Liquor Industry News 2-11-13

Franklin Liquors

Truman Cox


Source: A. Smith Bowman Distillery / Buffalo Trace Distillery

Feb 10th


It is with deep sadness that we announce the passing of Truman Cox, Master Distiller of our A. Smith Bowman Distillery.  Truman passed away on Saturday, February 9 after a short illness.  Truman joined the company in 2004 as Lead Chemist at Buffalo Trace Distillery and in 2011 realized his dream to become the Master Distiller at A. Smith Bowman Distillery in Fredericksburg, Virginia.  Truman’s passion for our industry was evident to everyone who knew him and he left a notable and positive mark on our company in the time he was with us.


Truman will be sadly missed by his many friends at Sazerac and in the industry.  Please keep Truman, his wife Susan and daughter Emmy in your thoughts and prayers.






Truman’s death at such a young age and an exciting time in his life is very sad.  He was a terrific, genuine person, full of energy and passion for the things he enjoyed most – his family and making great whiskey.  He had a wonderful sense of humor and larger than life personality that could light up any room with his presence and enthusiasm.  Having worked closely with him on his transition to A. Smith Bowman Distillery from Buffalo Trace Distillery I know well the dream and excitement we both shared for what could be.  I am sorry that we will not now see that dream realized in his own unique way, it was going to be fun and exciting.  True Master Distillers in our industry are very special people called upon to know their profession extraordinarily well and be able to communicate effectively with all types of audiences, we depend on them for so much.  The loss of any true Master Distiller is an especially sad event.  In the case of Truman, simply heartbreaking.






U.S. says most states lax on drunken driving


Source: Detroit Free Press

By Maureen Groppe

February 2, 2013


Two-thirds of the states could be restricted in how they spend some of their federal highway funds this year because they haven’t complied with mandates to combat drunken driving.


A combined $539 million would have to be spent on anti-drunken-driving programs or highway safety improvements instead of on general road and bridge construction in those states.


That’s the penalty for not having sufficient laws to restrict open alcohol containers in vehicles or to crack down on repeat drunken-driving offenders.


Nineteen states were already subject to the penalty before this year, and 14 more are having funds held in reserve while the Federal Highway Administration finishes its assessment of their laws.


Jack Basso, chief operating officer of the American Association of State Highway and Transportation Officials, said it appears that the federal government has tightened its application of the rules.


“Probably they are within their authority,” Basso said. “The question is, is it really achieving the spirit of the law?”


Federal officials say they had to review states’ drunken driving laws after Congress updated federal highway programs last year, including making changes to some of the compliance requirements. Some states fell short because the federal requirements had changed, while others had reworked their own laws without notifying the federal government as required.


Indiana, for example, amended its repeat drunken driving law in 2004 and no longer requires a sufficient amount of community service as an alternative to imprisonment, the federal government contends.


Indiana disagrees that its law isn’t tough enough. But state officials are most upset that the federal government also found fault with its open-container law, which hasn’t changed since the National Highway Traffic Safety Administration said in 2005 that it passed muster.


“For NHTSA to now claim non-compliance and immediately transfer funds is unreasonable, arbitrary and capricious,” Troy Woodruff, chief of staff at the Indiana Department of Transportation, wrote in a letter to NHTSA. “INDOT has at all times reasonably believed that state laws complied with federal requirements and budgeted accordingly.”


Indiana has asked for time for its state Legislature to make changes, but federal law requires states to be in compliance by the start of the federal fiscal year, which began in October.


Iowa faces that same problem. The state’s repeat-offender law had met federal standards until the requirements were changed by the 2012 highway bill. The federal law was implemented after the state Legislature had adjourned for the year. The state hopes to make the necessary changes this year, but that’s too late to be in compliance for this year’s funding cycle.


By contrast, when the requirements were first included in a 1998 highway bill, Congress gave states time to comply.


But although Iowa will have 2.5% ($10.5 million) of its federal construction dollars rerouted to safety programs, the state says that won’t cause a problem for road building. Stuart Anderson of the Iowa Department of Transportation said the state has construction projects that qualify as safety improvements, for which the money can be used.

Safety advocates say it’s too easy for states to shift funding between the construction and safety budgets, limiting the law’s effectiveness.


“Even if your funding is transferred to state safety activities, there’s a trapdoor in that that allows them to put the money back into construction programs,” said Henry Jasny, vice president of Advocates for Highway and Auto Safety. “We fought that bitterly when it first went into law – but we lost and it stayed in there.”


That may be why some states haven’t worried about complying, he said.


A spokeswoman for the Montana Department of Transportation said the state has no plans to align its repeat offender law with federal rules. She said the diversion of $8.8 million of its funds won’t affect road construction.


“Montana can still use the funds for road construction, specifically roadway improvements that demonstrate a highway safety benefit,” spokeswoman Lori Ryan said.


A spokeswoman for the South Dakota Department of Transportation said the penalty “does create some challenges in that potential uses of the highway construction funds is more restricted.”


But there are no efforts underway to bring either the state’s open-container or repeat-offender laws into compliance. The open-container rules are in violation because of a state law passed last year allowing people to bring their own wine to a restaurant. The law allows for a partially consumed bottle of wine that has been recorked and placed in a sealed bag or other container to be inside a vehicle.


Indiana officials contend that diverting $40.4 million of its construction funding into the safety budget would require the state to find “make-work” safety projects at the expense of needed infrastructure improvements.


“Moreover, good-paying construction industry jobs will be in jeopardy if funds are reallocated,” Woodruff complained to NHTSA.


States that NHTSA determined were newly not in compliance were to be officially notified by the end of January that some of their funding is being held in reserve. They have a month to provide additional information to the federal government before a final decision on their funding status is made.




America’s Beer Duopoly


Source: New York Times


Feb 9th


Consumers will benefit from the Justice Department’s antitrust suit to block Anheuser-Busch InBev, the country’s largest brewing company, from acquiring one of its competitors. This kind of action was seen less frequently in the Bush administration.


Anheuser-Busch InBev announced in June that it would pay $20.1 billion to buy the 50 percent stake in Grupo Modelo of Mexico – maker of Corona beer – that it did not already own. Together the two companies sell about 46 percent of all beer in the United States and more than 50 percent in big cities like Houston and Los Angeles, according to the department’s antitrust division. The proposed acquisition would leave the country with just two companies – the second being MillerCoors – controlling more than 70 percent of the beer business.


Under the Bush administration’s less robust antitrust division, a series of big mergers severely reduced competition in the beer industry and led to higher prices. In 2008, it greenlighted two mega-deals: Belgium-based InBev’s purchase of Anheuser-Busch, and a merger of the American beer divisions of SABMiller, a London-based brewing giant, and Molson Coors, a Canadian company.


Not surprisingly, beer prices started rising faster than the Consumer Price Index, according to a detailed study by the American Antitrust Institute, a research organization.


The Obama administration has made a compelling case against InBev’s purchase of Grupo Modelo, the third-largest beer company in the country. In recent years, Modelo has competed with the two larger brewing companies by keeping prices of its top-selling beer, Corona, stable even as Anheuser-Busch raised the prices of its popular beers, like Bud Light. That has given customers an incentive to switch to Corona. That competition will most likely disappear if InBev is allowed to own 100 percent of Modelo, which currently operates independently.


The companies have pointed to the success of microbrews like Samuel Adams and Brooklyn Lager, but those labels represent just 6 percent of the market. And many small companies find it very difficult to get their beers in stores and bars because the two big brewers have forced many distributors to sell only their beers.


The administration blocked AT&T’s 2011 offer to buy T-Mobile USA, and used the threat of a lawsuit to scuttle 3M’s purchase of a rival that would have given it an 80 percent market share for some office supplies. It was right to take the same position on the beer deal.




Constellation Seeks OK to Back AB InBev in Antitrust Suit


Source: Bloomberg

By Tom Schoenberg

Feb 9, 2013


Constellation Brands Inc., seeking to support Anheuser-Busch InBev NV’s bid to buy Grupo Modelo SAB, asked a judge to intervene in the U.S. lawsuit filed to block the deal.


Constellation, which jointly owns a U.S. beer distributor with Modelo, said in a filing yesterday in federal court in Washington that it should be allowed to support the deal in the proceedings. If the $20.1 billion acquisition is approved, Victor, New York-based Constellation would end up with Modelo’s stake in the distributor, Crown Imports LLC, along with a 10- year distribution agreement for brands including Corona.


“The acquisition of Modelo’s 50 percent interest in Crown is a transformational transaction for Constellation’s beer business,” Margaret Warner, a lawyer for Constellation, wrote in the filing. “The transaction will double Constellation’s participation in the beer business.”


Constellation, which said it had been part of negotiations with the Justice Department before the government’s antitrust case was filed, wasn’t named as a defendant in the lawsuit. Constellation and Crown, half of which is owned by Constellation, would get to argue for their own stake in the deal and “have a seat at any potential settlement table” if the judge allows them to intervene, the company said in court papers.


AB InBev Request


AB InBev, based in Leuven, Belgium, asked U.S. District Judge Richard Roberts in its own filing yesterday to let Constellation and Crown join the case. The Justice Department opposes the move, the companies said.


In a separate filing, the Justice Department and AB InBev asked Roberts to set a hearing for Feb. 15 to schedule how the case should proceed.


Gina Talamona, a Justice Department spokeswoman, declined to comment on yesterday’s filings.


“It seems likely a judge is going to grant this,” said Allen Grunes, an antitrust lawyer with Brownstein Hyatt Farber Schreck LLP in Washington who isn’t involved in the case. “The Justice Department has put the adequacy of the supply agreement and transfer of ownership of the distributor to Constellation at issue in their complaint.”


Constellation agreed to pay $1.85 billion for Modelo’s stake in Crown Imports, the two companies’ joint venture for U.S. distribution. That deal, which would give Constellation the exclusive right to import Modelo beer into the U.S. for 10 years, is contingent upon AB InBev buying Modelo.


Pricing Agreement


Before the lawsuit was filed on Jan. 31, negotiations with the Justice Department filing centered on how to structure a long-term supply and pricing agreement for importing Modelo’s brands to the U.S., three people familiar with the matter said Jan. 15. The talks subsequently broadened to include production assets, one of the people said.


The lawsuit alleges the Constellation deal was aimed at winning regulatory approval by “creating a facade of competition” between AB InBev and its importer.


Constellation “would acquire no Modelo brands or brewing facilities under this arrangement — it remains simply an importer, required to depend on ABI for its supply of Modelo- branded beer,” the department said in the complaint.


The department’s action “fundamentally threatens Constellation’s future in the beer business,” according to the company’s filing.


Crown Imports, which had $2.39 billion in sales for the year ending Feb. 29, 2012, according to the company, is AB InBev’s primary competitor in the U.S., not Modelo, Constellation said in a statement. Also, the company’s full ownership of Crown will improve competition and give Crown “greater flexibility in responding to competitive factors in each of its markets,” Constellation said.


The case is U.S. v. Anheuser-Busch InBev SA/NV, 13- cv-00127, U.S. District Court, District of Columbia (Washington).




Maker’s Mark cuts amount of alcohol in its bourbon to meet demand


Source: Daily Mail

10 February 2013


Distillers of a world famous bourbon has cut its alcohol content so it can meet increasing demand for the drink.


The owners of Maker’s Mark, which is distilled Loretto, Kentucky, said they are unable to produce the bourbon fast enough.


The plans became public after an email from Maker’s Mark executives Rob Samuels and Bill Samuels Jr, son of the company’s founder, emerged.


It announced that the bourbon – which used the slogan ‘It tastes expensive… and is’ – will drop its alcohol content by there per cent.


It will now be reduced to 42 per cent ABV from 45 per cent.


In the email, which was sent to clients, the pair are quoted as saying that stores have been running out of Maker’s Mark because the ‘demand for our bourbon is exceeding our ability to make it, which means we’re running very low on supply,’ according to WFPL.


They said they had made the decision after ‘looking at all possible solutions’.


The executives said by cutting the alcohol content they have been able to keep the same taste and increase ‘our limited supply so there is enough Maker’s Mark to go around.’


The distillery is also being expanded and production capacity is being increased.


The brand was founded by Bill Samuels Sr almost 60 years ago and the first bottle produced featured the company’s distinctive red wax seal.


The problem with supply may have been caused by the company underestimating the scale of demand.


Maker’s Mark is aged for up to six and a half years, meaning that quantities need to predicted in advance.


Bourbon is made from at least 51 per cent corn and has to be aged in charred-oak barrels.


Bartender Erik Lee told New York Post: ‘Usually you’re going to notice that. If I started putting a half shot of water in the bottom of everyone’s beer just to make the keg last longer they’d notice.’


However, other drinkers said the volume of the alcohol was not crucial to how enjoyable it is.


It is unclear when the reduced bourbon will become available.


The news comes after the brewer of John Smith’s Extra Smooth announced last month that it is watering down the drink to save £6.6million in duty annually.


It is being reduced from 3.8 per cent alcohol to 3.6 per cent.


Dutch brewer Heineken, which owns the John Smith’s brand, will bring the reduction into effect from this month, along with a price increase of about 2.5p a pint.


A Heineken UK spokesman said at the time the savings would be invested into the brewing and marketing of the beer.




Beware the Next Nefarious Up-Charge: Whiskey, Neat


Source: Bloomberg

By Devin Leonard

February 08, 2013


The other night, I was out in New York. It had been a long day and I needed a drink. To be specific, I needed a bourbon.


Like a lot of guys, I started out drinking beer. In my late thirties, I developed a taste for Irish whiskey. Then I moved on to Kentucky bourbon. I’ve been faithful ever since. At home, I drink Evan Williams. When I’m out, I treat myself to something fancier such as Booker’s, Knob Creek, Blanton’s, or Woodford Reserve. I enjoy a Manhattan. Old Fashioneds are nice, too. There’s one thing I don’t like with my bourbon: ice.


I sought to quench my thirst at a burger joint in Greenwich Village, part of a reputable chain of similarly themed restaurants like BLT Steak, BLT Prime, and BLT Fish. I sat down and asked my waitress about the bourbon selection. Just as I had hoped, she listed some of my favorites. “I’ll take a Woodford, straight up,” I said.


“Do you want it neat, or do you want it chilled?” she asked politely.


“I don’t really care,” I said. “I just don’t want any ice.”


The Woodford arrived. It wasn’t much of a pour. I finished it quickly and ate a burger.


I asked for the check. My drink was $13. A little steep, but isn’t everything in Manhattan? There was also a $2 charge for “neat.”


In all my years of bourbon drinking, this was something new: I was being charged extra for drinking my Woodford straight. Or perhaps I was being penalized for not imbibing it on the rocks?


I asked my waitress to clarify. She summoned the manager, a friendly young guy. He told me with a smile that I got extra Woodford without ice. He said this explained the extra charge. What’s more, he told me that this was common practice in the city.


“Well, this is the first time I’ve ever seen it,” I responded, adding that my bourbon wasn’t exactly jumbo-sized.


“Oh, no, sir,” he assured me. “Everybody does it.” They offered me another one free, just to make up.


I’ve since been doing some informal polling. My friends say they’ve never been to an eatery with a policy of charging extra for neatness. I called the Bartender Boot Camp, a bartender instruction center in New York, to get an expert opinion. Jordan Goldman, the center’s manager, asked two of his instructors about the additional fee for not ordering ice. “One of them said he’d never heard of the practice,” Goldman reports. “The other one said the only time she’d done it was when she worked in a restaurant in a catering hall. They would charge two dollars. She got complaints all the time.”


In other words, BLT Burger is breaking new ground, which is just what I’d suspected.


On the bright side, I wasn’t through drinking that night. I met a friend at the Village Vanguard, the famous jazz club. It was past the dinner hour, so it was time for an after-dinner drink. I ordered a $13 brandy. Straight-up, of course.


After my experience at BLT Burger, I was delighted when it arrived. “Now, that’s a nice pour,” my friend agreed. Not ordering ice didn’t cost me a thing.




New bill to allow wine trade in kegs, containers in Florida


Source: DBR

11 February 2013


A new bill ‘The Florida Wine Canister Act’, filed by Senator Wilton Simpson and Representative Frank Artiles, will allow Florida distributors and manufacturers to sell wine in kegs or large containers to businesses.


The previous law allowed winemakers to sell wine in a limited size of one gallon canister, however the new bill will allow increasing to six gallons per container.


Though, the new bill will not allow consumers to purchase the wine kegs, it will allow bars and restaurants to offer customers with wide range of wines by the glass and not fear of wine spoiling as its happens after opening the bottle for individual servings, reported


Artiles told the website that wine canisters are environment friendly option that allows restaurants to reduce wastage and streamline services.


“Nationally, over 100 distributors distribute wine canisters in 36 states. In fact, Texas and Pennsylvania have recently updated laws to allow wine canisters,” Artiles added.


Wine keg manufacturer Micro-Matic managing director John Soler was quoted by the website as saying that the initiative will help them grow their business and the Florida’s hospitality industry.




Beer: Nielsen C-Store Data Analysis: Beer C-Store Dollar Sales Growth Accelerates to +3.7% Due to Christmas Timing


Source: CITI

Feb 8th


Beer C-Store Dollar Sales Accelerate – In the four-week period ended Jan. 19, 2013, c-store beer dollar sales increased 3.7% YoY (vs. +1.7% last period and +4.9% over the last 52 weeks). The growth was driven by a 3.4 pt contribution from price and mix (vs. +3.2 pts last period and +3.6 pts over the last 52 weeks), as volume sales were up 0.3% YoY (vs. -1.5% last period and +1.3% over the last 52 weeks). We highlight that the volume sales growth seen in the period is likely attributable, in part, to Christmas timing (which depressed sales in the prior period), as sales in the current four-week period include those made on December 23rd and 24th, while sales in the year-ago period did not. That said, we do not believe the impact was as significant as that seen in the xAOC data released last week.


MillerCoors’ Miller Lite Weighs on Results – TAP’s MillerCoors JV saw its dollar sales growth accelerate modestly, to +0.9% YoY (vs. +0.7% last period and +2.7% over the last 52 weeks). While the Coors Light brand continued to post solid dollar sales growth (+5.0% YoY), the company’s results were negatively affected by its other major brands including Miller Lite (-3.1%), Keystone Light (-7.8%) and Miller High Life (-6.5%). MillerCoors’ volume sales were down 1.2% YoY in the period and price/mix contributed 2.1 pts to sales.


Crown Imports Continues to Outperform – STZ’s Crown Imports JV continued its relative outperformance, posting dollar sales growth of 19.0% YoY (vs. +6.4% last period and +13.8% over the last 52 weeks). Crown’s solid results were primarily driven by the 38.1% dollar sales growth posted by the Modelo Especial brand, while sales for both the Corona Extra (+12.8%) and Corona Light (+7.1%) brands also increased in the period. Total-company volumes grew 18.5% YoY in the period, and price/mix just contributed 0.5 pts. Looking ahead, we’ll continue to monitor the outsized growth being seen for Modelo Especial and the effect on Crown’s margins, given the lower price point of the brand.


Boston Beer’s Seasonal Offerings Drive Significant Growth – SAM posted dollar sales growth of 26.4% YoY in the four-week period (vs. +10.7% last period and +15.2% over the last 52 weeks). SAM’s seasonal offerings (+47.0% YoY) and its Samuel Adams Boston Lager (+13.6%) were the primary drivers of the company’s dollar sales growth, offsetting continued declines for the Sam Adams Light brand (-12.3%). The company’s dollar sales growth in the period was driven by a 25.4% YoY increase in volumes and a 1.0 pt contribution from price/mix.




Australia: Tax takes fizz out of alcopops


Source: The Age

Eli Greenblat

February 11, 2013


THE ready-to-drink category in Australia, also known by the more colloquial name ”alcopops”, continues to remain a growth-free zone thanks to the massive 70 per cent tax increase imposed on the sector by the Rudd government four years ago, as well as changing tastes such as the massive shift by drinkers to alcoholic cider.


Diageo Australia, local offshoot of the global spirits and beer giant that owns beverage brands such as Johnnie Walker, Smirnoff, Baileys, Tanqueray, Hennessy and Guinness, has reported that RTD sales sank 1 per cent in the first half of 2012-13 with the drinks category having flat-lined for years.


Diageo is the market leader in the RTD segment with local managing director Tim Salt saying the company would need to further innovate to create more interest in the category, offering drinkers new ranges of drinks from its popular Bundaberg Rum label while also directing more marketing dollars towards other beverages such as gin and rum. ”We are doing some new RTDs and we are really trying to change the way people perceive RTDs,” Mr Salt said.


This included a new Bundaberg Rum and soft drink pre-mixed drink currently being tested in the Queensland market, which uses brewed soft drink from a regional supplier. ”It’s a test, but I think what it does is tap into authenticity . and is an exciting innovation.”


Mr Salt said Diageo would not resort to price discounting to attract drinkers back to the RTD market despite many flocking to ciders, which are taxed at a vastly lower level by the federal government.


”The challenge for us is to make sure we have offerings that the consumer wants to buy; short-term price discounting might give you a short-term kicker but that’s not the game we are going to play.


”We have to work out how do we get consumers back into our RTDs and get that category growing through authentic products, great-tasting products and products that, at whatever price they are at, consumers recognise the value in those products.” Part of this innovation saw Diageo launch a few years ago a range of pre-mixed spirits packaged in casks, combining quality ingredients such as cloudy apple or blood orange with its branded vodka, Smirnoff. That category has also suffered of late, hit by intense price competition from ”me-too” brands trying to grab market share at any price.


However, there was some good news for Diageo in the first half, as its overall group sales in Australia rose 2 per cent as a renewed push in spirits and particularly premium labels helped drive a 3 per cent sales improvement for the half in spirits.


”The area we have seen a whole lot of growth in the first half was in what we call the ‘super premium’ area and that’s grown for us around 48 per cent in the first half”


He said this portfolio included products such as Johnnie Walker Gold and other spirits that sold for more than $50 a bottle.


In an effort to bolster its premium and super premium earnings, Diageo has also decided to invest further this year in its gin brand Tanqueray as well its premium rum range under the Bundaberg branding.




China: Pernod Ricard, Remy Cointreau risk sales hit from corruption crackdown – analyst (Excerpt)


Source: Just-Drinks

By James Wilmore | 8 February 2013


Pernod Ricard and Remy Cointreau’s sales in China are at risk of getting “caught in the crossfire” over a wider crackdown on corruption, according to an analyst.


A new anti-corruption programme has been launched in China since Xi Jingping took over as head of the Communist Party last November. The country’s Central Military Commission has already issued a ban on liquor and luxury banquets at receptions for high-ranking officers and the clampdown is expected to be ramped up this year.


In a note today (8 February), Deutsche Bank said that imported spirits are unlikely to be targeted specifically in a crackdown but they “will get caught in the crossfire of reduced entertainment and less gift-giving more generally”. “If there is an impact, not only will volume growth decelerate but mix will shift negative, pricing will struggle and there could be destocking too,” the note said.




India: Srei Infrastructure to Sell United Spirits Shares to Diageo


Source: Bloomberg

By Pradipta Mukherjee

Feb 8, 2013


Srei Infrastructure Finance Ltd., an Indian lender to road and power projects, plans to sell shares of United Spirits Ltd. it got as collateral for lending to Kingfisher Airlines Ltd. to Diageo Plc.


Diageo on Nov. 9 said it will buy a controlling stake in United Spirits for $2.04 billion. The maker of Johnny Walker whiskey said it will acquire 27.4 percent of India’s largest distiller at 1,440 rupees a share and will make a tender offer for 26 percent of the balance.


Once the regulators approve the transaction “then we get our money from Diageo,” Srei Vice Chairman Sunil Kanoria said in an interview on Feb. 7. “We get our money, we go home.”


Srei acquired 4.9 million shares of United Spirits after buying a 4.4 billion-rupee ($82 million) loan advanced to grounded carrier Kingfisher Airlines by ICICI Bank Ltd. United Spirits shares have risen 41 percent since Nov. 9 and are trading 33 percent higher than Diageo’s offer price. Kanoria didn’t explain why he isn’t selling at the market rate that values Srei’s stake higher at 9.3 billion rupees.


The Kolkata-based Srei had also lent about 700 million rupees to Kingfisher, Kanoria said in the interview.




United Kingdom: Drinks industry condemns plan for minimum alcohol pricing


The Government’s controversial plan to introduce a minimum price for alcohol is based on flawed evidence about the impact it will have on health and crime, according to a report to be published by the drinks industry this week.


Source: Daily Telegraph

By David Barrett

10 Feb 2013


A study by a leading economics consultancy will cast doubt on whether minimum pricing – which the Coalition has proposed at 45 pence per alcoholic unit – is the most effective way to reduce the impact of binge drinking.


Producers are angry about the government plans which they say could be illegal under European Union law, will raise prices for responsible drinkers and do nothing to reduce alcoholism.


The Scotch Whisky Association, which represents drinks groups including Diageo, Chivas Brothers and Glenmorangie, has protested to the European Commission.


Research carried out for the Government by Sheffield University originally claimed consumption of alcohol would fall by 4.3pc if the 45 pence minimum goes ahead, which would mean a can of strong lager could not be sold for less than £1.56 and the cheapest legal price for a bottle of wine would be £4.22.


The research – which ministers relied upon to help justify the new policy – predicted the move would lead to 2,000 fewer deaths and 66,000 fewer hospital admissions after 10 years, while the number of crimes would fall by 24,000 a year.


However, this week a new report by the Centre for Economics and Business Research will claim the official figures are either unreliable or based on old data from 2006 which have already been proved wrong.


Its analysis will conclude:


. Alcohol consumption fell by nearly 13pc in England between 2006 and 2010, even without a minimum price structure, far above what the Sheffield researchers predicted.


. Even though consumption has fallen, alcohol-related hospital admissions have risen significantly, which, it says, undermines the official report’s assumptions.


. The Sheffield study under-estimated how a fall in alcohol consumption would have an impact on alcohol-related crime.


The report, commissioned by the Wine and Spirits Trade Association, will say: “The fact that neither alcohol-attributable deaths, hospital admissions nor crimes have moved in the manner expected in response to this overall reduction in consumption also casts doubt over the capability of the Sheffield model to properly predict the relationships between alcohol-related harms and alcohol consumption.”


Oliver Hogan, the CEBR economist who wrote the report, said: “The evidence seems to suggest sensible drinkers are cutting back but problem drinkers are relatively undeterred by cost.”




Pennsylvania: Number of Pa. beer, wine retailers open question


Source: Bloomberg

By Peter Jackson

February 08, 2013


Republican Gov. Tom Corbett’s liquor privatization plan could result in many more Pennsylvania retailers selling beer and wine than he anticipates, a Senate Democrat said Thursday, as industry players critiqued legislation that has yet to be introduced.


Sen. Jim Ferlo, the ranking Democrat on the Senate Law and Justice Committee, said at least 10,000 retailers would qualify for the new licenses, twice as many as Corbett estimates, and warned that it would compound social problems and crime.


“I just see it all on the down side,” said the Allegheny County lawmaker, whose committee oversees liquor legislation and who favors keeping the state store system.


Corbett spokesman Eric Shirk said the administration’s consultant based its estimate of 5,000 stores on the experience of other states.


“Our number is based off a scientific, educated study,” he said.


Shirk noted that Corbett’s proposal calls for increased funding for state police enforcement activities, stiffer penalties for sellers who serve alcohol to minors and expanded treatment and prevention programs.


Corbett has billed his plan as a revenue-neutral strategy for enhancing consumer convenience and modernizing Pennsylvania laws governing the sale of alcoholic beverages. The plan is expected generate a four-year windfall of $1 billion from the initial sale of licenses, which the governor proposes using to create a block grant program for public schools.


Unlike licenses involving the sale of liquor, Corbett’s plan sets no limit on the number of wine and beer licenses that could be sold to retailers including big-box stores, grocery stores and pharmacies.


Licensees would face annual renewal fees ranging from $10,000 to $35,000 and limits on how much they may sell per transaction. For example, convenience stores could sell only one six-pack of beer at a time.


Most beer in Pennsylvania is sold by the case through about 1,200 retail distributors, while wine is sold at the more than 600 state stores that Corbett wants to close and replace with twice as many private liquor and wine stores.


Efforts to get the state out of the liquor and wine businesses have perennially failed.


Corbett’s initiative would dramatically open the sale of alcoholic beverages to private entrepreneurs, ending 80 years of state control, but critics were taking shots at the plan even before it was drafted into legislation.


Law and Justice Committee Chairman Charles McIlhinney, Ferlo’s Republican counterpart on the panel, said last month he is sponsoring a bill that would keep the state stores open while allowing beer retailers to buy special licenses to sell wine and liquor.


Mark Tanczos, president of the Pennsylvania Malt Beverage Distributors Association, which represents many of the 1,200 beer distributors, objected to a proposed $150,000 fee that distributors would have to pay for enhanced licenses that allow them to sell wine and to sell beer in six-packs as well as by the case.


“We’ve been asking to let them sell six-packs for 30 years,” said Tanczos, who owns a Bethlehem distributorship. “I don’t know why we’re singled out to pay that much.”


Jay Wiederhold, president of the Pennsylvania Beer Alliance, which represents about 45 wholesale distributors that deliver beer to retailers, said the proposal would increase overhead because trucks would be making more trips and more stops without an offsetting increase in revenue.


“You’re really not going to sell much more beer,” Wiederhold said. “If you bought a case of beer a week, you’re still going to buy a case a week.”


Louis Sheetz, executive vice president of marketing for the Altoona-based Sheetz convenience store chain, which was granted a license to sell beer at its Altoona store in 2010 after a court battle with distributors, said the one six-pack limit is unrealistic because customers typically want at least two six-packs, or 12 cans or bottles.


“A case equivalent (24 containers) would be a great customer convenience,” he said.




News From TTB


Source: TTB

Feb 8th



Karen Welch and Saul Cruz will serve as acting directors of our International Trade Division for February and March, respectively, as we seek a permanent director.



We recently published a revised version of our certificate of label approval (COLA) form-TTB Form 5100.31.


The updated COLA form’s instructions now reflect that as of February 1, 2013, we are processing all paper applications electronically. We’ve also clarified-

.         The circumstances allowing you to make changes to the mandatory alcohol content statements on labels without sending a new application (item 11 on the list of allowable revisions), and

.         Our policy on returning COLAs sent to us by third-party filers.


Please note that we will continue to accept the previous version of the form (dated July 2012).


Read Industry Circular 2012-03 for more information about the changes we’ve made to improve the way we process paper COLA applications and an overview of how these changes may benefit you.




NABCA Legislative Update: February 2, 2013-February 8, 2013


Source: NABCA

Feb 8th



Wells Fargo Weekly Economic & Financial Commentary


Source: Wells Fargo

Feb 8th



.         Economic news was somewhat disappointing this week with a weaker-than-expected increase in factory orders and a decline in nonfarm productivity.

.         However, a narrowing trade balance in December and pending revisions to nonresidential construction and government spending suggest an upward revision to 4Q GDP growth next month.

.         The ISM Nonmanufacturing Index suggested that growth slowed in January as business activity and new orders rose less rapidly than in previous months.

.         Despite the weak overall report, U.S. job growth will likely be driven by the service sector in the near-term.



.         After surging in 3Q12 thanks to the Olympics, U.K economic growth slowed to a 1.2% annualized rate in the fourth quarter.

.         While economic indicators remain somewhat benign, recent consumer confidence, housing price, and industrial production reports posted better-than-expected gains.

.         With inflation higher than target, the target interest rate and asset purchase programs were left unchanged following the Bank of England meeting this week.

.         German industrial production for December disappointed, but business confidence indices suggest only short-term weakness.

.         Japan’s manufacturing rebound has been continually sidetracked, but better-than-expected factory orders in December helped offset weaker industrial production.


Point of View

.         Interest Rate Watch

.         Ongoing concerns regarding fiscal policy will encourage the Fed to continue buying assets.

.         Recent data suggest economic conditions are improving and that Fed involvement may not be required through the mid-2015 date that was previously mentioned.

.         Credit Market Insights

.         Strong auto demand in 2012 was partially driven by low interest rates and easier financing requirements.

.         2013 is likely to be another strong year for auto sales as demand remains robust, rates stay low, and financing requirements continue to ease.


Topic of the Week

.         Federal Budget

.         The CBO projects economic growth of 1.4% in 2013 and 3.7% in 2014.

.         Assuming higher taxes and strong growth the budget deficit is projected to narrow to $430 billion in 2015, before expanding again beyond $1 trillion in 2023.

.         Bottom line, entitlement programs continue to threaten the budget.




Record Winegrape Crop Confirmed by Preliminary Grape Crush Report


Allied Grape Growers’ Aggressive 2012 Winegrape Crop Estimate only 3% off Actual Crush



Feb 8th


The State of California’s Agricultural Statistics Service released its annual Preliminary Grape Crush Report at noon today summarizing the size and value of the 2012 California winegrape crop. Prior to this release, Allied Grape Growers had estimated the size of the 2012 winegrape crop to be 3,885,000 tons – the most aggressive estimate in the industry. The actual winegrape tonnage crushed was 4,013,903- a slight 3 percent difference from the large estimate. The 2012 vintage provided a record winegrape crop, easily surpassing the previous record from the 2005 vintage by 258,737 tons.


In addition to a 4,013,903 ton winegrape crush, 99,111 tons of table-type grapes along with 270,085 tons of raisin-type grapes were crushed, bringing the total California grape crush, of all types, to 4,383,100 tons, a 13 percent increase over last year’s 3,874,158 tons. Of the total grape crush in 2012, 12 percent or 528,742 tons were crushed for grape juice concentrate production as opposed to wine, brandy or other uses.


According to the report, the average price of California winegrapes rose 20 percent from $639.87 per ton in 2011 to $772.09 per ton in 2012. This increase in average grape price translates to about $.16 per bottle in increased grape cost for California wine. White winegrapes, on average, increased in value by 15 percent while red winegrapes increased by 24 percent. The average value of raisin and table types also grew as compared to 2011, by 20 percent and 25 percent, respectively, driven by the increased demand for those grapes from the grape juice concentrate sector.


Individual highlights of the report include a record average price paid for Napa Valley Cabernet Sauvignon of $5,067 per ton for high end wine production down to a record average price of $318 per ton for raisin varieties used mainly for concentrate production. Not everything set records in the report however, as the crush of the popular Central Valley variety Rubired was down from 2011 by 12 percent to only 226,504 tons.


Year on year production changes for major California varietals include Chardonnay, the largest single variety crushed in 2012, at 734,864 tons, up over 31 percent; Cabernet Sauvignon at 495,662 tons crushed, up 29 percent from 2011; Merlot at 334,485 tons crushed, up 17 percent from 2011; Zinfandel at 449,650 tons crushed, up 30% from 2011; Pinot Noir at 247,303 tons crushed, up 45 percent from 2011; Pinot Grigio at 195,365 tons crushed, up over 12 percent from 2011 and finally, Muscat of Alexander (primarily for Moscato production) at 78,417 tons crushed, up almost 20 percent from 2011.




Australia ships wine in bulk, not bottles


Source: SF Gate

David Fickling

February 8, 2013


Hardys became Britain’s best-selling Australian wine brand by selling for as little as $5 a bottle, despite the 37 percent rise in its home country’s currency since 2009. To do that and still earn a profit, the winemaker turned to plastic bags.


No, not those bag-in-a-box jobs found at Sam’s Club or Costco. We’re talking 24,000-liter plastic bags, each able to carry the equivalent of 32,000 bottles of vino. Accolade Wines, the maker of Hardys, pared shipping costs that can amount to as much as $3 per case by ditching glass bottles and shipping its fruit of the vine in giant plastic bladders. After the 10,000-mile journey, the wine is bottled at a plant next to a scrap merchant a two-hour drive from London.


Australia’s $5.8 billion wine industry moves more than half its overseas shipments in bulk, making the 40-day journey to Europe safely ensconced in plastic. The practice is reshaping logistics and the flow of wine between the Land Down Under, the largest exporter outside Europe, and the United Kingdom, the biggest net importer. Richard Lloyd, Accolade’s global manufacturing director, said in an e-mail: “We don’t ship glass around the world, we ship wine.”


About 30 shipping containers are trucked every day from the English port of Avonmouth to Accolade’s nearby bottling plant. Treasury Wine Estates brands and Pernod Ricard’s Jacob’s Creek are also being shipped in bulk, while Casella Wines, maker of the wine label Yellow Tail, says it may move to bulk exports to cut costs.


Transport costs


Shipping in bottles can add 25 cents per bottle to costs, says Rabobank. Sea transport costs are typically based on volume, so filling a shipping container with cases of bottled low-end wine wastes space on packaging, says Tony Woodborne, manager of Flexibulk Logistics, a Sydney wine freight company.


“You lose a third of your volume to bottle and carton,” he said. While a 20-foot container accommodates about 9,900 liters of bottled wine, it can carry a 24,000-liter bladder at only a little more cost, he says.


Sending a container of bottled wine from South Australia, the nation’s biggest wine-producing state, to Europe costs about $3,300 to $3,400, says Ben Mislov, sales manager for transport company JF Hillebrand Group. Using a bladder only lifts the price to about $4,000, he says.


Accolade, owned by Champ Private Equity, packs its own Banrock Station and Hardys brands at the 1.6 million-bottle-a-day Avonmouth plant, along with the Rosemount, Lindeman’s and Wolf Blass labels owned by Treasury. Filling 12.5 million cases with Australian wine each year, the plant is bigger than any facility in Australia.


The country’s shipments of bulk wine have grown more than sixfold over the past decade and overtook bottled exports for the first time last year with 54 percent of the total, according to Wine Australia, an industry body. Four out of 5 bottles the country sells in the United Kingdom are now shipped as bulk, as are 2 out of 5 in the U.S., generally shipped to the West Coast.


More bulk shippers


Chile, the second-largest New World exporter, shipped about 36 percent of its overseas sales in bulk in the first six months of last year, says wine broker Ciatti. The U.S. and South Africa, the third- and fourth-largest exporters outside Europe, also shipped half their wine as bulk in 2010 and 2011, according to the U.S. Department of Agriculture and industry body Wines of South Africa. Half of U.S. exports go to Europe, where Accolade also bottles its California-grown export wines at its suburban London plant.


With the Australian dollar up against the U.S. dollar and the pound since 2009, Aussie wine producers have had to innovate to widen export margins.


Meanwhile, Owens-Illinois, the world’s largest bottle maker, shut down three of its 12 Australian glass furnaces, citing the move to bulk wine, the company said last year. And Amcor said revenue from its glass-packaging business declined 34 percent last year and has dropped a forecast that a new bottle furnace would be required every three years. Penrice Soda Holdings even blamed the growth of bulk wine for its decision on Jan. 18 to stop producing the soda ash used in glassmaking.


While bulk shipping is popular for lower-priced wines, it probably won’t be adopted for prestige labels, says Peter Booth, South Australia manager of freight company Booth Transport.


“Penfolds Grange in a bladder?” he said, referring to Treasury’s most prestigious label, which has sold for as much as $62,430 a bottle at auction. “I can’t imagine that ever happening.”




Sulfites Added to Wine — The Reason You Get a Hangover?


Source: Huff Post



Raise your hand if you’ve ever heard this before: “Drinking red wine gives me a headache. I’m allergic to sulfites.”


In red wine, “sulfites get a bad rap,” says Annie Rabin Arnold, owner of the Organic Wine Exchange. “People often blame sulphur, when in reality there are a host of other issues that may contribute to headaches.”


As W. Blake Gray writes in The Gray Report, some people really are allergic to sulfites, and it can be a life-threatening condition.

Should you fear the sulfites in your wine?


Should you seek out wine that doesn’t have any sulphur added? It’s easy to obsess about sulfites because wine with sulfites must be labeled as such if it is to be sold in the US. It’s been that way since 1987, when the phrase “contains sulfites” was legally mandated to appear on wine labels. Even my righteous bought-in-Whole-Foods Agriculture Biologique Bordeaux has sulfites in it – it says so right on the label. In fact, commercial wineries add lots of chemicals to their products, and some people might have an allergic reaction to those chemicals, and blame it on the sulfites.


Drink the wine. Lose the sulfites?


All wine contains some sulfites. Most of them are dissolved in the aging process. But there are options for those who want to drink wine with no additional sulfites, beyond what might occur naturally. There are winemakers, like Paul Frey of Frey Vineyards in Redwood Valley, VA, who don’t add these chemicals to any of their wines.


As Frey told me in an interview, for most of wine’s eight-thousand year history it was made without any synthetic additives at all. “Sulphur dioxide is a relatively new industrial ingredient in the history of wine,” he said.


“Sulfite is a nonessential preservative,” Frey said. It has never been allowed as an additive in any food or wine that carries the USDA organic seal. “By using alternative organic methods, food processors and winemakers do not need to use sulfur dioxide,” Frey added.


Other winemakers would take issue with that, saying that adding small amounts of sulphur dioxide stabilizes the wine, enhancing flavors, or even can be used to save a questionable batch. Winemaker Robert Sinskey adds sulphur to his wines, and has written: “Even if a farm is organic or Biodynamic, it is, at best, a simulation of nature. Every choice a farmer makes is an intervention, just as every choice a winemaker makes is an intervention.”


Sinskey made a commitment, more than 20 years ago, to make 100 percent organic wines. Yet he writes,


Even in the world of organic wines, there is a spectrum. You can have many spirited conversations (pun intended) about how “pure” pure can be, and now natural a wine might be. Paul Frey explained in our conversation that the first known law that allowed the use of sulfites was very restrictive. Even today, many natural wine purists consider sulphur a chemical of last resort, to be added only to save wine that might have become unstable.


Paul Frey would even say “no” to all that. “The root of and heart of organic is preservative- and additive-free,” he told me.


I think it gets down to whether you see wine as an industrial or an agricultural product, a completely commercial enterprise needing a long supermarket or liquor store shelf life, or a personal passion of artistic expression that needs to turn a profit in order to support the winemaker. Many winemakers, like Robert Sinskey, will add sulphur if it can help a wine worth helping. Sinskey points out that he grows wine in a region dominated by a paradigm of science and technology, a place dominated by the assumption that additives, preservatives and modifications are necessary for wine to be good and for winemakers to prosper.


So what’s the bottom line? How do you determine if the sulfites in wine are causing headaches?


According to WebMD, the FDA estimates that one out of 100 people are sensitive to sulphur compounds. If you’ve ever gotten a reaction after eating dried fruit, which often contains sulphur as a preservative, then you may be among those who are sensitive to sulphur in varying degrees, from intolerance to allergic reactions.


But if dried fruit doesn’t bother you, and you’re still getting headaches, you might having a reaction to the chemicals that are added to the industrialized wine.


The only way you’ll know for sure is to try an organic wine, or a wine made with minimal intervention — because then you’ll know what’s not in it — no added sulphur or mystery chemicals.




Suckling hails ‘superb’ 2010 vintage


Source: the drinks business

by Rupert Millar

8th February, 2013


Wine critic James Suckling has awarded 11 100 pointers in his review of the 2010 Bordeaux vintage as its release date nears.


Is the 2010 the best ever?


With fellow critic Robert Parker slated to release his scores in the spring, Suckling a veritable brace of 100 pointers for the widely lauded vintage – only nine were given to the 2009s.


In addition, three wines were given 99 points and nine 98 points.


The 100 pointers were: Cheval Blanc; Latour; Margaux; Vieux Château Certan; Lafleur; Le Pin; Mission Haut-Brion; Mouton Rothschild; Pétrus; Ducru Beaucaillou and Pontet Canet.


Angélus, Léoville-Las-Cases and Lafite were the 99 pointers while the 98s included Figeac, Palmer, Ausone, l’Eglise Clinet and Rauzan-Ségla.


The 100-point wines reveal a fairly even split between Left and Right Banks but Suckling was particularly effusive in his praise for Cheval Blanc, which he dubbed, “truly one of the greatest Chevals ever.”


What Parker will make of the vintage now is still guesswork. In 2011 he praised the vintage but was sparing with his points – unlike the 2009s.


He called the year “compelling” and gave 10 estates 100-point potential although a number of the 2009 high-rollers were not among them – notably Margaux which was a controversial decision considering the praise it garnered elsewhere.




Why You Should Make Time (and Place) for Port


Source: WSJ


Feb 8th


SOME WINES require a context and a setting-perhaps even props. For example, I’ve found that if you say “Port” to most people, they’re likely to respond with a set of stage directions (“a man sitting in a chair, smoking a cigar”) and not a description of the wine itself.


Perhaps that’s because Port is a wine of ceremony and ritual, of a time and a place (always at the very end of the meal). It’s also quite sweet and high in alcohol, which can make pairing hard. As Matt Reiser, wine director of UpStairs on the Square in Cambridge, Mass., put it: “Port isn’t versatile.” This is especially true compared with other fortified wines, such as Sherry. (Sommeliers are big Sherry boosters.) As Mr. Reiser noted, “You can drink Sherry throughout a meal-as an aperitif, with an appetizer and at the end of a meal. Port is too sweet.”


When I mentioned the Port-vs.-Sherry sommelier situation to Rupert Symington, he laughed. “I’m always amused to read stories about how sommeliers love Sherry. Sommeliers love wines but don’t care how much they cost.” Mr. Symington is the scion of the Symington Port family, which controls about a third of all premium Port sales world-wide. Its holdings include famous Port names such as Warre’s, Dow’s and Graham’s.


The Port market in the U.S. is “chugging along,” according to Mr. Symington, who said his sales were up modestly this past year. (Total U.S. Port shipments were 415,000 cases in 2012, compared with 404,000 in 2011 and 374,000 in 2010, according to the industry group Instituto dos Vinhos do Douro e Porto.) Mr. Symington pronounced himself “delighted” with his U.S. Port sales and didn’t necessarily think that Port needed to be more things to more people-it was fine as it was. And what was that? “Port is a wine of relaxation,” Mr. Symington declared.


That may or may not be the case, but Port definitely has a wide range of styles. Although all Port, produced in the Douro River Valley of Portugal, is made the same way (partially fermented wine is fortified with a neutral spirit, which stops fermentation and raises the alcohol level), there are two distinct types: ruby and tawny. The former is aged in bottle, the latter in wood-with many variations.


A basic ruby Port is generally fruity, sweet and cheap (and “clinically proven to give you the worst hangover of all time,” according to Tim Finch, store manager of K&D Wines in New York). Reserve rubies are a bit more complex, thanks to more time in the cask, but are still quite lively and fruity. Well-known reserve ruby Ports include Graham’s Six Grapes, Fonseca Bin 27 and Warre’s Warrior Port. Late-bottled vintage Ports have some of the character of a vintage Port but are much cheaper, and are meant to be consumed young. Vintage Port is the most famous ruby Port, although it’s made in the smallest amounts. It’s produced only in the best years and may take decades to mature. Vintages are “declared,” generally in unison, though some Port producers declare vintages more often than others. (The last universally great vintage was 2007, although the 2011 vintage is likely to be declared this spring.)


Tawny Ports are quite different from rubies-they’re generally less sweet-with flavors of spice and nuts. Since they’re aged for 10, 20, 30 or even 40 years in cask, they’re more oxidative in style-not to mention color (hence “tawny”). There are also Colheita tawnies, made from a single harvest, although they are not quite as common. (You can find Port facts and talk at


Tawny Port is gaining in popularity, according to the retailers and restaurateurs I spoke with. (In fact, the U.S. is the largest market for 20-year-old tawny “by a factor of four,” according to IVDP.) Bear Dalton, head wine buyer for Spec’s, the Houston-based chain, sells a lot of Port, especially tawny-even when (winter) temperatures soar into the 80s. How was that? “Air conditioning,” replied Mr. Dalton. “Air conditioning is the secret of Port in Texas.” And while Spec’s vintage-Port sales were slow, sales of Colheita tawnies were growing, especially among women, said Mr. Dalton. One reason may be that unlike an open bottle of vintage Port, which has to be consumed within a few days, a tawny can be sipped a little at a time over many weeks.


Tawny Port sales are also strong at Surdyk’s in Minneapolis, said wine buyer Andy Hall. While his vintage-Port sales have slowed “to a death crawl,” the tawny Ports were doing well, in part because they were different and more affordable, he said. Surdyk’s “sweet spot” for Port was $18 a bottle, though Ports that are cheaper do even better, Mr. Hall said.


I encountered the vintage “death crawl” during my own Port search-a surprising number of older vintage Ports were still on the shelves. When I told Bartholomew Broadbent that I’d found his 2000 Broadbent Vintage Port at a nearby store, he responded with a rather morose email: “Sadly, that’s indicative of the Port market; you can still find vintage Ports that hadn’t sold through.” In fact, Mr. Broadbent added, once-ballyhooed vintage Ports were selling at less than half the prices they commanded on release.


I bought 15 Ports altogether, rubies and tawnies ranging from $16 to $105 and including vintage Ports, late-bottled vintage Ports, aged tawnies and simple rubies as well. Then I called three Portophile friends, including my friend Richard, who only drinks vintage Ports “after dinner in front of a fire.”


The Graham’s Six Grapes was a pleasant and fruity quaff-it won a collective nod as our favorite entry-level Port ($16), although for a few dollars more the 2007 Taylor’s Late Bottled Vintage was an even better buy-elegant, powerful and rich. The three vintage Ports were impressive, from the 1985 Warre’s to the (still-young) 1994 Smith Woodhouse, but the 2000 Broadbent was the most remarkable-a nuanced wine at a perfect drinking point, with a very good price ($45).


The biggest surprise was how well the tawny Ports showed-the 20-year-old bottlings in particular, with notes of dried fruits, caramel and spice. (Many Port drinkers believe that 20 years is the perfect age for a tawny Port.) The 20-year-old Graham’s and the 20-year-old Taylor’s were much admired, but the 1997 Dow’s Colheita Tawny proved the most popular, thanks to a perfect balance between sweetness and acidity. Even Richard, the vintage-Port lover, was a convert. “I could even drink this as an aperitif,” he said.


A few days later, I bought a half-bottle of 2009 Croft Vintage Port to bring to dinner with friends. (Half-bottles make vintage Ports more drinkable young.) The wine was quite accessible-dense, ripe and sweet. Even a non-Port wine drinker enjoyed a glass and said he’d want to drink it again-in the proper setting, of course: “If I came in from a blizzard crusted with snow, a glass of Port would be very nice.”




WIA launches wine fraud initiative


Source: Harpers

by Carol Emmas

08 February 2013


The Wine Investment Association has teamed up with the National Fraud Intelligence Bureau to provide better protection for the wine industry and increase consumer confidence.


The move comes on the back of millions of pounds being invested annually by individuals and organisations in what, until now, has been an unregulated wine market, and has lead to a steady increase in cases of wine investment fraud, malpractice and misrepresentation.


The partnership will also help regulate such practices which includes people being duped into buying wine or vineyards that bear little resemblance to what is shown on the prospectus, or don’t even exist.


In response, the NFIB and the WIA are now working together to establish a new regulatory framework for industry members, overseen by an external auditor.


Peter Shakeshaft, director of the WIA, said: “WIA provides industry guidance to companies that trade in fine wine with the aim of protecting their customers and the integrity of the industry. Those companies that have successfully completed the independent audit process commissioned by the association will bear the WIA logo, offering consumers a ‘safety kitemark’ to trust.”


He added: “We welcome our association with the NFIB and their support in addressing the issues the industry faces, and look forward to growing our community of trusted providers.”


Chairman of the WIA, Hugo Rose MW, said there’s now a kitemark of trust that allows private investors to understand at a glance that WIA companies have been independently audited. The City of London Police will encourage all merchants involved in selling fine wine to make sure their clients become members at the earliest opportunity.”


Director of the NFIB, Det Supt Dave Clarke, said: “Fraudsters will always follow the money, with wine investment just the latest in a long line of investment opportunities that are being exploited and corrupted to the detriment of the industry.


“The NFIB sees an auditable framework of self regulation as a real and positive step towards maintaining and increasing consumer confidence, and assisting us to highlight those who do not operate to the necessary high standards.”






Danny Tomlin Named Chief Executive Officer and Dale Farino Named President of Associated Distributors, LLC


Source: The Charmer Sunbelt Group

February 8, 2013


The Charmer Sunbelt Group, one of the nation’s leading distributors of fine wines and spirits, is pleased to announce the following changes to our senior leadership team in Virginia.  Danny Tomlin, President, Associated Distributors, LLC will assume the newly created role of Chief Executive Officer and Dale Farino, currently Associated’s Chief Operating Officer, will be promoted to President.  Both appointments are effective as of February 1, 2013.


“As The Charmer Sunbelt Group strives to continually be the Distributor of Choice, a critical component of our success lies in the quality of our leadership team and the talent, passion and dedication of our associates,” said Greg Baird, Chief Operating Officer, The Charmer Sunbelt Group.  “It is with this in mind that we are pleased to have both Danny and Dale leading our efforts in Virginia.”


Mr. Tomlin brings over 38 years of experience to his new role, having led our operations in Virginia as President from 2010 to 2013.  Leveraging his knowledge of Virginia Distributing Company – where he previously served as President – Mr. Tomlin led the highly successful integration of that company with Associated Distributors.  His responsibilities as CEO will include implementing Charmer Sunbelt’s vision and long-term strategies for continued growth.


Dale Farino began his career with Associated Distributors in 1993 as the head of Operations.  He progressed through Associated for the next 19 years with increasing levels of responsibility, most recently serving as Chief Operating Officer.  Prior to joining Associated Distributors, Mr. Farino served in the United States Marines Corps as an Artillery Officer, obtaining the rank of Captain, and held several command and staff positions.  He also worked for the Coca-Cola Bottling Company of NY as a supervisor in the Production and Distribution Departments.  Dale’s vast experience makes him uniquely and perfectly positioned to lead Associated into the future.




Report: Restaurant sales, traffic improve in January


Black Box Intelligence analyzes the results of the latest Restaurant Industry Snapshot


Source: NRN

Wallace B. Doolin

Feb. 8, 2013


Black Box Intelligence and People Report released The Restaurant Industry Snapshot for January this week, showing a positive result for the first month of the new year. However, restaurant consumers indicated a slight pullback from December as reported through the Consumer Willingness to Spend Index from Consumer Edge.


Same-store sales rose 0.4 percent in January, an improvement over a decline of 1.1 percent in December. Same-store sales increased 5.8 percent the first week of January and dropped 1.4 percent the last three weeks of the month, ending on Sunday, Jan. 27.


Traffic declined 3.1 percent, reflecting a 0.6-percent improvement over December.


The results seen in the first week of the year were influenced by the mismatch of New Year’s Eve and New Year’s Day. Calculations done by Black Box Intelligence and People Report estimate the impact of New Year’s Eve and New Year’s Day falling into 2013 at a negative impact to the month of December of approximately 1.0 percent, which in turn benefitted the month of January by approximately 1.0 percent.


In January, the New York/New Jersey area showed the best performance out of the regions in the U.S. with a 3.8-percent same-store sales increase. The Southeast region was the lowest-performing area, with a same-store sales decrease of 3.3 percent.


People Report data shows a mix of turnover results as of the most recent month. In December, results show management turnover on the decline while hourly turnover increased. The most recent job growth reported by People Report is 0.7 percent, a decrease from November’s growth of 2.1 percent.


The split of positive to negative DMAs in January was 44 percent positive and 56 percent negative. This is an improvement from December results.

Consumer Edge Research, a partner company to People Report and Black Box Intelligence, released the January Restaurant Willingness to Spend Index this week as well. The results show a drop from 91 in December, which was the highest value the index had seen in all of 2012, to 83 in January.


“We may already be seeing the impact of payroll tax increases on our customer’s wallet, and the surveys done by our partners at Consumer Edge Research in January indicate that as well,” said Bill Schaffler, president at Black Box Intelligence and People Report.


The Restaurant Industry Snapshot is a compilation of real sales and traffic results from 185 DMAs from over 100 distinct restaurant brands and approximately 14,000 restaurant units 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.


This exclusive series to Nation’s Restaurant News provides C-level insights into the sales and traffic data from clients subscribing to Black Box Intelligence, a financial performance benchmarking company. The views expressed here do not necessarily reflect those of Nation’s Restaurant News.




Restaurants not required to serve allergen-free foods, Justice Department says


Source: NRA

February 8, 2013


Following some confusion over the Justice Department’s stance on how the Americans with Disabilities Act applies to food-allergic customers, the Department of Justice published a Q&A last week reaffirming that the ADA does not require all restaurants to provide gluten-free or allergen-free foods.


The Justice Department, however, indicated the ADA might require restaurants to take “reasonable steps” to accommodate people with celiac disease and other food allergies, as long as the accommodation doesn’t result in a “fundamental alteration” of the restaurant’s operation.


For example, it said the ADA may require restaurants to answer questions about menu ingredients and omit or substitute certain ingredients upon request if the restaurant normally does this for other guests. But, a restaurant would not be required to “alter its menu or provide different foods to meet particular dietary needs.”


The agency’s Q&A came in the wake of a December agreement between the Justice Department and Lesley University in Cambridge, Mass. The school agreed to provide gluten-free and allergen-free food options as part of the university’s meal plan, and take other steps to accommodate students with celiac disease and other food allergies. In this case, the meal plan was mandatory for all students living on campus. Food-allergic students filed the ADA lawsuit to force the school to modify the plan.




Texas: Bills Would Let Liquor Stores Open On Sundays


Source: KUHF

by: Elena Schneider, The Texas Tribune

February 10, 2013


Two bills would allow Texas liquor stores to open their doors on Sundays and extend hours for liquor sales during the week. But opponents, including some liquor stores, say the legislation could hurt businesses.


Texans have 66 hours during the week to buy bottled liquor under current law, but two bills filed this session could allow 10 more hours of shopping time by letting liquor stores stay open on Sundays.


State Sen. Juan “Chuy” Hinojosa, D-McAllen, and Rep. Senfronia Thompson, D-Houston, who have both received campaign donations from alcohol lobbying groups, have filed companion bills, Senate Bill 236 and House Bill 421, that would abolish the state’s “blue laws” limiting alcohol sales on Sundays. The bills would also extend liquor sales by an hour both in the morning and the evening on Monday through Thursday, allowing sales from 9 a.m. to 10 p.m.


Thompson “did not want any anti-consumer or anti-free-enterprise laws on the books,” a staffer for the representative said on Wednesday.


By changing the state’s Alcoholic Beverage Code, Texas could have reaped $7.4 million in general revenue funds for the 2012-13 biennium, according to a report released by the non-partisan Legislative Budget Board. In the past nine years, 14 states have repealed Sunday liquor bans.


On Sundays, Texans are allowed purchase beer and wine from noon to 9 p.m. It is also legal to purchase liquor by the drink at restaurants and bars, but not by the bottle. “We don’t understand the equity in that,” said Alan Gray, executive director of Licensed Beverage Distributors.


But the legislation faces an unlikely opponent: some liquor stores themselves. The cost of operating stores an extra day and for longer hours, they say, would eat up any additional profits.


“We won’t generate enough sales to handle the change,” said David Jabour, president of Twin Liquors, a family-run chain based in Austin.


The 1,600 locally owned liquor stores in Texas would suffer the most from the growing overhead, said Lance Lively, executive director of the Texas Package Store Association, which represents hundreds of liquor stores across the state.


“I spoke with a liquor store in Columbus, Texas, and the woman said, ‘If we’re going to be forced, not by the law but by competition, [to stay open Sunday], it’s just not going to be cost-effective and we’re going to close our doors,” Lively said.


Jabour also cited a potential decline in the quality of labor at liquor stores, saying “higher-quality employees” seek positions that do not require them to work Sunday.


Supporters of the bill, primarily alcohol distributors, said the sales and tax revenue boost would make up for any other costs.


“[Opponents] say the increase in sales would be marginal, but when we look at what happens in other states that repealed blue laws, we see the opposite happens,” Gray said. “Sunday has become the second-busiest shopping day of the week, and we think that it’s an inconvenience for all Texans not to purchase liquor by the bottle on Sundays.” Gray’s biggest client is Glazers, a Texas-based alcohol distributor with operations in 13 states.


Thompson’s staff noted that the legislation would not require liquor stores to open on Sundays, but Lively, of the Texas Package Store Association, disagreed. “If your competitors are open Sunday, it’s going to force you to be open, too,” he said.


Carolyn Beck, a spokeswoman for the Texas Alcoholic Beverage Commission, said that any change in law would have little impact on the commission’s operations.


Similar bills have come before the Legislature in the last three sessions, but none have made it out of committee.


“There’s not agreement in the industry, so change comes slowly,” Gray said.




India: Why Tamil Nadu is the most daunting liquor market in India


Source: Economic Times

Feb 10th


You would think nothing can ruffle Vijay Mallya’s United Spirits LtdBSE -0.69 % (USL) in the Indian drinks market. The company controls nearly half of India’s 230-million-cases-a-year market, thanks to a bevy of brands in its portfolio. Earlier this week, India’s largest drinks company posted a 71% increase in net profit to Rs 80.6 crore in the December-ended quarter.


But USL hardly sounded like a company that had reported spectacular earnings. Reason: the report card from Tamil Nadu. The company said it continued to be hurt by regulatory changes in Tamil Nadu where, it said, the state government is promoting local brands by artificially controlling supply.


“Against a capacity of 1 million cases per month [in Tamil Nadu] and a demand that is much larger, United Spirits’ monthly capacity is being artificially pegged at 0.75 million cases… to benefit new and existing local players,” it said in a statement.


Curious Market


That’s the odd thing about Tamil Nadu. It is India’s largest liquor market, with monthly sales of 42 lakh cases and growing at more than 12% by volume. According to a Times of India report, the state consumed liquor worth Rs 300 crore in four days to usher in the New Year. In other words, it is a drinks company’s paradise. Not just USL, even a rookie player would be panting at the prospects of such a market.


But Tamil Nadu also happens to be the most daunting liquor market in India. To understand why, you need to go back to 1983, when chief minister MG Ramachandran created the Tamil Nadu State Marketing Corporation, or Tasmac, to sell liquor in the state. Tasmac has an ironclad control over distribution of liquor in Tamil Nadu.


Subsequent governments have moved to further tighten Tasmac’s grip over liquor sales (6,798 retail outlets) in the state due to its potential to make money. In 2010-11, Tasmac earned Rs 18,000 crore. These revenues are important for the state government as they are diverted towards election freebies.


It is India’s largest liquor market, but also the most difficult to negotiate thanks to government restrictions and political nepotism.


After the AIADMK came to power, the government ordered that even hotels and pubs should procure liquor through Tasmac. The order was lifted only because the agency did not have the capacity to store imported foreign liquor.


A tightly regulated market is not the only rub for drinks companies. Liquor produced in the 11 distilleries in the state is divvied up between the large companies and a raft of local players (see Have You Heard…).


A senior executive of a top drinks company, speaking anonymously, complained that this goes against the grainBSE -4.89 % of free market economics: “The government passes whimsical ad hoc orders and consumers drink what the government decides.”


A new entrant must either establish a distillery on its own or partner an existing player. Modi Illva India, the producer of Rockford Reserve (see page 22), has launched the whisky in 18 states, but is yet to enter Tamil Nadu for this reason. That may also be why drinks giant Pernod Ricard has kept away from the state.

A senior executive of another drinks company says every local player is affiliated to a politician belonging to the AIADMK or the DMK. “It is a market neck-deep in political nepotism.”


A Tasmac official agreed. “For instance, the market share of Midas [a distillery owned by an associate of the AIADMK] was negligible during the DMK reign. It picked up after the AIADMK came to power.”


Political Factor


For this reason, fortunes can suffer a reversal following a change of government. The Tasmac official says Mallya’s USL took a beating after the AIADMK came to power. The company’s monthly market share fell to 12% in December from more than 20% in May last year. Volumes dropped to almost 5 lakh cases (of 9 litres each) from about 10 lakh. Currently, the company’s share is less than 10%. USL declined to comment for this article.




Tennessee: Tennessee officials crack down on take-out beer


Source: The Tennessean

Feb 9, 2013


State officials are once again cracking down on restaurants selling takeout craft beer.


The Daily Times reports the actions have led managers of the Copper Cellar family of restaurants to stop selling the beer to customers who want to take it home.


According to state regulators, restaurants aren’t allowed to sell alcohol to go – only breweries that meet certain requirements can sell take-home products.


Tennessee Alcoholic Beverage Commission assistant Director Keith Bell sent a memo to restaurants about the rule after the agency become aware of “growlers,” which are jugs filled with draft beer that customers can leave with.


Copper Cellar COO Bart Fricks said sales have stopped. The move is temporary in some locations, but will be permanent in Maryville barring a change in state law.


“It certainly means that we have ceased selling off-premise beer in four Smoky Mountain Brewery locations and three Calhoun’s,” Fricks said. “It also means that we are going to have to change our procedures to continue to sell off-premises beer in our three other Smoky Mountain Brewery locations.”


There are Smoky Mountain Brewery locations Knoxville, Maryville, Gatlinburg and Pigeon Forge. Fricks said changes are being made at the three facilities with in-house brewing so that takeout sales can resume.


Tennessee Alcoholic Beverage Commission attorney Ginna Winfree said the law hasn’t changed.


“Off-promises sales for off-premises consumption is not allowed in a TABC-licensed restaurant,” she said. “However, if a brewery has a contiguous yet separate area, they may sell for off-premises consumption. They have to have an in-house brewery, and it has to be contiguous yet separate.”


Fricks said the changes will be made.


“What we have to do is take people into a separate room and give them the beer. . We’re at least set up in those restaurants where we can do that. It’s going to be an inconvenience to the people purchasing it, but we can still provide the product for them.”


The company is encouraging customers to urge state lawmakers to change the regulation.




Tennessee: New bill hopes to alter Tennessee beer tax


Source: WATE


Feb 08, 2013


A new bill could mean last call on increases in Tennessee’s beer tax.


Tennessee has the highest beer taxes in the nation at 17-percent. Alaska has the second highest at just five-percent.


The goal of the Beer Tax Reform Act of 2012 is to alter the way beer is taxed, in hopes to make it cheaper to buy and cheaper make. And ultimately the bill’s sponsors hope to make Tennessee a more attractive state for  breweries.


“It’s not very profitable currently for brewers to enter this market,” said Jeremy Walker, the craft beer manager for Eagle Distributing.


As a distributor, Walker sees the effect of Tennessee’s beer tax on all parts of the industry.


“As cost of goods increase, the tax is going to increase, so it’s increasing at a rate that’s sky rocketing. Overall beer sales in the state of Tennessee have declined, while the revenue from the beer sales have increased by 30 percent,” Walker explained.


Put simply, as the price of beer goes up, so does the tax rate.


“Sierra Nevada elected not build their brewery here because, one reason was our high tax rate. It’s cheaper for brewers to send their beer elsewhere,” said Walker.


In other states, beer is taxed at a flat rate based on volume, not price. The bills co-sponsor Rep. Cameron Sexton (R-Crossville) says it’s hurting the state.


“There are other beer crafters in America that bypass Tennessee, so we’re losing that business as well, and were hurting the startup companies as well,” Rep. Sexton told 6News in a phone interview.


Rep. Sexton says the bill is revenue neutral. Meaning local governments that receive the money from the 17-percent beer tax won’t see that funding decrease.


“We’re still going to have the highest beer tax in the nation,” Walker said. “We’ll still have the highest. It just halts the sky rocketing rate of our taxes.


And making sure beer prices don’t continue to rise is what makes the customers happy.


“I like my beer prices right where they are,” Chris Weathers, a customer at Barley’s Taproom.


The bill’s sponsors, State Rep. Sexton, and State Sen. Brian Kelsey (R-Germantown) along with dozens of supporters from the beer industry are hosting an informational rally at Barley’s Friday February 15.


Walker says the hope is to raise a grassroots effort for support of the bill.


“The end person is the consumer,” he said. “They’re the ones affected most by it.”




Minnesota: Raise state taxes on cigarettes, alcohol


Source: Star Tribune

by: EDITORIAL BOARD , Star Tribune

February 9, 2013


A poised University of Minnesota student testified at the State Capitol this week about the impact her father’s death to esophageal cancer had on her life. He was a smoker who died prematurely when she was just 14.


“He wasn’t there when I graduated from high school,” said Kaila Narum of Andover. “And I won’t get a father-daughter dance at my wedding.”


Narum was the youngest and most powerful of nine witnesses who urged legislators to raise cigarette taxes as a matter of public health. It’s a measure supported by this page; numerous studies show that high cigarette prices motivate adults to cut back or quit smoking — and deter young people from ever starting.


For some of the same reasons, the 2013 Legislature also should raise taxes on alcohol sales. Alcohol-related costs to the state are staggering — millions more than the tax revenues currently collected from sales, according to the Minnesota Department of Health.


While the tobacco lobby is formidable, Minnesota’s liquor lobbyists have seemed invincible. Two years ago, they helped shoot down a two-penny-a-drink statewide liquor tax proposed by St. Paul Mayor Chris Coleman. The tax would have raised $48 million a year, some of which Coleman proposed using to fund the public cost of the Vikings stadium.


Gov. Mark Dayton wants to raise the state’s cigarette tax by 94 cents per pack, which he says will generate $370 million in revenue over two years even with a projected decrease in total sales. But Rep. Ann Lenczewski, DFL-Bloomington, is calling for a $1.60-per-pack increase, which would raise $440 million. In the Senate, Minority Leader Carla Nelson, R-Rochester, is proposing a $1.29-a-pack hike.


A coalition of 30 health and other groups, including the Mayo Clinic and HealthPartners, support the tax hikes. They say increasing prices by at least $1.50 per pack would save more than 25,000 lives and about $1.65 billion in long-term tobacco-related health costs to the state. Michael Bromelkamp, a CPA and principal with Olsen Thielen in St. Paul, told the House Taxes Committee that Minnesota employers lose nearly $3,400 for every employee who smokes because of higher health care costs, missed work and lower productivity.


Minnesota’s tobacco statistics are grim: 5,100 residents die annually from tobacco-related illness, some 53,000 high school students smoke daily and 77,000 young people will try tobacco this year. Dr. Courtney Jordan Baechler, a cardiologist, told lawmakers that one-third of those who become regular smokers will eventually die because of it.


That’s why measures championed by Nelson and Rep. Jenifer Loon, R-Eden Prairie, who seek to close the loophole on so-called “little cigars,” also deserve support. The fruit-flavored “cigars” look like cigarettes but cost less and are marketed to young people as a means to get them hooked on tobacco.


“Youth, students, kids like me are price-sensitive,” Narum testified. “When the price of something is increased dramatically, we can’t afford to buy it.”


Opponents argue that higher cigarette taxes will hurt the poor and small retail businesses and lead to a larger black market for smugglers. But lawmakers in other states are finding creative ways to deter cigarette smuggling.


It’s also worth noting that smoking rates are higher among minorities and lower-income groups, and they have fewer resources to tap when health problems arise. “Higher tobacco taxes will benefit rather than harm our communities,” testified Gloria Cazanacli of La Oportunidad, an area outreach agency for Latino youth and families.


The same can be said of Minnesota’s young people, as Kaila Narum reinforced Thursday with a critical question for legislators to ponder in the weeks ahead: “Will you protect Minnesota kids or the tobacco industry?”




Idaho: Bacon-infused whiskey? Idaho troopers crack down on infused liquor


Source: Associated Press

Feb 11th


Idaho State Police have bolstered the Alcohol Beverage Control Unit and are cracking down in Boise on infused alcohol such as bacon-infused whiskey and basil-infused vodka.


Lt. Russ Wheatley tells the Idaho Statesman the drinks violate Idaho law because the process of infusing the alcohol means taking alcohol out of a bottle and replacing it again.


Wheatley said something could be put in the liquor that makes people sick. Or an employee could replace one type of alcohol with a cheaper brand.


“From our perspective, (bars) have to sell liquor by the drink,” he said. “You can’t take it out of a bottle, replace it and then sell it again. That is illegal. This is really a consumer protection issue. We don’t know what people are putting in those bottles. There is a reason the rules are written the way they are.”


Red Feather co-owner Kevin Kelpe said he understands the strict interpretation of Idaho law but questions why it’s being enforced now when his bar staff has been infusing alcohol with flavors for a decade.


“I guess my question is: ‘How is this benefiting anyone?'” Kelpe said. “We don’t feel angry about it. But it is strange.”


An increase in funds from Idaho lawmakers allowed the unit to expand in 2012 from two officers to 10, along with a sergeant and a lieutenant. With more officers, expect stricter enforcement, Wheatley said. Earlier this month, the unit seized dozens of bottles of infused liquor.


“It was impossible to stay on top of these things with two employees,” Wheatley said. “What we have here is an industry that hasn’t been looked at very closely for the better part of 10 years.”


He said no citations were issued in the recent seizures, which he described as an educational action. But he said penalties could result if establishments continue to infuse liquor.

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