Franklin Liquors
Monday April 8th 2013
Great Day For Red Sox Home Opener!
AB InBev clears hurdle over Modelo deal
Source: FT
By David Gelles in New York
April 6th
The biggest beer deal in years looks set for completion as Anheuser-Busch InBev said on Friday it had reached an agreement with the US Department of Justice on antitrust challenges to its $20bn move for Grupo Modelo.
The settlement will allow AB InBev to move ahead with the deal, giving the Belgian brewer full control of the Mexican maker of Corona and other popular beers. A final settlement will be postponed until April 23, giving all parties time to complete the paperwork and obtain final approval from a judge.
AB InBev made its move for the half of Grupo Modelo it did not already own last June, the latest effort by the world’s largest brewer to increase consolidation in the beer market.
The DoJ objected in January, throwing a spanner into one of the biggest cross-border deals of 2012 by saying it would lead to price increases and hurt competition.
The justice department’s move came after five US senators raised concerns about AB InBev’s ability to put pressure on independent distributors to stop selling rival brands and craft beers.
In February AB InBev offered to offload assets and licences in an attempt to win regulatory approval. The concessions included agreeing to sell to rival Constellation Brands its Piedras Negras bottling plant, a high-tech facility near the US border that AB InBev had initially resisted selling.
It will also sell to Constellation the US rights to the Corona and Modelo brands for $2.9bn. The proceeds will help AB InBev offset the revenues from the US rights to Corona and Modelo that it will no longer enjoy.
When it announced its proposed concessions in February AB InBev also said it had found an extra $400m-$1bn in annual synergies.
As part of the original deal AB InBev will also sell Modelo’s 50 per cent stake in Crown Imports, a US joint venture, to Constellation for $1.85bn. The moves will position Constellation as a more robust competitor.
The DoJ said: “As we have said all along, any settlement would have to fully protect US consumers by preserving the competition that Grupo Modelo currently provides, while giving a divestiture buyer the freedom and capability to compete vigorously.”
AB InBev shares were up slightly in after-hours trading, after falling 2 per cent on Friday. They are up 33 per cent since the group announced the deal to take full control of Modelo.
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Diageo rejects raising United Spirits bid
Source: FT
By Louise Lucas
April 5th
Diageo is unlikely to increase its holding in Indian group United Spirits after it opted not to raise the price for its mandatory takeover offer above Rp1,440 a share.
The maker of Johnnie Walker whisky and Smirnoff vodka is buying a 27.4 per cent stake in United Spirits, which is controlled by mercurial liquor baron Vijay Mallya, triggering a mandatory offer to shareholders under Indian stock market rules.
However, the distilling group is sticking with the Rp1,440 price paid to acquire shares directly from United Breweries. That price represented a 35 per cent premium over the close on September 24, the day before the talks were announced, but is sharply below the Rp1,755 close on the Bombay Stock Exchange on Friday.
Failure to scoop up more shares neither scuppers the deal nor represents a setback for Diageo. The world’s biggest distiller, as measured by profits, faced a similar situation in China when it acquired a controlling stake in baijiu maker Shui Jing Fang at a price well below where the shares were trading at the time of the mandatory takeover bid.
The United Spirits acquisition followed years of on-off talks as Diageo pushed for control. The structure of the existing deal gives it power to appoint the top two executives of United Spirits, and it will also control voting rights as Mr Mallya’s United Breweries will vote with Diageo for four years.
Diageo said on Friday: “Diageo believes that a shareholding in excess of 25.1 per cent, together with the voting arrangements and other governance arrangements agreed with UB Holdings and its relationship with Vijay Mallya as chairman of United Spirits, would enable Diageo to control United Spirits and therefore consolidate the results of United Spirits in the event that it does not acquire a majority interest.”
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Buffalo Trace Distillery breaks ground on new experimental warehouse
Warehouse X to enhance whiskey research in search of the Holy Grail
Source: The Lane Report
April 5, 2013
Buffalo Trace Distillery broke ground Friday on an experimental barrel warehouse that will allow the distillery to take its quest for the “perfect bourbon” even further.
Named Warehouse X, this warehouse is the first new building Buffalo Trace has added to its 130-acre complex in more than 60 years. Comprised of brick, concrete block and skylights, this structure is no ordinary barrel warehouse. With a small footprint of only 30 feet by 50 feet, Warehouse X will have a capacity of around 150 barrels.
Its most compelling feature, however, is four independently operating chambers that will allow specific variables to be tested, in order to determine their effect on aging barrels. There will also be a barrel breezeway with an open-air rick, underneath a roof, that will allow a small number of barrels to age while being exposed to the natural elements.
The first four variables Buffalo Trace plans to experiment with are natural light, temperature, airflow and humidity. Warehouse X will test one variable at a time. For example, the first experiment will focus on the effect of natural light for at least two years. Each chamber will have varying degrees of light, ranging from 100 percent natural light to complete darkness. After the natural light experiment is concluded, a new experiment will start on temperature, and then studies will start on the effects of humidity, and so on.
Warehouse X is projected to be finished by August 2013, but the construction progress can be tracked via a blog updated frequently at www.experimentalwarehouse.com.
Upon completion, visitors to Buffalo Trace Distillery will be able to walk around Warehouse X and learn about the current experiment occurring inside.
“It’s no secret that we’re on the hunt to find the Holy Grail of bourbon,” said Harlen Wheatley, master distiller. “By building this experimental warehouse, we’ll be able to keep a tight control on the variables that affect the barrel aging process and can make changes along the way to the aging environment that will hopefully allow us to one day come up with the perfect bourbon.”
The whiskeys that will be aging inside Warehouse X will be bottled under the Experimental Collection line. It will be a minimum of eight years after the warehouse is complete before any whiskey will be bottled from Warehouse X.
Buffalo Trace Distillery is a family-owned company based in Frankfort, Ky. It is a fully operational distillery producing bourbon, rye and vodka on site and is listed on the National Register of Historic Places.
To learn more about Buffalo Trace Distillery visit www.buffalotracedistillery.com
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Global I/O®: US Beer – Nielsen data Beer Weakens on Tough Weather Comp
Source: UBS
Apr 5th
Input: Providing Perspective on a Critical Channel
Convenience stores represent 30-35% of beer volumes, 3-8pp higher than “AOC” (Food, Drug, Mass & Walmart). Despite this reality, much of the focus on scanner data has been on AOC (11% more beer is sold in C-store than AOC). ABI dominates C-store with 60% volume share, versus nationally. MillerCoors sources evenly from AOC/C-Stores, while Craft and Imports skew far more heavily toward AOC channels. By adding C-store analysis to our AOC analysis, we are more than doubling our off-premise visibility.
Input: March data Weak and February Strength Restated to Weakness
In C-store, over the last 4 weeks through 3/16/13, Beer dollar sales were -0.4% through -3.2% volume growth and 2.8% price/mix. Nielsen restated its beer data for the 4wks ended 2/16/13 in a meaningful manner. Rather than dollar sales up 4% on +1.1% volume growth, the Feb 16th 4 week period was +1% on -1.8% volume declines – a 3pp downward revision. In the latest period, ABI remained the pricing leader (+3%), but with volumes down 5.1%. MillerCoors volumes were -2.1% (-1.5% over last 12wk), with +1.8% in pricing. This represents the second volume share gain period for MC in our dataset. Volumes at Crown Imports remained strong, up 8%, while Boston Beer slowed in the c-store, with volumes +2% (+12% over last 12wks).
Output: Issue Facing Consumer Impacting Beer Sales
We reiterate our Buy on ABI & STZ and our Sell on SAM.
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Beer: Nielsen C-Store Data Analysis: Category Dollar Sales Decline 0.4% YoY, As Pricing Strategies Remain in Focus
Source: CITI
Apr 5th
Beer C-Store Dollar Sales Decline – In the four-week period ended Mar. 16, 2013, c-store beer dollar sales fell 0.4% YoY (vs. +1.0% last period and +4.2% over the last 52 weeks). The decline was driven by a 3.2% decrease in volume sales (vs. -1.8% last period and +0.8% over the last 52 weeks), partially offset by a 2.8 pt contribution from price and mix (vs. +2.8 pts last period and +3.4 pts over the last 52 weeks). We note that across the major manufacturers, price gap management remains a key focus, as the companies that took less pricing than the category average largely posted outsized or improved volume growth.
MillerCoors Volume Share Trends Improve – TAP’s MillerCoors JV gained volume share for the second consecutive month, +0.3 pts YoY (to 26.4%). In the period, volumes were down 2.1% (vs. -1.1% last period and -0.4% over the last 52 weeks). Meanwhile, dollar sales were down 0.3% YoY (vs. +0.8% last period and +2.4% over the last 52 weeks), as the company saw a 1.8 pt benefit from price/mix (vs. 1.9 pts last period and 2.8 pts over the last 52 weeks).
Crown Imports Continues to Outperform – STZ’s Crown Imports JV continued its relative outperformance, posting dollar sales growth of 8.8% YoY (vs. +7.5% last period and +13.3% over the last 52 weeks). Volumes were the key driver once again, +8.1% in thee period (vs. +6.7% last period and +12.5% over the last 52 weeks), as Crown realized a modest 0.7 pt benefit from price/mix (vs. 0.8 pts last period and 0.8 pts over the last 52 weeks). Looking ahead, we’ll continue to monitor the margins for the Crown Imports business (as we believe growth is primarily being driven by the lower-priced Modelo Especial brand), as well as the company’s price gap management (given our expectation that Crown’s falling price gap has been a key driver of market share gains).
Boston Beer’s Growth Decelerates Notably – SAM saw its dollar sales growth decelerate for the second consecutive period, to +3.1% YoY (vs. +7.1% last period and +14.4% over the last 52 weeks). The company’s dollar sales growth in the period was driven by a 1.6% YoY increase in volumes (vs. +6.3% last period and +12.4% over the last 52 weeks) and a 1.5 pt contribution from price/mix (vs. 0.8 pts last period and 2.0 pts over the last 52 weeks). Looking ahead, SAM will continue to face challenging dollar sales growth and volume sales growth comps (in the HSD to LDD range) over the remainder of 2013, such that we will be interested to see whether the company can post a re-acceleration in its growth trends.
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Vodka maker CEDC files for bankruptcy, Tariko to gain full control
Source: Reuters
Apr 8th
Poland’s Central European Distribution Corp <CEDC.O>, seeking to reduce its debt load, has filed for a pre-packaged bankruptcy that will give Russian businessman Roustam Tariko full control of the vodka producer, a court filing showed.
CEDC, which makes Absolwent and Parliament vodka and is a market leader in Russia, Hungary and Poland, has struggled with financial problems and the resignation of its chief executive.
A spat with Tariko ended last December when it ceded operational control to him in exchange for up to $65 million (42 million pounds) in funding.
The Chapter 11 restructuring plan, which was approved by the company’s creditors, will slash about $665.2 million in debt from the company’s balance sheet.
The filing showed CEDC had liabilities of $1.74 billion and assets of $1.98 billion.
If Delaware’s bankruptcy court approves the plan, Tariko’s Roust Trading will end up owning 100 percent of the company’s outstanding stock.
Holders of the existing 2016 notes which have claims totalling $982.2 million, will receive $822 million, consisting of $172 million in cash, $450 million in new secured notes and $200 million in new convertible notes.
Holders of 2013 notes who participate in the plan, will receive about $55 million, comprised of $25 million in cash and $30 million in secured notes issued by Roust Trading, resulting in an estimated recovery of 35.4 percent.
In a prepackaged bankruptcy, management negotiates the general terms of a bankruptcy plan with major creditors prior to the filing.
The case is Central European Distribution Corp et al, Case No. 13-10738, U.S. Bankruptcy Court, District of Delaware.
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AB InBev Plans Acquisitions to Boost China Market Share
Source: Bloomberg News
Apr 8, 2013
Anheuser-Busch InBev NV (ABI), the world’s biggest beermaker, plans acquisitions in China as beer consumption rises in its third-largest market.
Business in China is growing at a “double-digit” rate, “so that’s very good,” Chief Executive Officer Carlos Brito said yesterday at the Boao forum in Hainan, China. “We also have plans for inorganic growth because we have parts of the country where we have no breweries but where we sell our brands. It makes sense to have the production place closer to the consumption place.”
The Leuven, Belgium-based maker of Budweiser beer will boost capital spending globally to $3.7 billion this year as it increases investment in capacity expansion into Brazil and China. Brito, who spearheaded a bid for Mexico’s Grupo Modelo SAB, said the growth potential of the beer market in China was “humongous,” with per-capita consumption levels of the beverage much lower than elsewhere in the world.
The beermaker plans to build breweries in western China over the next three years and will focus on expanding beyond the coastal provinces, the CEO said.
AB InBev made an unsuccessful bid to buy Guangdong, China- based Kingway Brewery Holdings Ltd. (124)’s beermaking assets last year. China Resources Snow Breweries Ltd., which SABMiller co- owns with government-backed China Resources Enterprise Ltd. (291), agreed to pay HK$6.6 billion ($850 million) for the assets on Feb. 5.
AB InBev gained 0.9 percent to 75.79 euros as of 9:25 a.m. in Brussels. Among Chinese brewers, Tsingtao Brewery Co. gained as much as 5.1 percent to HK$49.75 in Hong Kong trading; Beijing Yanjing Brewery Co. rose as much as 3.4 percent to 6.05 yuan in Shenzhen and China Resources rose as much as 2.7 percent in Hong Kong.
Brito said the beermaker has two weeks to submit the final agreement to the U.S. Justice Department on the purchase of Modelo, after receiving agreement in principle for it. The final document would be very similar to the revised offer submitted by the company on Feb. 14 this year, he said.
The brewer agreed in June last year to buy the remaining 50 percent of Modelo it doesn’t own for $20.1 billion, giving it full ownership of the maker of Corona. After being sued by the Department of Justice, it amended the terms of its acquisition on Feb. 14 to try to appease competition authorities in the U.S.
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Seven die in Grupo Modelo accident
Source: FT
By Adam Thomson in Mexico City
Apr 8th
Grupo Modelo, the maker of Corona Extra beer, said that seven workers had died in an accident at its Mexico City brewery.
The company, which is currently the target of a $20.1bn takeover bid by Belgium-based Anheuser-Busch InBev, said that the workers died early Sunday while carrying out cleaning and maintenance work in a confined area of a cistern. Media reports speculated the workers inhaled toxic fumes but the company declined to give details.
Mexico’s largest brewer by volume said it had informed the families of the deceased as well as the authorities. “We are carrying out the corresponding investigations to find out the causes of the accident,” Grupo Modelo said.
The accident occurred at the company’s Mexico City brewery, where Modelo started its operations in 1925, according to the company’s website. A Modelo spokeswoman told the Financial Times that production had not been affected.
The tragedy comes as AB InBev, the world’s largest brewer by volume, and which last year recorded revenue of $39.8bn, is trying to acquire the 50 per cent of Grupo Modelo that it does not already own.
On Friday, Grupo Modelo, whose Corona brand is the US’s best-selling imported beer, said that it, AB InBev and two other beer companies had reached an agreement in principle with the US Department of Justice over AB InBev’s planned purchase of the rest of Modelo.
In January, the DoJ brought a lawsuit to block the proposed deal over concerns that it could lead to higher beer prices in the US.
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Vodka firm Synergy’s sales fall after tax hike
Source: Reuters
by Maria Kiselyova; Editing by Megan Davies and Tom Pfeiffer
Fri, Apr 5 2013
Russian vodka firm Synergy said on Friday that first-quarter sales of its own brands fell by 30 percent after an increase in excise tax prompted retailers to bring purchases forward to the previous quarter.
Russia has been tightening regulation of alcohol sales to curb drinking, with measures including an increase in the minimum vodka price, a ban on advertising in all media and tax increases.
The excise tax on spirits has risen by about a third, prompting distributors and retailers to buy additional volumes in the fourth quarter before the increase came into force at the beginning of 2013.
Synergy, maker of Beluga and Russky Lyod vodka brands, said sales of its own products amounted to 1.9 million decilitres in the January-to-March period, compared to 2.7 million in the same period of 2012.
Chief Executive Alexander Mechetin said he was cautiously optimistic that sales would rise in full-year 2013.
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PERNOD RICARD: Completion of the acquisition of the shares in Le Maine au Bois SAS
Source: 4-Traders
04/05/2013
Further to our previous press release on February 11th 2013, Pernod Ricard announces the completion of the acquisition of the shares in Le Maine au Bois SAS.
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Hard cider is filling more Americans’ beer glasses
It now garners a mere fraction of market share, but some big brewers are making major moves to expand its reach.
Source: MSN Money
By Jason Notte
April 5th
In Ireland, the U.K. and elsewhere, beer and hard cider coexist peacefully on adjacent taps at the local pub as equals. Hard cider hasn’t quite earned that respect in the U.S., but it’s coming.
The Craft Brew Alliance (BREW -0.13%), which produces Widmer Brothers, Redhook and Kona beers, announced the launch of its Square Mile Cider Company brand on Tuesday, and it says original and Spur and Vine varieties should be available on the West Coast starting in May.
That in itself isn’t such a big deal. But added to Samuel Adams producer Boston Beer’s (SAM -1.24%) jump into the cider industry, Anheuser-Busch InBev’s (BUD -1.96%) cider experiments and a recent spate of cider company buyouts, these are big moves by brewers to get a small piece of a growing segment.
Hard cider accounts for less than 1% of the total U.S. beer market, according to market research firm Symphony IRI. However, cider sales in chain and convenience stores brought in $450 million in 2011 and jumped 84.5% last year. That outpaces the 1.5% growth of the overall beer market, the 5.6% growth of wine and even the 17% growth of craft beer during the same span.
According to market research firm Nomura Research, beer companies have a whole lot of incentive to pick apples and get into the cider game. Roughly half of cider’s drinkers are women, who make up only about 20% of all beer buyers and drinkers. Cider also sells for an average of $35 a case, well above the $29-a-case paid for imported beers and the $33 brought in by craft beer.
Simply put, cider expands both demographics and income while still pouring the same 4.5% to 6.5% alcohol by volume served to the average beer drinker.
It hasn’t taken long for brewers to figure this out. In February 2012, MolsonCoors (TAP -1.69%) and SABMiller joint U.S. venture Miller Coors bought Minnesota-based craft cider producer Crispin for a reported $40 million. They plan to put it in their Tenth and Blake stable of craft and import beers. Last April, Boston Beer launched its Angry Orchard cider brands, which leaped into Nielsen’s (NLSN -0.97%) Top 10 beer growth brands by year-end. Angry Orchard grabbed 0.1% of the beer market’s volume and 0.2% of its share, which is noteworthy because all ciders combined made up 0.2% of the beer market in 2011.
Anheuser-Busch InBev, meanwhile, quietly launched its Michelob Ultra Light Hard Cider, but it stayed relatively quiet compared to the biggest player in the cider industry. Ireland’s C&C Group — which already produces Bulmer’s and Magners ciders — dipped a toe into the U.S. cider industry in 2011 by paying $25 million for California-based Hornsby’s ciders. It made a far bigger splash in December, when it purchased Woodchuck Cider maker Vermont Hard Cider Co. for $305 million.
Does any of this make cider any more respected or normal than it was in years past? The growth and evolution of cider in the last decade or so say yes. Once a syrupy sweet concession to young non-beer drinkers, cider has learned from small beer brewers and began offering seasonal and specialty batches flavored with maple, ginger and elderflower.
When Square Mile Cider launches from its home base in Portland, Ore., it will be surrounded by small West Coast ciders like Ace, Spire, Tieton, Blue Mountain and Wandering Aengus, and may even find its way into Bushwhacker Cider, Portland’s cider-only taphouse.
Cider may not be in America’s beer club yet, but drinkers are definitely saving it a place at the bar.
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Topless beer cans set to revolutionise art of drinking brew
Source: ANI
April 05, 2013
A brewery from Pennsylvania has debuted a beer can in which the entire lid is lifted, so that the drinkers can sip from it as a normal cup. Many craft beer outfits have turned to aluminium in recent years, including Sly Fox Brewing Company, however, the small openings allowed by conventional beer cans make it difficult to enjoy a beer’s smell and Sly Fox’s 360 Lid seeks to remedy that problem, the Huffington Post reported.
The firm’s head brewer Brian O’Reilly told Today.com that the technology allows the full flavour and aroma of the beer to hit the drinker’s senses.
Sly Fox is the first outfit in North America to use the new lid; it had been originally developed by Crown Beverage Packaging in partnership with SABMiller and debuted at the FIFA World Cup tournament in South Africa in 2010.
Helles Golden Lager is a German-style beer, which is made with imported German Pils malt and Saaz and Hallertauer hops.
According to the New Jersey Star-Ledger, the company is planning to roll out a 360 Lid-version of another of its brews: Pikeland Pils, a light-bodied, North German-style Pilsner with a dry flavor.
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Stop and Drink the Flowers
Source: WSJ
Eric Felten
Apr 5th
Artisanal distillers are taking a new approach to gin.
GIN HAS ALWAYS BEEN the worldliest of spirits. Its neutral liquor base is traditionally flavored not only with juniper berries, but also with exotic botanicals harvested all around the globe, from Asian cassia bark to citrus picked in the Mediterranean and West Indies to herbs, such as orris and angelica, found anywhere in between. It’s no accident that gin was the drink of empire.
Now artisanal distillers are taking a new approach to gin, rooting it in flavors and aromas closer to home. That’s the idea behind Terroir Gin (45% ABV, $35) from St. George Spirits in Alameda, Calif. Master distiller Lance Winters roams around nearby Mount Tamalpais, collecting California bay laurel, Douglas fir and coastal sage. Those and other local botanicals help create what he calls “gin with a real sense of place” (it just happens to be delicious, too).
In Spokane, Wash., Dry Fly Distilling is making soft, floral Dry Fly Gin (40% ABV, $30) flavored with hops from Yakima Valley, spearmint from Moses Lake and lavender from Pend Oreille River. And if Dry Fly captures Eastern Washington’s wild, scrubby terrain, the Botanist Gin (46% ABV, $40), from the distillery that makes Bruichladdich single-malt whisky, is a bracing portrait of the windswept Scottish island of Islay. They start with the basics-juniper berries, orris root, coriander. Then they give the gin an Islay accent with wild botanicals handpicked on the island: flowers from such native plants as heather, hawthorn, elder, gorse and creeping thistle; leaves of wood sage, sweet cicely, water mint and mugwort.
Nothing wrong with the old imperial style. But these gins offer a more specific sort of pleasure.
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Should States Get Out of the Booze Business?
Source: Stateline
By Melissa Maynard
Apr 4th
Pennsylvanians love to complain about their state’s tangled system for alcohol sales. Consumers can’t buy wine at grocery stores and have to go to a state-run store if they want to purchase that or hard liquor. Bars and restaurants are the only outlets authorized to sell six-packs of beer, while beer-specific stores, licensed to sell only by the case or the keg, are the go-to source for variety and volume.
Earlier this month, the Pennsylvania House voted to privatize wholesale and retail liquor sales, bringing the state closer than it’s ever been to overhauling a system put in place just after Prohibition. But changing a state’s alcohol sales system is never simple.
Seventeen states have an agency charged with overseeing the wholesale or retail sale of liquor or wine, but only Pennsylvania and Utah exert complete control over all such sales. The roster of “control states” (see map) hadn’t changed significantly in decades until last June, when Washington privatized its state-run system, becoming the first state since the 1930s to completely abandon its role in both retail and wholesale liquor sales.
One reason it is difficult to change the status quo is that alcohol sales involve deeply entrenched interests – with even deeper pockets. Liquor stores, grocery stores, bars and alcohol distributors all feel the impact when a state alters its policy. According to the Distilled Spirits Council of the United States, an industry group, the beverage alcohol industry contributes $400 billion to total annual U.S. economic activity, including $90 billion in wages and 3.9 million jobs.
Meanwhile, some advocates complain that debates over privatization often revolve around state revenues and private profits rather than public health and safety. “People have forgotten the primary reasons for regulation and the specific reason for the control system, which was to eliminate the profit motive from the sale of alcohol,” said Pamela Erickson, CEO of Public Action Management and former executive director of the Oregon Liquor Control Commission.
The Community Preventive Services Task Force, an independent body appointed by the director of the U.S. Centers for Disease Control, recommended against further privatization of state liquor operations after a February 2011 review of existing research.
The task force noted that privatization typically results in alcohol being sold on more days for longer hours, a boost in advertising, more outlets selling alcohol and looser enforcement of rules, such as the minimum drinking age. It found “strong evidence that privatization results in increased per capita alcohol consumption, a well-established proxy for excessive consumption and related harms.”
In Pennsylvania, Republican Governor Tom Corbett has made privatization a top policy priority, but it is uncertain how the state Senate will deal with the House-approved privatization measure when it reconvenes April 8.
Few Pennsylvanians love the current system, but most people are so used to it they are afraid of what any changes would do to their bottom line – and their bar tabs. “Any time you try to make a change, other licensees are impacted,” said Republican state Representative Mark Mustio, sponsor of the privatization plan that passed the House. “Because of that, it has always been very difficult even to do anything of a minor nature.”
Pennsylvania’s Plan
Mustio said his plan aims for a smooth transition. There are tax breaks and education vouchers to help the 5,000 state store employees who would lose their jobs because of privatization, and the existing beer distributors would be given preference for licenses that would allow them to stock their shelves with liquor and wine. They would be allowed to sell beer in six-packs or even in “growlers,” reusable containers that consumers can bring back and refill.
Mustio said he was strongly influenced by a recent visit to Washington state, where he talked with consumers at retail outlets and met with officials from the Washington State Liquor Control Board. While state stores in Washington had to shut down immediately, Mustio’s plan would gradually shutter Pennsylvania’s state stores as private sellers get up and running.
Mustio blames higher taxes and fees in Washington state for the rise in average prices that has occurred since privatization there (up $1.60 per liter, according to the Washington Department of Revenue). He said he wants Pennsylvanians to enjoy the convenience, competition and choice he witnessed in Washington.
Still, his bill hasn’t earned the support of some key constituencies, notably the union representing state store employees and the Malt Beverage Distributors Association of Pennsylvania. “You go through their laundry list of what they want, and you give it to them,” Mustio said of the Malt Beverage Distributors Association. “But still they’re against it. They want to be the only outlet allowed to sell any type of alcohol.”
Mark Tanczos, who heads the Malt Beverage Distributors Association, said the beer distributors he represents already are feeling pressure from new entrants to the marketplace, including grocery stores that have opened up in-house restaurants so that they can sell six-packs of beer to-go. “This change makes our demise even quicker, because how do we compete with these large corporations that have been unfettered for years?” he said.
Even though Mustio’s proposal would allow distributors to sell liquor, wine and six-packs of beer – a change they’ve been asking for since 1937 -Tanczos worries that chain stores and liquor giants from out-of-state would drive them out of business.
Washington’s experience
In Washington, a variety of outlets have long been allowed to sell beer and wine. Still, a similar battle has been playing out there among large and small retailers. Costco spent about $20 million to promote the November 2011 ballot initiative that privatized hard liquor sales in the state. The initiative allowed smaller retailers to bid for the former state sites that were put up for auction, but allows only retailers with more than 10,000 square feet of space to sell spirits at a new location.
Smaller retailers paid $49,600 to $750,000 in the auction, but many of them have suffered buyer’s remorse. “A third of us are already bankrupt or were never able to open,” said David Cho, a board member of the Washington Liquor Store Association. Cho said the liquor store he owns in Tacoma is operating at a loss because of competition from neighboring big-box stores and expensive state fees, including a 17 percent charge on sales to restaurants and bars that he was told wouldn’t apply to those sales. “Once the auction happened, they changed the rules,” he said. The Liquor Store Association is lobbying to remove the fee on sales to bars and restaurants.
Cho agrees with privatization advocates that the state shouldn’t be in the liquor business, but he wishes Washington had taken a more thoughtful approach. “A free market economy is always a good idea,” he said. “However, it’s a state’s job to promote competition and to protect small business owners. Eventually in Washington state, you’ll only have big-box stores, and the small business owners will be wiped out.”
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States still stuck in Prohibition: Column
Source: USA Today
Matthew Brouillette
April 6, 2013
It’s still a commonplace occurrence for states to meddle in the booze business — even when a majority of citizens support reversing this archaic public policy.
Eighty years ago, baseball was still segregated, Social Security was non-existent and it was illegal to buy alcohol in the United States. Times have changed, and Prohibition has since ended — except for a few holdout states that have failed to evolve their laws to coincide with changing national attitudes towards liquor.
It’s still a commonplace occurrence for states to meddle in the booze business — even when a majority of citizens support reversing this archaic public policy. In recent years, policymakers in Alabama, Idaho, Ohio, North Carolina, Pennsylvania, Texas and Virginia have all tried to end the government control of liquor sales without success.
The news isn’t all dismal, however. Last year Washington voters chose to kick the government out of the alcohol business, and just last week Pennsylvania lawmakers approved a privatization bill in the House of Representatives. An epic fight is now brewing in the Pennsylvania Senate between the defenders of the status quo and the friends of liquor liberty.
Pennsylvania’s battle highlights many of the issues facing the pro-privatization lobby in control states, though its system is more broken than most. It’s one of only two remaining states with a complete government monopoly over the sale of any type of alcohol other than beer, both wholesale and retail.
When the state created the Pennsylvania Liquor Control Board in 1933 following the passage of the 21st Amendment, then-Gov. Gifford Pinchot said it would “discourage the purchase of alcoholic beverages by making it as inconvenient and expensive as possible.”
To that end, government has been successful and Pinchot’s legacy lives on. While most of the country enjoys the freedom of walking to the corner grocery store to buy a bottle of wine or a six-pack of beer, Pennsylvanians face the annoying prospect of driving to the nearest government-run store — “nearest” often being a loose term — for wine or spirits, a distributor or tavern for beer, and making a third stop for groceries.
All of this could soon change, as the House vote shows. But standing in the way to block liquor freedom for Pennsylvania taxpayers and consumers are government unions that profit from the monopoly.
And what a fuss those unions are making. The United Food and Commercial Workers, which has roughly 3,000 members in the state-run stores, is doing everything it can to scare the General Assembly away from meaningful reform. One popular slogan, yelled loudest by a UFCW official at a pro-privatization press conference, is that privatization is a “picture of profit before people.”
Not true. The proposal would nearly triple the number of stores — mostly small, mom-and-pop businesses — selling wine and liquor, and allow thousands of grocery stores to expand and carry wine. The result is thousands of additional jobs for Pennsylvania families.
Pennsylvania’s economy would quickly feel the benefits. An economic analysis conducted for the state Office of the Budget estimated privatization would bring back $92 million from residents who now illegally cross state lines to buy their booze to get the prices and selection they want. Privatization would be an economic stimulus and create jobs.
It wouldn’t hurt the government’s coffers, either. The Office of the Budget estimates that alcohol would generate more tax revenue after privatization.
There’s also the small fact that liquor privatization is immensely popular. My organization, the Commonwealth Foundation, recently commissioned a poll of our state’s citizens. The poll showed that 61% of Pennsylvanians — Republicans, Democrats, Independents, even union households — want the government to get out of the booze business.
The numbers are even higher for regular patrons of the government-run stores. A full 77% of weekly customers voiced their support for cutting the red tape between them and the checkout counter.
Each of the 17 remaining government control states could benefit from privatization. While passage of liquor liberty legislation through the Republican-controlled Pennsylvania Senate remains far from certain, a victory here could generate the momentum in the remaining states to finally issue a last call for government-sold alcohol.
Matthew J. Brouillette is president of the Commonwealth Foundation.
In addition to its own editorials, USA TODAY publishes diverse opinions from outside writers, including our Board of Contributors.
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Internet blossoms into virtual vineyard as online wine clicks with buyers
Source: Associated Press
April 4
The internet is blossoming into quite the virtual vineyard.
Online wine options are everywhere, from flash sale sites like Lot18 offering daily deals to Facebook prodding you to send a little something for Aunt Suzy’s birthday. And now there’s a new generation of startups such as Club W, which adds a little algorithm to your albarino, using surveys and ratings to figure out what you might like to drink next.
The click-and-sip approach seems to be catching on, says Jeff Carroll of ShipCompliant, a Boulder, Colo.-based company that helps wineries comply with shipping laws. “Wine is a unique product and it lends itself well to the social aspects of the Internet in terms of discovery.”
Online sales have been around for a while, with individual wineries selling wine through their websites, a practice that has become more prevalent as more states relax Prohibition-era laws that had banned alcohol shipments.
Today, only seven states have an outright ban on direct-to-consumer shipping, though some of the states that do allow shipping have various restrictions, and 89 percent of the U.S. population has access to direct-to-consumer sales, according to Steve Gross of the San Francisco-based Wine Institute, a trade association.
What’s changed is the rise of third-party sites run by companies that don’t make wine, like Lot18.com, which offers special deals on wine. These sites got a boost in 2011 when the California Alcohol Beverage Control officials issued guidelines allowing third-party providers to act as agents in the sale of alcohol but requiring wineries to stay in control of the wine, making them responsible for following all the relevant laws. The advisory applies only to California, but was seen as creating a framework that others could follow. “That really changed the dynamic,” says Carroll.
Since the guidelines were issued, major Internet retailer Amazon has gotten back in the wine business, its third attempt, and Facebook has added wine to the gifts friends can send each other. Meanwhile, a number of smaller companies have jumped into the market.
Thanks to the data-gathering and interactive capabilities of the new technology, online sites serve as more than a digital catalog. Relative newcomer Club W tries to anticipate what customers want by basing selections on information gathered from surveys on customer flavor preferences along with their ratings of wines already purchased.
Club W CEO and co-founder Xander Oxman says the idea is to combine the convenience of a traditional wine club shipment with the personalized experience made possible by tools that capture a buyer’s likes and dislikes.
The club, which sends out monthly shipments of three bottles for $39, aims to appeal to casual drinkers, who usually shop for wine at supermarkets or liquor stores.
In its first nine months, Club W sold more than 100,000 bottles of wine, Oxman says.
Though it’s easier to ship wine across state lines now than it was 10 years ago, there still are numerous legal challenges being played out and some state legislators are looking at bills that could restrict third-party sales. Opponents generally cite concerns that alcohol will be delivered to underage drinkers; proponents say age verification tools and adult signature requirements on delivery prevent that.
Jeff Stai, owner of Twisted Oak winery, a winery based in the foothills of the Sierra in Northern California, has sold online for years, including lately through Amazon and Facebook.
Twisted Oak is licensed to sell in 30 states and though the tasting room accounts for the bulk of sales, about 20 percent of his business is from outside California and Nevada.
Stai jokes that he’s “not shoveling money into the bank,” from third party site sales, but they do provide a steady stream of orders. Twisted Oak also sells wine directly from its own website, going back about nine years and that has steadily increased, especially during the past two years, Stai says.
“It went from, ‘Oh, look, we have an order today,’ to ‘We’ve got orders every day.'”
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Rediscover Chardonnay
California’s versatile white-wine grape is escaping its syrupy reputation with lighter, brighter varieties untouched by oak
Source: WSJ
By LETTIE TEAGUE
Apr 5th
IT’S GOOD. It’s bad. It’s out. It’s in. Is there any grape whose fortunes have risen and fallen more often than those of Chardonnay-particularly Chardonnay from California? I’m convinced this is thanks, in part, to the grape’s chameleon nature. Chardonnay can be oaky or steely, fruity or flinty, depending on where it’s grown and the style that the winemaker wants to produce. Indeed, style is key when describing this most malleable grape.
Less oak and more steel is the style that’s in vogue for a growing number of winemakers. It’s appealing not only to the anything-but-Chardonnay crowd but to a new generation of drinkers as well.
A new generation was the target audience for Avant, the Kendall-Jackson Chardonnay that debuted in late 2010. “Jess wanted a new wine that would appeal to a new generation of wine drinkers,” said Caroline Shaw, executive vice president at Jackson Family Wines, who explained that Jess Jackson, the late Kendall-Jackson founder, came up with the idea in 2008.
When the producer of one of the country’s more popular Chardonnays (the decidedly oakier Vintner’s Reserve) decides to produce a largely unoaked Chardonnay, it seems like a good indication that something bigger may be afoot. And while Avant is produced in tiny amounts (130,000 cases) compared with the millions of cases of Vintner’s Reserve, Ms. Shaw said there was “real growth potential” with Avant.
That potential has already been realized with the Chamisal Stainless Chardonnay from the Central Coast, which debuted in 2006 at 1,000 cases and is now up to 30,000 cases-making it the winery’s best-selling wine. “Stainless” refers to the stainless-steel fermentation tanks used to make the wine.
Chamisal winemaker Fintan du Fresne-who hails from New Zealand, where unoaked Chardonnay is quite commonplace-said he thinks today’s U.S. wine drinkers get what the Stainless name means. For his part, Mr. du Fresne said, he’d had a particularly hard time comprehending California Chardonnay when he arrived in the U.S., in 2006. “I was trying to wrap my brain around California Chardonnay-the level of oak, the richness, the viscosity, the Rombauer-esque nature,” Mr. du Fresne said. (Rombauer Chardonnay is considered the epitome of the oaky Chardonnay style.) “My first question to the winery’s owner was, ‘Can we make a stainless Chardonnay?’ ” The owner told Mr. du Fresne he was crazy, but six months later he said, “Sure.”
Did Mr. du Fresne think that oak-free Chardonnay was a winemaker-led change? “I think there has been a push by winemakers for a leaner, less oaky style,” he replied. But as Mr. du Fresne pointed out, this wasn’t just about taking out oak but “a complete reconstruction of Chardonnay.”
According to Mr. du Fresne, the making of a stainless-steel-fermented Chardonnay requires different grape clones, different fermentation techniques, cooler fermentation temperatures and, often, forgoing malolactic fermentation. (Malolactic fermentation converts the tart malic acid to the softer lactic acid, making a softer, richer, more buttery wine.)
One of the top California Chardonnay producers, David Ramey, refers to his style as “neo-Burgundian” and notes that it can be achieved with less new oak and by picking earlier, when the grapes are less ripe. Mr. Ramey is doing both-not in response to the market but to his own palate. “It’s my own development-a reaction to my own wines,” he said. “I wanted the oak to be less present.”
Mr. Ramey’s two “basic” Chardonnays (he makes seven Chardonnays altogether) were among the 17 wines I tasted recently with friends-most of whom said they rarely drank California Chardonnay because it had too much oak, too much sweetness and too little acidity. I assured them the Chardonnays we were tasting were different.
Of course, oak or its absence alone doesn’t make a wine good. When the wines that we tasted were in balance, the quality of the fruit shone through. But when the fruit wasn’t great or the winemaking less than perfect, the wines came off as insipid and dilute. (These might have been helped by a little “make-up” of oak.)
Thankfully, there were many more successes than failures. In no particular order, our favorites included the fresh and citrusy 2011 Paul Hobbs CrossBarn Sonoma Coast, the lively 2011 Chamisal Stainless Central Coast, the complex 2010 Ramey Russian River Valley as well as the elegant 2010 Etude Carneros, the 2011 Williams Selyem Unoaked Chardonnay and the 2011 Mer Soleil Silver. The last was a soft, lush and ripe wine made even more memorable by its packaging (a gray ceramic bottle that one friend said “looked like a bomb that you’d light with a fuse and throw”-making perhaps the first unoaked Chardonnay Molotov cocktail).
Best of all, perhaps, were the prices. Since there was little to no expensive new oak used, the wines were affordably priced. None cost more than $33, and most were $15 to $22. That helped to win over even the least Chardonnay-friendly friend: “These are better values than white Burgundy,” he proclaimed. “You get more flavor and satisfaction with these wines than you would with most $23 white Burgundies.”
California Chardonnay is back-yet again.
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Crisis reduces Italian wine drinking
Source: The Age
April 6, 2013
Wine-drinking in Italy has reached record lows, thanks to the economic crisis and changing consumer habits.
A report by the country’s main farmers’ association says consumption has plummeted by 22 per cent over the past decade to its lowest level since the 19th century, with sales falling by two per cent between 2011 and 2012 alone.
Italians drank a total of 22.6 million hectolitres of wine in 2012, compared to 29 million hectolitres in the United States and 30.3 million in France.
An online survey found that 32 per cent of respondents said they only drank wine on special occasions, 18 per cent said they would have one or two glasses a week and six per cent said they never drank any wine.
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Young Americans
Source: FT
Jancis Robinson
Apr 5th
Every one of the 50 states now makes wine, even Hawaii and Alaska. North Dakota was the last to succumb
To his contemporaries Dustin Wilson, 33, has a dream job. A Maryland boy, he is now a Master Sommelier and wine director at Eleven Madison Park, one of New York’s most admired restaurants. Previously he worked for such luminaries in the world of the grape as Rajat Parr of RN74 in San Francisco and Bobby Stuckey MS of Frasca in Boulder, Colorado. And he knows how lucky he is. “Right now is a really exciting time to be involved in wine in this country,” he told me recently. What particularly excites him is that so many young Americans are so actively interested in his chosen subject. He is also stimulated by the current revolutionary fervour in a new generation of producers who are offering wines that have never before been made in the United States.
I have been observing the American wine scene since 1976, when I reported on the novelty of the French, in the form of Moët & Chandon, investing in the Napa Valley. By the 1990s Napa Valley was one big vineyard, but the wine industry was under threat from those it called neo-Prohibitionists. Warning labels on bottles had been declared mandatory and producers and retailers seemed ever more constricted.
Today things are quite different. The US has long been by far the biggest producer of wine outside Europe (so the fourth biggest in the world), but it has recently become the single biggest market for wine, consuming more in total than the former old soaks of France and Italy. Not only that, but wine as a subject is also enjoying unprecedented status in the US.
Unlike Europeans, Americans see wine as something novel and exciting, so they are delightfully proactive in their interest in it. Wine classes and tasting groups proliferate. Wine tourism has never been more popular, and in many cities wine tourists don’t even have to travel further than the suburbs where many an urban winery has been established, giving city dwellers hands-on experience of tasting, blending and even making wine. An interest in wine seems particularly marked among those in their twenties and thirties. At a public talk I gave recently in New York, I spotted hardly anyone over 35 in the audience, and all the questions came from young women.
Not surprisingly, this flowering of consumption has been matched by one in production. A keen interest in drinking wine can all too easily lead to a desire to make it, a desire that can be relatively easily realised in a country as rich in land and capital as the United States. I long ago lost count of the number of Americans who had decided to devote a portion of the fortune they had made elsewhere to the dream of owning a vineyard.
The total number of bonded wineries in the US has risen from under 3,000 at the turn of the century to approaching 8,000 today. And these are not just in the three Pacific states so well known for their wine production – California, Oregon and Washington. Every one of the 50 American states now makes wine, even Hawaii (from various hybrid vines and tropical fruits) and Alaska (also from local fruits and imported grape juice). North Dakota up on the Canadian border in the Midwest was the last state to succumb to the charms of wine production and like several states with similarly vicious winters, had to resort to winter-hardy hybrid vines.
My American wine travels have been confined to the west coast, New Mexico, New York, Vermont and Virginia, but whenever I have had the chance I have always gone out of my way to taste wines from as wide an array of states as possible. Massachusetts Merlot? Tennessee Traminette? You betcha!
There is still no shortage of pretty awful wine made in what the campaign called Drink Local Wine (drinklocalwine.com) calls “The Other 47”. But the exciting thing is that the proportion of good or very good wine made somewhere other than on the Pacific coast has been increasing markedly recently. My new book American Wine celebrates this revolution, and was written with Linda Murphy, a former wine editor of the San Francisco Chronicle and frequent judge at wine shows all over the US. No state is too obscure for Ms Murphy, fortunately for me since she has done by far the lion’s share of the work involved in the book.
I have tasted very respectable wines from Arizona, Colorado, Texas and New Mexico, and there are exceptional producers all over the country, but for us the hotspots of really top quality wine are the Finger Lakes of New York and the southern shore of Lake Michigan for fine Rieslings; Long Island for a wide range of rather European wines; and Virginia for increasingly fine red Bordeaux blends, Viognier, Petit Manseng and Petit Verdot. And it is possible to find decent Chardonnay virtually everywhere.
Things are changing in Oregon, Washington and particularly California too. Much to the delight of Dustin Wilson and the tight-knit posses of sommeliers on the American coasts, there is a perceptible pendulum swing away from turbocharged versions of a handful of international grape varieties towards much fresher, lighter wines that are more expressive of individual vineyards than cellar techniques. And they are made from a significantly wider range of grape varieties than used to be the case.
The trend was there but it has been encouraged by a succession of cool growing seasons in California – perhaps the result of climate change. In the panel I list a few of the newer producers associated with this trend, but I am well aware that newcomers on the wine scene have been sprouting just like the bright yellow spring crop of mustard between California’s blessed vines.
Tasting notes on Purple Pages of JancisRobinson.com
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Exane BNP Paribas equity research : LAURENT-PERRIER (=), VRANKEN POMMERY (-): The bubble monitor: February fails to fizz
Source: Exane BNP
Apr 5th
LAURENT-PERRIER (=) TP: EUR69 . Upside: 11%
Beverages (-) . France . Price (04 Apr. 13): EUR62.3
VRANKEN POMMERY (-) TP: EUR18 . Downside: 13%
Beverages (-) . France . Price (04 Apr. 13): EUR20.6
Champagne shipments down 6% in February
Both Lanson BCC and Vranken-Pommery mentioned a ‘slightly better start to the year’ in 2013. However, this is not backed up by the figures. Admittedly January and February are the two smallest months for champagne shipments, resulting in volatility in growth figures (+8% in January, -6% in February). The comp base however was not tough (global volumes dropped by 11% in Q1 12).
Recovering volume share in French off-trade will be tough for listed champagne players
Champagne houses lost considerable volume share in 2012 in French supermarkets, as they refused to compete with low-end brands on price. Recent comments by Vranken-Pommery suggest that at least part of these volume losses (1m bottles in the case of Vranken) should be recovered in 2013. Yet this is not what the 8% decline in shipments from champagne houses to France seems to suggest, after a 10% drop in January and against an easy comp base (-10% in Q1 12). Co-operatives on the other hand saw volume growth of 45% and 29% in January and February in France.
Steep volume drop in the EU and ROW for champagne houses in February
Shipments to the EU from champagne houses were down 10% yoy in February. There too, cooperatives gained volume share (shipments up +57%). In non-European markets, champagne houses experienced a 12% y/y drop in shipments.
Still cautious on listed champagne names
Our relative preference still goes to Laurent-Perrier (Neutral) vs. Vranken-Pommery (Underperform) given its higher exposure to non-European markets. However, we continue see better momentum and value elsewhere in the sector.
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Ste. Michelle Wine Estates Announces Executive Sales Promotions
Source: SMWE
Apr 5th
Ste. Michelle Wine Estates, the Northwest’s oldest and most acclaimed wine company, has promoted two executives to lead the company’s domestic and international sales regions.
The promotions are effective May 1, 2013 with the retirement of Glenn Yaffa, a 30-year veteran of Ste. Michelle Wine Estates whose accomplishments contributed greatly to Ste. Michelle’s success. He most recently held the position of Executive Vice President, Sales.
Frank Genovese has been appointed to succeed Yaffa as Executive Vice President, Sales. He will have direct oversight of the company’s domestic and international business units, the customer service department and the company’s wine education team.
Genovese joined Ste. Michelle in 1999 as Vice President for the East Sales Region. He was promoted to Senior Vice President National Sales Manager in 2005.
Ted Baseler, Ste. Michelle’s President and CEO said that Genovese is uniquely qualified to lead Ste. Michelle’s sales organization and build on Ste. Michelle’s current position as the third largest premium wine company in the U.S.
“The breadth of Frank’s executive sales experience, including leadership roles for Ste. Michelle and a major New Jersey wholesaler, has contributed greatly to Ste. Michelle’s phenomenal growth during the past 12 years,” Baseler said. “He is respected by our network of customers and wholesalers; he has a valued perspective on the complexity of the marketplace; and he is strongly committed to developing the company’s future leaders.”
“Ste. Michelle is a dynamic company with a wine portfolio that is unparalleled in the industry,” Genovese said. “My personal goal is for all tiers of the industry to recognize that Ste. Michelle is the premier fine wine company in the world.”
Dan Heller, Ste. Michelle’s West Region Vice President, will succeed Frank as Senior Vice President of Sales. The four regional sales vice presidents will report to Heller beginning May 1.
“As a 27-year veteran of the Ste. Michelle sales team, Dan has developed exceptional leadership and sales planning expertise. He also has built extraordinary relationships that have a win-win focus on achieving great business outcomes for all,” Genovese said.
Heller’s successor will be announced soon.
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STEPHEN BEBIS APPOINTED AS PRESIDENT AND CHIEF EXECUTIVE OFFICER OF LIQUOR STORES N.A. LTD.
Source: Liquor Stores NA
April 4, 2013
Liquor Stores N.A. Ltd. (the “Company”) (TSX: LIQ), North America’s largest publicly-traded liquor retailer, announces that Stephen Bebis is appointed President and Chief Executive Officer effective May 7, 2013.
Mr. Bebis has a deep resume of experience in the retail sector, and most recently was the President and Chief Executive Officer of U.S.-based Brookstone Inc., a specialty lifestyle retail company. From 1998 to 2011, Mr. Bebis served as the founder, President and CEO of Golf Town, the largest specialty golf retailer in Canada and one of the largest in the world. From 1996 to 1998, he was Chairman, President, and CEO of Sports and Recreation Stores, Tampa, Florida. Prior thereto, Mr. Bebis held various executive-level positions, including (among others) President of Home Depot Canada, and founder and CEO of Aikenhead’s Home Improvement Warehouse.
Jim Dinning, Chairman and current Interim Chief Executive Officer commented, “On behalf of Management and the Board, I am pleased to welcome Stephen to the Liquor Stores organization.”
Dinning added “With his rich retail experience and his remarkable success at growing the likes of Golf Town and Home Depot, we are confident we have a leader who will enhance the Company’s prospects for continued expansion and profitability, especially as we look towards growth in new U.S. markets.”
It is anticipated that Mr. Bebis will be appointed to the Board of Directors.
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PENDERYN MD ANNOUNCED AS CHAIRMAN OF CRAFT DISTILLERS’ ALLIANCE
Source: Agency Brazil
Apr 5th
Stephen Davies, managing director of Penderyn, the award-winning single malt whisky producer based in Wales’s Brecon Beacons, has been announced as chairman of the Craft Distillers’ Alliance.
Formed in 2012, the Craft Distillers’ Alliance is a body formed to uphold the interests of small spirits producers from around the world. The organisation was founded by whisky writer and enthusiast Dominic Roskrow, and as chairman, Stephen Davies will take an active role in the organisation, using his experience in the whisky industry to help the body to do more to aid small producers. The organisation has already scored a major success by striking a deal with a Glasgow-based distribution company to allow members to distribute directly to British trade and retail customers quickly and at an equitable price.
Dominic Roskrow, founder of the CDA, commented: “Having Stephen Davies and Penderyn on board is a significant step for the Craft Distillers’ Alliance. Under Stephen’s leadership, Penderyn has developed from being one of the smallest distilleries in the world into a world-class distillery whose products are enjoyed internationally, all without losing the independent spirit and craft production methods that made it so successful. It’s a perfect example of what’s so exciting about craft distillation, and I can’t wait to see what Stephen brings to the organisation.”
Stephen Davies, managing director of Penderyn, commented: “A look at the shelves of any drinks shop will show you that the industry is changing: along with the traditional brands which have been around for centuries, you’ll see spirits from a new breed of craft distillers: unique, vibrant and distinct, but all united by a real passion for creating a wonderful spirit for its own sake. This is a time of change for the whisky industry in particular as more and more craft distillers enter the market, and we wholeheartedly support the CDA’s aims of promoting small spirit producers and lobbying to provide easier routes to markets around the world.”
The CDA currently has more than 30 members including Compass Box, Berry Bros & Rudd and Wemyss in Britain, as well as members in Australia, New Zealand, America, Japan, India and across Europe.
Penderyn is imported and distributed in the United States by Gemini Spirits and Wine
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Tesco faces £1bn writedown to quit America
Tesco is facing a bill of about £1bn to quit its loss-making Fresh & Easy business in the US.
Source: Daily Telegraph
By Graham Ruddick
07 Apr 2013
The size of the charge, which will be in the form of a writedown in the value of Tesco’s assets, highlights the torrid time that Britain’s biggest retailer has faced in the US since opening in 2007.
Philip Clarke, the chief executive, is set to confirm in the company’s full-year results next week that Tesco will exit the US after launching a strategic review last year.
However, this will come at the cost of a writedown on the value of Tesco’s investments in the country, including the wholly-owned stores, leases and a major distribution centre in Riverside, California.
Mr Clarke is understood to be working on the sale of the business – with Aldi one of the potential buyers – but a closure of Fresh & Easy and then a piece-by-piece sale of the assets remains the most likely outcome.
Tesco may not reveal the future of Fresh & Easy in the results, but in order to break with the past and underline its determination to leave the US, it is understood that the FTSE 100 company will book a substantial impairment.
Tesco is the third biggest retailer in the world. Under Sir Terry Leahy, it built successful businesses in countries ranging from Ireland to the Czech Republic, South Korea and Thailand.
But Fresh & Easy will go down as one of Sir Terry’s and Tesco’s biggest failures. Other retailers to have suffered in the US include J Sainsbury and Marks & Spencer.
Mr Clarke has been under pressure to review the loss-making Fresh & Easy since taking over from Sir Terry in March 2011.
Last October, Mr Clarke halted new store openings in the US and then announced two months later that Tesco would begin a strategic review because Fresh & Easy “will not deliver acceptable shareholder returns on an appropriate time frame in its current form”.
Mr Clarke said: “This has not been an easy decision but I know it’s the right one.”
Tesco declined to comment on Sunday night.
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Punch hits out at bondholders
Source: FT
By Mark Wembridge, Duncan Robinson and Michael Stothard
Apr 5th
The head of Punch Taverns hit out at disgruntled bondholders for not coming up with a viable alternative to the pub company’s latest restructuring offer which some spurned last week.
Stephen Billingham, executive chairman of the debt-ridden group, said: “They’re not pitching anything – there are no alternative proposals. We’ve not seen viable alternatives.”
Punch has been in extended talks to restructure its £2.4bn of net debt, which consists of two securitised vehicles that require regular cash injections to keep them from breaching covenants.
The rejected offer would see investors in one of the vehicles, Punch B, write off a quarter of their £914m of debt. Creditors involved in the larger £1.5bn Punch A vehicle would see amendments in their financial covenants and defer restructuring in order to buy time for a turnround in the business.
Mr Billingham said, however, that a number of bondholders simply did not understand the restructuring offer. “There has been a learning curve. It’s not confusing, it’s just complicated.”
The plan, which needs the approval of three-quarters of creditors in each debt vehicle for the restructuring to be implemented, could achieve a £463m cut in debt service payments over the next five years.
One senior bondholder warned that the restructuring was unlikely to happen in its current form. “The only proposal from the five US hedge funds that control Punch has been publicly rejected by the senior bondholders,” he said.
“It is difficult to see how this restructuring gets launched in the first half.” Hedge funds such as Glenview Capital Management control the bulk of Punch’s equity.
The update on the restructuring came as Punch reported a year-on-year slip in interim revenues for the 28 weeks to March 2 from £264.6m to £243.3m, as the group pared down its estate of non-core pubs. Punch plans to sell about 400 non-core pubs in each of the next four years.
A £42.9m one-off charge for an interest-rate swap dragged Punch to a pre-tax loss of £16.7m. On an underlying basis, pre-tax profit shrunk by a fifth to £26.2m. The diluted loss per share was 2p – down from earnings of 3.7p a year ago – and there was no dividend.
Punch’s tenanted pubs have suffered from declining like-for-like income in recent years, with dwindling beer consumption, higher taxes, and a plethora of cut-price supermarket offers for alcohol hurting the whole sector.
Since it was spun out from its parent company in 2011, Punch has struggled under the weight of its debt burden, which was built up during the credit binge before 2008. Roger Whiteside, Punch’s former chief executive, quit the company in February to run Greggs, the bakery chain, leaving Mr Billingham as executive chairman.
Punch shares rose 3.5 per cent to 11p.
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New York: Critics stomp on stained wine pol
Source: New York Post
By CARL CAMPANILE and SALLY GOLDENBERG
April 8, 2013
Good-government groups and a fellow Democrat yesterday criticized Bronx state Sen. Jeff Klein for pushing a bill benefiting a national wine distributor that contributed $33,000 to his campaign.
The Post first reported yesterday that Klein’s re-election war chest is brimming with $33,000 in donations from Empire Merchants LLC.
The company, in turn, is pushing a measure to require all wine to be warehoused in New York for at least a day before being sold in local stores – which could tack an extra $7 on a bottle of wine for consumers.
“That becomes questionable in light of what’s happened in the last couple of days. That would raise concern,” said former Bronx Assemblyman Michael Benjamin, referring to last week’s arrest of Assemblyman Eric Stevenson for allegedly accepting bribes from businessmen in exchange for tailor-made legislation.
Benjamin added that aiding a particular industry is not uncommon – but said it’s questionable when an elected official receives campaign contributions from the very industries the lawmaker is supporting.
“I’m sure more bills are going to be scrutinized,” said Benjamin, Stevenson’s predecessor.
George Venizelos, assistant director in charge of the FBI’s New York office, said last week’s corruption arrests are important to establish and maintain public trust.
“Once you lose that public trust, it hurts everybody,” he said. “It hurts the city and the country.”
And Barbara Bartoletti, legislative director of the New York State League of Women’s Voters, said: “This is clearly giving campaign contributions with the bottom line in mind. That’s why we need campaign-finance reform.”
Meanwhile, Mayor Bloomberg told reporters that “there’s more corruption” to be uncovered and urged, “We’ve got to clean up Albany.”
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Kansas: House breaks with Senate on alcohol bill; Capitol stays ‘dry’
Source: Wichita Eagle
By Dion Lefler
Friday, April 5, 2013
The Kansas House has decided that the Capitol will stay “dry,” at least for now.
Hours after the Senate approved a measure to allow alcohol under the dome under certain circumstances, the House sent the bill back to a committee for a rework.
The provision, part of Senate Substitute for House Bill 2199, was proposed to allow drinking in the Capitol during official functions, such as a planned party to celebrate completion of the renovation of the Capitol building.
But the House sent it back to a conference committee of representatives and senators after a ruling that an unrelated part of the bill dealing with home beer brewers had been improperly added to the catch-all measure.
The rules decision came after an impassioned plea on the floor by Rep. Pete DeGraaf, R-Mulvane.
DeGraaf railed against another part of the bill, which would allow automatic wine-dispensing machines to be used under limited circumstances at state-owned casinos.
“Why is that?” DeGraaf said. “Because we profit from state-owned casinos.”
Moments later, he asked, “What’s next? Fountains with flowing alcohol where you can just go in and drink it?”
A number of House members applauded that suggestion.
The bill had appeared to have sufficient support to pass, after a procedural motion to send it back to committee failed 67-50.
Earlier Friday, the Senate voted in favor of the bill 29-10.
The only issue that got much attention there was the provision on drinking at the Capitol, which touched off a lengthy debate about the role of the Capitol in public life.
Sen. Julia Lynn, R-Olathe, said she feels that the Capitol belongs to the people and should be available for public events such as art openings and concerts, where it would be appropriate to have alcoholic beverages in a controlled environment.
“We’re not opening up the Statehouse so we can stash flasks in our desks,” she said.
Others, however, balked at the idea, saying that allowing alcohol would diminish the gravitas of the center of the state’s government.
“This building is dedicated to the people’s business,” said Sen. Pat Apple, R-Louisburg. “It is not for rent, it is not for sale.”
Senate President Susan Wagle said the only event currently proposed to be alcohol-optional would be a celebration of completion of the long-running renovation of the Capitol.
She said she and Gov. Sam Brownback are hoping to use the rededication party as a fundraiser to benefit a Kansas charity. “We want to open it (the Capitol) up and show it off,” she said.
The Capitol renovation project is in its final stages and expected to be completed this year.
The bill would have allowed alcohol to be served at Capitol events with the approval of the Legislative Coordinating Council, a group of House and Senate leaders.
The bill also would have made several other changes in alcoholic beverage laws, primarily in allowing some liquor licensees, such as hotels, to provide free samples or coupons for free drinks.
Negotiators say they will rework the bill when they return from a monthlong break in May.
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