Liquor Industry News 3-5-13

Franklin Liquors


Tuesday March 5th 2013

Biodynamic LEAF Day

GS Research – Brown-Forman Corp. (BF__B): Below consensus for 3Q13; remain Sell rated on valuation


Source: Goldman Sachs

Mar 4th





What’s changed

BF__B reports 3Q FY13 earnings before market open on Wednesday March 6. We are at $0.65 for the quarter, which is below consensus of $0.70, largely due to lower top-line expectations. Our estimates are unchanged and we remain Sell rated due to high valuation. We do not expect a change to guidance, as we sit near the midpoint of management’s range (GS $2.64 for FY13 vs. guidance of $2.58-$2.70, consensus $2.69).



We are $0.05 below consensus, mainly due to sales expectations – We are forecasting reported gross sales to be up 4.5% vs. consensus of 6.8%, but we expect underlying sales to be up 7.5% (vs. 7.8% in 1H13). The top line should continue to be somewhat noisy given (1) retail and wholesaler inventory de-loading that is still being worked out post the build in 1Q (we expect a -1pt impact to shipments) and (2) this will be the final quarter of the Hopland impact which will shave about 2pt off of sales by our estimate. On an underlying basis, we expect depletions up 4% (estimate 0.5-1pts of retail de-loading still impacting this number) and price/mix of +3.5%, in line with 2Q13.


Price/mix to drive gross margin expansion – The gross margin has stepped up nicely in FY13 and we expect this to continue given positive portfolio mix and higher pricing. We forecast gross margins (on net sales) to be up 340 bp year-over-year to 66.7%.


Advertising expense expected to step-up given FY12 spend timing – Ad spending was largely 1H loaded last year due to the Tennessee Honey launch so we are forecasting 3Q13 underlying ad spend growth to step up to +9.5% from +6.5% in 1H13.



Our 12-month, EV/EBITDA-based price target of $62 is unchanged.


Key risks

Higher bourbon demand, higher pricing, lower inflation, lower SG&A




BFb: 3Q13 Earnings Pre-Game Primer


Source: CITI

Mar 4th


Solid Net Sales Growth Expected – In 3Q13, we expect BFB’s reported sales to increase 7.0% YoY (which is essentially in line with the Street’s +7.3% estimate), the result of (i) an easy comp as sales were down slightly in the year-ago period, (ii) the benefit from the company’s 1Q13 price increases, and (iii) the solid volume trends seen in Nielsen-tracked channels (particularly for the Jack Daniel’s and Woodford Reserve brands). We expect that the absence of the agency relationship for the Hopland-based wines (which ended Dec. 31, 2011) will act as a 3-pt drag such that underlying net sales will be up 10% YoY.


Margins Should Expand – We expect that BFB will deliver a 48.0% gross margin (+100 bps YoY), driven primarily by the benefits of the Hopland sale, price increases and improving mix-shift. We believe that BFB’s operating margin will expand to 23.1% (+160 bps), as the company’s gross margin savings will be complemented by lower ad spending and SG&A expenses (as a percentage of sales). Our estimate is 90 bps ahead of consensus.


EPS Growth Expected – In 3Q13, we expect that BFB will deliver EPS of $0.72, which represents 15.7% earnings growth YoY, and is two cents above consensus.


What We’ll Be Interested in Hearing About – An update on bourbon pricing following the recent developments with BEAM’s Maker’s Mark brand; management’s expectations for the international tax environment over the remainder of 2013; additional detail regarding the decision to take over distribution in France beginning in 2014; color on the introduction of a number of flavored line extensions for the Canadian Mist brand; and BFB’s outlook for the EU.


Conference Call Details – Wednesday, Mar. 6, at 10:00 am ET. Dial-in: 888-624-9285 (domestic) and 706-679-3410 (international). No password is required.




Hidden Billionaire Garavoglia Pouring Campari Fortune


Source: Bloomberg

By Kambiz Foroohar & Zohair Siraj

Mar 4, 2013


Jillkerry Ward, a 37-year-old bartender at upscale French restaurant Le Cirque in New York, grabbed a glass Friday night and poured a negroni: two parts gin, a splash of sweet vermouth and two shots of Campari.


“We probably pour 10 to 15 of these every night,” she said, garnishing the cocktail with an orange. “It’s a classic.”


Davide Campari-Milano SpA (CPR), which sells the bitter aperitif and is Italy’s largest maker of alcoholic beverages, has doubled in value in the last five years and reached a record in October as demand for Campari in Italy increased. Thirst for the company’s other brands, such as Skyy vodka and Wild Turkey bourbon, has expanded in the U.S. and Brazil as well.


The surge has made 79-year-old Rosa Anna Magno Garavoglia Italy’s oldest known female billionaire. Garavoglia, who controls a 31 percent economic interest in the company, has a net worth of at least $1.5 billion, according to the Bloomberg Billionaires Index. She has never appeared on an international wealth ranking.


The company, based in Milan, had revenue of 1.3 billion euros ($1.7 billion) in revenue in the last 12 months, up 30 percent over its fiscal year 2009 sales. It controls more than 45 brands in 190 countries, including the rights to produce and distribute Jagermeister liqueur and Glenfiddich Scotch whisky.


The company has been on a buying binge, spending more than $1 billion since 2007 to acquire eight beverage companies in the U.S., Europe and emerging markets such as Brazil and Jamaica. More than three-quarters of its sales come from spirits, according to data compiled by Bloomberg.


Red Passion


“Campari has taken positive steps to get products that have credibility with the connoisseurs and have mass appeal,” Josh Harris, co-founder of The Bon Vivants, a San Francisco- based company that consults for liquor brands, said by phone Feb. 28. “What they are doing is phenomenal.”


Garavoglia controls 60 percent of Milan-based Alicros SpA, a family holding company, according to Italian regulatory filings. Alicros owns 51 percent of Davide Campari-Milano, the documents show. She inherited the stake from her late husband, Domenico Garavoglia, a Campari executive who received it from company’s last living heir in 1982.


Two of Garavoglia’s three children — Campari chairman Luca Garavoglia, 44, and Alessandra Garavoglia Forloni — split a fortune valued at more than $900 million. Chiarra Bressani, head of group communications at Campari, said the family declined to comment on their net worth and does not grant interviews.


Loyalty Reward


Campari traces its roots to Novara, a city 34 miles (55 kilometers) northwest of Milan, where Gaspare Campari opened a cafe in 1860, according to the company’s website. He began developing his own drink concoctions, the most famous of which was the aperitif that eventually adorned the family name. Campari’s son, Davide, began selling the beverage, which was nicknamed Red Passion


Domenico Garavoglia, who held a degree in industrial chemistry, joined the company in 1952. Nine years later, he was put in charge of the Red Passion recipe, which is still a closely-guarded secret, according to Campari’s website.


Angiola Maria Migliavacca, the last heir of the Campari family, retired and made Garavoglia managing director in 1976. The company passed to Garavoglia six years later as a reward for his loyalty. He died in 1992.


His son, Luca, became chairman in 1994. A year later, he bought the Italian soft drinks portfolio of Utrecht, Netherlands-based Royal Wessanen NV for 35 percent of Campari. The company sold shares in an initial public offering in 2001, leaving the family with 51 percent of the equity.


Skyy Vodka


At the time, Garavoglia’s eldest daughter, Maddalena Garavoglia, accused her family in Milan civil court of forcing her out of the company. A judge sided with Maddalena in 2006, forcing her mother and two siblings to pay her 100 million euros.


The family has since diversified its holdings beyond Campari. Alicros acquired 50.4 percent of Trevisan Cometal SpA, a Verona, Italy-based aluminum engineering operation, for 95.5 million euros in 2007. The company went into bankruptcy two years later after failing to renegotiate its debt.


Alicros also owns real estate companies Immobiliere San Gottardo, Roma and Lubita, which are valued at about 56 million euros, according to the company’s annual report.


Campari bought an 8.9 percent stake in San Francisco-based Skyy Spirits LLC, the maker of Skyy Vodka, in 1998. It acquired another 50 percent of Skyy for $239 million about two years later, and another 30 percent for $156 million in 2005.


Buying Spree


The company’s expansion into the U.S. continued with the 2009 purchase of the Wild Turkey brand of Kentucky bourbon for $575 million from from Paris-based Pernod Ricard (RI) SA. Campari Chief Executive Officer Bob Kunze-Concewitz said in August 2011 that the company will continue to make acquisitions to expand.


That month it spent $26 million to buy Sao Paolo-based Sagatiba Brasil, producer of a sugar-based spirit called cachaca, which used to make caipirinha cocktails. The company bought Lascelles DeMercado & Co., the Jamaican maker of Appleton rum, last September in a deal valued at $414.8 million.


Still, about a third of Compari’s sales are generated in Italy, where the economy, saddled with $2.6 trillion in debt, has contracted for 18 straight months. Italian political instability, after last week’s election ended in a four-way split, threatens to reignite concern about the deepening of its debt crisis.


Campari missed earnings estimates in November, which Kunze- Concewitz blamed on the country’s economic woes. Its annual sales growth has dropped to 4.8 percent from 15.3 percent in 2010, according to data compiled by Bloomberg.


‘Increasingly Complex’


More analysts are bearish on the stock than bullish. Six analysts have a buy rating on Campari, and 16 analysts have hold or sell ratings, according to data compiled by Bloomberg. The average 12-month target price for the company by those 22 analysts is 5.79 euros, 3.75 percent lower than yesterday’s closing price in Milan.


“The company has made many deals in the past decade, with the portfolio now increasingly complex and containing too many brands that don’t have strong growth profiles,” said Samar Chand, an analyst at Barclays in London in a telephone interview. He downgraded the stock to an ‘Underweight’ in November “Apart from Wild Turkey, nothing else has sustainable traction.”




Exane BNP Paribas equity research : CAMPARI GROUP (=): FY 12 Results on 7 March  


Source: Exane BNP

Mar 4th


TP: EUR5.8 . Downside: 4%

Beverages (-) . Italy . Price (01 Mar. 13): EUR6.0


Italy to be the key driver of Q4 performance

A sudden deterioration from September translated into a 10% organic contraction in Q3 sales from Italy. Since then, consumer confidence and unemployment have deteriorated further whilst political uncertainty has prevailed (see Friday drinks – Mamma mia!). As this tough environment is compounded by destocking from Q4, we expect Italian Q4 sales to be down 14% (-5.4% in FY12 vs. management guidance of -2%).


Some upside risk in the US?

We expect a recovery in Germany (relisting at a key retailer) and stronger trading in Russia, leaving FY12 sales growth in Europe ex Italy only marginally in the red (-0.3%). In the US, there might be upside risk to our 9% organic growth estimate in FY12 – which factors in some promotional activity for vodkas – since all other key competitors had a strong year-end.


Outlook for 2013

We anticipate organic sales growth of 4.4% in FY13e but don’t expect management to give any quantified guidance for the year given the very poor visibility in Italy. On the positive side, latest NABCA data continues to show the strength (both volume and price) of the US spirits market.


Conference call Thu 7 Mar. 2013 at 1:00 pm CET (12:00 pm UK time) on +44 1212 818003




Constellation seeks to reassure Modelo’s U.S. beer distributors


Source: Reuters

Mon, Mar 4 2013


Constellation Brands Inc sought to reassure the U.S. distributors of Grupo Modelo’s beers on Monday that the brand will continue to grow in the United States after the wine company takes it over.


Constellation Chief Executive Officer Rob Sands said in a letter that the company’s experience in “producing and moving hundreds of millions of cases of beverage alcohol annually” will help it to successfully own and run the Piedras Negras brewery in Mexico, near the U.S. border.


Constellation would acquire the brewery as part of a revised deal by which Anheuser-Busch InBev SA would buy out Modelo. Constellation already owns half of Crown Imports, Modelo’s U.S. distributor. In addition to buying the factory, Constellation would take full control of Crown.


“Constellation and Crown are completely aligned on goals, strategies and investments for this business, including our strategy of continuing to gain market share by growing the business organically and adding new products to the portfolio,” Sands said in the letter, a copy of which was seen by Reuters.




Carlsberg in Chongqing takeover offer


Source: FT

By Louise Lucas, Consumer Industries Editor

Mar 4th


Carlsberg is ramping up its bet on China, just weeks after issuing a profit warning on the back of falling share in Russia, by launching a takeover offer for up to 30.29 per cent of the shares in Chongqing Brewery Company for Rmb2.9bn ($465.6m).


Chongqing, in which Carlsberg already has just below 30 per cent, offers one of the few remaining midsized Chinese brewers on the block. The move comes one month after SABMiller agreed to pay Rmb5.38bn to acquire China’s lossmaking Kingway .


Chongqing has proved something of a rollercoaster ride for Carlsberg. The Danish brewer took its initial stake in June 2010, paying Rmb40.22 a share, and saw its stake double in value some 16 months later.


But just a month or so later the shares went into meltdown, triggered by a statement from the company that was interpreted by the market as suggesting failed results from the trial of a new hepatitis B vaccine, conducted by its biotech arm, Chongqing Jiachen Biotechnology.


Shareholder action, which included Carlsberg pushing for independent accountants to audit Chongqing Brewery, ensued amid a fall in the share price that erased some $5bn of market value.


Carlsberg, which inherited its initial stake in Chongqing Brewery through its takeover of UK’s Scottish and Newcastle and boosted its stake in the Chinese company in 2010 to become its biggest shareholder, is paying Rmb20 a share for its latest stake, 25 per cent above Chongqing’s pre-suspension close last week.


Following the deal, Asia’s contribution to Carlsberg’s earnings before interest and tax will rise to about 20 per cent, compared with Russia’s dominant 40 per cent.


Although China offers meagre profitability compared with other beer markets – largely a reflection of the low retail prices – analysts broadly welcomed the news.


Carlsberg said the purchase price equated to 15.7 times future earnings before interest, tax, depreciation and amortisation and is expected to be accretive to earnings per share in the first year. However, Carlsberg said the requirement for Chinese regulatory approval, which could take up to 12 months, meant the deal would only have an impact next year.


On inheriting the biotech arm, a spokesman said: “Biotech is not a core competency for Carlsberg. However, we will continue to manage this investment professionally and diligently and have nothing further to add at this stage re future plans.”


Jørgen Buhl Rasmussen, Carlsberg’s chief executive, said: “Our Asian business is very important for our long-term growth strategy and we are very pleased that we now can take this important step forward in China.”


Shares in Carlsberg rose 1.1 per cent to DKr594.5.




Korea’s KT&G Considers Bidding for Oriental Brewery


Source: WSJ


Mar 4th


KT&G Corp. 033780.SE -0.79% is considering making a bid that could be valued at up to $3 billion for Oriental Brewery Co., people familiar with the matter said, as the South Korean tobacco maker weighs expanding its portfolio in the country beyond cigarettes.


There was no guarantee KT&G would bid as it was still in the early stages of considering a deal, the people said. But if KT&G pushes ahead, the company likely would join with another fund or funds to buy South Korea’s top brewery by sales, one of the people said.


KT&G said it wasn’t considering bidding for Oriental Brewery, which is owned by private-equity firm Kohlberg Kravis Roberts KKR +1.04% & Co. A KKR representative declined to comment. Oriental Brewery said it had no knowledge of the matter.


Oriental Brewery products are stacked at a store in Ilsan, South Korea. KT&G is considering buying Oriental, brewer of the popular Cass beer.


Oriental Brewery came to the spotlight in 2009 when the KKR bought the maker of South Korea’s No. 2 beer, OB, from Anheuser-Busch InBev NV BUD -0.01% for $1.8 billion. The deal is Asia’s biggest leveraged buyout since the financial crisis, according to Dealogic.


KKR hasn’t begun a formal sales process. But Oriental Brewery, which also sells Cass beer, is an attractive target. The company in 2011 became South Korea’s top brewer, with about 50% of the market, ahead of longtime top brewer Hite-Jinro Co., 000080.SE +0.15% according to Daiwa Securities. Imported brands make up just 5% of the beer sold in South Korea.


Oriental Brewery is estimated to be valued at between $2.5 billion and $3 billion, one of the people familiar with the matter said.


KT&G, formerly known as Korea Tobacco & Ginseng Corp., was established in 1987. Although KT&G also sells red ginseng and other health foods, buying Oriental Brewery would diversify the company’s focus beyond cigarettes, which it sells under the Esse, Pine and Raison brands.


One possible obstacle to a deal is AB InBev’s right to buy Oriental Brewery back within five years of its 2009 agreement with KKR. The people familiar with the matter said AB InBev has the right to buy back the stake it sold for about 11 times Oriental Brewery’s estimated earnings before interest, depreciation and amortization. It wouldn’t be surprising if KKR sought more, given the multiples on recent deals. Heineken NV’s HEIA.AE +0.51% purchase of the stake it didn’t already own in Asia Pacific Breweries Ltd., which brews the popular Tiger beer, was made at 16.8 times Ebitda.


KT&G reported 2012 net profit of 725 billion won (US$669 million), down 11% from a year earlier, because of sluggish results at its red-ginseng division. Net sales rose 7% to 3.985 trillion won.




Remy denies plasticizers


Source: Peoples Daily

March 05, 2013


Remy Cointreau, the French producer of cognac brand Remy Martin, said Sunday that it was preparing the necessary documents for its products to clear Chinese customs, denying earlier media reports which said that customs had barred their entry for containing excessive levels of plasticizers.


“The new regulation increased the complexity of customs clearance; we are preparing the needed documents for all of our products,” the company said in a statement.


Containers of three French cognac brands including Remy Martin were recently blocked from entering China’s market for excessive levels of plasticizers harmful to human health, the Shenzhen-based Securities Times reported over the weekend citing French media.


Starting February 1, Chinese regulators have required all distributors of imported distilled liquor to submit a third-party plasticizer test report for each batch of imports.




Vijay Mallya loses crown; Pernod Ricard now India’s most profitable spirits firm


Source: Economic Times

Mar 5th


French firm Pernod Ricard has overtaken Vijay Mallya’s United SpiritsBSE 2.77 % to become the country’s most profitable spirits marketer last year, thanks to Indian consumers’ increasing appetite for premium drinks.


The maker of Absolut Vodka and Chivas Regal Scotch whisky crossed the $1-billion sales mark in the country in 2011-12 when its sales rose 34% to Rs 5,941 crore, making India the fourth-largest market for Pernod Ricard. Its net profit soared 77% to Rs 593 crore during the period, according to the Registrar of Companies, where it filed the financial results in January, making India the fifth-largest contributor to the French firm’s worldwide profits.


In comparison, United Spirits reported a net profit of Rs 343 crore on standalone sales of Rs 7,763 crore last fiscal. On a consolidated basis, United Spirits’ sales during the fiscal year 2012 stood at Rs 9,356 crore and net profit amounted to Rs 187.2 crore.


While Pernod Ricard has been earning higher profit at an operating level compared with United Spirits since the past two years, this is the first time the maker of Blenders Pride and Royal Stag whiskies raked in higher profit at the net level. “Pernod’s success in India demonstrates that it is possible for an MNC to run a highly profitable spirits business in India,” Arnab Mitra and Akshay Saxena of Credit Suisse said in an investor note. “The other key takeaway from Pernod’s success in India is that its business is not built around the company’s global brands, but around local brands it acquired from Seagram’s in India,” the note added. Pernod’s volumes have jumped from 1 million cases in 2000 to 22 million cases in 2011.


This is still less than one-fifth of United Spirits’ volumes, which controls 55% of the 250-million-case Indian spirits market. One key reason for Pernod’s high profitability is its growing heft in the premium Indian-Made Foreign Liquor, or IMFL, space as Indians guzzlers move up the price ladder with the brand they drink becoming a status symbol or lifestyle statement. “For consumers, higher personal income and growing brand awareness is driving the trend of up-trading from regular to premium IMFL,” said Sudip Sinha, beverage analyst at Rabobank Group India. “For supply side, premiumisation is seen as an indispensable strategy given companies are unable to raise prices either in response to changing raw material cost or consumer demand during the year because of rigid control on pricing and potential impact on demand due to progressive taxation,” Sinha said.


Pernod Ricard’s margins in India are some three times that of United Spirits. For every case it sells, United Spirits earns over Rs 70 in profits and over Rs 720 in sales. In contrast, Pernod’s profit per case is Rs 320 while its average sales value is Rs 1,760, an industry insider said. A global report by Credit Suisse said that in 2012, Pernod Ricard’s organic growth in India was 26% – faster than any other major market and slightly ahead of China’s 24% growth. Three IMFL brands – Royal Stag, Blenders Pride and Imperial Blue – make up for over 98% of Pernod’s volumes in India. In 2012, it sold 12 million cases of Royal Stag, a prestige whisky,while United Spirits sold 16.9 million cases of McDowellBSE 4.90 % No.1 in the same segment. In the premium segment, while Pernod Ricard sold over 3 million cases of Blenders Pride, United Spirits sold around 6 million cases across brands such as Antiquity, Royal Challenge and Signature.




SABMiller’s Exit From Molson Coors Partnership Provides Opportunity for Improved Canadian On-Premise Beer Position


Source: MarketWire

Mar 4th


“SABMiller is putting its own team on the ice now,” says Chuck Ellis of SABMiller’s prospects now that the company has dissolved its Canadian partnership with Molson Coors. Ellis is President of Restaurant Sciences LLC (Newton, MA), which tracks on-premise food and beverage sales in the U.S. and Canada. “Our Q4 2012 sample of more $30MM in beer sales for Canadian restaurants and bars looked at brand distribution. We were surprised by the depth of brand diversity in spite of AB-Inbev and Molson Coors’ control of a combined 80 percent market share.”


The chart below shows the Top-25 brands for Q4 of 2012:




A Look At Worldwide Alcohol Consumption


Source: Red Orbit

March 4, 2013


When examining the history of alcohol, we find it runs parallel to much of recorded human history. Throughout time, the use of alcohol has played an important role in religion and worship. Additionally, its use has provided nutrients and provided medicinal, antiseptic and analgesic properties.


In early Egyptian culture, both beer and wine were deified and presented to their gods. Cellars and winepresses were represented by a deity whose hieroglyph was a winepress. And alcohol wasn’t only to be enjoyed in this plane of existence. The use of alcohol for funerary purposes involved the storage of the beverage in the tomb of the dearly departed so they might use it in the after-life.


Individual enjoyment of alcohol has also been recognized. Whether consumed as a social lubricant or as an accompaniment to a fine meal, the benefits of drinking have long been documented. Misuse of alcohol, while also very well documented, typically only refers to a minority of drinkers.


In fact, in ancient times, the practice of habitual drunkenness was a rarity. This is not to say, however, that over-imbibing at banquets and festivals was unusual. One such event, known as the symposium, was a gathering of Greek men for an evening of conversation, entertainment and drinking. The evening typically culminated in the intoxication of the attendees. By 425 BC, however, warnings against intemperance, especially at symposia, had increased in their weight and frequency.


Despite the importance of temperance and moderation held by early cultures, it has been pointed out that historical accounts of alcohol and its moderate users are often overshadowed by their more boisterous counterparts who added a certain color to history. Therefore, those individuals who regularly enjoyed the drink typically received a disproportionate amount of attention. The abuse of alcohol can be problematic, on both the personal and societal level. Inebriates, through their actions, are highly visible characters and their exploits have often led to the implementation of legislation across different times and cultures. Conversely, the moderate drinker tends not to draw the ire of the community and, therefore, has been overlooked by the writers of history.


While alcohol, with all of its benefits and ills, has been around for most all of human history, a new study, conducted by the Centre for Addiction and Mental Health (CAMH) out of Canada, reports alcohol is now the third leading cause of both disease and injury worldwide. These findings were reached despite the fact most adults actually abstain from drinking.


Kevin Shield, lead author of the study, and colleagues published their findings, a part of the 2010 Global Burden of Disease study, in this month’s issue of the journal Addiction. The study showed Canadians, in particular, drank more than 50 percent above what is considered the global average.


“Alcohol consumption has been found to cause more than 200 different diseases and injuries,” said Shield. “These include not only well-known outcomes of drinking such as liver cirrhosis or traffic accidents, but also several types of cancer, such as female breast cancer.”


To arrive at their findings, the team calculated a 2010 estimate based upon the amount and patterns of alcohol consumption by country from a 2005 study. What they were able to determine was there are vast differences by geographical region in the numbers of people who consume alcohol, the amount they drink and the general pattern of drinking.


For instance, Shield and colleagues determined the hardest drinkers reside in Europe and Sub-Saharan Africa. Alcohol drinkers in these areas also consume alcohol in what is considered to be an unhealthy manner, often binge drinking to complete intoxication irrespective of whether a meal was consumed or not.


Northern Africans, along with those living in the Middle East and South Asia were the most temperate drinkers on Earth. This may be a result of strong religious and cultural mores that frown on, and even punish, drunkenness.


On our own continent, as mentioned above, the team determined we are very liberal with our libation consumption. Our patterns of drinking have been noted as being fairly detrimental, especially since one recurrent pattern was that of excessive binge drinking.


Worldwide, the global burden of disease and injury associated with the use of alcohol is sizeable. The team states, for the year 2010, alcohol was responsible for 5.5 percent of the overall global burden. This places alcohol use in third place, just behind high blood pressure and tobacco use. In all, the Global Burden of Disease and Injury evaluates 67 total risk factors.


It is important to note that Shield’s study is a compiled summary of the results from multiple population surveys, sales and production data, and additional data on alcohol consumption that is not covered in official records. Their research covered every country, territory and region on the planet.


One particularly interesting aspect of the 2005 study showed nearly 30 percent of alcohol consumed was categorized as “unrecorded” alcohol. This designation refers to alcohol that was not intended for consumption, along with home-brewed and illegally produced alcohols. There are some regions on the globe where this unrecorded alcohol accounted for greater than half of all alcohol consumed in the area.


“The amount of unrecorded alcohol consumed is a particular problem, as its consumption is not impacted by public health alcohol policies, such as taxation, which can moderate consumption,” said Dr. Jürgen Rehm, a study author and director of CAMH’s Social and Epidemiological Research Department.


“Improving alcohol control policies presents one of the greatest opportunities to prevent much of the health burden caused by alcohol consumption,” said Shield “To improve these policies, information on how much alcohol people are consuming, and how people are consuming alcohol is necessary, and that is exactly the information this article presents.”


Throughout the course of human history, there has always been a minority that finds just too much enjoyment in the drink. This minority, however, has not deterred the occasional use by the majority who have clearly found benefit in beers, Bordeaux’s and bourbons. It was the founding Director of the National Institute on Alcohol Abuse and Alcoholism who said, “.alcohol has existed longer than all human memory. It has outlived generations, nations, epochs and ages. It is a part of us, and that is fortunate indeed. For although alcohol will always be master of some, for most of us it will continue to be the servant of man.”




New Mexico: House approves alcohol ban on interlock users


Source: KOB Eyewitness News 4

By: Stuart Dyson



How about this for a DWI crackdown?


You get convicted of drunk driving, you get your ignition interlock, you get an interlock license – you can’t buy any booze.


The state House of Representatives overwhelmingly passed a bill Monday afternoon that would outlaw liquor sales to people with interlock licenses. The bill’s sponsor got the idea from something he saw with his own two eyeballs at a Santa Fe convenience store.


Rep. Brian Egolf was gassing up his car when he saw a man come out of the store with a 20 ounce bottle of Coca Cola and two miniatures of Jack Daniels whiskey. The man got in his car, dumped the whiskey into the Coke, but he didn’t take a drink. Not yet.


“This guy starts his car with an interlock,” Egolf said. “He drives a few miles, then drives the rest of the way home, or to his destination, drinking a Jack and Coke – with an interlock there in his car! I thought, ‘This is absolutely unbelievable!'”


It’s pretty easy for a clerk or a bartender to spot an interlock license – they’re vertical – just like licenses for people under 21


The bill passed in the House on a 59 to 5 vote. It now goes to the state Senate, where lawmakers say it should be popular. This one could go all the way to the state law books.




‘Beer goggles’ just a myth: expert


Source: Economic Times

March 4th


‘Beer goggles’, the phenomenon that a few drinks can make you see even plain faces as more attractive than they are, is just a myth, a brain expert has claimed.


Dr Amanda Ellison’s book ‘Getting Your Head Around the Brain’, which pulls together a range of research into how alcohol affects the brain, argues that men and women do not see each other any differently after alcohol.


“The area of the brain that makes us want to mate keeps functioning, no matter how much we drink, meaning that people can still assess how visually-appealing others are,” said Ellison, senior lecturer in the Department of Psychology at Durham University.


“We still see others basically as they are. There is no imagined physical transformation – just more desire,” she said.


Ellison has found that a fluke of nature sees alcohol closing down the section of the mind that stops us acting on impulse long before it deadens the ‘reptilian’ part responsible for our urges, The Telegraph reported. “The area of the brain that makes us want to mate is the oldest part – and located so far down that it keeps functioning however much we drink – until we are ready to pass out,” she said.


But after as little as half a pint of beer, alcohol starts bonding with the receptors of the upper lobes which control decision-making. The more primitive section of the brain in the cortex below which governs our drive is carrying on unaffected. Normally, this part of the brain is kept in check by the upper lobes.


Hangovers are caused by dehydration – the brain shrinks and tugs on the meninges which causes the headache, she said.


“But before that, alcohol switches off the rational and decision making areas of the brain while leaving the areas to do with desire relatively intact, and so this explains beer goggles,” she added.




GuestMetrics: Despite a pressured consumer environment, premiumization taking place in the wine category


Source: GuestMetrics

Mar 4th


According to GuestMetrics, based on its POS database of over $8 billion in sales, despite the consumer base in the United States remaining under significant economic pressure, the wine category in on-premise displayed a strong premiumization trend in 2012.


“In analyzing the four price segments within the wine category, the top two segments gained share at the expense of the bottom two in 2012,” said Bill Pecoriello, CEO of GuestMetrics LLC. “Based on our data, in comparing the change in share of the wine category in 2012 versus the prior year, the Ultra Premium segment gained 180 basis points in 2012 and the Super Premium segment gained about 40 basis points, while the Popular Premium and Economy segments each lost about 110 basis points of share.  As we wrote about back in January, consumers traded down from wine-by-the-bottle to wine-by-the-glass, but despite this trend, they actually traded up to more expensive wines.”  


“Specifically looking at the roughly 60% of sales in the wine category that comes from wine sold by the glass, Ultra Premium gained nearly 2 points of share and Super Premium about 1.5 points of share at the expense of the less expensive price segments,” said Peter Reidhead, VP of Strategy and Insights at GuestMetrics.  “Conversely, looking at the 40% of sales that comes from wine sold by the bottle, the Ultra Premium segment gained even more share, about 2.5 points.”  Based on data from GuestMetrics, given the large differential in pricing across the four segments, while Ultra Premium makes up approximately 7% of units sold in both wine-by-the-glass and wine-by-the-bottle, it now accounts for 12% of total sales by the glass and nearly 22% of sales by the bottle.


“In our minds, this underscores the importance of restaurant operators having an up-to-date understanding of the economic pressures the consumer is facing and the trade-offs they are making to deal with those pressures,” said Brian Barrett, President of GuestMetrics. “Even though consumers are currently purchasing wine more often by the glass instead of by the bottle, it is important restaurants offer an attractive assortment of high end wines to meet consumers’ evolving tastes.”       




Extra lots unveiled for El Bulli auction


Source: Decanter

by Richard Woodard

Monday 4 March 2013

Bidders at an auction of wines from famed Catalan restaurant El Bulli will now also have the chance to secure lunch with chef Ferran Adria and a selection of memorabilia.


Auction house Sotheby’s has announced a number of additional lots for the sales, due to be held in Hong Kong on 3 April and New York on 26 April, on top of the 8,800-plus wines from the Spanish restaurant’s extensive cellars.


As well as lunch with Adria – with an opening bid of US$5,000 – new lots include four El Bulli chef’s jackets signed by him (opening bid: $1,000) and a set of El Bulli knives ($5,000).


There’s also a large selection of menus, wine lists and assorted stationery (from $250 each), various mesh, corrugated and Baroque metal trays and even ‘crockery for spherical olives’ ($150 each).


Sotheby’s hopes to raise well over $1.5m from the auctions, with wines including magnums of Chateau Latour 2005, rare sherries and a selection of Burgundies from Domaine de la Romanee-Conti.


Each bottle will be adorned with a specially designed El Bulli sticker, and many will be signed by Adria and business partner Juli Soler.


The money raised will go to the El Bulli Foundation, a gastronomic research and innovation organisation set up by Adria after he closed the restaurant in July 2011.




New England: Horizon Beverage Group Reorganizes Its Senior Management Team


Source: Horizon Beverage Group

Mar 4th


Horizon Beverage Group is pleased to announce upcoming senior management changes.  Effective March 11th, 2013 an Executive Committee will be created to assume all top line managerial responsibilities across the five state New England region.   Jim Tsiumis, Senior Vice President, has been added to the Executive Committee and will spearhead corporate strategy.  In addition, a Sales Operating Group will be created to manage day-to-day sales operations for all Core Business Units.  The Sales Operating Group will report directly to the Executive Committee.


The newly created Sales Operating Group consists of eight executives each responsible for a specific core area of the business.  Joe Bramanti has been promoted to President, Premium CBU.  Jim Merrill has been promoted to President, Coastal CBU.  Steve Ziner has been promoted to President, Wine CBU.  Angelo Collins has been promoted to President, Rhode Island CBU.  Joe LaRocca has been promoted to President, Control State CBU.  Seth Kurlinski has been promoted to General Manager of the Alliance Business Group.  Jim Hogan, Vice President, will continue to oversee the growing National Account universe across the region.  Bill Ehrhardt, Vice President, will continue to oversee the independent regional account business.


“We are extremely pleased to make these organizational changes as we continue to reinforce our sales capabilities, providing industry leading service to our retail customers across the region” says Robert Epstein, Co-Chairman, Horizon Beverage Group.  “This structure better aligns our organization with our supplier partners, allows for a quicker decision making process and more clearly defines corporate governance.”


“It is a talented group of people that will raise our level of sales capabilities and lead our company into the future,” adds Jim Rubenstein, Co-Chairman Horizon Beverage Group.  “As we move into our 4th generation of family ownership, this structure establishes distinct lines of authority and integrates long term future growth plans with bolt-on flexibility allowing us to adapt to a rapidly changing industry.”




Publix posts same-store sales increase of 2.2% for fiscal 2012


Source: RT

By Michael Johnsen

March 1, 2013


Publix on Friday recorded fiscal 2012 sales of $27.5 billion, up 1.9%. However, 2012 year-end sales included a 52-week period, versus 2011 year-end sales that were tracked over a 53-week period. Excluding that extra week, sales for 2012 would have been up by 3.8%. Same-store sales were up 2.2% for the year.


“I’m pleased with the improvement in our operating results for 2012, a 52-week year, as compared with 2011, a 53-week year,” stated Publix CEO Ed Crenshaw. “As a result of our associates’ efforts, our stock price reached a new all-time high after considering stock splits.”


Net earnings for 2012, a 52-week year, were $1.6 billion, a 4% increase. Earnings per share increased to $1.98 for 2012, up from $1.90 per share in 2011.


Publix’s sales for the fourth quarter of 2012, a 13-week period, were $7 billion, a 3.6% decrease from last year’s $7.2 billion, a 14-week period. Excluding the additional week in the fourth quarter of 2011, sales for the fourth quarter of 2012 would have increased by 3.4%. Comparable store sales for the fourth quarter of 2012 increased 1.2%.


Effective March 1, 2013, Publix’s stock price increased $0.70 from $22.50 per share to $23.20 per share. Publix stock is not publicly traded and is made available for sale only to current Publix associates and members of its board of directors.




Supervalu restructures executive, banner leadership


Source: RT

March 4, 2013


Supervalu has named new leadership at the executive and banner retail level. According to the company, the move is part of its plans to move forward with a focus on serving wholesale grocery operators, growing its hard discount format and running a smaller, more efficient retail operation following the close of its previously announced transaction with AB Acquisition LLC. That transaction is expected to be completed the week of March 18.


Mark Van Buskirk has been named EVP merchandising and marketing for Supervalu, where he will be responsible for overseeing companywide retail merchandising and marketing efforts, along with directing Supervalu’s private brand offerings and retail pharmacy teams. He spent the past 20 years in leadership positions with Kroger, most recently serving as vice president, meat and seafood merchandising and procurement.


Rob Woseth has been named EVP chief strategy officer. In addition to overseeing real estate and corporate development, Woseth will focus on identifying strategic growth opportunities that support independent grocers, as well as working with banner leadership to build and maximize the company’s traditional and discount retail businesses. He spent the past 10 years in business development, strategy and leadership positions with Albertsons Inc. and Albertsons LLC.


Steve Fox has joined Supervalu in the role of senior vice president, food merchandising, reporting to Van Buskirk. He comes to Supervalu after spending 41 years in retail leadership positions with Fred Meyer, a division of Kroger. During his tenure with Fred Meyer, Fox spent 10 years as VP produce merchandising/procurement and 11 years as vice president of grocery merchandising/procurement.


All three appointments are effective immediately.


Duncan also announced a leadership change at the company’s hard discount retail chain, appointing Ritchie Casteel as president and CEO of Save-A-Lot, effective immediately. Ritchie has more than 40 years of experience in retail, including over 30 years in a variety of leadership positions with the original Albertsons Inc, where he finished his tenure as VP operations for Albertsons’ Intermountain West Division.


Casteel also served as director of sales and operations for Grocery Outlet from 2005 to 2009 where he worked closely with independent owner operators to improve sales, margin, shrink, marketing, expense controls and financial balance. Casteel replaces Santiago Roces who will remain with the company over the next several weeks to assist Casteel in ensuring a smooth and efficient transition.


Following the transaction, Supervalu will retain five strong regional retail banners: CUB Foods based in Minnesota; Hornbacher’s in North Dakota; Farm Fresh in Virginia; Shop ‘N Save in St. Louis; and Shoppers in Baltimore/Washington DC. Together these banners operate 191 traditional retail grocery stores and represent slightly more than 25% of the company’s anticipated revenues after the banner sale is complete. The five banner presidents will report directly to Duncan and serve on his leadership team.


Those appointments include:


Eric Hymas has been named president of Shop ‘N Save, replacing Marlene Gebhard who will remain with the company over the next several weeks to assist Hymas in ensuring a smooth and efficient transition. Hymas most recently served as senior vice president of merchandising for Supervalu, which included responsibility for all categories across center store, as well as beverages, fuel and convenience, and fresh departments. Hymas has more than 30 years of experience in grocery retail having started his career in an Albertsons store in Idaho Falls, Idaho.


Bill Parker has been named president, Farm Fresh, after serving for the past seven months in the role of interim president. His appointment is effective immediately.


Brian Audette will continue as president of CUB Foods.


Matt Leiseth will continue as president of Hornbacher’s.


Bob Bly will continue as president of Shoppers.


Commenting on today’s announcement Duncan said, “We have much work to do, both today, and after the transaction closes, but I am pleased with the new leadership team we are assembling and know together we will work tirelessly to improve our business and increase shareholder value. I am energized by what I have seen every day and believe this company will be successful going forward.”


Duncan will name additional members of his leadership team in the near future. Today’s announcement also includes news of several current executives who will depart the company upon completion of the transaction. They include:


Kevin Holt – president, Supervalu retail


Tim Lowe – EVP merchandising


Michael Moore – EVP and chief marketer officer


“I thank Kevin for his leadership over our retail teams, as well as Tim and Michael for the work they have done leading our retail merchandising and marketing efforts, respectively,” said Duncan. “They have helped ready the business for the future and I appreciate all they have done to ensure a smooth transition. I wish each of them well with their future endeavors.”




New York: Cuomo creates one-stop shop for beer and wine manufacturers


Source: Albany Watch

Mar 4th


Gov. Andrew Cuomo announced today the creation of a one stop shop to provide the state’s wine, beer and spirits manufacturers with a single government contact for assistance with business regulations, Gannett’s Haley Viccaro reports.


The new system is in response to producers’ concerns about the number of state agencies they deal with for business and compliance issues. This problem was discussed during Cuomo’s Wine, Beer, and Spirits Summit in October 2012.


“With this one-stop shop, the days when our state’s beverage producers have to navigate a complicated bureaucratic process to find answers to their questions are coming to an end,” Cuomo said in a statement.


Small businesses in particular have found it difficult to collaborate with many state agencies, Cuomo said. The one-stop shop will allow manufacturers to speak with a single contact for business assistance.


“These businesses, many of whom are small and do not have access to additional resources to assist in the process, do not know what agency they must deal with for a particular issue and therefore can be unnecessarily subject to avoidable fines,” said Kenneth Adams, president of Empire State Development, in a statement.


The goal of the system is to partner with the industry to help facilitate growth and job creation by allowing a single contact for questions regarding regulations, licensing, incentives and issues within the industry.


The one-stop shop will consist of representatives from state agencies including the State Liquor Authority, Department of Agriculture & Markets, Tax and Finance Department, Labor Department, and others.


“Over the past two years, we have sought to transform state government into an entrepreneurial government that is a true partner to the private sector and can help facilitate innovation, industry growth, and job creation,” Cuomo said in a statement.




New Mexico: Total Wine & More makes city debut


Source: ABQ Journal

By Rosalie Rayburn

Mar 4, 2013


Wines from France, Italy, Spain, California, Australia and many other well-known growing regions line the shelves, the walls, the chilled areas – and that’s not all at Total Wine & More.


The newly opened store at 10420 Coors Bypass NW lives up to its name, with more than 20,000 square feet of floor space devoted to thousands of wines, beers and spirits from all over the world.


The West Side location near Cottonwood Mall is the 89th store for the Delaware-based chain and the first in New Mexico. A second store is in the works for the Uptown area of Albuquerque.

“We are not the corner liquor store,” Edward Cooper, vice president of public affairs and community relations, said in a phone interview.


Store aisles feature wines by style with labels like “Bubbly and festive” or “Big and Robust,” or place of origin, including New Mexico. Selections range from low-cost party wines at around $2 per bottle to connoisseur vintages like a Chateau Lafite Rothschild 2006 with a $1,000-plus price tag.


Beer lovers can indulge themselves too with a choice of domestic and imported mass-market beers, and craft brews produced by small enterprises like Marble Brewery and La Cumbre Brewing Co. in Albuquerque.


Customers can sample wines and beers at in-store tasting stands. A classroom at the back of the store will provide opportunities to learn more about individual producers and production methods, said Bill Tice, the Total Wine district manager who gave the Journal a tour of the store.


Even non-drinkers will find something to their taste at Total Wine. The store carries an extensive selection of gourmet snacks, glassware and gift items. There is also a walk-in humidor with an extensive range of cigars.


The new store will have about 40 employees, most of them full-time jobs, Cooper said. All employees undergo comprehensive training to ensure they are knowledgeable about store products, he said.




Nebraska: Nebraska lawmakers consider increasing beer tax


Source: The Independent

March 4, 2013


A Nebraska lawmaker said alcohol problems in Whiteclay inspired him to propose a bill Monday that would increase a beer excise tax by 5 cents per gallon.


The increase would generate about $2.3 million over each of the next two years, Sen. Al Davis of Hyannis told the Legislature’s General Affairs Committee. The panel took no action on the bill.


The money would be split evenly between the State Patrol Cash Fund and county law enforcement agencies. Davis said the money would allow law enforcement agencies to hire workers to combat alcohol-related crimes. Counties would be given the extra tax only from alcohol purchases in their area.


Whiteclay, a northwestern Nebraska town that borders the Pine Ridge Indian Reservation, has only about a dozen residents but four beer stores. Last year, the Whiteclay stores sold about 4.3 million cans of beer. Tribal leaders have blamed Whiteclay beer stores for alcohol abuse on the reservation.


“Dealing with alcohol-related crimes can be overwhelming for local police force out there,” Davis said. “I don’t think it will deter consumption much, but it will provide revenue to law enforcement.”


Nebraska’s current beer tax is 31 cents per gallon, which is higher than in all bordering states. South Dakota taxes 27 cents per gallon of beer, while Wyoming taxes just 2 cents per gallon of beer. Davis said the proposed increase in Nebraska would amount to about a nickel per 12 pack of beer.


Nebraska breweries, the Nebraska Grocery Association and the Nebraska Licensed Beverage Association oppose the bill. Davis said he expected the opposition and that he would be willing to consider exempting Nebraska brew pubs from the excise tax.


Jason Payne, president of the Nebraska Craft Brewers Guild, said the group opposes the increase. He said it would hurt local breweries, including his own Lucky Bucket Brewing Co. in La Vista. Nebraska has 18 craft breweries, eight of which have been established in the past two years, Payne said.


“Speaking as a small-business owner in Nebraska, a suggested tax increase from 31 cents a gallon to 36 cents a gallon would be a determinate to an exciting and growing segment in Nebraska’s economy,” he said.


Thomas Wilmoth, co-owner of Zipline Brewing Co., said the bill would not only slow the growth of his year-old brewery in Lincoln, but also increase the cost of beer for consumers.


He noted that Nebraska’s craft brewing industry actually grew during the recession, unlike many sectors of the state’s economy. He said states with lower excise taxes, such as Colorado, have more breweries.


No one testified in support of the bill, but the Nebraska Association of County Officials and Project Extra Mile, a group that works to stop underage drinking, submitted supporting letters.


Project Extra Mile said a review of 72 studies printed in the Journal of Preventive Medicine shows a link between increased alcohol taxes and a decrease in alcohol consumption.


“Young people are particularly sensitive to price changes, and the literature is clear that as price increases, youth access to alcohol decreases,” said Nicole Carritt, Project Extra Mile executive director.


Davis asked the committee to keep in mind he crafted the legislation to combat alcohol problems in Whiteclay.


“I don’t think we are going to be losing customers to other states,” Davis said. “I don’t think we are going to be impacting significantly anything except funneling revenue back to our law enforcement where it needs to be.”




Tennessee: Wine-in-grocery-stores debate: claims vs. facts


Source: WBIR 10

By Josh Brown, The Tennessean

Mar 4, 2013   


To hear one side tell it, if the state’s grocery stores sell wine, Tennessee will see more alcoholics, more underage drinking and the collapse of countless small liquor stores.


The other camp predicts an economic shot in the arm, stoking wine sales to new highs and making Tennessee the purchasing destination for wine lovers who live near state borders.


State lawmakers are debating yet again legislation that would allow food sellers to also sell wine. A bill cleared a state Senate committee last week – the most progress one has made since supporters began their most recent push.


That bill still faces hurdles: a win in another Senate committee before heading to the Senate floor, approval from the state House, the governor’s signature. Then counties already selling wine in liquor stores and restaurants would hold referendums on whether groceries could sell it.


Supporters and opponents are making their breathless arguments in the public eye. Here’s what they’re saying, and what fact-checking revealed.


. Sales of wine in grocery stores will lead to more alcoholism.


Last week, Vanderbilt University psychiatry professor Peter Martin testified to senators that allowing grocery and convenience stores to sell wine would ultimately increase the rate of alcoholism in the state.


“The major issue here is people want to sell alcohol because they’re hoping to make more money, and of course, they’re only going to make more money if they sell more,” he said.


Martin, who directs the division of addiction psychiatry at the medical school, drew a straight line from higher sales of wine to higher consumption of the beverage.


“If you increase per capita consumption, you increase the number of people who are addicted to alcohol,” he said.


While Martin acknowledged at the meeting that he knew of no studies comparing alcoholism in states that allow wine sales in grocery stores and in states that don’t, he pointed to studies that have found cheaper alcohol has been associated with higher rates of addiction. He declined to give a follow-up interview.


But Martin’s view isn’t universal in the field of addiction psychiatry. Mike Baron, a Nashville psychiatrist who specializes in addiction, said the measure would have little to no impact on alcoholism in Tennessee.


“It’s not going to make any difference,” Baron said. “I have never heard or never seen any literature that those states that have wine in the grocery store have a higher relapse rate or a higher alcoholism rate.”


Recovering alcoholics will have little problem from increased availability of alcohol, Baron said.


“If they’re going to want to drink, they’re going to plan it out and get alcohol,” he said. “Generally those alcoholics who don’t want to look at beer or want to avoid it, they just won’t go down that aisle. And they’ll do the same with the wine aisle.”


. Convenience and grocery stores aren’t as diligent in checking identification, so selling wine there will increase underage drinking.


In recent months, Madison County Sheriff David Woolfork has been outspoken against bringing wine sales to food stores.


Woolfork said his officers have seen firsthand the impact alcohol can have on underage drinkers. He believes the measure would worsen the problem.


“The fact that you have more convenience stores selling more wine,” he said, “the more underage are going to be drinking.”


Woolfork worries that convenience store clerks aren’t as diligent in checking IDs as other alcohol sellers.


“Convenience stores have such a tremendous turnover,” he said. “Two words come to my mind, and that’s convenience versus public safety.”


But Madison County wine and spirits stores appear to be cited at a higher rate than food sellers, according to a comparison of citation figures provided by law enforcement and state alcohol officials.


Since 2009, county narcotics officers have handed out 59 citations to grocery and convenience stores, of which there are 250 in the county. That translates to a rate of roughly 23.6 percent. In the same time period, state alcohol control officials gave five citations to liquor stores, of which there are a dozen in the county. That translates to a rate of roughly 41.6 percent.


The data don’t reflect where agents choose to focus their attention or whether stores had multiple citations, which could affect the rates.


Law enforcement officers in Virginia have found no correlation between underage drinking and sales of wine in grocery stores, said Dana Schrad, executive director of the Virginia Association of Chiefs of Police.


“We don’t have a problem with that coming out of the grocery stores, because they do diligently check IDs,” she said. “And the thing about grocery stores is that they do have better surveillance systems.”


. If shoppers are allowed to buy wine at the same time as their food, then wine and spirits stores will lose money and be forced to close.


“It would be devastating,” said Bard Quillman, owner of Red Dog Wine & Spirits in Franklin. “I can’t tell you exactly what I’m going to lose, but I can tell you I’m going to lose.”


Quillman, who serves on the board of the Tennessee Wine & Spirits Retailers Association, said if people buy more wine, it also could hurt sales of other goods.


“If people buy more wine, that purchase comes out of their discretionary income,” he said. “If I choose to buy a bottle of wine, then I will choose to not buy something else. I won’t buy a movie ticket. I won’t go out to dinner.”


Other wine store owners acknowledge some changes could allow them to survive if the measure passes.


Brent Barnett, general manager of McScrooge’s Wines & Spirits in Knoxville, wrote a letter to a lawmaker urging changes to allow stores like his to sell items other than high-alcohol beverages. “We would welcome the ability to sell beer, glassware, apparel and any other items,” he wrote.


Barnett also wants lawmakers to let liquor store operators own multiple locations and stay open 365 days a year – instead of being closed on Sundays and certain holidays.


“These legal changes may bring the opportunity to create stronger, retail stores that will, in the end, create more jobs, in addition to revenue for local citizens, the city and the state,” he wrote.


Jayson Butler, who owns Highway 64 Liquor Store in Giles County, has arrived at the same conclusion.


“I’m definitely not ready for the grocery stores being able to sell the wine,” he said. “I don’t want to go into this thing empty-handed. If it passes with nothing else, it’s going to be bad.”


Butler also wants more freedom to expand the items he sells, such as accessories – like wine stoppers and corkscrews – and low-alcohol beer.


“That never really made any sense to me, not being able to sell low-gravity beer,” he said. “But that’s the way it was, and I played by the rules.”


. Tennessee is losing tax revenue from shoppers who live near the border with states that allow grocery stores to sell wine.


If shoppers don’t live far from wine-selling groceries across state borders, they will drive a little farther and spend their money out of state, the grocery lobby contends.


There’s anecdotal evidence that really happens. In recent years, Costco Wholesale Corp. opened one of its large retail stores just over the state line in Georgia near Chattanooga. Ron Harr, head of Chattanooga Area Chamber of Commerce, said that since the store opened, Chattanooga residents have streamed across the state line to shop.


“Our concern is the loss of the tax revenue,” he said. “People are not only buying their wine there, but they’re buying their groceries. We’d rather they keep that tax revenue in Tennessee.”


But it’s likely factors other than convenience of buying wine and food at the same time are prompting the longer drive.


A check Friday showed that at that Costco store across the Georgia line, a bottle of St. Francis cabernet sauvignon was $14.99 plus 7 percent sales tax. The same bottle at Riverside Wine, Spirits and Beverages in Chattanooga was $19.99 plus 9.25 percent tax. An Erath pinot noir cost $14.99 at the big-box store, $19.99 at the wine store.

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