Franklin Liquors
Friday March 8th 2013
Today Is A Biodynamic ROOT Day.
Fitting For A Snow Day!
Campari Slides After Posting Surprise Decline in Annual Earnings
Source: Bloomberg
By Clementine Fletcher
Mar 7, 2013
Davide Campari-Milano SpA, (CPR) the maker of Skyy vodka, reported an unexpected drop in annual profit amid declining sales in Italy and Brazil, and said this year will also be “challenging.”
Earnings before interest and taxes fell to 287.5 million euros ($374.3 million) from 295.5 million euros a year earlier, the Milan-based distiller said today, sending the shares down the most since November. The average estimate of 12 analysts surveyed by Bloomberg News was 307 million euros.
Revenue reached 1.34 billion euros. On a so-called organic basis, excluding currency shifts and acquisitions or disposals, sales at the maker of Wild Turkey bourbon rose 2.8 percent, compared with the 2.7 percent median estimate of seven analysts.
Trading in Campari shares was halted in Milan after the stock fell as much as 4.6 percent.
“We expect 2013 to be another challenging year due to heightened macroeconomic difficulties in eurozone markets,” Chief Executive Officer Bob Kunze-Concewitz said in the statement. The company expects “continued positive momentum” in the U.S. and Pacific regions as well as improvements in Latin America and eastern Europe, he said.
Turbulent economic and political conditions in Campari’s home market of Italy have roiled sales, while stagnant growth across the rest of the continent has offset growth in in the Americas region, which includes the U.S., the world’s most profitable spirits market. U.S. sales rose 8.6 percent on an organic basis last year, representing 22 percent of revenue. Brazilian sales plunged 7.9 percent as Campari sold fewer local brands. Revenue in Italy, which provided 29 percent of business last year, fell 3.3 percent on an organic basis.
Commercial Dispute
European sales increased 3.4 percent on growth in Russia and as the company sold more Aperol in Austria and Switzerland. Campari registered a 9.1 percent decline in Germany due to a commercial dispute that affected the Campari and Aperol brands.
Sales in the rest of the world advanced 12 percent, aided by sales of Wild Turkey in Australia and a “positive development” in China, South Africa and Nigeria.
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GRUPPO CAMPARI – FY 2012 Results
Source: Gruppo Campari
Mar 7th
The Board of Directors of Davide Campari-Milano S.p.A. (Reuters CPRI.MI – Bloomberg CPR IM) approved today the draft Statutory Financial Statements and its consolidated financial results for the year ended 31 December 2012.
2012 RESULTS HIGHLIGHTS
. Sales: ? 1,340.8 million (+5.2%, organic growth +2.8%)
. Contribution after A&P: ? 532.3 million (+5.3%, organic growth +2.1%, 39.7% of sales)
. EBITDA pre one-offs: ? 337.4 million (+2.6%, organic change -0.4%, 25.2% of sales)
. EBIT pre one-offs: ? 304.7 million (+2.0%, organic change -1.1%, 22.7% of sales)
. Group net profit: ? 156.7 million (Group net profit Adjusted[1]: ? 167.7 million)
. Net financial debt at ? 869.7 million as of 31 December 2012 (? 636.6 million as of 31 December 2011), after acquisitions for a total value of ? 317.3 million
. 2012 proposed dividend confirmed at 2011 level (? 0.07 per share)
Bob Kunze-Concewitz, Chief Executive Officer: ‘2012 results were overall satisfactory considering the very difficult market context and the continued steady progress in improving our brand and market mix. Regarding the existing business in 2012, adverse market conditions in the Group’s traditional markets, particularly Italy, Brazil, Germany, affected our aperitifs and still wine portfolio but were compensated by strong growth in newly established sales platforms in Australia, Argentina and Russia in combination with the continued strong performance of the overall US business. Moreover, we benefitted from healthy cash flow generation thanks to good working capital management. Looking forward, we expect 2013 to be another challenging year due to heightened macroeconomic difficulties in Eurozone markets. However, continued positive momentum in the US and the Pacific, coupled with improvements in Latin America, stronger growth in Eastern Europe, particularly in Russia, as well as a strong innovation pipeline and heightened brand building in our core categories will help compensate European weakness. Moreover, we expect to further strengthen our Brand portfolio and route to market in the Americas and the Pacific thanks to our transformational acquisition of Lascelles deMercado. Net in net, looking forward we are well equipped to tackle the awaiting challenges’.
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Davide Campari-Milano SpA: What matters – No light at the end of the tunnel
Source: Barclays
Mar 8th
Stock Rating/Industry View: Underweight/Neutral
Price Target: EUR 5.40
Price (06-Mar-2013): EUR 6.04
Potential Upside/Downside: -11%
Tickers: CPR IM / CPRI.MI
What to do – still lagging peers: Trading in the key Italian market remains depressed while continued retail disruptions in Germany will suppress any top-line outperformance in the short term. Further, cost constraints, largely at the gross margin level, will result in an organic margin decline for the full year, a contrast to peers that are reporting encouraging growth trends. We expect Campari to report top-line growth of +4% in F13, with organic earnings up +3%, compared to peers that will generate high single digit top and bottom line growth. Trading on a C13 PE of 18.0x, only a 3% discount to Diageo (OW) and Pernod (OW), we reiterate Underweight.
What’s next – short-term pressures: Management have signalled a weak Q1 result with underlying trading in Italy not improving YTD compared to the c.-4% declines in Nov/Dec-12, while a change in stocking patterns will shift c.?20-25mn of Q1 sales into Q2/Q3. Further, Campari has not reached an ideal resolution in Germany regarding its re-listing with a key discount retailer, impacting Aperol sales. The company will try to offset the lost sales through greater on-trade activations and innovation, however is only expected to realize flat Aperol sales for the year (-16% in F12). Whilst Russia, the Pacific and the US will be strong, we believe sentiment will be focused on the European situation.
What we learnt – a bearish outlook: F12 was in-line at the sales level but missed at net income by 1%, with weaker margins and a higher finance charge. Italy disappointed with Q4 sales down -7%, but Russia (+132%) and the Americas (+5%) helped to offset. Both working capital and capex disappointed, with the latter expected to rise further in F13.
What’s changed – more downgrades: We have reduced our F13e EPS by 4% to reflect a weaker top-line expectation, the upfront costs of integrating its new bottling facility in the US (-50bps on gross margin), a slightly higher debt coupon and for FX. Our F14e EPS is unchanged to reflect the US production benefits, stronger M&A synergies and some cost savings (rationalized production in Brazil and shared services) offsetting our FX change.
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No Blip in Beer Sales for Anheuser-Busch
No Effect Seen On-Premise With Recent Legal Claims
Source: Marketwire
Mar 7, 2013
“Legal claims by individuals in three states in late February that some AB-Inbev products did not live up to stated alcohol-by-volume levels have had no impact on sales of Anheuser-Busch beers in the nation’s restaurants, bars and nightclubs to date,” said Chuck Ellis, President of Restaurant Sciences LLC (Newton, MA), an independent firm that closely tracks food and beverage product sales throughout the foodservice industry in North America. “The chart attached shows no effects of the public dispute.”
The first such claim was made in California on February 26th. Additional claims were made in Pennsylvania and New Jersey. Restaurant Sciences tracked US sales of AB-Inbev brand beers versus all other beer brands sold in restaurants and bars from February 20th (the week prior), through March 5th (the week after). The data shows that AB-Inbev Specified Beers steadily hovered around 20 percent of the relative on-premise market share. The data carries a relative standard error of 2.3 percent.
“The legal process around these claims has just commenced, so it is still early to make any definitive statement about the on-premise effects for AB-Inbev and its competitors. We also do not yet know whether there has been any impact in the retail channels,” said Ellis. “But, we can say with high confidence that AB-Inbev has weathered the initial impact of the story quite well in its on-premise channels, where over 50 percent of consumer dollars are spent on beer each year in the United States.”
About Restaurant Sciences
Restaurant Sciences is the premier provider of syndicated data and insights on food and beverage consumption in restaurants, bars, nightclubs and other foodservice establishments. The company delivers market share, market basket, competitive analysis, pricing, promotional, trend, segmentation and custom analytics to food and beverage manufacturers and distributors, as well as the broader industry they serve. Restaurant Sciences transforms over $1 Billion per month in guest check-level sales information into detailed data and insights across all segments of the foodservice landscape in the United States and Canada. Insights are delivered online through their business intelligence tool or through custom analytics. Visit www.restaurantsciences.com.
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Miller Lite’s Comeback Strategy Includes Celebs, New Bottle
But Don’t Look for Any ‘Brand Ambassadors’ From Lite’s New Stable of Stars
Source: Ad Age
E.J. Schultz
March 07, 2013
MillerCoors’ answer to Justin Timberlake? Vince Vaughn. And Ken Jeong. And Chuck Liddell. And Questlove.
The brewer is rolling out a plethora of Miller Lite ads starring celebrities and a major movie tie-in as the brand seeks a comeback with its “Miller Time” campaign and new packaging. But Lite is taking a more measured approach with its celebs compared with other big beverage brands, which have tapped A-listers while giving them marketing titles, such as “creative director.” For instance, Bud Light Platinum recently made Mr. Timberlake its “creative, cultural and music curator,” while Diet Coke has made Taylor Swift a “program ambassador.”
Lite is using celebs that might not be as well-known as Mr. Timberlake or Ms. Swift, but have what execs described as common-man cachet. And the brand is weaving in multiple celebs, rather than casting its lot with a single star. “Celebrities are challenging because the bigger the celebrity, the more it runs the risk of overshadowing what it is you are trying to do. It becomes an ad for the celebrity vs. an ad for your brand,” Exec VP-Chief Marketing Officer Andy England told Ad Age, while previewing the brewer’s 2013 marketing plans.
One Miller Lite ad envisions what it would be like to hang out with actor Ken Jeong, who will star in the upcoming “Hangover Part III” movie. In one bar scene in the ad, he self-mockingly says, “I’m that guy from that thing.” Similar ads will show male drinkers hanging with mixed martial arts legend Chuck Liddell and music star Questlove. The spots are by Miller Lite lead agency Saatchi & Saatchi.
The biggest A-lister on Miller Lite’s slate is Vince Vaughn, but he won’t be making any original appearances in Lite ads. Rather, one commercial will show clips of Mr. Vaughn’s upcoming movie “The Internship,” which also stars Owen Wilson. The ad is part of a marketing tie-in the brand is making with the movie.
“Celebrity is not our strategy,” said Con Williamson, chief creative officer at Saatchi & Saatchi, New York. “Our strategy is solely focused on Miller Time.” He added: “The celebrities that appear are guys that I think guys can actually picture hanging out with,” joking that “I don’t know that I could hang with Justin Timberlake. I’m far from cool enough.”
Anheuser-Busch InBev’s use of Mr. Timberlake for Bud Light Platinum is part of the brewer’s strategy to use the higher-alcohol line extension to compete with spirits in upscale, nighttime drinking occasions. Paul Chibe, A-B InBev’s VP for U.S. marketing, said he recognizes that there can be challenges with tying brands to one celebrity. But he said Mr. Timberlake is not in a “spokesperson role.” While the pop star appeared in one recent ad, there is not a “mandate for him to be in the [ad] copy. He will be helping … think about how we better connect with consumers.”
Miller Lite’s use of celebrities goes back decades, starting with its original “Great Taste, Less Filling” campaign that made its debut in 1974 and introduced the nation to light beer. The campaign — one of the most heralded of all time — featured ex-jocks dubbed the “Miller Lite All Stars” arguing over the beer’s attributes. Mr. England noted that “it was a who’s-who of American testosterone that really launched Miller Lite.”
But in recent years, Lite has struggled, while MillerCoors’ other light beer, Coors Light, has risen. Shipments of Lite, the fourth-largest U.S. beer brand, dropped by 3% in 2012, while No. 2 Coors Light jumped by 2.4%, according to preliminary figures from Beer Marketer’s Insights.
In a comeback attempt, MillerCoors revived the “Miller Time” tagline last year, while moving the account from DraftFCB to Saatchi & Saatchi.
This year, Lite will get a ton of marketing support: 14 TV ads are planned. A significant chunk of the marketing will tout a new bottle launching in May, which will sell exclusively at on-premise accounts including bars and restaurants. The new design, which features broader shoulders and a narrow waist, is meant to revive Lite’s on-premise business, which has been a weak spot.
The bottle, Mr. England said, is “big news for Miller Lite,” calling it the “No. 1 thing” the brewer will do for the brand this year.
Here is a look at what else MillerCoors has planned this year:
Coors Light: Under WPP’s Cavalry, the brand will continue its long-running “Rocky Mountain Cold Refreshment” positioning. Ads show mountain climbers retrieving the brew from the icy outdoors, then delivering the brew to bars, parties and the like.
Miller High Life: Windell Middlebrooks, who plays a beer-truck driver known for extolling common-sense values, will no longer appear in TV ads. Instead, the new campaign by Saatchi will plug High Life’s role in “everyday celebrations,” while putting greater emphasis on the beer’s heritage as the “Champagne of Beers.”
Keystone: The economy brand, which is handled by Saatchi, is ending its “Keith Stone” campaign, which had centered on the laid-back everyday-hero character. Keith “worked very well for our entry-level drinker,” Mr. England said. But “the challenge with Keith is that he was frankly more polarizing with our … 30-something regular guy.” On that front, the brand has a new partnership with tournament fishing organization FLW. No TV ads are planned.
Redd’s Apple Ale: The brewer will continue to dedicate significant marketing spending behind this new apple-flavored malt beverage that recently went national. A strawberry line extension is planned. The agency is Cavalry.
Third Shift: This new small-batch brew has started national advertising by Cavalry featuring an animated TV spot that spotlights brewers (similar to the approach used by small craft beers). One line in the ad declares that “when beer is your calling, you never clock out.”
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New Report Examines Need for State Alcohol Regulatory Funding
Source: CAP
Mar 7th
Former Michigan Liquor Control Commissioner and former Michigan House of Representatives Floor Leader Pat Gagliardi has authored a new report, “The Need for State Alcohol Regulatory Funding: Fighting Deregulation by Defunding,” made possible by a grant from the Center for Alcohol Policy.
“In repealing Prohibition a national consensus was achieved that alcohol could be sold legally again, but only under state control,” Gagliardi notes in his report. “In crafting alcohol policy today it is imperative that states understand both the history of alcohol regulation and the need for an effective regulatory structure.
“The fervor to cut budgets and anti-regulatory sentiment can lead to ill-considered changes in alcohol policy,” the report continues. “There is a real danger that state alcohol control will be reduced to the point of ineffectiveness by overburdening the regulatory system that, to date, has been successful and has enjoyed overwhelming public support.”
“I have seen firsthand how law enforcement officers are struggling to do more with less funding and resources,” said Center for Alcohol Policy Advisory Council member Jerry Oliver, former Detroit Chief of Police, former head of the Arizona Liquor Control Commission. “This report shines some much-needed light on an issue that can have big consequences in communities across the country.”
“The Need for State Alcohol Regulatory Funding: Fighting Deregulation by Defunding” analyzes the number of alcohol enforcement agents in states across the country, their increasing workload and the scope of their duties, as well as the record number of licenses for enforcement agents to monitor. The report also outlines several suggestions for ways states can seek to increase funding for their alcohol beverage control operations.
“The reality is that smarter and better equipped regulation and enforcement of existing laws can result in increased tax revenue and improved public health and safety,” Gagliardi concludes in his report. “Advocates for retaining a strong state-run alcohol policy understand that sufficient resources must be dedicated to the regulation of alcohol to ensure a fair marketplace as well as reduce substance abuse and to protect the health and safety especially of children.”
For more information about the report, or to arrange an interview with the report’s author, please contact Pat Gagliardi at (517) 420-8860.
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Alcohol ‘hard to regulate on social media’
Source: NZ Herald
By Isaac Davison
Friday Mar 8, 2013
Alcohol advertising is so seamlessly blended into social media and smartphone technology that government will struggle to regulate it, a researcher says.
Massey University psychology lecturer Antonia Lyons was reporting the findings of the first New Zealand research on alcohol marketing on social networking sites at the “Perils of Alcohol Marketing” conference in Wellington.
A law change in December created new offences for promoting excessive consumption of alcohol or the targeting of minors in alcohol advertising.
But this would be strained by the way beer, wine and spirits companies marketed their products on sites such as Facebook.
In a study of 154 people aged between 18 and 25, associate professor Lyons found that social media extended young people’s drinking habits.
“Facebook was embedded in these people’s drinking cultures. They used Facebook to gain information about drinking, places, people, products to organise when they go out, to share photos about drinking … to interact while engaging in a drinking session. They use it to connect with alcohol brands and products and to receive alcohol promotions.”
Alcohol marketing was seamlessly integrated with users’ conversations, photographs, and comments.
“There’s a lot of viral marketing going on. The distinction between whether the online materials are made by a user or a brand is blurred. It seems like it is coming from a friend and not an alcohol product.
“Despite the vast amount of alcohol products, events and marketing on the internet, and particularly on Facebook, this content just wasn’t viewed as marketing.”
Because the marketing was not as explicit, it was much less likely to raise people’s defences as consumers.
Facebook users, including minors, could make statements on company’s pages, or discuss particular brands in ways which the industry could not.
“Users can say ‘I’m so drunk – this is fantastic’ in a way that brands never say it. And that’s what happens on these Facebook walls,” she said.
The research indicated that new laws to criminalise the promotion of binge drinking or drinking among young people could be difficult to enforce online.
Companies were increasing their promotions in social media. Drinks giant Diageo now invested a fifth of its marketing budget in social media, and attributed a 20 per cent increase in sales to this strategy.
The rise of GPS-enabled smartphone technology also meant people were constantly logged into social media, and guided by increasingly sophisticated alcohol-related apps. Because websites were continually mining data from users, this allowed alcohol companies and bars to tailor their advertising, such as offering discounts to people when they approached a bar.
Professor Lyons said: “What this does is raises alcohol marketing to a whole new level, and at the same time it raises serious public health concerns.”
The conference heard that the French Government, which enforced strict bans on all alcohol advertising, recently lost a legal challenge against Facebook after attempting to restrict alcohol marketing on the website.
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Concha y Toro voted World’s Most Admired Wine Brand
Source: Drinks International
07 March, 2013
Concha y Toro has been voted the World’s Most Admired Wine Brand for the third year running, ahead of Torres and Penfolds.
Now available to download, World’s Most Admired Wine Brands is a comprehensive industry poll of the world’s best regarded wine.
http://www.drinksint.com/files/Supplements/2012/Most_Admired_Combined_low_res_PDF_.pdf
The survey has become a reliable barometer of the way the industry regards its leading players. As any wine professional knows, sales success is not the only indicator of a healthy brand.
And achieving mega volumes does not necessarily mean that a wine can be regarded as great. Winning the admiration of your peers, and wine professionals across the world, is not something that can be achieved merely by installing 1-million litre tanks at your winery, shifting 10 million cases a year, or buying the sponsorship of a major sporting event.
So how can it be done? In many ways, it’s an intangible thing. We can’t always put our finger on exactly why we admire something. But we gave our judging panel a few pointers.
When casting their votes, we asked judges to use the following criteria: wines should be of consistent or improving quality, they should reflect their region or country of origin, they should respond to the needs and tastes of their target audience, they should be well marketed and packaged, they should have strong appeal to a wide demographic.
The judging panel, as usual, included Masters of Wine, consultants, winemakers, wine writers, retailers, educators, buyers and analysts.
This year we recruited extra judges from emerging markets in Asia, to give the panel more of a balanced look, and to reflect the explosive growth that wine is experiencing in the region. In particular we’ve approached wine educators – the people who are doing more than most to spread wine knowledge in markets such as China – to take part in the poll.
Judges can vote for up to six wine brands. Again we emphasised that this was not necessarily a competition to reward the best-selling wines in the market, or those with the most critical acclaim. To help them on their way, we supplied a list of more than 80 well-known brands and producers, but as usual we also encouraged the option of free choices – names not included on our list.
The results are fascinating. While some brands have been a model of consistency, and have performed equally well in all three Most Admired surveys, a few tend to yo-yo around the top 50 and some dip in and out. Where there was a tie for places, a small jury of voters was assembled to decide the final positions.
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Constellation Brands, Interfood Importacao Sign Deal to Import, Distribute Premium Wines, Spirits in Brazil
Source: Benzinga
Paul Quintaro, Benzinga Staff Writer
March 07, 2013
Constellation Brands, Inc, the world’s leading premium wine company, and Interfood Importação Ltda., Brazil’s top imported wine distributor, announced today that their group companies have signed agreements for the importation and distribution of a key selection of Constellation’s coveted premium wines and spirits brands into South America’s largest country.
“We are pleased to represent Constellation to further develop the Brazilian market,” said Gabriel Cury, founder, Interfood Importação Ltda. “Constellation has an award-winning portfolio of wine and spirit brands that are globally recognized for quality, craftsmanship and taste. We also believe that changing consumer needs and Brazil’s hosting of the World Cup in 2014 and the 2016 Summer Olympics will boost demand for wine throughout the country and these agreements position both companies well.”
Through the agreements, Interfood will import and distribute brands from Constellation’s global portfolio representing each of its key regions including Robert Mondavi Winery, Robert Mondavi Private Selection and Woodbridge by Robert Mondavi from California, Inniskillin Ice Wine from Canada, Kim Crawford from New Zealand, Ruffino from Italy, and SVEDKA vodka from Sweden.
“Constellation is a global company with an unparalleled portfolio of brands,” said Philip Kingston, senior vice president, International, Constellation Brands. “Interfood enjoys a powerful sales and distribution network and an intimate knowledge of the Brazilian consumer. These agreements demonstrate our commitment to make our portfolio more readily available in growth markets such as Brazil, where consumers desire more access to world-famous wines.”
According to industry data, Brazil is a key market for the global wine industry and is projected to continue its growth trajectory over the next five years.
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China’s Wine Market Bubbles, But Not With Champagne
Source: WSJ
By Jason Chow
March 8th
The West may toast birthdays and weddings with Champagne, but China still hasn’t found a taste for the bubbly, a new study finds.
China, including Hong Kong, is the world’s fifth-largest wine market, and its thirst for wine is on the rise, according to the report released by wine-trade fair Vinexpo and compiled by International Wine & Spirit Research. Chinese drinkers consumed 159.3 million 9-liter cases of wine in 2011, representing a 142% increase from 2007. What’s more, the IWSR forecasts growth to increase by another 40% over the next three years.
Of all those bottles, 99.5% were red, white or rose wines. That means just 0.5% – or one out of 200 bottles – contained bubbles. “The Chinese ignore the sparkling wines right now,” said Robert Beynat, chief executive of Vinexpo, in an interview in Hong Kong.
To compare, 7% of all the wine consumed in the world in 2011 was sparkling, and the category is set to increase another 9% by 2016. Global consumption of non-sparkling wines, on the other hand, is predicted to increase by just 5% over the same period.
According to Mr. Beynat, Chinese consumers have yet to discover sparkling wines such as Champagne, Cava and Prosecco, mainly because of a lack of marketing in the mainland. He predicts that the major Champagne brands such as Moët & Chandon, Veuve Clicquot and Taittinger will lead a breakthrough in coming years.
“It starts with Champagne,” he said. “The Chinese will start to drink it as an aperitif first, then will move on to other sparkling wines.”
Bubbles or no, China is still far behind the Western world in terms of per capita consumption. Chinese drinkers consumed only 1.4 liters of wine per person in 2011, way below French drinkers who ranked first by downing an average of 53.2 liters per person that year. China’s per capita consumption is predicted to increase to 2.1 liters per person over the next three years.
China is now the sixth-largest producer of wines in the world, higher than Australia and behind France, Italy, Spain, U.S. and Argentina. Mr. Beynat said domestic production is key to growing consumption within China.
“We all prefer products from our own countries,” he said. “Once [domestic Chinese vineyards] produce more, China will drink more, and then they’ll even import more.”
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Last chance to enter the 2013 Decanter World Wine Awards
Source: Decanter
by Decanter.com staff
Thursday 7 March 2013
Competition organisers are issuing a final call for entries into this year’s Decanter World Wine Awards, as the submission phase draws to a close.
Application forms to enter wines into this year’s competition will no longer be available to download after today.
Entries have been coming in steadily since the competition opened in January, and early submissions indicate that this year’s awards will feature a number of countries represented for the first time.
The competition, founded in 2003, is celebrating its 10th anniversary this year, and will feature a new-look line-up of regional chairs, including Bob Campbell MW (New Zealand), Andreas Larsson (Austria) and Jon Bonné (USA).
Judges from more than 25 countries are expected to fly in to London to join DWWA panels, including some of the world’s most pre-eminent masters of wine, sommeliers, wine buyer and critics – each selected for their particular regional expertise.
Judging for this year’s awards will begin on Monday 29 April, and results will be announced at the London International Wine Fair in May.
https://dwwa.ipcmediasecure.com/
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New fine wine stock exchange Cavex to launch
Source: Decanter
by John Stimpfig
Thursday 7 March 2013
A new online fine wine stock exchange for the trade and private collectors and investors is set to launch later this month.
Cavex, which has been 18 months in the making, is aiming to break new ground in the way fine wine is bought and sold, providing competition to existing exchanges such as Liv-ex and Berry Bros & Rudd’s BBX.
Cavex CEO and co-founder Stephen Maunder claims that the trading platform – www.cavex.co.uk – is unlike all other UK-based exchange models.
‘We’re different to Liv-ex because we’re open to private individuals,’ he said.
‘And we’re different to BBX for two reasons: one is that the trade can use our site and the other is our fee structure – we take a small 3% commission on both sides of the trade.’
In contrast, BBX is a one-sided transaction, with the seller paying the full 10% broking commission.??
Fund manager Peter Lunzer of Lunzer Wine Investments said he thought many collectors and investors would like the idea of cutting out merchants and brokers to buy and sell wines direct at an agreed price.
‘Most importantly of all, it will potentially generate much greater rates of return on investment,’ he said.??
The exchange, which will hold data on over 50,000 wines, is open to global buyers, but wines can only be traded via recognised UK bonded warehouses.
Cavex, which is due to launch in late March, has been funded by more than a dozen City backers, who have collectively put a six-figure sum into the new venture.
Maunder’s career spans more than 25 years in money broking and banking, as well as a five-year spell with Bibendum’s Fine Wine Team.??
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Kroger Q4 profit beats Street
Source: RT
March 7, 2013
Kroger reported a better-than-expected profit for its fourth quarter profit amid a surge in sales.
For the period ending Feb. 2, Kroger earned $461.5 million, compared with the year ago period when the company reported a loss of $306.9 million as pension costs dragged down results.
Revenue rose 12.8% to $24.2 billion. Same-store sales increased 3% for the quarter, excluding fuel. After adjusting for the extra week in the fourth quarter, total sales increased by 3.7% over the fourth quarter of fiscal 2011.
For the full 2012 fiscal year, total sales increased to $96.8 billion or 7.1% compared with the prior fiscal year. After adjusting for the extra week in fiscal 2012, total sales increased to $94.8 billion or 4.9% compared with the prior fiscal year.
Excluding fuel, total sales increased 6% over the same period last year. Further adjusting for the extra week, total sales excluding fuel increased 4%.
Net earnings for fiscal year 2012 totaled $1.50 billion.
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Costco reports better-than-expected February sales
Source: MarketWatch
Andria Cheng
March 07, 2013
Membership warehouse club chain Costco Wholesale Corp. (US:cost) on Thursday reported a 6% increase in its comparable February sales, including a 6% gain in the U.S. and a 4% increase overseas. The result beat the 5.1% average estimate of analysts surveyed by Thomson Reuters. Excluding the positive impact of gasoline inflation, U.S. sales rose 6%, beating the 4.8% consensus estimate. Costco stock was unchanged at $102.56 in premarket trading.
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Carrefour: in the right aisle
Asset sales lift profits but investors want more sustainable improvements
Source: FT / Lex
Mar 7th
It must feel good when a recovery plan goes to, er, plan. And things are looking that way for new Carrefour boss Georges Plassat. The world’s second-largest retailer by revenues reported on Thursday that net income in the past 12 months tripled to ?1.2bn. Shares gained 3 per cent.
Granted, ?1.1bn of those net earnings came from discontinued operations mostly linked to the sale and closure of Carrefour’s businesses in Colombia, Indonesia, Malaysia and Singapore. But operating income from continuing businesses was still above expectations at ?2.1bn (admittedly those expectations were pretty low), despite a 3 per cent fall. Meanwhile, margins on continuing operations in France (46 per cent of Carrefour’s sales) expanded by 30 basis points year on year over the past six months to 3.6 per cent.
Even so, investors will know that the performance in 2012 comes against a poor base in 2011 when Mr Plassat’s Swedish predecessor Lars Olofsson was running the show. No fewer than five profit warnings were issued that year. The 2012 continuing profit margins in France are still below the 3.7 per cent in 2010. And group continuing operating margins of 2.8 per cent are well below those at Tesco of 5 per cent and Walmart’s 6 per cent. What is more, Carrefour still derives three-quarters of its revenues from Europe, where the environment is challenging. Sales were flat in France, but down 3 per cent in the rest of the region.
Carrefour’s asset sales have helped free up funds to boost capital expenditure this year to up to ?2.3bn from ?1.5bn in 2012. This will at least help to rectify the lack of investment in France in 2011. And Mr Plassat is optimistic that he can sustain margins this year. Still, shares in Carrefour trade on 15 times forward earnings, a big premium to peers. So until improvements are seen to be sustainable, investors should have their own plan B.
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S&P Cuts Darden Outlook On Weak Sales, Earnings
Source: WSJ
By Nathalie Tadena
Mar 7th
Standard & Poor’s Ratings Services cut its outlook on Darden Restaurants Inc. (DRI) to negative from stable, citing expectations the restaurant operator’s weak sales and earnings could persist into 2014.
S&P affirmed Darden’s corporate credit rating at triple-B, two notches above junk territory.
The firm noted Darden, which owns Olive Garden, Red Lobster and LongHorn Steak House, recently posted operating results that were weaker than its pervious expectations. S&P said it could downgrade Darden’s rating if the weak sales and earnings trends further pressure its market position and credit metrics, which have already weakened as a result of its debt-financed acquisition of Yard House in August.
S&P continues to view Darden’s business profile as “satisfactory,” due to its leading market position in the casual-dining industry and good geographic and concept diversity. However, the firm said increased competition, continuing weak consumer sentiment, and the shifting of customers’ perception of value toward lower-priced product offerings have hurt Darden’s recent operating performance, especially at Olive Garden and Red Lobster. The company’s combined same-store sales turned negative in the prior two quarters, a trend S&P expects to continue in the next several quarters before it starts to improve in fiscal 2014.
Earlier this week, Moody’s Investors Service also lowered its outlook on Darden to negative from stable, pointing to weaker-than-expected operating performance. Moody’s rates Darden at Baa2, in line with S&P’s rating.
Coming out of the recession, rivals like Chili’s Grill & Bar and Applebee’s dished out deep discounts while Darden held its menu prices steady to protect profit margins, and in turn, lost customers.
The company has been making efforts to appear more affordable and remodel its older restaurants. But the turnaround is proving tougher than it expected.
Last month, Darden cut its full-year guidance and projected weak fiscal third-quarter results, saying its customers are getting pinched by the rising payroll tax and higher gas prices. In December, the company said its fiscal second-quarter profit fell, as same-restaurant sales at all three of its major chains sank, led by Olive Garden’s decline.
Shares were off by three cents to $47.23 in recent trading. The stock is up 4.8% year-to-date.
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Del Frisco’s 4.8 Million-Share Secondary Offering Prices at 4.6% Discount
Source: WSJ
By Debbie Cai
Mar 7th
Del Frisco’s Restaurant Group Inc. (DFRG) said a secondary offering of about 4.8 million shares priced at a 4.6% discount to Thursday’s close.
All shares are being sold by the steakhouse operator’s largest shareholder, which is an affiliate of Lone Star Funds. Del Frisco’s won’t receive any proceeds from the sale of these shares. The shares priced at $17 a piece.
Lone Star currently owns about 76% of the company’s stock and will reduce its stake to about 56% upon completion of the offering. The company had 23.8 million shares outstanding as of Feb. 22.
The company runs about 32 high-end restaurants under the Del Frisco’s Double Eagle Steak House, Sullivan’s Steakhouse and Del Frisco’s Grille brands. Del Frisco’s went public in July, raising $75 million to repay debt and build working capital.
Shares closed down 3.6% at $17.82 and were unchanged after hours. Through Thursday’s close, the stock is up 22% over the past three months.
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Pennsylvania: Ferlo pushes plan to keep and improve state liquor stores
Source: The Tribune-Review
March 6, 2013
As debate continues over privatizing the state liquor system, a Democratic senator on Wednesday proposed legislation that would keep and improve the state stores.
Sen. Jim Ferlo of Highland Park sent a memo to colleagues seeking co-sponsors for a bill to “modernize” Pennsylvania’s Wine and Spirits stores. The 619 stores could close under legislation pushed by Republican Gov. Tom Corbett. The House plans to vote on Corbett’s bill, or an amended version, when its liquor committee considers the bill in two weeks.
“I am proud to introduce legislation to modernize, rather than privatize, Pennsylvania’s liquor sales operations,” Ferlo said. “My proposal will address consumer concerns, protect middle-class jobs, and move the revenue-generating asset that is the (Pennsylvania Liquor Control Board) forward into the future.”
Ferlo said his legislation would address pricing, flexibility in hiring, direct shipment of wine and changes in beer sales.
His ideas would allow stores “to operate at peak performance and will help produce as much as $100 million,” Ferlo said.
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Kansas: Hearing on bill to expand liquor sales draws crowd
Source: KC Star
By Fred Mann and Brent Wistrom
March 7th
A hearing room in Topeka was packed to overflowing on Thursday for testimony on a House bill that would expand liquor sales to grocery stores, convenience stores and large retailers.
Speakers from among the 200 people who were crammed into the room recited poll figures about Kansans’ opinions, projected job losses, boasted of economic gains, listed DUI statistics and raced through piles of testimony in hopes of swaying a majority of House Commerce, Labor and Economic Development Committee members to their point of view. The committee plans to vote on the bill either Friday or next week.
In Wichita, consumers and liquor store owners were voicing their own opinions in response to an Eagle questionnaire through the Public Insight Network. They cited competing priorities: convenience, safety, a desire for a free market, a desire to protect small businesses.
Kansas law now allows only retail liquor stores to sell wine, liquor and full-strength beer. Grocery and convenience stores can sell 3.2 beer and wine coolers.
Similar proposals to expand the sale of alcohol have failed in the Kansas Legislature in recent years without even reaching a vote.
Uncork Kansas, a coalition of convenience stores, grocery stores and chambers of commerce that is pushing the bill, said it has offered to remove hard liquor from the legislation. That would allow consumers to buy wine and beer at their grocery or convenience stores, and would allow liquor stores to keep their monopoly on hard liquor, according to the coalition. The bill, HB 2206, also would expand the offerings of liquor stores to include mixers, snacks, cups and ice.
Additional provisions would provide a buy-out period for liquor stores that wish to get out of the business and would allow liquor-store owners to own multiple stores, which is not allowed under current Kansas laws.
Those who favor the proposal said changing the laws would lead to economic growth in the state. More grocery and convenience stores would be built in Kansas, meaning more jobs, they say.
Opponents said the law would drive small liquor stores out of business and send money from the sales of beer and wine out of the state to locations where corporations like Wal-Mart and QuikTrip are headquartered.
Convenience cited
Consumers who shared their opinions with The Eagle and favored the legislation cited convenience as the top reason. They want a chance to buy a bottle of wine for dinner at the same store where they purchase food for their dinner.
Many of those who want the bill to pass have lived in or visited other states where liquor is sold at grocery stores, and they say Kansas’ liquor laws are antiquated.
“A Walgreens in Seattle even had a small wine section,” said Michael Kline of Wichita, “And guess what? There was no anarchy in the streets.”
Kline said he is tired of Kansas lagging behind in cultural and progressive matters.
“My friends and colleagues from other states have a good chuckle when they read about our driving-the-car-while-looking-in-the-rearview-mirror attitude,” he said.
Concern about damage to small liquor stores is overblown, said those who back the bill. Many said they still would do business with liquor stores for specialty beers and wines.
Jim Lepping of Andover moved from Michigan, where alcohol was available in grocery stores. He said he would buy expensive wines and harder liquor in liquor stores and would buy other wines and beer in grocery stores.
Lepping, 59, grew up in Livonia, Mich., 20 miles west of Detroit.
“Within a five-mile radius, we had 10 mom-and-pop stores that have been in business for years. I grew up that way my whole life. They’ve survived all that time,” he said.
Dana Knott of Hesston said she should be able to choose where she purchases adult beverages without the government dictating her choices.
The convenience of buying beverages at grocery stores with kids in a cart beats having to make another stop at a liquor store, she said.
“Have you ever tried to get a 30-pound child out of a car seat so you can run in and buy beer for a ballgame?” she said. “It’s not worth the effort.”
The state currently is mandating a monopoly that picks winners and losers in the marketplace, she said.
“It simply doesn’t make sense to allow only one type of retailer to offer a legal product just because ‘we’ve always done it that way,’?” Knott said.
Small business issue
But opponents of the bill said the current liquor laws are adequate. Convenience is a weak reason to support a change in the law, they said. They see that as laziness, considering that plenty of liquor stores are available. Safety and controlling the sale of alcoholic beverages are more important issues, they said.
Opponents said they don’t want their children exposed to liquor while mom and dad are shopping for groceries. They also fear that teen workers in the larger stores would slip six-packs out the back door to their underage friends. They predict a rise in alcoholism and DUIs among teens.
Rachel Robinson of Perry has a 14-year-old daughter. She worries that her daughter’s older friends may get a job at a large store.
“I don’t want her walking into Wal-Mart and walking out with a bottle of alcohol,” Robinson said. “I think that is going to be very accessible if this passes.”
Robinson sells alcohol to stores from a Kansas distributer, and she worries about losing the small liquor stores she serves, which would affect her business.
Protecting small businesses appeared to be the main reason people oppose the proposed legislation. Susan Lehr, manager at Simon Liquor in Park City, said the store employs five part-time workers who are earning a second income for their families at the store.
She worries that the big stores will drop their prices on beer to run the small businesses off.
“This is not a fair practice since we are trying to keep our jobs and our families taken care of. How would they like it if the shoe was on the other foot?” Lehr said.
Convenience stores and supermarkets have enough specialized goods to sell, she said.
“We do not tread on their toes, so please do not tread on ours. We are trying to make a living, too,” Lehr said.
Katie Vornauf owns F&K Liquor in Wichita with her husband, Forrest, and she used to work in the grocery business.
“If we don’t stop all this, Wal-Mart and Dillons will get in the real estate market and we will have to buy our houses from them,” she said. “You may laugh at that now, but 20 years ago, everyone laughed when Wal-Mart started selling groceries.”
She and her husband used their retirement savings and took out a loan to open their liquor store three and a half years ago, she said.
“We have worked hard and our business is doing well,” she said. “Basically, all the money we make stays local. If this law passes, I truly believe that the value of our business would drop in half overnight. Whether or not we could even stay in business is totally questionable.”
Flora Bishop of Wichita also opposes the bill, fearing it would harm small businesses and create problems for underage clerks in grocery stores.
“The only positive for me,” she said, “would be that with the huge inventory of liquor, the grocery stores would probably not rearrange their stores so often.”
The rural view
In Topeka, Jessica Lucas of Uncork Kansas hauled up a mailbox full of letters she says come from people who want expanded alcohol sales in retail stores.
Lucas said rural grocery stores need expanded alcohol sales to help them stay open and continue offering all of their products.
“The only roadblock has been this government regulation that protects liquor stores while doing nothing to support the needs of our small grocers who are trying to survive in this tough economy,” she said.
The politically powerful Kansas Chamber of Commerce also supports the change, noting that QuikTrip and Hy-Vee say they may not expand in Kansas until liquor laws are changed.
But opponents reiterated that the bill is a threat to small businesses and a step toward making it easier for kids to get alcohol.
“The people in our state do not want this changed,” said Rep. Jim Howell, R-Derby.
He said Derby would go from having five liquor stores to 16 if the bill becomes law.
“How does this change our community?” he asked.
Howell said recovering alcoholics will face increased temptation and kids will be desensitized.
“There will be social consequences,” he said.
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Tennessee: GOP leaders urge liquor stores to deal
Source: WBIR 10
By Chas Sisk / The Tennessean
Mar 7, 2013
Republican leaders in the state House of Representatives said Thursday that now is the time for liquor interests to strike a deal over wine sales in grocery stores, rather than continuing to fight over the issue.
House Speaker Beth Harwell and Majority Leader Gerald McCormick told reporters that liquor store owners and distributors should not await the outcome on wine-in-grocery stores legislation before trying to negotiate other changes to Tennessee’s liquor laws. GOP leaders, who have used their political clout to get the bill moving after years of debate, said they will not champion new rules for liquor stores late in the legislative session.
“I suspect they’ll come to the table quicker than that. It would probably be in their best interest to do so,” said McCormick, R-Chattanooga. “At the end, we’re going to be trying to pass the budget and go home. … We’re not going to go over an extra week or two to talk about liquor stores.”
Harwell cast a pair of decisive votes Wednesday in a House subcommittee to move along House Bill 610, which would let grocery stores sell wine if voters have signed off in a local referendum. The bill would represents the biggest change to the state’s liquor laws since by-the-drink sales were legalized in 1967.
Harwell said she wanted to keep the bill alive to encourage both sides to work out a deal that would loosen some of the restrictions on the liquor industry. Suggestions have included letting liquor stores sell items other than alcohol and letting operators own more than one liquor store.
Liquor store owners, however, have shown few signs of budging. Chip Christianson, owner of J. Barleycorn’s in Nashville and a board member of the Tennessee Wine & Spirits Retailers Association, said his colleagues are prepared to fight the issue to the end.
“We’re not going to support it anywhere along the way,” he said. “If we get beat, certainly we will sit down.”
Wine-in-grocery stores legislation is expected to be brought up next week by the Senate Finance Committee. The bill also has to clear several more hurdles in the House.
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Maine: War of words on Maine liquor contract goes on
Source: NECN
March 6, 2013
The war of words between Gov. Paul LePage and majority Democrats over Maine’s liquor contract continues in Augusta.
Democrats said Wednesday that LePage is playing political brinkmanship by threatening to veto any bill he gets before lawmakers pass his proposal to repay a $484 million hospital debt with money raised from restructuring the state’s liquor contract.
LePage says that instead of passing his bill, which he says would put $700 million back into the state’s economy, lawmakers are “playing games.” LePage also put up a video on You Tube in which Mainers say the state should pay its debts.
Democrats, meanwhile, listed eight bills which are being finalized but would be sidetracked by LePage vetoes. The bills deal with issues from fishing season dates to college savings.
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Idaho: Jeff Anderson – Lotteries, Liquor and The Five Wives Controversy (Excerpt)
Source: Boise Weekly
by George Prentice
Mar 6th
Jeff Anderson knows a thing or two about dual responsibilities. When he was general manager of Boise’s KBOI-TV 2, he was also managing the CBS affiliate in Idaho Falls.
“I’m kind of use to having the ‘two office’ thing,” Anderson, 55, told Boise Weekly.
Born in Illinois and raised in northern California, Anderson first stepped foot in a college radio station at Cal State-Chico, launching a broadcast career that ultimately brought him to Idaho in 1996 to oversee KBOI-TV.
But in 2006, when ownership wanted to make some changes, Anderson said he was reluctant to leave the Gem State.
“I chose not to go to Cleveland, Tampa or Raleigh, N.C.,” he said. “I just couldn’t see being two plane trips away from my children.”
So the husband, father and grandfather of two decided to seek a position in state government, landing a job as director of the Idaho Lottery in 2007. Little did he know that three years later, in 2010, he would again find himself with dual responsibilities, after Gov. C.L. “Butch” Otter appointed him director of the Idaho State Liquor Division.
http://www.boiseweekly.com/boise/jeff-anderson/Content?oid=2830311
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North Carolina: New ABC chairman sworn in, excited to get to work
Source: News 14 Carolina
Mar 7th
The North Carolina Alcoholic Beverage Control Commission officially welcomed in some new leaders Monday at a ceremony in Raleigh.
Supreme Court Justice Paul Newby swore in two new commissioners, Kevin Green and Joel Keith, and a new chairman, Jim Gardner. Gardner says the office continues to help the state’s economy and he is excited to serve at the helm.
“Eight hundred million dollars in sales, $300 million actually goes back into state and local governments. It’s all self-supporting, nothing comes out of the budget” he said.
Gardner also says he looks forward to working with universities and high schools in the area to address the issue of underage drinking.
Tags: beer, Biodynamics, liquor, Wine
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