Liquor Industry News 1-8-12



Bacardi purchases St-Germain liqueur


Already a popular ingredient among U.S. bartenders, Bacardi hopes to take the elderberry liqueur and expand its distribution worldwide.


Source: Miami Herald


Jan 7th


Bacardi Limited is going shopping again, adding another boutique spirit to its brand portfolio.


The Bermuda-based spirits giant, whose U.S. headquarters is in Coral Gables, will announce Tuesday that it has purchased St-Germain. The premium elderflower liqueur is one of the fastest-growing spirits brands in the United States and a favorite cocktail ingredient at trendy bars.


Bacardi is buying the brand from the Cooper Spirits Co., which is based in New York and also has an office in Palm Beach. Terms of the deal were not disclosed.


The acquisition continues Bacardi’s trend of focusing on the acquisition of super premium brands, including Bombay gin, Grey Goose vodka and most recently a stake in Patrón tequila.


“We, as a company, have a track record of nurturing new and up-and-coming brands,” said Robert Furniss-Roe, president of Bacardi North America, which is based in Coral Gables. “St-Germain is a great complement to our portfolio. We don’t have anything like it. We see a very long runway in front of St-Germain.”


Founder Robert Cooper said he wasn’t actively looking to sell but began having conversations with Bacardi Deputy Chairman Barry Kabalkin about the possibility. Ultimately, Cooper decided that selling to a larger international company would help foster St-Germain’s future growth.


Since its launch in the U.S. in 2007, St-Germain grew by more than 50 percent in 2011 to reach nearly 77,000 cases worldwide, according to IWSR, an industry data source. In 2012, that growth was expected to continue with a projected 100,000 cases in sales worldwide.


“As an independent I could still grow the brand, but I didn’t think I would have the same potential to reach consumers far and wide on an international scale,” said Cooper, 36, who is a third-generation distiller. His family created Chambord liqueur. “For me it’s as much about securing St-Germain’s future. Bacardi is in the best position to take what we’ve started and further build on that success.”


Cooper will not hold any ownership stake, but he will remain available as a consultant to Bacardi and the “brand protector” of St-Germain.


What Cooper wants to ensure is that St-Germain maintains its French hand-crafted, artisanal roots. The liqueur is made from elderflower blossoms hand-picked during a few weeks every spring in France. Only one batch is made annually.


The majority of St-Germain’s business is done in bars and restaurants, where many bartenders consider it one of their go-to ingredients. You’ll find cocktails with St-Germain on the menu everywhere from the Mandarin Oriental Hotel to BLT Steak and the Living Room at the W South Beach.


“It’s the best liqueur to come out in 75 years,” said John Lermayer, bartender at the Regent Cocktail Club at the Gale South Beach. “It goes well with everything. I’ve never seen anything as mixable since sugar. It goes just as well with rye whiskey as it does with Champagne.”


But some of Miami’s trend-setting bartenders like Gabe Ortega of the Broken Shaker in Miami Beach say they have moved away from using St-Germain.


“It has gotten so overused that it has lost its uniqueness,” Ortega said.


“Now it’s on everybody’s drink list.”




Treasury Wine bidding war could net more than $4bn


Source: The Australian

Blair Speedy

January 07, 2013


AUSTRALIA’S largest wine company could soon be in foreign hands, with institutional investors predicting Treasury Wine Estates — owner of some of the country’s most famous wine labels — is ripe for a takeover offer with a potential bidding war netting up to $4.2 billion.


And while global wine players would undoubtedly be interested in TWE’s portfolio of premium labels, including Penfolds, investors from China — the world’s fastest-growing wine market — are likely to lead the charge.


TWE was approached by US private equity firm Cerberus Capital in September 2010, before it had even been demerged from its former parent, brewing major Foster’s.


China’s Bright Food was also rumoured to have made an approach in 2011, just months after the spin-off from Foster’s had been completed.


But with the wine sector on the edge of a major recovery as global oversupply disappears and Chinese demand continues to surge, speculation is rife that a serious bidder for TWE will soon emerge.


“Whether it’s the next three months or the next three years, ultimately with that stable of brands, they’ll be attractive to a global player or the Chinese,” said Perpetual fund manager Matt Williams, whose company is TWE’s fourth-largest shareholder, with a 5.1 per cent stake.


“The market has recognised this also — TWE is not trading cheaply at over 20 times consensus earnings, so the market is not going to let it go for a song if a financial buyer turns up.”


Shares in TWE have risen as much as 67 per cent in the 19 months since the demerger, climbing from a debut price of $3.36 in May 2011 to a peak of $5.60 in September last year.


The stock has since lost some ground after warning in October that a slow start to the financial year would cut first-half earnings by up to 20 per cent, and closed at $4.71 on Friday, giving TWE a market capitalisation of $3.05bn.


Macquarie analyst Greg Dring has said TWE’s share price indicates the market expects “either a significant lift in earnings and/or a takeover” and has valued the company as high as $4.2bn in the event it hives off Penfolds into a separate company as part of a takeover defence.


The Chinese are certainly out there, having snapped up the Gemtree and Stonehaven wineries in South Australia and Ferngrove in Western Australia in the past 18 months.


John Geber, owner of Chateau Tanunda in South Australia’s Barossa Valley, said he was constantly being approached by Chinese investors wanting to buy him out, but dismissed rumours he was selling up.


“The Chinese guys have been looking around the Barossa with a couple of merchant banks and our name seems to be coming up all the time — you never say no, but it’s not what I want to do,” he said.


“It’s happening constantly — the Chinese want Barossa and iconic labels. I can’t believe how often we’re being approached, and they’re serious guys; they’re not tap-dancers.”


A number of Chinese investors also expressed interest in Nufarm chief Doug Rathbone’s Rathbone Wine Group, parent of wine labels Xanadu, Parker, Yering and Mount Langi Ghiran, which is close to settling on a sale to Australian wine group Hesketh for a price believed to be close to $10m.


Merrill Lynch analysts David Errington and Silvia Spadea have said the oversupply problems that dogged the Australian wine sector for the past seven years has disappeared as grape growers pulled out unprofitable vines, leaving a maximum capacity of about 1.6 million tonnes, all of which is needed to match current demand.


Meanwhile, demand from China is continuing to surge, with purchases of Australian wine up 16.3 per cent by volume and 23.1 per cent by value over the 12 months to the end of September.


Wine prices in the US, Australia’s biggest wine market in value terms, are now rising after more than a year of decline.


“New markets are opening up, and the supply of wine globally is tightening,” the analysts wrote in a briefing to clients.


“We believe that Treasury Wine Estates is in a unique situation, with the ability to materially increase its margin at the expense of the major retailers of the world.”


Brad King, portfolio manager at Armytage Private, said he had high expectations TWE would be taken over this year.


“The Chinese are the most likely, but the Europeans could still have a look at it because it has global brands and they might consider that their distribution networks could go into China better than TWE is doing now,” he said.


TWE chief David Dearie has markedly increased the company’s focus on the fast-growing Asian market for export sales, particularly China, adding sales staff and enhancing its marketing effort.


“David is over in Asia trying to spruik the wines, so they’re grooming the distribution and sales network, but if they could do the same thing through a takeover I think they’d consider it,” Mr King said.


However, neither fund manager thought it likely that TWE would hive off the flagship Penfolds brand as part of a takeover defence.


“I’m not sure how much the other assets are worth — if you look at Fairfax, you can see it’s not a good idea to hive off your best asset and leave a shell that is a lot less attractive,” Mr King said.


Mr Dring estimated Penfolds accounted for as much as 50 per cent of TWE’s pre-tax earnings.




STZ: 3Q13 Earnings Pre-Game Primer


Source: CITI

Jna 7th


Sales Should Increase – In 3Q13, we expect that STZ’s sales will increase 8.0% YoY (70 bps above consensus), an acceleration relative to the 1.2% increase in 2Q13. Our 3Q13 forecast reflects the strong dollar and volume sales trends seen for STZ’s wine and spirits brands in Nielsen-tracked channels in the U.S., as well as the easy YoY comp (as sales were down 27.5% YoY in 3Q12, reflecting the divestiture of the Australian and U.K. wine businesses).


Margins Should Expand – We expect that STZ’s gross margin will expand 30 bps YoY, to 40.8% driven by improving mix. Meanwhile, we believe that STZ’s operating margin should expand 60 bps YoY, to 22.4%, owing to reduced SG&A spending as a percentage of sales. Our estimate is 90 bps below the Street’s forecast given the stepped-up investment spending in support of TV advertising being introduced for several of its brands, including Woodbridge by Robert Mondavi, Black Box and Simply Naked. On a segment basis, the North America business should post a 25.0% operating margin, (+40 bps YoY), while we expect a 15.7% operating margin for Crown Imports (-30 bps YoY) due to negative mix-shift given the outsized growth that we have seen for lower-priced Modelo Especial in Nielsen-tracked channels.


EPS Should Increase – In 3Q13, we expect that STZ will deliver EPS of $0.54, which represents a 9.0% increase YoY and is one cent below consensus.


What We’re Interested in Hearing About – An update on the regulatory approval process for the Modelo acquisition; detail about Crown Imports’ recent beer price increases in the U.S.; further information regarding the consumer response to STZ’s new product launches; and an update on the sustainability of STZ’s wine category share gains.


Conference Call Details – Wednesday, Jan. 9, at 10:30 am ET. Dial-in: 973-935-8505.




Diageo’s open offer for United Spirits shares delayed: source


Source: Reuters

Mon, Jan 7 2013


UK drinks group Diageo’s mandatory tender offer to buy up to 26 percent of shares in India’s United Spirits has been postponed as the deal has yet to receive local regulatory approvals, a source with direct knowledge of the matter said on Monday.


Diageo agreed in November to buy a 53.4 percent stake in United Spirits Ltd for $2.1 billion under a two-stage process including the mandatory tender offer which was set to open on Monday and close on January 18.


A new date will now be set for the offer after the deal receives approval from the capital markets regulator Securities and Exchange Board of India and the Competition Commission of India, said the source.


United Spirits, which is currently controlled by Indian businessman Vijay Mallya, declined to comment on the open offer.


“The initial timings were clearly outlined as indicative only,” a Diageo spokeswoman said in London.


“We continue to work towards our initial timeline, which would see the transaction completing in Q1 2013,” .


Shares in United Spirits ended down 1.2 percent at 1,914.25 rupees on Monday, higher than Diageo’s offer to minority shareholders of 1,440 rupees a share. The stock is up nearly 43 percent since the announcement on the deal.


Some analysts have said the sharp jump in the stock price could mean the British group, owner of such brands as Johnnie Walker whisky and Smirnoff vodka, will be forced to sweeten the offer price.




United Kingdom: Suffolk Children aged 12 treated for alcohol abuse


Source: EADT

By Chris Harris

Monday, January 7, 2013


CHILDREN as young as 12 have needed specialist treatment for alcohol problems in Suffolk, new figures reveal.


The statistics, for the last three years, show 355 children were given specialist care because of concerns over their drinking.


But the figures, released by Suffolk PCT following a Freedom of Information request, reveal a downward trend in recent years and experts said last night that there is now better education and awareness in schools of the problems linked to alcohol.


There were 130 youngsters seen in 2009/10 – when at least one child aged 12 received treatment – but that fell to 114 the following year and to 111 in 2011/12.


Simon Aalders, co-ordinator at Suffolk Drug and Alcohol Action Team, welcomed the drop and said it was down to greater awarenes.


He said: “Young people are much more aware of the harm alcohol can do. There’s discussions in schools and education is where the most gains will be made.


“It helps them discuss and understand the impact drinking too much can have.


“The awareness raising has been absolutely fundamental to our ongoing success.”


Mr Aalders, although welcoming the drop to 111, said there were still youngsters they were not seeing.


He added: “There will always be a percentage of people that we don’t see. They will tend to have strong family networks.


“I’m not trivialising it in any way but it becomes a pattern of behaviour and they come out of it the other side without any long lasting conditions.


“We know it’s not just 111 [young] people in the county with alcohol problems. People present when they recognise they have a problem.


“They present when the young person is using alcohol and it’s having a negative impact on their lives. It does not necessarily mean alcohol addition.”


Suffolk’s figures, however, compare badly with North East Essex, which treated 67 children for alcohol problems over the same period.


Suffolk Primary Care Trust covers a population of around 600,000 people, compared with 322,000 at North East Essex PCT.




Scotland Food & Drink event encourages Amazon link up


Source: Harpers

by Carol Emmas   

Monday, 07 January 2013


Not-for-profit organisation Scotland Food & Drink has launched an event to encourage Scottish whisky and spirits distillers to grow its sales through online retailer Amazon.


The event, which takes place on January 31, is looking to give distilleries the opportunity to hear from the team about their business and learn about what they look for from suppliers.


The briefing will cover an overview of and its strategy, what it would mean to become a supplier, why companies should consider trading with, opportunities for suppliers in Scotland and a Q&A session.


It will also host a Meet the Buyer session where companies are invited to apply for a one-to-one with the grocery team, to present products and discuss how they fit with‘s trading requirements. is looking to develop its whisky and spirits offer in order to strengthen its current range. It is particularly interested in meeting distillers who are able to offer high-end products including premium spirits and malt whisky, and who have the capacity to manage volumes and a consistent supply.


Scotland Food & Drink is supported by the Scottish government and was created to guide food and drink companies of all sizes towards increased profitability, with the aim of growing the industry to a value of £12.5 billion by 2017.




Bill would let Colorado parents buy alcohol for children


Source: Denver Post



Parents could be able buy alcohol for their children at Colorado bars and restaurants if they were 18 and older but not 21 yet, under a proposal by a Republican lawmaker.


Sen. Greg Brophy is introducing the bill for the legislative session that begins Wednesday. He says he thought of the proposal because he and his wife recently took their daughter to dinner to celebrate her 20th birthday, and she couldn’t have a drink with them.


Brophy says he also wants parents of returning servicemen to be able to buy their children drinks at bars or restaurants.


He says the bill would allow parents to buy their adult children drinks in any place that allows on-premise alcohol consumption. Wisconsin has a similar law.




Retired Businessman Purchases $27,000 Bottle Of Scotch


Source: FoxPhilly

Jan 06, 2013


A Portland, Oregon man is now the proud owner of a $27,000 bottle of rare scotch.


Retired businessman Lyle Shellenberg recently purchased the rare bottle of Glenfiddich scotch whiskey. He is now just one of only six people in the United States to purchase one of the 50 bottles released worldwide each year.


The hand crafted bottle came in a locked leather case.


Makers of the scotch say it spent half a century aging to perfection.


Shellenberg tells FOX News he plans to drink it at a special event sometime with his family.




Brooklyn Brewery to open plant, restaurant in Sweden by end of year


The pub will look out over Stockholm’s harbor and have room for 250 visitors indoors and outdoors.



By Stephen Rex Brown

January 6, 2013


How about a Brooklyn Lager with that Swedish meatball?


The 25-year-old Williamsburg-based brewery will open a plant and restaurant in downtown Stockholm by the end of 2013.


The new brew pub will look out over the Swedish capital’s harbor and have room for 250 visitors indoors and outdoors.


“Remember student exchange programs? How about brewer exchange programs,” the company wrote in an announcement on its website. “Swedish brewers will train in Brooklyn and learn our deepest, darkest secrets.”


Brooklyn Brewery honcho – who was a foreign correspondent before “retiring” to beer making – Steve Hindy wasn’t drunk when he chose Stockholm.


The Swedes can’t get enough of the beers familiar to most New York barflies, such as Brooklyn Lager, Brooklyn East India Pale Ale and Brooklyn Pilsner.


In other words, Sweden is the cure for whatever ales the borough, once the nation’s most important brewing center.


“Sweden is our largest export market and second biggest market overall,” the company wrote. The biggest market, of course, is New York City.


After training in Williamsburg, the Swedish brewers will start by crafting new Brooklyn Brewery beers that will only be available in the Stockholm brew pub.




Fine wine prices ‘could rise 14pc in 2013’


Prices of finest plonk on the benchmark wine index could trickle higher this year as investors plough their money into physical assets, according to a wine investment fund.


Source: Daily Telegraph

By Rachel Cooper

Jan 2013


Publishing its forecast for 2013, The Wine Investment Fund predicted that the main wine index – the Liv-ex 100 – will end this year 14pc above where it finished 2012.


The Liv-ex index is a marketplace for professional buyers and sellers of fine wine, with the Liv-ex Fine Wine 100 representing the price movement of 100 of the most sought-after fine wines.


Its members, including merchants, brokers, retailers and wine funds, account for the vast majority of global fine wine turnover.


The bulk of the index consists of Bordeaux wines, although wines from the Burgundy, the Rhone, Champagne and Italy are also included.


Last year, the Liv-ex Fine Wine 100 finished 9.6pc down on the year, compared to a 5.9pc rise in the FTSE 100 and a 2.1pc rise in the price of gold.


Compilers of the Liv-ex index said the market had been driven down by the eurozone crisis, sluggish Asian demand and a weak British economy.


But during the second half of the year, the market did stabilise, with a number of wines posting strong performances. For example, the release of new vintages for Taittinger, Dom Perignon and Cristal saw Champagne’s average share of exchange turnover more than double in 2012.


“Although this was a difficult year for the fine wine market, the Liv-ex indices have finished 2012 on a positive note,” said Liv-ex director James Miles.


“Since the lows of July, the value of bids on the Exchange has increased threefold, suggesting a return of confidence.”


Looking ahead to this year, The Wine Investment Fund said “conditions appear much brighter”, with the second half of 2012 having shown some signs of recovery.


The fund added that the return of confidence towards the end of last year heralded the start of a recovery in wine prices and that this will be maintained throughout the new year.


Although the fund believes there is an 85pc chance this year will see price rises, it added that falls of up to 5pc are possible. “Falls of greater than this are likely only to result from a major disruption to the world economy which is not foreseen by mainstream economic forecasters,” said the fund.


“In the longer term many investors are becoming nervous about the inflationary effects of the very loose monetary policies (low interest rates and the printing of money, known as ‘quantitative easing’) being pursued around the world,” added Andrew della Casa, director of The Wine Investment Fund.


“Like gold, wine is a physical asset which is immune to inflation and its value cannot be eroded by the actions of governments. It is therefore likely to attract attention when inflation fears rise. In the years to come, there is also the prospect of new sources of demand from markets such as India coming through.”




My Wine Goals for the Year, More and Less


Source: WSJ


Jan 6th


ALMOST NO ONE who makes resolutions will stick to them. Such are the sad findings of a study published late last month by the Journal of Clinical Psychiatry, which reported that only 8% of the people who make resolutions are actually successful in keeping their pledge. But I’ve figured out how to beat the odds: I’ve made a New Year’s resolution to drink more wine-and less wine. That is, I’ll drink fewer of the wines that I already love, and more of the wines that I’ve somehow ignored. (In both cases, the numbers are large.)


The latter will likely prove easier to pull off than the former; most wine drinkers I know-including professionals and amateurs-have wines that they love and tend to favor. According to Gerald Weisel, proprietor of Weimax Wine & Spirits, in Burlingame, Calif., many of his customers want to drink the same wine over and over again. Mr. Weisel’s New Year’s wish would be for those wine drinkers to walk into his shop and ask for something ” ‘below the radar’ or, as my Italian friends say, ‘fuori strad’-off the road,” he said.


One of the wines I will have to give up is Chablis, a wine I drank a lot of in 2012. One reason was the 2010 vintage: The wines were simply outstanding that year. It was a classic vintage, producing wines of great purity and refinement that were also well priced. That’s another great virtue of Chablis; unlike other white Burgundies, Chablis is actually affordable. A basic Chablis costs as little as $15 a bottle, and even a grand cru Chablis from a top producer may cost $150 or so-considerably less than any other grand cru white Burgundy.


There are, of course, many other worthy French whites worth tasting-for example, the wines from Savoie, a mountainous region in the French Alps. Savoie whites made from the Jacquère grape have a crisp, Chablis-like character with a lovely floral aroma. While they may not be as complex as Chablis, they are very reasonably priced-even the best examples cost under $30 a bottle. The same is true of white wines from Roussillon, which may be even more interesting than the reds of this region and are also quite cheap. And then there’s Muscadet, the perennially underrated wine of the Loire. Although I drank plenty of Loire Valley whites in the past year (Vouvray, Sancerre and Montlouis), I didn’t pay much attention to Muscadet. And yet, the wine’s price/quality ratio is ridiculously skewed; a case of great Muscadet costs less than a bottle of grand cru Chablis. It’s a resolution that will be easy to keep.


One final white wine that I will resolve to support is German Riesling. And yes, German Riesling requires not just a promise of tasting but of full emotional commitment-just ask the sommeliers who are drinking (and selling) the stuff. In fact, if it weren’t for this country’s sommeliers, I don’t think anyone would be drinking German Riesling at all. But my pledge should be fairly easy to fulfill given the general excellence of the 2011 vintage in Germany.


As to red wines, I admit to lingering overly long over quite a few, including California Cabernets, Washington Merlots and Châteauneuf-du-Papes. The latter was particularly easy to do, thanks to a string of great vintages (2010, 2009, 2007) and all that ripe fruit. But this year I’ll be drinking more wines from other parts of the New World, such as Oregon and Australia (something I keep meaning to do), and the Northern Rhône, too. These sterner, more structured Syrah-based wines may be more forbidding in their youth than their southern counterparts, but the best possess an admirable depth, complexity and ageability, apparent even in wines from “lesser” appellations like Crozes-Hermitage.


As for Italian wines, I’ll be obliged to drink fewer from the north, since I paid more attention to regions like Piedmont and Friuli and Alto Adige than I did to, say, Campania, Abruzzi and Puglia in the south. I also overlooked too often the southern island of Sicily, where grapes with multivowel names like Nero d’Avola, Frappato and Nerello Mascalese are responsible for some of the most intriguing reds in modern Italian winemaking-and where there’s at least one winery owned by a faded British pop star.


I drank a lot of Spanish whites last year-I was practically awash in Albariño this past summer, and I had a brief but passionate affair with wines from the Priorat-but I thoroughly neglected Rioja, arguably Spain’s most classic region. And apparently I’m not alone: Even Richard Jennings, one of the most prolific tasters on, told me that one of his goals was to drink more Rioja in 2013-and that’s after he tasted more than 7,000 wines in 2012.


But there is much to be said in favor of Rioja, most notably that it is one of the rare wines aged by its producer; the wines are held at the winery until they are deemed ready to drink. Hence the proliferation of older Riojas on the market-many of them often quite cheap. (I found a lovely 2005 gran reserva for $20 last week.)


One wine I overlooked (and definitely under-drank) this past year was Port. If the definition of eternity is “two people and a ham,” according to Dorothy Parker (or Irma Rombauer, author of “The Joy of Cooking”-there’s some debate), then the definition of a debauched night would likely be two people and a bottle of Port. And yet a great vintage Port is one of the most civilized means of ending an evening. There just need to be at least six people at the table. Perhaps that will be part of my Port resolution: I will do more of my drinking with more of my friends.


My last resolution is thoroughly local (unless locavorism is “too 2012”): I’ll be drinking more wines made close(r) to home. That includes wines from Long Island, the Finger Lakes and even New Jersey, which claims more than 40 wineries now. In fact, according to a prominent wine economist, there is even a “world-class” Syrah vineyard in southern New Jersey, next to Jon Bon Jovi’s house. That vineyard is on my list to visit soon.


There are so many wines I look forward to drinking this year. And I think my resolutions will be easy to keep-though maybe not as easy as Amy Goldberger’s. Ms. Goldberger, the sommelier at Fifth Floor restaurant, in San Francisco, told me she has resolved to drink “more Riesling and less Riesling” in 2013.


May the New Year bring you every wine that you want-and more.




Lot18 Sours on Flash Sales, Lays Off 25 as It Shifts to Wine Subscriptions


Source: All Things D

January 7, 2013


Online wine seller Lot18 is shrinking and refocusing its business in an effort to become profitable.


This morning, the New York-based company handed out pink slips to about 25 employees, or about 35 percent of its staff, according to a source familiar with the matter.


Lot18 will now employ 46, half as many as it did a year ago.


It is the second layoff in the past year for the startup, which started selling wine online in November 2010.


The first round was tied to the discontinuation of its travel and food businesses, which it had expanded into shortly before raising $30 million in venture capital in late 2011. Investors include Accel Partners, New Enterprise Associates and FirstMark Capital.


This time, the layoffs are connected to a shift in strategy. Rather than exclusively operate as a flash sales company, which sells bottles of wine at a discount to a free membership base, it will also try to sell wine through a subscription model.


The model is already well established by others in the industry, such as Global Wine Company, which runs the New York Times Wine Club, for instance, and Direct Wines, which operates a wine club for The Wall Street Journal.


The recurring revenue stream is far more predictable than getting members to return to the site and pay for single orders. As it stands right now, Lot18 is a marketplace, so it does not own any inventory or warehouses. Instead, the company’s headcount is a considerable expense, as are its marketing costs to get new members – just like other sites, including Groupon. In addition, it subsidizes shipping, since wine is so heavy and fragile.


According to a spokesperson, the new initiative is allowing the company to scale back on the time and attention that the flash sales business requires. However, not all employees will be let go immediately and Lot18 plans to do select hiring for the new business.


In a statement, CEO Jay Sung said: “The team we have – and many of the excellent people who left the company today – worked incredibly hard to make Lot18 strong, but we need to resource according to our new business model and operate the existing business more efficiently with considerably less burn.”


The cuts impacted all parts of the company’s business, including marketing, procurement and merchandising. Andrew Koch, the company’s VP of product, left the company recently, and we are hearing that Barbara Anderson, the company’s chief counsel, is leaving voluntarily. Lot18’s founder, Philip James, remains with the company and is leading the launch of the new subscription business.


In the fourth quarter, the company tested two new subscription services. Customers could either sign up to receive six bottles for $99 a month, or 12 bottles for $149 a month (the first month cost $49 and $79, respectively).


Since its launch, the current club has exceeded its growth targets, the spokesperson said. A new product launch will occur in early 2013.




Three given suspended sentences for massive Champagne fraud


Source: Decanter

by Giles Fallowfield

Monday 7 January 2013


Three former managers of the Esterlin Champagne co-operative have been given eight-month suspended prison sentences and ?2,000 fines for selling fake vintage Champagne.


Between 2002 and 2005, Patrick Jean, the former president of Esterlin, commercial director Lysiane Géraudel and chef de Cave Franck Zehner sold 426,000 bottles of fake vintage champagne to the Ed supermarket group, a subsidiary of the Carrefour group.


The three were first indicted in 2005, as reported.


The Mancy-based co-operative also has to pay a fine of ?20,000, the court in Chalon decided before Christmas.


The court has additionally levied a fine of ?2.841m payable to French customs and excise


However the Ed supermarket group, which sought ?2m in damages, is understood to be unhappy with its award of ?5,000.


The CIVC, Champagne’s governing body, also brought a civil action against Esterlin, communications director Thibaut Le Mailloux confirmed.


It did this ‘as soon as the case was brought to the attention of the criminal court by the fraud squad,’ he said. ‘This is what we systematically do when such cases – albeit rare – occur. This shows our strong determination to take action against any company or individual whose criminal actions directly or indirectly damage the reputation of Champagne.’ It is unclear whether further action will be taken against the co-op.


During the trial Zehner said in a signed statement read out in court, ‘Since I arrived in 2000, there has never been a true vintage [Champagne] sold to Ed, never.’


The co-defendents claimed not to know what went on in the cellar and sought to blame Zehner for the fraud and other problems at the co-op. However the judge suggested Zehner would have had no interest in organising the fraud on his own. If that had been the case, he quipped, ‘We are here in the presence of a crime without a motive.’


When the current Esterlin president Eric Potié, who is also president of the Federation of Cooperatives of Champagne (FCVC), was asked by the judge if these practices had disappeared at the co-op, his response was: ‘In my position, I am unable to know exactly what is in the cellar, but it seems to be correct.’




Dievole and Poggio Landi bought by Argentina’s Bulgheroni


Source: Decanter

by David Furer

Monday 7 January 2013


One of Chianti Classico’s largest estates, Dievole, has been purchased by Argentinian billionaire Alejandro Pedro Bulgheroni, owner of several wineries in Argentina, Uruguay, and California.


Bulgheroni has also bought Poggio Landi in Montalcino for a reported ?15m. The 134ha estate, with 25ha of vineyards, formerly belonged to Stefano Cinelli Colombini, owner of Fattoria dei Barbi.


Bulgheroni has plans to renovate the estate, adding a new cellar, refurbishing the farmhouse, and beginning wine production once a winery is installed.


The wine production of both operations is being overseen by Tuscany’s Alberto Antonini, who for years has consulted to Bulgheroni’s Uruguay estate, Bodega Garzón.


Located 15km north of Siena, Dievole consists of 80ha of vines and substantial olive groves – and a luxury resort that was redesigned around its 15th century villa a few years ago.


The Tuscan businesses will be managed from Dievole with new management already in place.


According to statements made to the Italian press, Cinelli Colombini says production at Fattoria dei Barbi will remain unchanged.




Third Sideways novel to be set in Chile


Source: the drinks business

by Lucy Shaw

7th January, 2013


Rex Pickett, author of wine-themed novel Sideways, which inspired the Oscar winning movie of the same name, is to set the third part of the trilogy in Chile.


Pickett is currently half way through a four-month research trip to Chile, where he is gathering material for the novel, to be set in Chilean wine country, which is expected to be published in 2014.


Among the wineries Pickett has visited thus far are Casas del Bosque in the Casablanca Valley, Matetic and Viña Casa Marin in the San Antonio Valley, Lapostolle in the Colchagua Valley and Amayna in Leyda.


Pickett outlined the basic plot for the novel on his website: “Miles has been reduced to corporate outings after the success of his novel and the movie that sprang from it.


“He’s sucked the marrow out of the Pacific Coast and wants a big change. He could have gone to France, but everyone’s done France. Events will conspire to take him to Chile.”


At the end of Pickett’s second novel – Vertical – the sequel to Sideways, he hinted that protagonists Miles and Jack were headed for new horizons.


The Chile idea came about when Wines of Chile approached Pickett with the idea of a four-month sponsored trip


Pickett is full of enthusiasm for the country: “Chile is exploding with possibilities.


“It’s the mirror opposite of the US Pacific Coast, running from southern California all the way up to Washington, so you have this incredible range, not to mention all the microclimates and unique volcanic soils,” he told website This is Chile.


He believes Chilean wines are the perfect antidote to inaccessible pricy Burgundies.


“The most expensive bottle in the country is US$250 and everything else is way below that, yet the quality of the wine is there,” he said.


Pickett is still fine tuning the novel’s plot, and is toying with the idea that Miles gets invited to Chile as a guest of Wines of Chile, mirroring his own experience.


“Jack could come down to rescue Miles from an earthquake, fall in love with a woman and get dumped in the Atacama Desert.


“Maybe Miles’ love interest Maya comes back in the picture and their dream is to buy a plot of land in Patagonia to make biodynamic Pinot Noir,” Pickett told This is Chile.


“Chile will be a journey and wine will play a part, but I don’t know what that journey is yet because I have to experience the country first,” he added.


In addition to Sideways III, Pickett is also pushing director of the Sideways film Alexander Payne for a sequel based on his second novel, Vertical, set in Oregon, published in October 2010.




Increase Employee Productivity and Brand Image


Source: Advantage 24/7LLC

Jan 7th


Advantage 24/7LLC, a national direct to consumer marketing company, located in Buffalo NY has created a Turnkey solution that’s perfect for supporting a company’s Reward and Consumer E-commerce initiatives.


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Company’s often consider building a Branded Merchandise Store, but after looking into the costs for product research, purchasing, warehousing and fulfillment, admin., etc. it is just too overwhelming.

Advantage 24/7 will do it all, a significant advantage for companies that want to control costs and eliminate wasted product purchases.     


You can reach Advantage 24/7 by emailing or calling 716-568-8090.




FDA proposes new food safety rules


Source: NRN

Alan J. Liddle   

Jan. 4, 2013


Proposed federal safety rules announced by the U.S. Food and Drug Administration today are expected to reduce the risk that restaurateurs will receive dangerously contaminated foods, industry, public health and consumer groups maintained.


The rules, which the Washington-based FDA promulgated as part of the Food Safety Modernization Act, or FSMA, signed into law by President Obama in 2011, appear to have no direct impact on restaurant-level foodservice operations, as they target food manufacturers and produce growers and harvesters.


But the measures, which will be subject to public comment for 120 days before being finalized, have the attention of restaurateurs, as they will impact the quality of the overall food supply, thereby reducing their potential liability.


“For the foodservice industry, there is no greater priority than food safety and our customers’ well-being. The National Restaurant Association strongly supports the Food Safety Modernization Act and believes these changes should provide for safer imported and domestically produced foods,” said Joan McGlockton, NRA vice president for industry affairs and food policy.


FDA officials said new rules build on strides made during the Obama administration, such as the first egg safety rule protecting consumers from Salmonella and stepped-up testing for E. coli in beef, as well as existing voluntary industry guidelines for food safety.


The first rule proposed Friday would require makers of food to be sold in the United States, whether produced at a foreign- or domestic-based facility, to develop a formal plan for preventing their food products from causing foodborne illness, not unlike the Hazard Analysis Critical Control Points, or HACCP, program now followed by the meat and seafood industries, said Michael Taylor, FDA deputy commissioner for foods and veterinary medicine. The rule would also require manufacturers to have plans for correcting any problems that arise.


FDA officials said the second rule proposed Friday calls for enforceable safety standards for the production and harvesting of produce on farms drawn from science- and risk-based standards for the safe production and harvesting of fruits and vegetables.


“The FDA Food Safety Modernization Act is a common-sense law that shifts the food safety focus from reactive to preventive,” U.S. Health and Human Services Secretary Kathleen Sebelius, said in a statement about the goal of FSMA and the new rules. “With the support of industry, consumer groups and the bipartisan leadership in Congress, we are establishing a science-based, flexible system to better prevent foodborne illness and protect American families.”


Once the final rules are entered into the Federal Registry, large food manufacturers will have a year to comply and large growers up to 26 months to fall in line, while smaller companies may be granted longer compliance deadlines.


Jean Halloran, director of food policy initiatives at public-advocacy group Consumers Union, said her group looks forward to analyzing the proposed rules “that really go to the heart of the problems we’ve had with food safety in recent years.”


“The produce rule should take aim at serious problems like the 2006 outbreak of E. coli in spinach, which caused several deaths,” Halloran said. “The ‘preventive control’ rule [for manufacturers] should help put a stop to incidents like the salmonella outbreaks at the Peanut Corporation of America in 2009, which killed nine people, and the Sunland plant last year, which left hundreds of people sick.”


But at least one food-safety advocate and foodborne illness litigator, Seattle attorney Bill Marler, questioned whether the rules alone will achieve the goal of safer food for restaurants.


“Clearly, for restaurants that are buying fresh produce, conceptually, this should make it less of a risky product,” Marler said of the proposed grower rules. “My difficulty with the rules is that ultimately they require an enforcement mechanism, [and] that is a manpower issue.”


Marler said he believes that the current system for most non-meat food inspections that often rely on third-party audits of fields or facilities has not worked well, as was evident by recent deadly outbreaks of peanuts and cantaloupes, among others, in which the producers had received passing audit scores before the problems erupted.


“In the outbreaks I’ve been involved with, 90 percent of the time there has never been an FDA inspector in the plant or, if there has been, it was five years ago. That simply is not adequate,” Marler said.


The passage of the Food Safety Modernization Act and the new rules “gives us the opportunity to rethink how you spend inspection dollars and how you do inspections,” added Marler, who said his public comments about the new rules will include advocacy for a stronger system of federal and state inspectors instead of increasing reliance on private-sector inspectors paid for by business and ultimately consumers, through finished goods pricing.




Benihana Settles With Fired Managers Over Unpaid Vacation (Excerpt)


Source: Law360

By Joshua Alston

January 07


Benihana National Corp. has agreed to pay $660,000 to settle a class action brought by former Benihana managers who said the restaurant chain forced them to forfeit their unused vacation time upon termination, according to a motion filed Tuesday in California federal court.


Benihana will pay $460,000 to settle the vacation claims, plus an additional $200,000 to cover the plaintiffs’ legal fees, according to the motion. Benihana maintains it was not liable for the claims, but agreed to pay the settlement to avoid a protracted court battle, it says.


U.S. District Court Judge William H. Alsup is scheduled to hear the motion Jan. 24.




Morrison lags behind rivals as sales fall


Source: FT

By Andrea Felsted and Rose Jacobs

Jan 7th


Wm Morrison confirmed its position as one of the big retail losers this Christmas, although the supermarket chain avoided a profit warning.


Dalton Philips, chief executive, said Morrison had failed to entice enough “floating” shoppers, blaming lacklustre promotions, an embryonic convenience arm and the lack of an online food business.


Mr Philips said Britain’s fourth-biggest supermarket chain had struggled to “give that floating customer a reason to say hey, at Morrison they have got great value and they do some things better than everybody else”.


He said the group had also failed to distinguish itself from rivals in a sea of “me too” promotions.


Morrison, a winner in previous Christmases, had also suffered the “major headwind” of not having a significant convenience and online business.


The comments came as Morrison said sales at stores open at least a year fell 2.5 per cent year-on-year in the last six weeks of 2012, excluding fuel and VAT.


The figures were slightly better than the 2.8 per cent fall forecast by some analysts.


However, analysts at Citi said the performance was flattered by an additional day of trading, which may have boosted the performance by 1-2 percentage points.


Mr Philips denied that the group was “disenfranchising” its core customers, with revamped stores, including exotic fruit and vegetables and the use of misters to keep produce fresh, particularly given increasing competition from the so-called hard discounters such as Aldi and Lidl.


“It is just not factually correct,” he said, pointing to strong growth from its “M Savers” value range.


Mr Philips also signalled that Morrison would unveil a move into online grocery retailing later this year, when it announces full-year results in March.


He said he was “100 per cent confident” he would be with the group in March to update the City, despite the deteriorating performance.


One top 10 shareholder said he continued to support Mr Philips.


“They have got a very difficult environment out there, but he’s painfully honest in what needs to be done, and they are tackling these things,” said the shareholder.


However, another top 10 shareholder said Morrison had done a good job in cutting costs to address the sales weakness, but this “probably does indicate that at some point shortly they are going to have to rebase their profits in some way”.


Mr Philips said profits for the year to February would be “broadly in line with expectations”, holding the shares broadly flat at 257p.


However, Clive Black, analyst at Shore Capital, cut his forecast of this year’s pre-tax profit from £916m to £863m. Philip Dorgan at Panmure Gordon cut his forecast of pre-tax profit in the year to March 2014 from £866m to £811m and in 2015 from £895m to £800m.




Saudi Arabia: Filipino liquor ring busted in Saudi


Source: Emirates 24 / 7

Monday, January 07, 2013


Saudi Arabia’s feared religious police arrested several Filipinos found to be manufacturing alcoholic drinks and selling them in the local market.


Members of the Commission for the Promotion of Virtue and Prevention of Vice seized what newspapers described as the “liquor gang” during a raid on their house in the western Red Sea port of Jeddah, Saudi Arabia’s second largest city after Riyadh.


Sabq daily said police confiscated six barrels full of alcoholic drinks and tools used in making the liquor, adding that all the liquor was destroyed. It did not say how many Filipinos were arrested during the raid.


Liquor is strictly banned in Saudi Arabia, one of the most conservative Muslim nations with a population of 28 million, including around eight million foreigners.

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