Liquor Industry News 2-18-13

Franklin Liquors

Maker’s Mark Says It Will NOT Be Watering Down Its Bourbon After Backlash


Source: Business Insider

Adam Taylor

Feb 17th


Earlier this month Maker’s Mark bourbon announced that due to rising demand it intended to lower the amount of alcohol in its liquor.


The plan, leaked to the New York Post, was to drop from 45 percent alcohol by volume, or 90 proof to 42 percent alcohol by volume, or 84 proof.


Understandably there was outrage amongst whiskey drinkers, who didn’t like the idea that their favorite drink would be diluted, yet still cost the same price.


Maker’s Mark have listened, however, and a notice posted on their website today announces that they have changed their plans.


Here’s the full announcement:


You spoke. We listened. And we’re sincerely sorry we let you down.


So effective immediately, we are reversing our decision to lower the ABV of Maker’s Mark, and resuming production at 45% alcohol by volume (90 proof). Just like we’ve made it since the very beginning.


The unanticipated dramatic growth rate of Maker’s Mark is a good problem to have, and we appreciate some of you telling us you’d even put up with occasional shortages. We promise we’ll deal with them as best we can, as we work to expand capacity at the distillery.


Your trust, loyalty and passion are what’s most important. We realize we can’t lose sight of that. Thanks for your honesty and for reminding us what makes Maker’s Mark, and its fans, so special.


We’ll set about getting back to bottling the handcrafted bourbon that our father/grandfather, Bill Samuels, Sr. created. Same recipe. Same production process. Same product.


As always, we will continue to let you know first about developments at the distillery. In the meantime please keep telling us what’s on your mind and come down and visit us at the distillery. It means a lot to us.




Rob Samuels                          Bill Samuels, Jr

Chief Operating Officer           Chairman Emeritus 




Bourbonomics 101: What the Maker’s Mark dilution debacle says about corporate strategy


Source: Washington Post


Feb 18th


The main message being drawn by the decision by the producers of Maker’s Mark bourbon to reverse track and undo plans to reduce its alcohol content is: Don’t mess with bourbon drinkers.


But behind the decision is an interesting lesson in how the overarching strategic needs of big global companies can lead to bad decisions for lovers of the products under their umbrellas.


One of the tricky things about making and selling good whiskey is that it takes time; Maker’s is a blend that is around six years old. Which means that the fine people at the Maker’s Mark distillery in Loretto, Ky., and their corporate overlords at what is now called Beam Inc. were having to make decisions back in 2007 that determined how much Maker’s Mark they have to sell now.


And, it would seem, they guessed wrong. They didn’t properly foresee the booming worldwide demand for the supple, nectar-like perfection of Maker’s. Sales of the bourbon rose 14 percent in 2011 and 15 percent in 2012. This is part of a broader trend: Some 16.9 million cases of Kentucky and Tennessee whiskey were shipped in 2012, according to the Distilled Spirits Council, up from 14.9 million cases in 2007; the revenue earned on that whiskey soared more than 28 percent in that span.


That is normally a problem – too much demand for a product – that a company loves to have. The simple answer to that problem would be to raise prices to whatever level will make the market clear. Maker’s didn’t do that, and the result was predictable: Shortages of the bourbon in some markets.


The problem is that Beam Inc., the parent company of Maker’s Mark, has crafted a role for Maker’s as one of its “power brands,” along with the likes of Jim Beam bourbon, Sauza tequila and Courvoisier cognac. It is supposed to be one of the major drivers of the company’s sales, a standard that can be found at every decent bar in the world (or, as Beam Inc. puts it in its annual report, the power brands are “our core brand equities, with global reach in premium categories and large annual sales volume”).


Having those power brands ensures that Beam Inc. has relationships with distributors around the world who need its products, in turn giving Beam Inc. the leverage to ensure that its “rising star” brands also earn a place in distributors’ warehouses, on liquor store shelves and behind the bars.


The “rising star” brands include both some marvelous whiskies (Laphroaig Scotch, Knob Creek and Basil Hayden’s bourbons) and some mass-market products that seem better suited for a sorority party than a proper bar (something called Pucker Vodka, another called Skinnygirl Cocktails). What such diverse products have in common is that they are fast-growing. Basil Hayden’s saw a stunning 35 percent increase in sales in 2012. And Beam Inc. can ensure they get distributed and have a fair shot in the marketplace because liquor distributors know they need Maker’s and the other power brands.


What does all that have to do with Maker’s Mark’s supply shortfall, and the ill-fated decision to dilute the bourbon a bit to keep up with demand?


Most companies would simply raise the price of Maker’s until the market cleared. But Beam Inc. depends on Maker’s Mark to be one of its mainstay products – and if it raised the price too quickly, it could lose that status. Many higher-end bars now use Maker’s Mark as their standard go-to bourbon for mixed drinks, and at many mid-tier places it is their standard premium option. If the price of Maker’s gets too out of whack with other bourbons of similar quality, they might rethink that practice and turn to less pricey options. I’ve already noticed a growing number of bars in D.C. using Bulleit bourbon, a bit cheaper and rougher on the finish than Maker’s, as their standard bourbon for Manhattans and Sidecars.


And if that kind of change happened on a large enough scale, it could cost Maker’s its status as that go-to powerhouse brand that helps underpin a company that sold $3.1 billion worth of liquor last year.


So you can see why it might have been a little wary about raising prices further. It also doesn’t do if you have a “power brand” that people can’t get hold of. Hence, the decision last week, now reversed, to reduce Maker’s Mark from 90 proof to 84 proof (or 45 percent alcohol to 42 percent alcohol). It would stretch the company’s existing supply of bourbon further without either increasing prices or having shortages.


The company seems not to have anticipated the degree of anger the move would prompt from loyal Maker’s drinkers, and, as the statement from Rob Samuels and Bill Samuels Jr., who lead the distillery, put it Sunday, “You spoke. We listened. And we’re sincerely sorry we let you down.”


So what now? The underlying problem is still there. And now it’s decision time for Maker’s Mark and Beam Inc. Are they really going to allow there to be shortages of Maker’s at times, meaning that they would be essentially charging a below-market price? Are they going to hike price and risk Maker’s status as a go-to mass market bourbon brand? Or are they going to find other, sneakier ways to get more supply of whiskey that is less blatant than diluting it, such as introducing even younger whiskey into the blend?


Ironically, for Maker’s Mark drinkers, the best outcome they can hope for is that the bad press that surrounded the short-lived reduction in alcohol content will lead to a slump in demand for the product, so that the answer might be none of the above.




Maker’s Mark illustrates the importance of thinking BEFORE you act


Source: Scholars & Rogues

Feb 17th


In case you haven’t been tracking along, the folks at Maker’s Mark (which is owned by Beam, Inc.), faced with more demand than they could meet, recently announced that they’d be lowering their alcohol by volume (ABV) from 90 proof to 84 proof. You won’t even notice, they assured us.


The backlash was swift and loud. Makers Mark customers pitched a hissy fit, and at least one marketing analysta (Roger Dooley, writing at Forbes) wondered if the company had committed “brand suicide.”


Do you really want to go on the record as saying the palates of your customers are so unrefined that they can’t tell the difference when the whiskey is diluted? In reality, in blind taste tests most people probably can’t tell the difference between similar colas, beers, whiskeys, etc. Nevertheless, brands still strive to maximize their taste differentiation. Can you imagine Coke saying, “We could change our formula a little, or even put Pepsi in our cans, and not many of our customers would notice.”?


To their credit, MM leadership today changed course, announcing in a public letter that:


.effective immediately, we are reversing our decision to lower the ABV of Maker’s Mark, and resuming production at 45% alcohol by volume (90 proof). Just like we’ve made it since the very beginning.


Good for them. The thing is, we shouldn’t over-congratulate them because this was a butt-stupid mistake to start with. Dooley had commented on their missed opportunity last Thursday:


Maker’s Mark could have used their looming shortage as an opportunity to make their brand stronger. If they encountered sporadic shortages for a period of years, they could raise prices and leverage the scarcity to take the brand up a notch in prestige.


And all he was doing was stating what every smart marketer in America knew instantly: you never give people less. If the choice is between raising prices or cutting portions, for instance, raise the prices. Customers may not like it, but they react worse when they find themselves getting less for their money. Psychologically, when you do so you are taking something away from them.


Same thing with the MM trainwreck. The shortage was arguably even good news from a brand perspective because the unanticipated shortage (whatever that may say about your forecasting operation) emphasized the demand for your product. You could have responded with something like this:


Wow, folks, you like our product so much that you bought more than we expected. It’s going to take us about five or six years to get caught back up because we will not sacrifice the quality of our fine whiskey, no matter how much it costs us. In the meantime, we’re grateful to our customers and salute their discernment.


Instead, you miss the obvious opportunity, you violate the customer’s trust, and you dilute your brand by far more than the three percent you’re cutting the ABV in your now somewhat less prestigious liquid refreshments.


Given that Makers Mark had committed the gaffe, today’s announcement was precisely the right move. But there was no excuse for the mistake in the first place. Now, thanks to a moment of unfathomable stupidity, they’re faced with the challenge of restoring their tarnished reputation.


Maybe Makers Mark will be just fine. Maybe this won’t even register a blip on their sales numbers – time will tell. In the meantime, though, the company’s need to understand what they have done. Leaving the product as is, running a new ad campaign, dumping money into PR aimed at assuring us that everything is hunky-dory, none of that can undo one simple fact: a few days ago, they announced to the world that they can water down their whiskey with no noticeable impact on quality.


That’s a hell of a brand promise, and it’s a bell that you can never unring.


Think. Act. In that order.




Diageo Launches Pioneering eCommerce Site


Source: The Motley Fool

By Sam Robson

February 15, 2013


Alexander & James is Diageo’s (LSE: DGE  ) (NYSE: DEO  ) first foray into e-commerce that directly targets customers seeking the multinational alcoholic beverages company’s premium labels, Blue Label and Gold Label Reserve Johnnie Walkers, Tanqueray No. 10, Ciroc, Ketel One and selected single malts such as Cragganmore, Singleton, and Caol Ila.


By launching the website, Diageo aims to capitalize on the ever-increasing trend to buy online and will sell directly to “discerning shoppers” in the U.K.


Alexander & James managing director Philippa Dickson commented:


We created Alexander & James in response to the way people are seeking to purchase luxury items online. We identified an opportunity to create a luxury e-commerce platform that would be engaging and inspiring, bringing the brand product credentials to life — craftsmanship, heritage, provenance.


Alexander & James is more than an online shop, it provides ideas that will appeal to the lifestyle of the discerning person alongside new and beautifully packaged gift ideas. It is a white glove, end to end luxury brand experience where people will be able to learn about our spirits and receive expert advice on food pairing and mixology ideas for every occasion. We provide the ease of making a well-informed purchase online.


On a day that saw the Office for National Statistics reveal that U.K. retail sales fell in January, despite analysts having predicted a rise, the move could prove to be a canny one for Diageo. Volumes were down 0.6% year on year, although heavy snowfall in the month was blamed for the decrease in footfall. It ought to be pointed out, too, that larger retailers fared better than their smaller counterparts, while the amount spent online accounted for 10.1% of all retail spending (excluding fuel).


With innovative strategies like the launch of Alexander & James and increasing its spend on key markets, I believe Diageo can continue to grow over the next few years, having already seen earnings increase at a rate of 14% per year over the last five.




Diageo, United Spirits officials to meet this week


Source: Economic Times

Feb 17th


Top officials of Diageo and United Spirits, including its chairman Vijay Mallya, are likely to meet this week to discuss regulatory and other issues related to their proposed USD 2 billion deal.


The transaction — that would see global liquor major Diageo acquiring majority stake in United Spirits LtdBSE 0.40 % (USL) — is yet to receive green signal from fair trade regulator CCI, which is believed to have concerns about possible impact of competition in the market once the deal goes through.


Sources said that top officials of Diageo and USL are likely to meet this week in Goa to discuss various issues related to the proposed deal. UB Group Chairman Vijay Mallya is also expected to be present at the meeting.


Officials are expected to deliberate on issues related to regulatory compliance, including additional costs, among others, they added.


Depending on the outcome, there could be more meetings in the future, sources said.


One of the world’s largest spirit companies, USL is part of Mallya-led UB Group, whose aviation venture Kingfisher AirlinesBSE -4.97 % is going through turbulent times.


When asked about status of various regulatory approvals and whether the company has asked USL to take care of expenses related to regulations, Diageo said, “We have received Sebi’s comments and we are considering them”.


The company did not provide further details while similar queries sent to USL did not elicit any response.


On January 31, capital market regulator Sebi had cleared an open offer by Diageo for purchase of 26 per cent stake in USL, which is part of the USD 2 billion deal.


Sources said Competition Commission would take some more time before deciding on the Diageo-USL transaction and it has also sought more information from Diageo.


A final decision by the Commission is likely in March, they added.


“Regarding the deal, the Commission is basically looking at Section 20 (4) of the Competition Act which relates to the impact of a combination to the competition in that relevant market,” sources said.


Besides, there are also concerns that the deal could lead to consolidation in the Indian liquor industry in the long term, they said.


Section 20 relates to various aspects of a combination in a relevant market, including actual and potential level of competition through imports, extent of barriers to entry and degree of countervailing power.


As part of the deal, Diageo would acquire 27.4 per cent stake for Rs 5,725.4 crore through a combination of share purchase from existing promoters and preferential allotment of shares. In addition, it had offered to acquire an additional 26 per cent stake for Rs 5,441.07 crore through an open offer for public shareholders. Meanwhile, Securities and Exchange Board of India (Sebi) has allowed Diageo to launch an open offer for buying shares in United Spirits after getting all regulatory clearances.


Sebi has also said that UK-based Diageo would have to pay an interest of 10 per cent per annum for the period of delay to the public shareholders tendering their shares in the open offer.


Last week, Diageo’s manager for the open offer, JM FinancialBSE -2.41 %, had said that the revised schedule would be announced in due course after all the regulatory approvals.


The open offer proposal, which was made about three months ago soon after the deal announcement on November 9, was cleared by Sebi after numerous clarifications sought by the regulator.


The market regulator was earlier not comfortable with certain provisions of the proposed offer, including those related to preferential allotment of shares, as it feared that the minority shareholders might be at disadvantageous position under the existing terms of the deal.


However, some changes have been made to the satisfaction on the regulator as well as the companies to clear the deal.




UB Group Proposes Sale of Some Pledged Shares to Diageo


Source: WSJ


Feb 15th


Kingfisher Airlines Ltd.’s parent, UB Group, 507458.BY -1.66% has proposed to the now-grounded airline’s lenders that they may sell shares in one of the group’s companies to Diageo DGE.LN -0.48% PLC to recover part of the carrier’s loans.


Diageo in November agreed to buy an up to 53.4% stake in UB Group’s United Spirits Ltd. for $2 billion, or 1440.00 rupees a share. Some of USL’s shares are pledged with Kingfisher’s banks to back the carriers’ loans.


USL’s shares closed at 1901.70 rupees on the Bombay Stock Exchange Friday.


UB Group spokesman Prakash Mirpuri said Kingfisher’s banks “explicitly support” USL’s deal with Diageo, and the lenders would see if there was “an orderly method” to dispose of the shares.


Neither Kingfisher’s top lender, State of Bank of India, nor Diageo immediately commented on the proposal.


The combined value of the shares that USL and another UB Group company, Mangalore Chemicals 530011.BY +1.48% and Fertilizers, pledged with Kingfisher’s banks is 5.0 billion rupees ($92 million), Shyamal Acharya, deputy managing director at State Bank of India 500112.BY +1.28% said recently.


Kingfisher has put up 65 billion rupees worth of collateral against the loans, which include real estate, shares and guarantees given by group companies and Kingfisher Chairman Vijay Mallya.


Its lenders said Wednesday that they were planning to recall all their loans, worth 70 billion rupees, from the airline as it had failed to convince them of any business plan to stay afloat or raise funds.


A recall is a demand for immediate repayment of loans, failing which banks will go through a legal process to take control of shares and assets a company has put up as collateral against the debt.


Kingfisher has incurred losses since its inception in May, 2005. The airline started with aggressive expansion plans, buying costly planes and a stake in then leading budget carrier Air Deccan.


But its business plummeted soon, due to high input costs, cut-throat competition and high debt. The carrier owes more than $2.5 billion to lenders, suppliers, employees and the Indian government.


On Oct. 1, 2012, its employees went on strike because they hadn’t been paid in months, forcing the airline to cancel all flights. The government later deactivated its license.


Even if the lenders accept the proposal to sell pledged USL’s shares to Diageo, it may still take a while for the transaction to happen as the Diageo deal itself is stuck over regulatory issues.


The government’s antitrust body has queried USL over the deal, saying this might give Diageo an inordinate control of India’s liquor market.


“The deal hasn’t even come to the board yet,” Ashok Chawla, chairman of the Competition Commission of India said Friday.




Campari pays US$20m for Appleton distribution rights


Source: The Spirits Business

by Becky Paskin

15th February, 2013


Campari America has bought the distribution rights for Appleton Estate in the US from Kobrand Corporation, in a deal worth US$20million.


Campari’s buy-back of the US distribution rights for Appleton Estate is thought to be the first of many similar deals in other key markets


Gruppo Campari, which acquired the Lascelles deMercado brand portfolio – including Appleton Estate, Coruba Rum and Wray & Nephew – in December last year, currently only owns the group’s distribution rights in Jamaica and the UK.


The deal will allow Campari to take control of the distribution of Appleton Estate in the US, with effect from 1 March.


Bob Kunze-Concewitz, CEO of Campari, said: “This is a key step in the integration process of the Appleton portfolio into our distribution network. It confirms our strong commitment to achieve a swift in-sourcing of the brands with the objective to exploit the brands’ full potential in the key US market.


“Owned distribution will enable greater focus on the acquired business and more efficient brand building activities. Moreover, it will allow us to further leverage our strong distribution capabilities as well as to entirely capture the brand contribution in the highly strategic US market”.


The move is thought to be the first of many as Campari seeks to own distribution rights for the portfolio in other key markets.




Fitch Puts Constellation Brands on Watch for Downgrade


Source: WSJ

By Nathalie Tadena

Feb 15th


Fitch Ratings has placed its ratings on Constellation Brands Inc. (STZ) on watch for a possible downgrade, noting that the wine and spirits maker’s sweetened $4.75 billion bid to buy the U.S. assets of Mexican brewer Grupo Modelo (GPMCY, GMODELO.MX) will increase its leverage.


Fitch currently rates Constellation at double-B-plus, one notch into junk territory.


On Thursday, Constellation unveiled a revised deal to acquire Grupo Modelo’s U.S. assets to appease regulators vexed by a related Anheuser-Busch InBev NV (BUD, ABI.BT) transaction. Under the new terms of the proposed deal, Constellation agreed to pay an additional $2.9 billion to by a Modelo brewery in Piedras Negras, Mexico, and buy a license to make Modelo’s beers on an ongoing basis.


The Department of Justice last month filed an antitrust lawsuit to block InBev’s $20.1 billion bid to buy Modelo, which makes Modelo and Corona beers, as the federal government contended customers would see higher prices if the deal was approved.


The Justice Department hadn’t been convinced Constellation’s side deal to buy Modelo’s U.S. imports business would create a truly separate entity. Constellation, poised to see annual sales double if it won control of those assets, had contended the deal would give the company firm control of pricing and distribution decisions. Constellation already had a 50% stake in a U.S. imports business with Modelo, called Crown Imports, and the company last summer agreed to take over the rest of that unit.


Fitch said there is good strategic rationale for the deal, given the strong cash-flow-generative ability of Crown, the growth of imported beer sales in the U.S., and the strength of the Corona brand. However, the firm said its watch for a possible downgrade reflects that Constellation’s leverage will increase to a level that is high for its current rating category.


On Thursday, Moody’s lowered its outlook on Constellation to negative, citing the meaningful increase in leverage as a result of the revised purchase price and greater integration risk as the company takes on the role of brewer and distributor. Moody’s affirmed its rating on Constellation at Ba1, in line with Fitch’s rating.


Shares were down 24 cents at $43.15 after hours. The stock is up 29% over the past three months.




Carlsberg profit lags as Russia stalls 


Source: Reuters

Feb 18th


Danish brewer Carlsberg reported a weaker-than-expected quarterly profit after sales stalled in its key Russia market and fell in western Europe.


The world’s fourth biggest brewery scrapped its long-term margin forecasts due in part to market uncertainty, although it forecast operating earnings in 2013 to rise slightly to around 10 billion Danish crowns ($1.79 billion) from 9.8 billion a year earlier.


The group’s operating profit (before special items) in the fourth quarter rose to 2.15 billion Danish crowns ($384.79 million), slightly lagging an average 2.30 billion crowns estimate in a Reuters poll.


“For 2013, the Carlsberg Group expects beer market dynamics for all three regions to be similar to 2012,” the company said in a statement.


“2013 volumes are expected to be impacted by destocking in France and Russia,” it said.


Fourth-quarter revenue rose to 15.93 billion, exceeding an average 15.63 billion crowns estimate in the poll.


It forecast a mid-single digit percentage rise in annual adjusted net profit.




Accolade Wines chooses Southern Wine & Spirits to distribute wares in 24 markets


Source: San Francisco Business Times

Chris Rauber

Feb 15th


Accolade Wines North America’s U.S. and Australian wines is being distributed in 24 American markets by Southern Wine & Spirits of America Inc., the companies said Thursday.


Accolade, based in Napa, boasts brands including Atlas Peak, Geyser Peak Winery, XYZin, Hardys and Banrock Station, some produced in the Bay Area, others Down Under. Its entire portfolio of wines is now being distributed in 24 markets, including California, New York, Florida, Illinois, Arizona, Colorado, Pennsylvania, the District of Columbia and Maryland, among other big wine-swilling locales.


“We look forward to working closely with Southern in 2013 and beyond,” Tim Matz, Accolade’s managing director said in a release. A spokesman for Southern Wines & Spirits said the deal, signed last June, runs for five years.


Miami-based Southern Wine & Spirits has operations in 35 states.


It’s not clear why it took the companies more than half a year to get the news out about a deal signed in mid-2012.




Rum punched – Reduction in waivers set to impact spirits, other industries (Excerpt)


Source: The Gleaner

Nedburn Thaffe, Gleaner Writer

February 18, 2013


Plans by the Government to slash millions of dollars in discretionary tax waivers once afforded to the manufacturing sector could see the rum industry being hardest hit, according to president of the Jamaica Manufacturers’ Association (JMA), Brian Pengelley.


While pointing out that this was not the only area of the sector that runs the risk of being shut down under the Government’s soon-to-be implemented policy on waivers and incentives, Pengelley said the rum industry was heavily dependent on molasses, with more than 60,000 tonnes imported annually.


“The distillers in Jamaica who export rums abroad to blenders buy all the molasses that is available in Jamaica, but Jamaica does not produce enough molasses, so, therefore, they have to rely on imports. These have been coming through the waiver system,” said Pengelley, who is also sales director at Red Stripe, distributor of wines and spirits for parent company, Diageo.


“We are asking for a very favourable consideration on that because there is no way that we can afford to shut the distilleries down or increase their cost,” he said.




Buffering Against Alcohol (Excerpt)


Using a new assembly method, scientists have combined multiple enzymes in a polymer nanocapsule to reduce blood alcohol levels and liver damage in drunken mice.


Source: The Scientist

By Dan Cossins

February 17, 2013


Illustration of an biomimetic enzyme nanocomplexYUNFENG LU, UCLAA nanocomplex of enzymes can lower blood alcohol levels and reduce liver damage in intoxicated mice, according to a study published today (February 17) in Nature Nanotechnology. The research, which employed a new technique to assemble and encapsulate multiple enzymes, suggests that tailored enzyme nanocomplexes could be built for a wide range of applications.


“It’s a very elegant approach to positioning enzymes in a controlled fashion, and it’s certainly a step forward,” said Jan van Hest, a professor of bio-organic chemistry at Radboud University in Nijmegen, Holland, who was not involved in the study. “They show very nice results already, with increased [enzyme] activity in living systems, and it’s a very generic approach so it looks like it could be extended [to other applications].”







Feb 6th


Congresswoman Lucille Roybal-Allard along with Congressman Frank Wolf (VA) and Congresswoman Rosa DeLauro (CT) introduced H.R. 498, to reauthorize the Sober Truth on Preventing Underage Drinking (STOP) Act. Signed into law six years ago with broad bipartisan and bicameral support, the STOP Act addresses the epidemic problem of underage drinking in this country. Reauthorization of the bill would provide for the continuation of an interagency coordinating committee, a parent-focused media campaign and a community grant program that has facilitated community efforts to address underage drinking.


“When young people use alcohol, they often don’t realize the damaging effects drinking can have on their own lives, their families and their communities,” said Congresswoman Roybal-Allard. “The STOP Act will continue the successful programs of the original legislation and help curb the devastating effects underage drinking can have, including increased youth violence, traffic crashes and serious injuries,” Roybal-Allard added.


According to the 2012 Monitoring the Future survey, lifetime use by 8th, 10th and 12th graders is among the lowest levels in years. Despite this progress, youth alcohol consumption remains a widespread and persistent health problem, and alcohol is still the number one drug of choice among young people. We need to do everything we can to continue to curb youth alcohol consumption, and the STOP Act is an important piece of that effort.




Wells Fargo’s Weekly Economic & Financial Commentary


Source: Wells Fargo

Feb 15th



.         Economic news this week suggested continuing growth, although at a sluggish pace.

.         Small business optimism improved in January as the capital expenditure and hiring outlooks strengthened.

.         However, businesses across the spectrum are concerned about future sales prospects and are, consequently, limiting inventory gains.

.         Manufacturing activity continues to be on shaky footing, as manufacturing production sank 0.4% in January.

.         Despite the reduction in real disposable income resulting from the payroll tax increase, retail sales inched higher in January, growing 0.1%.

.         This is a somewhat slower pace than the 0.5% average increase November and December, suggesting that consumer spending will likely slow in 1Q13.

.         Real consumption may also suffer as oil prices are climbing higher.

.         On the positive side, the continued job market improvement should help support consumer spending.



.         The sovereign debt crisis continues to hamper economic activity in the Eurozone as GDP for the continent contracted for the sixth consecutive quarter.

.         Most concerning in 4Q12 was German, which saw GDP contract 0.6%, the fastest rate of contraction since 2009.

.         Weakness in investment spending and exports appears to be the source of the economic slowdown.

.         However, recent reports suggest the economy may be rebounding in 1Q13.

.         While Japan’s economy also shrank in 4Q12, strong gains in consumer spending indicate a reason for optimism.

.         Furthermore, Industrial Production is expected to move higher in 2013, helping push the economy back to expansion territory.


Point of View

.         Interest Rate Watch

.         Despite looming fiscal issues, the fundamentals of the U.S. economy have improved, suggesting continued growth throughout 2013.

.         Fed policy is likely to remain accommodative, keeping Treasury yields relatively low.

.         Credit Market Insights

.         Consumer credit grew 5.8% in 2012, with the entire increase stemming from nonrevolving credit.

.         While rising amounts of credit typically signal an improved economic outlook, the rapid growth in student loans may indicate an unsustainable avenue.




Champagne shipments fall by 14m bottles


Source: Decanter

by Richard Woodard

Friday 15 February 2013

Champagne sold 14m less bottles in 2012, a 4.4% decline after a slump in pre-Christmas trade.


The final figure of 308.8m bottles was lower than anticipated – industry insiders had forecast a 3% fall to 314-315m bottles – following poor demand in November and December, when shipments fell by 6-7% and 8.8% respectively.


Leaving aside the lowest point of the economic crisis in 2009 – when shipments slumped to 293.3m bottles – this represents Champagne’s worst year in terms of volume since 2005.


However, the Comite Interprofessionnel du Vin de Champagne (CIVC) pointed out that shipments by value (ex-cellar) were stable at ?4.37bn, describing the figure as ‘very satisfactory’.


Shipments to the vital French market – which still accounts for 55.5% of global shipments – declined by 5.6% or over 10m bottles to 171.4m bottles.


Meanwhile, the ongoing crisis in the European Union prompted a 7.1% volume decline to 76.4m bottles.


There was better news, however, in markets outside the EU, which added 1.9m bottles or 3.2% over the year, importing 61m bottles in total.


That represents an all-time high, thanks to growth in key markets such as Japan and Australia, and soaring demand in emerging markets, including China, Russia, Mexico and Nigeria.


The CIVC said the volume decline was expected because of ‘the hard economic environment’ and highlighted an increase in average per bottle prices, adding: ‘These results, despite a diminution in volume on European markets, reinforce the strategy of creation of value and the development of the Champagne prestige.’


Detailed figures for the US and the UK are not yet available.




Argentina’s wine industry still struggling despite worldwide acclaim


Source: The Raw Story

By Agence France-Presse

Saturday, February 16, 2013


Argentina has built up a world-class wine industry, luring a flood of wine tourists, but boosting the quality quotient is still keeping its winemakers hard at work.


The century-old industry, with its heart in the Mendoza area in the southwest, has increased volume by leaps and bounds in the past two decades, with Argentina’s malbec-based reds drawing raves worldwide.


“In the broad scheme of everything going on with wine around the world, we have a long way to go,” said Martin Castro, who runs a vineyard in the Valle de Uco area in Mendoza, a parched and sunny province abutting the soaring Andes that grows its grapes with a huge irrigation network fed by mountain water.


“On top-end wines, we still have work to do to compete globally. But we definitely have a presence with malbec, which is well-known globally,” Castro stressed, referring to the varietal used as a base grape in many meat-friendly local reds – a varietal that used to be common in Bordeaux, now less so.


If the industry has far to go, it also has come far, especially in the past few decades.


Argentina has become the world’s number-five producer, according to the International Organisation of Vine and Wine (OIV). Meanwhile it is the world’s ninth-ranking exporter, and a big domestic consumer, the Argentine Wine Clearinghouse (OVA) said.


Castro and his partner Cristian Allamand, an agricultural engineer, are among those riding the wave, with plenty of hard work. They oversee production at Bodegas Luminis, which in recent years has enjoyed phenomenal growth.


It is among the 900 or so wineries spread out on over 20,000 hectares in the Mendoza area, alone – an area that also has attracted foreign capital like France’s Pernod Ricard, Chile’s Trivento (Concha y Toro) and Portuguese Finca Flichmann.


Thousands of tourists traipse from tasting to tasting on local wine trails, staying at boutique hotels at or near many wineries, dizzied by so much malbec and its perfect partner, grass-fed local beef.


“Aside from malbec, the most widely grown red varietal in Argentina, there are many others that are doing well,” Castro said, checking out the vines at his winery 950 meters above sea level, with a dramatic Andean backdrop.


Marcelo Pelleriti, the boss over at Monteviejo, said Argentina had plenty to be proud of, having won considerable renown for its malbec-based reds and their local terroir.


Last year winemakers here exported 365 million liters, up 17 percent year on year, worth $920 million, OIV data showed, with top markets being the United States, Canada and Russia.


Still, “we have a way to go, when there are countries like France with 400 years of history, and which can do very large volume as well as the higher end and pricier vintages,” Castro said sounding somewhat hopeful despite the world’s cool economic growth.


Mendoza is the fifth most populous of Argentina’s provinces but produces 70 percent of Argentine wines.




LAURENT-PERRIER (=), VRANKEN POMMERY (-): The bubble monitor – Nothing to celebrate in December


Source: Exane BNP

Feb 15th


LAURENT-PERRIER (=) TP: EUR69 . Upside: 1%

Beverages (-) . France . Price (14 Feb. 13): EUR68.6


VRANKEN POMMERY (-) TP: EUR18 . Downside: 17%

Beverages (-) . France . Price (14 Feb. 13): EUR21.7


Champagne shipments down 9% in December

There was little to celebrate for champagne. After a 7% y/y volume drop in November, December shipments were down 8.8%. Only 87.6 million bottles were shipped during the last two months of 2012, which is even 4% lower than in the corresponding period of 2008.


Volumes down 4.4% in 2012 – Sales stable thanks to price increases outside Europe

Full-year shipments were down 4.4%. However, total champagne sales were flat in 2012 (EUR4.37bn) as champagne houses benefitted from better conditions in the USA and Asia. Pernod Ricard’s champagne portfolio best exemplifies the divergence: Asian- and US-driven Perrier-Jouët’s sales rose by 7% in H2 while Europe-exposed Mumm’s revenues were down 5%.


No positive surprise for champagne names in Q4 – Technical rebound in January?

The Q4 sales figures from Laurent-Perrier and Vranken failed to surprise positively. The latter did, however, manage to maintain a positive price/mix during the period – albeit at the expense of volume growth. As a result, we now forecast Vranken’s EBIT margin flat at 11% in 2012. In the short term, we could see positive growth in shipments in January, especially in France, as retailers restock after the year-end festivities, for which they kept inventories at a low level.


The rules on interest deductibility have a significant impact on our EPS

We now have better visibility on the limitation of interest deductibility in France. We have incorporated the new rules (interest deductibility limited to 85% in 2013 and 75% in 2014). Given its very high leverage, Vranken-Pommery is hit hardest by these new rules (2013e EPS cut by 9% vs -5% for Laurent-Perrier FY14e). Our asset-based target prices are unchanged. In the low-visibility champagne world, we maintain our relative preference for Laurent-Perrier given its exposure to non-European markets (now bigger than France) but we see valuation and earnings uncertainty for both names.






Source: Wine & Spirit Daily

Feb 15th


Australia-based Robert Oatley Vineyards USA and WineSource International of Georgia are joining together to form Pacific Highway Wines & Spirits. Together their complimentary portfolios allow them to have broader market reach and strengthen the representation of their collective brands. Officed in Petaluma, Ca Pacific High’s portfolio includes wines from South Africa, California, New Zealand, Australia, Italy, Argentina, as well as an American whiskey. The joint-venture has also formed an alliance with Republic National Distributing Company and Young’s Market Company.




France: New record for wine and spirits exports in 2012 – figures (Excerpt)


Source: Just-Drinks

By Stuart Todd

15 February 2013


Wine and spirits exports from France hit a new high last year in value terms, according to figures released this week.


Exports in 2012 were up by 10% on the prior year, the Fédération des Exportateurs de Vins et Spiritueux de France (FEVS) said yesterday (14 February), coming in at a record EUR11bn (US$14.73bn). The three principal contributors to the performance were Cognac, Bordeaux and Champagne, FEVS said.






Source: Glazer’s

February 16, 2013


Glazer’s today announces that Amy Moore is promoted to Vice President On Premise Sales DMH Division. Moore will be responsible for leading and driving the On Premise Sales agenda for the Diageo/Moet Hennessy portfolio for Glazer’s throughout the state of Texas. Amy will report to Steve Cohen, Senior Vice President, DMH Texas. The appointment is effective February 16, 2013.


Steve Cohen said, “We are pleased to be promoting Amy to Vice President within the DMH Division. Amy joined Glazer’s in 2008 and has moved quickly through the ranks of On Premise, starting as a Sales Rep and then moving to District Sales Manager and, most recently, Regional Sales Director. Her commitment to both our suppliers and our customers is highly valued and her knowledge of the on premise business is keen. She is a highly motivated professional, focused on growth, and we are all very excited about this next step in her Glazer’s career.”


Amy holds a BA from the University of North Texas.




Ruth’s Hospitality Group keeps focus on traffic after 4Q sales grow


Company aims to offset food cost inflation through traffic growth rather than price increases


Source: NRN

Mark Brandau

Feb. 15, 2013


The parent to Ruth’s Chris Steak House and Mitchell’s Fish Market reported traffic and sales growth for the fourth quarter of 2012.


After recording a same-store sales gain at its namesake steakhouse chain for the 11th consecutive quarter, Winter Park, Fla.-based Ruth’s Hospitality Group said it would stick with value-focused strategies to maintain traffic growth and offset expected beef inflation in 2013.


The parent of several upscale-casual brands, including Ruth’s Chris Steak House and Mitchell’s Fish Market, reported traffic and sales growth for the fourth quarter of 2012. The company is also off to a strong start this year, with sales increasing in the mid-single digits through the middle of February, officials said.


“We believe our strategy of growing sales through traffic first and pricing second continues to pay dividends, as shown by the continuation of our healthy comp sales and traffic growth,” chief executive Mike O’Donnell said during the 150-unit company’s earnings call with investors. “While we believe we have additional pricing power, we expect to be thoughtful and prudent with respect to future increases.”


For the Dec. 30, 2012-ended fourth quarter, Ruth’s net income grew to $3.6 million, or 10 cents per share, compared with $1.9 million, or 4 cents per share, a year earlier. The latest quarter’s results also reflect an extra operating week compared with a year earlier.


Revenue increased 15.5 percent to $115.1 million, reflecting an extra operating week compared with a year earlier, as well as same-store sales gains of 5.4 percent at company-owned Ruth’s Chris Steak House locations and 3.4 percent at Mitchell’s Fish Market. Franchised locations of Ruth’s Chris logged a 3.4-percent increase in same-store sales during the fourth quarter.


Traffic moves at brisk pace


O’Donnell and chief financial officer Arne Haak noted that guest count growth contributed to the sales expansion at Ruth’s Chris Steak House and Mitchell’s Fish Market in the fourth quarter, an effect the company would focus on increasing in 2013.


At the 64 company-owned namesake steakhouses, the 5.4-percent same-store sales increase in the quarter comprised a 1.7-percent gain in traffic and a 3.6-percent lift in the average check.


Private dining and catering grew 12.2 percent in fourth quarter due to strong holiday bookings, O’Donnell said.


A 5.4-percent increase in guest counts offset a 1.9-percent decrease in the average check at the company’s 19 Mitchell’s Fish Market locations, officials added.


“With the current economic backdrop it is still our strategy to focus on growing sales through traffic gains and maintaining our value orientation,” O’Donnell said.


O’Donnell credited Ruth’s Chris’ Sizzle, Swizzle and Swirl happy hour – in place at two-thirds of company-owned units and one-third of franchised restaurants – and the Ruth’s Classics fixed-price offer for continuing to drive traffic in the fourth quarter and full year.


“These prix-fixe selections now comprise approximately 20 percent of sales, consistent with the trends we saw in the third quarter,” O’Donnell said. “Customers who select Ruth’s Seasonal Classics continue to exude a preference for the higher price of the two offerings.”


While total orders of the three-course Classics offer dipped slightly in the fourth quarter, 60 percent of those orders were placed in the higher of two available price tiers, he said.


“While there remains economic uncertainty,” O’Donnell added, “we feel the continued growth in comparable-store traffic and sales, the reduction in preference for Ruth’s Classics, and the increased preference for the higher-price items is a sign of continued improvement in consumer confidence.”


At Mitchell’s, a “Reel Delicious” lunch deal contributed to the decrease in average check, but brought about a 10-percent increase in lunch traffic.


At Ruth’s Chris, the menu currently reflects 2 percent of menu price increases taken in 2012 and the early part of 2013, officials said. One part of the total menu price increase was a broad but small hike last spring, and most recently, small tweaks have been made to Ruth’s Classics, bringing the low end of the two-tiered price point to $42.95.


But the brand likely would hold firm on prices in the near future, Haak said.


“We are not putting any more price increases on the Ruth’s Classics,” he said. “We feel that’s where we want it to be. . We’ve also pulled some of our price increases on appetizers. We’re very reluctant pricers. We’d prefer to offset our costs with traffic, and we’re mindful of the elasticity we observe in our customers, as well as what the competitors are pricing.”


Beef costs rose 5.1 percent year-over-year during the fourth quarter, Haak said, but Ruth’s largely managed through that inflation with the 2 percent of pricing, a higher sales mix for alcohol and easing costs of other commodities.


Beef inflation is “likely to be north of 10 percent” in 2013, Haak said.


Domestic development plans for 2013 include one new company-owned Ruth’s Chris unit and the relocation of another corporate restaurant, as well as four to five franchise openings. The company also announced a franchise deal for four restaurants in mainland China to open over the next three years.


For the full fiscal year 2012, Ruth’s recorded a $20 million net loss, or negative 58 cents per share, driven in large part by the company’s repurchase of its preferred shares in March from Bruckmann, Rosser, Sherrill & Co., which resulted in a one-time reduction of net income of $35.8 million.


Other non-cash charges included a $900,000 charge for legal fees, a $5 million charge to relocate one location, and asset impairment charges for two other units. In fiscal 2011, Ruth’s had logged a net profit of $16.7 million, or 39 cents per share.


Full-year revenue rose 7.9 percent to $398.6 million. On a 52-week basis, same-store sales increased 5.2 percent at company-owned Ruth’s Chris restaurants, 2.5 percent at Mitchell’s Fish Market and 4.6 percent at franchised Ruth’s Chris units.


Ruth’s Hospitality Group also operates Columbus Fish Market, Mitchell’s Steakhouse and Cameron’s Steakhouse.




NRF: Retail sales up slightly in January


Source: RT

By Marianne Wilson

February 14, 2013


Retail sales ticked up in January as consumers adjusted their spending in response to the increase in payroll taxes and rise in gasoline and energy prices. According to the National Retail Federation, January retail sales (excluding automobiles, gas stations and restaurants) increased 0.3% seasonally adjusted from December and increased 5.4% unadjusted year-over-year.


January retail sales, released today by the U.S. Department of Commerce, showed total retail and food services sales (which include non-general merchandise categories such as automobiles, gasoline stations, and restaurants) increased 0.1% seasonally adjusted month-to-month and increased 4.7% adjusted year-over-year.


“With the return of healthy housing prices, stronger employment statistics combined with historic highs on Wall Street at the end of 2012 and 2013, consumers seem a bit more confident these days,” NRF chief economist Jack Kleinhenz said. “Even though retail sales were relatively modest in January, consumers seem to have adjusted accordingly to rising taxes and energy prices. Far from secure, consumer confidence continues to be shaky.”


Other findings from the January retail sales report include:


Clothing and clothing accessories stores’ sales decreased 0.3% seasonally-adjusted month-to-month and increased 5.9% unadjusted year-over-year.


Electronics and appliance stores’ sales increased 0.2% seasonally-adjusted month-to-month and increased 2.7% unadjusted year-over-year.


Furniture and home furnishing stores’ sales decreased 0.2% seasonally-adjusted month-to-month and increased 5.8%  unadjusted year-over-year.


General merchandise stores’ sales increased 1.1% seasonally-adjusted month-to-month and decreased 0.3% unadjusted year-over-year.


Sporting goods, hobby, book and music stores’ sales increased 0.6% seasonally-adjusted month-to-month and increased 8.3% unadjusted year-over-year.




Whole Foods narrows forecast despite strong Q1


Source: RT

By Marianne Wilson

February 14, 2013


Whole Foods Market reported that its first-quarter net income rose 24% to $146 million, exceeding expectations, on stronger revenue. But the grocer narrowed its revenue forecast and said its earnings growth may slow through the remainder of the year amid higher store-opening costs and plans to increase its selection of lower-priced products.


Total sales increased nearly 14% to $3.86 billion for the 16-week period that ended Jan. 20. Same-store sales were up 7.2% for the quarter.


Whole Foods opened 10 stores in the first quarter and has opened one store so far in the second quarter. It plans to open five additional stores in the current quarter.


The company said it recently signed 11 new leases averaging 38,800 sq. ft. in size. These stores are scheduled to open in fiscal year 2014 and beyond.


The retailer also closed on the purchase of six locations from Johnnie’s Foodmaster on Nov.30, which expands its presence in the Boston area. It is remodeling the stores and plans to reopen them under the Whole Foods Market banner in its 2013 fiscal year.


“We opened a record number of stores and delivered another quarter of strong sales and earnings growth,” said Walter Robb, co-CEO of Whole Foods Market. “We are well-positioned to internally fund our expansion plans and have the pipeline and infrastructure in place for square footage growth to accelerate through 2014 and hopefully beyond.”






Source: MPSA

Feb 15th


In November 1999, the Authority issued Bulletin #583, which provided guidance to the industry regarding the ability of suppliers and distributors to sell to retailers sealed pre-wrapped packages containing: (1) different kinds of scheduled alcoholic beverages; and (2) individual bottles of a scheduled alcoholic beverage and other merchandise. In light of inquiries from, and discussions with, suppliers and distributors regarding permissible conduct under Bulletin #583, the Authority is considering making changes to the guidance contained in Bulletin #583.


A proposed advisory to replace Bulletin #583 was discussed with industry representatives at a public meeting conducted by Chairman Rosen on January 17, 2013. A video recording of that meeting is available for viewing on the Authority’s website. After considering the comments made at that meeting, a revised draft of the proposed advisory has been prepared and will be submitted to the Members of the Authority at the February 27, 2013 Full Board meeting. The meeting will be held at the Authority’s New York City Office. Anyone wishing to attend may also do so via videoconference at the Authority’s offices in Albany and Buffalo. The meeting is open to the public.


Anyone wishing to submit written comments in advance of the meeting may forward same to the Secretary’s Office by the close of business on February 20, 2013. Please refrain from submitting alternative versions of the proposed advisory.


New York State Liquor Authority

Secretary’s Office

80 South Swan Street, Suite 900

Albany, New York 12210

Phone: (518) 474-3114





Idaho: Cross-border liquor sales – ‘Their mistake is our gain’


Source: Spokesman-Review

Feb. 13, 2013


Idaho’s seen big boosts in sales in its state liquor division from Washington residents, division Director Jeff Anderson told the Joint Finance-Appropriations Committee today. “Sales along the border there are up probably 20 to 30 percent,” Anderson said. “With the addition of the Stateline store, combined Post Falls/Stateline is tracking about plus-70 percent.”


The sales got a boost when Washington’s liquor prices spiked after the state’s voters decided to privatize their state liquor system, but to keep all state taxes and fees in place. Rep. George Eskridge, R-Dover, asked, “As consumers in Washington get used to the convenience, I guess, of buying it out of the store, even though it’s got a higher price, my question is, will we continue having the same advantage? Or will the Washington consumers adapt to their prices and elect to stay home?”


“It’s difficult to predict,” Anderson responded. “I can tell you we monitor about 13 stores along the border, from Lewiston up to Oldtown.”


He said, “There are moves in the Washington Legislature, on the part of Costco and others, to try and repeal portions of how that whole system was implemented. But for the time being, we anticipate to continue to have additional business.”


An example is the “super premium” Patron brand of tequila, Anderson said. “It sells for around $50. In Idaho, out the door, that’s about $53. Pre-1183 (the Washington initiative), Washington state might have been maybe $56. So there was really no reason for a super-premium consumer to drive to try and find it at a lower price. Now, that same product in Washington can sell for as much as $75 to $80, when you add in all the taxes and fees. So when you think about the difference  between $53 and $75, that’s really what’s driving this, is the premium/super-premium categories.”


Eskridge responded, “We’ve got something good going here. We’ve got cheaper liquor prices, cheaper gas prices, cheaper tobacco prices. We need to keep on that trend and maybe we’ll continue improving our revenue situation in relation to Washington state. Their mistake is our gain, so let’s continue that.”




Idaho: Idaho per-capita liquor sales remain low, despite boost from Washington buyers


Source: Spokesman-Review

Feb. 13, 2013


Idaho’s per-capita liquor consumption remains low, state Liquor Division director Jeff Anderson told legislative budget writers this morning. “We’re well below the national averages, despite the Washington state effect that has had an impact on sales at the border.” He said Washington’s move to privatize liquor sales – in a state that already had the nation’s highest liquor prices, adding a private profit margin to those prices to keep state revenues whole – resulted in “a significant price advantage for us at the border.” If sales to Washington residents are extracted, Anderson said, Idaho’s per-capita liquor sales are “even below the control-state average.”


The liquor division has added 18 stores since 1995, but its current focus is to “get more out of the stores we have as opposed to adding more stores.” The one exception: A new store in Stateline, at the Washington state line, added in 2012, due to pressure on the Post Falls store from cross-border sales. “It’s quickly becoming our No. 1 store,” Anderson said.


The liquor division’s budget request for next year is a “maintenance of service” request, Anderson said, with no new state liquor stores proposed; it does, however, propose remodels or locations for five existing stores. The division’s distribution of proceeds to the state this year was $63 million; in the next 10 years, Anderson said forecasts show the division should bring the state $700 million in distributions.




Florida: Legislature to Fight Over Beer, Wine


Source: The Ledger

By Lloyd Dunkelberger

Sunday, February 17, 2013


Beer containers and wine canisters will all be part of the turf wars that Florida lawmakers will engage in this spring.


Although Tallahassee is run by the Republicans – who espouse less regulation and more free markets – one of the dirty secrets is that businesses and other special interest groups often use the legislative process and the state bureaucracy to literally box – or bottle – out their competitors.


This spring, lawmakers will battle over the size of beer containers.


Craft-beer advocates are behind a bill (HB 715) that would allow brew pubs to sell 64-ounce “growlers” or containers.


State law prohibits beer containers of more than 32 ounces, unless they are gallon size (128 ounces).


It is reminiscent of a battle waged a dozen years ago by state Sen. Tom Lee, R-Brandon, and former state Rep. David Bitner, R-Port Charlotte, who finally got a bill passed that upended a 36-year-old law that restricted beer bottles to 8, 12, 16 and 32 ounces.


You might wonder why that 1965 law was passed. It was aimed at handcuffing Miller Brewing, which at the time was selling a popular 7-ounce “pony” bottle.


The growler war will be fought by the craft-beer lobbyists, who argue that allowing the popular half-gallon containers will help the young industry flourish in the state. They will face opposition from the beer distributors, who want to keep the current system, which is quite lucrative for them, intact.


The growler opponents will cloak their argument in health and safety concerns – likely finding allies in groups that see larger containers leading to more alcohol consumption.


The growler bill isn’t the only “size matters” battle facing lawmakers.


Sen. Wilton Simpson, R-Trilby, has a measure (SB 658) that would allow manufacturers and distributors to sell wine canisters as large as 6 gallons in size to restaurants and bars. The law restricts the size to a gallon. Proponents say lifting the restriction would allow the hospitality industry to offer more high-end wines by the glass – because the canisters keep the wine fresher than bottles.


Simpson said his bill is lifting a Prohibition-era regulation and would help wine manufacturers in Florida, including one in his district.


“This legislation would simply remove antiquated red tape that arbitrarily limits wine-container sizes in Florida,” Simpson said in a statement. “By updating these statutes, which were written just after the Prohibition era, the Legislature would effectively allow Florida’s hospitality industry to proceed with custom-tailored wine-by-the-glass programs through innovative new methods and with technology manufactured within my district.”


Some 36 states now allow the canisters, said Rep. Frank Artiles, R-Miami, who is sponsoring the House version of the bill (HB 623).


Texas and Pennsylvania were the latest states to lift the restriction.




Georgia: State House considers alcohol-related bills


Source: The Telegraph

February 16, 2013


In a state that first allowed Sunday alcohol sales in 2011, the Georgia House of Representatives is at work on bills to free the flow of small-batch hooch.


One legislator said it used to be seen as a “hillbilly” activity, but now homemade beer and craft moonshine are going mainstream.


The biggest beer contests in Georgia can attract as many as 400 homemade beers, beer sommelier and consultant Matt Simpson from Cobb County told a state House panel last week. He was testifying in favor of a bill that would make such competitions legal.


“Our current law doesn’t allow for transport of home brew,” said House Bill 99 sponsor state Rep. Jason Spencer, R-Woodbine. “That essentially makes home brew competition illegal. … Let’s make it legal and let these folks exchange recipes. Just let them do this.”


Under the bill, a two-adult household could produce a maximum of four batches of up to 50 gallons of beer, four times more than Georgia law now allows. But hobby brewers must still quaff the suds at home unless they are going to a competition.


Spencer’s bill got unanimous approval from the Regulated Industries Subcommittee on Alcohol and Tobacco on Thursday. And the moonshiners’ old enemy, the revenue man, stood aside.


The Department of Revenue is not in favor of House Bill 99 or against it, said Sean Casey, assistant deputy commissioner of the department. He testified simply to note that transported home brew would be “quasi-commercial” and thus might be hard to distinguish from a commercial, taxable drink. But in response to questioning, Casey said he had heard of no problems of people running home brew.


His department would be in charge of collecting the bill’s proposed $50 for a beer contest permit.


Simpson called home brewing an expression of creativity, personal freedoms and economic development. “Every craft brewery, almost every brewery is a tree from which home brew was the acorn,” he said, citing Sweetwater in Atlanta.


If home brew is an acorn of economic development, craft distilling may very well be seed corn.


State Rep. Rusty Kidd, I-Milledgeville, said what’s good for wineries is good for distillers. He introduced a bill that would let places like Georgia Distilling in Milledgeville retail up to two liters of liquor to each of its visitors.


“There are about 10 distillery operations throughout the state that are making moonshine and other alcoholic beverages,” he said. They are drawing visitors for tours and tastings, but lack a key attraction such as Braselton winery resort Chateau Elan. Distillery visitors cannot buy a bottle of alcohol directly from the maker.


Kidd said his House Bill 185 would boost tourism in places where people already have invested their own money to set up distilleries and open their doors to visitors.


The subcommittee ran out of time before it could hear testimony and vote on Kidd’s bill. It also had to delay hearing House Bill 137 by state Rep. Wendell Willard, R-Sandy Springs, which would legalize retailing and shipping gift baskets that contain wine. Hearings have not yet been rescheduled, and time is running short. The annual legislative session will end as early as the first week in April.


“People used to look down their nose at hillbillies” for making alcoholic beverages at home, said state Rep. Alan Powell, R-Hartwell, the subcommittee’s chairman. But, he pointed out, it’s actually a lot of work.


On the other side of the Capitol, a bill by state Sen. Cecil Staton, R-Macon, would allow alcohol retailers to conduct tastings at their stores.


Senate Bill 169 been co-signed by his GOP state Sens. Ross Tolleson, R-Perry, and Burt Jones, R-Jackson.


No hearing has yet been set. Staton pushed a similar bill last year, but it never made it out of committee.




Washington: Pot law to complicate job of state liquor enforcement officers


Source: King 5


February 15, 2013


Right now there are 56 liquor enforcement officers on the job in Washington, policing the state’s bars and liquor stores and keeping an eye out for illegal liquor sales and sales to minors.


But their job is about to get harder and more complex. Under I-502, the legal Marijuana Initiative approved last fall, the agency is called on to set up the web of rules and regulations covering marijuana sales and to enforce those rules.


Officer Josh Bolender, lobbying in Olympia on behalf of his union (Washington Federation of State Employees), says pot changes the game.


“Cannabis is a whole new thing for us. It is uncharted territory,” he said.


Liquor enforcement officers like Bolender wear a uniform, carry a badge and a gun, but don’t have the same law enforcement powers as other police officers. They are called “Limited Authority” peace officers.


With the number of stores selling liquor tripling in the last year and a half with the privatization of booze and with legal marijuana just around the corner, Bolender and fellow enforcement officers say they’ll be running into some dangerous criminal situations they aren’t authorized to deal with.


“With the unlicensed sale of cannabis there is often a nexus with other drugs, illegal drugs like methamphetamine, cocaine and heroin,” said Bolender.


He and his union are asking the legislator to expand their authority, and provide full law enforcement training for any new hires to the agency. At least 16 more enforcement officers are expected to be hired in conjunction with the implementation of I-502.


House Bill 1876, under consideration now in Olympia, would give them the tools they say they need to operate in an entirely new environment.


The Washington Association of Sheriffs and Police Chiefs normally opposes the expansion of police power beyond the “Limited Authority” designation. In this case, the WASPC’s Executive Director Mitch Barker tells me they would certainly be willing to “revisit the issue” and try to figure out ways to help Liquor Enforcement Officers do their job.




Pennsylvania: Food merchants, beer distributors at odds over proposed alcohol privatization


Source: The Reporter


Saturday, 02/16/13


Of the many interest groups salivating over Gov. Corbett’s new, highly publicized proposal to privatize the state’s liquor business, the Pennsylvania Food Merchants Association is at the top of the list. Under Corbett’s plan, the long-running state store system would be eliminated, and beer, wine and, potentially, distilled spirits could be sold in the grocery stores, convenience stores and other food retail outlets in the state that are represented by the PFMA – from prominent chains like Wawa, Giant, Weis, Acme and Sheetz to small mom-and-pop stores. They stand to get a significant chunk of Pennsylvania’s multi-billion-dollar alcohol business.


“We think it’s a very forward-looking proposal for Pennsylvania,” said David McCorkle, PFMA’s president and CEO. “It’s the most forward-looking thing that any governor has put forth since Prohibition.”


“We think it’s a positive first step that focuses on improved customer access and has the potential to create a free and open marketplace for the sale of wine and beer,”Dennis Curtin, director of public relations for Weis, said in a statement, adding in a separate phone conversation that “beer is a natural extension of the retail food business, and customers would appreciate having that option.”


On the other side of the fence, however, sit the state’s approximately 1,200 beer distributors – about 400 of which are represented by the Malt Beverage Distributors Association of Pennsylvania – who contend that Corbett’s proposal would create a competitive environment that’d be nothing short of devastating.


“If this happens, 90-percent of us will be out of business,” said Paul Kim, owner of North Penn Beverage in Souderton, one of Montgomery County’s biggest beer distributors. “How are we supposed to compete? Don’t get me wrong, I’m biased because I’m in this business, but I spent a lot of money to buy my business with the presumption that my business was going to be there for a long period of time. It’s tough enough that we have to deal with the economy the way it is, now we have to worry about the state actually taking our livelihoods away from us?”


“The incumbent stakeholders are going to resist change because they’ve had a monopoly for the last 80 years that they don’t want to give up,” countered PFMA senior vice president Randy St. John.


That the two sides are at loggerheads is nothing new – competing interests mobilized and fought bitterly when prior Pennsylvania governors Dick Thornburgh and Tom Ridge tried, and ultimately failed, to privatize liquor sales.




Kansas: Lawmakers Looking Into Liquor Selling Laws


Source: WIBW

Feb 17th


Kansas lawmakers are once again facing a proposal to let grocery and convenience stores sell wine, liquor and full-strength beer. But supporters of existing laws are ready for this year’s fight with a poll showing most Kansans are on their side.


The Topeka Capital-Journal reports ( ) the poll of 500 likely voters in 2014 was commissioned by a coalition called Keep Kansans in Business. The group represents the interests of the state’s 750 locally owned liquor stores, which now have the exclusive right to sell anything other than wine coolers or so-called weak beer.


Two-thirds of those surveyed by the national research firm Public Opinion Strategies said they oppose the expansion of liquor sales to grocery and convenience stores. About the same number said the change would be bad for the Kansas economy.




Colorado: Boulder alcohol enforcement may shift emphasis to ‘problem’ businesses


Residents voice concern about negative effects on nearby neighborhoods


Source: The Daily Camera

By Erica Meltzer



Reducing the impact of drunken students on University Hill has bedeviled city leaders and neighborhood activists for more than a decade.


Last year, Boulder officials proposed using new land-use rules, including expanding the alcohol-free buffer zone around the University of Colorado and requiring more frequent reviews for liquor license holders not just on the Hill but also in the downtown area.


But some University Hill residents say the real problem is house parties in the neighborhoods, and they share the view of many Hill business owners that an overly restrictive approach to liquor licenses there is stifling development.


In a community survey, many residents said they feel the city has enough tools through its existing laws and doesn’t need to create new regulations. They also said the city should spend less time testing the defenses of businesses that have a history of compliance and put more resources into curbing bad businesses.


The city is now proposing a new approach of focused enforcement that targets “problem” businesses, as well as measures to encourage the hosts of private parties to be more responsible.


The City Council will discuss how to “reduce community impacts from over-consumption of alcohol” at its regular meeting on Tuesday.


No ‘silver bullet’ solution to alcohol abuse


In a memo to City Council, officials said they planned to focus enforcement on “problem” licensed establishments and use joint inspection teams that involve police, fire, building inspectors and code enforcement, along with alcohol licensing staff.


City spokesman Patrick Von Keyserling said the city looked to its experience regulating medical marijuana, where it used a similar approach. The number of medical marijuana businesses in the city dropped, and though some business owners complained the city was too strict, officials believe the remaining businesses are good operators who take compliance seriously.


Other proposals include:


Hiring professional administrative hearing officers to rule on violations, instead of putting those cases before the Beverage Licensing Authority.


Creating a “cost-recovery” ordinance to charge hosts of private parties when police have to respond.


Exploring special “late night” licenses to hold those operators more accountable.


Creating a distinction in the zoning code between low-intensity alcohol establishments that sell food and mostly beer and wine and high-intensity establishments that sell more liquor.


“There is no one magic silver bullet to solving alcohol abuse in the community, so we are recommending a multi-pronged approach,” Von Keyserling said.


Some of the changes could be done administratively if City Council approves of the ideas. Others would require ordinance changes and a public hearing.


The discussion around the community impacts of alcohol abuse has tended to focus on University Hill, with its large student population and its history of riots.


However, an analysis of liquor license violations going back to 2005 found more violations — particularly in the form of selling to minors — in the downtown area than on University Hill. Only a handful of businesses citywide had more than two violations in that time period, though in a few cases, business owners surrendered their licenses or transferred them to new owners rather than fight allegations.


Councilman George Karakehian, who owns a business downtown, said University Hill may not generate the most liquor code violations but it does generate the most complaints from neighbors.


He said he’s heard from downtown business owners who are worried they will be swept up in new regulations that would be better targeted at the Hill.


Boulder police Alcohol Enforcement Officer Carlene Hofmann said the department already takes a similar approach to downtown and the Hill. The Hill team that was deployed on weekend nights is now the “neighborhood impact team” and puts more officers wherever they are needed on evenings when a lot of people are out drinking and socializing.


She said most of the violations brought before the liquor board are sales to minors, rather than over-service and the general conduct of the establishment, because those cases are easier to prove. And most of the sales to minors cases that go before the liquor board are the result of sting operations, she said.


Underage drinkers are often first identified by patrol officers, who may have a lot of other calls to deal with on a Friday or Saturday night. That can make follow-up investigations into whether businesses behaved irresponsibly more difficult, though Hofmann said she follows up on every confiscated fake ID.


City officials said they want to focus on more comprehensive investigations of suspected problem establishments.


“Over-service cases are difficult to investigate and prove,” the memo said. “Nevertheless, over-service is a significant problem in the community. Working with the City Attorney’s Office, the police department will attempt to develop effective enforcement approaches to address over-service.”


Some licensees welcome more comprehensive strategy


City attorneys last year successfully painted K’s China as a business with a pattern of serving minors, despite not having previous liquor license violations. The liquor board suspended K’s license for 15 days and put strict new rules on the business, including barring it from serving its signature “volcano” drink special.


Owner Bo Mai said he felt singled out by the city and said officers never demonstrated that the IDs being used by underage drinkers should have been caught as fakes.


Von Keyserling said city officials believe the liquor board provided adequate due process to Mai, and the move to hearing officers isn’t meant to impugn the work done by that body. Longmont, Greeley, Loveland, Fort Collins and Erie all use hearing officers to rule on alleged liquor license violations. The Beverage Licensing Authority would continue to rule on applications for liquor licenses and renewals.


Ryan Shorter, owner of Cosmo’s Pizza and the “no name” bar attached to it, said he used to see plain-clothes officers in his bar, observing the general conduct of the establishment. Now, they test his doormen with underage buyers. Shorter said he trains his employees to always check ID, but it’s inevitable that someone will eventually make a mistake.


Shorter said he’d welcome a more comprehensive approach to enforcement.


“Wouldn’t it be better if they were actually seeing if people were being over-served?” he said. “I feel like there could be a different way to use their resources.”


In a letter to City Council, Mark Heinritz, owner of The Sink, noted that there are more liquor license holders on the Hill now than a decade ago, but more businesses close early and they’re serving fewer customers.


He said the use review process for businesses that want to stay open past 11 p.m. has had the intended effect of limiting late-night service, as well as the unintended one of driving away potential new business.


He said he supported most of the proposed changes, but he also called on the city to do more toward revitalization of the Hill.


“Attracting new business to the Hill is a big challenge, and it will require firm support from the city,” he wrote. “Additional or more restrictive regulations will not help support the Hill.”


Rowdy partying seen as shifting to neighborhoods


Brian Barrett, a Realtor who has lived on University Hill for 10 years, said the problems with “roving gangs” of drunken students is worse than it used to be.


“There’s been a very small group that is a vocal minority that has power with the city, and they’ve done everything they can to shut down legitimate bar/restaurant operations. In doing so, they’ve shifted the partying out into the neighborhoods.”


Barrett pointed to the former Flatirons Theater, where the city rejected a “brew and view” proposal, only to end up with a pot shop in the location for several years.


Mark Kovach, another University Hill resident, said he travels regularly to New Orleans and sees nicer, quieter neighborhoods a few blocks from Bourbon Street than he sees in his own Boulder neighborhood.


They pointed to what they called a “prohibitionist” element in the University Hill neighborhood, particularly in Beverage Licensing Authority board member Lisa Spalding.


Spalding, who advocated revoking K’s China’s license, said she didn’t want to comment on alcohol policy because of her position on the Beverage Licensing Authority, but she rejected the idea that she is a “prohibitionist.”


” I think that as a community we have a responsibility to create a safe environment that encourages socializing and the legal and responsible use of alcohol but discourages illegal and dangerous drinking,” she said in an email. “I think many of the licensed establishments in Boulder feel the same way and run their businesses accordingly. We do, however, have occasional problems with businesses that find it easier to make money by serving minors and over-serving their patrons.”


Spalding said the charge of prohibitionism is “made by a small number of people who either do not support state liquor laws or find it more lucrative to break them.”


Stephen Schein, the co-owner of Half-Fast Subs on University Hill, said he has no problem with the city holding alcohol-serving establishments to high standards and pulling the license of irresponsible operators.


He said the city’s approach of restricting late-night service in particular has damaged the business potential of the neighborhood.


“You have a lot of vacancies in a thriving, bustling town like Boulder right across from a major American university,” he said.


Business owners have a lot more at stake than the hosts of house parties, he said.


Those business owners, he said, are “the only people with a vested interest in making sure alcohol gets served responsibly.”




Egypt: Alcohol sale to be banned in Egypt’s new suburbs





Two years after the Egyptian revolution that ousted an authoritarian regime, liberals are increasingly concerned that the ruling Islamists are out to curb personal freedoms and build a society in their own image.


Alcohol, forbidden to Muslims but enjoyed by some Egyptian Christians and by foreign tourists, is one area where the Islamist authorities are introducing controversial change.


Nabil Abbas, the vice president of the New Urban Communities Authorities (NUCA), said on Sunday that the government would no longer issue licenses for the sale of alcohol in new residential settlements on the outskirts of Cairo, Alexandria and other big cities.


“NUCA has stopped renewing licenses to sell alcohol but the current ones will continue until they expire,” Abbas said. “Representatives of the residents in new suburbs complained that the sale of alcohol leads to problems including attacking women and randomly ringing doorbells of people’s homes.”


Egyptians opposed to the country’s Islamist leaders condemned the move as an infringement on personal freedoms.

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