of poverty of any city in the nation, to have more alcohol available in these distressed communities, that is not what people are looking for.”




Pennsylvania: Pa. liquor privatization drive hits wholesale snag


Source: NJ Herald


Jun 08, 2013


What may end up derailing the Republicans’ drive to privatize Pennsylvania’s sale of wine and liquor is not who gets to sell it – but who gets to deliver it.


Both a four-month-old plan by Gov. Tom Corbett, a Republican, and a bill that passed the GOP-controlled House in March would dismantle the Pennsylvania Liquor Control Board’s less-seen but lucrative business of buying and delivering wine and liquor.


However, a state senator who will play a key role in drafting that chamber’s plan has sent strong signals that he does not think now is the right time to privatize the wholesale system, even as a top House Republican takes the hard position that no privatization bill could pass his chamber without it. That disagreement is emerging as a key sticking point as top Republican lawmakers try to reach a compromise in a quickly shrinking amount of time before the July 1 deadline that Corbett has pressed them to finalize a plan.


Complicating their efforts is opposition to privatization from Democratic lawmakers and the union that represents state wine and liquor store employees, who warn that it could simply empower a few big wholesalers that profit handsomely from their control of top-selling brands in Pennsylvania. In the meantime, distillers and wholesalers – the companies that ship and market wine and liquor – are vying for the upper hand in whatever regulatory structure fills the vacuum if the Liquor Control Board is banned from the wholesale business.


Sen. Charles McIlhinney, who heads the Senate committee that is handling the matter, said he is leaning toward writing legislation that would break state control of wine and liquor sales at the retail level, albeit under a different format than those envisioned by the governor’s plan or the House bill.


But McIlhinney, R-Bucks, also argued that selling the wholesale system right now would be unwise. Doing so would ignore the potential that it would be much more valuable once retail privatization legislation allows more stores to sell wine and liquor, McIlhinney said. And getting as much bang for the state’s privatization buck will be especially important since the state stands to lose a revenue stream of more than $100 million a year in profits from the state’s liquor business, McIlhinney said.


“It might be a better choice to find some sort of a lease program or some sort of an avenue where maybe we do keep the wholesale for the time being until we can guarantee some revenue without having the price go up,” McIlhinney told reporters after his third and final hearing on the subject Tuesday.


It is a valuable business: The architects of Corbett’s plan and the House bill each estimated the wholesale side would account for more than 50% of the overall value to the state if newly created licenses are sold to private companies that want to transport or sell alcoholic beverages.


And right now, it is what gives the Liquor Control Board substantial negotiating power. The agency’s status as a single large buyer allows it to cut out many middlemen brokers that exist in other states and negotiate favorable prices directly with distillers and vintners. That leverage helps produces profits for the state treasury, proponents say.


A substantial retail expansion could demand tens or hundreds of millions of dollars to build warehouses, hire workers and buy trucks and inventory systems, whether it is carried out by the Liquor Control Board or by private-sector wholesalers, said Dawson Hobbs of the Wine and Spirits Wholesalers of America, a Washington, D.C.-based trade association.


But privatizing the wholesale system could potentially create what some warn would be an oligarchy of a few private wholesalers to the detriment of consumers.


To that end, a trade association for liquor companies, the Washington, D.C.-based Distilled Spirits Council of the United States, asked the Senate to reject parts of the governor’s and House plans that would allow wholesalers to have “franchise protection” rights. Such legal protection, which exists in about a dozen other states, would give wholesalers exclusive control over the distribution and marketing of liquor brands with virtually no fear of losing the contract to a competitor, council official Mark Gorman said.


That, he suggested, could hurt consumers on the key elements that could otherwise benefit them: price, availability and selection.


House Majority Leader Mike Turzai, an ally of Corbett’s in the crusade to privatize the state’s wine and liquor business, said any Senate bill that does not immediately sell off the wholesale end of the business will not pass the House. It is, he said, “an essential component.”


Turzai, R-Allegheny, also played down the influence that McIlhinney will have over any bill that ultimately comes to the Senate floor.


“There will be a full body of the Senate that takes this up,” Turzai said. “It’s not going to be limited to a singular member.”




Australia: Alcohol spilling into young minds


Source: The Australian

by: Madonna King

June 08, 2013


SOMETIMES it’s the things that creep up on us that pose the most danger: our weight, a nagging health issue we ignore, a problem we look past with a child.


Our use of alcohol has now fallen firmly into that camp too.


But just as the grassroots revolt over how accepted gambling had become in our lives saw Tom Waterhouse pull his head in, perhaps a crackdown on the “normalisation” of alcohol is next.


In Coles, alongside the soft drink, you can buy a four-pack of Coopers Ultra Light.


It looks like a beer, it’s in a can like a beer, and it’s brewed by Coopers Brewery in South Australia.


The alcohol content is small, at 0.5 per cent.


Coles is not breaking any law. Under the Liquor Act 1992, you don’t need a liquor licence to sell drinks unless the alcohol content creeps above 0.5 per cent.


Coopers Ultra Light is wedged in with the lemonade and ginger beer in the drinks aisle.


You are expected to see it as a soft drink, and no doubt children do.


My eight and nine-year-old daughters purchased a four-pack with money I gave them.


I was wanting to see if any staff, including those at the checkout, would raise an eyebrow? No one did.


That worries federal AMA president Dr Steve Hambleton who says we are now “grooming the next generation of drinkers”.


Hambleton doesn’t think something masquerading as a soft drink should carry any alcoholic content – but his bigger concern is that the Ultra Light is placed with other drinks.


That approach “de-sensitised” children to the shapes and brands of alcohol and defied widespread research which showed that the earlier you expose a child to advertising, the earlier they will test drinks.


And the earlier a child test drinks, the heavier they will later drink.


My beef is not whether supermarkets sell alcohol or not, as long as they follow the law. But surely alcohol should be seen as alcohol, not something else.


It should be labelled, placed separate from other drinks, and off-limits to children.


Late this week we saw one Queensland high school ban its students from consuming energy drinks because of health fears.


Isn’t this as – or even more – dangerous?


But as one reader of this column found, no one in authority could be bothered showing interest.


After seeing the drinks for sale at her local Coles, Pam phoned the Australian Competition and Consumer Commission to determine whether they needed a permit.


There she was told it was not in their jurisdiction and that she needed to go to a state authority.


Pam called the state office of fair trading, which she said told her they would need all the details in writing.


Next stop was the office of her local MP, who promised they would look into it – but that it could take a while.


“The retailers are attempting to normalise the sale of alcohol by associating it with groceries and other everyday purchases,” Pam wrote.


“I consider this to be a deliberate, deceitful attempt to introduce children and young people to alcohol, similar to the practice of handing out free cigarettes in the shopping malls years ago.”


She’s right.


But it could be something as simple as Coopers Ultra Light being sold in your supermarket that turns alcohol advertising on its head.


Tom Waterhouse’s recent retreat was prompted by a public backlash which targeted him as the gambling pin-up boy.


Such was the outrage that any support for his position reached the indefensible.


All of a sudden, it was clear that gambling had seeped too far into our everyday lives.


Perhaps it’s time to look at alcohol that way too, because it has now become a “normal” part of everyday living – from television advertising to sporting sponsorship to our home, where the witching hour has us reaching for a glass.


The problem is not the alcohol content; it’s the priority we are granting it.


And selling it with soft drink to children is just plain wrong.




Pernod Ricard takes pregnancy logo scheme global


Source: Marketing Week

By Sebastian Joseph

Fri, 7 Jun 2013


Pernod Ricard is to expand the use of its European on-pack health warning system for pregnant women to the rest of the world as part of ongoing efforts to promote responsible drinking.


Pernod Ricard will inform women worldwide not to drink when pregnant with warnings on bottles.


A logo telling pregnant women not to drink will be seen on all bottles for brands such as Chivas Regal, Absolut and Malibu produced by the company’s 80 subsidiaries. The business says the expansion of the voluntary labelling system aims to “unambiguously” highlight to pregnant women the dangers of drinking.


It will be supported by public conferences, leaflets and PR activity that will also highlight the company’s other commitments to responsible drinking.


Drinks makers have come under increasing pressure from the Government to implement pregnancy warnings on labels. The Portman Group has pledged to ensure pregnancy warnings along with unit information and daily guidelines will be included on 80 per cent of all labels by the end of 2013 as part of the industry’s commitment to the Responsibility Deal.


Pernod Ricard became the first global drinks business to include the logo throughout Europe in 2008.




Wells Fargo’s Weekly Economic & Financial Commentary


Source: Wells Fargo

Jun 7th



.         May’s larger-than-expected rise in nonfarm payrolls does not mark a significant change in the economic outlook.

.         A very large proportion of the jobs being added are in lower-paying sectors, most notably the leisure and hospitality sectors.

.         Employment in many higher-paying sectors has actually weakened.

.         Manufacturing employment fell by 8,000 with most of the weakness coming from nondurable goods.

.         The recent slide in the ISM manufacturing survey, combined with declines in the related areas of the employment report, has likely raised concerns at the Fed that slow global growth and sequester-related defense cutbacks are taking a heavier toll on the economy than previously thought.



.         The global economy has started to show bits and pieces of good news on the production side.

.         This good news could be an indication that the global economy many not be weakening further.

.         The stronger PMI reported in the U.K this week was a very positive development.

.         The reading came in at 51.3, which is supportive of an expansionary environment.

.         In Brazil, industrial production increased by 1.8% for the month-much stronger than the expected 1.0%.

.         The slowdown in Germany appears to be coming to an end.

.         Industrial production has been up for three consecutive months.


Point of View

.         Interest Rate Watch

.         The jobs report supports economic growth outlook and continued Fed easing.

.         The rise in the unemployment rate signaled Fed policy would likely remain easy through at least September.

.         Credit Market Insights

.         Household net worth is at an all-time high, but consumers remain cautious.

.         Household borrowing has been particularly weak.

.         The bulk of the gains in consumer credit have been in the form of student loans.


Topic of the Week

.         Commercial real estate enters a new world.

.         With the exception of apartments, the sluggish economic recovery has made for a painfully slow improvement in operation fundamentals and new construction.




Giant US firm which makes Budweiser crushes tiny UK brewers – for naming beer after their children’s primary school


Source: Daily Mail

By Martin Delgado

8 June 2013


With just £1,000 in the bank and one part-time employee, the Belleville Brewing Company is hardly in a position to threaten the global dominance of the world’s biggest drinks producer.


But Anheuser-Busch, the powerful US corporation which numbers Budweiser among its brands, apparently thinks otherwise.


Lawyers acting on its behalf have written to the group of parents who run Belleville demanding that they drop the name or else face court action which could bankrupt them with legal fees. The US giant claims that customers could confuse Belleville’s ales and its own fruit-flavoured Belle-Vue beer.


The heavy-handed intervention has shocked the fledgling British business, which is named after the popular state school attended by the children of Belleville’s two directors – real ale fans Adrian Thomas and Mark McGuinness-Smith.


Potential investors are also required to have a child at Belleville Primary in Wandsworth, South London, to ensure the small-scale enterprise retains its community links. Mr Thomas, 50, said: ‘The legal threat is ludicrous because the products are completely different.


‘Belle-Vue is a Belgian fruit-flavoured beer with a tart taste. Our beer is made with American yeast and hops and is more like a pale ale. None of the shops and pubs we supply are more than a few miles away.’


However, Anheuser-Busch – which last year generated revenue of  nearly $40billion (£26?billion) – has  made the extraordinary claim that consumers could confuse the two.


A warning letter, drafted by British lawyers hired by the Missouri-based company to protect its UK commercial interests, says: ‘Visually and aurally, Belle-Vue and Belleville share the first six letters in common and end with the same letter “e”.


‘Conceptually, both Belle-Vue and Belleville would be understood by the English-speaking consumer as signifying something beautiful.


‘As a result of this considerable degree of similarity .??.??. your use [of the name] is bound to lead to deception and confusion among the public and our clients’ consumers and potential customers.


‘Such use also enables you to take unfair advantage of, or free ride on, our clients’ reputation in the EU.’ The letter, from Bristol law firm Humphreys & Co, demands the destruction of all packaging and promotional material bearing the microbrewery’s name and the removal of any references to Belleville on the company’s website within 28 days.


Mr Thomas, a musician who played guitar and keyboards with Tubular Bells creator Mike Oldfield in the 1990s – said his first instinct was to defy the threat of a High Court injunction. But after consulting colleagues, he decided a more prudent course would be to choose another name. One option under consideration is Northcote, the name of a road in Wandsworth.


Mr Thomas started home-brewing in his kitchen and offered his ale for the first time at a beer festival organised by the parent-teacher association at Belleville. His nine-year-old son, Callum, attends the school and elder son Jake, now 11, is a former pupil.


Mr Thomas added: ‘There is only one member of Belleville staff – me – and I don’t draw a salary.


‘The legal action must have been triggered when we registered the name. We feel coerced and bullied. It’s as if they’re saying, “We have more money than you, so you’ve got to do as we say.”?


A UK spokesman for Anheuser-Busch, whose chief executive Carlos Brito last year received a £2.7?million bonus, said: ‘We are unable to comment on ongoing legal matters.’




Vijay Mallya tells striking Kingfisher Airlines staff he has no money to pay them


Source: ET

Jun 7, 2013


Kingfisher Airlines chairman Vijay Mallya today told his agitating employees, who began a hunger strike, that he did not have money to clear their salary dues.


“I don’t have the money to pay your salary dues, because I cannot use the proceeds from the United Spirits-Diageo deal for this due to an injunction from the Karnataka High Court,” Mallya reportedly told the striking employees.




‘Vicki’s Vodka’ $250K lawsuit: Vicki Gunvalson, Brooks Ayers sued for fraud


Source: Examiner

By: Rachael Monaco

June 8, 2013


The original real housewife Vicki Gunvalson may have dug herself a hole she cannot get out of this time. Vicki and her boyfriend Brooks Ayers are being sued by Robert Williamson III for $250,000 on the grounds that they conspired to commit fraud in their joint “Vicki’s Vodka” venture.


Professional poker player Robert Williamson III filed court documents on June 7 Radar Online reports. In the documents Williamson alleges that Gunvalson breached their contract, committed fraud, failed to live up to good faith dealings, misrepresented herself and “conspired to unjustly enrich herself. “Brooks Ayers is named as a co-defendant in the action.


What happened? Vicki Gunvalson and Robert Williamson III launched a business venture together, creating “Vicki’s Vodka.” Gunvalson then gave Brooks Ayers 16.67 percent of the business without Williamson’s knowledge.


Ayers then turned around and sold his 16.67 percent of “Vicki’s Vodka” to Williamson for $50,000, who is now claiming fraud. A written agreement dated March 6, 2013 confirming the sale was filed in Clark County, Nevada.


Williamson III lawsuit alleges that Brooks and Vicki used the purchase as a way to extort additional money from him in bad faith “without the intent to honor the intent of the transaction.”


Williamson alleges that Gunvalson “demanded” that the ownership he purchased from Ayers be returned to her. The lawsuit claims that Brooks Ayers and Vicki Gunvalson intended to “lure Robert Williamson II into the purchase of Brooks interest” without the good faith intent to move forward with the company and make it successful.


Vicki Gunvalson later sent Williamson a cease and desist letter claiming a “total lack of cooperation’ to make “Vicki’s Vodka” a success. The Twitter account for “Vicki’s Vodka” has not had a tweet posted since May 12. The “Vicki’s Vodka” Facebook page has not had a post since February.




News From TTB


Source: TTB

Jun 7th




If you are an alcohol beverage industry member (such as an importer or bottler) and are considering making changes to your previously approved alcohol beverage label, please review our complete list of allowable revisions before you submit your certificate of label approval (COLA) application – you may not need to send us the revised label at all!


When we updated our COLA application, TTB Form 5100.31, Application for and Certification/Exemption of Label/Bottle Approvalin July 2012, we expanded the list of items an alcohol beverage industry member can change on a previously approved label without TTB approval.


The idea behind the change is this: With a longer list of allowable revisions, we expect a decrease in the number of submitted label applications. With a decrease in the number of submitted label applications, we anticipate a faster review time for labels for new products and products with major changes.


A key component to the success of these changes is for industry members (or even consultants and attorneys practicing in the field) to know and understand the specific types of changes allowed for previously approved labels, and to exercise their freedom to make minor allowable changes to their labels without sending unnecessary requests for additional COLA approvals. With these changes, we anticipate industry may see a faster and easier application process in the future!




In China, fake European wine more worrying than tariffs


Source: Reuters

By Terril Yue Jones

Jun 9th


Bruno Paumard, the cellar master at a vineyard in China, can’t stop laughing while describing a bottle of supposedly French wine a friend gave him two years ago.


It’s white wine, with a label proclaiming it is from the vineyards of Romanee-Conti, the bottle bearing the logo that is on bottles of Chateau Lafite-Rothschild, and declares its origin as Montpellier in southern France.


Domaine de la Romanee-Conti, better known for highly prized and highly priced vintages from France’s Burgundy region, makes only a tiny amount of white wine, labeled Montrachet. It has nothing to do with the equally prestigious Lafite, which is from the Bordeaux region, and neither brand is produced anywhere near Montpellier.


“It’s the most magnificent example of a hijacked brand of wine I’ve ever seen,” says Paumard, who works with Chateau Hansen in China’s Inner Mongolia. “It doesn’t get better than that.”


Liquor stores, restaurants and supermarkets in China, the world’s most populous nation and fifth-largest wine consumer, wage a constant battle against fake wines. The amount of knock-offs on the market may increase as Beijing investigates wine imports from the European Union, threatening anti-dumping tariffs or import curbs.


It announced the investigation after the EU slapped anti-dumping duties on Chinese solar panels.


“More expensive wine is okay, I just don’t want any fakes,” said Helen Nie, a Beijing housewife sharing a bottle of the Italian house white at a restaurant with a friend.


“If the cost goes up I’d still buy wine, though some people wouldn’t – the price makes a difference. But the quality is important; it’s a health question.”


EU wine exports to China reached 257.3 million liters in 2012 for a value of nearly $1 billion, more than a ten-fold increase since 2006 as rapidly increasing wealth transformed lives and tastes in the world’s fastest growing major economy. More than half of the 2012 total – 139.5 million liters – came from France.


Nobody knows how much of the market is cornered by fakes and copycats, says Jim Boyce, who follows China’s wine industry on his blog,


“Things that are faked tend to be things that are very popular,” Boyce said.


And wine, especially expensive wine, is popular in China, sometimes more for bragging rights than taste.


“Those expensive wines are where you see more fakes,” said Maggie Wang, who was sharing the house wine from Sardinia at the Beijing restaurant with Nie.


“But there’s lots of phony wine. Everything’s faked in China,” she said. “For a lot of Chinese consumers, the more expensive it is, the more they’ll buy it. Chinese like things like that – they’ll buy the most expensive house, drive the most expensive car. They don’t want the best, they want the most expensive.”




Given the high margins and the demand, the counterfeiters tend to focus on European fine wines.


The iconic Chateau Lafite has become the poster child for wine forgery. A bottle of Lafite from 1982, considered one of the greatest vintages of the 20th century, can cost upwards of U.S. $10,000.


That has led to a thriving industry in Lafite knockoffs in China. Aficionados say there is are more cases of 1982 Lafite in China than were actually produced by the chateau that year.


Christophe Salin, president of Domaines Barons de Rothschild, which owns Lafite-Rothschild, says fake Lafite however isn’t the major problem.


“I have never seen a bottle of fake ’82 Lafite,” says Salin, who has been travelling to China for 20 years.


“The problem we have is the creative attitude of some Chinese. They sometimes use our name in funny ways,” he told Reuters in a telephone call from Paris.


Several wines on the market are branded with names close to Chateau Lafite, including “Chatelet Lafite”. Chatelet is the name of one of the busiest subway stations in Paris.


Lafite “is such a generic brand in China that it has widespread appeal as a name and as a status symbol,” says Boyce.


The mystique extends beyond the wine — in Beijing there is a “La Fite British Exotic Bar” and the “Beijing Lafitte Chateau Hotel.”


The first step for anyone counterfeiting wine is to find or manufacture a bottle that is close to the original.


“People will also use real bottles with something else inside, or make labels that are spelled differently,” says Cheng Qianrui, wine editor for the Chinese lifestyle website Daily Vitamin. “If you know wines, you can tell, but not a lot of Chinese do.”


Last year’s 10 percent surge in wine imports over 2011 was led by Spain, which accounted for 36 percent of cheaper bulk wine imports to China in 2012, according to Chinese customs figures. Bulk wine accounted for just under half of all wine imports last year.


The copyright problems however tend to focus on the better-known marques.


Importer Torres Wines includes Chateau Mouton-Rothschild, another top-ranked Bordeaux, in its portfolio. Sales Director Sun Yu says phony wine brands such as “Mouton & Sons” or “Edouard Mouton” pop up in the Chinese market.


“It happens in secondary or third-tier cities where they don’t have much wine knowledge,” Sun says.




Elite wine makers are trying to fight back, sometimes by smashing bottles after tastings, to prevent their being refilled for resale.


Anti-counterfeiting measures by major international spirits brands, which also fall victim to fakes in China, include bottle buyback programs, tamper-proof caps and covert tagging of bottles. But such measures are less common with wine brands, according to an executive at an international beverage company in China.


Domaines Barons de Rothschild has been putting tamper-proof tags on bottles of Chateau Lafite and its second label, Les Carruades de Lafite, since the 2009 vintage.


But the producer has been protecting its elite bottles since 1996, company president Salin says, with four other identification techniques that he won’t reveal.


“If you show me a bottle of Lafite, I can instantly tell you when it was bottled, a lot of things,” he says. “To counterfeit it is not easy.”




Wine Advocate slams branded cases claim


Source: the drinks business

by Lucy Shaw

7th June, 2013


Lisa Perrotti-Brown MW, editor-in-chief of The Wine Advocate, has slammed recent claims that Robert Parker is involved with the sale of branded wine cases.


As reported on earlier this week, négociant Bordeaux Vins Selection (BVS) announced it was to release cases of wines given 100-point scores by Parker in specially designed wooden gift boxes signed by the US wine critic.


However, Perrotti-Brown dispelled the claims yesterday on The Wine Advocate bulletin board, stressing that Parker never authorised the use of his signature.


“Robert Parker did not give permission for his signature to be used on any such packaging, and after speaking with Bordeaux Vins Selection, they will no longer be using his signature at all.


“We spoke with BVS last night to confirm that Robert Parker’s signature was not to be used in their packaging, in the format of our logo or otherwise,” she said.


“Some of the claims in the media suggest that we are profiting from the marketing and packaging of wines. This is not true. We continue to maintain our strict policy of not profiting from the sale of wine.


“Endorsing wines for profit is in direct conflict with the policy we have maintained for more than 34 years. We have no plans to change this policy,” she added.


The Wine Advocate recently moved into the sale of commercial licenses, allowing merchants like Bordeaux Vins Selection to market and sell cases using Parker’s perfect scores for the wines as a commercial hook.


The license allows merchants to reproduce Parker’s tasting notes and scores, though the use of Parker’s signature is not permitted within the agreement.


“This deal is in no way exclusive to BVS – other merchants are free to put together their own selections of Robert Parker rated wines,” Perrotti-Brown clarified.


“Neither Parker nor the TWA team have had any part in the selection of wines. We are not endorsing or profiting from the packaging or sales of the BVS cases,” she added.


In addition to commercial licenses, The Wine Advocate has also moved into the sale of bundles of subscription gift cards to to retailers.


“They are no different from the subscriptions available on the website; it’s just in a fancy card format that makes for a more presentable gift,” said Perrotti-Brown.




Nobles Crus suspended


Source: Decanter

by Jim Budd

Friday 7 June 2013

The Nobles Crus wine fund has been suspended due to a lack of liquidity.


The Luxembourg Commission de Surveillance du Secteur Financier (CSSF) temporarily suspended the fund on 27 May. It is not allowed to pay out redemptions or accept new funds.


Due to recent changes in European law, as of 31 December 2013, fund managers running unit trusts will not be allowed to invest in wine funds and other alternative investments.


This has led a number of Nobles Crus’ institutional investors to sell their holdings in the fund.


Miriam Wilson and Michel Tamiser, general partners in Noble Crus’ parent company Elite Advisers, have told their investors that ‘Nobles Crus now finds itself confronted with a few requests from some large institutional for redemptions involving considerable sums of money.


‘Currently, Nobles Crus does not have the necessary liquidity to honour these requests in the very short term.’


They continue: ‘As we have always emphasised, the fine wine market is relatively liquid, however, in different proportions to those of the financial markets. We are well aware of the importance, in the current circumstances, to sell at market price and not too hastily sell in order to free up the necessary liquidity to honour these redemption requests.’


Nobles Crus shares were worth ?180.25 as of 30 April 2013.


Last year valuations of fine wines by the Nobles Crus wine fund were questioned by the Financial Times and by French website LeVif/L’Express; Elite vigorously defended its valuation procedure.


A sale in February 2013 where ?8.7m was achieved at the ‘valuation price of Nobles Crus portfolio’ is further evidence of the accuracy of their prices, Wilson and Tamisier say.


In a separate development, on 4 June the UK Financial Conduct Authority (FCA) banned the promotion of wine funds and other alternative investments to the ‘vast majority of retail investors in the UK’.


From 1 January 2014 these products will be limited to sophisticated investors and high net worth individuals.




French site accused of selling Yquem 2012


Source: the drinks business

by Rupert Millar

7th June, 2013


An online retailer,, has been criticised for apparently trying to sell Château Yquem 2012 en primeur – even though that vintage was not produced by the estate.


Several Sauternes châteaux announced that they would not be producing a 2012 vintage because of poor conditions.


However, according to French newspaper Sud-Ouest, this did not stop the fine wine retailer trying to sell 2012 Yquem.


The paper managed to capture a page from the site, which it claimed showed promised customers delivery of the wine by 2015 and available at the soonest possible price.


The page has since been taken down.


In reply, 1855’s president, Emeric Sauty de Chalon, wrote to Sud-Ouest: “1855 has never put Yquem 2012 on sale; no price was ever announced, there was no possibility to buy this product and it was never available to our clients and, evidently, no bottle was ever sold.


“Only the possibility of being informed of its availability was accessible to our clients.


“1855 very much regrets that Sud-Ouest did not contact the company before distribution of the article, the objective of which seemed to be to blacken the image of our group more than faithfully inform its readers.”


As Sud-Ouest pointed out, and as the drinks business reported at the time, Yquem announced in December of last year that it would not be producing a 2012 vintage.


The newspaper has previously reported that has been censured before for late and damaged deliveries and even not delivering wine at all to some 200 clients.


There have also been questions raised concerning an affiliate company of,, by Château Conseillante in Pomerol, which said that the site was offering its 2012 vintage at a “ludicrously reduced” price and that it feared there was “very little chance” of buyers receiving the wine.


Reports of dissatisfaction with date back at least as far as 2011, as this French site “Into The Wine” makes clear.




Japanese wine investors


Source: FT

By Jancis Robinson

Jun 7th


Some of the finest wines are made by Japanese-owned companies, but you would never know this from the labels


Last month I witnessed the opening of spanking new winery buildings at an estate in the Rheingau that attracted 600 guests from all over the world and included every luminary of German wine. But the most extraordinary aspect of the celebrations was that there was not a Japanese face in sight. German wine has long been relatively popular in Japan but that is not why I was surprised. Weingut Robert Weil has been owned by the Japanese whisky giant Suntory since 1988, yet you would never know it.


There was no mention of the connection in any of the literature handed out at the event. The Suntory website acknowledges its three subsidiaries in the European wine business but directs you firmly to Robert Weil’s own website on which there is not a mention of Suntory or Japan. Yet in the words of the president of the Rheingau wine growers association, Stefan Ress of the Weingut Balthasar Ress in the next village, “What an opportunity was given to the Rheingau by Suntory’s investment in Weil. Nothing better could have happened to the region.”


Weil is widely seen as the jewel of Rheingau, historically Germany’s grandest wine region. The pristine estate and its smart new cellars, not to mention its growth from 18 to 90 hectares of vineyard in the past 25 years and the impeccable quality and consistency of its wines, including a miraculous Trockenbeerenauslese every year, are all presumably made possible by the yen underpinning them. Wilhelm Weil, who had to take over the family estate as a very young man at about the time of the sale to Suntory, is an exceptional steward.


This extreme discretion, I realised on reflection, is characteristic of Japan’s best-known acquisitions in the world of wine, which include some of the very finest producers of all.


In Bordeaux, Suntory owns part of a negociant business and also owns the third-growth Château Lagrange of St-Julien. Here too they have steered a property that was far from realising its potential to one that, despite its less-than-perfect location, is a model of consistent delivery, making long-lasting wines of dependable quality and harmony. The current director Bruno Eynard told me once that someone from Suntory visits every so often, adding with only slight exasperation that he always has a full-time Japanese employee who “wants to understand everything exactly all the time; le feeling is not enough for them. But Suntory is definitely motivated by top quality rather than profit.” This determined learning process is presumably driven by the fact that Suntory has its own large winery in Japan where very passable ripostes to red bordeaux and white burgundy are crafted by dedicated staff, but otherwise the French management are left to get on with things.


There is an even more hands-off approach at other high-profile Japanese-owned wine producers. In 1988 Madame Lalou Bize-Leroy acquired the Charles Noëllat domaine in Vosne-Romanée and set up Domaine Leroy in competition with the world-famous Domaine de la Romanée-Conti whose door she was shown after a family tiff. But she was able to do this only because she was backed by her Japanese importers Takashimaya, whose name she has always had difficulty pronouncing. It is hard to think of a more headstrong producer in the world. I cannot imagine the Japanese managing to lay down any sort of law with her. Indeed the only evidence of a Japanese connection with Domaine Leroy is the number of bottles of its wines found in the smartest wine shops of Tokyo and Osaka. Hew Blair of Justerini & Brooks, who has been visiting Domaine Leroy since the beginning, reports that he is yet to see any evidence of Japanese influence.


Japanese presence elsewhere is just as subtle. Few visitors to Ridge Vineyards, California’s truly iconic producer of great, ageworthy, classical reds based on ancient Zinfandel vines and Bordeaux blends from almost equally historic vineyards, know that it has been owned since 1987 by a Japanese wine lover. Paul Draper continues to run this tight ship and although his travels take him all over the world, he rarely visits Japan. Also in the late 1980s Markham winery in Napa Valley was bought by Mercian, one of Japan’s most significant wine producers, but it is run by an all-American team.


There are California wineries such as Kenzo, Freeman, Dalle Valle and Clos Pegase that are obviously and explicitly Japanese-owned or part-owned. In the case of Kenzo most of the wine produced on its 100 acres of vineyard is exported to Japan. But I am even more fascinated by the – perhaps coincidental – way in which all over the world some of the producers of the wines I admire most happen to have Japanese owners who are as firmly in the background as the make-up artists in a kabuki theatre.


My favourite producer on Madeira, for instance – hardly an obvious investment prospect – is Barbeito. Ricardo Diogo de Freitas, arguably the island’s most talented and certainly most dedicated winemaker, took over the reins of this relatively young family company only in 1991. He encouraged other family members to exit the bulk madeira business and concentrate on top quality bottled wines; he now even bottles single-cask madeiras. But Barbeito needed capital to embark on this adventure. It sought and received it from the Kinoshita family whose business had long been importing Barbeito madeiras. Yet, again, there is no evidence of any Japanese connection at its immaculate new lodge outside Funchal – just delicious evidence of yen transformed into nectar.


In New Zealand, perhaps partly because of proximity, Japanese influence is relatively strong. At least two small-scale producers of fine, handcrafted reds, Kusuda of Martinborough and Sato of Central Otago, are family affairs where the work is done by Japanese immigrants and their friends. But De Redcliffe near Auckland is an example of a high-profile outfit whose Japanese ownership is very much in the background.


Japanese discretion and precision are two very positive qualities for wine in my book.




China v European wine: aux armes!


In EU-China trade dispute, France is likely to be the biggest loser


Source: FT

Jun 7th


The hardy citizens of Europe made it through the banana wars. They even survived the bra wars – against China, no less. Trade disputes capture the imagination only when they have a catchy name. The solar panels at the heart of the spat between Europe and China were never going to excite interest. But that has changed since China this week said it would probe European winemaking subsidies. The battle for the bottle, perhaps? Aux armes, Bordeaux and Burgundy!


About a fifth of the wine drunk in China last year came from the EU. Sixty per cent of that, or 227m bottles, was French. EU wine exports to China have grown more than 50 per cent a year for the past three. For a country that increasingly likes the odd glass of foreign wine, it is odd that China has taken threatening action that could sharply raise the cost of that wine. But China is anything but reckless: the 2bn bottles the Chinese drank last year work out at under two per head. That makes the country a mere entry-level toper compared with the 60-plus bottles the average French person consumes, or even the eight drunk by Hong Kongers.


In other words, France’s one-tenth share of China’s wine market, which is expected to grow in volume by about 8 per cent a year, is more important to France than the cost of each bottle is to China’s small if growing band of oenophiles. And those wine fans have options, too. Any drop in European imports will probably only benefit its 450 domestic wine producers. Less than a third of China’s wine is imported and it is already the sixth biggest producer in the world, ahead of Australia, according to Vinexpo.


Pitting French viniculture against Chinese power could turn into a real fight. The French wine industry – the world’s biggest – is no slouch at promoting a sons-of-the-soil, family enterprise image. Yet the one-quarter of exported Bordeaux that headlines its wine sales to China and Hong Kong comes from big-production vineyards that can hardly be deemed artisanal. With China’s wine imports already taxed at about 50 per cent of value, French wine fans had better stock up in case the wine wars are only just beginning.




Restaurants set to double overall job growth


Source: NRA

June 7, 2013


In his latest commentary, the National Restaurant Association’s Chief Economist Bruce Grindy breaks down the latest jobs report.  Restaurants added more than 38,000 jobs in May, and are on pace to post their second consecutive year of job growth above three percent.  Meanwhile, the overall economy continued down the path of steady but moderate employment gains.


The restaurant industry continued to be one of the top job creators in the economy in May, according to figures from the Bureau of Labor Statistics.  Eating and drinking places – the primary component of the restaurant industry which accounts for roughly three-fourths of the total restaurant and foodservice workforce – added a net 38,100 jobs in May on a seasonally-adjusted basis, the third time in the last four months with gains above the 30,000 level.


Meanwhile, the overall economy added a net 175,000 jobs in May, which essentially matches the average number of jobs added during the last 12 months.  The private sector added 178,000 jobs in May, while government payrolls declined by 3,000.


On a year-to-date basis through May 2013, eating and drinking places added jobs at a strong 3.2 percent rate, which is double the 1.6 percent gain registered in the overall economy.


If the current trend holds, 2013 will represent the 14th consecutive year in which restaurant industry job growth outpaces the overall economy, and the third consecutive year in which the industry registered job growth in excess of 2.5 percent.  In comparison, the overall economy hasn’t posted job growth above 2.5 percent since 1998.




Restaurant Serves Kids Alcohol Instead Of Orange Juice


Source: You Tube

Jun 7, 2013


Some New Jersey parents are upset this week after they say a family restaurant served their kids alcohol.


Jeremy and Dawn DeRoo took their three daughters to brunch at Bazil’s on Sunday and ordered them orange juice; when one of the girls complained that it tasted funny, their mom figured it was just different than the kind they were used to and didn’t think much of it. But after tasting it later, she discovered that it was actually a mimosa. To add insult to injury, the waitress allegedly brushed it off as no big deal and offered to replace the drinks with milk, and the manager never came over to apologize.


The DeRoos say their kids showed signs of being drunk later that day and slept for hours after they got home.


“That’s not good enough for parents having kids, drunk and sleeping all day. It’s not fair. These little kids shouldn’t have any alcohol period,” Jeremy DeRoo said.


The restaurant’s owners say they aren’t sure how the mixup happened, and that all drinks are labeled to avoid mixups; luckily for them, the DeRoos say they aren’t going to pursue legal action.




Fuller’s pulls in profits and taps premium cider market


Source: FT

By Duncan Robinson

Jun 7th


Fuller, Smith & Turner, the London-based brewer, has jumped into the premium cider market for the first time in its 168-year history by buying Cornish Orchards for £3.8m.


Michael Turner, chairman of Fuller’s, said the 21-year-old cider maker was “small but perfectly formed”.


“They are completely passionate about the quality of what they produce – and we’re going to bring some commercial rigour,” said Mr Turner. The deal comprised £2.4m in cash, £500,000 of assumed liabilities and another £900,000 to be paid depending on production targets.


Fuller’s, which makes London Pride, announced the deal as it unveiled its full-year results. Pre-tax profits rose 22 per cent to £35.2m for the year to March 30 as the group benefited from exposure to the more resilient premium end of the pub market.


While domestic demand for beer was slack, Fuller’s exports have almost doubled over the past five years. “Our exports have been moving ahead very quickly and the difference is the duty,” said Mr Turner.


Beer in the UK attracts up to 12 times more duty than on the continent. Exports now account for about a fifth of the group’s beer volumes.


Overall revenues rose 7 per cent to £271.5m as the group expanded its estate. Diluted earnings per share rose a quarter to 52.1p, while the group’s dividend rose 10 per cent to 8.35p.


Management hopes that increased demand for craft beers will continue and help maintain volumes. Fuller’s entered the craft lager market this month with the launch of Frontier.


“If you look at food, the good old days of meat and two veg have changed,” said Mr Turner. “Everyone looks at different types of food now. People’s tastes are getting far more sophisticated and the same is happening with beer.”


Like-for-like profit growth in the group’s managed division was 6 per cent, compared with a 1 per cent rise in like-for-like profits in the tenanted division. Tenanted pubs across the whole industry have struggled with rising utility and other costs.


Improved recent weather resulted in a 7 per cent jump in like-for-like sales at the group’s managed pubs and hotels for the nine weeks to June 1. Fuller’s tenanted division continued to struggle, however, with like-for-like profits down 1 per cent over the same period.


Shares in Fuller’s were 5.7 per cent ahead in afternoon trading at 930p, having risen more than a quarter over the past 12 months.




In a Grocery Face-off, Is Costco Amazon-Proof?


Source: Bloomberg

By Brad Stone

June 06, 2013


Seattle-based (AMZN) has a cross-town retail rival in Costco Wholesale (COST), located in nearby Issaquah, Wash., and the histories of the companies are interestingly intertwined. During Amazon’s formative years, founder Jeff Bezos got some key advice from his Costco counterpart, Jim Sinegal. And Amazon Prime, the two-day shipping club, was inspired in part by Costco’s membership fees and the psychological inclination of shoppers to maximize the benefits of a club they have already paid to join.


As I was researching the connections between the companies last year for my upcoming book on Amazon, I called Sinegal and left a message asking if he could talk. He called back on a Saturday and left his cell phone number, then invited me to Costco’s headquarters for a one-on-one visit. That kind of availability and transparency is extremely unusual for the leader of a Fortune 500 company, and the conversation lead to my story in this week’s Bloomberg Businessweek about the company’s bizarro corporate culture and Sinegal’s like-minded successor, Craig Jelinek.


Costco is thriving, but Amazons’s relentless expansion looms over the second-largest retailer in the U.S., as it does every other retailer. The online giant is moving rapidly into apparel and is reportedly set to expand AmazonFresh, its Seattle-only grocery delivery business-two categories that are key to the continued vibrancy of big-box behemoths such as Wal-Mart Stores (WMT), Costco, and Target (TGT). Last year, I wrote that Amazon was poised to extend grocery delivery beyond Seattle, and on Wednesday the company quietly rolled out the service in Los Angeles.


Costco executives watch Amazon closely and believe the companies share a lot of cultural values, such as frugality and an interest in building for the long term. Like everyone else, they also marvel over the fact that Wall Street allows Amazon to get away with nearly nonexistent profit margins. “At some point people have to make some profits,” says Jelinek. “It is fashionable to make a lot of money these days.”


Jeff Brotman, Costco’s co-founder and chairman, says Bezos “doesn’t have to make a profit or break even on” services like Amazon Prime and AmazonFresh. “He’s building great loyalty with that, as we have with our executive membership,” which costs $110 a year and entitles members to additional benefits. Like other Costco executives, Brotman was skeptical that home grocery delivery could be profitable, but he notes that Amazon doesn’t really have to make it work perfectly in the short term: “He can spend a billion dollars experimenting and putting televisions on a truck and delivering them the same day with apples and oranges. That’s a research and development experiment that competitors and normal online businesses can’t do.”


So is Costco (and, for that matter, Wal-Mart) doomed if Amazon figures out home delivery of perishables and other sundries? Costco executives certainly don’t think so, and I agree. As others have noted, Amazon still has a lot of work to do to make home grocery delivery an economical option. And Costco members, attracted in part by its low prices, are exceedingly loyal, as its recent earnings reports have demonstrated.


Costco executives are not blind to the Amazon threat, and they talk in vague terms about evolving to meet the challenge. “It’s obviously a huge point of discussion around here,” says Paul Latham, vice president in charge of membership, marketing, and services. “We view Amazon as one of our primary competitors in almost every category. We all believe we are going to have to adapt in some form.” Latham also adds that “there’s a recognition that at some point Amazon has to start making money. They can’t continue on their current path of just pouring everything back into more infrastructure.”




Norway: Norwegian Politicians Defend Wine Monopoly


The majority of the country’s local politicians want continuation of wine monopoly and are against wine sale at convenience stores and supermarkets.


Source: Nordic Page

Jun 7th


A survey conducted among the country’s politicians for Newspaper News Agency (ANB) shows a majority against open for the sale of wine in regular stores. 52 percent of the respondents are against sale of high degree alcoholic beverages including wine at regular stores.


While 97 percent of the Christian Democratic Party politicians are against wine shops, 90 percent of FrP politicians want sale of wine at regular stores.


The greatest resistance to the wine shop is on the predominantly conservative West Coast of Norway.


It may Lead to Higher Consumption of Alcohol


According to press chief Jens Nordahl in Wine Monopoly, a principle decision to move wine sales to the corner store have dramatic consequences.


– Product selection will be significantly lower, and the price will go up. And market access for the people will be drastically larger when the number of outlets will increase from the current 280 to 5,000 stores, said he.


Also, the politicians and health authorities are concerned that consumption will increase drastically with allowing wine sale out of monopolies. When alcopops were moved from monopolies to the convential stores in the early 2000s, sales of alcopops had dramatically increased from four million to 16 million liters per year.


A recent study conducted by TNS Gallup for Wine Monopoly also shows that 90 percent of the population is satisfied with the availability of the wine monopoly. Only eight percent are dissatisfied with the availability.


Vinmonopolet (English: The Wine Monopoly) is a government-owned alcoholic beverage retailer and the only company allowed to sell beverages containing an alcohol content higher than 4.75% in Norway.


As the arm of the Norwegian government policy to limit the citizens’ consumption of alcohol, primarily by means of high cost and limited access, the primary goal of the Vinmonopolet is to responsibly perform the distribution of alcoholic goods while limiting the motive of private economic profit from the alcohol industry. Equally significant is the social responsibility of Vinmonopolet, to prevent the sale of alcohol to minors and visibly inebriated customers.


Outlets, located across the country from cities to smaller communities, typically close business earlier than other shops, normally weekdays at 18:00 and Saturdays at 15:00. In 2007 Vinmonopolet sold 71,100,000 litres (18,800,000 US gal) of alcohol.

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Liquor Industry News 6-5-13

June 5, 2013

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Anheuser-Busch completes $20.1B Grupo Modelo deal


Source: KSDK

Jun 4, 2013   


Anheuser-Busch InBev has completed its $20.1 billion purchase of Mexican brewer Grupo Modelo.


The world’s largest brewer has been trying for almost a year to buy the half of Modelo that it did not already own. The Department of Justice initially blocked the deal, concerned that it would hurt U.S. beer shoppers’ choices, but signed off on the combination after AB InBev agreed to sell Modelo’s entire U.S. business to a wine maker, Constellation Brands Inc.


Constellation will sell Modelo brands including Corona in the U.S., effectively replacing Modelo as a competitor to AB InBev. AB InBev expects that deal to close Friday.


AB InBev, based in Belgium, sells Budweiser, Stella Artois and other beers. The combined company will also sell Corona and other Modelo brands outside the U.S




AB InBev Judge Rejects Bid to Block Modelo Buyout


Source: Bloomberg

By Joel Rosenblatt & Karen Gullo

Jun 5, 2013


A group of consumers who claimed Anheuser-Busch InBev NV (ABI)’s $20 billion acquisition of Grupo Modelo SAB (GPMCF) will lead to higher beer prices lost their bid for a court order blocking the deal.


It would be “difficult and awkward at this point to set aside the transaction” completed yesterday morning, U.S. District Judge Maxine Chesney said at a hearing yesterday afternoon in San Francisco. She considered a request for a temporary restraining order by Joseph Alioto, attorney for nine consumers who filed an antitrust lawsuit to block the deal on grounds that it will reduce competition.


Budweiser-maker AB InBev, the world’s largest beer company, agreed as part of the merger to sell Mexico City-based Modelo’s stake in their joint U.S. distribution venture to Constellation Brands Inc. (STZ) for $1.85 billion. Constellation “will be in no position to maintain lower prices in the face of ABI constant pressure to increase prices,” Alioto said in a June 3 court filing.


“The plaintiff would have to show that it is not a legitimate transaction, that it’s a sham,” Chesney said. “I do not find that the plaintiff has made that showing by this time.”


The U.S. said its agreement with Leuven, Belgium-based AB InBev to turn Victor, New York-based Constellation into a competing brewer could save beer drinkers almost $1 billion a year because of lower prices.


Alioto has sued to block other deals, including the one that created United Continental Holdings Inc. and the merger of Southwest Airlines Co. (LUV) and AirTran Holdings Inc.


The case is Edstrom v. Anheuser-Busch InBev NV, 13-cv-01309, U.S. District Court, Northern District of California (San Francisco).




Brands by Value: full results (Excerpt)


Source: Drinks International

04 June, 2013


Brand valuation and marketing company Brand Finance has compiled a ranking of the world’s biggest spirits by  brand value. Here is the top 50.


This year’s Brands by Value table continues to see a volume shift towards local brands from developing countries. The potential for these brands, especially from China, is immense and opportunities to develop variants to enhance margin – and, in turn, cross borders – remain. Margin growth remains with the global power brands however.




BFb: 4Q13 Earnings Pre-Game Primer


Source: CITI

Jun 4th


Solid Net Sales Growth Expected – In 4Q13, we expect BFB’s reported sales to increase 5.5% YoY, the result of: (i) a relatively easy comp as sales were up just 1.3% in the year-ago period, (ii) the benefit from the company’s 1Q13 price increases, and (iii) the solid volume trends seen in Nielsen-tracked channels (particularly for the Jack Daniel’s, Gentleman Jack and Woodford Reserve brands). The Street is looking for 7.5% sales growth. We expect that currency movements will act as a 1-pt drag such that underlying net sales will be up 6.5% YoY.


Margins Should Contract – We expect that BFB will deliver a 52.5% gross margin (-10 bps YoY), driven primarily by an unfavorable comp (as 4Q12 benefitted from favorable cost variances). We believe that BFB’s operating margin will contract to 18.3% (-40 bps), the result of higher SG&A spending related to reorganizations in Europe and Asia, and also due to increased advertising and promotional investments. We highlight that our operating margin estimate (which is 50 bps ahead of consensus) may be somewhat high given that BFB began a significant ad campaign (including TV spots) for the Gentleman Jack brand in mid-April.


EPS Unchanged YoY – In 4Q13, we expect that BFB will deliver pro forma EPS of $0.49, which is essentially unchanged YoY and is three cents above consensus.


What We’ll Be Interested in Hearing About – An update on bourbon pricing, including a read into whether BFB will act as a price leader in the category; management’s expectations for the growth of whiskies going forward, including share shifts between brown and white spirits; additional detail regarding the alcohol advertising ban in Turkey and its potential impact on Jack Daniel’s; color on the NTSB proposal to reduce the legal blood alcohol limit for drivers; and BFB’s gross margin expectations for FY14.


Conference Call Details – Wednesday, June 5, at 10:00 am ET. Dial-in: 888-624-9285 (domestic) and 706-679-3410 (international). No password is required.




Belvedere revenue falls by 5% y/y in Q1


Source: Warsaw Business Journal

3rd June 2013


Belvedere, owner of the Sobieski vodka brand, had a revenue of ?188.7 million in the first quarter of 2013, 5 percent less than in the corresponding period of 2012. In Poland, which accounts for 60 percent of Belvedere’s sales, revenue fell by as much as 9.4 percent.


The company explains that the situation in the Polish vodka market has worsened, but it managed to maintain its leading position, with Krupnik vodka’s market share at 14 percent. All of Belvedere’s brands have a combined market share of 17.5 percent in Poland.


Sales in the US were hit as well, falling by 46.5 percent compared to the same period of last year. The reason behind this could be the fact that Belvedere decided to move Sobieski vodka to the premium category and as a result increased its price.


There are markets where Belvedere increased its revenues. In France, sales grew by 8.4 percent, in Denmark they rose by 4.8 percent and in Latvia they grew by 11.1 percent.




Pennsylvania: Deadline looming, Pa. senator to submit a different plan on privatizing liquor stores


Source: Post-Gazette

By Karen Langley

June 5, 2013


After a final hearing on privatizing state liquor sales, the chairman of a key Senate committee said Tuesday he will unveil a plan that departs from the House proposal with less than two weeks to negotiate differences before Gov. Tom Corbett’s requested deadline.


Sen. Chuck McIlhinney, R-Bucks and chair of the Law & Justice Committee, said he has set aside the bill the House passed in March and will propose his own plan the week of June 17. Mr. Corbett has repeatedly said he wants a privatization bill on his desk by June 30.


Mr. McIlhinney said he favors maintaining the current number of retail licenses but allowing businesses to sell more types of alcohol. Where the House plan sells off the wholesale operation, Mr. McIlhinney said the state should wait to see how changing the rules of retail sales affects the worth of a wholesale license.


“I’m having a really tough time getting a handle on that value of the wholesale system,” he said. “Selling it right now, outright, isn’t something I think you’re going to see in the bill.”


Such a change spells trouble in the House, where Majority Leader Mike Turzai, R-Bradford Woods, said any liquor-privatization bill must be “substantially similar” to the legislation that cleared his chamber.


“Wholesale divestiture is a crucial component to make sure there is a competitive market,” he said. “It’s an essential component.”


Mr. McIlhinney said he opposes the House bill in large part because it divests the state’s wholesale business through a one-time sale of licenses. He said he would not use the bill, which he described as “rather complicated,” as a starting point.


But Mr. Turzai said he expects the House bill to be considered by the Senate.


“I believe that the Senate as a whole will ultimately take up House Bill 790 and study it in detail,” he said. “The only bill that gets to the governor’s desk is a serious bill, one that is substantially similar to House Bill 790.”


The House bill would create 1,200 licenses for the sale of wine and spirits, first available to beer distributors, with the possibility of up to 600 additional licenses as state liquor stores close. Groceries could buy licenses to sell wine but not beer, except through existing restaurant licenses. State stores would be required to close by county as private retailers opened, and the Liquor Control Board would be required to close all state stores when the number fell below 100.


Mr. McIlhinney said he wants to allow holders of alcohol licenses to sell more types of products. Asked what a grocery could sell under this plan, he said: “You’re talking about an alcohol license. Alcohol means wine, spirits and beer.”


Mr. Corbett kicked off this year’s attempts at privatization in January with a proposal that, unlike the House bill, would have allowed groceries and convenience stores to sell beer and would have set a deadline for shuttering the state stores. But he hailed the passage of the House version as a momentous step.


Testifying before the Senate panel Tuesday, Lt. Gov. Jim Cawley said the administration believes its plan is best suited to achieve its goals. But he said Mr. Corbett has shown he is willing to talk with legislators about how to improve convenience, selection and pricing in liquor sales.


“Certainly the governor has indicated his willingness to enter into and continue discussions,” he said.


Mr. Corbett’s spokesman, Kevin Harley, declined to say whether the components Mr. McIlhinney described would be acceptable to the governor.


“We look forward to seeing Sen. McIlhinney’s bill and working with him and the Senate to provide consumer choice and convenience,” he said. “We’ll wait to see the details of his bill.”


The committee meeting featured a sharp exchange between Mr. Cawley and Sen. Jim Ferlo, D-Highland Park, who called the lieutenant governor’s remarks “totally outrageous” — drawing applause from the union members filling the hearing room — and criticized the secretary of health, Michael Wolf, the commissioner of the state police, Frank Noonan, and a deputy secretary of education, Carolyn Dumaresq, for sitting beside him.


Afterward, Mr. Noonan and Mr. Wolf said the proposal would bring additional money to liquor enforcement and alcohol education, while Ms. Dumaresq spoke about an education grant program that Mr. Corbett proposed, using the proceeds from his privatization plan.




Pennsylvania: Boisterous and Tense Moments at Pa. Liquor Store Privatization Hearing


Source: CBS Philly

By Tony Romeo

June 4, 2013


The chairman of the Pennsylvania state senate committee vetting liquor privatization legislation says he expects to offer his own bill in about two weeks, now that his panel has held the last of three hearings on the issue.


The last hearing before the Senate Law and Justice Committee turned raucous when the ranking Democrat on the panel, Jim Ferlo, attacked several members of the Corbett cabinet for supporting liquor privatization as a room packed with state store workers cheered him on.


“For the colonel of the state police to even suggest that a proliferation of alcohol around the state is somehow going to be enhanced under privatization I think is just almost laughable on its face,” Ferlo said.


But his comments got a stern rebuke from Lt. Governor Jim:


“What should be embarrassing to you is the way you just impugned the character of three very excellent public servants!”


The Pennsylvania House has already passed a liquor privatization bill.  The chairman of the Senate committee says he expects to offer his own bill that will significantly reduce the number of state-run liquor stores in Pennsylvania.




Oregon: OLCC Commissioners to vote on extending the 50-cent surcharge on distilled spirits and a possible 25-cent increase of the surcharge


Source: OLCC

Jun 4th


The Commissioners of the Oregon Liquor Control Commission will hold a special Commission meeting Thursday, June 6 at 7:30 a.m. via phone. At the meeting, the Commissioners will vote on whether to continue the 50-cent surcharge on distilled spirits in addition to a separate 25-cent surcharge increase on distilled spirits.


The Governor’s Balanced Budget for the Oregon Liquor Control Commission for the 2013-2015 biennium includes an extension of the current 50-cent surcharge on distilled spirits. OLCC Commissioners’ action is required to continue the current surcharge levels.


The current 50-cent per bottle (25 cents per mini) surcharge is scheduled to expire June 30, 2013.


The proposed 50-cent surcharge is a continuation of the surcharge that was initiated in the 2009-2011 biennium and extended through the 2011-2013 biennium. Should the Commissioners approve an extension, the surcharge could continue.


If the 50-cent surcharge is continued, it is expected to generate $32.4 million for the biennium. If the Commissioners approve an additional 25-cent surcharge, it could generate an additional $16.2 million for the biennium.


How the revenue is distributed is determined by statute and can only be changed by the legislature.


The Commissioners will consider public comment heard at the April Commission meeting as well as written public testimony submitted during the public comment period.


Written comments on both proposals were accepted until 5:00 PM, June 3, 2013. No public comment or testimonials will be accepted at the June 6 telephone meeting.




Whiskey Makers Court Jewish Market


Source: The New York Times


June 4, 2013


For avid whiskey lovers, few events are more eagerly anticipated than WhiskyFest, an enormous tasting that touches down in several American cities throughout the year. But when sponsors of the New York festival suddenly moved it last year from Tuesday to Friday and Saturday, many regulars were unable to attend.


An alternative arrived suddenly in the form of a new one-night event, held on the eve of WhiskyFest. Despite little time to advertise, it drew a crowd of 250 to its unlikely Manhattan location: the West Side Institutional Synagogue.


These whiskey devotees, it turned out, were Jews shut out of the big event because they observe the Sabbath. And to drive home the point of the tasting, its founder, the fledgling Jewish Whisky Company, called it Whisky Jewbilee.


Whiskey has numerous fan bases, but few are more devoted – and arguably less noticed by the press and public – than Jews, particularly observant Jews. Synagogues are increasingly organizing events around whiskey, and whiskey makers are reaching out to the Jewish market.


Retailers have long recognized Jews as valuable customers. “Jewish men are very interested in the selection of whiskey available at a wedding or bar/bat mitzvah,” said Jonathan Goldstein, vice president of Park Avenue Liquor Shop, a Manhattan store known for its whiskey selection. “They very often will pick up a special bottle to offer close friends or relatives.” Of the Friday before the Jewish holiday of Purim, last February, he said, “It was like Christmas in here.”


Part of the spirit’s appeal to many Orthodox Jews is that most whiskey is naturally kosher. In contrast, wine, owing to its long connection to Jewish tradition, must satisfy many regulations to earn a hechsher, the symbol of kosher certification.


But that hasn’t stopped prominent Scotch producers like Glenrothes, Glenmorangie, Ardbeg, Bowmore and Auchentoshan from courting the Jewish consumer by obtaining official kosher certification for certain bottlings.


Bourbon producers have even less to worry about, because by federal law their spirits must be aged in new casks, rather than in the sherry, port or wine barrels that some whiskey distillers use, and that give some kosher drinkers pause because of their exposure to wine. Yet the Buffalo Trace Distillery in Kentucky recently enlisted the help of the Chicago Rabbinical Council in laying down more than 1,000 barrels of three styles of whiskey, all certified kosher and set for release in five or six years.


In a smaller-scale but similar enterprise, the Royal Wine Corporation, a New York producer of kosher wine and grape juice, asked Wesley Henderson two years ago if he would be interested in making a kosher-certified version of his boutique bourbon, Angel’s Envy. “We were looking for a bourbon line in general,” said Shlomo S. Blashka, a wine and spirits educator at Royal, also the New York-area distributor of Angel’s Envy. “The Jewish community is a very big bourbon community.”


Mr. Henderson did not have to be told. “You’d have to be blind not to notice it,” he said. “I thought, if you had a kosher bourbon, that would be a great thing. It seemed a no-brainer.”


For the new whiskey, Angel’s Envy was aged for six months in barrels that had held Kedem kosher port for 20 years. The run sold quickly, Mr. Henderson said, and may become a permanent addition to the bourbon maker’s line.


In 2011, Jason Johnstone-Yellin and two partners founded the Jewish Whisky Company, which has bottled barrels from six Scotch distillers. “We had the opportunity to purchase casks, where not everybody would have that opportunity,” said Mr. Johnstone-Yellin, who was born in Scotland and whose American wife is Jewish.


During a recent trip to the Victoria Whisky Festival in British Columbia, he said, he buttonholed a representative of a well-known international whiskey distillery and asked if it would let the Jewish Whisky Company bottle one of its casks.


“The response was: ‘We’re very protective of our brand. We don’t do that,’ ” said Joshua Hatton, another partner in the business, who also founded a popular blog, Jewish Single Malt Whisky Society – now renamed Jewmalt.


Mr. Johnstone-Yellin, not giving up, gave the man his card and pointed to the word “Jewish.” “This is our market,” he said. “These are our customers and members.”


The man paused, he said, then agreed to talk to them.


The bond with whiskey goes way back. Mr. Blashka said early Jewish immigrants to America, unable to trust the provenance of local wines, turned to certain distilled liquors, including whiskey. “Because the wine was an issue, typically spirits was their avenue for drinking,” he said.


As recent decades have ushered in a revival in Scotch, bourbon and other whiskeys, Jews, like many other groups, have moved beyond the usual blends and have developed more sophisticated tastes. “Now we have many whiskeys that we know are kosher,” said Rabbi Aaron Raskin of Congregation B’nai Avraham in Brooklyn Heights, whose preferred whiskey is the smoky Laphroaig, a single malt from Islay. “It is used to add to our joy.”


“And it helps attendance at synagogues,” he added.


Whiskey-centered events at temples are a lot more common than they used to be, said Joshua London, a lobbyist for the Zionist Organization of America who regularly writes about whiskey for Jewish publications. For the last three years, Mr. London has been asked by his Orthodox synagogue in Potomac, Md., to pull together bottles for an annual pre-Passover whiskey and barbecue night.


This year, 350 people attended the sold-out event. One rabbi, Charles Arian, began developing an interest in bourbon 10 years ago, after he married a woman from Kentucky. When he moved from Connecticut to a new post at Kehilat Shalom in Gaithersburg, Md., he began organizing bourbon tastings. “There are two things I am passionate about besides Judaism,” he said. “Bourbon and Georgetown basketball.”


For him, a big attraction of whiskey is its handmade origin. “It can only get so technical because of the barrel,” he said. “A barrel is made by a human being, just like a Torah scroll can only be made by a human being. We’re not importing Torah scrolls from China.”


The extent of a congregation’s, or congregant’s, embrace of whiskey can vary. “It all depends on what rabbi you hold by,” Rabbi Arian said. Some are content with whiskeys that are kosher by nature; others like the extra insurance of a hechsher. Aging or finishing in wine barrels will disqualify a bottle for one drinker, while another isn’t troubled by the distinction.


For years, there was no greater yardstick of Jewish interest in whiskey than New York’s WhiskyFest, sponsored by Whisky Advocate magazine.


“If you went years ago, you’d see that close to 50 percent of the people attending were wearing kippot,” Mr. Blashka said, referring to skullcaps. When WhiskyFest became a two-day event in 2012, held during the Sabbath, many Jews who wanted to attend were not pleased. “I wish I could tell you the sheer number of e-mails I received from my readers, distributors, importers, distillers,” Mr. Hatton said.


He said an importer and a distributor entreated him to assemble a pop-up festival for the disenfranchised customers and many producers in town for WhiskyFest.


Whisky Jewbilee will return this fall, at a larger site, and a second date in Westchester County will be added. “There were a couple distillers that we didn’t reach out to” last fall, Mr. Johnstone-Yellin said. “They said, ‘You will have us be part, won’t you?’ They’re smart people. They know who’s not going to be standing at their table on Friday and Saturday night.”




Return of the Cocktail Culture (Excerpt)


A New Film Celebrates Barkeeps and the Cocktails They Serve


Source: WSJ


Jun 4th


Bow-tied bartenders serving classic Manhattans in coupe glasses for an eclectic clientele may be a familiar scene in New York now-as it was more than a century ago-but it took a long time for the cocktail to come back to its full glory. In his new documentary “Hey Bartender,” which has its premiere Friday at Village East Cinema in the East Village, Douglas Tirola explores that revival, using expert witnesses like the pioneering mixologist Dale DeGroff (aka “King Cocktail”) and an insider’s look at such local cocktail-culture staples as PDT, Milk and Honey, the Flatiron Lounge and Employees Only. Messrs. DeGroff and Tirola annotated a timeline devoted to the cocktail’s rise, fall and return.




China Ups Ante in Trade Spat With EU


Source: WSJ

Jun 5th


China increased the stakes in its efforts to roll back the threat of European Union tariffs on its solar equipment exports Wednesday by announcing an investigation into what it called unfair EU wine-trade subsidies.


In a two-pronged response to what is becoming one of the biggest China-EU trade disputes, Beijing’s commerce ministry said it hoped to find solutions to the solar dispute acceptable to both sides as soon as possible, and reiterated its strong opposition to the tariffs.


The moves came hours after EU officials said they would delay for two months the full impact of import tariffs they plan to put on Chinese solar power equipment to allow Chinese manufacturers to negotiate a settlement.


“Trade relations are an important foundation for the China-Europe relationship,” commerce ministry spokesman Shen Danyang said. “China is unwilling to see the trade friction in the solar sector have an impact on the overall China-Europe relation.”


His remarks were diluted by the simultaneous announcement that the ministry has opened anti-dumping and antisubsidy investigations into wine from the EU.


“Wine imports from the EU enter our market via dumping, subsidies and other unfair trade practices, and have hit our wine production,” the ministry said.


The EU’s decision Tuesday came after a campaign of intense lobbying by the Chinese government that appeared to help swing the tide of opinion among some of the 27 EU national governments against the tariffs.


China is the EU’s second-largest trading partner, though that relationship has been marred by spats over trade in telecommunications, chemicals and seamless pipes.


The solar tariffs will come into force Thursday at 11.8%, a quarter of the average level seen in a European Commission plan circulated last month. The tariffs were supposed to average around 47%. They will cover solar panels and their main components-solar cells and silicon wafers-which the commission says Chinese companies are dumping at below fair-market prices.


Mr. De Gucht is giving Chinese solar-panel manufacturers until Aug. 6 to propose an acceptable alternative to the tariff plan. All manufacturers will face the same 11.8% tariff for the two-month period. If an agreement isn’t reached by then, the tariffs will come into force at the originally planned level.


Solar panels and related equipment make up a large chunk of China’s exports, accounting at their peak in 2011 for 7% of all Chinese sales to the EU.


Chinese solar-panel producers are already facing tough economic conditions, as a cyclical downturn has hammered demand and pushed Chinese giants like Suntech Power Holdings into bankruptcy proceedings STP -1.96% . The U.S. government last year slapped antidumping tariffs on Chinese-made solar cells, the devices in panels that convert sunlight into electricity.


Likewise, China’s wine market has exploded in recent years, with Europe-France in particular-its main trading partner.


China imported 430 million liters of wine last year valued at $2.6 billion, up 8.9% from a year earlier; more than two-thirds of that came from the EU, according to local wine consultancy Ease Scent Wine & Culture Co. Ltd., citing government customs data.

Wine imports from France alone were 170 million liters last year, up 11% on-year and accounting for 40% of China’s total wine imports.


Chinese investors have also sought out investments in Europe’s wine industry. Among other examples, Cofco Group, China’s largest state-owned food trading firm, purchased Château de Viaud, a winery in the Bordeaux region in 2011.


Wine consumption per capita in China is still a fraction of that in other countries. Chinese drinkers consumed only 1.4 liters of wine per person in 2011, far below the French average of 53.2 liters per person, according to research company International Wine & Spirit Research. It predicts China’s per capita consumption will increase to 2.1 liters per person over the next three years.


Share of Chinese winemakers soared in response to Wednesday’s developments. Yantai Changyu Pioneer Wine Co. 000869.SZ +10.00% Ltd., China’s largest listed grape winemaker in terms of market capitalization, was 10% higher at 44.44 yuan Wednesday afternoon.

Gansu Mogao Industrial Development Co. 600543.SH +9.33% shares rose 7.3%, while Tonghua Grape Wine Co. 600365.SH +7.52% Ltd. was 5% higher and Citic Guoan Wine Co. Ltd. increased 7.5%.




George Grant joins Glenfarclas board


Source: the drinks business

by Gabriel Savage

4th June, 2013


Glenfarclas Distillery owners J&G Grant has announced the appointment of George Grant to its board of directors.


The sixth generation of his family to work for Glenfarclas, George joined the company in 1997. Having spent two years working with Fine Vintage to promote the single malt Scotch whisky in Hong Kong, he returned to Speyside in 1999.


Since then, George has taken on responsibility for promoting Glenfarclas across North America, Germany and the UK. As sales director, he now oversees the company’s presence in more than 70 markets, overseeing sales growth of over 75% during the last four years.


Welcoming his son to the board, chairman John Grant said: “He has done an excellent job in challenging times over the last few years, and we are confident that as sales director he will continue to grow our brand around the world”.


Among the recent activities from Glenfarclas was last month’s £14,000 joint release with Hine Cognac of 1953 vintage expressions.






Source: Glazer’s

June 4, 2013


Glazer’s, Inc. today announces the promotion of David Aikens to Vice President, Multicultural Sales and Marketing, effective June 1, 2013. In this position, Aikens will be responsible for marketing efforts across Glazer’s business channels to positively impact sales execution and engagement across multicultural markets, including African-American, Hispanic/Latino-American, Asian-American and GBLT populations.


Aikens joined Glazer’s in 2011 and most recently was Director of Multicultural Sales and Marketing, DMH. Aikens led the promotional marketing team that earned Glazer’s Diageo’s “Golden Bar Award” for Multicultural Marketing in 2012. Prior to joining Glazer’s, Aikens held various positions in advertising, distribution, promotions, marketing and new business development working with a diverse portfolio of clients in the beverage alcohol and consumer products industries. His knowledge across multiple marketing avenues, as well as his multicultural market expertise, positions Glazer’s well to continue its lead in this area. Aikens earned a Bachelor of Science degree in Marketing from Rochester Institute of Technology.




Sarah Pearson Appointed Director Of Marketing For The Hess Collection Winery


Source: Hess Collection

Jun 4th


Sarah Pearson has been appointed Director of Marketing for The Hess Collection winery, reporting to Chief Marketing Officer Derek Bromley.


Pearson will primarily focus on The Hess Collection Winery and Hess Family Wine Estates wineries Artezin, MacPhail and Sequana, and will also contribute to domestic marketing efforts for Hess Family wineries Glen Carlou, Peter Lehmann, Colomé and Amalaya.




Frank Soares


Source: Premier Beverage

Jun 4th


With a heavy heart, we announce that a beloved member of the Premier Beverage family, Frank Soares, passed away on the morning of Saturday, May 25th as the result of a heart attack. Frank joined the Premier team in 2003 as the Senior Manager of Operations for the Jacksonville facility and in 2009 became the Senior Manager of Operations and Distribution for the Miramar house. He was with the Premier Beverage team for 10 years and made a lasting impact on everyone he knew. He had an incredible can-do attitude and a constant quest for continuous improvement. Frank was also a loving husband to his wife of 26 years, Dianna, and a devoted father to their three children Michelle, Nick, and Emily.




Tesco recovery in doubt as sales fall


Source: FT

By Andrea Felsted, Senior Retail Correspondent

Jun 5h


Tesco said sales from UK stores open at least a year fell by 1 per cent in the past three months.


This is a reversal from the 0.5 per cent increase in UK like-for-like sales, excluding petrol and VAT, in the three months to the end of February.


The performance raises questions about the momentum behind Tesco’s recovery, after Philip Clarke, chief executive, last year said he would invest £1bn to turn round the UK business after Tesco’s first profit warning in 20 years in January 2012.


The first quarter performance also compares with a period a year ago when UK like-for-like sales fell by a similar amount.


Mr Clarke said the performance was held back by a revamp of its non-food business in the UK, where it was ditching some lines and going more upmarket in others in an effort to win customers from rivals such as John Lewis.


However, he said the group had seen positive like-for-like sales in all food categories, with the exception of chilled convenience and frozen food after the horsemeat scandal.


Outside the UK, like-for-like sales in Asia fell by 3.8 per cent, where Tesco has been hit by restrictions on opening hours in South Korea. Like-for-like sales in central Europe fell by 5.5 per cent.


“Conditions outside the UK remain challenging and we have broadly maintained our performance from the fourth quarter of last year,” said Mr Clarke.




Ahold: shopping for growth


Dutch grocer must spend wisely after disappointing investors with small buyback


Source: FT

Jun 4th


Even the most adept people-pleasers struggle to meet everyone’s needs equally. Ahold must know how that feels. On Tuesday, alongside first-quarter results, the cash-rich Dutch grocer said that it would return ?2bn to shareholders through a buyback programme over the next two years. Shareholders showed their disappointment that the buyback was not bigger by marking down the shares by 3 per cent. But Ahold made the right compromise.


It was the sale of Ahold’s 60 per cent stake in Scandinavian retailer ICA for ?2.5bn that has given it the firepower to increase the share buyback from ?500m. But even after the programme there will be ample room for Ahold to invest in growth. The retailer has net cash of ?1.2bn. Deutsche Bank estimates that, following the ?2bn buyback, Ahold will still have a comfortable net debt position of 1.5 times adjusted earnings before interest, tax, depreciation and amortisation, well within its 2 times target threshold.


After all, Ahold needs to shop for growth. Its exposure to the US and European markets means that same-store sales growth has been slipping. It fell 20 basis points in the first quarter from a year earlier to 1.8 per cent. In 2011 those sales were growing at almost 3 per cent. And top-line growth is becoming more important as margins falter. Operating margins were down from 4.3 per cent a year ago to 4.1 per cent in the first quarter. Much of that came from a one-off pension settlement in the US, but Ahold admitted that the shift to online and pricing pressure played a role.

More video


Ahold now trades on 13 times forecast earnings, on a par with the average of its European peers. It is also ahead of its closest rival, Belgium’s Delhaize, on 12 times, but then Ahold has better management and a stronger market position. It will need to spend wisely if it wants to please investors further.




Consumables buoy Dollar General’s record Q1 results


Source: RT

June 4, 2013


Dollar General reported record sales, operating profit and net income for the first quarter ended May 3, thanks to strong growth in its consumables categories.


The company reported net sales of $4.23 billion for the quarter, an increase of 8.5% from $3.9 billion in the prior year’s quarter. Same-store sales increased 2.6%, resulting from increases in both customer traffic and average transaction amount. Total sales increases in consumables significantly outpaced increases in the company’s non-consumable categories, reflecting the impact of continued financial pressures on consumers as well as unfavorable weather conditions in many of the company’s geographic regions.


The company’s gross profit, as a percentage of sales, was 31% in the 2013 first quarter, a decrease of 89 basis points from the 2012 first quarter. The gross profit rate was negatively affected by higher markdowns; a higher mix of consumables, which generally have lower gross profit rates; increased inventory shrinkage; and lower initial markups. These factors were partially offset by improved transportation efficiencies and other logistics initiatives, in addition to modestly lower fuel rates.


While the company’s gross profit was lower than it anticipated, its operational profit saw record growth. Dollar General’s operating profit for the quarter was $395 million, or 9.3% of sales, a 3% increase from $384 million, or 9.9% of sales, in the prior year’s quarter.


“For the quarter, we achieved same-store sales growth of 2.6% reflecting strong growth in our consumables categories offset by softer sales in seasonal and weather-sensitive categories,” said chairman and CEO Rick Dreiling. “We believe the continued strength in consumables is a sign of the underlying health of our business.”


The company’s net income was $220 million for the quarter, a 3.5% increase from $213 million in the prior year’s quarter. Adjusted net income – which excludes expenses relating to secondary offerings of the company’s stock in both the 2013 and 2012 periods, losses associated with restructuring the company’s credit facility in 2013, an amendment of the company’s revolving credit facility in 2012 and income tax effect of adjustments – was $232 million for the quarter, an 8% increase from $215 million in the prior year’s quarter.


“We have updated our outlook for the year to reflect moderating sales growth and a lower expected gross profit rate than we previously anticipated,” Dreiling added. “We are well positioned for our same-store sales growth to accelerate to 4 to 5% for the year as our key initiatives, such as the roll out of tobacco and Phase 5 planogram changes, continue to gain traction through the year. Sales of non-consumables are expected to remain challenging, and we anticipate a continued shift to lower margin items within consumables and higher inventory shrink. We believe that our customers’ dependence on our everyday low pricing and convenient locations has never been greater.”




Restaurant sales continue to rise in May


Black Box Intelligence analyzes the results of the latest Restaurant Industry Snapshot


Source: NRN

Jun. 4, 2013


Black Box Intelligence and People Report released The Restaurant Industry Snapshot for May this week, reporting a third straight month of positive sales.


Same-store sales rose 0.8 percent in May, showing an improvement over April’s 0.4-percent increase. Same-store traffic results declined 1.6 percent, a slight improvement over April.


Consumer Edge Research, a partner company to People Report and Black Box Intelligence, released the Restaurant Willingness to Spend Index last week with a value of 88 for May, an increase over the index score of 86 reported for April. Based on historical data gathered through the partnership, an increase in the index score suggests a higher Black Box Intelligence same-stores sales rate in the month of June.


“Sales are still weaker than we would like to see, but three straight positive sales months is a result not seen since last June through August, 2012,” said Bill Schaffler, president at Black Box Intelligence and People Report. “Additionally, we are encouraged the consumer continues to indicate they may be turning a bit of a corner, as they indicated an increased desire to spend their money two months running, a result we have not observed since 2011. This is encouraging news as we enter the summer months.”


In addition, 104 out of 176 DMAs posted a positive result in May. The New England region performed the best with a 3.5-percent same-store sales increase. The Southwest was the lowest-performing area, with a same-store sales decrease of 1.0 percent.


People Report also presents turnover results by position by segment to their member companies each month. In April, results show management and hourly turnover increasing.


The most recent job growth reported by People Report is an increase of 1.0 percent, higher than last month’s increase of 0.4 percent. The job growth, although positive, remains slower than reported in most of 2012.


The Restaurant Industry Snapshot is a compilation of real sales and traffic results from 170+ DMAs from 100+ restaurant brands and approximately 15,000+ restaurants that are clients of Black Box Intelligence. Currently, data is reported in four distinct segments: casual dining, upscale/fine-dining, fast casual, and family dining. Black Box Intelligence is a sister company to People Report, which tracks one million restaurant employees on workforce analytics. The Restaurant Industry Snapshot also includes the Restaurant Industry Willingness to Spend Index from Consumer Edge Research, which is a monthly household survey of more than 2,500 consumers. Consumer Edge Insights is a marketing partner with Black Box Intelligence and People Report




Landry’s buys Mastro’s Restaurants


Plans to expand the steak and seafood concept are already in the works


Source: NRN

Ron Ruggless  

Jun. 4, 2013


Landry’s Inc. of Houston has confirmed its purchase of Mastro’s Restaurants LLC of Woodland Hills, Calif., and already has plans to expand the 11-unit, upscale brand by three more units during the next 15 months.


Terms of the deal were not disclosed, but a Landry’s spokesman said Mastro’s chairman and chief executive Mark Levy would stay with the Landry’s division. “Levy and his management team will remain in place to run day-to-day operations of the concept,” a company spokesperson said.


“Mastro’s is the best steak and seafood restaurant concept in America,” Tilman Fertitta, owner, chairman and chief executive of Landry’s Inc., told Nation’s Restaurant News Monday. Landry’s owns and operates a wide variety of restaurant, hospitality and gaming brands, ranging from Landry’s Seafood and Rainforest Café to the Golden Nugget Casinos and Hotels.


“[Mastro’s] is the leader in all markets in which it operates,” Fertitta said. “Business will continue as usual without any changes visible to the customer, and I look forward to helping the management team continue to grow the brand with three new planned unit openings over the next 15 months.”


Fertitta said that on May 24, Landry’s acquired all of the Mastro’s Restaurants equity interests, which included those of the founding Mastro family. A majority interest in the company was held by Kinderhook Industries LLC and Soros Strategic Partners LP, two New York-based private-equity firms that had grown the company since buying it in 2007. At the time of the 2007 purchase, Mastro’s Restaurants included five Mastro’s Steakhouses and two Mastro’s Ocean Clubs.


The original Mastro’s Steakhouse remains in Scottsdale, Ariz., and the company has added Mastro’s City Hall Steakhouse in Scottsdale, as well as steakhouse locations in Chicago and the California communities of Beverly Hills, Costa Mesa, Thousand Oaks and, in the fall of 2012, Palm Desert. Also in fall 2012, the Beverly Hills location opened The Penthouse, an upscale lounge.


The Mastro’s division also has upscale seafood Mastro’s Ocean Club units in Las Vegas; Newport Beach, Calif.; and Scottsdale.


An industry insider familiar with Mastro’s units speculated that Mastro’s produced earnings before interest, taxes, depreciation and amortization of about $22 million, and indicated a selling price would be around 10 times EBITDA. The Mastro’s units were likened to Morton’s Steakhouse, which Landry’s acquired for $116.6 million in a deal closed in February 2012.


Average Mastro’s Steakhouse checks are estimated around $135, ranking it among the nation’s more expensive steakhouses.


Privately-owned Landry’s also owns McCormick & Schmick’s Saltgrass Steak House, Landry’s Seafood House, Claim Jumper, Bubba Gump Shrimp Co. and The Chart House, as well fine-dining restaurants Vic & Anthony’s, Brenner’s Steakhouse, Grotto, LaGriglia, Willie G’s and Oceanaire.


Landry’s also owns the Golden Nugget Hotel & Casinos in Atlantic City, N.J., Las Vegas and Laughlin, Nev.; the Isle Casino Hotel in Biloxi, Miss.; the Kemah (Texas) Boardwalk; the Galveston Island (Texas) Historic Pleasure Pier; the San Luis Resort, Inn at the Ballpark; and the Downtown Aquarium in Denver and Houston.


Landry’s said in 2012 that its companies were expected to generate about $2.5 billion in revenue.




Conference recap: Strong restaurant fundamentals in the spotlight


Source: Goldman Sachs

Jun 4th


Four common themes emerged at the conference

We hosted our 2013 Lodging, Gaming, Restaurant and Leisure conference over the past two days. Participating restaurant stocks included: BWLD, CAKE, DNKN, DPZ, EAT, SYY, THI, and YUM. We thought the tone was solidly positive and identified four key themes that emerged:


(1) Continued unit growth opportunities abound

Every single restaurant company that presented is planning to build more units – and we found these plans to be credible. For BWLD, DNKN and THI the primary growth is to take place in North America. YUM and DPZ, on the other hand, are primarily expanding overseas – largely in emerging markets. CAKE and EAT represent somewhat of a hybrid, with unit growth both here and abroad. We are most optimistic with respect to DPZ and YUM, as we believe there is more of a natural tailwind in emerging markets where chain restaurant penetration is still in the single digits.


(2) Trends may be choppy, but share gainers posting solid results

While industry trends are somewhat choppy, and some companies talked to increased promotional/competitive intensity (i.e. EAT, THI), most of the companies that presented were posting solid SSS results. This includes BWLD, DNKN, DPZ and CAKE – all of whom are gaining market share.


(3) Margins may be poised to rise further

There were a few companies that talked to margin pressures from a tough competitive environment. But for the most part, restaurant companies expect to enjoy margin expansion as a result of SSS leverage, cost cutting and benign food inflation. We concur as we are modeling for operating margin expansion for all presenting companies with the exception of YUM (China issues) and BWLD (wing inflation) – but we expect margin expansion for these two exceptions as the discreet issues fade in 2014.


(4) FCF deployment and capital structures remains in focus

All of the companies that presented, other than BWLD (which is reinvesting for growth), talked to their capital allocation strategies. Further, some companies (DNKN, THI) indicated a likelihood to take on more debt to enhance returns to shareholders. While not as explicit, comments from SYY and DPZ also suggest the potential for increased debt leverage.




Commentary: EAT Management at the Goldman Sachs Lodging, Gaming and Leisure conference


Source: Goldman Sachs

By Michael Kelter and Ivan Holman

4 Jun 2013


-Casual dining industry: EAT management noted that it has shifted its focus from unit growth towards driving sustainable EPS growth. The casual dining industry is exhibiting signs of maturity; however, there remain markets where Chili’s has significant opportunities to gain share, particularly from independents. Notably, the competitive environment remains challenging, with a step-up in promotional activity from some key competitors.


-Pizza launch: The company was upbeat on its current Pizza and flat bread platform, suggesting it is on pace to reach 8-10% of sales as per its expectation. The product is preferred by consumers once they get a trial, and it carries a higher margin contribution profile.


-Kitchen investments: The company continues to make significant investments in the back of house and kitchen. Management indicated that it expects these investments, and the ability to further expand menu innovation, to drive improvements in traffic and margin profile. Units equipped with the new kitchen platform can now roll out baked items via new oven capabilities. EAT is also testing a new fryer that may save money in the future.


-Pace of remodels: company-owned remodels are currently 40% completed. Management expects to be able to complete 60+ units per quarter, and by 2014/2015 will have fully rolled out re-images to all of its markets. The company expects franchisees to remodel units in the future as well, but the franchisees are still digesting the expenses associated with the new kitchen equipment at the moment.


-Cost cutting: The company expects to achieve a targeted 400bps of cost cutting benefits by the end of next year. There remain opportunities to further build on these gains as the company focuses on waste reduction initiatives and as restaurant employees get more comfortable with the new kitchen equipment.




Commentary: CAKE Management at the Goldman Sachs Lodging, Gaming and Leisure conference


Source: Goldman Sachs

By Michael Kelter and Ivan Holman

Jun 4th


-Key drivers of profitability: Management highlighted five key levers available to drive long-term earnings growth: 1) SSS momentum, 2) domestic unit growth, 3) international unit growth, 4) operating margin improvement, and 5) capital deployment to shareholders.


-High-end exposure: Management indicated that SSS trends have benefited from the company’s exposure to higher-income consumers. This subset of consumers has not seen as pronounced an impact with regard to higher payroll taxes and fluctuations in gas prices. Furthermore, the company has been able to drive top-line growth without relying on significant discounting activity, in stark contrast to many Casual dining peers.


-Real estate discipline: The company believes it can achieve 300 Cheesecake Factory units domestically over the long run. Site selection follows a rigorous review process, with new units yielding 10% higher sales per square vs. legacy.


-Menu differentiation: CAKE highlighted menu differentiation as a significant driver of sales growth. The company believes this will remain a key driver of comp looking forward.


-International strategy: CAKE’s international runway remains intact, with the company seeing significant positive contribution to the P&L from international royalty streams. Management believes that international growth will be a key contributor to operating margin expansion back towards historical high-water levels. CAKE recently signed a license agreement for development in South and Central America, and sees further potential for growth in the Middle East. Management indicated that it is actively pursuing incremental licensing agreements over the coming years.


-License vs. Franchise: Management indicate that it is pursuing a licensing strategy vs. a franchise model in international markets. This structure allows tighter control over site selection, as well as processes and best practices in international locations.


-Capital allocation: Management indicated it remains committed to deploying excess cash flow to shareholders through both share repurchase activity and future dividend increases. The cadence of share repurchases is structured to offset options creep, as well as provide EPS accretive returns of shareholder capital.




North Carolina: Beer bills hop through committee


Source: WRAL

By Laura Leslie

Jun 4th


Two House bills that would facilitate beer sales are headed to the Senate floor after a very brief appearance in the Senate Commerce Committee.


House Bill 829, the “Growler Bill,” would allow restaurants, retailers and wine shops to sell resealable 64-ounce glass jugs of beer. Growler sales and refills are currently allowed only at the brewery.


Sponsor Rep. Chuck McGrady, R-Henderson, was barely two sentences into his presentation when Sen. Clark Jenkins, D-Edgecombe, motioned for a favorable report. The bill passed unanimously with no debate.


House Bill 610, In-Stand Beer Sales, also chugged through in record time. It would allow vendors to sell beer in the stands at professional sporting events at venues with a seating capacity of 3,000 or more. Vendors would not be allowed “to verbally shout or hawk the sale of malt beverages.”


Current law allows in-stand beer sales only at Bank of America Stadium in Charlotte. Patrons at other venues must stand in line at the concession counter to buy beer.


Sponsor Rep. Jon Hardister, R-Guilford, called it a “customer service bill.”  


Rev. Mark Creech, executive director of the Christian Action League of North Carolina, warned the committee that in-stand sales would lead to more consumption. He cited a 2008 study by the National Institutes of Health that found that in-stand alcohol vendors were more likely than concession workers to sell to intoxicated or underage customers.


But Tim Kent, executive director of the North Carolina Beer and Wine Wholesalers Association, said professional sports team owners want the right to provide in-stand sales. He said patrons will be able to spend more time in their seats with their family and friends, instead of standing in long lines at the beer counter.


The second measure also passed unanimously with no debate, except a quip from Sen. Jim Davis, R-Macon.


“Are all these alcohol bills directly related to being in the House?” he asked Hardister.




United Kingdom: They’re opening a Wetherspoon’s on the motorway? Booze Britain’s addiction is totally out of control


I am not against anyone enjoying a drink. But it’s really started to feel like the drinks industry has a grip on almost every aspect of our culture


Source: The Independent

Jun 4th


The announcement that the Women’s Prize for Fiction is to be sponsored by Baileys has drawn accusations of sexism. Why pair such a saccharine, sickly drink that is so overtly targeted at women with a contest that celebrates the blistering, strident writing of novelists like Zadie Smith and Lionel Shriver?


Some suggest instead using Johnnie Walker, which, like Baileys, is also owned by drinks company Diageo. But wouldn’t it be better that alcohol was nowhere near a prize the aims of which surely include encouraging girls and young women into novel-writing?


I don’t want to sound like a killjoy. In fact, my twenties and early thirties were effectively sponsored by Sauvignon Blanc (only becoming a parent has driven me away from drink for fear of dealing with both a hangover and a young child at the same time). I am not against anyone enjoying a drink. But it does sometimes feel like the drinks industry has a grip on every aspect of our culture.


In what must be the most bizarre of decisions by a council’s licensing committee, the pub chain JD Wetherspoon has been given the go-ahead for a bar at a motorway service station. If you’re driving down the M40 between 8am and 1am, you can peel off at Junction 2 at Beaconsfield for a pint of lager or a glass of white wine. What could possibly go wrong?


Of course, there is nothing to stop someone on the M40 leaving at the same junction and finding a country pub a few miles away, but they would have to make the special effort. Now they can just have a swift half in between popping to the loo and filling up the tank. The bar will be open by Christmas – just as the nation’s drink-drive levels soar. The health minister, Dr Dan Poulter, described the move as “extraordinary”. As a former hospital doctor, he should know.


Last year, there were more than 1.1 million alcohol-related admissions to hospital – more than double the number 10 years ago. Drink costs the NHS £2.7bn every year, including a £1bn burden on accident and emergency services. Alcohol Concern predicts that this will rise to £3.7bn by 2015. There are many causes of the current crisis in A&E (waiting times are at a nine-year high, it was revealed yesterday), but alcohol is a factor that is growing in significance every year. Nationally, “alcohol admission episodes” for 2010/11 were 1,895 per 100,000 in the population, compared with 1,389 in 2006/07.


During my last visit to an A&E department in south London, I sat in the waiting room for an hour watching other patients arrive. One woman was so drunk she rolled off her chair, vomiting on the floor. A man was carted in by paramedics who described him as “completely pissed”. Another woman, only marginally less drunk, had broken her arm. It was 11 o’clock in the morning.


In my home city of Liverpool, I have walked down streets where, before midday, it is commonplace to see people already staggering from drink. This may sound hysterical, but is backed up by the depressing statistic that Liverpool has the second-highest level of alcohol-related hospital admissions for men (after Salford) in England and the third-highest for women. It is not just traditionally working-class areas that have a problem. A University of Sunderland study found that 60 per cent of women in high-income postcodes – including Knightsbridge in central London and Esher in Surrey – drink more than three units of alcohol a day.


All the evidence is there that we as a nation have a drinking problem, and we cannot handle it. Visiting tourists, including those from the US, gaze open-mouthed at our heavy drinking culture. And yet the Government, for fear of being branded Nanny Statists, has failed to take action. A year ago, David Cameron promised to introduce a minimum price for alcohol, which he said would lead to 900 fewer deaths a year by 2020. It was backed up by a Home Office report saying that minimum pricing would reduce consumption, and, in turn, alcohol-related illness and death. The Prime Minister lamented that beer had become cheaper than water. His words turned out to be cheaper still – earlier this year he dropped the plan. Mr Cameron, it was said, did not want to deny hard-up people a can of lager at the end of the day.


This is a mystery because a year ago, when he pledged the minimum price, our economy was hardly booming. But perhaps the mystery is solved when we consider how hard the drinks industry works. The decision to relax licensing hours under Tony Blair’s government in 2004 was the result of some concerted behind-the-scenes lobbying. Is it just a coincidence that, since that year, hospital admissions have risen so dramatically? The Home Office is currently looking at relaxing laws outlawing pubs on publicly owned land at motorway service stations (the Beaconsfield one is on private land).


And the latest spotlight on the lobbying industry reveals that the All-Party Parliamentary Beer Group is sponsored by a roll-call of drinks companies, including Molson Coors, Greene King, Carlsberg, Enterprise Inns, M&B plc, Punch Taverns, and Heineken. The group also received £8,227 from Diageo, owners of Baileys. They do get about, don’t they? It’s enough to turn you to drink.




Australia: Independents, brewers protest wine in supermarkets plan


Source: TheShout

By James Atkinson



Independent bottleshops, brewers and the health lobby have voiced their objections to a South Australian plan that would allow wine to be sold in supermarkets, which has support from lobbyists for IGA, Foodland, Coles and Woolworths.


The proposal for SA supermarkets with a minimum of 400sqm floor space to be able to sell bottled wine attracted a total of 59 published submissions, most of them in opposition.


The Australian Liquor Stores Association (ALSA) questioned the need for the new class of liquor licence, given that supermarkets are already able to apply for a liquor licence under existing laws, providing the licensed premises is classed as separate.


“It is important that the liquor licensing regime is fair and equitable with all liquor licence applicants treated the same, using the same assessment criteria and taking into account the merits of each application,” said ALSA CEO Terry Mott.


Staunchly resisting the proposal was the Australian Hotels Association – which launched the ‘Let’s Draw The Line’ campaign in February – as well as many independent bottleshop operators who made their own submissions, including Wayne Anderson, manager of Glynde Hotel Cellars.


Anderson said his Adelaide bottleshop already has nine liquor stores operated by Woolworths and Coles within a five kilometre radius.


“If the proposed amendments are passed there will be potentially another 16 licences granted to supermarkets within this same radius, eight of them owned by Woolworths and Coles, the rest trading under the IGA or Foodland banner,” he said.


“This is an excessive increase in licences that goes way beyond catering for the demand within the community,” Anderson said.


“Wine and grapes over beer and barley”


Several health organisations wrote to oppose the plan on the basis that it may cause alcohol-related harm, while the Brewers Association objected on the basis of “product discrimination”.


“It seems illogical that a South Australian Government would unfairly favour wine and grapes over beer and barley, yet they all contribute to the economy and its strong cultural heritage,” said CEO Denita Wawn.


The Independent Supermarket Retailers Guild of SA, which primarily represents the independently-owned Foodland and IGA stores – which do not have an existing liquor retail footprint and therefore have the most to gain – said it was “delighted” to support the proposal.


“Both Foodland and IGA owners have established a policy to stock and sell only branded South Australian wine in their supermarkets,” said CEO Colin Shearing.


“They will not introduce a house brand in any wine category and nor will they stock cleanskins.”


Proposal gets support from the chains


Representing Coles and Woolworths, the Australian National Retailers Association (ANRA) said it was “supportive overall” of the plan, calling for the new supermarket licensing scheme to be transparent and straightforward for applicants.


“The current liquor licence application process for retailers in South Australia is cumbersome and our members have experienced extreme difficulty in obtaining new licences,” ANRA said.


Woolworths provided its own submission, arguing that SA currently has just 194 retail liquor licences, the lowest density of packaged liquor licences in Australia.


“The benefits of the proposal will be particularly evident in rural and regional areas where choice for consumers is limited and communities are underserviced by packaged liquor outlets,” said Andrew Wilsmore, manager – public affairs at Woolworths Liquor Group.


Business SA CEO Nigel McBride said that if the state is serious about promoting its wine industry then wine in supermarkets is a “logical decision”.


“One cannot imagine visiting Paris and not being able to find Champagne in the supermarket so likewise, Clare Valley Riesling, Barossa Shiraz or Coonawarra Cabernet Sauvignon should also be available in supermarkets in South Australia,” he said.

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Liquor Industry News 6-4-13

June 4, 2013

Franklin Liquors


Tuesday June 4th 2013

Today Is A Biodynamic  LEAF Morning BUT

A FRUIT Night. Great To Taste Or Drink Wine Tonight


AB InBev, Constellation Brands Seek Dismissal of Lawsuit


Source: Bloomberg

By Karen Gullo

Jun 4, 2013


Anheuser-Busch InBev NV (ABI) seeks dismissal of a private antitrust lawsuit alleging its $20 billion acquisition of Grupo Modelo SAB will lead to higher beer prices, while customers who filed the lawsuit asked a judge to postpone the deal.


Budweiser-maker AB InBev, the world’s largest beer company, called claims of nine beer customers that the deal will allow it to control Constellation Brands Inc. (STZ) and conspire to raise beer prices “outlandish and completely unsupportable.” Constellation also asked a judge to dismiss the lawsuit.


AB InBev is acquiring Grupo Modelo in a deal that calls for Constellation to buy the stake that Modelo holds in their joint U.S. distribution venture for $1.85 billion.


In a U.S. Justice Department-supported transaction, AB InBev made binding commitments to turn winemaker Constellation into a competing brewer that will produce and control all Modelo brands in the U.S., including Corona, the country’s biggest import, lawyers for the beermaker said in filings yesterday in federal court in San Francisco.


The antitrust complaint “should be seen for what it is: the latest in a line of shakedown attempts by plaintiff’s counsel premised on baseless assertions of fact,” said Allen Ruby, AB InBev’s attorney.




Attorney Joseph Alioto, representing the nine beer consumers in the antitrust lawsuit, said Constellation has been inclined to follow AB InBev’s price increases before the deal, and AB InBev will be running the brewery and suppling the beer production during the first three years of the transaction.


He asked U.S. District Judge Maxine Chesney to issue a temporary restraining order blocking the companies from finalizing the transaction today and order them to show why the deal shouldn’t be put on hold while the lawsuit proceeds.


“The new Constellation is under-capitalized and highly leveraged, having incurred billions of dollars in additional debt in order to make to acquisition,” Alioto said in a court filing yesterday. “As such it will be in no position to maintain lower prices in the face of ABI constant pressure to increase prices.”


The U.S. said its agreement with AB InBev to turn Constellation into a competing brewer could save beer drinkers almost $1 billion a year because of lower prices.


Alioto has sued to block other deals, including the one that created United Continental Holdings Inc. and the merger of Southwest Airlines Co. (LUV) and AirTran Holdings Inc.


The case is Edstrom v. Anheuser-Busch InBev NV, 13-cv-01309, U.S. District Court, Northern District of California (San Francisco).




Molson Coors – Buy ahead of investor day


Source: Nomura

June 04, 2013


European Beverages

Stock Rating: Buy

Target Price: USD 61.00

TAP.N (USD 49.41)

Ian Shackleton – NIplc


Investor day a key event

We see the investor day on 12 June as a material catalyst, as we expect firmer indications both on innovation as well as on cost-cutting targets. Our model assumes US 50m pa from cost savings across the business over the next three years. The later timing of the event (June vs usual timing of March) should give confidence that the new CFO has fully worked through the numbers.


Trading overall looks in line

Although industry volume momentum in US and Canada still looks sluggish, we see robust price/mix, esp in US, as well as better market share performance in the US, as positives. Although the UK remains tough, price/mix in C Europe looks strong.


Scope for further rerating

The investor day should support the thesis in our initiation report (dated 11 January 2013) where we expected rerating of the shares over the next 12 months provided the company delivered against consensus expectations. Further out, as the company delevers into 2014, we see scope for using capital to renew the share buy-back programme.


Valuation still low

Although valuation has moved up slightly since our initiation (was at under 10x 2014E P/E, now at c12x but still well below beer average of 16.4x), our target price would still only assume 2014E P/E of under 14x.




CEDC Confirms Effective Date of its Reorganization Plan Expected to Occur within Three Business Days       


Source: PR Newswire

May 31st


Central European Distribution Corporation (CEDC) confirmed that CEDC’s Prepackaged Plan of Reorganization (the “Plan”), which was approved by the U.S. Bankruptcy Court for the District of Delaware on May 13, 2013, is expected to become effective within three business days, by June 5, 2013.


Following the effective date, CEDC will make a cash payment to holders of its 2013 Convertible Notes and certain of its 2016 Senior Secured Notes and issue new notes to holders of its 2016 Senior Secured Notes and new shares to Roust Trading Ltd. (“RTL”).  All of the previously issued 2013 Convertible Notes and 2016 Senior Secured Notes and shares of outstanding CEDC common stock will be cancelled. The Plan will result in a reduction of approximately $665.2 million of debt of CEDC. As a result of the cancellation of CEDC’s common stock, as of the effective date CEDC anticipates it will cease to be a public company in Poland and that its common stock will no longer be subject to listing and trading on the Warsaw Stock Exchange. RTL, owned by Mr. Roustam Tariko, will receive 100% of the outstanding stock of the reorganized CEDC in exchange for funding CEDC’s cash payments under the Plan and cancelling CEDC’s existing debt obligations to RTL.


In addition, CEDC announced that on Wednesday, May 28, Alfa Bank, one of CEDC’s significant financial partners in Russia, resumed lending to CEDC by providing access to previously established credit lines with the bank. CEDC was able to draw down 1 billion Russian roubles (approximately $30 million U.S. dollars equivalent) under these credit lines, thereby further enhancing the liquidity position of its operations in advance of the effective date.


Distributions by CEDC to holders of the 2013 Convertible Notes are expected to be made following the effective date of the Plan. Distributions by CEDC to holders of 2016 Senior Secured Notes are expected to be made as soon as practicable after CEDC confirms elections under the Plan’s cash option. CEDC anticipates that the cash option elections will be confirmed five business days following the effective date and that cash distributions to holders of 2016 Senior Secured Notes will be made on or about five business days following the effective date, and that distribution of new notes to holders of 2016 Senior Secured Notes will be made on or about ten business days following the effective date.


CEDC and its U.S. subsidiaries, CEDC Finance Corporation International, Inc. and CEDC Finance Corporation LLC (collectively CEDC FinCo),  commenced voluntary proceedings under Chapter 11 of the U.S. Bankruptcy Code on April 7, 2013.


The Chapter 11 filing did not involve CEDC’s operating subsidiaries in Poland, Russia, Ukraine or Hungary. Those operations, which are independently funded and generate their own revenues, have continued normally and without interruption during the U.S. restructuring process.


Copies of documents filed by CEDC in its Chapter 11 proceedings before the U.S. Bankruptcy Court for the District of Delaware, including the Findings of Fact, Conclusions of Law and Order confirming the Second Amended and Restated Joint Prepackaged Chapter 11 Plan of Reorganization of Central European Distribution Corporation, ET. al., are available without charge at:








Source: Panache Distillery

Jun 3rd


Panache Beverages Inc., a premier alcoholic beverage company that produces Wódka vodka and Alibi American Whiskey, has signed an asset purchase agreement to acquire the Empire Winery and Distillery in Hudson, Florida.  The move deepens Panache’s commitment to the long-term growth and vertical integration of its business.


The expected acquisition of the facility, which is anticipated to re-open as Panache Distillery before the end of 2013 includes right, title and interest to all assets including the buildings, machinery, inventory and equipment. The Panache Distillery will offer full integration of domestic distillation, bottling and sales operations.


James Dale, CEO of Panache Beverages, Inc. explains, “Moving to manufacturing is a critical step for both Panache and its brands.  The distillery will provide us with means to manage the supply of our own brands while also providing the parent company with new and diverse revenue streams.”


Production of top selling national spirits brands, Wódka and Alibi American Whiskey, will transition to the Panache Distillery. The move strengthens Panache’s leadership position within the distilled spirits industry by facilitating control of supply chain and increased margin and cost control.


The distillery acquisition will also diversify the Panache business, adding bulk spirits production and turnkey third-party contract distillation and co-packing as ancillary businesses and additional revenue streams.


Jacob Call, the former Senior Manager of Distillery and Bulk Sales for the largest distillery and spirits bottler in the Southeast United States, has been appointed as the President of Sales and Operations for Panache Distillery.


About Panache Beverages

Panache Beverages, Inc. (OTCQB:WDKA), based in New York, NY is an alcoholic beverage company specializing in the development, global sales and marketing of spirits brands. The Company’s expertise lies in the strategic development and aggressive early growth of its brands establishing its assets as viable and attractive acquisition candidates for the major global spirits companies. Panache intends to build its brands as individual acquisition candidates while continuing to develop its pipeline of new brands in to the Panache portfolio. Panache’s existing portfolio contains three brands: Wódka

Vodka, Alchemia Infused Vodka and Alibi American Whiskey.




Global shock as manufacturing contracts in US and China


Manufacturing has begun to contract in the US and China for the first time since the Lehman crisis, raising fears of a synchronized downturn in the world’s two largest economies.


Source: Daily Telegraph

By Ambrose Evans-Pritchard

03 Jun 2013


The closely-watched ISM index of US factories tumbled through the “boom-bust line” of 50 to 49, far below expectations. It is the lowest since the depths of the crisis in mid-2009 and a clear sign that US budget cuts are starting to squeeze the economy. New orders plunged 3.5 to 48.8 on weak foreign demand and reduced federal contracts.


The news came hours after HSBC said its index for China also fell below 50, a major inflexion point for the world’s industrial workshop.


“This is not a good moment for the world economy,” said David Bloom, currency chief at HSBC. “The manufacturing indices came in weaker than expected in China, Korea, India and Russia, and then we got America’s ISM.


“We thought we had a clear picture that the US was recovering, Japan was printing money and were we’re back to happy days, and now suddenly a huge spanner has been thrown in the works.”


Mr Bloom said a sharp strengthening of the Japanese yen on safe-haven flows and the 16pc fall of the Nikkei index from its peak are disturbing. “People are asking whether the ‘Abenomics’ bubble is bursting.”


The OECD says the US is tightening fiscal policy by 3.2pc of GDP this year, the biggest squeeze in half a century. Consumers spent their way through the initial shock in the first quarter by slashing the national savings rate to 2.5pc.


“People have been living in a psychological bubble,” said Charles Dumas from Lombard Street Research. “They ignored the cuts but now they are starting to feel it.”


The ISM quoted a string of gloomy comments from different sectors, such as “government spending has tightened” (computers), “over the past 20 days we have seen the trend flatten” (furniture), or “downturn in European and Chinese markets is having a negative effect on our business” (machinery).


Wall Street reacted calmly to the ISM shock, betting that the US Federal Reserve will delay plans to taper its monthly bond purchases of $85bn (£55.5bn). Stephen Lewis from Monument Securities said this may be a misjudgement. The latest minutes of the Federal Advisor Council, which advises the Fed on markets, are packed with warnings over the side-effects of quantitative easing.


The council said it is “not clear” that QE is boosting the economy, and warned that zero rates are pushing pension funds underwater on their liabilities, and may be causing firms to defer investment on the grounds that rates will remain low.


They also said Fed purchases of mortgage bonds was depriving banks of “bread and butter” business, pushing them into riskier corporate and emerging market debt, and blowing a “bubble” in fixed income and equity markets.


“Normally the council just goes along with the Fed says but it is clear that they have become more alarmed at aspects of Fed policy, so this is significant,” said Mr Lewis.


Fed chairman Ben Bernanke has since begun to echo some of the concerns, testifying to Congress on May 22 that “very low interest rates, if maintained too long, could undermine financial stability”.


The Boston Fed’s ultra-dovish president Eric Rosengren has also shifted ground, saying the bank may need to start tapering soon. The Fed’s centre of gravity has clearly shifted.


The concern is that the Fed has largely made up its mind to turn off the liquidity spigot and will not be deterred unless the economy deteriorates dramatically. Or as one trader commented, the “Bernanke Put” has become the “Bernanke Call”.




Leadership Lessons from Constellation Brands CEO Rob Sands


Source: Forbes

Jun 3rd


Constellation Brands CEO Rob Sands: He listens to his employees and prioritizes the important stuff.


Last June, Constellation Brands STZ +0.75%, the giant wine, beer and spirits producer and marketer based in Victor, N.Y., announced it was buying the 50% of Mexican beer producer and marketer Crown Imports that it didn’t already own, for $1.85 billion, from Anheuser-Busch InBev . The deal grew out of Anheuser-Busch’s takeover of Mexican brewer Grupo Modelo and the Justice Department’s insistence, for anti-trust reasons, that Anheuser-Busch sell some of its U.S. beer interests, including the top-selling Corona brand. Because of the DOJ’s pressure, Anheuser-Busch also agreed to sell Constellation a Mexican brewery and perpetual rights for the Grupo Modelo brands in the U.S., for an additional $2.9 billion, bringing the deal to $4.75 billlion.


Constellation is the biggest wine producer in the world, with brands like Robert Mondavi, Clos du Bois and Manischewitz. It also owns spirits brands including Svedka vodka and it has annual sales of some $2.8 billion. The Crown Imports deal is expected to nearly double revenues to $5 billion. The market loves the deal, driving Constellation shares up from $22 when it was first announced, to $52. The transaction is expected to close in the next week.


Robert Sands has been President and CEO of Constellation since July of 2007. His father Marvin founded the company in 1945, when the American wine industry consisted mainly of desert wine that shipped in bulk and was bottled like milk. The business has transformed since then, as Constellation acquired wine labels around the world and focused on premium brands. After graduating from law school and practicing for two years, Rob joined the company in 1986 as general counsel. Rob’s older brother Richard became CEO in 1993 and held the top job until 2007, when he became Executive Chairman and Rob became CEO. During his tenure as CEO, Rob sold off 200 brands and focused the company on premium labels.


I talked to Rob about what he learned from his father and brother about being the boss, what it was like to step into the CEO’s job just before the Great Recession hit, how he handled the downturn, and his strategy going forward, including how the Crown Imports acquisition plays into Constellation’s plans. Here are excerpts from our interview:


What leadership lessons did you learn from your father?


He really cared about the people who worked for him and he had an open door policy. Regardless of whether the person worked on the bottling line floor or was a senior executive, he treated everyone the same. He was a strong believer in leadership by example and having people emulate what he did as opposed to telling people what to do. He taught my brother and me that the TV version of how senior executives manage, by sitting around, telling people what to do, was not a successful model. He encouraged people to do their best and enjoy what they do. He accomplished things through collaboration, as opposed to command and control.


Can you think of a story about how he collaborated with employees?


He spent a lot of time playing bridge with our head of production and our head of sales and he gave them a lot of latitude. It was one of them who came up with our first brand, Richard’s Wild Irish Rose, named for my brother Richard.


Did you always think you would wind up running the company?


No. In college I was a philosophy major and was considering going to graduate school and getting a Ph.D. But during college I decided that going to law school would be more practical. I practiced law for a couple of years and realized it was a bit of a grind and not very interesting. I thought that being in the family business would be a lot more exciting.


Your older brother became CEO seven years after you joined the company. What leadership lessons did you learn from him?


Though my father was very smart and very analytical, my brother was super analytical. He was much more interested in specific metrics around the performance of the company and whether it was creating shareholder value. He made sure we understood in great detail what the returns were projected to be on our acquisitions.


Tell me about the challenges of becoming CEO.


I had been Chief Operating Officer from 2002-2007 so it was an obvious progression for me. My brother is seven years older than me and he stayed on as Executive Chairman. But 2008 and 2009 were interesting times. When I took over the company we had a significant amount of debt, 5.3 times EBITDA. We had acquired a lot of businesses all over the world. We had a far-flung and decentralized business. I had to shift the focus from being in hyper-acquisitive mode to being more of a world-class consumer goods product company and consolidating our operations.


How bad was the recession for your business and how did you get through it?


It wasn’t particularly severe. We decided to focus on premium products where there was a greater return on capital. We shut off all of our value businesses and centralized the company. We sold our Australian wine business, our Washington state wine business, our U.K. business. We sold off a billion-plus in assets.


How did you decide to focus on premium brands?


It was a collaborative process with people whose job it is to think about strategy and growth with me. Shortly after I became CEO I brought in Boston Consulting Group to do a portfolio analysis on our whole business. We determined what parts of the business were generating return on invested capital. I have a senior management team who all come from big companies. The CFO is from Pepsi. Our chief legal officer is from TD Bank and First Federal Bank. Our chief human resources officer is from Frito Lay, Pepsi and Prudential. We had a lot of diverse ideas. That’s how you know what to do: you listen to other people.


That sounds like the leadership lesson you learned from your father.


It’s not about sitting there and telling people what to do and giving top-down direction. It’s really about hiring great people and then listening to them, taking their ideas and figuring out how to put them into action, making sure you have a lot of diverse points of view so you seize on the best course of action, instead of thinking you’re the guy who knows everything.


Are there any other leadership lessons you’ve learned as CEO?


It’s important to maintain an entrepreneurial spirit throughout the corporation. Also part of leadership is making sure you’ve got a reward system in place so that people want to win and are creating their own wealth through the company’s success. Our people get bonuses, stock options and stock-based long-term incentives. We do that down to the manager and director level. A typical vice president who has been here 12 or 15 years has made $1 million in savings.


How is the Crown Imports deal going to affect your company?


Our market cap went from $4 billion to over $10 billion as a consequence of this deal.


What challenges lie ahead for you?


The wine business is fast-growing but it’s highly fragmented so we have the challenge of continuing to grow and build brands in a fragmented category. On the beer side, we’re the third largest player in the U.S. with a premium portfolio of beers that is fast-growing and takes advantage of favorable demographic trends, in particular the growth of the Hispanic population in the U.S. We have to keep that portfolio relevant and premium and we have to continue to innovate.


Do you have any time management secrets to share?


It’s all about having good people and letting them do what they know how to do so you don’t become overwhelmed with details best left to others. You should really narrow down the things you focus on. We have something called our executive management committee strategic agenda. It’s the six or seven things the senior leadership team needs to focus on. You have to know what’s important and what’s not.




Auction Napa Valley smashes record


Source: Decanter

by Courtney Humiston in Napa

Monday 3 June 2013

Auction Napa Valley, the annual charity auction, has raised US$16.9m, far exceeding the previous record of US$10.5m set in 2005.


In three-and-a-half hours of intense bidding on Saturday at the Meadowood hotel in St Helena, the 33rd edition of the event raised a record US$14.3m, bringing the total – combined with the online auction and the barrel auction – to US$16.9m.


Exclusive experiences, expensive cars and travel-oriented lots dominated the offerings and drove sales skyward.


The highest-earning single lot was from Korean-owned Dana Estates. When the bidding, fuelled by fist-pumping and pompom-waving, reached US$500,000 Dana doubled the package-which included three double magnums and a seven-day trip for four to South Korea – bringing the total to over US$1m.


Bill and Deborah Harlan, whose lot stayed focused on their wine – a 20-vintage retrospective tasting of Harlan Estate for eight people- came in second at US$800,000 with fellow Napa cult winery Screaming Eagle not far behind, offering a single 12-litre bottle of vintage 2010 that went for US$500k.


Friday’s barrel auction of mostly Cabernet Sauvignon from 2011 and 2012, held at Raymond Vineyards in St Helena, was as competitive. Fans of Shafer proved unwavering, paying US$78,000 for a barrel (10 cases) with the highest bidder offering nearly $8,000 for 12 bottles. Realm Cellars (US$61,350) and Tim Mondavi’s Continuum (US$59,200) were not far behind.


In April, Garen Staglin of Staglin Family Vineyard, who along with his wife Shari and children Shannon and Brandon are this year’s honorary chairs, told that he wanted to get ‘the right people in the room’ in order to raise the most money in the history of the event – a goal that he achieved.


Shari Staglin said, ‘Even after 33 years, Auction Napa Valley still has some surprises up its sleeve. We are grateful to the bidders, the vintners and the 500 community volunteers who, year after year, work together to showcase what makes Napa Valley such a special place – good food, great wine and a community spirit unlike any other.’


Auction Napa Valley, which is organised and run by trade association Napa Valley Vintners, has donated US$110m to health, youth and affordable housing non-profit programs. Founded in 1981, the event takes place over four days in June.




Elysee Palace wine sale fetches nearly triple estimate


Source: Decanter

by Jane Anson in Bordeaux

Monday 3 June 2013


The public auction of Eylsee Palace wines saw frenzied bidding over two sessions, raising ?718,000 (including auction charges) – a sizeable increase on the estimated ?250,000.


The auction, which took place at the Hôtel Drouot in Paris, saw the sale of 171 lots in an evening sale beginning at 7.30pm on Thursday 30, then a further 380 lots the following afternoon of Friday 31, so 552 in total, accounting for 1200 bottles of wine from the French government cellars.


The highest prices were seen for a Pétrus 1990 for ?7625 (including charges) against an estimate of ?2500. An Angelus 1961, estimated at ?220, sold for ?1100, while a Latour 1982, estimated at ?2200 sold for ?4625. ‘The Elysée Palace effect,’ as the spokesperson for the Drouot auction house confirmed to


As expected the sale, which was overseen by auctioneer Ghislaine Kapandji, attracted large numbers of Asian buyers, as well as those from the US, Europe and France itself.


Fan Dongxing, an importer from Shanghai, travelled to France for the auction and bought large amounts of Cognac, as well as the Pétrus. ‘The Chinese like French wine,’ he told assembled media at press conference held after the sale on Thursday night, ‘and it is a great honour that these wines came from the Elysée cellar.’ He added that he would be selling them on to professionals back in China.


All bottles had labels stating they came from Elysée Palace cellar with the date of sale. The wines themselves were not present in the room, but displayed on a screen during bidding. They had been available for viewing beforehand.


Not everyone was happy at the sale however. Oliver Poels, editor-in-chief of the Revue du Vin de France had called the wines ‘a national treasure’, and Michel-Jack Chasseuil, one of France’s most important private collectors with a cellar of over 40,000 wines, wrote an open letter to president Francois Hollande, denouncing the sale for selling off the best bottles of France to ‘overseas billionaires’ for a ‘few crumbs of bread’.


The proceeds from the sale are to be reinvested in buying more modest wines for the government cellar, and to fund social projects.




Full speed ahead at LVMH


Source: the drinks business

by Gabriel Savage

3rd June, 2013


Jean-Guillaume Prats, the new head of Moët Hennessy’s Estates & Wines division, has outlined an ambitious timetable for its new Indian and Chinese wine projects.


July is due to see the official investiture of a new winery for Domaine Chandon’s Chinese outpost, while Domaine Chandon in India is set to unveil its inaugural wine in October. 2013 will also mark Moët Hennessy’s first harvest for its red wine project in China.


Turning first to Chandon’s Chinese operation, which is located beside the Yellow River in Ningxia Province, close to the Mongolian border, Prats described this warm, dry area with light, fairly acidic soils as “extremely suitable for our sparkling wine project.”


Having produced its first vintage in 2012, the result will “probably” appear on the market in 2014 after further maturation in bottle, Prats told the drinks business.


Reminding that “Moët was the first to go to the New World,” he noted that 2013 marks the 40th anniversary of the establishment of Domaine Chandon in Napa Valley, California.


Since then, the Chandon name has expanded to wineries in Argentina, Brazil and Australia, with these latest projects in China and India marking the next phase of Moët Hennessy’s pioneering ethos.


“Moët has always been a forward thinker,” emphasised Prats, who joined the luxury drinks subsidiary of LVMH in February from his previous role as managing director of Bordeaux second growth Château Cos D’Estournel. “It’s really part of our DNA that is based on two pillars: long established brands and innovation.”


Prats described one of his priorities in this new role as being to strengthen the Chandon brand across these various sources and its primarily local distribution markets.


“Soon we will have six estates with a common packaging, style and market dedication to feed the young, up and coming consumers who want great bubbles, but maybe don’t want to spend quite the same money as Champagne,” he told db.


Although acknowledging the ?500-a-bottle red wine launched this year by Chandon’s Ningxia neighbour Château Hansen, Prats confirmed that, in this location at least, “we will not go into the still wine business.”


That’s not to suggest that Moët Hennessy is ignoring the huge popularity of red wines in the Chinese market – this autumn it will harvest the first grapes from its other estate, this time 2,600m up in the Shangri-La mountains of Hunan Province, close to Tibet.


Here, at the same latitude at Morocco, on a site founded upon gravel washed down by the Mekong River, the focus is on red wine from Cabernet Sauvignon and Merlot grapes.


With no winemaking facility or brand name yet in place, Prats will not even confirm whether this year’s harvest will even go on sale. “We will only put something onto the market that we are proud of,” he insists, while adding by way of reassurance: “I think we have something exceptional.”


In addition to these two major Chinese projects, construction is already well underway near Nashik, Maharashtra, for Moët Hennessy’s first winery in India.


Having produced its first vintage in 2012 at a separate facility, the initial result is due to launch this October in Mumbai as the sixth piece in the Chandon jigsaw.


Drawing a diplomatic comparison between the challenges of producing wines in India and China, Prats remarked: “Things take more time in India.” However, with India’s federal and state import duty structure proving prohibitive for many foreign wine brands, he balanced this with the observation that “clearly there is an advantage to being a local producer.”


Highlighting a further appeal presented by India for the Chandon brand, Prats noted: “In India today there is a slightly more love for bubbles than there is in China.”


From a broader perspective, Prats pointed to the strategic thinking behind this strengthening and expansion of the Chandon brand. “We’re exactly where the market is going,” he emphasised.


“The market wants great bubbles of two types: celebration wines like Veuve Clicquot or Moët & Chandon and then with Chandon we are just below that for a young, upcoming people who maybe don’t want to spend quite that much.”


A full interview with Jean-Guillaume Prats, including his plans for the rest of the Estates & Wines portfolio, potential gaps to be filled and where Bordeaux is going wrong, will appear in July’s issue of the drinks business.




Shannon Ridge Acquires Historic Lake County Property


Source: Balzac

Jun 3rd


Shannon Ridge Family of Wines is growing again with the purchase of 100 acres of the historic Ogulin Estate, located in the cool High Valley Appellation of Lake County.


Shannon Ridge will be rebuilding and preserving the 1870s-era home and winery on the property. Currently there are 18 acres under vine, and Shannon Ridge plans to plant an additional 62 acres to cabernet sauvignon, zinfandel, petite sirah, and chardonnay in 2014.


The property was sold to Shannon Ridge by owners Harold and Grace Ogulin. Harold Ogulin is a third generation descendant of original Lake County pioneers. He and Grace will have a life estate on the property.


The portfolio of award-winning Shannon Ridge wines includes the Single Vineyard Collection and High Elevation Collection, as well as affiliated brands Vigilance Vineyards, Dalliance, and Cross Springs. Shannon Ridge’s vineyards are certified sustainable by Farming for Flavors ®, and are known for their woolly compost machines – a flock of 1,000 sheep, complete with shepherd and a team of highly trained sheepdogs. The sheep do an excellent job of canopy management and leaf removal, and pick the vineyard clean after harvest. They also manage the cover crop in the spring and work hard to reduce fire danger in the surrounding hills the remainder of the year.




French wine ‘has Italian origins’


Source: BBC News

By Jason Palmer

June 3rd


Evidence of the earliest winemaking in France has been described – and it indicates Italian origins.


Shaped vessels called amphoras, known to have been imported from the Etruscan people of Italy around 500 BC, have shown chemical evidence of wine.


A wine press identified in the same region shows that the beverage quickly gained favour and launched a local industry that would conquer the world.


The study appears in Proceedings of the National Academy of Sciences.


There is also evidence that the wines contained herbal and pine resins, which may have helped preserve them for shipping.


The history of wine development is a patchy one, principally because wine leaves behind few chemical markers that archaeologists today can ascribe definitively to wine, rather than other agricultural products.


The earliest known examples of wine-making as we know it are in the regions of modern-day Iran, Georgia, and Armenia – and researchers believe that modern winemaking slowly spread westward from there to Europe.


In 2004, Patrick McGovern of the University of Pennsylvania Museum led a team whose findings suggested that wine based on rice may have been developed in China at the same time or even before efforts in the Middle East.


But details for many parts of the spread from the Middle East, including into France, remained unclear.


Dr McGovern and colleagues have now pinned down another part of the story in the new study.


“You could argue that it comes [into France from] farther north on the continent,” he told BBC News.


“You could have it spreading across Germany, say, from Romania – but this really provides a definite set of evidence that it came from Italy.”

Molecular historians


The team was examining what are called amphoras, vessels designed for carrying both liquids and solids and for neat packing into a boat’s hull.


The Etruscans, a pre-Roman civilisation in Italy, are thought to have gained wine culture from the Phoenicians – who spread throughout the Mediterranean from the early Iron Age onward – because they used similarly shaped amphoras.


Further, it is known that the Etruscans shipped goods to southern France in these amphoras – but until now it remained unclear if they held wine or other goods.

Wine pressing platforms were usually found outside of towns, nearer the vineyards themselves Wine pressing platforms were usually found outside of towns, nearer the vineyards themselves


Dr McGovern’s team focused on the coastal site of Lattara, near the town of Lattes south of Montpellier, where the importation of amphoras continued up until the period 525-475 BC.


They used a high-precision analytical tool called gas chromatography/mass spectrometry, which provides a list of the molecules absorbed into the pottery of the amphoras. The results showed that they did once contain wine – as well as pine resin and herbal components.


But more surprising was the find of a wine-pressing platform, where grapes were ground and liquid drained off.


“In a walled town like this, it is unusual to find a wine press from an early period,” Dr McGovern said. “Finding the chemical evidence for the press, that was a surprise.”


The find is consistent with a pattern seen elsewhere – that wine is introduced from abroad, but a local culture eventually seeks to transplant the grapes and grow their own, local wine industry.


“From there, [winemaking] spread up the Rhone River, the domesticated vine gets transplanted, it crosses with the wild grapes and all sorts of interesting cultivars develop – those are the ones that spread around the world.


“Most of the wine we have today is from French cultivars, which ultimately derive from the Near-East cultivar via the Etruscans,” he explained.


“There’s still a lot of blanks to fill in, but I find it very exciting.”


The methods used in the study have pushed the boundaries of what can be gathered chemically from archaeological remains such as those in Lattara.


Regis Gougeon of the University Institute of Vine and Wine at the University of Bourgogne said the work was “undoubtedly a good example of technology and methodology leading the science”.


“It was already acknowledged – in particular thanks to Patrick McGovern’s work – that viniculture might have travelled from the Near East to the Mediterranean Sea area about 3000 BC,” Dr Gougeon told BBC News.


“However, this Etruscan hypothesis is indeed rather new and sheds an interesting light on the possible input of this educated and art-oriented civilisation.”




Restaurant chains expect to raise menu prices


More than 90 percent of respondents to a SpenDifference survey said they plan to hike prices during the remainder of the year


Source: NRN

Mark Brandau   

Jun. 3, 2013


A vast majority of restaurant chain operators said they expect to raise menu prices during the balance of the year, according to a new survey by SpenDifference.


Denver-based SpenDifference found that more than 90 percent of respondents said they plan to hike menu prices this year, projecting an average increase of 1.6 percent. One-third of respondents said they plan to raise menu prices 2 percent or more.


The operators’ sentiments contrast with the first quarter of 2013, when restaurant chains largely resisted raising prices. SpenDifference completed the survey the week of May 13 and found that 64 percent of respondents kept prices flat or raised them only 0.5 percent in the first quarter.


SpenDifference said respondents were evenly split among full-service and limited-service brands, and that chains represented in the study were as small as fewer than 100 units or as large as more than 800 locations. The company said just under 50 restaurant chains participated in the survey.


Chain executives polled for the supply chain consulting firm’s survey also projected an average same-store sales increase of 2.2 percent for 2013, which would mark a 25-percent increase over their collective results from SpenDifference’s survey last year. Respondents predicted that sales gains would come mostly from price increases, with stronger traffic accounting for only about 25 percent of the growth.


“From the data and discussions with our members, it appears that they believe consumers may be more willing to accept higher prices, especially with the economy strengthening,” Brad Moore, the firm’s senior vice president, said in a statement. “But even the larger price increases they are planning this year will only cover about 75 percent of expected menu inflation, which they forecast at just under 2 percent.”


Through the first-quarter earnings season, chains have addressed whether they will raise menu prices in 2013, but no real consensus has emerged for the industry as a whole.


McDonald’s disclosed during a conference call for its first-quarter earnings, in which domestic same-store sales decreased 1.2 percent, that it raised menu prices by about 0.6 percent during the first quarter, replacing about half of a 1.2-percent increase from the prior year that was rolling off.


“The reason for that is because consumers are very sensitive to price,” chief executive Don Thompson said during the call. “We don’t have the inflationary environment or the consumer sentiment environment to go out and take the same kind of price increases that historically we did. We do believe that this is not a structural kind of a change; we think that it is based upon the economy at this point.”


Buffalo Wild Wings has dealt with commodity pressures due to volatile chicken wing prices over the last several years. The company’s first-quarter same-store sales rose 1.4 percent at company locations and 2.2 percent at franchised units, despite food and labor costs driving a contraction in margins of more than 3 percent.


The Minneapolis-based chain’s biggest cost control initiative this year is the forthcoming roll-out of a new pricing system that will price wings per portion rather than by individual wings. The brand has yet to determine whether it will raise prices when the new menu goes systemwide in July. Buffalo Wild Wings’ prices were 4.7 percent higher than last year’s menu prices in the first quarter, and that level will roll off to 2 percent higher and 0.2 percent higher in the third and fourth quarters, respectively.


Denver-based Chipotle was similarly noncommittal about raising menu prices this year in its first-quarter earnings call. Higher food costs squeezed Chipotle’s margins more than 1 percent in the first quarter, chief financial officer Jack Hartung said, but commodity costs were stabilizing, and the brand is still considering whether to raise any prices – which would not happen before late summer or fall in any event.


In Krispy Kreme Doughnuts’ first quarter, the chain reported an 11.4-percent increase in same-store sales at company-owned locations. Only 3 percent of that gain came from higher menu prices, officials said.


The 6.6-percent increase in same-store sales for Ruth’s Chris Steakhouse in the first quarter included a 2-percent menu price hike that occurred during the period, officials for parent company Ruth’s Hospitality Group said. Yet they added that Ruth’s Chris would try to mitigate the need for further menu price increases in the near future.


“While we believe we have additional pricing power, we will continue to be thoughtful and prudent, with respect to future increases,” chief executive Michael O’Donnell said. “It is still our strategy to focus on growing sales primarily through traffic to maintain our value orientation.”


Ruth’s also said it had contracted 40 percent of its beef needs for the remainder of 2013, at prices that averaged 4 percent to 6 percent above last year’s prices.


Nearly three-fourths of respondents to SpenDifference’s survey said renegotiating commodities contracts was their preferred cost control strategy, while 60 percent said they would promote limited-time offers or core menu items with more favorable margins.


“To protect or improve their margins, operators need to look beyond menu price increases and contract negotiations and find other ways to save money in their supply chains,” Moore said.




Ahold Remains Cautious For 2013, Ups Share Buyback


Source: Dow Jones

Jun 3rd


Dutch retailer Royal Ahold NV (AH.AE) Tuesday said first quarter net profit was boosted by the sale of its stake in Swedish retailer ICA and increased its share buyback program, but added it remains cautious about the prospects for the rest of the year.




– Sales 10.1 billion euro, up 4.4% at constant exchange rates.

– At constant exchange rates, net sales increased by 4.4%

– Underlying operating income 416 million euro, up 0.4% at constant exchange rates.

– Underlying operating margin 4.1% compared to 4.3% in the first quarter of 2012

– Operating income 345 million euro, down 68 million euro due to a 63 million euro pension settlement

– Net income 1.951 billion euro, of which 1.748 billion euro related to the sale of Ahold’s stake in ICA

– Share buyback program increased to 2 billion euro, to be completed by end of 2014

– Ahold continued to gain market share in its major markets as a result of identical sales growth, the expansion of its store network, and strong growth in the on-line business.

– “We remain cautious in our outlook for 2013 but we are committed to deliver on our Reshaping Retail strategy,” Chief executive Dick Boer said.

– Ahold remains on target to deliver 600 million euro in cost reductions, to be completed in 2014




Pennsylvania: Liquor privatization issue down to the wire as Lt. Gov. Jim Cawley to testify


Source: Patriot News

Sue Gleiter

June 03, 2013


It has been a very long last call in Pennsylvania. For more than two years, lawmakers have debated the pros and cons of scraping the state’s 80-year-old liquor monopoly.


Will a sale of the state’s 600 wine and liquor stores generate a financial boost to the state’s budget? How will the 4,000 state workers be compensated? Will cases of drunken driving and underage drinking rise or drop in a free market?


So many ‘what if’s” as the clock ticks.


On Tuesday, the Senate Law and Justice Committee will host its third and final hearing targeting liquor privatization. The pressure is mounting.


Lt. Gov. Jim Cawley is scheduled to testify on behalf of the governor’s administration. Gov. Tom Corbett has said he would like to see a proposal on his desk by the June 30 budget deadline.


This is not the first time Pennsylvania has attempted to pass legislation to privatize the state’s liquor stores. Both governors Dick Thornburgh and Tom Ridge unsuccessfully tried.


The latest efforts were spearheaded more than two years ago by House Majority Leader Mike Turzai, an Allegheny Republican. He introduced a bill in June 2012 but it failed to pick up momentum.


Earlier this year, Gov. Corbett energized the push to privatize during a Pittsburgh press conference. The governor proposed funding educational programs through a potential sale of the state-run system.


“Why do we continue to deal with an antiquated liquor system that is 75 years old? The question should be ‘Why don’t we have choice? Why don’t we have convenience like the other 48 states in the union?'” Corbett said.


In March, the House of Representatives passed what was deemed a historic bill designed to dismantle the state-run stores in favor of opening up liquor sales to private business.


The bill allows beer distributors first shot at 1,200 wine and liquor licenses and would allow supermarkets to sell wine.


Turzai called the proposal “A-plus product.” “This is a great opportunity for Pennsylvania. It is a historic opportunity for Pennsylvania,” he said.


But not everyone is in agreement. Some of the most outspoken opponents against privatization include the United Food and Commercial Workers Local 1776 who have stood their ground under leader Wendell Young IV.


Nicknamed “the yellow shirts” for the bright union shirts, members have crowded into hearings and converged at the Capitol to spread their message. Most recently, the union paid for radio and television advertisements touting Corbett’s push to privatize as a “reckless scheme.”


Along with union members, beer distributors have been critical of some elements of the privatization legislation. On one side they would like to sell smaller packages of beer beyond cases but on the other side they say competition from the private sector would create an uneven playing field and hurt business.


“Eighty to 90 percent of our income comes from beer sales. How are we going to be making a living if everyone has it?” asked Mark Tanczos, president of the Malt Beverage Distributors Association of Pennsylvania.


Their biggest competitors would include grocery stores who applaud the idea of selling alcohol, whether it be wine, beer and liquor.


Giant Food Stores, Weis Markets, Target and Walmart have all said they would sell alcohol just as they do in their stores in other states.


Already, more than 150 supermarkets in Pennsylvania sell beer via restaurant liquor licenses. Those licenses require supermarkets to have separate cash registers and sit-down cafes.


And there is room for growth. David McCorkle, president and CEO of the Pennsylvania Food Merchants Association in Camp Hill, said the bill currently would carve out about 820 grocery licenses, not enough to allow the more than 5,000 grocery outlets throughout the state, to sell wine.


The bill also leaves convenience stores out of the equation. McCorkle would like to see more grocery licenses, and licenses for convenience stores.


Then there are the consumers. Everyone says they want to be able to buy wine in the supermarket or a six-pack at the local beer distributor.


But when you boil down the issue, it’s not at the top of most voters’ agendas.


In a recent Franklin & Marshall College poll 47 percent of voters said they support selling off the state-run stores to the private sector, a drop from 53 percent in February. In addition, the number of those who say they strongly oppose privatization is 31 percent, up from 24 percent in February.


“I think in the last couple of months there is less support for liquor privatization. There has been a long debate and it centers around a lot of things,” said poll director G. Terry Madonna.


So will this be the year Pennsylvania uncorks a privatization deal?


Senate Law and Justice Committee chairman Sen. Chuck McIlhinney, a Bucks County Republican, has said he will introduce his own bill this month. But he has left many scratching their heads with his shifting positions and conflicting statements.


“Sen. McIlhinney is trying to navigate the turf wars among a variety of interest groups . all while appeasing his own constituents and hanging onto to his seat,” said Ed Uravic, a Harrisburg University of Science and Technology professor who spent 20 years as a GOP legislative aide in Harrisburg and Washington.


“He could be dragging his feet, or he could be making a political move,” Uravic added.




Washington: Guest – Legislature should reject Costco’s unfair liquor legislation


The Legislature should not support changes to Initiative 1183, proposed by Costco, the main backer of the initiative. The state would lose tens of million dollars in needed revenue.


Source: Seattle Times

By John Guadnola and Rick Hicks

Jun 3rd


As mandated by Initiative 1183, the state liquor stores and distribution center shut down for good on June 1, 2012. Unfortunately, that has not meant the end of needlessly divisive battles over our state’s liquor policies.


After spending more than $20 million to pass I-1183, Costco, in alliance with the restaurant industry and big grocery chains, is now attempting to rewrite the very rules it put in the initiative. The intent is to game the rules of the new system in a way that gives the big retailers an unfair competitive advantage over licensed distributors.


Costco and its surrogates are pushing legislation, 2SHB 1161, in the special session that would exempt retailers from paying the 17-percent fee required on retailer-to-restaurant sales. Creating a new tax break costing the state millions in revenue, at the same time the state is scrambling to find funding for tougher drunken-driving laws, makes no sense.


The proposed change would allow Costco to act as a liquor distributor, making unlimited sales to bars and restaurants, while exempting it from paying any of the $150 million in fees required of licensed distributors. This would not only unfairly tilt the competitive playing field, it would thwart the voters’ will and cost the state tens of millions in lost revenue.


I-1183 clearly states that retailers must pay the 17-percent fee on all their sales. Costco added this requirement to address the public’s concern that taxpayers could lose hundreds of millions in revenue by privatizing the liquor system. In combination with other fees and taxes, this retailer fee ensures taxpayers get more liquor revenue now than they did before privatization.


Now, Costco and its allies blame the Liquor Control Board for a fee Costco itself included in the initiative, and their proposed legislation eliminates the 17-percent fee on sales to restaurants. If big chains can make unlimited sales without paying the fee, the state loses revenue. But on most liquor brands, prices for restaurants would remain unchanged because suppliers have made it clear they prefer to go through a distributor rather than sell directly to retailers.


Washington’s spirits and wine distributors have been doing business here for many years, and with the imposition of new distributor fees their profit margins here are among the lowest in the country. Nonetheless, they are rooted in communities across the state and they are proud to have built good relationships with their employees.


Over the past 18 months they have invested hundreds of millions of dollars in creating a state-of-the-art private distribution system that reaches every corner of Washington, adding 1,000 well-paid jobs, many of them union jobs represented by the Teamsters. All of that will be put at risk if Costco has its way.


Backers of the Costco approach claim that a bipartisan group of legislators is supportive [“Repeal liquor fee for retailers to supply restaurants,” Opinion, May, 24]. They fail to mention that another bipartisan group of legislators strongly opposes the Costco approach, and instead favors a better alternative where distributors would voluntarily agree to pay more in fees in order to pay for a substantial tax cut for restaurants and other changes to warehousing and other rules to help smaller liquor retailers and independent grocers compete.


The Liquor Control Board is currently initiating a court-mandated small business economic study of the rules implementing I-1183. Legislators should slow down and allow this study to proceed.


With time and careful consideration, elected leaders in Olympia can come to an agreement that treats all market players fairly, rather than rushing through special-interest legislation that benefits one group at the expense of others and undermines the expressed will of the voters in the process.


John Guadnola is the executive director of the Association of Washington Spirits and Wine Distributors. Rick Hicks is president of Teamsters Joint Council 28.




United Kingdom: Alcohol is killing too many of us


It gets ever cheaper and now it’s linked to over a million hospital admissions a year. Minimum unit pricing would be a good start


Source: The Guardian

Kieran Moriarty 

Monday 3 June 2013


In 2011-12, there were over 1.2m alcohol-related hospital admissions in England, according to figures released last week – more than twice as many as a decade ago. There has been a 500% increase in deaths from liver cirrhosis, mainly due to alcohol, in the past 40 years.


Alcohol costs our country £25bn each year, due to its impact on health, crime and society, the workplace and the family. Alcohol exacerbates health and social inequalities. The most socially and economically deprived have up to 10 times greater alcohol-related mortality and admissions to hospital. Approximately a third of all A&E attendances are alcohol-related, reaching up to 80% at weekends. Something has to be done.


Traditionally, we associate alcohol-related harm with the middle-aged, and it is true that this age group, especially men, have the highest rates of liver disease. However, liver specialists are now caring for teenagers with cirrhosis, or life-threatening necrosis of the pancreas, after just five years of sustained, heavy binge drinking.


Young women are especially vulnerable, since they have less body water than men, resulting in higher blood alcohol concentrations for the same amount of alcohol drunk. I have seen five women in their 20s die from cirrhosis due to alcohol.


Alcohol misuse can lead to high blood pressure, strokes and cancers. Doctors are now caring for increasing numbers of young people in their 30s with permanent alcohol-related brain damage. Many of these people require long-term, supervised care, of which there is a major shortage.


So what has changed in the last decade to cause such a rapid increase in admissions? Availability of alcohol has multiplied far beyond the local pub – most is sold in off-licences and supermarkets, where it is often deeply discounted as a loss leader to entice customers into the store.


Alcohol is often much cheaper than bottled water. It is 45% more affordable than it was in 1980, hence it is the cheap, high-strength lager and cider in particular that is drunk in large quantities – especially by the most socioeconomically deprived, the very people we most need to protect. The government had intended to introduce minimum unit pricing for alcohol, but this now appears to be under threat.


The introduction of a 50p minimum unit price in England could bring a nearly 7% reduction in average alcohol consumption and prevent more than 3,000 alcohol-related deaths and 98,000 hospital admissions each year. In addition, it could reduce annual alcohol-related crimes by more than 40,000, including 10,500 violent crimes.


In British Columbia in Canada, a 10% increase in alcohol prices led to a 32% reduction in alcohol-related deaths and a 22% fall in the consumption of higher strength beers.


The minimum unit price works as it targets the problems caused by cheap, high-strength alcohol but does not adversely impact moderate drinkers, who would spend an average of just 28p extra per week. Its introduction is supported by the medical profession, the police, children’s charities and emergency services. Many parts of the global alcohol production industry are opposed.


David Cameron and the coalition committed to minimum pricing in March last year. However, the absence of this policy from last month’s Queen’s speech clearly reflects that corporate interests have got to other members of the cabinet. In 2010, the House of Commons health select committee concluded in its report on alcohol: “It is time the government listened more to the chief medical officer and the president of the Royal College of Physicians and less to the drinks and retail industry.”


And further action is needed. Currently, treatment services are not adequately equipped to cope with the nation’s alcohol problem. Only one in 18 dependent drinkers access treatment services per year, compared with one in two dependent drug users.


Specialist care can pull people back from the brink of the most devastating consequences of alcohol misuse, especially alcohol-related liver disease, give them back their self-respect and restore them to their families and communities. The development of high-quality, integrated prevention and treatment services for those with alcohol-related disease would be a wise investment for the future health of our nation, especially that of our young people.

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Liquor Industry News 6-3-13

June 3, 2013

Franklin Liquors


Monday June 3rd 2013

Biodynamic LEAF Morning BUT A FLOWER Night.

Great To Taste Or Drink Wine And Watch The Bruins


Beer: Nielsen C-Store Data Analysis: Beer Dollar Sales Continue to Decline (0.9% YoY) as Pricing Continues to Weigh on Volumes


Source: CITI

May 31st


Beer C-Store Dollar Sales Decline – In the four-week period ended May 11, 2013, c-store beer dollar sales fell 0.9% YoY (vs. -3.1% last period and +3.0% over the last 52 weeks) on a somewhat challenging YoY compare as dollar sales in the year-ago period were up 5.6%. The dollar sales decline was driven by a 3.5% decrease in volume sales (vs. -5.6% last period and -0.4% over the last 52 weeks) on a +2.3% comp, partially offset by a 2.6 pt contribution from price and mix (vs. +2.6 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 Remains Challenged – TAP’s MillerCoors JV posted a 4.0% volume decline in the period (vs. -5.7% last period and -1.1% over the last 52 weeks), despite an easy comp as volume sales were down 0.7% in the year-ago period. As such, the company’s volume share was down 0.2 pts (after having been flat or up in each of the prior three months). Meanwhile, dollar sales were down 2.5% YoY (vs. -4.2% last period and +1.3% over the last 52 weeks), as the company saw a 1.5 pt benefit from price/mix (vs. 1.5 pts last period and 2.4 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 11.9% YoY (vs. +8.7% last period and +12.6% over the last 52 weeks). Volumes were the key driver once again, +12.1% in thee period (vs. +7.3% last period and +11.8% over the last 52 weeks), as Crown saw a modest 0.3 pt drag from price/mix (vs. a 1.4 pt benefit last period and a 0.8 pt benefit over the last 52 weeks). Going forward, 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 belief that Crown’s falling price gap has been a key driver of market share gains).


Boston Beer’s Growth Continues to Accelerate – SAM saw its dollar sales accelerate for the second consecutive period, to +14.0% YoY (vs. +10.3% last period and +14.9% over the last 52 weeks). The company’s dollar sales growth in the period was driven almost entirely by a 13.9% YoY increase in volumes (vs. +9.6% last period and +13.0% over the last 52 weeks), as price/mix acted as a 0.1 pt benefit (vs. 0.7 pts last period and 1.9 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 maintain low-double-digit growth.




Nielsen C-store: MNST slows partly on tough comp; TAP still soft


Source: Goldman Sachs

May 31st


Energy drink category slows to +4.3%; MNST ekes out small share gain

Nielsen convenience store data for the four weeks ended 5/11/13 showed energy drink category sales up 4.3%, a deceleration from 8.9% last period. This was predominantly volume based as price/mix was +0.3% in the month. MNST’s sales growth also slowed, with +5.1% this month versus +10.1% last month. Comps for the category and MNST were tougher this period than last month, but the data was still softer than expected. Recall also that MNST indicated that its sales growth in Nielsen c-store data for the 4-weeks ending 4/27/13 was +6.5%. July comp remains tough at 28% but we still expect MNST’s sales growth to accelerate to double-digits in the back-half of the year as comparisons ease. Red Bull remained the primary share gainer but saw its sales slow to +9.7% from +16.6% last month. Rockstar remained a significant share donor with sales down 3.8%.


Beer category still off to a tough start in 2013, but sales improve from last month due to an easier compare

Beer sales were down 0.9% which was an improvement from -3.1% last month, although it appears all of that was due to an easier comparison (+5.6% last year this month vs. +8.2% the prior month). Price/mix remains solid at +2.6% this month, but volumes have been weak and have averaged -2.8% year to date. We continue to see a bi-furcation in growth with premium and sub-premium sales down 4-6% while above premium grows MSD-HSD.


TAP sales decline 2.5% as mainstream beer still struggling

It’s been a tough start to 2013 for mainstream beer as TAP and ABI portfolios were down 4% and 4.9%, respectively, in this period. The two big companies continue to take 1-2% pricing while the above premium pricing has remained flat for the most part. Tough compares, the payroll tax impact, poor weather and divergent pricing with the high end all appear to be making for a challenging 2013 so far for TAP and ABI.


High end beer continues growth momentum

Both Crown Imports and SAM had their beer portfolio sales up double digits this month with Crown +11.9% and SAM +14%. Each had no price/mix in the period. Both are an acceleration over last month, but are both exactly in line with their 52wk growth rate.




Constellation and Crown Mull Craft Investments


Source: Brewbound

by Max Rothman

May 31st

Following the agreement between Anheuser-Busch InBev (ABI) and the U.S. Department of Justice, as the dust settled and the components were parceled, Constellation Brands secured a coup of its own.


While ABI bought the stake in Grupo Modelo that it didn’t already own for $20.1 billion, Constellation bought the 50 percent of Modelo brands sold in the U.S. by Crown Imports, a leading importer of Corona, that it didn’t already own for $2.9 billion. This also gave Constellation the rights to Modelo’s brewery in Piedras Negras, Mexico.


This coup shifted the landscape for Constellation and its subsidiary and venture partner, Crown, enabling the companies to explore and possibly invest in the still-growing craft beer industry.


“It opens the horizon,” Crown president Bill Hackett said of the agreement. “We are completely unshackled.”


Right on cue, less than one week after the settlement, Jeff Menashe, CEO of the Demeter Group, a San Francisco-based investment bank, assembled a presentation for Constellation titled Why Craft Beer is Next. The presentation explained how the Modelo deal could transform Constellation’s future and lead the company and its investors toward craft beer.


Menashe believes that investors have reached a greater level of comfort with the craft beer industry because it’s further proven itself in the marketplace by displaying consistent years of growth.


“Craft has become big enough and it’s not looking as though there’s any reason for it to sort of fall from that position,” Menashe said.


The presentation noted that over the past year, Constellation’s 123 wine brands and seven spirits brands pulled in $2.8 billion in revenue, while Crown’s four beer brands, highlighted by Corona, pulled in $2.6 billion. This imbalance explains the power of beer’s revenue and the potential need for more beer brands. The presentation also noted that unlike the craft beer industry, the current depth of the wine market leaves little space for growth. Menashe doesn’t see any extra space for premium glass, super premium and ultra premium wine brands.


Yet despite their divergent growth rates, Menashe mentioned several similarities between the two segments; both come at a premium price, appeal to millennials, focus on style and depend on a back story. This story can talk about the ingredients, the geographical association or the brand personality, but no matter the details, it steadily aims to give the brand a human dimension.


As wine’s growth subsides and craft beer’s growth continues to increase, the similarities between these segments could smooth Constellation’s transition to craft beer, according to Menashe.


“I think that the craft and those wine brands I’m referring to are tracking or are trying to speak to the same consumer,” he said.


Hackett said that he’s constantly talking with craft brands, and while he hasn’t yet struck a deal, he envisions significant moves in the near future. He also said that Crown’s 15 warehouses across the country and advanced distribution system will allow whatever brand it picks up to reach the right markets at a quick rate.


“I think we’re just on the cusp of expanding our business,” Hackett said.




Edrington Group trials flavoured Famous Grouse variants (Excerpt)


Source: Just-Drinks

By Ian Buxton

31 May 2013


The Edrington Group has completed what it describes as a “research exercise” with flavoured variants of The Famous Grouse blended Scotch whisky.


The Famous Grouse Citrus, Vanilla and Spice were tested in 1 litre packages at 35% abv through Swedish retailer, retailing at SEK206 (US$ 31.16), just-drinks understands.




Coming soon? Nutritional labels on alcohol (Additional Coverage)


Source: USA Today

Mary Clare Jalonick

June 1, 2013


Alcohol beverages soon could have nutritional labels like those on food packaging, but only if the producers want to put them there.


The Treasury Department, which regulates alcohol, said this past week that beer, wine and spirits companies can use labels that include serving size, servings per container, calories, carbohydrates, protein and fat per serving. Such package labels have never before been approved.


The labels are voluntary, so it will be up to beverage companies to decide whether to use them on their products.


The decision is a temporary, first step while the Alcohol and Tobacco Trade and Tax Bureau (TTB) continues to consider final rules on alcohol labels. Rules proposed in 2007 would have made labels mandatory, but the agency never made the rules final.


The labeling regulation, issued May 28, comes after a decade of lobbying by hard liquor companies and consumer groups, with clearly different goals.


The liquor companies want to advertise low calories and low carbohydrates in their products. Consumer groups want alcoholic drinks to have the same transparency as packaged foods, which are required to be labeled.


“This is actually bringing alcoholic beverages into the modern era,” says Guy Smith, an executive vice president at Diageo, the world’s largest distiller and maker of such well-known brands as Johnnie Walker, Smirnoff, Jose Cuervo and Tanqueray.


Diageo asked the bureau in 2003 to allow the company to add that information to its products as low-carbohydrate diets were gaining in popularity.


Almost 10 years later, Smith said he expects Diageo gradually to put the new labels on all of its products, which include a small number of beer and wine companies.


“It’s something consumers have come to expect,” Smith said. “In time, it’s going to be, why isn’t it there?”


Not all alcohol companies are expected to use labels. Among those that may take a pass are beer companies, which don’t want consumers counting calories, and winemakers, which don’t want to ruin the sleek look of their bottles.


The Wine Institute, which represents more than a thousand California wineries, said in a statement that it supports the ruling but “experience suggests that such information is not a key factor in consumer purchase decisions about wine.”


Spokeswoman Gladys Horiuchi said the group knows of no wine companies that plan to use the new labels.


The beer industry praised the agency for acknowledging that labels should take into account variations in the concentration of alcohol content in different products.


The industry has opposed the idea of defining serving size by fluid ounces of pure alcohol – or as 12 ounces of beer, 5 ounces of wine or 1.5 ounces of 80-proof liquor – on the grounds that you may get more than 1.5 ounces of liquor in a cocktail depending on what else is in the drink and the accuracy of the bartender.


The ruling would allow the labels to declare alcohol content as a percentage of alcohol by volume, the approach favored by the beer industry.


“We applaud the TTB’s conclusion that rules be based on how drinks are actually served and consumed,” said Joe McClain, president of the Beer Institute.


McClain said the beer industry is pleased that the ruling provides “substantial flexibility” in terms of the format and placement of the disclosure on packaging.


It is unclear whether beer companies will actually use the labels, however.


Consumer advocates criticized the regulation.


“It doesn’t reflect any concern about public health,” said Michael Jacobson, director of the Center for Science in the Public Interest. He said the rules are too close to what the alcohol companies had sought.


Consumer advocates have said that listing alcohol content should be mandatory so consumers know how much they are drinking. Jacobson and others also support having calorie counts on labels, but they said the labels should not include nutrients that make the alcohol seem more like a food.


“Including fat and carbohydrates on a label could imply that an alcoholic beverage is positively healthful, especially when the drink’s alcohol content isn’t prominently labeled,” Jacobson said.


Current labeling law is complicated.


Wines containing 14% or more alcohol by volume must list alcohol content. Wines that are 7% to 14% alcohol by volume may list alcohol content or put “light” or “table” wine on the label. “Light” beers must list calorie and carbohydrate content only. Liquor must list alcohol content by volume and may also list proof, a measure of alcoholic strength.


Wine, beer and liquor manufacturers don’t have to list ingredients but must list substances people might be sensitive to, such as sulfites, certain food colorings and aspartame.


Tom Hogue of the TTB said the aim of the ruling is to make sure alcohol labeling is more consistent. “The idea here is we are trying to make it easy for the industry to communicate this with consumers if they want to do so, and if their consumers want them to do it,” he said.




United Breweries net profit falls 19.6% in March quarter


United Breweries reports a 7% increase in sales, helped by higher demand for its Kingfisher beer


Source: Livemint

Mihir Dalal

Thu, May 30 2013


United Breweries Ltd (UBL), the beer-making business of Vijay Mallya’s UB group, reported a 7% increase in sales to Rs.1,003.62 crore for the March quarter, helped by higher demand for its Kingfisher beer.

Net profit for the quarter ended 31 March fell 19.6% to Rs.5.85 crore, but the company said that results of the two periods are not directly comparable as some UB businesses were merged into UBL in the 2011-2012 financial year.


UBL has led the rebound in beer sales in India after high prices hurt demand in the year ended March 2012. In the last financial year, most brewers including SABMiller and Carlsberg reported strong numbers helped by demand for strong brews-beer with alcohol content of over 5%.


UBL shares fell 1.67% to Rs.736 on Thursday on the BSE. The benchmark index rose 0.34% to 20,215.40 points. The results were announced after market hours.


“The fourth-quarter results are not comparable but the full-year Ebitda (earnings before interest, tax, depreciation and ammortization) margins got a boost from lower bottling costs. They have made investments in bottling and it’s paying off,” said Sunita Sachdev, analyst at UBS Securities.


Over the past few years, UBL has been investing on patenting its bottles, which helps the company control bottling costs since only UB can reuse them.




US consumers cut spending 0.2 percent in April after income fails to grow


Source: Washington Post

By Associated Press

Published: May 31


Americans cut back on spending in April after their income failed to grow, a sign that economic growth may be slowing.


Consumer spending dropped a seasonally adjusted 0.2 percent in April, the Commerce Department said Friday. That was the first decline since last May. It followed a 0.1 percent increase in March and a 0.8 percent jump in February.


A drop in gas prices likely lowered overall spending. Adjusted for inflation, spending ticked up 0.1 percent last month. Still, that was the smallest gain since October.


Consumers also likely spent less to heat their homes last month, which may have reduced spending on utilities. April’s weather was mild after an unusually cold March.


Income was unchanged last month, after a 0.3 percent rise in March and 1.2 percent gain in February. Wages and salaries barely grew, while government benefit payments fell.


The retrenchment in spending indicates consumers may be starting to feel the impact of higher taxes. But a separate report Friday showed consumer confidence rose to a six-year high in May, suggesting the decline in spending may be temporary.


Americans are taking home less pay this year because of a 2 percentage point increase in Social Security taxes. A person earning $50,000 a year has about $1,000 less to spend this year. A household with two high-paid workers has up to $4,500 less.


Income taxes on the wealthiest Americans also increased.


Consumer spending drives 70 percent of economic activity. It grew at the fastest pace in more than two years from January through March, helping the economy expand at a 2.4 annual rate during that quarter.


Economists said the latest spending figures suggest growth may be slowing in the April-June quarter to around a 2 percent rate. But most still expect growth to improve slightly after that as the impact of tax hikes and government spending cuts fades.


“Overall, a sobering report for those expecting … growth to accelerate sharply,” said Paul Ashworth, chief U.S. economist at Capital Economics. “There will be some modest pickup in the second half of the year, as the fiscal drag starts to ease, but we expect the improvement to be very gradual rather than dramatic.”


Slower growth could lead the Federal Reserve to delay any scaling back in its bond purchases, which are keeping borrowing costs low.


Investors had been speculating that the Fed would start to slow its purchases in the next few months. That’s led to a spike in Treasury yields and higher interest rates.


Low inflation could also lead the Fed to continue its bond purchases.


The Fed’s preferred inflation gauge, which is updated as part of the consumer spending report, showed that prices fell 0.3 percent in April and increased just 0.7 percent in the past 12 months.


Still, economists say the Fed’s stimulus is most tied to the health of the job market, which has improved in recent months.


Employers have added an average of 208,000 jobs a month since November. That’s well above the monthly average of 138,000 during the previous six months.


Greater hiring is among several trends that could partly offset the impact of the tax increases and revive spending later this year.


Consumer confidence surged in April to a five-year high, according to the Conference Board, as Americans’ outlook on the job market improved. And on Friday, the University of Michigan’s survey showed consumer sentiment rose this month to its highest level since July 2007.


Home prices have surged 11 percent over the past year. Rising home tend to make homeowners feel wealthier and more likely to shop. Some economists estimate that for every dollar increase in home values, consumer spending can rise as much as 10 cents.




Wells Fargo’s Weekly Economic & Financial Commentary


Source: Wells Fargo

May 31st



.         Consumer confidence is at its highest level since the recession, spurred by negligible inflation, a stronger stock market, and continued job growth.

.         However, consumer spending pulled back slightly in April.

.         1Q13 GDP was revised lower, with reductions in government spending subtracting more from headline growth than originally estimated.

.         Consumer spending and business investment were both stronger than initially reported, suggesting ongoing economic expansion.

.         The newest data supports the thesis of a recovering housing market, as both home prices and pending home sales moved higher.



.         Switzerland and Sweden surprised economists with stronger than expected 1Q13 GDP results.

.         Unfortunately, fixed business investment declined and businesses remain cautious regarding the Eurozone’s economic outlook.

.         While Brazil’s economy continues to struggle, inflation concerns have forced the central bank to increase the policy rate.

.         India’s economic growth has slowed, as the country struggles to generate growth without substantial inflation.

.         Despite expansionary efforts by the BOJ, inflation remains below 1.0% in Japan.

.         However, the economy does seem to be responding, as industrial production in April was stronger than expected.




Handbag war escalates as LVMH accuses Hermès of ‘smear campaign’


Source: FT

By Scheherazade Daneshkhu in Paris

May 31st


LVMH accused Hermès of waging a relentless “smear campaign” against the world’s largest luxury goods group by sales on Friday, as the handbag war between two of France’s most well-known companies intensified during a public hearing.


LVMH, which is headed by Bernard Arnault, France’s richest man, asked for the stock exchange investigation into its 2010 build-up of a 17 per cent stake in Hermès to be nullified, claiming there had been procedural irregularities that did not allow it to mount a fair defence.


“The procedure should be dismissed?.?.?.?There are serious violations to the presumption of innocence, in the impartiality of investigators,” Georges Terrier, LVMH’s lawyer, said at Friday’s public hearing by the regulator’s sanctions committee.


He was flanked by Pierre Godé, Mr Arnault’s right-hand man and LVMH’s deputy chairman. “We have the greatest respect for the house of Hermès. But its managers have for more than two years led a smear campaign against LVMH and slander that is very detrimental to the image and reputation of LVMH,” Mr Godé said. Hermès denies the allegations.


Hermès, which is family controlled but publicly quoted, views LVMH’s stakebuilding as an “attack”. LVMH used equity swaps to amass a 17 per cent stake, which it announced suddenly in October 2010, saying its intentions were friendly.


The Autorité des Marchés Financiers, the regulator, dismissed LVMH’s allegations, saying its inquiry had been “scrupulously conducted”. It also said that the lack of transparency was so serious that it called for the maximum ?10m fine against LVMH.


The inquiry had found that LVMH violated stock exchange rules on disclosure, a finding the sanctions committee – an independent body – will decide whether to uphold and whether to impose financial penalties.


It is the first time that LVMH has been accused of stock market violations. According to the conclusions of the watchdog’s inquiry, the luxury goods group should have declared its speculation on Hermès shares four months earlier than its October 2010 statement.


The markets watchdog also alleges that LVMH planned a financial operation against Hermès, which could have affected Hermès’ share price.


For its part, LVMH accused the AMF of having shifted the parameters of its inquiry and preventing the luxury company from seeing documents that it said were crucial to its defence.


The sanctions committee will give its decision this summer. But whatever the regulatory outcome, the bitter fight between the maker of Louis Vuitton bags and Hermès, creator of the Kelly and Birkin bags, is set to continue in the courts, where Hermès has lodged a separate legal complaint against LVMH.


In the complaint, which is being examined by investigating magistrates, Hermès alleges insider trading and manipulation of its share price against LVMH. A counter-complaint has been filed by LVMH for “slander, blackmail and unfair competition”.


Patrick Thomas, chief executive of Hermès, has said the silk scarves group wants LVMH to reduce its shareholding or sell out altogether in order to expand the company’s free float – currently less than 5 per cent.


The Hermès family owns 72 per cent of the shares and is largely protected from a hostile takeover through its limited partnership structure. Nevertheless, Hermès family members last year took a belt and braces approach to ensure their control, by setting up a holding company that gives family members first right of refusal on share sales.




Large selection boosts wine sales


Source: ID Report

May 31st


Operators that offer a larger selection of wine brands sell more wine, especially at bars. So found a survey of 2,000 U.S. drinkers over the age of 21, reported by Alcoholic Beverage Demand/Tracker.


. Among drinkers who visit restaurants regularly, 31% say they are more likely to drink wine and 23% would order more glasses of wine as a result of being offered a larger selection of wine brands


. With more choices, 26% of wine drinkers are more likely to experiment by ordering wine brands they never tried before


. Among wine drinkers who visit bars regularly, 38% say they are more likely to drink wine and 31% will order more servings of wine with a wider selection of brands


. Only 25% of wine drinkers who visit bars say that a larger selection of brands has no effect on their consumption


“Our latest findings confirm the value for on-premise operators to offer a large selection of wine,” said David Decker, president of Consumer Edge Insight, the company that conducted the survey. “For those who enjoy wine, seeing a larger selection of brands at a bar or restaurant is an invitation to consume and experiment.”




Bon Pasteur sold to Goldin Group of Hong Kong


Source: Decanter

by Adam Lechmere

Friday 31 May 2013


Michel Rolland’s Chateau Le Bon Pasteur in Pomerol and its two sister properties have been sold to the Goldin Group of Hong Kong.


The sale, which was decided in December last year but has taken some months to finalise, has just been announced by Vignobles Rolland, the owner of the properties.


The CEO of the Goldin Group is Sutong Pan, whose biography details his ‘profound experience infinance and property development [and the] manufacturing of advanced electronicproducts in China, Hong Kong and the United States.


Pan Sutong ‘is passionate about wine, well connected in Bordeaux wine circles, and ready to make every effort to valorize the wines, and the name, and to perpetuate the history in accordance with family tradition,’ Rolland Vignobles said.


The current technical team will remain in place under the direction of Michel and Dany Rolland, it added.


Goldin is also the owner of cult Rutherford, Napa property Sloan Estate, which it bought in 2011 for areported US$40m. Michel Rolland is its consultant.


The Bon Pasteur dealincludes two other Rolland estates, Chateau Rolland-Maillet in St Emilion and Chateau Bertineau St Vincent in Lalande-de-Pomerol. The properties’ vineyards amount to some 16ha.




Heavy rains across Europe delay growth ‘by three weeks’


Source: Decanter

by Panos Kakaviatos and Jane Anson in Burgundy

Friday 31 May 2013

The heavy rains that have been falling across France and much of Europe for the past few weeks have halted vine growth in many regions, jeopardising flowering at a crucial time of the year.


Trouble ahead…clouds over Clos des Lambrays in the Côte de Nuits [pic: Panos Kakaviatos]


In Burgundy, almost 400mm of rain has fallen since 27 April on the Cote d’Or – more than double the average. Growers say that the harvest is unlikely to begin before October, which will be three to four weeks late.


Surveying the Domaine Marquis d’Angerville Clos des Ducs vineyard in Volnay, owner Guillaume d’Angerville pointed out the noisy and constant flow of water draining from the celebrated vineyard: ‘We’ve only had five days without rain in the last 30 days,’ he said.


Over in Beaune, Frederic Barnier, winemaking director of Louis Jadot, pointed to clouds in the sky on 28 May: ‘This is typical, about two hours of sun, and then the rain comes back – we have had more than double normal rainfall since January, and what worries me most is the lack of sun.’


Flowering has been delayed and vineyard treatments such as ploughing that would normally have been completed by now have been difficult due to muddy vineyards..


Vintners have resorted to ’19th century methods’ of applying preventive anti-mildew treatments by hand-spray, said Frederic Mugnier of Jacques Frederic Mugnier in Chambolle Musigny.


Although abnormally low temperatures have minimized the risk of the spread of mildiou and oidium, winemakers worry that an imminent rise in temperatures will result in disease.


‘Up to 10 degrees C, mildew will not develop, but temperatures have been close to passing that border,’ Mugnier said.


Vintners are facing similar problems in the rest of France. In Bordeaux, new plantings are being put on hold. ‘Everything is behind schedule,’ said Peng Wang of Chateau de Pic in Cotes de Cadillac. Champagne is on high alert for frost risk, while Loire winemakers are reporting rapid spread of vegetation and weeds.


Problems are not just limited to France. Axel Heinz of Ornellaia, speaking at a tasting of his wines in Bordeaux last week, said that Tuscany has also had a cold spring, and the vines are about two weeks behind their usual stage at the end of May.




Chile Concha Y Toro 1st-Quarter Net Increases 0.3% To CLP5.25 Billion


Source: Dow Jones

May 31st


Vina Concha y Toro SA (VCO, CONCHATOR.SN) posted 5.25 billion Chilean pesos ($10.6 million) in first-quarter net profit, an increase of 0.3% from the same period last year, the Chilean wine maker said late Thursday.


In the first quarter, export sales increased less than expected as the winemaker couldn’t ship part of its production in March due to labor strikes at several Chilean ports.


Revenue for the quarter rose 2.5% year-on-year to CLP91.08 billion, the company said in a statement.


Concha y Toro, one of the world’s biggest wine exporters, has been focusing on premium wines to offset a stronger peso and rising production costs.




Bubbling under


Source: FT

By Jancis Robinson

May 31st


Growers’ champagnes consistently offer so much better value than the heavily marketed grandes marques


Is champagne a wine or a brand? This question preoccupied me as I tasted the offerings of five grape growers from the Champagne region in the cellars of Justerini & Brooks in St James’s Street, London. In the heart of clubland, a stone’s throw from Hedgie Central, you can imagine easily, I’m sure, Justerini’s client base and the sort of customers I was tasting with. These champagnes were without a shadow of a doubt wines – each one eloquently individual, the expression of particular growing seasons, personal winemaking philosophies and techniques, different villages and even different plots within the Champagne vignoble. Even the best-known name of the five, Egly Ouriet, enjoys nothing like the brand recognition of one of the grandes marques.


Justerini’s prices for these gems range from just £21.58 a bottle, for Forget-Brimont’s bargain non-vintage blend from Premier Cru vineyards, to £82.97 for Egly Ouriet’s magnificent 2002 vintage champagne from Grand Cru vineyards. These growers’ champagnes consistently offer so much better value than the heavily marketed grandes marques that I applaud Justerini’s buyers for taking notice of their increasing importance in the world of wine. But I suspect they may be a tough sell to some of their customers, accustomed as they are to the security of a well-known brand.


There are about 20 well-known grandes marques, robustly priced champagnes made in such quantity that they have to blend dozens and often hundreds of ingredients to produce a consistent style. When you serve your guests one of these, they know they are being treated to something with a certain price tag and reputation. But only wine nuts know their Larmandier-Bernier (one of my favourite champagne growers) from their Laurent Perrier (one of the grandes marques). In some circles it would take a certain confidence to serve champagne from a little-known grower, however good, especially since from a distance it can be so difficult to tell a lovingly crafted grower’s champagne from a cheap, mass-market buyer’s own brand.


The key is to look at the pair of initials in small print on the label. Growers’ champagnes are denoted “RM” for récoltant-manipulant. A buyer’s own brand is marked “MA” for marque d’acheteur, while someone who buys in wine to make their champagne, as all the grandes marques do, is an “NM” for négociant-manipulant. A co-op wine is marked “CM” for coopérative de manipulation. Checking this at a party would take extremely good eyesight and a certain amount of impudence.


I have long thought it odd that the big champagne producers have adapted so little to the increasing sophistication and curiosity of wine-drinkers. I have sought, largely in vain, to learn which years their non-vintage blends are based on, or how long the blend has been in contact with the character-forming sediment from the second fermentation in the bottle and, ideally, when the champagne was separated from it (an operation known as disgorgement). Most grandes marques leave their customers entirely in the dark about this sort of nerdy detail. And of course it is even more infuriating to me that such champagne continues to sell so well despite their brand owners treating their non-vintage blends as though they were branded fizzy drinks – which of course they are, even if rather more expensive than the average cola.


Good growers, bless them, are far more likely to deliver such facts on a plate – or at least on back labels. The likes of Bérèche et Fils, Chartogne-Taillet and Pascal Doquet are all excellent at telling their customers which vintages and grapes are in the blend. Egly Ouriet prints exactly how many months the wine was in contact with the lees (106 in the case of that 2002) and when it was disgorged. Isabelle Diebolt of Diebolt-Vallois explained to me, chez Justerini, that they are quite happy to supply informative back labels if their importers ask for them. Justerini’s don’t. The Swedish monopoly insists on them. Please, importers, ask for max facts. Your customers can always ignore them if they are not interested.


The most energetic importers of grower champagnes I know are Terry Theise in Washington DC and Vine Trail of Bristol. Terry almost single-handedly ignited American sommeliers’ love affair with these terroir- and vintage-driven wines, while Nick Brookes of Vine Trail can claim to have done the same, a little later, in the UK. The guests at Vine Trail’s recent grower champagne tasting were quite different from the St James’s crowd. Young, casually dressed restaurant staff made up the majority and were clearly set to order enough to warrant a personal appearance from most of the 13 growers whose wines (no, not brands) were on show.


There was such individuality evident in this selection, it was thrilling. I didn’t enjoy every single wine but I truly appreciated them – for the individual story each had to tell. They really did taste like quite different drinks from grande marque champagne (which is sometimes exquisite but too often dull and overpriced). Many of Vine Trail’s champagnes are Extra Brut or even Brut Nature with much less added sugar than most champagnes, yet most taste beautifully balanced rather than searingly tart.


There are more than 4,650 champagne growers making and selling their own champagne. Some of it is dismal. I should stress that I am not advocating all grower champagne; it has to have been handpicked by someone like Theise, Brookes, Justerini’s or The Sampler in London. Nick Brookes’ last foray in search of new growers to add to the Vine Trail portfolio involved auditioning 41 potential suppliers, of which he chose a single one. Anyone with an intimate knowledge of champagne drinking in France will understand.


But if you are seriously interested in wine, as opposed to brands, you ignore this segment of Champagne producers at your peril. As Isabelle Diebolt put it, “these wines are for people looking for something different, something determined by terroir. We look for it in cheese, in coffee, in chocolate. Why not champagne?”




Not Just for Fondue: The Fresh Whites of Savoie


The French region is known for its cheeses, but its wines are more obscure. That could change as more people try Savoie’s light, refreshing, affordable white wines, says Lettie Teague.


Source: WSJ


May 31st


THE CONNECTION between wine and cheese has been well documented. There are books and seminars and even educational videos explaining the closeness of their relationship. And while the two are often produced in the same places, they’re particularly tight in the Savoie region of France.


Located in the picturesque, pricey French Alps, Savoie is home to famous cheeses like Reblochon and Tomme de Savoie, and has even been called the birthplace of fondue. The reputation of its wines, however, is a bit more obscure. Made with grapes such as the unfamiliar Jacquère and Gringet, the wines of Savoie are little-known and can be quite hard to find. But thanks to an appealing combination of high quality and low price, that may soon change.


I first tasted a Savoie wine almost 12 years ago, at Artisanal Bistro, the cheese-centric New York restaurant. The wine was the Pierre Boniface Apremont Vin de Savoie, and although that was long ago, I still remember how well it went with my croque monsieur-its bright acidity offering a bracing contrast to the richness of the ham and the cheese. And it was cheap: The retail price was between $10 and $12 a bottle. I saw the Boniface many times over the years, but I never found any more wines from Savoie-and eventually, I stopped looking for them.


Then about a year and a half ago, Joe Salamone, a wine buyer at Crush Wine & Spirits in New York, mentioned that he had some particularly good Savoie whites. I bought the bottles he recommended and found them just as good as, if not better than, the Boniface Apremont. They were not only crisp and refreshing but also intensely minerally; some even had a Chablis-like flintiness as well. Others were more opulent and rich, but they were all quite reasonably priced-generally around $20 a bottle.


Most of the wines were made from the Jacquère grape, a rather obscure varietal everywhere else in world but common and popular in Savoie. Wines made from Jacquère are quite dry and rather light-bodied, with a Sancerre-style acidity and delicate floral aromas. They’re perfect wines for summer, though in Savoie they’re often consumed après-ski with melted cheese.


Some Savoie whites are richer and more viscous; these are the wines made from the Altesse grape, another Savoie-specific varietal, which tastes a bit like a cross between Chardonnay and Roussanne (yet another grape grown in Savoie). In fact, Altesse is frequently blended with Chardonnay in both still and sparkling Savoie wines.


There are other grapes grown in Savoie, too, most notably Gringet (a high-acid white said to be related to a grape from Jura, in eastern France) and Mondeuse blanche and noire (the latter is a bit like Syrah), as well as a few others that are yet more obscure.


Many of these grapes have alternate names. That’s another hallmark of Savoie wines-in addition to their affinity for cheese, they come with quite a few aliases. For example, Altesse is also known as Anet, Fusette d’Ambérieu and Prin Blanc, while Jacquère’s alternate monikers are Martin-Cot and Cugnette.


Jacquère is grown to particularly good effect in Apremont, which means “after the mountain.” Apremont is probably the best-known town in Savoie, as there are quite a few producers based there. In fact, Apremont shows up so often on labels that non-Savoie-savvy drinkers might be excused for thinking it, too, was a grape.


There are other well-known Savoie towns, most notably Chignin, where Jacquère is grown; and Frangy, where Roussette (aka Altesse) is grown. Of course, “well-known” is a relative concept when it comes to Savoie. There aren’t many wine drinkers who really know the wines-at least, not yet. According to Mulan Chan-Randel, who buys Savoie wines for K&L Wine Merchants in California, almost all of their Savoie sales are “hand sells” in the store. There are almost no Internet buyers-that is, very few are seeking the wines out. In fact, the only time that customers actually request a Savoie wine is “when they’re making fondue,” said Ms. Chan.


Savoie wine importer Russell Herman said that he sometimes describes Savoie as “the upper Rhône Valley,” and that seems to help orient people geographically. Mr. Herman has been importing the wines of Savoie producer Eugène Carrel for six years. The wines have sold well, according to Mr. Herman, who attributes part of their success to a “general movement toward high-elevation whites, with lower alcohol levels, that are fresh and light.”


In fact, those last two words were key to my decision to organize tastings of 20 or so Savoie wines recently. “Fresh” and “light” are the defining words of a summer wine, after all. Most of the wines that I bought were made from the Jacquère grape, although I had some Altesse and Gringet wines and a couple of sparkling wines as well. Most cost around $20 a bottle, although a couple cost as much as $44.


I tasted the wines alone and with food (including cheese, of course) and tasted them all with friends, none of whom had ever had encountered wines from the region. This last fact was particularly striking, as some of my friends are serious collectors who buy and drink wines from all over the world.


But their enthusiasm was nearly as vast as their ignorance. “This is clean like a whistle,” said my friend Sue approvingly of the crisp 2010 Domaine Giachino Apremont. “It’s exactly the kind of low-alcohol wine that I love,” she added, looking at the 11.5% alcohol number on the label of a bottle of 2010. “It’s tingly,” said another friend of the minerally 2011 Domaine Belluard Les Alpes, one of the two wines made from the Gringet grape in the tasting. (The other, also made by Domaine Belluard, was Le Feu, a single-vineyard wine made from the estate’s oldest vines that was even more impressive. At $41, it cost about $12 more than the Les Alpes.)


There were very few disappointments among the various bottles-a rare occurrence in any tasting. Even the Pierre Boniface, a wine I hadn’t tasted in years, was still good, if a bit simple compared with some of the others. My friends were also quite pleased by the prices (the 2012 Eugène Carrel Roussette de Savoie, at $18, was deemed a steal). In fact, the only dissenter was a wine collector who seemed alarmed to find that he liked so cheap a wine.


A few days later, I decided to check out the Artisanal wine list; there were probably quite a few Savoie wines on it by now. But there were none: Even the Pierre Boniface was gone. What happened? I asked Artisanal’s wine director, Brian Mitchell (who recalled the Boniface favorably from his years in retail). Mr. Mitchell replied that he simply preferred other wines; for example, with the fondue he was featuring a Swiss wine made from the Chasselas grape. Although disappointed, I understood; the Swiss know how to pair wine with cheese, too.




Billionaire buys the neighbour’s chateau


Source: Timaru Herald



Wine-loving American billionaire Bill Foley has opened his chequebook again to buy a $1.85 million chateau next door to his luxury lodge south of Featherston.


Mr Foley, owner of the exclusive Wharekauhau Country Estate, near Lake Wairarapa, received Overseas Investment Office approval in April to buy the house.


The OIO announced its decision yesterday. Mr Foley, who is worth more than $1.5 billion, intends to use the house, Chateau Wellington, as his home when he is in the country.


He manages a Kiwi wine empire from Te Kairanga winery in Martinborough, which he bought in 2011.


The 430-square-metre chateau includes three bedrooms with luxurious en suites, an outdoor swimming pool and sweeping views of Palliser Bay.


Its extensive open grounds allow easy access for helicopters to fly guests in from Wellington.


When he is not in residence, Mr Foley intends to offer it as additional luxury accommodation for Wharekauhau.


He began buying vineyards in Wairarapa and Marlborough in 2009, and his holding company, Foley Family Wines, controls brands including Vavasour, Dashwood, Redwood Pass, Boatshed Bay, Goldwater and Clifford Bay.


He has extensive interests in the American wine industry and owns numerous vineyards in California and Washington State, while remaining chairman of the insurance firm Fidelity National Financial, a Fortune 500 company.




China: Call for cheaper wine as economy slows


Source: China Daily

By Tang Zhihao in Shanghai and Zhou Siyu in Beijing

June 3, 2013


The wine industry in China is paying more attention to less expensive brands as an increasing number of Chinese people seek more affordable imported bottles to enjoy socially rather than for business purposes.


The figures from Wine Intelligence, a London-based consulting firm specializing in the wine business, show that in the first quarter of 2013, 69 percent of 1,024 people surveyed aged between 18 and 50 in China said they usually spent less than 200 yuan ($33) on imported wine for a casual occasion. Wine Intelligence did not provide figures for previous years because there was a change to its survey methodology. However, Wine Intelligence said there is growing demand for less expensive wine in China.


“There is a growing trend of drinking wine for pleasure rather than buying it primarily as a gift or serving it at banquets as a status symbol and, along with this growth in more casual drinking, there’s also a higher demand for wine at more affordable price points,” said Maria Troein, China country manager of Wine Intelligence.


There is no industry definition for entry-level wine or affordable wine. However, industry insiders said wine priced below 200 yuan could be defined as entry-level wine.


“The Chinese, as in other mature markets, are showing more interest in wine and getting to know more about it. This has created new market segments of young drinkers who like to drink wine and that fits their lifestyles – whether it is in restaurants, bars or even at home,” said Joao Gago, managing director of Boutique Wine Asia. BwA is an imported-wine trading company in China with annual trading volume of 20 containers of wine from more than 10 countries.


Gago said 50 percent of BwA sales are made up of wine priced around 90 yuan, an increase from 25 percent in 2012.


“Before it was not common to see a Chinese person order a bottle of wine in a restaurant or buy wine to share with friends at home. Now it is becoming better appreciated. It has become part of daily life, especially in bigger and more sophisticated cities such as Shanghai,” said Gago.


“Wine is said to be good for the health and a bottle of wine might provoke more topics to talk about in one’s leisure time,” said Wang Yue, a white-collar worker in Shanghai.


The gradually maturing wine market in China has made wine businesses in Bordeaux, France, keen to introduce more affordable varieties to the Chinese market to capture demand from ordinary people. In previous years, Bordeaux wine was considered to be a symbol of social status and only suitable for high-end business banquets. Bordeaux wine traders are trying to change that image.


Every year, the Bordeaux Wine Council (Conseil Interprofessionnel du Vin de Bordeaux, or CIVB in French), a French group that represents more than 10,000 Bordeaux wine producers and vine growers, recommends to Chinese wine lovers a selection of 100 Bordeaux wines that are best adapted to the Chinese market and are priced at the entry and medium levels (100 to 350 yuan a bottle).


“We want the customers to know that not all Bordeaux wines are expensive. Some of them are but there are also some that are affordable and of good quality,” said Thomas Jullien, Asia Manager of the CIVB.


China has become the first export destination for Bordeaux wine. In 2012, China imported a total of 64 million liters of Bordeaux wines, twice the volume sent to Germany, its closest rival, according to CIVB data.


Changing market conditions are also pushing Chinese wine makers to develop less expensive brands to better fit market demand.


“Our new products will be priced between 50 yuan to 100 yuan a bottle, affordable for ordinary folk. This is in line with the relatively slower economic growth this year,” said Luan Xiuju, managing director of China Foods Ltd, the Hong Kong-listed consumer food arm of the country’s largest State-owned food conglomerate China National Cereals, Oils and Foodstuffs Corp


Industry experts believe more affordable wine will help cultivate a wine culture in China and boost market demand in the long run.


“China’s market is growing very fast but people are still less familiar with the wine culture than they are in Western countries. The most important thing right now is to bring wine into households as well as people’s daily lives,” said Ma Wenfeng, a senior analyst at Beijing Orient Agribusiness Consultant.




Bill Howell, former CEO of Miller Brewing, dies at 83


Source: Washington Post

By John Schmid

June 2


When Bill Howell joined Miller Brewing in 1970, the “champagne of beers” ranked as the nation’s No. 7 brew.


But Mr. Howell helped widen the appeal to a mass market of blue-collar drinkers and transform the American brewing industry with the introduction of the nation’s first mainstream low-calorie beer. By the time he retired from Miller in 1988, it was the nation’s No. 2 brewery.


Mr. Howell died May 25 in Richmond after a long illness. He was 83.


“The goal was to take Miller out of the champagne bucket and put it into the lunch bucket without losing that premium image,” said Leonard Goldstein, who replaced Mr. Howell as Miller’s chief executive.


He moved to build new breweries to keep up with demand, said Billy Apple, a retired Miller executive who worked for decades with Howell.


William K. Howell grew up in rural Virginia and attended the University of Richmond, where he played wide receiver on a football scholarship and studied business. After a stint in the Marine Corps, he took a job at the Philip Morris tobacco company in Richmond.


When Philip Morris diversified beyond its cigarette brands with the 1970 acquisition of Miller Brewing, Mr. Howell moved to Milwaukee to become vice president of operations. He became chief executive in 1984.


At the time of the Philip Morris acquisition, Miller was best known for its “High Life” brand.


Philip Morris wanted to bring a new image to Miller. Mr. Howell helped introduce the “It’s Miller time” advertising slogan, conveying the notion that Miller was the beer of the working man.


Miller’s biggest breakthrough was the 1973 introduction of Miller Lite. No other brewery had found the brewing formula or marketing strategy for a successful low-calorie, low-alcohol beer.


Mr. Howell worked with the brewmasters on a formula that had 96 calories but tasted like regular lager. The idea was to market Miller Lite to men and dispel the notion that it was a watery women’s drink.


Miller created a genre of amusing television advertisements, hiring sports figures such as John Madden, Mike Ditka, Bob Uecker and celebrities such as Rodney Dangerfield.


Mr. Howell worked with the marketing team to come up with the slogan, “Great Taste, Less Filling.” Commercials ended with the catchphrase: “Everything you’ve always wanted in a beer. And less.”


Miller ignited change across the brewing world. Other breweries followed suit with light beers of their own, including Miller’s main rival, Anheuser-Busch.


Since Mr. Howell retired, Miller has had several ownership changes. South African Breweries acquired Miller in 2002, and it now exists in a joint venture with Molson Coors, called MillerCoors. It retains its brewing operations in Milwaukee.


Mr. Howell is survived by his wife, two sons and grandchildren.




RPI hits 10-month high as business expectations improve


Source: NRA

May 31, 2013


Driven by higher same-store sales and an improving outlook among restaurant operators, the National Restaurant Association’s Restaurant Performance Index (RPI) hit a 10-month high in April.  The RPI stood at 101.0 in April, up 0.4 percent from a level of 100.6 in March, and is the third time in the last four months that the RPI topped the 100 level, which signifies expansion in the index of key industry indicators.


“Growth in the Restaurant Performance Index was due largely to restaurant operators’ healthier outlook for the business environment in the coming months,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association.  “In particular, there was a dropoff in the proportion of operators who expect conditions to worsen in the months ahead, which suggests a broadening of the perspective that the expansion is firmly entrenched.”


The RPI consists of two components – the Current Situation Index (measuring current trends) and the Expectations Index (measuring restaurant operators’ six-month outlook) – and tracks the health of and outlook for the U.S. restaurant industry.


The Current Situation Index stood at 100.1 in April – up 0.3 percent from a level of 99.8 in March.  April represented the first time in eight months that the Current Situation Index rose above 100. While overall sales were positive in April, restaurant operators reported a net decline in customer traffic for the fifth consecutive month.


The Expectations Index stood at 101.9 in April – up 0.5 percent from March and the highest level in 11 months.  Each of the four expectations indicators stood above 100 for the fourth consecutive month, which indicates a firming of optimism for business conditions in the months ahead.


Restaurant operators also reported an uptick in plans for capital spending in the months ahead.  Fifty-nine percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, up from 55 percent who reported similarly last month.


Restaurant operators are also somewhat more optimistic about staffing growth in the months ahead.  Twenty-two percent of operators plan to increase staffing levels in six months (compared to the same period in the previous year), while just 10 percent said they plan to cut positions.




United Kingdom: Alcohol trade body to enforce rules outside ASA’s remit


Source: Marketing Week

By Sebastian Joseph

Fri, 31 May 2013


PR, blogs and any other content beyond the remit of the Advertising Standards Authority will now be regulated by industry body the Portman Group after it expanded its code of practice.


The Portman Group will now regulate alcohol marketing laws outside the ASA’s remit.


The clamp down on gaps between the remits of both regulatory bodies are part of changes to the industry body’s voluntary code of conduct governing the marketing of alcohol (see box).


Producers now being able to make lower-strength of their of their drinks a dominate theme in advertising campaigns. This was prohibited in the past but the group is hoping the shift will spur the industry’s Responsibility Deal with the Government by introducing and promoting new lower-strength alcohol ranges.


Alcohol brands will also be required to promote responsible drinking as a key part of any sponsorship campaign. Brewers AB Inbev and Heineken already do this through their work around the FA Cup and Champions League respectively.


Henry Ashworth, chief executive of the Portman Group said the updates, some of which were first mooted in 2011 alongside the launch of the Responsibility Deal, aim to strike the “right balance between enabling innovative campaigns and NPD while also curbing “unacceptable” marketing.


He adds: “The industry works hard to operate an effective and practical approach to self-regulation which is supported by producers and retailers and I am encouraged that Government has recognised this in its alcohol strategy.


The Portman Group, which is funded by the UK’s nine biggest producers and has 140 signatories, is working with the Government to help shape its alcohol strategy. The strategy, due to be announced later this year, could lead to another revision of the laws.


It comes a week after UK regulators revealed they are to review whether tougher rules on alcohol brands advertising on TV are needed.


Revision of the ‘Code of Practice on Naming Packaging and Promotion of Alcoholic Drinks’:


Ensure consistent and seamless self-regulation – the remit of the code has been expanded so that it covers all alcohol marketing not regulated by the ASA or Ofcom. This also extends to online marketing such as user-generated content not claimed by the publisher.


Clamp down on inappropriate marketing claims – brands can no longer make direct or indirect links with sexual activity or references to sexual success.


Protect under 18s – Images of people who are (or look like they are) under 25 can longer be featured in campaigns drinking or holding alcohol.


Promote low and lower alcohol alternatives – Brands can make the lower alcohol content of their drinks a more prominent part of marketing activity.


Introduce a UK-wide Sponsorship Code – Drinks makers will be required to promote responsible drinking as an integral part of any sponsorship activity.




Iran: Seven Die in Iran After Drinking Homemade Alcohol


Source: NY Times


June 3rd


A batch of illegally distilled alcohol has killed seven people, sent dozens to the hospital and blinded several others in the southern Iranian city of Rafsanjan, local news media reported Sunday.


Hospitals in Rafsanjan started filling up last week with patients who were complaining of a loss of vision and other symptoms consistent with alcohol poisoning. Doctors in the area blame concoctions containing high levels of methanol – a simple alcohol used as an antifreeze and also for biofuels – mixed with energy drinks.


Most of the victims were young. “All those who died were men under the age of 27,” said Dr. Hamid Najmedin of the Rafsanjan Medical Science University, the Ebtekarnews Web site reported Sunday.


Alcohol is strictly forbidden in Iran, and those caught consuming it can be punished with a lashing according to Iran’s Islamic laws. Persistent use is punishable by death. But large amounts of foreign alcohol is smuggled in, and many Iranians drink a kind of homemade vodka known as arak sagi, or dog sweat.


A bottle of smuggled vodka costs the equivalent of $28, while the locally made product sells for about one-third less.


Government policies that have stoked inflation, and international economic sanctions have driven up the prices of all products, including smuggled alcohol, forcing many Iranians to buy homemade liquor. In the past seven months the number of deaths related to bad alcohol has more than doubled, the semiofficial Mehr news agency has reported.


But some officials in the region cast this most recent episode as part of a political plot to influence the June 14 presidential election or to lower voter turnout as a way to raise doubts about the popularity of Iran’s leaders. The governor of Rafsanjan, which is a relatively wealthy region that is the center of Iran’s pistachio cultivation, said the alcohol distributors were trying to stop people from voting.


“We are creating a political epic, but some people are trying to create an atmosphere in which they can achieve their mischievous goals,” the governor, Akbar Pourmohammadi, told the semiofficial Fars news agency, adding that three people had been arrested. It is unclear whether those poisoned by the illegal alcohol will be punished.




Nevada: Wirtz Beverage Nevada Bolsters Craft Segment In the Marketplace


Renowned Brands & Industry Experts Join the Distributor


Source: Respublica

May 31st


Wirtz Beverage Nevada (WBN) announced today strategic investments in the craft category supporting its progressive expansion statewide. Several renowned national and regional artisanal beer and spirit brands along with three industry experts join the company, a leader in the wholesale distribution of beer, wine and spirits.


“We see incredible opportunity in the craft business so we forward invest behind great brands and with the right specialization,” said Kevin Roberts, SVP Wirtz Beverage Nevada. “With our continued expansion into the category, our footprint is expected to grow exponentially.  Leveraging the expertise of our specialists, we foresee even more opportunity for growth.”


With committed professionals leading the effort, such as Craft Brand Specialist Kent Bearden, the Wirtz Beverage Nevada team is comprised of a talented ensemble of beer, wine and spirits experts with a wide range of abilities and experience. The newly-appointed craft experts will bolster the Wirtz Beverage Nevada team and include:


Michael Shetler, Craft Brand Specialist:  Michael Shetler is an industry veteran holding several highly-lauded accreditations including Sommelier, Cicerone Beer Server, BAR and Beer Judge Certifications and is also currently working towards Cicerone ranking. Holding varied senior-level industry positions, most recently, Michael was Director of Beverage for the Aria Hotel where he oversaw all beverage operations. In his role with WBN, Michael will help enhance the programming and performance of its craft portfolio.


Jack Kramer, Craft Brand Specialist:  A graduate of the Culinary Institute of America and University of Nevada Las Vegas, Jack holds respective degrees in Culinary Arts Management and Hospitality Management. Career experience includes more than seven years in the wholesale beverage industry. An accredited beverage professional, Jack is a Certified Cicerone and Certified Sommelier. With WBN, His expertise will contribute to building craft brands.


Joseph Morandi, Head Draft Technician – Northern Nevada: A student of zymurgy for more than 20 years, Joe is an avid home brewer and winemaker with Cicerone Beer Server and Beer Judge Certifications as well as Micro Matic Advance Draft Training. Currently, Joe is also pursuing a Siebel Institute Associate Brewing Science degree. A renowned expert, Joe owned a quality draft line service company. In his new role, Joe will oversee the quality and service standards of the WBN craft beer portfolio including proper delivery methods and pouring techniques.


Together, the specialized team will support the company’s integration of its artisanal brands statewide, now including the Reno/Northern region. Its expansion into the category includes newly-formed partnerships with many illustrious brands some of which include Rogue Brewery, Ballast Point, Green Flash, Sierra Blanca and Santa Fe.


Continuing education, training and programming efforts demonstrate Wirtz Beverage Nevada’s commitment to the craft business.  Already, its sales force has undergone extensive training with all members holding Level One Cicerone accreditation.


“There is an incredible appreciation, both inside and outside the walls of Wirtz Beverage, for the craft segment,” said Kent Bearden. “The additions to our company complement our ability to service the market’s growing demand for premium beverage offerings with the knowledge and service to match.”




Pennsylvania: Corbett – lawmakers need to act now on transportation funding


Source: WHTM

By Dennis Owens

May 30th


Cars and trucks zipped along Interstate-83 in Cumberland County directly behind Governor Corbett today as he strained his voice to be heard over them.


But he delivered a clear message, mostly intended for House Republicans: get me a transportation funding plan and get it to me in time for the June 30 budget deadline.


Corbett no doubt senses that transportation funding is in a legislative logjam and he hopes this roadside press conference will help free it from Capitol congestion.


The governor wants either his $1.8 billion plan or Senate Bill 1, a $2.5 billion plan, passed. Both the Senate and governor’s plan would increase fees and gasoline taxes to pay for additional funding for roads, bridges and mass transit, which are frequently criticized and widely considered among the worst in the nation.


“This is how we get a sustainable long-term solution to having funding for Pennsylvania for transportation,” Corbett said.


PennDOT Secretary Barry Schoch gave specific examples of where new money would go. He showed the brand new Lowther Street bridge in the background as an example of the good things that can happen with more cash. He also warned that projects like the widening of Interstate 83 would be scrapped without extra money.


“The reason for that is, we’ll go back to basic maintenance,” Schoch said. “Unfortunately, if we don’t take action on funding, this is the last of these type projects you’ll see in the Harrisburg region.”


House Transportation Committee Chairman Dick Hess (R-Bedford/Fulton/Huntingdon) agreed and said lawmaker should approve more funding.


“We’ve kicked this can down the road for 13 years now,” Hess said at the press conference. “We have to do something. You sent us here to be leaders. I know it’s not the most popular thing to do, but sometimes you have to do what’s right.”


But right is wrong to many House Republicans who worry about passing a bill that would raise prices at the gas pump. Majority Leader Mike Turzai (R-Allegheny) was less than enthusiastic about the issue when asked about it Wednesday.


“Transportation has always been a Senate priority,” he said. “It has not been a House priority.” Remember, leaders drive the agenda in the General Assembly.


What is a priority for the House Republicans is liquor privatization. House Whip Stan Saylor (R-York) is in charge of rounding up votes. He says votes for roads would flow more freely if the Senate would reciprocate on booze.


“There’s a chunk of the members in the House Republican caucus and they’re saying, ‘We want the liquor bill.’ That is the tradeoff for getting their vote on transportation.”


There’s no official link between liquor and transportation, but based on that comment, there’s a de facto linkage between the two.


Saylor smiled and said, “I’m just being honest.”


A year ago, also beside a busy road, then-Auditor General Jack Wagner poked a stick at a  crumbling bridge support in Harrisburg. He forcefully asked the legislature to act on a transportation plan.


Wagner’s big stick didn’t work but Corbett’s trying the highway-side press conference tactic. It remains to be seen if that will work.


Corbett made it clear he wants transportation, and pension reform, and liquor privatization on his desk with the budget, by the deadline that is now 30 days away.


But if lawmakers continue to stall on a transportation package, they risk getting run over by the issue.


Adams County Representative Dan Moul (R) seems to understand the danger of suggesting that roads and bridges, “aren’t a priority.”


“I don’t want to wait until a school bus full of school children goes through a bridge and into a river to do something about it. I want to be proactive.”


In federal and state dollars, PennDOT currently spends about $6 billion a year.

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Liquor Industry News 5-30-13

May 30, 2013

Franklin Liquors


Thursday May 30th

TGI Fridays operator faces class-action suit for alleged alcohol-swapping scheme in N.J.



Brent Johnson / The Star-Ledger

May 29, 2013


Two Monmouth County women say it’s time for the nation’s leading operator of TGI Fridays to pony up.


Kristi Pasieka and Nicole E. Ruglio filed a class-action lawsuit last Friday in Mercer County Superior Court accusing 13 of the chain restaurant’s New Jersey locations of serving customers less-expensive liquor disguised as top-shelf brands.


“Being that it was spread over multiple stores, it clearly was a common policy,” Stephen DeNittis of Marlton, a lawyer for the two women, said today. “I don’t think it was a mistake.”


The class-action suit, brought “on behalf of New Jersey consumers,” is the latest development in what the New Jersey Division of Alcohol Beverage Control has labeled “Operation Swill,” a year-long investigation that last week accused 29 bars and restaurants across the state of practicing similar switches at the hands of unwitting drinkers.


The sweep by state agents included 13 TGI Fridays operated by the Briad Group, a Livingston-based hospitality company that runs 70 TGI Fridays nationwide. In all, Briad operates 16 of the restaurants in New Jersey.


The lawsuit claims that Briad instituted “a uniform policy” to “substitute cut-rate liquor” for premium brands to inflate profits over at least the last year, which violates the New Jersey Consumer Fraud Act.


DeNittis said Pasieka and Ruglio were both suspicious of drinks they had ordered at a TGI Fridays in Hamilton.


“One of them had a couple of Grey Goose vodkas,” DeNittis said. “She thought they tasted funny. But she thought, ‘Maybe it’s just me today.'”


Then, the attorney said, the women notified his firm after hearing of the state’s sting operation.


“These people didn’t get what they ordered,” DeNittis said. “It’s classic consumer fraud.”


The suit seeks refunds for customers in addition to three times the price of each drink in punitive damages, DeNittis said.


Pasieka and Ruglio could not be reached for comment today.


Rick Barbrick, the president of Briad, said today the company hasn’t review the complaint yet and “therefore are not clear on its merits.”


“However, we reiterate our ongoing mission to treat all of our patrons honestly and fairly and will continue to do what is right to fulfill that mission,” Barbrick said in a statement. “We have already begun our own investigation to learn if any of the reported allegations are accurate. Based on what we learn, we will take the steps needed to correct any issues that are identified.”


TGI Fridays declined to comment on the lawsuit today.


The chain’s corporate office n Texas issued a statement last week saying it had “zero tolerance for actions that undermine the trust of our guests and call into question the reputation we have built up over the past 48 years.”


The state ABC and Attorney General’s Office said last week they were still testing 1,000 bottles of alcohol collected from the 29 places. If found to have violated state law, the bars and restaurants could have their liquor licenses suspended or revoked.


Officials said no criminal charges had been filed.


The TGI Fridays accused are situated in Clifton, East Hanover, East Windsor, Freehold, Hamilton, Hazlet, Linden, Marlboro, North Brunswick, Old Bridge, Piscataway, Springfield, and West Orange.




Suntory set to raise $4.7bn in soft drinks IPO (Additional Coverage)


Source: FT

By Ben McLannahan in Tokyo

May 29th


Suntory Holdings is set to raise up to Y476bn by selling shares in its non-alcoholic drinks business, in what would be the biggest initial public offering on the world’s hottest main equity market this year.


The Japanese group was on Wednesday cleared for the listing of Suntory Beverage & Food (SB&F), best known outside Japan for its Orangina Schweppes business, on the Tokyo Stock Exchange.


Offering shares in the business would realise a long-held ambition for Suntory Holdings, Japan’s number two drinks company by market share, which sharpened its focus on soft drinks after failing to pull off a merger three years ago with its domestic rival, Kirin Holdings.


Nobutada Saji, chairman and president, recently told the Nikkei newspaper that the bulk of the proceeds from the IPO would go towards deals overseas, with an emphasis on southeast Asia.


Pricing will be finalised on June 24, Suntory said, with shares beginning to trade on July 3. At the indicative price of Y3,800 a share, an offering of the maximum 125.2m shares would raise Y476bn ($4.7bn). With its parent holding on to a 59.5 per cent stake, SB&F could rank among the world’s top 20 drinks groups by market capitalisation, on a par with Asahi Group Holdings.


Bankers said the offering – the largest in Tokyo since the return of Japan Airlines from bankruptcy last September – should provide another shot in the arm for a domestic market reinvigorated by the growth-friendly policies of Shinzo Abe, prime minister.


Japan’s Nikkei 225 stock average has risen 52 per cent over the past six months, beaten only by Venezuela and Ghana, as investors have bet that Mr Abe’s aggressive mix of fiscal and monetary stimulus will lift profits at the nation’s biggest companies.


The SB&F IPO comes as Japan’s drinks groups seek to diversify from their historic dependence on selling beer to the domestic market, where the outlook has been depressed by shifting tastes and an ageing population. Last year, for example, Japan’s brewers shipped 220m cans of beer, down 36 per cent from a decade earlier.


In 2009 Suntory bought France-based Orangina Schweppes for ?2.6bn and the Frucor energy drink group in Oceania for ?600m. Last year the group’s overseas sales ratio was 21 per cent – short of Kirin’s 30 per cent ratio, with its rival having spent Y1tn on foreign deals between 2007 and 2010.


Tokyo has seen a steady flow of new listings this year, as companies have rushed to tap the rapidly rising market. Thursday sees the Y120bn debut of Jin Co, a retailer of eyewear, which becomes the 26th company to list shares in 2013.


Japan accounts for less than $20bn of the $44bn raised in IPOs and follow-on issues across Asia so far this year, according to Bloomberg.


Nomura, Morgan Stanley and JPMorgan were named as joint global co-ordinators for the SB&F deal.


Shares in Asahi and Kirin lagged behind a rising market on Wednesday as consumer-focused investors reset portfolios to take account of more supply.




Suntory: dealmakers drink up


Both investors and Japanese drinks company must be careful not to overpay


Source: FT Lex

May 29th


Ask old hands in Asia’s moveable feast of food and drink deals and there is one maxim they hold to: Japanese companies always overpay. If Suntory, which plans to list its non-alcoholic drinks business in July to raise funds for overseas deals, holds true to form, there will be some happy dealmakers and soft drinks owners. Just as well, then, that it may face constraints.


Since the Japanese group first mooted its plans last year, its peers have collectively rallied by two-fifths. That should be good for the IPO’s pricing. Encouragingly, too, share prices relative to book value have risen by a third – but only by a tenth versus expected earnings – suggesting a reassessment of the sector’s value rather than overly optimistic estimates of future sales. As for Suntory’s spending power, credit is seductively cheap. But the yen’s one-sixth decline against the dollar in those five months will at least curb the company’s cash-splashing freedom.


Japanese drinks companies have spent more than Y1tn ($10bn) overseas in the past six years – including Suntory’s purchase of Orangina Schweppes and Frucor. But there are signs that they may be learning to control their thirst. Kirin, which netted about Y50bn profit from selling its 15 per cent in Fraser and Neave to Thai Beverage in February, has since announced a similarly-sized buyback plan. Suntory executives, too, have said they will walk if deals are too pricey.


Fans of Suntory’s Japanese whiskies will be disappointed that the listing will include only its food and soft drinks unit, worth about three-fifths of sales. Lovers of Lost in Translation will have to hold the jokes for now. There are few details of the float size or price yet. But this is likely to be Tokyo’s biggest deal of the year, so will attract plenty of interest. Over to investors, then, to make sure they do not overpay.




PERNOD RICARD (+)  China: short-term pause, medium-term gain


Source: Exane BNP

May 29th


TP: EUR109 . Upside: 14%

Beverages (-) . France . Price (28 May. 13): EUR95.2


Pernod Ricard hosted an Asia CMD event in Beijing on 28-29 May

The CMD was hosted by the Pernod Ricard Asia and China teams. The key speakers included incoming CEO Alexandre Ricard and regional managers.


China still expected to see strong growth given the size of the incremental consumer base

Pernod confirmed that the Chinese imported spirits market has seen a deceleration (impacted by the general slowdown in the economy post-leadership change). Yet the presentations strongly supported the view that the medium-term opportunity remains immense. The group will need to manage through the current cyclical slowdown, but if the number of MACs (Medium Class and Affluent Consumers) does indeed grow to 400m (from 200m) by 2020 as projected, the sheer size of the incremental consumer base over the coming 6-7 years will ensure continued rapid growth. Pernod believes this supports its view it can sustainably deliver high single-digit to double-digit growth in net sales in China. We agree this is fundamentally possible even in a more subdued economic environment.


Pernod unveiled some bold targets for Asia

In China, the group targets to grow its market share by at least 3 percentage points (to more than 50% share of imported spirits) over the next few years and deliver double-digit growth in operating profit. In India, the target is the same for both market share and profit growth. For Asia overall, Pernod targets to grow its share of the spirits market to more than 40% by 2015 (+5 percentage points versus 2012) and to deliver double-digit operating profit growth sustainably.


The track record in Asia has been remarkable

The CMD event served to highlight the Asia division’s impressive performance over the past decade (2002-12). In China, sales have increased 27x and profit by 50x; in India, sales have risen by 7x and profit by 11x; and in Korea, sales have climbed 7x and profit 7x. Overall, since the acquisition of Seagram’s Asian business back in 2002, Pernod Ricard’s Asia sales have risen 7x and business profit increased 10x, to EUR1bn.




Concerns over rum subsidies


Source: Trinidad Express

By Carla Bridglal

May 28, 2013


Rum was on the agenda for Caricom leaders as they used yesterday’s visit by United States Vice-President Joe Biden to Trinidad and Tobago to highlight concerns about the impact of US rum subsidies to Puerto Rico and the US Virgin Islands.


“The most contentious issue is rum subsidies to Puerto Rico and the US Virgin Islands. We don’t expect (Biden) to make a decision today but we expect to let him know the whole position and the full ramifications of continuing those subsidies and that it will clearly affect rum production,” Trade Minister Vasant Bharath said yesterday.


The US has  been running a “Rum Cover-Over Programme” since 1917, which consists of a tax levied on sales of spirits in the US market.


Most of this revenue is transferred to the US Virgin Islands and Puerto Rico-US dependencies-to aid these territories’ economic development.


These islands, however, use much of these funds to encourage their local rum industries, at the expense of other Caribbean rum-producing countries.


Caricom has since considered taking the matter to the World Trade Organisation.


Bharath was speaking at a discussion on the Logistics Performance Index report on Trinidad and Tobago at the Arthur Lok Jack Graduate School of Business, Mt Hope.




Diageo Applauds the Alcohol Tax and Trade Bureau (TTB) For Approving Serving Fact Information on Beer, Wine and Distilled Spirits Containers


A Victory for Public Health and American Consumers Who, After a Decade-Long Wait, Finally Get Basic Serving Fact Information


Source: PR Newswire

Press Release: Diageo

May 29th


The following statement is for attribution to Guy L. Smith, Executive Vice President, Diageo North America:


“Almost ten years ago – in December 2003 – Diageo led the industry when it stood with a coalition of consumer and public health advocates to publicly call on US regulators to allow Serving Fact information to be displayed on beverage alcohol products.  Today, we are proud to celebrate a victory on behalf of the American public.  The Alcohol Tax and Trade Bureau (TTB) granted the industry permission late yesterday to voluntarily label our beer, wine and spirits products with the serving size, number of servings per container, alcohol per serving, number of calories, and number of grams of carbohydrates, protein and fat per serving.


“While there is still work to be done, this action by TTB, coupled with a recent FTC ruling on labeling, is a stunning leap forward for consumers who have a clear right to know what is in their drink.  It is important to note that prior to this ruling by the TTB, It was illegal for an alcohol manufacturer to list these basic serving facts about alcohol products on the packaging.  Simply put, this common-sense ruling will allow us to bring our products in line with all other consumable products that include Serving Fact information on all of their labels.  This information is important in helping consumers make informed and responsible decisions.


“We want to acknowledge the more than 70 consumer and public health groups that stood with us in support of labeling in 2003, and specifically mention the National Consumers League and the Center for Science in the Public Interest who supported this important initiative from the very first days.  We are proud that today is the day when we can finally say: Consumers wanted it, common sense demanded it, and Diageo fought for it.”




Move over tequila, here comes Chinese firewater


Source: Reuters

By Pete Sweeney

May 29th


Chinese baijiu, a flammable, pungent white liquor averaging a 110-proof wallop, is the world’s most consumed form of liquor thanks to its popularity in China, but for the first time distillers are looking to develop export markets.


According to data from International Wine & Spirit Research, Chinese people drank over 11 billion liters of baijiu in 2012; the spirit, distilled from sorghum, wheat or rice, accounted for more than one-third of all spirits consumed in the world.


But as a new generation of Chinese drinkers discovers the imported spirits that were unavailable to their parents, baijiu risks losing that market share unless it creates new markets overseas.


“Baijiu hasn’t been marketed to the West yet but I think it can be,” said James Rice, managing director of Sichuan Swellfun Co Ltd, a baijiu maker in Chengdu, western China, in which London-based beverage multinational Diageo has taken a sizeable stake.


“People are interested in China and here’s a piece of Chinese culture that can go right to your dinner table.”


The opportunity has also attracted small entrepreneurs like David Zhou, who founded Washington-based Everest Distillery to import a Chinese baijiu and rebrand it for sale locally.


“We really want to go for mainstream U.S. consumers and we do believe they can accept it.”


But Rice, and other distillers, have to deal with a major challenge: baijiu tends to make a terrible first impression.


“I thought it tasted like paint-thinner and felt like a liquid lobotomy,” said Michael Pareles, manager at the U.S. Meat Export Federation in Beijing. “However, like many other things in China, I eventually grew to like it.”


Torsten Stocker, head of Greater China consumer practice at Monitor Group in Hong Kong, was skeptical about prospects for overseas expansion.


But he suggested the liquor could be better distributed to the swelling overseas Chinese community, which now depends on duty-free stores in airports to stay stocked.


Baijiu’s punch makes it a tough sell in Western bar culture where people drink on an empty stomach. So does its fuel-like odor and its aftertaste. But the history of alcoholic beverages shows that nearly any taste can be acquired.


“Tequila has a very unusual flavor compared to more popular spirits,” said Derek Sandhaus, industry consultant and author of a forthcoming book on baijiu appreciation.


“But through clever marketing, good cocktails, and good management, it’s earned a place on the bar shelf. I see no reason why the world’s most popular spirit can’t do the same.”




But an adjustment is still probably necessary.


Matt Trusch, a former China resident, founded a distillery called Byejoe USA that imports baijiu base from China, then re-filters it to make it more drinkable.


“We’ve made it much more palatable to American tastes.”


Vinn Distilleries in Portland, Oregon, founded by a family of ethnic Chinese immigrants from Vietnam, is reproducing a generation-old baijiu recipe, and Vinn president Michelle Ly has marketed it – in very small volumes – to non-Chinese consumers.


Curiously enough, she said a group of investors had approached her with an idea to export her U.S.-made baijiu back to China, advertising it as a product of high quality control – an issue domestic baijiu brands have struggled with.


Baijiu expert Sandhaus thinks the best avenue for developing drinkers overseas is to follow the model of Japanese sake and market baijiu as the alcohol to drink with Chinese food. But he added that there is no need for distillers to rush.


“It will still be a very long time before baijiu stops being a very lucrative business in China.”




Boricuas Slam Coors For Using Puerto Rico’s Flag On Beer Cans


Source: Fox News Latino

May 28, 2013


Boricuas are “insulted” by the use of their flag on beer cans.


As companies gear up for the annual Puerto Rican Day Parade in New York City, one grassroots group is not happy with one beer giant’s marketing campaign.


According to Latino Rebels, “Boricuas for a Positive Image” have formally asked the company MillerCoors to stop distribution of a special Coors Light beer can which dons an image of the Puerto Rican flag.


In a statement released last week, the New York based community group said: “We believe Coors has insulted the Puerto Rican community by using this promotion before the parade.”


The activist group further noted that other Puerto Rican organizations, elected officials, activists, and neighborhood groups asked that “Coors, Inc. cease distributing a promotional beer can with the symbol of the Puerto Rican flag.”


One of the group’s members, Lucky Rivera, said that the beer can is “an insult to our culture, history, and flag. We will not allow Coors to insult us.”


If Coors chooses to not comply with their demands, the group warned it will plan protests and demonstrations.


Along with contacting Coors directly, the group has also sent a letter to Simon Bergson of Manhattan Beer Distributors asking that he “immediately stop manufacturing and/or distributing your offensive promotion.”


The group is also disappointed that the marketing agent of the parade, which will be held in Manhattan June 9, has “more interest in profit than in portraying a positive image.”


As the “Boricuas for a Positive Image” voice their concern at a corporate level, The National Institute for Latino Policy said some of the blame must also be placed on the parade’s board of directors.


“It seems like the leadership of the National Puerto Rican Day Parade just can’t help themselves!”


The group further noted: “The cry is going out on the need to hold the board of directors of the Parade accountable.”


Given that the National Institute of Alcohol Abuse and Alcoholism has found that Puerto Ricans have one of the highest rates of alcohol dependence in the Latino community, it is “surprising to many in the Puerto Rican community that the Parade leadership would allow the Puerto Rican flag to be displayed this year on a beer can.”


The policy institute also said in light of the theme for this year’s parade being Salud — Celebrating Your Health, the choice of sponsorship is even more egregious.


“So, in this case, they must be using ‘salud’ as drinkers do,’¡Salud!’ and not as a public health message.”


The move has left many scratching their heads.


“The Board and many other volunteers of the Parade work hard every year to pull off this unique and high profile event, why would they want to tarnish their efforts in this way?”


Coors and the parade’s board of directors have yet to comment on the issue.




The Real McCoy Rum from Barbados Becomes RUM FOR ALL’s Newest Member!


Source: Spirit Journal, Inc./RUM FOR ALL

May 29, 2013


Rum For All continues to expand as The Real McCoy, a new Rum from Barbados, becomes the initiative’s newest member. The Real McCoy is named after the pioneer Rum Runner of the Prohibition era, Bill McCoy, who fuelled the Roaring Twenties by supplying New York’s speakeasies with his famous uncut Rum that earned him the moniker, The Real McCoy. To bolster the name, The Real McCoy recently scored a 92/EXCELLENT-Highly Recommended rating at Ultimate Spirits Challenge 2013 and a silver medal at the American Distilling Institute Artisan Spirits competition in Denver, CO.


Said co-director and spirits authority Sean Ludford, editor of, “Paul, Sue and I warmly welcome The Real McCoy to the Rum For All advocacy initiative. These forward-thinking Rum producers get the Rum For All educational message of ‘The rising tide lifts all the boats’. Maybe in this case, we’re talking Rum running schooners. Together, the RFA members affirm Rum For All’s unifying, proactive theme of media, trade, and consumer education about this great spirit.”


Added co-founder of The Real McCoy Sean Heyniger, “We are honored to become members of Rum For All because we’ve been telling our staff that we are not just in the Rum business, we’re also in the education business. Our award-winning The Real McCoy Rum delivers exactly what the name says – only the best, unadulterated, finest quality Rum. It really is The Real McCoy and, as such, we’re proud to share it with Rum For All.”


The current Rum For All Members are:

. 10 Cane, Trinidad

. Appleton Estate, Jamaica

. Bacardi, Puerto Rico

. Banks Rums, West Indies

. Brugal, Dominican Republic

. Cruzan, Virgin Islands

. Depaz, Martinique

. Diplomatico, Venezuela

. Don Q, Puerto Rico

. Mount Gay, Barbados

. Ron Abuelo, Panama

. Shellback, Barbados

. The Real McCoy, Barbados


After highly successful events across the continent in 2012 and so far this year in New York and Chicago, Rum For All is conducting major media and trade educational programs in Denver, CO, Kansas City, MO, Washington DC, Boston, MA and more cities in 2013.




Bordeaux 2012: Mouton tops Sotheby’s en primeur list


Source: Decanter

by Richard Woodard

Wednesday 29 May 2013


Chateau Mouton Rothschild was the ‘clear winner’ of the Bordeaux 2012 en primeur campaign, according to a league table released by Sotheby’s Wine Retail in the US.


The top 10, ranked in order of total value of each wine sold by Sotheby’s New York office, includes four out of the five First Growths – Latour having withdrawn from the en primeur system – as well as Right Bank luminaries Cheval Blanc and Ausone.


But more keenly priced châteaux, such as Palmer and Pichon Baron, also make the list, which was drawn up after just over a month’s en primeur trading, but before Sotheby’s had taken delivery of its allocation of Pétrus.


Sotheby’s Wine president and CEO Jamie Ritchie said Mouton had been a clear winner ‘by a significantly large margin’, and added: ‘Congratulations to Baroness Philippine [de Rothschild], [winemaking director] Philippe Dhalluin and the whole Mouton team for making a terrific wine and pricing it very sensibly.’


The top 10, with price per six-bottle case and change on 2011 pricing:


1: Mouton Rothschild (US$2,244, down 30% on 2011)

2: Margaux ($2,244, down 31%)

3: Lafite Rothschild ($3,174, down 22%)

4: Mission Haut-Brion ($1,398, down 28%)

5: Cheval Blanc ($2,814, down 28%)

6: Palmer ($1,374, down 5%)

7: Ausone ($3,450, down 23%)

8: Lynch Bages ($570, down 10%)

9: Haut-Brion ($2,244, down 30%)

10: Pichon Baron ($600, down 7%)




Hansen Chinese Cabernet priced at ?500


Source: Decanter

by Richard Woodard

Wednesday 29 May 2013


Chinese winery Chateau Hansen, based on the edge of the Gobi Desert, is set to sell a new icon wine for ?500 a bottle in its home market.


Hansen, based in Wuhai, Inner Mongolia, is poised to release the new wine, a single varietal Cabernet Sauvignon called Red Camel, this summer.


Up to 10,000 bottles of Red Camel will be produced, sourced from a single parcel of vines in organic vineyards in the neighbouring region of Ningxia.


The grapes are harvested in two waves: the first batch, making up about two-thirds of the blend, when the grapes reach about 12% alcohol; and the second very late, when the vines are bare and the grapes are beginning to shrivel.


The wine is matured for two years or so in 100% new French oak under the supervision of winemaker Bruno Paumard, sommelier, author and former winemaker at Bouvet-Ladubay in the Loire Valley.


Château Hansen is based in an area of Inner Mongolia more renowned for coal-mining than winemaking, but is close to the winegrowing regions of Ningxia and Gansu province.


Hansen’s production – wines include Cabernet Gernischt, Semillon and Riesling – has reached 2m bottles, with the vast majority of sales in its home market of China.




Top Australian winery


Source: Barossa Herald

May 29, 2013


Château Tanunda has been awarded a top honour at the 2013 Berlin Wine Trophy for the third time.


Last Friday, the Five Red Star winery was awarded Australian Wine Producer of the Year at one of the biggest international wine competitions in Europe.


Not a winery to shy away from the gold,  the prestigious winery also won a Premium Gold Medal Best Red Wine over 20 euros and Best Dry Red Wine of the show for The Château’s 100 Year Old Vines Shiraz 2010. The 2009 vintage won the same awards at the 2012 Berlin Wine Trophy.


Château Tanunda proprietor John Geber said he was absolutely thrilled about winning such high profile awards.


“The growing critical acclaim on three continents makes me very proud and is a tribute to the team behind the growing and making of our wine,” Mr Geber said.


“I am delighted that our delicious old vine wines from the ‘New World’ are consistently winning such coveted awards in the ‘Old World’.


“I am not aware of any other winery that can beat our recent track record which truly reflects the best of both worlds.”


Over the years the Barossa Valley has built a name for itself as the home to premium wines and in recent months it has become very evident world wide that the Barossa is home to outstanding premium wines.


Grange has wowed judges in the United States, Thorn-Clarke Wines took out the title of Best Australian Shiraz in London and now Château Tanunda has brought home more gold for the iconic region from Berlin for their 100 Year Old Vines Shiraz 2010.


“No one has ever won Australian Wine Producer of the Year three times, at the Berlin Wine Trophy,” Mr Geber said.


“The award shows our consistency in making premium wines.


“It is great for the Barossa and great for Australia,” Mr Geber said about all of the wineries receiving recognition for their great wines from international wine bodies.


In addition to the international awards won by Château Tanunda  the winery has been accredited with a 5 Red Star Winery rating by James Halliday Australian Wine Companion 2013.




Wine estate in receivership and for sale


Source: NZ Herald

By Vaimoana Tapaleao, Morgan Tait

May 30, 2013


A winery estate with a capital value of $2.3 million is for sale after being placed in receivership.


The popular Ascension Wine Estate in Matakana, north of Auckland, was established by Darryl Soljan and his wife, Bridget, in 1994.


The property, well known as a classy venue for weddings, business functions, music concerts and festivals, was initially marketed for sale in the middle of last year but was placed in receivership this month.


The land and buildings, with a capital value of $2,318,000, is being advertised by Bayleys Real Estate. Tenders close on June 27.


Agent Scott Kirk said the land, buildings, hospitality business and winery/vineyard assets were all being marketed for sale but the business was still running for the time being.


“To all intents and purposes, the business is running as usual and is being sold with a substantial number of corporate and private function bookings already confirmed throughout the year and right up until Christmas and beyond,” Mr Kirk said.


“A number of concert acts are also scheduled to perform at Ascension throughout the second half of 2013 and the receiver’s expectations are that those dates will be honoured should a new owner look to buy the business with that intention.”


The 7.56ha vineyard, winery and function centre is known for its summer concerts including this year’s Classic Hits Winery Tour, the Hollies, Fat Freddy’s Drop, and Shapeshifter.


High-profile guests include some from international software company Microsoft.


Receiver Andrew McKay of Corporate Finance was unavailable for comment yesterday.


Directors John Bulog and Russell Hay did not want to comment on the situation, referring all calls to Mr Soljan; he did not return the calls.


The Soljans developed the estate in a bid to make their own way in the wine world from the family’s established West Auckland estate.


Mr Soljan spoke to the Herald Business magazine in 2011 about the Ascension, which at the time employed 28 fulltime-equivalent staff.


Visitors to the vineyard topped 50,000 the same year and Mr Soljan spoke of his responsibility to the micro-economy of the Matakana community.


Up for grabs

* 7.6ha of land on Matakana Rd, Auckland.

* 710sq m air-conditioned function centre to host up to 300 guests.

* VIP dining room.

* Several hundred thousand dollars of wine stock from previous vintages including this year’s harvest.

* Small winemaker’s cottage.




Patrón Spirits Appoints Dave Wilson President, International and Global Chief Operating Officer


Source: Patron Spirits

May 29th


Patrón Spirits, one of the fastest-growing companies in the global beverage alcohol industry, announces that Dave Wilson has joined the company as President of its international operations and Global Chief Operating Officer, effective June 10. Reporting to President and Chief Executive Officer Ed Brown, Dave will be responsible for the day-to-day worldwide operations and management of the company.


Dave joins Patrón Spirits from Brandmuscle (Centiv) where for the past seven years he has served as President of the company’s beverage alcohol group. Dave began his 33-year career in the spirits industry at Joseph E. Seagram & Sons, where he held various positions in production, finance, and sales and marketing management. After Seagram, Dave spent nine years in executive roles at National Wine and Spirits, and at Southern Wine & Spirits.


“Dave’s tremendous experience and leadership will help us grow the future of this company and our brands, and I’m thrilled that he is joining our team,” said Brown.


“On a personal note, I’ve been very fortunate to work with Dave in the past, and I’m excited that our paths cross once again!”


Added Wilson, “I am sincerely honored to be joining Patrón Spirits, and I appreciate the opportunity, challenge, and confidence that Ed Brown has presented. I am excited to get started, and to meet with our employees and partners throughout the world. This is a great company and I am proud to be associated with this management team, and representing these iconic brands.”




Santa Barbara Winery Lures Napa Valley Talent


Winemaker Adam Henkel Leaves Iconic Napa Valley Winery for Crown Point Vineyards.


Source: Gemini Consulting

May 30th


Today Crown Point Vineyards has announced the appointment of Adam Henkel as the winemaker for the newly established winery located in the Happy Canyon of Santa Barbara AVA.  Henkel comes to Crown Point after eight vintages at the venerable Harlan Estate Winery in the Napa Valley. As an integral part of the winemaking team at Harlan Estate, Henkel was responsible for executing the direction set by accomplished industry veterans Cory Empting, Bob Levy and Michel Rolland.  Henkel became known for producing profound, character-driven wines for the esteemed family of brands.


“This is the perfect opportunity for me,” says Henkel of the move to Crown Point. “It’s exciting to be at the helm of a young Cabernet driven winery in the quickly rising Happy Canyon.” The region, a bucolic valley of horse ranches and hillside vineyards, boasts a unique microclimate and serpentine soils rich with minerals. The combination concentrates the flavors of the grapes and enables the vineyards to produce exceptional and unique varietals. “It’s a winemaker’s paradise,” adds Henkel. “The access we have to amazing fruit from both warm and cool climates is truly incredible.”




NBWA’s Rebecca Spicer Recognized as Rising Star by American Society of Association Executives


Source: NBWA

May 29th


National Beer Wholesalers Association (NBWA) Vice President of Communications & Public Affairs Rebecca Spicer received the Rising Star Award from the American Society of Association Executives (ASAE) today. The Rising Star Award recognizes a young professional in the association sphere who is truly “one to watch” because of her contributions to the association profession and promise of future leadership. Spicer was honored today at the American Society of Association Executives (ASAE) In Honor of Women luncheon event in Washington, D.C.


“We at NBWA have known of Rebecca’s leadership and service for several years. It is great to see her recognized by colleagues and the association community as well,” said NBWA President & CEO Craig Purser. “She makes the association industry stronger through her hard work, dedication and promise for the future. She gives back to the community in countless ways, always working to advance her organization’s interest while helping others.”


Before joining NBWA in 2007, Spicer served in the White House as Associate Director of Communications. She also spent 12 years in television news, most recently at WJLA-TV in Washington, D.C., where she received the Outstanding Newscast Award from the Associated Press; the Outstanding Continuing Coverage Award from the Associated Press for coverage of the 2002 sniper shootings in the Washington, D.C., region; and an Emmy Award nomination for Outstanding News Program for coverage of the terror attacks on September 11, 2001.


Spicer also worked at KTRK in Houston, Texas; WTNH in New Haven, Connecticut; WVTM in Birmingham, Alabama; and CNN in Atlanta, Georgia. She began her career as a high school intern helping with “Snow Bird” school cancellations at WSMV in her hometown of Nashville, Tennessee.


Spicer is a graduate of the University of the South in Sewanee, Tennessee, where she has served on the Board of Trustees and as reunion chair. Spicer also holds a degree in Telecommunications from Indiana University in Bloomington, Indiana.


Additionally, she serves on the National Advisory Council for the Harpeth Hall School in Nashville, Tennessee, and on the Salvation Army Advisory Board of the National Capital Region.




Australia: Coles trials ‘big box’ liquor store format


Source: SMH

Eli Greenblat

May 29th


Coles is trialling a range of new formats for its underperforming liquor businesses unit, comprising the 1st Choice, Liquorland and Vintage Cellars groups, including a warehouse-style model to better compete against big-box market leader Dan Murphy’s.


The supermarket chain, owned by Perth-based conglomerate Wesfarmers, has opened a ”Liquorland Warehouse” in Sydney that is two to three times larger than the usual Liquorland format and offers a wider variety of wines, beers and other alcoholic beverages.


Situated in Sans Souci, south of Sydney, the Liquorland Warehouse will use its larger buying power to offer lower prices to customers.


”Liquorland Warehouse in Sans Souci has been developed as a trial store that will provide us with an active retail space to test new innovation in liquor retailing,” A Coles spokesman told BusinessDay. ”The opening of this store saw hundreds of customers experience the new format and we will continue to test and listen to customers to ensure we continue to evolve this site in line with what our customers want.”



The spokesman said the Liquorland Warehouse concept sat somewhere between a normal Liquorland and a larger 1st Choice store. It had more refrigeration and a bigger range than a traditional Liquorland.


The warehouse format trial, which began last week, is part of a wider strategy by Coles to improve its liquor operation, which has remained stubbornly behind the pace of rival Woolworths and its Dan Murphy’s stores for at least five years.


It is a problem that Wesfarmers boss Richard Goyder has highlighted in a number of sales and profit updates over the past year for acting as a drag on the turnaround of the Coles supermarket group and its sales momentum.




Indiana: Reject heated argument over cold beer



By Doug Ross

May 30, 2013


The convenience store industry, having been thwarted repeatedly in its lobbying efforts, is asking the courts to change state law restricting the sales of cold beer to package liquor stores. This is a restriction that should remain in place.


The Indiana General Assembly has been whittling away at the alcohol laws that favor package liquor stores over supermarkets, convenience stores and other retail establishments that sell alcoholic beverages for carry-out.


One remaining restriction, though, is on sales of cold beer.


Indiana is the only state that gives liquor stores a monopoly on retail cold beer sales. And with liquor stores closed on Sundays, people who want cold beer need to plan ahead or slip across the state line.


In its lawsuit filed earlier this month, the Indiana Petroleum Marketers and Convenience Store Association claims the restriction on cold beer sales violates the equal protection guarantees of both the U.S. and Indiana constitutions.


If that’s the case, why should Indiana have any alcohol sales restrictions at all? There’s a very good reason, one that risks being forgotten in the march of time since the end of Prohibition.


Homer Simpson’s line, “To alcohol! The cause of … and solution to … all of life’s problems,” is worth remembering because it rings so true. People who drink to drown their sorrows often learn too late that their drinking causes even more sorrows.


Alcohol fuels all sorts of bad behavior, and the ready availability of cold beer could fan those flames.


Indiana, like other states, put laws in place to restrict the sales of alcohol because consumption can be dangerous under certain circumstances. In the case of cold beer, that includes ready availability for motorists to consume as soon as they leave the store.


Making cold beer readily available at convenience stores and supermarkets would greatly increase its availability, and thus the likelihood of the beer getting in to the wrong hands.


This is a restriction that should remain in place. Existing Indiana law should be upheld.




Ohio: Ohio Lawmakers Shield Liquor Deal Money from Audit


Source: The Associated Press

Wednesday, May 29, 2013


House Republicans fast-tracked a measure Wednesday shielding proceeds of JobsOhio’s $1.5 billion liquor deal from public audit, over the objections of the Republican state auditor and legislative Democrats.


The move followed a high-profile faceoff this spring between JobsOhio, which is Gov. John Kasich’s private nonprofit job-creation office, and Ohio Auditor Dave Yost, a fellow Republican.


Yost sent a representative to the Statehouse on Wednesday to ask lawmakers to delay the provision, but he failed to stop it from clearing a midday committee vote and the House floor, by a 61-34 vote, a few hours later.


The amendment explicitly limits Yost’s authority to auditing JobsOhio’s public funds, and clarifies that proceeds from the sale of bonds backed by state liquor proceeds for the next 25 years are not public funds but private ones.


Democrats strenuously contested the move, saying it would allow secret dealings by the job-creation office that’s been the subject of legal and political disagreements since its creation in 2011.


Democratic state Rep. Connie Pillich, of suburban Cincinnati, said Ohioans are “clamoring for transparency and for accountability” in government.


“At a time when public trust in government seems to be at an all-time low, this measure is launched almost in the middle of the night and it shrouds public dollars in secrecy,” she said. “What are you hiding?”


Republican state Rep. Ron Hood said, “The people are clamoring, I agree, but they’re clamoring for jobs.”


He agreed with fellow Republicans who said allowing the state auditor into the private books of JobsOhio and other nonprofit corporations that spend public money – including the Cleveland Clinic or Ohio State University – would compromise Ohio’s economic prospects.


Amid Yost’s state audit of JobsOhio, JobsOhio volunteered its public financial records but declined to produce documentation of his private finances – including income, private donations, and spending.


Yost ultimately subpoenaed the records and JobsOhio turned them over in protest.


Kasich’s office said the House provision clears up confusion.


“The uncertainty that’s been raised about the Legislature’s intent created a lot of unease in the economic development community, as well as in higher education, so it’s helpful across many fronts to get this resolved,” spokesman Rob Nichols said.


JobsOhio spokeswoman Laura Jones said the move “not only helps JobsOhio know how to move forward but it’s also critically important for the job creators who use economic development incentives to grow and expand in Ohio.”


Brian Rothenberg, executive director of the liberal think tank ProgressOhio, said the public has the right to know how JobsOhio is spending its money. ProgressOhio is among parties challenging the constitutionality of its funding mechanism in court.


“Once again Kasich’s chosen the concerns of corporate contributors over the red flags raised by our state auditor,” Rothenberg said in a statement. “This bill is plainly contrary to anyone’s idea of good governance, which is why it is being hurried through without any review or scrutiny.”




United Kingdom: Carling workers vote in favour of strikes


Source: the drinks business

by Andy Young

29th May, 2013


Employees at the Molson Coors brewery in Burton-on-Trent have voted in favour of strike action, in a dispute over pay and conditions.


Carling breweryThe Unite union said its members at the brewery voted by a margin of 97% in favour of strike action, although no dates have yet been set for the strikes, to allow talks to continue.


Unite said that the dispute “centres on the 455-strong workforce at the brewery being sacked after 10 June and reemployed on inferior pay and conditions.”


Unite regional officer Rick Coyle said: “The overwhelming vote in favour of strike action shows the strength of feeling at the way the company has behaved towards its loyal workforce.


“Talks are carrying on today (Wednesday). The management has engaged in a constructive dialogue and Unite is seeking a settlement that is fair to our members – and we are working very hard to achieve that end.


“Until these talks have concluded – and depending on the outcome – the union won’t be announcing any strike dates.”


A Molson Coors spokesman said: “Clearly we are disappointed by today’s announcement. However, this vote does not make strike action a certainty given that negotiations are ongoing.


“We continue our engagement in meaningful consultation with Unite and its members so that we come to a solution that supports a competitive future for Burton brewery and is fair to our employees.


“As a company we have strong contingency plans in place to ensure that we can fulfil our customers’ orders.


“The proposals we put to workers are part of tough decisions that we have taken across the whole business, which are necessary to ensure a sustainable future for Molson Coors in Burton.”


Unite has argued that Molson Coors is a profitable company, which benefited from George Osborne’s recent reduction in beer duty, and that there was no financial imperative for the proposed cuts.


The Burton plant produces Carling, Grolsch, Coors Lite and Cobra lagers, as well as beers including Worthington, White Shield and Stones.


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