Liquor Industry News 2-21-13

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January, 2013, Control State Results


Source: NABCA

Feb 19th


During January, nine-liter spirits case sales in the control states grew 8.7% compared to same month last year sales. Rolling-twelve month volumes were up 4.0% compared to December’s 3.6%. Alabama, Iowa, Idaho, Montgomery County Maryland, Maine, Michigan, Mississippi, Montana, North Carolina, Ohio, Utah, Virginia, Vermont, West Virginia, and Wyoming reported monthly growth rates exceeding their twelve month trends.


Control state spirits shelf dollars were up 12.3% during January while trending at 6.9% during the past twelve months. Alabama, Iowa, Idaho, Montgomery County Maryland, Maine, Michigan, Mississippi, Montana, North Carolina, Ohio, Utah, Virginia, Vermont, West Virginia, and Wyoming reported growth rates exceeding their twelve month trends.


Price/Mix for January is 3.6% compared to December’s 2.7%.


Control State spirits sales appeared to be robust during January. When analyzing these results, consider:


Michigan, with 16% of the Control States’ spirits and dollars volume, reported five weeks of sales this January against four weeks last year, artificially inflating sales and skewing Control States results. Michigan had seven more selling days-26% more-during this year’s January compared to last year’s. Utah, with 2% of Control State spirits volume, reported five weeks of sales against four weeks the previous year: there were 5 more selling days-22% more-during this year’s January. After normalizing nine-liter spirits case sales for Michigan and Utah, January’s nine-liter case growth is 4.5%, and rolling-twelve month volumes show an increase of 3.7%. Likewise, after normalizing shelf dollars, January’s control state shelf dollar growth rate is 7.6%, and its twelve-month trend is 6.5%. January’s normalized Price/Mix is 3.1%.  


The January, 2012, calendar had four Sundays compared to five this year. Retail outlets in six control jurisdictions-Alabama, Montana, Mississippi, North Carolina, Utah, West Virginia-are closed on Sundays. The New Year holiday during 2012 was celebrated on Sunday; the 2013 New Year was celebrated on Tuesday. Many retail outlets in the Control States are closed on New Year’s Day. January, 2013, had eight fewer selling days because of New Year’s position in the Calendar relative to 2012.


During January, Irish Whiskey, with 0.8% share of the control states spirits market, was the fastest growing category with 22.9% growth reported and a twelve month growth trend of 19.8%. Vodka, with 35% share, grew during the same periods at 9.0% and 5.4%. January growth rates reported for Brandy/Cognac, Canadian Whiskey, Cordials, Domestic Whiskey, Gin, Irish Whiskey, Rum, Scotch, Tequila, and Vodka exceeded their twelve-month trends.


January’s nine-liter wine case sales growth rate was 3.3%. Pennsylvania, New Hampshire, Utah, Mississippi, Montgomery County Maryland, and Wyoming reported -1.7%, 2.4%, 39.3%, 3.5%, 12.7%, and 3.0%, respectively. January’s rolling-twelve month wine volume growth, 4.3%, is up slightly from December’s 4.2%.




Anheuser-Busch and U.S. in Talks to Resolve Antitrust Concerns


Source: New York Times


Fbe 20th


The purchase of Grupo Modelo, the maker of Corona beer, would give Anheuser-Busch InBev greater access to emerging markets like Mexico.Associated PressThe purchase of Grupo Modelo, the maker of Corona beer, would give Anheuser-Busch InBev greater access to emerging markets like Mexico.


Anheuser-Busch InBev and the Justice Department said on Wednesday that they were in talks to resolve antitrust concerns over the beer maker’s planned deal with Grupo Modelo, the maker of Corona beer and other brands.


The parties said they had jointly requested a temporary stay of an antitrust suit filed by the Justice Department while they work through the options.


Last year, Anheuser-Busch InBev offered $20.1 billion to buy the part of Grupo Modelo that it did not already own. The deal, one of the biggest in the beverage industry, was meant to cap years of deal-making that transformed a small Brazilian brewer into a juggernaut that eventually swallowed the maker of Budweiser.


The Grupo Modelo deal is a vital merger for Anheuser-Busch InBev, which has been seeking greater access to emerging markets. Buying Grupo Modelo, a Mexican brewer, is meant to solidify its footprint in attractive markets in Mexico and elsewhere in Latin America.


But the Obama administration filed suit on Jan. 31, seeking to block the deal on antitrust grounds. United States authorities said the original merger proposal would increase Anheuser-Busch InBev’s control of the American beer market, letting it raise prices while reducing choice for local consumers.


Grupo Modelo is the third-largest beer company in the United States. Anheuser-Busch InBev is the largest, ahead of MillerCoors.


Despite robust competition from microbrewers and other brands, analysts say the craft beer market makes up just 6 percent of beer sales. The biggest brewer in the market, Anheuser, has regularly raised its prices every year, with MillerCoors following suit, the Justice Department said.


Anheuser-Busch InBev first countered that the government’s lawsuit was based on faulty assumptions, since the company that determined Grupo Modelo’s prices in the United States was Grupo Modelo’s importer, Crown Imports.


Then, last week, Anheuser-Busch InBev offered broad concessions, saying it would sell the rights to Corona and other Grupo Modelo brands in the United States to Constellation Brands, one of the world’s largest wine companies, for $2.9 billion. Constellation already owns half of Crown Imports, alongside Grupo Modelo.


The new agreement would also include the sale of a brewery close to the United States-Mexico border that is owned by Grupo Modelo, as well as the perpetual licensing rights to Grupo Modelo’s brands in the United States.


In a statement on Wednesday, the Justice Department and the companies involved in the talks jointly requested a delay until March 19. Anheuser-Busch InBev and Grupo Modelo reiterated their contention that the “revised transaction resolves the concerns raised” by the antitrust suit.


The proposed deal for Grupo Modelo would be the second-largest takeover in the beer industry after the $52 billion merger that created Anheuser-Busch InBev, according to Thomson Reuters.




Beer Map: Two Giant Brewers, 210 Brands


Source: NPR

by Caitlin Kenney

February 19, 2013


In the past decade, a few big beer companies went on a buying spree, spending some $195 billion to buy up brewers around the world, according to Bloomberg.


Beer drinkers can be excused for not noticing. Unlike, say, airlines, which fold their acquisitions into one big, global brand, big beer companies tend to keep the brands they buy in the market.


As a result, the two biggest beer companies on the planet – Anheuser-Busch InBev and SABMiller – now own more than 200 brands based in 42 countries (including 18 in the U.S. alone). We’ve put together this handy guide so you can know whose beer you’re really drinking.


See the map:


The story of Anheuser-Busch InBev’s rise to global dominance is all about consolidation. Inbev was born out of a merger of Belgian brewer, Interbrew, and Latin American brewer, Companhia de Bebidas das Américas aka AmBev, in 2004. That same year, Anheuser-Busch grew by acquiring one of China’s biggest brewers, Harbin. The company we know today came about when InBev bought the American/Chinese powerhouse, Anheuser-Busch, for $52 billion dollars in 2008.


SAB Miller, the number two global brewer, got its name in 2002 after South African Breweries bought Miller. Just a couple years later, the firm grew by buying up the second largest brewer in South America, Bavaria. Two years later, they launched a joint venture in the U.S. with MolsonCoors* to create MillerCoors. In 2011, they bought Australia’s biggest brewer, Foster’s, and took a big stake in Russia’s second biggest brewer, Efes.


These days, the beer market is increasingly about the world outside the United States. The fastest growing beer market in the world right now is China, and several South American markets are growing rapidly as well. That’s why brewing giants like ABI are trying to snap up brewing operations all over the globe. Just last April, ABI paid $1.2 billion for a big stake in Cerveceria Nacional Dominicana, the Dominancan Republic national brewer, which brews Presidente beer.


That’s why Anheuser-Busch InBev (ABI), the world’s largest brewer, wants to buy the world’s seventh largest brewer, the Mexican brewer, Grupo Modelo.


The buyout offer would give ABI control of 46 percent of the U.S. beer market (it has 39 percent of the U.S. beer market and Grupo Modelo has 7 percent). That alarmed the Department of Justice’s antitrust division so much they sued to stop the merger.


But ABI really wants to make this deal happen. The company even agreed to sell off the right to sell Corona in the U.S. The move is an attempt to appease U.S. regulators, but it hints at something larger – ABI’s interest in the market outside the U.S.


“The AB InBev and Grupo Modelo transaction has always been about Mexico and making Corona more global in all markets other than the U.S.,” the company said in a recent press release.


*Clarification: The MillerCoors joint venture applies to the U.S. MolsonCoors still has sole ownership of Blue Moon and Coors Light outside the U.S.*




Anheuser-Busch Outsources Production of 4 Goose Island Beers


Source: The Daily Meal

Feb 20, 2013


When Anheuser-Busch InBev purchased Chicago craft brewery Goose Island in 2011, the companies were vocal about the fact that not much would change. Goose Island founder John Hall maintained oversight of operations, and brewing was still in the hands of brewmaster Brett Porter. However, two years later, the other shoe has dropped.


Anheusher-Busch has announced it will move production of Goose Island IPA, 312 Urban Wheat, Honker’s Ale, and Mild Winter to A-B facilities in Fort Collins, Colo., and Baldwinsville, N.Y.. The change is necessary in order to ensure supply meets demand, says the company, because these four brews are now available nationwide. Production of limited distribution, high-end specialty brews like Sofie, Matilda, and Bourbon County Brand Stout will stay at the original Fulton Street Brewery.


The A-B Goose Island buyout takeover was emblematic of the push by macro-brewers to keep craft upstarts from taking too much market share away from big beers – see also Budweiser’s recent launch of Black Crown. The Brewers Association highlighted the trend in the much-discussed essay, “Craft vs. Crafty.”


According to a rep, Brett Porter will still oversee all production of Goose Island labels, even the ones offsite, but it remains to be seen if there is any discernible degradation in quality or flavor of the outsourced brews. (It seems especially ironic that 312 Urban Wheat is one of those leaving its city of origin, since it is named after the downtown Chicago area code.)


If they are good, the benefit of the change will be more drinkers with access to Goose Island beer. Have you had a chance to compare the new and the old Goose Island offerings?




Boston Beer Fourth-Quarter Net Down 5.1% as Margins Drop


Source: Dow Jones

By John Kell

Feb 20th


Boston Beer Co.’s (SAM) fourth-quarter profit fell 5.1% as margins slid and prior-year results included a tax-settlement gain, masking strong demand for Sam Adams seasonal brews and newer products like Angry Orchard ciders.


Boston Beer, along with Craft Brew Alliance Inc. (BREW), are the two largest U.S.-listed beer companies that focus exclusively on the craft-beer industry. That segment of the market makes up a small percentage of the total U.S. beer business, though demand in the higher-priced segment is growing rapidly as seasonal blends and other new flavors appeal to more consumers.


But competition in the space has intensified as big brewers aggressively push their craft brands. Boston Beer has beefed up its salesforce and has spent more on ads and local marketing, in part reacting to the challenge by smaller and larger brewers.


Overall, Boston Beer reported a profit of $16.9 million, or $1.25 a share, down from $17.8 million, or $1.33 a share, a year earlier. Net revenue climbed 7.7% to $153 million. The latest results had one fewer week than the prior-year period, which also had a 16-cent gain related to a state income-tax settlement.


Analysts surveyed by Thomson Reuters expected a profit of $1.25 per share on revenue of $152 million.


Gross margin narrowed to 52.1% from 56.4%.


Core shipment volume, or beer shipped to distributors and wholesalers, grew 9% to about 729,000 barrels. The amount sold by those distributors and wholesalers, known as depletions, increased 16%–primarily due to growth for Angry Orchard ciders, Twisted Tea malts and Sam Adams seasonals.


Ad, promotional and selling expenses dropped 6.7% in the latest quarter, primarily as a result of having one less week in the quarter, though costs for ads and local marketing increased.


For the new year, Boston Beer sees a full-year profit of $4.70 to $5.10 a share, compared with Wall Street’s projection of $5.05 a share. The company projects depletions and shipments to grow between 10% to 15% and is targeting price increases per barrel of between 1% to 2% to help offset high costs for barley, packaging and other ingredients.


Boston Beer’s shares fell 1.6% to $150.51 after hours.




SAM: Solid Growth Expected to Continue in 2013


Source: CITI

Feb 19th


Target Price Change

Estimate Change


EPS In Line with Consensus – After the market’s close, SAM reported 4Q12 GAAP EPS of $1.25 (down 6% YoY, including the impact of a favorable tax settlement in 2011 and one extra week in 4Q11), which was in line with consensus, but 10 cents below our estimate, as full-year earnings of $4.39 came in at the lower end of management’s upwardly-revised full-year guidance for EPS of $4.30-$4.60.


Can Launch Confirmed – SAM management confirmed that they hope to launch Sam Adams cans in mid-2013, though they continue to work through the logistics. The introduction of cans, when fully scaled from a manufacturing perspective, should be slightly gross margin accretive, though it remains to be seen how long it will take to achieve full manufacturing efficiencies. Management does not expect the launch will be cannibalistic from a shelf-space perspective.


2013 Outlook – For 2013, SAM expects to deliver the following:


o        Shipments & Depletions: +10-15% (unchanged vs. mid-Dec, up from HSD mid-Nov),

o        Revenue per Barrel: +1%-2% (unchanged vs. mid-Nov guidance),

o        Gross Margin: 53%-55% (unchanged vs. mid-Nov guidance),

o        Incremental Investment Spending: +$18-$26mm (vs. +$6-$12mm in mid-Nov),

o        EPS: $4.70-$5.10 (+7%-16%), vs. consensus of $5.05 and Citi at $5.06.


Updating Our Estimates and Target Price – Reflecting today’s results and management’s updated guidance, we are adjusting our estimates as follows: FY13 to $5.06 (from $5.31), FY14 to $5.65 (from $6.07) and FY15 to $6.27 (from $6.76). We assert that SAM should trade at a 27x multiple (up from 25x previously) which takes into account (i) the continued outsized growth of craft beer, and (ii) the benefit of SAM’s investment spending to maintain its preeminent position in the category. Given our FY14 EPS estimate, we derive a $153 target price on SAM (up from $152) and maintain our Neutral rating on the stock.




Molson Coors Tough Ship to Right


Source: UBS

Feb 19th  


Robust Volume Declines Across all Regions – Lowering Numbers

4Q marked the second consecutive quarter with volume declines in every region.  While the first few weeks of 2013 have showed positive volume growth in Canada and Europe, we believe this is indicative of timing benefits compared to the prior year (pricing), rather than a true reversal of trends.  We are lowering our 2013 and 2014 EPSe on continued volume declines and greater than expected COGS inflation (+3.2% v prior est +2.7%).  Our EPSe for 2013 and 2014 are $3.96 and $4.13, respectively (from $4.04/$4.33). Our price target, at 11x 2014e, is now $45.


Components of 2013 Numbers

In 2013 we expect volumes to be down 0.6% in Canada, -0.7% in United Kingdom, and +0.6% in Central Europe. 1Q13 volumes outside the US will benefit from lapping price increases last year.  At MillerCoors, we expect volumes to remain negative (-1%) with less pricing than seen in 2013 (+2% v +3%). We expect consolidated EBIT to be up 6.5%, but offset by higher y/y interest expense.


Investment Thesis: Remain Neutral – Topline Unlikely to Inflect

Volumes throughout the regions continue to be weak. Improvements would generate significant operating leverage, but consumer headwinds and competitive dynamics, particularly in the c-store channel, make an inflection unlikely. Central Europe will need to show volume growth before we become more constructive on the deal. A +3.1% dividend yield should help provide downside support.


Valuation: Neutral; Price Target  to $45

Our $45 price target is based on 11-times our new 2014e EPS of $4.13.




The world’s most expensive drinks


Source: the drinks business

by Andy Young

19th February, 2013


From a US$1 million vodka to a US$2m Cognac, here’s a look at some of the world’s most expensive drinks.


Recession, what recession? As Melbourne’s Joel Heffernan recently showed when he set a new world record for the most expensive cocktail, pricey drinks have become increasingly commonplace in the drinks industry.


Whether it is for age, rarity or packaging reasons, the drinks featured over the following pages are the most expensive on the planet.


What’s more, there appears to be a ready supply of people willing to pay for them.


How many, if any, would appear on your lottery wish-list?




Pennsylvania: State Patty’s Day – Bars, Beer Shops Paid To Not Serve Alcohol


Source: Huff Post




Nearly three dozen downtown bars, restaurants and beer shops have agreed to halt alcohol sales to counter an early St. Patrick’s Day celebration created by Penn State students, the most aggressive effort yet to curb drinking for the unofficial holiday known as State Patty’s Day.


In exchange, each business will receive a $5,000 subsidy to help account for lost revenue. A committee composed of university and community leaders announced the plan Tuesday and listed 34 businesses that it said supported this Saturday’s “alcohol-free zone.”


Every downtown establishment that sells alcohol will refrain from doing so Saturday, said Damon Sims, university vice president of student affairs and co-chairman of a committee known as the Partnership: Campus & Community United Against Dangerous Drinking. The majority of the funds to pay for the subsidies to businesses would come from campus parking fees collected during previous State Patty’s Day weekends, he said.


State Patty’s Day was created in 2007 to celebrate St. Patrick’s Day when it fell on spring break that year. But the holiday no longer falls during the break, and school administrators, student leaders and community residents have grown weary of a weekend that has become synonymous with excessive drinking and property damage.


Besides that, the last thing Penn State needs as it seeks to redeem its reputation after the Jerry Sandusky child abuse scandal is more negative attention.


Other schools have similar unofficial holidays, but Sims said he thought no other university community had gone to the extent of getting establishments to go alcohol-free.


“Everyone in the partnership really wanted this to go away. … This became one of the few things that we thought of that we hadn’t tried,” Sims said in a phone interview. “Perhaps we can find more headway than in the past.”


The weekend in recent years has also sparked talk on social media, which authorities have said has contributed to a spike in out-of-town revelers.


“This is an outside-the-box solution that businesses, the borough, student leaders and the University have embraced,” Tom Fountaine, borough manager and committee cochairman, said in a statement that included declarations of support from student and business leaders.


Police, along with community, school and student groups, have ramped up efforts in recent years to counter the excessive drinking that marks State Patty’s Day. Fraternities and sororities banned parties for Friday and all social functions Saturday. Volunteer opportunities have also been promoted as alternative activities in a day of service.


Last year, authorities said arrests dropped by about 13 percent to roughly 300.


“I don’t think it’s a bad idea. If you ask me, State Patty’s Day is pretty dumb,” fourth-year senior Nick Stuchlak said about the no-alcohol zone. After meeting fellow senior Nick Mattise at the university’s main gate downtown, Stuchlak said he doesn’t do anything special for the day, which he equated to just an excuse to drink.


But Stuchlak and Mattise both questioned how the move would affect how non-Penn State visitors would act.


“I think we’ve learned better in the past year how to act, but people from out of town – this isn’t their town,” said Stuchlak, of Scranton. “They actually have no stock in acting correctly.”


Said Mattise, also of Scranton: “It’s gotten out of hand with the out-of-town people.”


The change is targeted especially at discouraging out-of-town guests from visiting for the purpose of excessive drinking, Sims said. “If it makes it a less inviting place, then it would achieve” the goal.


State Patty’s Day this year falls on the weekend after the annual student-organized Dance Marathon, an event that generates positive publicity for the university. Students raised a record $12.3 million this year for pediatric cancer research and care.


Jennifer Zangrilli, director of operations at Dante’s Restaurants Inc. and president of the Tavern Owner’s Association, said the association was “excited and proud” to support the alcohol-free zone. “Our collective desire is to see our community and downtown not only grow but thrive,” she said.


Food and non-alcoholic drinks will still be offered by establishments to appeal to “responsible visitors.” Penn State’s two campus hotels also planned to cut off alcohol sales Saturday.


Freshman Jeremy Smith, of Lansdale, remained a little skeptical. He said he doesn’t plan on participating, but like Stuchlak noted that alcohol could still be purchased away from downtown.


“I don’t know if it will have as big an impact as they think,” Smith said. “There are so many places you can get things … They would have to really, really go big scale to damper everything.”


It was unclear how the initiative would affect establishments that weren’t downtown. In previous years, state liquor stores closed early for the day.


Making downtown alcohol-free means the stepped-up police presence can focus on cracking down on house parties or otherwise unlicensed establishments, Sims said.




NBWA Applauds Introduction of Legislation to Reauthorize the STOP Underage Drinking Act


Source: NBWA

Feb 20th


The National Beer Wholesalers Association (NBWA) applauds the introduction of H.R. 498, legislation to reauthorize the Sober Truth on Preventing (STOP) Underage Drinking Act, by Rep. Lucille Roybal-Allard (CA) along with Reps. Frank Wolf (VA) and Rosa DeLauro (CT).  


“The STOP Act is an integral part of the fight against underage drinking because it ensures that federal, state and local governments have tools and information they need to prevent alcohol purchase and consumption by those who are not of legal drinking age,” said NBWA President & CEO Craig Purser.  “Reauthorization of the STOP Act is necessary to increase and better coordinate federal support for state efforts in the fight against underage drinking and to reaffirm the effective state-based regulation of alcohol.”


The STOP Act, which became law in 2006 with NBWA’s support, notes that alcohol is different than other consumer products and is best regulated by the states, consistent with the 21st Amendment:


Alcohol is a unique product and should be regulated differently than other products by the States and Federal Government. States have primary authority to regulate alcohol distribution and sale, and the Federal Government should support and supplement these State efforts.


Additionally, the STOP Act highlights health and safety concerns related to underage drinking and provides funding for state initiatives to address such problems.  The legislation authorized a national media campaign, new grant programs and research to combat underage drinking.  It also formally established and funded the federal Interagency Coordinating Committee on the Prevention of Underage Drinking (ICCPUD), chaired by the U.S. Department of Health and Human Services, to help coordinate the various federal agencies involved in alcohol issues.


The STOP Act has received broad bipartisan support, and it marked the first time in recent history that Congress and the executive branch joined together to coordinate activities to fight underage drinking.  When it was originally introduced in 2006, STOP was supported by the licensed beverage industry, alcohol control organizations and the public health community.


“The STOP Act is a solid example of the great things that can be accomplished when groups with different agendas work together to achieve a common goal,” added Purser.  




India: Allied Blenders sees consolidation rising with Diageo entry


Source: DNA

By Nupur Anand

Thursday, Feb 21, 2013


Deepak Roy, executive vice-chairman & CEO of Allied Blenders & Distillers, maker of Officer’s Choice whiskey & Jolly Roger rum, says that challenging times for the liquor industry continue as consumers continue to downtrade. As consolidation and brand-building picks up, the liquor industry will only be a big boys’ game, he tells Nupur Anand. Excerpts from the interview.


Have consumers started drinking more or is the slowdown continuing?

Two years back, the industry was growing at an average of 11-12%; last year it slipped to 7.5%, and this year till December the growth was only 4%. The reason for the slowdown has been steep increase in prices not led by manufacturers but by excise department, making it prohibitively expensive for consumers. Also, the increased cost of companies on account of high raw material had led to companies reducing investments in brands.


Does that mean that people are increasingly opting for cheaper variants?

Yes, the downtrading trend has become stronger and is more apparent in the mass segment. The premium segment is still growing. But in the mass whiskey segment, there are very clear downtrading trends. A lot of people in the segment have moved to cheap whiskey or country liquor, depending on which state you are talking about. So the popular whiskey segment is growing about 2% lesser than last year.


What about the other spirits category?

Vodka growth has slowed down. In fact I think its only 1-1.5%. Brandy is growing well at about 18-20%, driven by growth in South India. And in this the premium and semi-premium is doing well. If you look at rum, it has not been growing in the last two years.


Are you using this slowdown period to expand?

Yes, we are closer to implementing some of our expansion plans. We are creating a back-end manufacturing facility in Andhra Pradesh. We are also close to acquiring a bottling plant in West Bengal. We are also looking at a bottling unit in Rajasthan and distillery in Maharashtra. With this capacity addition, we should be good for the next three years, considering we are aiming a growth of 20% plus.


There have been reports that you have been scouting for funds…

Yes, we are looking at a private equity funding right now. We have engaged someone who is helping us with the valuation of the business. We are looking at raising about `500-600 crore. This money will be used to fund our expansion plans for the next three years. We are hoping to raise it in the next three to six months.


Are you planning to introduce any new brands or products?

We have some plans but we can’t disclose that but we are very ambitious on the product plans. Our past launches have also been very successful. For instance, in Officers Choice Blue, a launch in the semi- premium segment, we have crossed a million cases in ten-and-a-half months. And that too when we are not present in several states which are very big markets.


Are you looking at premiumising your portfolio?

Yes, we are clearly looking at the premium segment because margins are anyway thin, and with inflation hitting us very badly if you want to remain profitable you will have to turn the focus on the premium segment.


There have been reports that several companies are looking at acquisitions…

Yes, going ahead there will be further consolidation in the market. And especially now that the industry is dominated by two giants– Diageo and Pernod Ricard– so competing with them is very difficult. With consolidation there will be more control on prices and this will, in turn, have a better control on raw material.


Are you also scouting for acquisitions?

Yes, we are also on a lookout for good brands if we get them at a good price.


Does Diageo entering the market means more competition?

Well, we are glad they are coming in. It will make the market better in terms of pricing and also more transparent, a good crop of people will come in.


What brand-building exercises are we likely to see going ahead?

Since direct advertisement is banned, we will continue to see more surrogate advertisement. The activity in clubs and bars will increase dramatically. Also, association with events will become a big thing in liquor business and therefore it will become a big boys’ game, smaller players will not be able to match up.




Deadline Extended for ULTIMATE SPIRITS CHALLENGE® to Friday, March 1, 2013


Source: U-BC

Feb 19th


3 Tangible Benefits to Suppliers Who Enter ULTIMATE SPIRITS CHALLENGE:


1.       All spirits rated 85 and higher receive concise, descriptive TASTING NOTES.


2.       UBC results are distributed to over 60,000 retailers, restaurateurs, beverage buyers, and bartenders via Beverage Media’s ULTIMATE BEVERAGE CHALLENGE BUYING GUIDE that will appear in the October 2013 issue of Beverage Media publications.


3.       Spirits with excellent price/value ratios receive GREAT VALUE recognition.

Invest in your brands.




Castle Brands Announces Fiscal 2013 Third Quarter Results


Source: Business Wire

Feb 14th


Castle Brands Inc. (NYSE MKT: ROX), a developer and international marketer of premium and super-premium branded spirits, today reported financial results for the three and nine month periods ended December 31, 2012.


Operating highlights for the quarter ended December 31, 2012:


    Net sales increased 21.8% to $10.6 million for the quarter ended December 31, 2012, as compared to $8.7 million for the comparable prior-year period

    Total case sales of beverage alcohol products increased 19.4% to 96,599 cases compared to 80,888 cases in the prior-year period

    Strong growth of the Jefferson’s bourbons and rye lead to a 66.4% increase in whiskey revenues from the prior-year period

    Gosling’s Black Seal Rum exceeded 100,000 cases sold in the U.S. for the 12 months ended December 31, 2012

    Gosling’s Stormy Ginger Beer case sales increased 79.7% to 55,074 cases compared to 30,644 cases in the prior-year period

    EBITDA, as adjusted, improved by 78.6% to a loss of ($0.1) million, compared to a loss of ($0.5) million for the three months ended December 31, 2011


“Castle Brands continued to deliver on the key elements of our plan. Case sales and revenues from our spirits brands increased strongly for the quarter and the year-to-date, well ahead of industry average. Cost containment continued to cause our operating margins to improve. As a result, cash consumed by operations, as measured by EBITDA, as adjusted, declined significantly,” stated Richard J. Lampen, President and Chief Executive Officer of Castle Brands.


“This is an exciting time for Castle Brands. We are particularly pleased with the increased penetration that Gosling’s Rums and Jefferson’s Bourbons continue to gain in key U.S. markets and we plan to boost the marketing programs, event sponsorships and promotions for these brands throughout the year. Furthermore, during the last nine months, our Irish portfolio, including our Irish whiskeys and Brady’s Irish Cream, achieved double digit year-over-year growth,” stated John Glover, Chief Operating Officer of Castle Brands. “During our fourth quarter, we will introduce Castello Mio, our new Sambuca, strengthening our liqueur portfolio.”


The Company had net sales of $10.6 million in the third quarter of fiscal 2013, an increase of 21.8% from $8.7 million in the comparable prior-year period. This sales growth was driven by increased rum and whiskey sales in the U.S. and international markets. Loss from operations was ($0.4) million for the three months ended December 31, 2012, an improvement of 44.3% from a loss of ($0.8) million for the comparable fiscal 2012 period. Including the ($0.2) million dividend accrued under the terms of the Series A Preferred Stock, the Company had a net loss attributable to common shareholders of ($0.8) million, or $(0.01) per basic and diluted share, in the fiscal 2013 third quarter, compared to a net loss attributable to common shareholders of ($1.4) million or $(0.01) per basic and diluted share, in the comparable fiscal 2012 period.


EBITDA, as adjusted, for the third quarter of fiscal 2013 improved to a loss of ($0.1) million, compared to a loss of ($0.5) million for the prior-year period.


For the nine months ended December 31, 2012, the Company had net sales of $30.6 million, a 20.2% increase from $25.5 million in the prior-year period. Loss from operations was ($1.7) million for the nine months ended December 31, 2012, an improvement of 40.9% from a loss of ($2.9) million for the comparable fiscal 2012 period. Including the ($0.6) million dividend accrued under the terms of the Series A Preferred Stock, the Company had a net loss attributable to common shareholders of ($2.9) million, or $(0.03) per basic and diluted share, in the first nine months of fiscal, compared to a net loss attributable to common shareholders of ($4.5) million or $(0.04) per basic and diluted share, in the comparable fiscal 2012 period.


EBITDA, as adjusted, for the nine months ended December 31, 2012 improved to a loss of ($0.7) million, compared to a loss of ($2.1) million for the prior-year period.




Bordeaux chateaux ‘don’t know how to sell’ wine – Philippe Magrez


Source: Decanter

by Chris Mercer

Wednesday 20 February 2013

Too many Bordeaux chateau owners rely on negociants and prestige, warns Philippe Magrez.


Too many Bordeaux chateaux ‘don’t know how to sell’ wine and several estates are being hampered by disputes among members of their owning families, says Philippe Magrez.


Speaking to in London this week, Magrez said that Bordeaux chateaux are storing up problems in an increasingly competitive world wine market, because they remain too removed from the sales process.


His comments reignite a long-standing debate around Bordeaux’s negociant system, which critics claim separates wine producers from consumers.  


‘If I’m a negociant, my problem is not to push your brand, it is to sell your stock. Many many chateau owners don’t know how to sell, and this is a big problem,’ said Magrez, who runs Magrez Group alongside his sister, Cécile Daquin, and father, Bernard.


He warned that a younger generation of wine drinkers have a ‘different dream’ to Bordeaux and are more willing to consume wines from all over the world; meaning the Bordelais must redouble marketing efforts.


‘I’m not sure that all the negociants will exist in 20 years, and the same for the small chateaux. Many small chateaux just exist because there is a French bank named Credit Agricole.’


Magrez also said that some top Bordeaux estates are hamstrung by family disagreements. ‘I could give you five or six names of chateaux who could do the same as us, but they don’t,’ he said, referring to the Magrez Group’s efforts to build a 40-estate empire in Bordeaux and beyond.


‘The less people from the same family you have in a company, the better,’ he said.


Despite this, Magrez said he has a good working relationship with his father and sister. ‘A lot of people say it’s impossible to work with Bernard Magrez, but it’s easy. My father says, no problem, ‘I write the rules of your job, my job and of your sister’s’. Sometimes we have small fights, but in the end we are all thinking about the consumer.


‘Bernard is 77 years old, but he’s in the company as if he’s 40.’


When asked whether the Magrez Group is in the market for more wine estates, nothing is being ruled out. The firm is open to opportunities, whether it’s in southern England, Italy or elsewhere. ‘It depends on the market,’ he said, but adding that ‘our main business is Bordeaux’.   


Last year, Bernard Magrez purchased Clos Haut-Peyraguey, making him and his self-built business the owner of four Grands Crus Classés spanning Sauternes, Graves, Saint-Emilion and Médoc.




Champagne shipments down -8.8% in December, all regions declined


Source: Barclays

Feb 19th


CIVC global shipments declined by -8.8% in December, a deterioration from the -7% reported in November and declined -4.4% for the full year 2012. This comes despite an easy comparable of -8.5% in December 2011 and confirms the challenges the industry faces as November and December are the biggest months in the year accounting for close to 30% of annual shipments. France was down by -8.8% on an easy comparable (-5.9% in December 2011). European volumes were down by -13.3%, compared to -20.9% a year before. Shipments to other countries (19% of volumes) declined by -0.2%. For the full year industry shipments continued to show weak trends, down -4.4%, with a -5.6% decline in France, -7.1% in rest of Europe and +3.2% in other countries.

We reiterate our negative stance on the champagne sector. With austerity measures increasing in many of the core European markets and with an additional 1,700 kilo per hectare of grape supply due to hit the market (a 25% increase in supply on 2011 following the yield restrictions imposed by the industry in 2009), category pricing appears vulnerable. We believe the risks remain skewed to the downside. We maintain our UW ratings on Laurent-Perrier and Lanson-BCC, and EW rating on Vranken-Pommery. Our preferred pick in the European Beverages space remains Pernod Ricard (OW, PT EUR 105) given its superior emerging market, Brown Spirits exposure.



Natural wine is more than ‘ticking boxes’ 


Source: Decanter

by Chris Mercer

Wednesday 20 February 2013

There’s no point being too dogmatic about natural wines, says Real Wine Fair organiser Doug Wregg.


The Real Wine Fair organiser has argued that ‘natural wines’ don’t need a strict definition, as divisions in the sector re-emerge ahead of fresh exhibitions.


Wregg defended the Real Wine Fair’s decision not to ‘establish a charter’ for natural wines.


‘We are quite inclusive,’ he told ‘There’s a broad spectrum of wines that are low intervention. Sulphur is not such an important issue,’ he said.  


Real Wine Fair has faced criticism from some corners of the natural wine movement over its relatively liberal approach.


This year’s Real Wine Fair will take place over March 17th and 18th, rather than clashing with rival UK fair RAW in May, as it did last year.


Wregg didn’t directly criticise RAW when speaking to, but he did say that natural wine should be about more than ‘ticking certain boxes’.


‘I don’t think there’s any point in being dogmatic about it,’ he said. ‘If you do, you get into legal definition, which leads to bureaucracy, which means people paying to join the club, and then you get splinter groups. Some growers then won’t value it as a term, because it doesn’t go far enough. Keeping it loose is keeping it strong.’


However, some worry that the concept of natural wines remains too vague.


‘We think a tighter definition of natural wine would be good, because consumers are hearing the word regularly in the media, and the lack of definition creates confusion,’ said John Beveridge, of Organic wine merchant Vintage Roots.


‘In lieu of certification, we are moving towards increased and clearer labelling, such as marking wines as low sulphur or no added sulphur, biodynamic, vegan etc.’ In January, the three most popular wines at Vintage Roots were all ‘no added sulphur,’ he added.


Vintage Roots won’t be attending Real Wine Fair, but will visit RAW, where two of its listed producers, Meinklang and Clos de Caveau, hope to exhibit their wines.


Wregg said that this year’s Real Wine Fair is in a better venue, in Wapping’s Tobacco Dock, and will include a boutique wine shop run by Roberson, as well as a host of pop-up restaurants from well-known players on the London scene, such as Fifteen, Modern Pantry, Galvin and Club & Cellar Gascon.


Commenting on the date change, he said it’s better if Real and RAW don’t compete directly. ‘We also asked the growers, and they said they’re always really knackered by the time it comes to the end of May’.




Coastal & Pacific Wine & Spirits Announces the Appointments of Lewis Kenrick and Fred Fox to its California Leadership Team


Southern’s California Division Announces the Appointment of Aki Toumasis to its Newly-Established Inside Sales and Direct Marketing Leadership Role


Source: Business Wire

Feb 19th


Pacific Wine & Spirits (PWS) of California, a division of Southern Wine & Spirits of America, Inc. (Southern)-the nation’s largest wine and spirits distributor with current operations in 35 states-is proud to announce two new appointments to its California leadership team. Coastal & Pacific Wine & Spirits Executive Vice President, General Manager Gerry Rivero announces the PWS appointments of Lewis Kenrick to the role of Vice President, General Manager and Fred Fox to the role of Vice President, General Sales Manager Southern California. Concurrently, Southern Wine & Spirits of California’s Senior Vice President, Sales & Marketing Patrick Daul announces the appointment of Aki Toumasis as Vice President, Inside Sales & Direct Marketing for Southern across the State of California.


“Aki’s extensive industry experience along with his outstanding knowledge of the California marketplace will be a tremendous asset to our supplier partners in his leadership of the new Inside Sales and Direct Marketing Division.”


Lewis Kenrick & Fred Fox


Kenrick-who previously held the position of PWS Vice President, Chains-will assume the role of PWS Vice President, General Manager for the State of California. Commenting on his appointment, Rivero said, “Lewis has delivered strong commercial results and demonstrated exemplary leadership with his team, his customers and with our supplier partners in his previous chain leadership role. I am confident he will bring that same level of passion and focus to his new role as the PWS General Manager for California.” Prior to joining Pacific Wine & Spirits five years ago, Kenrick spent eight years with a major supplier partner in various roles of increasing responsibility.


Regarding Fox’ appointment, Rivero added, “Fred started with Southern Wine & Spirits in 1989 as a Sales Rep in Fort Lauderdale, and, throughout his 24-year career, has excelled in a variety of high-profile roles in South Florida. In 2003, Fred became a founding member of the Coastal Wine & Spirits (CWS) of Florida team, and has spent the past 10 years leading the on-premise division for CWS in South Florida. We are excited to have Fred join the PWS team as the leader in Southern California.”


In announcing these new appointments, Rivero concluded, “The proven track record of strategic leadership, supplier collaboration and strong business results of these two individuals will accelerate PWS’ transformation to the next level of world-class selling.”


Aki Toumasis


As Aki Toumasis assumes his role as Vice President, Inside Sales & Direct Marketing, Daul commented, “Aki started his career at Southern in 1996, and, for the past five years, he has been the Vice President, General Sales Manager for PWS of Southern California.” Daul continued, “Aki’s extensive industry experience along with his outstanding knowledge of the California marketplace will be a tremendous asset to our supplier partners in his leadership of the new Inside Sales and Direct Marketing Division.”


These appointments are all effective March 1, 2013.




Phusion Projects Names Matthew Dornauer General Counsel


Source: Phusion Projects

February 20, 2013


Phusion Projects today announced the hiring of Matthew Dornauer as the company’s first general counsel.  In this role, he will be responsible for the company’s worldwide legal matters and government affairs.


Prior to joining Phusion Projects, Dornauer was at the Chicago office of Sidley Austin LLP, an international law firm, where he worked with Phusion since 2009.  At Sidley, he was a member of the general litigation group and his practice included a diverse range of litigation, regulatory and transactional matters.

“We’re thrilled to welcome Dornauer to our executive team.  Given his understanding of our company, this will be a seamless transition,” said Jaisen Freeman, co-founder and managing partner of Phusion Projects. “His background and experience are a perfect fit for us, particularly at a time when we are experiencing solid growth.”


Dornauer received his J.D., cum laude, from the University of Notre Dame Law School and his B.A., summa cum laude, with distinction in Political Science from The Ohio State University.  He is a member of the Illinois Bar and resides in Chicago.




BJ’s 4Q profit drops 29% as consumers pull back


Source: NRN

Lisa Jennings   

Feb. 20, 2013


BJ’s Restaurants Inc. reported a 29-percent decrease in profit for the fourth quarter Tuesday, saying sales trends are softening as consumers pull back on dining out in light of payroll tax increases and other pressures.


The company reported that the decline in net income was largely due to one-time pre-tax charges during the quarter that ended Jan. 1 and an additional operating week the prior year. However, in an earnings call with analysts following the report, Greg Levin, BJ’s chief financial officer, said the chain saw “a lot of choppiness” in the fourth quarter and noted that same-store sales were negative going into the new fiscal year.


For the first seven weeks of the first quarter in January and February, same-store sales fell 0.5 percent, compared with an increase of 4 percent for the same period last year, he said.


Consumers appear to “need a catalyst or an event to dine out,” said Levin, and they are also generally pulling back on dining out midweek. “In fact, the first quarter feels a lot like 2008, in which the middle of the week has become soft with weekends and special events holding up relatively well,” he said.


Levin predicted it would take about two quarters for consumers to adjust to the “new reality” of “a little less jingling in their pockets” as a result of higher payroll taxes and other changes in tax regulation this year.


The fourth-quarter report was the “final watch” for retiring chief executive Jerry Deitchle and the first earnings report for his replacement Greg Trojan, who stepped into the CEO chair earlier this month.


Raising brand awareness


The company is targeting several areas for improvement, including raising awareness of the brand in all markets, according to Trojan.


“We need to refine our brand positioning and look to spend efficient marketing dollars to drive even more traffic into our restaurants,” he said, noting that one of BJ’s strengths is the diversity of guests and the reasons they visit.


“How do we communicate what we do and what BJ’s is to such a varied constituency when it represents quite different experiences to so many?” he continued. “A difficult mission, but essential to fully realizing our potential in my mind.”


Trojan said the chain will also work on its plan for future development, rethinking the traditional 8,500-square-foot footprint for BJ’s restaurants.


“I’m convinced that we need more flexibility in the box that we are building,” he said. “We need to be able to fit in smaller places in older established real estate constrained markets, like the Northeast, for example. A smaller footprint will also make us more competitive in smaller markets, which dictate a lower upfront investment.”


In addition, Trojan plans to work on the chain’s human resources strategies with the goal of becoming “the company of choice to work for at all levels of our team,” he said. “Given the challenges laid out by health care reform and other regulations, we will look for opportunities to manage these changes in a way which widens our competitive advantages.”


Meanwhile, BJ’s is increasing its marketing spending and promotions during the first quarter. The chain is expanding a test of TV advertising in six small markets, covering about 28 restaurants.


In addition, Levin said BJ’s will be “very prudent” on menu pricing this year, focusing on “everyday affordability.” Menu prices will likely increase 2 percent for the year, including a 3-percent increase during the first quarter and 2-percent increases for the second and third quarters.


The company expects commodity costs to increase about 2.5 percent to 3 percent for 2013.


Net income for the quarter was $7 million, or 24 cents per share, compared with $9.9 million, or 34 cents per share, a year ago, which included an extra operating week that contributed about 6 cents per share.


During the fourth quarter that ended Jan. 1, the company also saw pre-tax charges totaling about $1.4 million, or about 4 cents per share, related to the cost of a California sales tax audit and one-time costs associated with the chief executive transition.


The same-store sales increase of 3 percent reflected the benefit of menu price increases and a favorable mix that offset a 0.9-percent decrease in traffic.


“In our view, maintaining 99 percent of our guest traffic in our comparable restaurant sales base was really a solid achievement for the fourth quarter in light of all the headwinds we faced,” said Levin, crediting the chain’s steak-and-seafood entrée platform and the two-dine-for-$14.95 lunch special promotion.


Revenue for the quarter increased 8 percent to $184.8 million, compared with $171.8 million a year ago, including an extra operating week in fiscal 2011 that contributed about $13.9 million in sales. Excluding the extra week, revenue would have risen 17 percent for the quarter.


For the entire year, BJ’s said revenue increased 14 percent to $708.3 million, compared with $620.9 million in fiscal 2011. Same-store sales increased 3.2 percent for the year.


Net income for the year was $31.4 million, or $1.09 per share, including pre-tax charges of about $2 million, compared with $31.6 million, or $1.08 per share, the year prior.


BJ’s said 16 restaurants opened in fiscal 2012, including five during the fourth quarter. Another 17 openings are scheduled for fiscal 2013, including the relocation of a smaller format restaurant in Oregon to a larger “Brewhouse” unit.


Based in Huntington Beach, Calif., BJ’s ended the year with 130 casual-dining restaurants under the BJ’s Restaurant & Brewery, BJ’s Restaurant & Brewhouse, BJ’s Pizza & Grill, and BJ’s Grill brand names.




Nevada:  Booze Bonds Seen Overcoming Worst Housing Slump


Source: Bloomberg

By Amanda J. Crawford

Feb 18, 2013


Nevada Governor Brian Sandoval, whose borrowing ability has withered as the state suffered the nation’s biggest drop in property values, wants to tap a revenue stream that emerged from the recession unscathed: liquor taxes.


Levies on alcoholic beverages rose in seven of the past eight years, even as property taxes have suffered, state data show. The Republican governor proposed $58 million in general- obligation bonds to repair state buildings in his 2013-2015 budget proposal, and his administration is considering using revenue from existing booze levies to back the debt. It’s an opportune time to borrow, as signs of an economic rebound lead investors to ask for less extra yield on Nevada securities.


Sandoval, 49, is seeking a way to borrow at municipal interest rates close to four-decade lows. The property tax revenue that traditionally funds the state’s general-obligation debt service has been falling since 2010. As a result, Nevada is unlikely to be able to issue new debt backed by those taxes until 2020, according to the state treasurer.


“What we need is a very predictable, reliable funding stream,” said Jeff Mohlenkamp, director of the state’s Department of Administration in Carson City.

Recession Hit


In Nevada, the recession that ended in 2009 hit harder than elsewhere in the nation. The jobless rate peaked at 14 percent in 2010, the highest since at least 1976. While it fell to 10.2 percent in December, that tied the state with Rhode Island for the nation’s highest level, data compiled by Bloomberg show. Nationwide, the rate was 7.8 percent.


Nevada is one of 11 states without a prediction for when tax collections will return to peak levels, according to the National Conference of State Legislatures. It wouldn’t be the first to turn to alcohol sales to bolster its finances.


Last month, a private entity created by Ohio Governor John Kasich to spur job growth sold $1.5 billion in debt backed by profits from the state’s wholesale liquor distribution system. In 2009, the state issued taxable Build America Bonds with a similar backing of liquor profits.


While Sandoval is still weighing options for a dedicated funding source for the debt, such as the tax on slot machines, the liquor levy on licensed importers and wholesalers has emerged as the most probable choice, Mohlenkamp said.


Alcohol Advance


Revenue from that source has surpassed pre-recession levels, rising every year except one since fiscal 2005. It will probably keep climbing over the next three years, according to the state’s Economic Forum, the entity charged by the legislature with estimating general-fund revenue.


Meanwhile, state property tax collected to repay general- obligation bonds is projected to decline to $129.8 million in fiscal 2013 from $186.7 million in 2010, according to the treasurer’s General Obligation Debt Capacity and Affordability Report. Property-tax revenue generally trails changes in home values.


The proposed bonds, which would need approval from the legislature as part of Sandoval’s $6.6 billion budget plan, would probably be structured so the debt is backed secondarily by the state’s general fund, Mohlenkamp said. If approved, the same mechanism could be used for more bonds in the next biennium, he said.

Funding Promise


The promise of stable, dedicated funding may alleviate some concern that the housing market may not have bottomed, said Michael E. Johnson, managing partner in Solana Beach, California, at Gurtin Fixed Income Management LLC.


“It is something we could be interested in,” said Johnson, whose firm handles $4 billion in munis. “Traditionally, liquor revenues across the country are relatively stable. I tend to like that part of it.”


Last month, Nevada, which has about $2 billion of debt, issued tax-exempt general obligations. The refinancing sale showed the state shrank its relative borrowing costs in the past year.


Five-year tax-exempt debt sold last month yielded 1.18 percent, or about 0.33 percentage point above benchmark bonds, data compiled by Bloomberg show. That extra yield is down from about 0.5 percentage point for similar-maturity debt at a Nevada offer in March. The securities were rated AA by Standard & Poor’s, the third-highest level.


Premium Push


Before the sale, state officials worked to reduce what they call the “Nevada premium” resulting from the state’s fiscal travails, said Chief Deputy Treasurer Mark Mathers.


“During the financial crisis, Nevada was in the news for its high foreclosure rate and high unemployment rate,” Mathers said in an interview. “The headlines left our bonds, despite being AA, trading at a higher spread than other AA-rated states.”


There have been signs of a turnaround in Nevada, the fastest-growing state in the last decade.


Home values in Las Vegas, Nevada’s largest city, rose about 10 percent in November from a year earlier, the fifth-best annual gain in the 20-city S&P/Case-Shiller index. Prices fell 61 percent from February 2007 to March 2012 — the most of any American city.


Home prices in Nevada remained 52 percent lower in December than they were at their peak in March 2006, the largest drop of any U.S. state, according to CoreLogic, an Irvine, California- based data provider.


States’ Quest


Nevada joins states investigating alternative funding to expand debt capacity as traditional revenue streams stagnate, said Emily Raimes, an analyst at Moody’s Investors Service.


“There are a lot of discussions going on in the states on the best way to fund the transportation and capital programs they want to fund,” Raimes said from New York. “Nevada is not very unusual in that it is looking at other funding sources.”


While the state isn’t required to identify a dedicated funding stream for its general-obligation debt, the treasurer’s office has recommended the step to reassure investors, Mohlenkamp said.


“They have recommended we identify a direct funding stream to provide a little more certainty, a little more structure to the bond purchasers,” he said.




Washington: Tacoma’s West End may become ‘Alcohol Impact Area’


Source: 13 Fox

By Kate Burgess

Feb 21st


Parts of Tacoma are seeing an increase in alcohol-related crimes, so the city is working to ban some forms of fortified wines and malt liquor in the worst-hit areas.


The West End Neighborhood Council is pushing to make their community an “alcohol impact area” and ban the sale of highly alcoholic drinks.


Some in the West End say public drunkenness is becoming a major problem. So the neighborhood council is working to make its area the third AIA in the city of Tacoma.


If the City Council adopts the ban, more than 45 wines and malt liquors would be pulled from the shelves, including Colt 45, Steel Reserve and Thunderbird wines.


Stores north of Highway 16 and west of 19th Street would be affected. Some business owners are worried it could hurt their bottom line.


But police say these drinks have an extremely high-alcohol content that contributes to chronic public drunkenness, which affects the whole community.


Tacoma police Lt. Daniel Still said those who abuse alcohol “go into our parks and they defecate. They scare the neighbors; they scare the kids in school ground areas. They keep the citizens from enjoying the parks; the parents won’t come by with their children and play. You’ll have alley ways that are littered with broken bottles and crushed cans of specifically these products.


“Some businesses have actually reported to us that they’ve increased their bottom line; their business is actually increasing. You’ll have less chronic public inebriants and illegal activity, unsavory activity happening around their stores,” he said.


If the City Council approves the temporary ban, store owners would have six months to get rid of their leftover product, and the city will look at new data and crime statistics later to see if the ban worked.


If it does, the drinks might be banned permanently.


The City Council will vote on the proposed temporary ban Tuesday.

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