Franklin Liquors
Thursday April 18th 2013
Diageo sales boosted by US spirits
Diageo said a strong performance and higher prices in its US business has led to sales growth, balancing out weaker sales in Europe.
Source: Daily Telegraph
By Rebecca Clancy
18 Apr 2013
In a trading update released this morning, the drinks giant said it had organic net sales growth of 5pc in the nine months to March 31, with volume up 1pc.
US spirits, Diageo’s biggest business, was the key driver of performance in North America, with organic sales growth of 6pc, compared to a 4pc fall in sales in Western Europe.
Diageo, which has shifted its focus to emerging markets, also reported a jump in sales of 14pc in Latin America and 9pc in Africa and Eastern Europe.
However, the maker of Johnnie Walker whisky and Guinness stout said overall volumes were down 1pc in the first quarter of 2013 but that it had benefited from a strong price/mix and a small positive impact from foreign exchange, with organic net sales up 4pc.
The company said performance in Latin America and Caribbean moderated in the third quarter as consumer weakness in Brazil impacted performance despite share gains.
“Diageo’s performance for the nine months is in line with the first half and our expectations,” said Diageo chief executive Paul Walsh.
“Strong performance from our biggest business, US spirits; the continued growth of spirits in Africa; share gains across our markets in Asia Pacific and double digit growth of Johnnie Walker, Crown Royal, Buchanan’s, and Tanqueray are the highlights of the quarter.
“Given our market positions and geographic diversity we remain confident that Diageo’s performance continues to be in line with our medium term guidance.”
Rival drinks company SABMiller also released a trading update this morning which shows that group revenue for last year grew by 7pc.
Lager volumes on an organic basis were up 3pc for the full year, while soft drinks volumes were up 4pc, the group reported.
SABMiller said the overall financial performance in 2013 was in line with its expectations.
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Quick Note – Diageo (DGE LN, Buy) – Q3 slightly lower, but no change to estimates
Source: Nomura
April 18, 2013
Stock Rating: Buy
Target Price: 2400p
Q3 slightly lower but no change to our estimates
Q3 organic revenue growth +4% vs Nomura and consensus +5%. The Q3 run-rate +4% is slightly slower than H1 +5.2% and 9M +5%, but this mainly reflects rounding. We maintain our FY13 estimate of +5% (slightly below company medium-term guidance of +6%). In our preview note, we had reduced our FY revenue estimate to 5% vs previous 6% to reflect slightly slower Q3 and Q4. However, we retain our EBIT and EPS estimates as we see stable infrastructure and marketing costs.
Cal 2014E P/E 16.6x vs Pernod (Neutral) 16.3x and spirits avg 17.7x.
Next news:Diageo Innovation Day on 9 May.
M&A story still has legs
Although the M&A story appeared to have stalled at the end of 2012, with the company ruling out a Cuervo deal, we believe Diageo’s strong balance sheet (estimated net debt/EBITDA of under 2x by year-end) offers scope for further M&A activity. In addition, it looks likely that the company will gain control of United Spirits over time, even though it looks unlikely that the tender offer (planned to increase the 27% holding to over 50%) will succeed at the price being offered (R1440).
Growth by division
Although the company does not report Q3 revenues by division, we estimate from the nine-month run-rate implied Q3 organic revenue growth N. America +8.5% (NE +5% and 9mth +6%), Western Europe flat (NE -4%, 9mth -4%), Africa, EE & Turkey +5% (NE +11%, 9mth +9%), Latin America and Caribbean +8.5% (NE +12%, 9mth +14%), Asia Pac +1% (NE +5%, 9mth +4%).
Colour by region
N. America – Q3 sees some acceleration in spirits revenue (price/mix driven), with beer and RTD a drag factor as in H1.
Western Europe – We believe no change to the underlying dynamic. Q3 benefitted from technical factors given weak French comp after the duty hike at the beginning of cal 2012, earlier Easter and shipment phasing in Spain, which is expected to reverse in Q4. We believe Spain, Greece and Ireland will remain challenged, partially offset by positive growth in Germany
LatAm – Brazil was weak despite market share gains driven by negative consumer sentiments and drink-driving regulation brought in December. In Colombia and Venezuela, systems changes led to higher shipments in the first half which reversed in Q3.
Africa, EE & Turkey – Key market Nigeria remains weak together with one-off impact in Kenya from elections. Q3 was negatively affected in Turkey by stocking up in Q2 ahead of duty increases.
Asia Pac – Weaker vs a strong comp last year owing to pricing timing. Korea scotch market remains weak. China is robust, but off a small base.
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SABMiller posts strong growth in Africa, LatAm weak in Q4
Source: Reuters
April 18, 2013
Global brewer SABMiller Plc said on Thursday it had posted a 7 percent rise in full year organic revenue, boosted by strong demand in Africa and a surprisingly robust performance in Europe.
The London-based company, which owns more than 200 beer brands, said full-year lager volumes had grown by 6 percent in Africa on an organic basis despite tough comparatives, as additional capacity came on stream. The final quarter was up 9 percent.
However, lager volumes in Latin America, its largest market, declined 1 percent in the final quarter, hit by softer economic conditions and a price increase in some markets.
Europe proved to be more resilient than expected, with new “brand and pack innovations” outweighing the tough economic conditions to send lager volumes up 6 percent on an organic basis in the full year, and 3 percent in the final quarter.
Warmer weather in China helped the company to post an improved performance in the fourth quarter after the country’s coldest winter in 28 years hit demand in the third quarter.
The group, which operates in over 75 countries with its Pilsner Urquell, Peroni and Grolsch brands, said overall full year lager volumes were up 3 percent in the year and 4 percent in the quarter, with overall financial performance in line with expectations.
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Rémy Cointreau: Consolidated Sales for the 12 Months
Source: Herald Online
April 18, 2013
Rémy Cointreau’s (Paris:RCO) consolidated sales for the financial year ended 31 March 2013 were ?1,193.3 million, an increase of 16.3% (up 8.8% organically). Group brands increased by 18.6% (up 10.3% organically). This performance is even more remarkable in that it was achieved on the back of double-digit growth the previous year.
Over the 12 months, the foreign exchange effect was a positive 6.8%, whilst changes in the Group’s structure, related to acquisitions, were a positive 0.7%. The organic growth of 12.4% in the fourth quarter exceeded the full-year average, due to the favourable effect of a later Chinese New Year.
The US and Asia maintained their double digit growth. Europe, despite a mixed economic environment, also contributed to this performance.
Jean-Marie Laborde, Chief Executive Officer, commented:
“This performance confirms the Group’s strategic orientation initiated over the last few years. Our results were driven by the move upmarket of the entire brand portfolio, innovations supported by targeted investment and the expertise of our worldwide distribution network.
“During the financial year we have, once again, consolidated our positioning and reaffirmed our high value and long-term strategy.”
Rémy Martin achieved double-digit organic growth for the fourth consecutive year, an increase of 12.7% (up 21.5% as published). The Group’s ongoing policy of moving upmarket, the pricing policy, combined with high quality innovations as well as a more modest increase in volumes, in line with our long-term objectives, all contributed to this good result.
Asia and the Americas were the main drivers of Rémy Martin’s growth. In the Europe/Africa region, growth was driven by Russia and Western Europe where sales also increased, particularly in the UK.
Liqueurs & Spirits – The entire division increased 3.9% organically (up 10.8%). The increase was enhanced by Bruichladdich’s integration within the division’s portfolio from 1 September 2012.
Cointreau achieved a strong full-year performance with 7% growth, thanks, in particular, to expansion in the US supported by increased marketing investment. The brand reported good results in Western Europe, driven by Benelux and the UK.
Despite a continued challenging economic situation in Greece, Metaxa grew in its markets with high potential (Eastern Europe). Sales of Passoa and St Rémy also increased.
Partner Brands – The growth in brands distributed on behalf of our partners was primarily driven by Scotch whiskies in the US. The worldwide refocus on a high value strategy, initiated more than a year ago by Piper-Heidsieck champagnes is bearing fruit, particularly in the US, despite the difficult economic climate in Europe. The relaunch of Charles Heidsieck champagnes met a positive welcome in the markets.
Rémy Cointreau will focus on achieving estimated growth in current operating profit of around 10% on a like-for-like basis, and above 15% as published.
In a worldwide economic environment which is still disrupted, particularly in Europe, but nevertheless remains favourable for the premium spirits industry, Rémy Cointreau remains true to its long-term high value strategy. The Group will continue to rely on its very high quality brands, the dynamism of its distribution network and its strict cost control.
Read more here: http://www.heraldonline.com/2013/04/18/4783592/remy-cointreauconsolidated-sales.html#storylink=cpy
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Hine is put up for sale
Source: Harpers
by Lucy Britner
Wednesday, 17 April 2013
The managing director of Hine has confirmed to Harpers that the Cognac house is up for sale.
Francois Le Grelle said he was unable to release any more information at this stage and that meetings are yet to be had with any potential buyers.
The news follows the announcement earlier this week that Hine’s owner, CL World Brands, had agreed to sell its Scotch whisky arm, Burn Stewart Distillers to South African drinks giant, Distell, in a deal worth £160 million. The move followed the sale of a majority stake in Jamaican Appleton rum’s parent company Lascelles DeMercado to Italian drinks company Gruppo Campari in September 2012. CL World Brands is a subsiduary of the troubled Caribbean company CL Financial, which came under the management of the Trinidad and Tobago government in 2009, following a bail out.
Hine is best-known for its vintage approach to Cognac and the house is celebrating 250 years of production this year.
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AB to sell stake in City Beverage distributorship
Source: Chicago Tribune
By Emily Bryson York
April 17, 2013
Anheuser-Busch has agreed to sell its interest in Chicago’s City Beverage, its largest local distributor.
The agreement is part of a bill expected to clear the Illinois House this week, ending a multi-year battle that amounted to a referendum on how alcohol is regulated in the state.
“Anheuser-Busch is pleased with the agreement reached with the Illinois legislature as it relates to our minority investment in City Beverage,” Mark Bordas, region vice president of state affairs with Anheuser-Busch said in a statement.
The world’s largest brewer, owned by Leuven, Belguim-based Anheuser-Busch InBev, has until Jan. 1, 2015, to sell off its interest in City.
Most states regulate alcohol sales through what’s called a “three-tier system,” designed to separate manufacturing, distribution and retail sales between different business interests.
The bill, HB 2606, amends the Liquor Control Act of 1934 and states that “no person licensed as a manufacturer of beer … shall have any interest, directly or indirectly, in a holder of a distributor’s license or importing distributor’s license.”
“I know of no opposition to my legislation,” Rep. Frank Mautino said in a statement released Wednesday by the Associated Beer Distributors of Illinois. He did not immediately respond to a request for additional comment.
Bill Olson, president of the distributor’s association, said the amendment sprung from meetings held by Senate President John Cullerton, including Anheuser-Busch, MillerCoors, Wine and Spirits Distributors of Illinois, and his organization.
Anheuser and the Illinois Liquor Control Commission have been involved in a string of litigation on this issue since the ILCC blocked the world’s largest brewer from acquiring City Beverage in 2010.
BDT Capital, an investment firm owned by Byron Trott, now owns 70 percent of City Beverage. BDT did not immediately respond to a request for comment on this story.
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United Spirits Hits New High
Source: WSJ
By RAGHAVENDRA UPADHYAYA
Apr 17th
Shares of United Spirits Ltd. 532432.BY -1.84% rose to hit a record high of 2,195 rupees in intraday trade Wednesday on speculation that Diageo DGE.LN -0.76% PLC may raise its offer to minority shareholders in its bid to increase its stake in the Indian liquor company.
The stock came off the peak and closed 6.1% higher at 2,156.20 rupees, still substantially higher than Diageo’s offer of 1,440 rupees a share.
“It is rumors that the fresh offer will be made at 2,200 rupees a share, and this is the sole reason for the stock to hit a high,” said a strategist at a local brokerage, who declined to be named.
“The current offer is much below the market price and is expected to fail. However, we have no way to confirm whether the fresh offer will be made and are advising investors to stay cautious,” the strategist said.
A spokesman for Diageo declined to comment.
On April 5, the U.K.-based brewer had said that its offer would remain at 1,440 rupees a share and that the price was “justified” based on local regulations.
Diageo is offering to buy an additional 26% stake in the Indian company to bring its total shareholding to 53.4%. Diageo’s offer opened April 10 and closes April 26.
Nomura in a research report issued the day the offer opened recommended that investors buy shares in United Spirits, with a target price of 2,200 rupees. The brokerage said the company would be well-placed to take advantage of growing consumer spending in India over the next two years, particularly with Diageo buying a majority stake in the company.
However, Nomura also said Diageo’s offer to United Spirits shareholders was much lower than the market price and wasn’t likely to succeed. United Spirits shares closed at 1,818.50 rupees the day the Nomura report was issued.
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Suntory in race to buy British soft drink brands Lucozade, Ribena from GSK
Source: DBR
18 April 2013
Suntory Holdings, a Japan-based beverage company, plans to acquire two British soft drink brands – Lucozade and Ribena – for over £1bn from UK-based pharmaceuticals giant GlaxoSmithKline (GSK).
Lucozade sports drink range includes Lucozade Energy, Lucozade Revive, Lucozade Sport and Lucozade Sport Lite.
Ribena is a fruit drink brand available in different flavors including apple, orange, raspberry and pomegranate.
Ribena Really Light is the low-calorie version of Ribena with no added sugar. The Ribena Plus range includes Ribena Plus with vitamin A and vitamin C to help support immunity, and Ribena Plus with calcium for healthy bones.
The Japanese company is in discussions with banks including Morgan Stanley and Nomura about gathering a bid.
The move is in line with the company’s intent to expand presence into western markets.
On the other hand, the British drugmaker intends to sell Lucozade and Ribena brands to focus on emerging markets.
Suntory produces soft drinks under the brands such as Orangina and Schweppes.
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German Liquor supplier Waldemar Behn buys Danzka vodka from Belvedere
Source: DBR
18 April 2013
German liquor supplier Waldemar Behn has purchased Danzka vodka from France-based Belvedere Group for an undisclosed amount.
The deal is said to be the biggest in Behn’s 121-year history.
With sales of 2.6 million bottles in 2012, Danzka vodka is well known brand globally and is available in over 50 markets at global duty-free and travel-retail accounts.
Waldemar Behn managing director Rudiger Behn was quoted by DFNIonline.com as saying that Danzka vodka will be the main asset of the company.
“Danzka ensures our independency in the liquor industry and will boost our international business, especially in duty-free, heavily,” Behn added.
“And, finally, with Danzka we are invested now in one of the largest and fastest-growing spirit categories.”
The acquisition includes appointment of Torben Vedel Anderson as global sales director for the brand. From 1 May 2013, Anderson will work towards the growth of the brand.
Andersen told the website that Danzka vodka’s main market is duty-free channel and will continue to be so.
“I am also new to the Behn Group and the new owners, but I have been met with big ambitions for Danzka vodka and very creative ideas to be rolled out,” Anderson added.
“I have been appointed global sales director and will focus on the continued development of the Danzka vodka brand and other Behn products including Dooley’s liqueurs in Asia, Middle East, Americas duty-free and Latin America.”
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Elephant dung beer sells out in minutes
Source: the drinks business
by Andy Young
17th April, 2013
A Japanese brewery created a beer using ingredients from elephant dung and it sold out within minutes of going on sale in the country.
The beer, which is called Un, Kono Kuro, is made using coffee beans that have passed through an elephant.
The Sankt Gallen brewery called the beer a “chocolate stout”, despite it not containing any chocolate. The coffee beans used in the beer come from elephants at Thailand’s Golden Triangle Elephant Foundation, which cost over US$100 per 35 grams. The beans are so expensive as 33kgs of beans in the mouth yields 1kg of useable coffee beans.
The beans are definitely a candidate for one of the top 10 weirdest beer ingredients.
Mr Sato, from Japanese website RocketNews24.com, tasted the beer and said: “After taking my first sip there was an initial bitterness that got washed over by a wave of sweetness. Following that, a mellow body rolled in and spread out through my mouth.
“Usually people talk about aftertaste when drinking beer but with Un, Kono Kuro the word afterglow is much more appropriate.
“After downing the last drop, slowly rising from my throat and mouth was that afterglow. The combination of bitter and sweet stayed fresh and lingered in my head. It was a familiar aroma that accompanied me through the entire beer.”
Although the bottles of the stout sold out after going on sale on the Sankt Gallen website the brewery has said that it plans to put the beer on tap at its new shop, which opened in Tokyo earlier this month.
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68 percent of teen alcohol-related deaths actually due to factors other than drunk driving, MADD reports
Source: Fox News
By Amanda Woerner
April 17, 2013
When Debbie Taylor’s 18-year-old son, Casey, died of alcohol poisoning following a night of drinking at a party, she was blindsided.
“Casey was an honor roll student; he was very smart, he was very responsible,” Taylor told FoxNews.com.
Taylor knew her son drank occasionally, and she had spoken to him about the risks of drinking and driving.
“I always taught him that he shouldn’t drink and drive,” Taylor said. “And I went as far as to tell him, ‘Call me, I’ll come and get you,'” Taylor said. “As a parent, I thought that message would be enough.”
“The conversation I wish I would have had was to tell him not to drink until he was 21,” Taylor said.
After Casey’s death, Taylor began working with Mothers Against Drunk Driving (MADD) to educate parents about the importance of talking to their teenagers about alcohol – beyond just the risks associated with drinking and driving.
And the importance of addressing teen-related drinking deaths outside of the parameters of drunk driving is critical: A new analysis of data released by MADD on April 17 revealed that 68 percent of teenage deaths attributable to underage drinking are not traffic-related, but due to other factors like alcohol poisoning, drowning or suicide.
The data is released in advance of MADD’s annual Power Talk 21 Day, which takes place April 21, a national day dedicated to encouraging parents to talk to their kids about drinking.
Power of parents
MADD first launched Power Talk 21 Day two years ago.
“It is really a day to draw attention to the information we have available to parents, to help them start talking about underage drinking, and the dangers of it, with their children,” Jan Withers, the national president of MADD, told FoxNews.com.
To help parents start the conversation, MADD offers a research-based, instructional booklet called Power of Parents, which is free to download, on their web site.
“In the past three years, we’ve been able to literally reach one parent every 30 minutes – to get the handbook in the hands of a parent every 30 minutes,” Withers said.
MADD partnered with Dr. Robert Turrisi, a professor at Pennsylvania State University with a joint appointment in the Department of Biobehavioral Health and the Prevention Research Center, to create the Power of Parents booklet.
“Most people think that when young people get a little older, their parents make less of a difference and peers and friends are everything,” Turrisi said. “It’s undeniable that friends are important – but research is showing a much more important role for parents than may have been initially expected.”
Turrisi’s research indicates that by discussing alcohol with teens, parents can dramatically reduce the odds of their children engaging in dangerous drinking.
“When we look at things like the frequency of drunkenness in the past 30 days, highest level of BA (blood-alcohol) concentration, or heaviest drinking nights – it varies slightly from study to study and outcome to outcome – but typically you are seeing a reduction of something around 50 percent,” Turrisi said.
And Turrisi and Withers note it is important for parents to discuss drinking with their teens on more than just one occasion.
“The real key, the most important thing, is to have that respectful communication be ongoing. Don’t just assume that they know because you’ve had the discussion. The key is to continually have that conversation,” Withers said.
Through her work with MADD and with the efforts of events like Power Talk 21 Day, Taylor hopes she will be able to encourage other parents to speak to their children about drinking.
“It can’t hurt to have that conversation with your kids,” Taylor said.
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Sporting bodies are ‘in alcohol industry’s pocket’
‘We facilitate the drinks industry to groom our children,’ psychiatrist tells committee
Source: Irish Times
Fiona Gartland
Thu, Apr 18
Sporting bodies are “very much in the alcohol industry’s pocket”, an Oireachtas committee was told yesterday.
Prof Joe Barry of Alcohol Action Ireland told the Oireachtas Committee on Transport and Communications that suggestions alcohol sponsorship of sports did not have an effect on alcohol consumption in young people were not true.
He said he read the transcript from a previous committee meeting at which the IRFU, FAI and GAA made the assertion and he was “saddened” to hear it. “Their relationship with these companies is causing a lot of harm to young people.”
Prof Barry said alcohol companies would not spend so much on marketing and advertising if it did not work.
A study, funded by the seventh framework programme of the European Commission and carried out among 6,500 children aged 13 to 15, showed an association between exposure to alcohol sports sponsorship and increased drinking in school children, he said.
Dr Bobby Smyth, a consultant child and adolescent psychiatrist with Alcohol Action Ireland, said it was with “typical arrogance” that the alcohol industry, “and those in receipt of its money”, had demanded evidence be provided that proved sponsorship promotes consumption.
“If they have proof that alcohol sponsorship does nothing to increase alcohol related harm, than Alcohol Action Ireland would have no issue with this activity,” Dr Smyth said.
The average consumption in Ireland for adult drinkers was the equivalent of one bottle of whiskey for each man and woman, per week, and the average age to begin drinking was 15 .
“There are 60,000 children who are going to start drinking this year,” Dr Smyth said.
Dr William Flannery, from the faculty of addiction psychiatry at the College of Psychiatry of Ireland, said suicide was the leading cause of death among 15-24 year-olds in Ireland. A 2010 study showed that in 24 per cent of all cases of self harm, alcohol was involved.
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RABOBANK REPORT: SOURCING OPTIONS FOR U.S. WINERIES
Sourcing priorities are shifting from ‘flexibility’ to ‘control’
Source: RaboBank
April 17, 2013
In its newly published report on sourcing opportunities for U.S. wineries, Rabobank says that securing appropriate quality wines at prices that permit acceptable margins remains a challenge for many wineries, despite record levels reached by the U.S. wine-grape crop in 2012.
In the report, Rabobank’s Food & Agribusiness Research and Advisory (FAR) group says the reduction of the oversupply of wine is creating challenges for wineries to secure the right product at the right price. U.S. wineries should review their sourcing strategies and shift their priorities from “flexibility to control.”
The report, “From Flexibility to Control: Wine Sourcing Strategies for Future Growth,” by Stephen Rannekleiv, Rabobank wine analyst, addresses a variety of options for U.S. wineries to explore when developing sourcing plans.
“There are many options that wineries can consider to secure supply for their brands,” said Rannekleiv. “Each entity will need to keep long-term strategic plans in mind as they focus on where they will go to secure their supply.”
Rannekleiv outlines three key areas in which U.S. wineries can improve their long-term sourcing strategies:
1. Looking above and beyond for vineyard acquisitions. Vineyard acquisitions are an important way to secure greater supply for long-term growth. However, wineries committed to making acquisitions will need to pay prices that are above traditional prices for land; otherwise they may need to look beyond their traditional production regions.
2. Consider alternative partners for third-party contracts. Wineries must be careful not to over-commit on contract prices, particularly in California’s San Joaquin Valley, where pricing may begin to see downward pricing pressure. The lower pricing in planting contracts (compared to current pricing) has limited interest in expanding acreage among traditional growers, but alternative partners (such as almond growers and investment funds) have been emerging, which may allow wineries to continue contracting for future supply.
3. Improving efficiency to optimize productive assets. Growers expanding production in the San Joaquin Valley will need to invest in improved production technology to assure long-term price competitiveness with imports. In California’s north coast region, there may be opportunities to optimize the use of available fruit in wine brands that offer more attractive margins.
The report concludes that those U.S. wineries that do not implement adequate sourcing strategies will have limited ability to grow brands in the future.
About Rabobank Group
Rabobank Group is a global financial services leader providing wholesale and retail banking, leasing, real estate services, and renewable energy project financing. Founded over a century ago, Rabobank is one of the largest banks in the world, with nearly $1 trillion in assets and operations in more than 45 countries. Rabobank is a premier bank to the global food, beverage and agribusiness industry, and has been financing leading food and agribusiness companies across North America for over 30 years. Rabobank’s Food & Agribusiness Research and Advisory team is comprised of more than 80 analysts around the world who provide expert analysis, insight and counsel to Rabobank clients about trends, issues and developments in all sectors of agriculture. www.Rabobank.com
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Bordeaux 2012: Stream of small chateaux release but no big names yet
Source: Decanter
by Jane Anson in Bordeaux
Wednesday 17 April 2013
After Chateau Gazin started things off on Monday morning, a steady stream of smaller chateaux have released their Bordeaux 2012 wines, with a few healthy – and other less healthy – reductions, and a glimmer of hope that there may be a market for the wines.
Two Cru Bourgeois, Chateau Sénéjac was released this morning at ?7.80 ex-Bordeaux (-5% on last year), and Chateau Belle Vue at ?8.30 ex-Bordeaux; a healthier drop of 14% for a wine that was widely appreciated during last week’s tastings.
Fifth growth Chateau Camensac saw an 11% drop to ?14.40 ex-Bordeaux, while another Cru Bourgeois, Chateau Citran has come down 3.3% to ?8.75 ex-Bordeaux.
Yesterday, Chateau Le Prieuré in Saint Emilion and Pomerol’s Vray Croix de Gay both managed a slightly under 8% drop to ?21 and ?30 respectively.
Joss Fowler, head of fine wine at Fine+Rare, told Decanter.com, ‘There’s been nothing to get our customers excited about so far. From a commercial point of view, something needs to come out at the right price, and big enough to send a message. From a Bordeaux point of view, no one wants to be the litmus test and go first. They don’t want to be too cheap and fly out the door, but they don’t want to be too expensive and fail. So despite rumours of a quick campaign. I wonder.’
Jerome Jacober of Eminent Wines, a merchant based in London and Hong Kong, who works with many private clients and restaurants on the Chinese mainland, sees demand from his clients potentially picking up after a significant drop last year.
‘The big labels still count in China. But I want and expect a 25% price drop to assure client interest. It’s a tricky vintage, all about grapes and brands, but I will be recommending my clients to buy at the right price.’
‘As the Asian en primeur market is so young,’ added Fowler, ‘those who bought in 09 and 10 have only had experience of getting burnt. So just like in Europe and the US, it’s only seriously interesting prices that will tempt them.’
Alex Dolan, sales manager at Symbolic Wines, which is based in California but does half its turnover with Russian clientele, said, ‘The vast majority of our Russian clients still want the labels. En primeur represents under 10% of our turnover, but we expect that to go up this year, if we can offer good value.’
Also in California, but concentrating more specifically on the US domestic market, Chuck Hayward of JJ Buckley thinks chateaux need to be realistic about supply and demand. ‘Many wineries still have stock from the more expensive 2010 vintage, while the 2011s currently in barrel saw little demand when they were offered last year. In addition, consumers can buy older vintages at prices that rival the prices for 2009s and 2010s.’
NB in all En Primeur articles ‘ex-Bordeaux’ indicates the price from the negociants, ie the Bordeaux Place
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Martignetti Companies Announces New Leader for Classic Wine Imports
Source: Martignetti Companies
April 17, 2013
Martignetti Companies, New England’s leading Wine & Spirits distributor has announced the appointment of Mary Masters to the position of Vice President of its Classic Wine Imports Division of Massachusetts effective May 1, 2013.
Masters, a Portfolio Manager with the company since 2006, has over twenty years of experience in the fine wine sector of the industry with a concentration on the distribution tier of the business.
Mark Fisher, Martignetti Companies’ President of Sales and Marketing commented, “Mary’s expertise within the fine wine arena; coupled with her leadership and interpersonal skills will prove to be an exceptional addition to Classic Wine Imports. Her background and experience will bring a focused approach to the areas of distribution and qualitative execution within the Classic Division which will accrue to the benefit of our valued suppliers.”
Previous to her role as Portfolio Manager with Martignetti Companies, Mary held roles with Southern Wine & Spirits, Western Distributing and with National Distributing in Orlando, FL and Atlanta, GA.
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BNA Wine Group Adds Mark Castaldi as Chief Operating Officer
Source: BUSINESS WIRE
April 16, 2013
BNA Wine Group has hired wine industry veteran Mark A. Castaldi as the company’s chief operating officer, with responsibility for full oversight of company operations, fiscal efficiencies, supply chain management, grower relations, grape procurement and other outside vendor contracts.
Castaldi has more than 20 years experience working and consulting in the wine, beverage and food industries. His extensive experience includes serving as COO or general manager for noted California wine companies, including Sonoma Wine Company, Schug Winery, Constellation Wine Company, Kendall-Jackson Wine Estates and Beringer Wine Estates.
“Mark is extremely well-connected in the wine industry and his operations experience will be invaluable as we take our young company to the next level,” said John Hooper, owner and president of BNA Wine Group LLC. “With Mark onboard we’ll have the solid operational foundation from which to expand our wine portfolio and distribution network.”
Currently, there are five wines in BNA Wine Group portfolio: Butternut Chardonnay, Bandwagon Pinot Noir, Bandwagon Chardonnay, The Rule Cabernet Sauvignon and Volunteer Cabernet Sauvignon. Retail prices for the wines range from $15-30.
In 2012, Hooper sold Tennessee Wine and Spirits distributing company, which his family founded in 1939, and teamed with Little Lion Wine Company founder and winemaker Tony Leonardini, and industry sales veteran Gary Carr to launch BNA Wine Group. The team has a keen understanding of both sides of the wine business and is dedicated to creating distinctive wines notable for taste and value.
BNA Wine Group is headquartered in Nashville, Tenn., but also has offices in St. Helena, Calif., where both Leonardini and Castaldi are based.
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Chuck Wright Joins Phusion Projects’ National Account Team
Source: Phusion Projects
April 17, 2013
Phusion Projects today announced the hiring of Chuck Wright as the national account team lead. In this role, Wright will be tasked with the management of Phusion’s chain business in Arizona, Nevada and Southern California.
Wright brings nine years of experience to Phusion Projects and most recently worked at Lagunitas Brewery Company where he was the southwest regional sales manager. He also spent several years working at Diageo-Guinness as a distributor manager and off premise specialist, and Miller Brewing Company as a retail sales representative.
“Wright has great experience in the industry and will be a strong addition to our national account team,” said Robbie Farquharson, vice president of national accounts. “His addition to our company comes at a perfect time as we continue to see tremendous growth with all three of our brands.”
Wright resides in San Diego, Calif. and graduated from the University of South Carolina with a degree in marketing and management.
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Pennsylvania: For Corbett, privatizing liquor stores is about saving his own job: As I See It
Source: Patriot-News
By Wendell W. Young IV
Patriot-News Op-Ed
April 16, 2013
It only took two years, but it appears that Gov. Tom Corbett has finally ‘fessed up about why he persists in trying to dismantle Pennsylvania’s wine and spirits shops: he really likes his job.
According to recent reports, the governor is leaning on fellow Republicans to support dismantling the Pennsylvania Liquor Control Board so he can bolster his reelection chances.
It would be more ironic than tragic if not for the stakes. Gov. Corbett wants to put as many as 5,000 PLCB employees and roughly 12,000 beer distributor workers out of a job so he can save just one: his own.
At least our governor has come clean and told voters the truth, a rarity in his first three years in Harrisburg. Time and time again, our governor has proven that he just cannot be trusted.
He promised to balance our state budget by spreading the pain across the board – on businesses and the middle class alike. Not true: He has given his business friends $800 million in tax cuts, made up by middle class taxpayers who have yet to see a single break.
He promised that by cutting corporate taxes, he would create jobs and the middle class would benefit. Not true. Our state unemployment is higher than the national rate and is headed in the wrong direction.
He promised to reform Harrisburg and change the way that ‘politicians’ in Harrisburg work. Not true. Our governor has taken yacht trips, helicopter rides, tickets to black tie galas and other goodies from corporate and lobbyist friends. It’s now been revealed that one of his corporate patrons, who paid for the governor’s private flights and a yacht vacation, is accompanying Gov. Corbett on a state-sponsored trade mission to South America, and previously joined him on a similar junket to France and Germany.
When pressed, his defense was that he didn’t break the law.
At least our governor has come clean and told voters the truth.
He promised to conduct a transparent government accountable to the voters. Not even close to the truth. Gov. Corbett continues to try and cut a backroom deal with a foreign company to outsource our state lottery. He signed the first deal – later ruled illegal by our Attorney General Kathleen Kane – without benefit of one single public meeting.
On the LCB issue, the governor continues to mislead. He strong armed the state House to rush a bill through without a single hearing (sound familiar?) because he simply cannot stick to the facts and make a compelling case.
Corbett claims the state stores make no money. Not true: They’re currently running at 14.8 percent profit.
Corbett first claimed that an auction of liquor licenses would generate $2 billion; then it was $1 billion and, then $800 million. On this point, nobody knows how much the auction might generate because the bill was rushed through the process. But the record suggests that Gov. Corbett’s projections remain a pipe dream.
Corbett and his allies say that displaced workers will find new jobs. Not true. The governor’s own experts at Public Financial Management concede that 2,300 full-time equivalent employees will go on unemployment compensation and virtually no new jobs will be created. None. And that estimate did not include the impact on the 12,000 employees of our state’s beer distributors who could lose their jobs under Corbett’s current plan.
Finally, Gov. Corbett said that not one person has told him that privatization is a mistake. Not true. There are too many groups opposed to privatization to list here but a very quick sampling includes: Mothers Against Drunk Driving, PA Fraternal Order of Police, PA Chiefs of Police, Drug and Alcohol Service Providers Organization of Pennsylvania, The Commonwealth Prevention Alliance.
In addition, a taskforce of The U.S. Centers for Disease Control issued a recommendation against wine and spirit privatization because of increased public health risks, while not addressing Pennsylvania specifically.
The truth of the matter is that privatization is bad public policy: it will cost jobs, hike prices and increase underage drinking, drunk driving and other public health risks. Gov. Corbett cannot convince his fellow party members on the merits, so he needs to make it about keeping his job.
But UFCW is encouraged that public hearings when this complex and important issue are to be convened in the Senate. Our members are confident that issues are aired, the governor’s political wishes will lose to good old fashioned facts.
Wendell W. Young IV is president of Local 1776 of the United Food and Commercial Workers Union, which represents state liquor store employees.
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Ireland: Further decline in alcohol industry sales
Source: Irish Times
Mark Hilliard
Wed, Apr 17, 2013
Alcohol sales in pubs has continued to decline while increases in related taxes have catapulted the wider drinks industry into further “chaos”, research published today has shown.
The Drinks Industry Group of Ireland (Digi) has warned that the current picture means the trend of job losses – 6,000 in Irish pubs since 2009 – will continue.
Its annual ‘Drinks Market Performance Report’ shows that the volume of pub sales has dropped by nearly one third in the past five years while consumptions levels have fallen by 0.5 per cent last year and by almost 20 per cent since 2001.
Digi points to a hike in alcohol product taxation of up to 41 per cent as being a major contributor, fortified by a shift in consumer habits.
Almost 60 per cent of alcohol sold in Ireland last year was done so in the off-licence trade, although the independent operators in this sector have also suffered a further decline in business.
“The figures in this report are stark; the Irish pub and independent off-licence sectors are in crisis and that crisis is being exacerbated by the huge tax hikes the sector has had to shoulder in the last 18 months,” said Digi chairman Peter O’Brien.
And things do not appear to be improving according to report author Anthony Foley of DCU’s Business School who says bar sales in January of this year dipped nearly 7 per cent on 2012.
“The overall market will be hit by the very large increases in excise levels in Budget 2013 and will decline slightly due to reduced average consumption and loss of consumers through emigration,” he said.
Digi has warned that apart from the obvious rolling impact on jobs, the decline in the industry is a threat to the tourism sector which relies on the ‘traditional pub’ and to local communities.
The report points to VAT increase from 21 per cent to 23 per cent in January 2012 and large excise increases in Budget 2013 resulting in beer excise increasing by 22 per cent, spirits by 18 per cent and wine by 41 per cent.
Digi warns that “the huge wine excise has had a particularly negative impact on the already hard pressed restaurant sector, and has counteracted any benefit from the introduction of a lower tourism VAT rate”.
Consumption too has taken its toll, it says, with average per adult rates decreasing by 0.5 per cent in the past year and by 19 per cent in since 2001.
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