Liquor Industry News 4-5-13

Franklin Liquors


Friday April 5th 2013

Biodynamic ROOT Day


Brown-Forman to Distribute Jägermeister in Australia


Source: Business Wire

Apr 4th


Brown-Forman Australia (NYSE:BF-A – News) (NYSE:BF-B – News) announced today that it has been appointed the exclusive distribution rights to Jägermeister, effective July 1, 2013. Jägermeister has become a leading liqueur brand in Australia since it was introduced eleven years ago, transcending pop culture and building legions of loyal consumers.


In September of last year, Jägermeister introduced two RTDs in Australia, Jägermeister Raw and Jägermeister Ginger & Lime, to offer the great taste of Jägermeister as premium all natural RTDs. These were the first two brand extensions in the history of the franchise and provide a strong platform for future growth.


“Jägermeister has achieved an enviable position in the on-premise and achieved national distribution since its introduction to the Australian market and is experiencing encouraging early results for the RTDs,” said Marshall Farrer, managing director for Brown-Forman Australia. “We are pleased to add this brand to our portfolio in Australia.”


“After more than a decade of great success, we now look forward to taking Jägermeister to the next level in the Australian market,” said David Bell, Regional Director Asia Pacific at Mast-Jägermeister SE.


Suntory will continue to distribute Jägermeister through June 30 and the companies will jointly work to ensure a smooth transition for all customers.




AB InBev Near Final Agreement With U.S. Over Modelo Deal


Source: Bloomberg

By Sara Forden

Apr 5, 2013


Anheuser-Busch InBev NV (ABI) and the U.S. Justice Department are close to a settlement of a lawsuit seeking to block the brewer’s purchase of Grupo Modelo SAB, three people familiar with the matter said.


An agreement will probably be announced next week, said the people, who asked not to be named because the discussions are confidential. There’s a chance both sides will seek a short extension of an April 9 deadline to report progress on a settlement to the federal judge in charge of the case so they can put the final touches on the deal, two of the people said.


AB InBev is negotiating with the Justice Department for approval of a revised merger plan that would have Modelo sell control of all its brands in the U.S., as well as a brewery it built in Piedras Negras, Mexico, to Constellation Brands Inc. (STZ), a winemaker and beverage distribution company.


The department is reviewing Constellation’s plan to boost brewing capacity at the Piedras Negras plant by about 70 percent to ensure that Modelo-brand products would remain viable competitors in the U.S. beer market, two people familiar with the matter said March 8.


AB InBev rose 0.2 percent to 76.65 euros at 9:04 a.m. in Brussels trading. Constellation fell 0.2 percent to $48.25 in New York yesterday, while Modelo was unchanged at 112 pesos in Mexico City.

Stock Moves


Laura Vallis, a spokeswoman for Leuven, Belgium-based AB InBev in New York, and Angie Blackwell, a Constellation representative, declined to comment on the prospects for settlement. Jennifer Shelley, a Modelo spokeswoman, and Gina Talamona of the Justice Department, also declined to comment.


The Justice Department will probably demand in the consent decree that Constellation make its commitments binding to invest in the expansion of the Piedras Negras plant, said Sandeep Vaheesan, special counsel with the American Antitrust Institute and author of a white paper recommending that the transaction be blocked. The department will also probably insist Modelo transfer to Constellation employees with marketing, distribution and production experience in the beer market, Vaheesan said.


“The Justice Department probably wants to make sure that Constellation, which has been principally focused on wine and spirits, can fill the shoes of Modelo, which is a brewer,” Vaheesan said.




Global companies eye stake in Original Choice maker


Source: Times of India

Boby Kurian

Apr 4, 2013


Three global spirits companies have evinced preliminary interest to buy a large stake in Bangalore-based John Distilleries, makers of Original Choice, which is among the top six Indian whiskey brands.


Family-owned Scottish distiller William Grant & Sons, Thai Beverage Public Company (ThaiBev) and Beam Inc have signed non-disclosure agreements ahead of starting formal talks, said banking sources familiar with the matter.


John Distilleries mandated Morgan Stanley to find a foreign strategic partner, who could emerge as the largest shareholder, in a deal pegging the enterprise value of the company at Rs 900 crore.




GS survey bullish on the US consumer, especially at the high end


Source: Goldman Sachs

Apr 4th


US consumer sentiment and spending intent continues to rise

We conducted our regular quarterly survey of 2,000 US consumers, a data series that dates to 2005. The survey was in the field in mid-late February, subsequent to the 2% payroll tax hike, and incorporates the impact of delayed tax rebates and higher gasoline prices. Despite headwinds, consumers reported continued improvement in sentiment towards the economy and the highest intent-to-spend levels since the financial crisis.


Balance sheets bolster consumers; a lower savings rate may help offset higher taxes in 2013

Our survey suggests three reasons why the savings rate may fall in 2013, buoying consumer spending and potentially fully offsetting the impact of higher taxes: (1) consumers reported an increase in credit card debt this quarter, (2) those with jobs were most inclined to re-lever their balance sheets (and the economy is currently creating jobs at a pace of two million annually), and (3) for the first time since the financial crisis, more consumers thought their home value was rising rather than falling.


The delta between high- and low-income households has widened

While an improved consumer outlook was universal in the survey, it was more pronounced amongst high-income households (over $90K) relative to lower-income households (under $50K); the delta between these two groups in our survey hit a new high. At the category level, our survey suggests Travel/Entertainment and Accessories as the most over-indexed to high-income households. We also highlight the following 11 stocks which have high-end exposure and are Buy-rated: BLMN, EL, KORS, PNRA, SBUX, TSLA, TFM, TUMI, VAC, WFM, WYN.


Consumers demand for Autos and Accessories rising

In terms of sectors, the greatest increase in demand versus a year ago in our survey was in Autos. Our Auto analyst Pat Archambault believes this dynamic is likely to persist for several years as SAAR normalizes after the crisis. He highlights F as the best way to prosecute this theme.


We also highlight Accessories (i.e., jewelry, handbags) where demand is rising at an increasing rate in our survey. Our Specialty Apparel analyst Lindsey Drucker Mann believes branded accessories are in a robust growth cycle and highlights KORS and TUMI.




Gunmaker Sues Liquor Co. Over Tommy Guns Vodka


Source: Law 360

By Bill Donahue

April 04, 2013


The company behind the famed Thompson submachine gun, better known as the Tommy gun, sued an Illinois liquor maker last week for selling a brand of vodka under the trademarked gun name.


New York-based Saeilo Enterprises Inc. still produces and sells the gun, which rose to infamy as the weapon of choice for Prohibition-era mobsters and has long been a staple of the Hollywood arsenal. On March 27, it said Alphonse Capone Enterprises Inc. has been trying to tread on that fame by selling a product called Tommy Guns Vodka.


“Defendant’s unauthorized use of the Tommy gun marks is … willful and has been done with the intention of trading upon the valuable goodwill built up by Saeilo in its long-used and trusted Tommy gun marks,” Saeilo says. “Defendant intended to confuse, cause mistake or deceive consumers.”


Saeilo’s suit also claims that Tommy Guns Vodka, which comes in a glass bottle shaped like famous submachine gun, also infringes the company’s trade dress rights to the Tommy gun.


In total, the 10-count complaint against Alphonse Capone Enterprises lists claims of infringement, dilution, false designation of origin and trade dress infringement under the federal Lanham Act, state-law claims of infringement and deceptive practices, and common law unfair competition and and infringement.


The gunmaker wants a permanent injunction barring Tommy Guns Vodka from store shelves, as well as an award of damages, attorneys’ fees and costs.


It wasn’t clear at press time whether the vodka was still being sold. A company website for Alphonse Capone Enterprises, which appeared to be updated infrequently, said the vodka was launched in January 2005. The company couldn’t be reached for comment.


Saeilo has been aggressive in defending its control of the Tommy gun name and look. It sued a company last month for selling toy replica Tommy guns that bore the name, and hit a similar company with a case over toy guns in late 2011.


The case filed in March is still pending; Saeilo eventually dropped the earlier suit.


Saeilo is represented by Boris Umansky of Dennemeyer & Associates LLC.


Counsel information for Alphonse Capone Enterprises wasn’t immediately available.


The case is Saeilo Enterprises Inc. v. Alphonse Capone Enterprises Inc., case number 1:13-cv-02306, in the U.S. District Court for the Northern District of Illinois.




Pernod Ricard pockets £108m in Chivas dividends


Source: The Scotsman


5 April 2013


CHIVAS Brothers, Scotland’s second-largest whisky distiller, has paid dividends worth a total of £108 million over the past 18 months to French parent company Pernod Ricard as demand from emerging markets continues to drive Scotch sales.


The Paisley-based producer – which makes whiskies including Chivas Regal, the Glenlivet and Royal Salute – toasted soaring sales and profits in the year to 30 June, according to accounts filed at Companies House.


The latest financial figures cover the period before a wider slowdown in the growth of exports reported earlier this week by the Scotch Whisky Association (SWA) trade body.


Chivas Brothers – which also owns whisky labels such as 100 Pipers, Passport and Something Special – posted a 17 per cent rise in pre-tax profits to £201.9m on the back of an 18 per cent rise in sales to £610.1m.


Growth in its Scotch business out-stripped that for Pernod Ricard as a whole in 2011-12. The Paris-listed group – which also owns brands including Absolut vodka, Beefeater gin and Jacob’s Creek wines – reported a 9 per cent rise in profits to ?2.1 billion (£1.8bn) on the back of an 8 per cent increase in sales to ?8.2bn. In February, Pernod Ricard warned of slower growth in Scotch sales in Asia during its current financial year, following the handover of political power in China and structural changes in the South Korean market.


No-one from Chivas Brothers was available to give an update on current trading yesterday, but its accounts revealed that the subsidiary has continued to pay hefty dividends to its parent.


A total of £23.6m was paid in the year to 30 June, with the notes to the accounts showing that a further ?69.8m was paid in January and monthly dividends have already totalled £24.9m so far in its current ­financial year, exceeding the previous year’s total.


The accounts showed that the company had also reached an agreement to fund its pension scheme, with a one-off payment of £60.5m and an asset-backed funding structure secured against some properties.


News of the payouts comes just a day after larger rival Diageo – Scotland’s biggest distiller and owner of the Bell’s, Johnnie Walker and Talisker brands – announced that it will build a £50m “super-distillery” near ­Alness in Easter Ross.


The facility – which will become Scotland’s largest malt ­distillery, capable of producing 13 million litres of spirit each year – will dwarf Diageo’s 10.2m-litre Roseisle site, which opened in 2010, and Pernod Ricard’s Glenlivet development, which has been expanded in recent years to produce ten million litres. Alan Gray, a whisky analyst at Edinburgh-based investment software firm Sutherland’s, said large companies such as Diageo and Pernod Ricard were investing in production to meet demand in five-to-ten year’s time.


Export figures from the SWA showed that the volume of whisky sent overseas fell by 5 per cent year-on-year in 2012, which was blamed on the slowdown in the eurozone and changes to duty levels in France. Demand from emerging markets continued to grow.




Diageo’s open offer for United Spirits shares to start on April 10


Source: Economic Times

By Reuters

5 Apr, 2013


UK drinks group Diageo’s mandatory tender offer to buy up to 26 per cent of shares in United Spirits will start on April 10 and end on April 26, a manager for the deal said on Friday.


The price for the tender offer to United Spirits shareholders will remain at Rs 1,440 ($26) a share, JM Financial BSE 1.80 % said in a notice to the Bombay Stock Exchange. United Spirits shares were trading at Rs 1,841 on Friday.




Brits are biggest in-flight boozers


Source: the drinks business

by Patrick Schmitt

4th April, 2013


British air passengers have been voted the heaviest drinkers according to a survey of 700 international cabin crew by Skyscanner.


54% of Brits begin their holiday with a drink in the airport or onboard a flight.


Holidaying Brits beat the Russians into second place according to the travel site, which also polled UK passengers for their reaction to the concept of alcohol-free flights.


According to Skyscanner research, over half of Brits admit to starting their holiday with a drink either in the airport or onboard the plane.


However, 41% of respondents said they would book an alcohol-free flight should it be offered – with a quarter of those saying that this was to avoid the risk of sharing a plane with drunken passengers.


The survey followed a suggestion in November last year by Russian officials to ban vodka on some flights after a report by Russian national carrier Aeroflot identified over 1,000 incidents of drunk passengers being abusive, attacking the crew and fellow passengers and even trying to get inside the cockpit.


Interestingly, the Skyscanner survey also revealed that Brits aged 18-24 were biggest supporters of an in-flight alcohol ban, while travellers from the North East of the UK were most opposed to introducing such a restriction.


Commenting on the findings, Skyscanner’s Victoria Bailie said, “Although British and Russian travellers might be the biggest on-board drinkers, these results are a clear sign that the popularity of alcohol-free flights is on the rise.


“It seems that travellers would prefer to forgo their favourite tipple rather than spend several hours sitting next to someone who has had one too many,” she added.


The survey failed to flag up the fact that Britain’s biggest drinkers are likely to booze more heavily before boarding the plane should an in-flight ban be imposed.




United Kingdom: Street disorder drops after Ipswich bans super-strength alcohol


Police say campaign stopping sale of strong cider and beer is improving safety


Source: The Independent

Martin Hickman

Thursday 04 April 2013


An East Anglian town has seen a dramatic fall in street disorder since most of its shopkeepers banned the sale of super-strength alcohol. Suffolk police said there had been a 49 per cent reduction in “street drinker events” in Ipswich during the first six months of the voluntary Reducing the Strength campaign.


The experiment was launched by police and the Co-op in September amid concern at the behaviour of itinerant drinkers intoxicated by the likes of Tennent’s Super and Carlsberg Special Brew.


At the time, the Government was backing plans for a minimum price for alcohol to stop supermarkets and  off-licences selling ultra-cheap strong cider and beer. Although the Coalition has reportedly since ditched its national plan, Ipswich is half-way through the first year of its local initiative.


At its outset, 53 stores halted the sale of cheap beers, lagers and ciders with an alcohol volume of at least 6.5 per cent. Now, 80 shops are taking part including Tesco, Debenhams, M&S, BHS, Waitrose, Sainsbury’s and Aldi, equating to two-thirds of the town’s 122 stores.


Updating the public on progress, Suffolk police said that between last September and this March the public had reported 94 “street drinker events” to police, compared with 191 events during the same period in the previous year, a drop of 49.2 per cent.


Local businesses have also reported positive effects, with surveys revealing a 20 per cent fall in the number of people stating they witnessed “a high level of street drinking around their premises.” But there was no change in the number of reported crime and anti-social behaviour outside stores owned by the Co-op. Police said that was against a background of falling incidents of crime and anti-social behaviour across the town.


Tim Newcomb, Assistant Chief Constable at Suffolk police, said: “We wanted to reduce the number of stores selling these products and to reduce the amount of crime and anti-social behaviour occurring in and around  off-licensed premises in the town.


“We are far from being able to say that we have fully achieved these aims, but we can say that we are seeing some clear improvements and that the campaign is helping us move towards an even safer town.


“Our results directly related to this campaign in relation to crime and ASB [anti-social behaviour] are limited at this point, but are set against the backdrop of fantastic work carried out by police and partners to tackle issues connected with street drinking in Ipswich. Reducing the Strength will add to these results and will help in providing these vulnerable people with routes out of their chaotic lifestyles.”


The police praised the “fantastic support” independent and national retailers had given the scheme, adding that many had shared its view that removing the products would help the community.


Assistant Chief Constable Newcomb added: “There are still a third of these stores in Ipswich that are continuing to sell these items however, and we will now work with these businesses, along with our partners, to further discuss the benefits of the campaign.”


A significant number of police forces and public-sector agencies across the UK have been in contact with Suffolk police to discuss the campaign, which has the backing of Ipswich Borough Council, Suffolk County Council and NHS Suffolk.




Australia: Industry slams rehashed AIC figures on societal costs of alcohol


Source: The Shout

By Amy Looker

Fri, 05/04/2013


A new report on the costs of alcohol misuse released by the Australian Institute of Criminology (AIC) is based on flawed research, according to two leading industry associations.


Both the Australian Liquor Stores Association (ALSA) and the Australian Hotels Association (AHA) have fired back in response to the AIC study released earlier this week, which ALSA and AHA say is an update of the 2008 Collins & Lapsley report that has since been discredited by leading international economist, Dr. Eric Crampton.


Crampton’s critique of the Collins & Lapsley methodology found that the estimated $15 billion social cost of alcohol misuse per annum was grossly overstated and estimated the real cost to be no more than around $3.8 billion per annum.


According to ALSA’s chief executive, Terry Mott, the AIC report states that over $7 billion of consumers’ money is already collected every year in alcohol taxation, which he says is around double any realistic estimate as quoted by Crampton & Burgess at approximately $3.8 billion.


“The economic cost modelling used in the Collins & Lapsley study were not meaningful, had been shown to be flawed and were not based upon standard economic models,” Mott said.


He added that the focus should remain on creating meaningful debate and developing targeted interventions for high-risk groups, not simply adding another overall tax on all consumers.


“The goal should be to change the behaviours of individuals who drink to get drunk, which is why ALSA also support DrinkWise – a not-for-profit, independent research and social change agency funded by the Australian alcohol industry, that is dedicated to building a safer drinking culture in Australia.”


AHA’s national chief executive officer, Des Crowe, said the hotel industry is also concerned by the AIC’s use of what it describes as “flawed” research.


“There are both costs and benefits of consuming alcohol,” Crowe said.


“Until a more balanced view emerges from the research community that recognises this reality, cost of harm studies should not be used by policy makers to justify further regulation or intervention in the hotel industry.”




Indulge in China’s Latest Export


Source: WSJ


Apr 4th


There are still a few wine-producing countries left on the map that command genuine novelty value. China may boast the world’s fifth-largest vineyard area and a thirsty domestic population that consumes nearly all of its wine, but in fine-wine circles, its presence in Europe is still headline news. True to form, when Britain’s oldest wine merchant, Berry Bros. & Rudd, announced last month that they were stocking four wines from Changyu, China’s largest and oldest winery, a slew of articles appeared detailing this vinous curiosity.


Actually, the rebirth of Chinese fine wine has been a few years in the making. In 2011, I had a first taste: the 2009 Cabernet Sauvignon blend by He Lan Qing Xue. Made in Ningxia, a small, landlocked province in Central China, it won the best red Bordeaux varietal over £10 at the Decanter World Wine Awards. I thought it was a reasonable effort, but certainly not something I would stock my cellar with just yet. So when I heard that Ningxia’s latest export-Château Changyu Moser-was going to be released in London at £39, or ?46, a bottle, my curiosity was piqued.


Armed with a map of China’s wine regions and an open mind, I trotted off to the tasting, which by coincidence landed on the vernal equinox-an appropriate time to challenge my taste buds and try something new.


China has been producing wine of one sort or another since the early days of the Tang Dynasty (around 625). But its modern incarnation dates back to the late 19th century, when Zhang Bishi, a government officer, established the Changyu winery on the Shandong Peninsula. So good were his wines that “The Wine Opus” notes that they received four gold medals at the 1915 Panama-Pacific International Exposition in San Francisco. Today, the Yantai Changyu Group boasts a collection of wineries dotted around China, complete with uncanny replicas of European châteaux.


Château Changyu Moser, an impressive looking property that wouldn’t look out of place on the banks of the Gironde, is one of its best. Their Moser XV, a blend of 90% Cabernet Sauvignon and 10% Merlot, is made in partnership with Austrian wine producer Lenz Moser.


“Against what we have tasted out of China before, it is clearly a big leap up,” says Mark Pardoe, Berry Bros. & Rudd Master of Wine. “It’s a novelty value in that it is something interesting coming out of China but it could be the first stirrings of quite an important plan. If they think they can do this well, they will do it and almost nothing can stop them.”


The wine in question had none of the off-notes or unusual tastes one often associates with new wine regions. It had a nose of ripe fruit and a recognizable structure. At the back of the throat, it left a rather stringent, bitter flavor-an almost green pepper character. This is probably due to the ripeness of the grapes, which I suspect they will iron out in a few vintages.


The three ice-wines the company produces under the Changyu Golden Valley label did more to justify their steep price tag. The aromatics were strong, the fruit was very correct, the aroma profile was as you would expect, but the Gold Diamond fell away a little on the palate.


To compete viticulturally with its international counterparts, China still has a long way to go. Indeed, I could list dozens of wines that I would prefer to drink at the same price. But given it’s the first glimpse of what this vast country can produce, it’s a pretty competent effort. Where they go from here will be fascinating to watch.




New Zealand investors acquire Prophet’s Rock winery


Source: DBR

05 April 2013


A group of New Zealand investors having viticulture interests in the Central Otago region have purchased Prophet’s Rock, a Central Otago-based boutique winery, for an undisclosed amount.


With the acquisition, the winery is set for expansion into the offshore markets.


Founded in 1999 by Mike and Angela Mulvey, Prophet’s Rock produced its first wine in 2005. The winery is mainly known for its Pinot Noir, Dry Riesling and Pinot Gris wines, which are produced by Prophet’s Rock winemaker Paul Pujol from an estate vineyard located in the Pisa sub-region of Central Otago.


Under the acquisition deal, Pujol will become the general manager of the winery, besides handling wine making duties.


Pujol said the acquisition creates new opportunities for the winery, as they can now source grapes from an additional Bendigo vineyard in Central Otago.


“The investment stemming from the purchase means the winery can fully realize its potential,” Pujol added.


“It enables us to bring this second vineyard fully on-stream and gives us the critical mass to expand distribution further into offshore markets.”




German wine stocks at all-time low


Source: Harpers

Written by L’re Burger   

04 April 2013


German wine stocks are at their lowest ever levels since reunification, with high demand also driving up prices.


With an annual production of 9-10 million hl per year, German producers are already selling everything they produce within a year of harvest, said Steffen Schindler, marketing director at the German Wine Institute.


Prices rose in 2010 when only 7.1 million hl were produced following a poor harvest, and remained at the same level in 2011 and 2012 despite production returning to normal levels.


High domestic and international demand, coupled with a run of good vintages, has allowed German wine producers to maintain their prices, he said.


“In the past we used to have two or three bad vintages a decade, and that’s no longer the case. The quality has gone up for even entry-level wines and they’re now starting to fetch the high price these wines deserve.”


Schindler said Riesling has succeeded in completely changing the image of German wines, with the wine industry now considering it as Germany’s key premium wine variety. The rise in popularity of Riesling has led to increased interest in other German varieties, he added.


Germany is also now the world’s third-biggest producer of Pinot Noir, thanks to ideal growing conditions, the climate, its ancient German terroirs, old bush vines and traditional winemaking skills.


“Germany has established itself as Burgundy’s key competitor as a world-class Pinot Noir producer,” said Schindler.


Germany now exports up to 1.3 million hl of wine a year and is hopeful of gaining further rises in its export prices.


Its key export markets are the US, Netherlands, the UK, Norway and Russia, but there is also an increasing demand for German wines in Hong Kong and China.


The German Wine Institute hopes to capitalise on Germany’s strong affiliation with Asian cuisine as part of its ongoing marketing strategy and will be exhibiting at UK consumer shows later this year.




Hugh Johnson cellar to go under the hammer


Source: Decanter

by Chris Mercer

Thursday 4 April 2013

First-growths dating back more than 50 years and a large selection of vintage German wines are among a host of bottles to be auctioned from Hugh Johnson’s cellar.


Johnson said that it was ‘agony’ deciding which bottles to part with for the auction, which will take place on May 16 at Sworders Stansted Mountfitchet salerooms, in north Essex.


The sale, which could raise tens of thousands of pounds, comes as a result of Johnson and his family selling their home of the past 40 years, Saling Hall, also in Essex.


The Elizabethan manor house has five cellars, which Johnson has taken delight in filling with top wines from the 20th Century, including some ‘real gems’.


A provisional auction list seen by reveals a series of first-growths and other top Bordeaux from down the ages, including Latour and Y’Quem 1945, as well as Latour 1937. There is also at least one bottle of Latour 1961; six bottles of the same vintage recently sold for £28,000 at an auction of part of the UK Government’s wine cellar organised by Christie’s.  


There’s a treasure trove of great wines from beyond Bordeaux, including a magnum of Krug Champagne from 1971, three 1830 Malmseys – regarded as a signature vintage – and a large selection of vintage German wines, as well as Burgundies, Spanish and Italian.


Highlights from Johnson’s Burgundy collection include two vintages of DRC Grand Echezeaux, two bottles of La Tache – 1988 and 1999 – and a 2000 Leflaive Chevalier Montrachet.


‘For me, one of the great joys of life is drinking vintage German wine,’ Johnson told this week. He highlighted a strong showing of Scharzhofbergers, largely from Egon Muller, and an assorted collection of wines from Robert Weil, set to include Riesling and Riesling Eiswein.


‘This is the majority of my cellar but by no means the whole thing. There’s nothing [on the list] that I would be ashamed of,’ said the Decanter columnist, author and gardener, who is downsizing his cellar as part of a move to London to be nearer his children and grandchildren.


‘We’re trying to be realistic about what we would actually drink in the next few years.’

The present auction list remains in draft form, but is set to have around 318 lots. Precise details of bottle numbers are not yet available for all the wines, but lots are likely to be bottles rather than case loads.   




Bordeaux 2012: Chateau Raymond Lafon not to release 2012


Source: Decanter

by Panos Kakaviatos

Thursday 4 April 2013


Chateau Raymond Lafon has joined Chateau d’Yquem and Chateau Rieussec in announcing that it will not make a 2012 vintage wine.


Lafon, an unclassified Sauternes producer, told in the build-up to en primeur that a dry September had prevented development of botrytis – the so-called noble rot – which naturally concentrates grape juices whilst imparting spicy flavours that are characteristic of Sauternes.


Chateau co-owner Jean-Pierre Meslier explained that the harvest was too small, describing it as ‘fine and elegant’, but not as ‘concentrated as normal.’


The estate harvested with about 114 grams of residual sugar instead of the chateau’s habitual 130 to 140, he said.


‘When rain fell later in the month, botrytis spread, but more rain than needed in October compromised pickings.’


The best grapes will make ‘an excellent’ second wine: ‘Les Jeunes Pousses de Raymond-Lafon,’ Meslier added.


The last vintage that Chateau Raymond Lafon did not produce any wine was 1974.




Bill Koch’s Bad Trip With Counterfeit Wine Is Cautionary Tale For Collectors


Source: Forbes

Apr 5th


On the evening of Oct. 27, 2005, William I. Koch, the billionaire coal and petroleum magnate, attended an invitation-only, haute cuisine dinner and wine tasting at Daniel Restaurant in New York City, owned by the famed French chef, Daniel Boulud. It was a festive and highly exclusive event, sponsored by Scarsdale, NY-based Zachys Wine Auctions, to promote a sale on the following two days titled, “Over 17,000 Bottles of Greatness.” At the dinner, which according to the invitation would offer “a bird’s eye view of collecting at the high end,” the wine offerings included some of those coming up for auction. Among them were a 1947 Château Latour, and a 1950 Château Latour-wines that could fetch about $10,000 at the sale.


Koch didn’t attend the auction but sent a wine consultant, acting on his behalf, to purchase 2,669 bottles of wine at a total cost of $3.7 million. In the process the connoisseur, who is #329 on the Forbes Billionaires list, added to his collection some fine trophy wines that lived up to the catalog’s billing of “the best of the best.” What he didn’t realize at the time was that he had also acquired 24 fakes.


One was a magnum (a 1.5-litre bottle) of 1921 Château Petrus for which Koch paid $29,500 at the Zachys auction. It turned out to be a deftly assembled fake, manufactured by a former perfumer who went into the wine counterfeiting business. His recipe: add fragrance and flavor to 1957 Château Petrus; re-bottle and re-cork; then top it off with a capsule and a custom-manufactured label. Voila!


That bottle turned out to be a smoking gun in a case on trial in Manhattan federal court in which lawyers and witnesses are duty bound not to drink the evidence. It pits Koch against another avid wine collector: onetime-billionaire Eric Greenberg, who was the consignor of all the wine in the Zachys sale. The catalog did not identify hm, but said he was “incredibly energetic,” and that he amassed his collection “with tremendous thought, energy and great knowledge of wine.” Koch, who could relate to all of this, assumed he was a kindred spirit.


Five years into a lawsuit against Greenberg, he has a different opinion. The case, to recover $355,810, has consumed millions in legal fees. For Koch, it’s largely a matter of principle. Greenberg, the testimony shows, had tried first to sell part of his collection through Sotheby’s and Christie’s auction houses. Both turned him down because they doubted the authenticity of some of the items, which came from sources that they recognized as counterfeiters. In the suit, Greenberg contends that he did not know any of the bottles at issue were counterfeit; and that besides, Koch could have determined their authenticity if he had inspected them before the auction.


Ultimately the jury will decide, but meanwhile the case is a cautionary tale for other collectors. For many collectibles, whether baseball memorabilia, vintage designer handbags, antiques, or minerals, counterfeits are rampant. Collectors can learn some cheap lessons from the negative-and positive-experiences this billionaire described in his court testimony this week.


1. Be passionate. People collect for a variety of reasons. Koch, who collects many other things besides wine, testified, “I collect what I love, what makes me feel good, gives me a great sense of peace and enjoyment. Then I collect things that I think are extremely historical, things that I can look back and say this was part of history.” For example, he owns the only picture of Billy the Kid, Jesse James’s gun and the gun that killed Jesse James.


2. Curb your compulsions. Koch rarely sells any of the items in his collections. “My wife calls me a hoarder because I won’t get rid of the stuff,” he said. He has this trait in common with many collectors, and with some people, it can reach extremes. The late psychoanalyst Werner Muensterberger serves up some pathological examples in his book, “Collecting: An Unruly Passion” (Princeton University Press, 1993). They include Thomas Phillipps, a 19th-century British book collector who abandoned his family, then made financing his insatiable habit the main criterion in courting a second wife. Muensterberger, who collected African art, believed that the pursuit of objects helps compensate for deep-seated trauma, anxiety or unfulfilled childhood needs.


3. Become an expert. With wine, in particular, it’s enormously difficult to distinguish the genuine from the fake. Interestingly, the most reliable sign is not the taste, which can vary depending on everything from how the wine has been stored, to the chemistry of the drinker’s saliva. Packaging is often a more reliable indicator; experts pay particular attention to the label and the cork.


Hiring experts to advise you is the next best thing to becoming one yourself. But hiring a pro who has a financial stake in helping you can be problematic. For example, evidence at the trial showed that the consultant who bid on Koch’s behalf at the Zachys sale was paid based on a percentage of the auction sale price.


Although the potential conflict has not been discussed in the testimony, this gave him an incentive to spend money, rather than rule out certain purchases. Neither he nor Koch inspected the wine, although the auction catalog clearly gave them the right to. That could come back to bite them since this detail is a key part of Greenberg’s defense.


4. Inquire about provenance. In the most literal sense, this refers to previous owners of whatever you’re buying. With some items, it adds to their cachet-as it did with Andy Warhol’s cookie jars, Jacqueline Kennedy’s simulated pearls and Rusty Staub’s game-worn warm-up jersey. With wine, provenance goes beyond previous owners to include “how the wine was kept over the years,” Koch noted. “That’s highly important because wine can deteriorate if it’s not kept properly.”


Likewise, if you find out that the item has passed through the hands of a known counterfeiter; a reseller known to have dealt in counterfeit goods; or a collector who’s been duped, that detracts from provenance. Generally speaking, the rarer the item, the more likely the one you have come across is a fake. The magnum of 1921 Château Petrus is a great example of that.


5. Look past the puffery. Auction catalogs, especially high-end ones, are masterfully written. Wine descriptions may include what are called “tasting notes”-highly poetic language by a wine reviewer. It’s there to entice you, but far more important is what the entry says (or doesn’t say) about the condition of what you’re buying. For example, 12 bottles of wine sold together as an auction lot with the description “two water-stained labels, one corroded capsule, one depressed cork,” signals a relatively undesirable (though more affordable) purchase. “Bin-soiled and nicked label” detracts from the value of the wine, while “fully branded cork” adds to it.


6. Read the fine print. Not surprisingly, the lawyers have a hand in writing auction catalogs, too. They are responsible for the very unpoetic, prefab language known as boilerplate. It’s written to protect the auction house against lawsuits by consumers. Unless the auctioneer has committed fraud, the legal lingo you find under a heading like, “Conditions of sale and limited warranty,” will generally get off them off the hook. Words to the wise: By agreeing to buy something “as is,” you accept all its warts.




Karin, we wish you well!


Grocery Manufacturers Association Appoints Karin Moore Vice President and General Counsel


Source: WSWA

Apr 4th


Grocery Manufacturers Association (GMA) President and CEO Pamela G. Bailey today announced the appointment of Karin F.R. Moore as vice president and general counsel.


“I am pleased to welcome Karin to the GMA team,” said Bailey.  “Her legal skill and trade association management experience make her the logical choice for this position, and I am certain that she will provide great value to GMA and its member companies as we advance the association’s member-driven agenda.”


Ms. Moore joins GMA from the Wine & Spirits Wholesalers of America (WSWA) where she was vice president and co-general counsel.  At WSWA, her responsibilities included coordinating the association’s national litigation strategy, advising on regulatory issues facing wholesalers at both the state and federal levels, and serving on WSWA’s senior management team.


Prior to joining WSWA, Moore was a counsel with O’Melveny & Myers’ Antitrust and Criminal Defense practice groups, where she focused on antitrust litigation, civil and criminal antitrust investigations, and federal and state cartel class actions. Prior to O’Melveny, she held a variety of positions with the U.S. Federal Trade Commission’s (FTC) Bureau of Competition, including counsel to the director and staff attorney with the Anticompetitive Practices Division. She holds a law degree from George Mason University School of Law and is vice-chair of the American Bar Association Section of Antitrust Law’s Trade, Sports and Professional Associations Committee.


“GMA represents many of the world’s most iconic brands and leading companies. I am honored to have the opportunity to serve the food, beverage and consumer products industry,” said Moore.   “I look forward to working with Pam Bailey, the GMA staff and its members to promote pro-growth policies and advocate for responsible public policy solutions that will allow the industry to continue to provide consumers around the world with safe, healthful, affordable products every day.”


Ms. Moore will report to GMA President and CEO Pamela Bailey and will serve as a member of the GMA Senior Leadership Team.  In her new role, she will direct the association’s federal and state litigation activity and provide legal counsel on a host of issues.  She will assume her new post on April 16.




Rite Aid comps down in March


Source: RT

By Alaric Dearment

April 4, 2013


Same-store sales at Rite Aid decreased 2% in March, including a 3.8% increase in same-store sales on the front end and a 4.5% decrease in pharmacy sales.


The 4,621-store chain reported total sales for the month of $1.939 billion, a 2.5% decrease compared with $1.989 billion in March 2012, while same-store prescription count increased 0.3%.


The company said that of the 3.8% increase in front-end same-store sales, 3% came from a shift in timing of Easter, which fell on March 31, as opposed to April 8 last year.


Investment firm Guggenheim Partners maintained its “Buy” rating on Rite Aid’s stock, saying it expected the company to post strong and above-trend growth in EBITDA in its fourth quarter 2012 earnings, which it will report next Thursday. Guggenheim analyst John Heinbockel noted that script count was below the 1.5% recent trendline, and the reason was unclear but appeared to be due to a weakening of the economy, but the firm expects the meaningful generic drug benefit to GM to persist into the first quarter of fiscal year 2014.




Restaurants poised for spring SSS inflection; upgrade PNRA / EAT


Source: Goldman Sachs

Apr 4th


Upgrade two more stocks ahead of a potential spring inflection

Based upon improving consumer sentiment, continued job/wage growth, and easier upcoming SSS compares, we upgrade two Restaurant stocks – PNRA and EAT – heading into a potential spring SSS inflection. A primary basis for our more bullish stance is the result of our latest survey of 2,000 consumers. It was completed mid-late February, thus incorporating the impact of the 2% payroll tax hike, higher gas prices, and delayed tax refunds. Despite these headwinds, consumers reported increased optimism and intent to spend, especially among high-income households (our companion report from today is Bullish on the US consumer, especially at the high end).


PNRA (CL-Buy): A preeminent growth story that has lagged

We upgrade PNRA to Buy and add the shares to the Americas Conviction List with 30% upside to our $215, 12-month price target. PNRA has a strong unit growth trajectory, SSS are solidly in the mid-single digits, margins are ramping, and FCF deployment is increasingly robust. A spring traffic inflection driven by easier compares, a new ad campaign, and new products may serve as a catalyst after a period of underperformance.


EAT (Buy): Solid traffic growth is the last piece of the puzzle

We upgrade EAT to Buy with 17% upside to our $44, 12-month price target. We have appreciated its cost cuts, FCF deployment, and international growth and believe that solid traffic growth may serve as the last key piece of the puzzle. It is accelerating remodels, something that is showing up in our survey as significantly improved brand scores. We believe this along with easier compares and new product launches will serve as a catalyst.


DPZ (Buy): Remove from Conviction List after outperformance

We remove DPZ from the Americas Conviction List, as the shares have approached our prior price target. We retain our Buy rating, as we believe DPZ’s long-term fundamentals and growth potential remain intact.

Other key brand-specific findings in our survey


SBUX – Starbucks rose to the highest scoring brand in our survey driven by higher “likelihood to recommend” scores and improved value scores.


CMG – We believe Chipotle’s “cool factor” may be wearing off as our survey suggests lower conversion scores among younger age cohorts.

We revise select estimates and price targets across coverage.


We also revise the P/E-based portion of our price target methodology.




Pennsylvania: City considers hiking liquor-drink tax to 15 percent




April 4, 2013


Need a reason to drink? How about improving the futures of Philadelphia’s school kids?


Mayor Nutter and City Council are rarely on the same page these days, but the possibility of increasing the “liquor by the drink” tax to help pay for the School Reform Commission request last week for $60 million seems to be gaining traction on both sides.


City Council President Darrell Clarke has pledged support for increasing the tax, which now adds 10 percent to your bar tab (on top of the sales tax) and sends it to the schools. Nutter said Thursday that it’s an option his administration is considering.


In 1994, then-Councilman Nutter voted in favor of creating the tax, which now brings in more than $45 million per year.


“President Clarke and I have talked about that and I am certainly interested in that kind of proposal, but my track record on that one is pretty clear,” Nutter said. The 1994 bill “was a tough vote for a lot of folks but I thought it was the right thing to do then and it’s certainly something that we should explore now.”


Clarke spokeswoman Jane Roh wrote in an email that the Council president “supports increasing this tax to bolster an annualized revenue stream for the schools.”


Pat Conway, president of the Pennsylvania Restaurant and Lodging Association, said that while businesses don’t like the tax, it’s the customers who usually absorb its cost.


“It would be a tough pill to swallow for restaurants and taverns and for the entire hospitality industry, but it’s actually more of a consumer issue,” Conway said.


The possibility of increasing the tax by half (to 15 percent per drink) has been floated. That’s no silver bullet cocktail shaker for fully funding the schools’ request, so Council and the mayor would have to find money in other places to reach the $60 million the schools say they need to plug their enormous budget gap.


Nutter supports funding the request but has been elusive as to how he wants to get that done. On Thursday he addressed criticism that his administration hasn’t yet presented a plan, saying he wants to first develop one with Council.


“We don’t have a plan today and we certainly don’t have all the answers today, and we don’t have to have a plan and all the answers today. Our budget process, at least under the Charter, is completed by the end of May,” he said.


Some in Council, including Clarke, have not committed to providing the full $60 million, arguing that after two years of city property-tax hikes for the schools, it’s Harisburg’s turn.


Nutter, however, said Thursday he thinks Philly needs to show its commitment first to get more money out of the state.


“It would put us at that much worse of a situation from a discussion or negotiation standpoint to somehow seek additional funding from the Commonwealth of Pennsylvania . . . while some might suggest that the city would not be putting dollars on the table,” he siad. “I have to reject that kind of strategy.”




Kentucky: Beshear signs bill lifting Prohibition-era ban


Source: WDRB

Apr 04, 2013


Gov. Steve Beshear has signed legislation lifting a Prohibition-era ban on the sale of alcohol at restaurants, bars and retail stores on Election Day.


The House and Senate voted overwhelmingly last month to allow alcohol sales during hours that polls are open.


Kentucky and South Carolina are the only two states that have such bans in place. In the past five years, similar bans have been lifted in Delaware, Idaho, Indiana, Utah and West Virginia.


Beshear signed the Kentucky legislation on Thursday.


Election Day alcohol was one of a handful of provisions in the legislation. Beshear touted the legislation Thursday as a measure that modernizes the state’s liquor laws and makes it easier for the alcoholic beverage industry to do business in Kentucky.


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