Not sure what to make of decision from county court judge in Wash last week in lawsuit to halt Costco-supported initiative to privatize liquor biz. State won summary judgment which it sez means privatization process goes forward. But part of ruling was that initiative involved separate issues, which plaintiffs insist means whole thing was unconstitutional and therefore void. Judge ordered new hearing for Mar 19 and looks like Wash Supreme Ct will have final say.

First day of annual legal symposium hosted by control state assn NABCA avoided 800-lb gorilla in room: attempts to privatize control states. That’s key focus of day 2. Instead, meeting kicked off with lively face off between attys Tracey Genesen, voice of direct shippers, and distrib advocate Deborah Skakel. They showed that after 7 yrs, still virtually no consensus on meaning of and key lessons from US Sup Ct’s Granholm decision. They did agree that clarity needed from Sup Ct on whether states can require presence/bricks and mortar of in-state wholesalers and/or in-state retailers.

Running theme thru other sessions on Monday was that pace of change/innovation in industry moving faster than regulators’ ability to keep up. Examples: growing number of COLA applications at TTB (over 145K in 2011) has agency thinking of streamlining process. Wine atty suggested TTB move to “deemed-approved” labels for some products that don’t need pre-clearance. Gallo atty warned of pitfalls if TTB were to drop COLA process, including conflicting state systems. Other issues creating challenges for regulators: 3d party alcohol sellers that advertise brands, attract clients and take orders but not licensed to sell/ship alcohol. Key to accommodating them seems to be making licensee control the money. (This is bigger in wine now, but note direct beer shipper beerjobber.com just went live.) Also, retail chains expressed some frustrations when seeking multiple licenses and “mobile alcohol” outlets -- from food trucks in Portland to “pedal bars” (powered by beer drinking bicyclists) elsewhere -- are expanding notion of “drinking places” all over the country. Seven yrs back, direct shipping seemed to be big head scratcher for regulators, industry attys, but clearly that was just the beginning.

“Man Up” ads have “run their course,” Molson Coors ceo Peter Swinburn said during Investor’s Day. New ads will be more “celebratory” and appeal to “broader demographics,” he said. Later same day, Ad Age broke story that MillerCoors “poised to revive classic tagline” for at least the 3d time. Indeed, “Miller Time’ never really went away,” wrote the mag and is “still found in bar signage for instance.” In recent yrs, Lite has again “struggled to find a winning theme” jumping from agency to agency and slogan-to-slogan, including “Man Laws,” “Ultimate Light Beer” and “Man Up.” And now it’s Miller Time. Again. Meanwhile, the brand has dropped for 4 straight years, falling 3.1 mil bbls, 17% during that period. And it’s off to a tough start in 2012, down over 5% in Symphony IRI Group foodstores yr-to-date and about 5% overall, INSIGHTS hears.

Molson Coors had its annual investor day yesterday afternoon and ceo Peter Swinburn rang the closing bell on the New York Stock Exchange. Peter announced several new products including Coors Light Iced Tea in Canada in April, a fall Leinenkugel Shandy extension and Carling Zest in UK, all demonstrating ramped-up innovation pipeline. There was shortage of innovation a few yrs back, but pipeline “now so full” in US that MillerCoors can’t get everything to mkt as quickly as it would like. In 2012, Molson Coors will also place more emphasis on top line growth and less on cost savings with increased mktg investment of at least $30 mil, including in US.

Analysts this morning so far had kinda ho-hum reaction, with both Goldman Sachs analyst Judy Hong and Morgan Stanley’s Dara Mohsenian calling analyst meeting “uneventful” and Stifel Nicolaus’s Mark Swartzberg saying “we didn’t hear enough news to alter our estimates on Molson Coors.” Then too, “we remain skeptical around TAP’s ability to reinvigorate topline trends,” wrote Dara, “with weak beer category growth in its mature markets, market share losses and beer innovation has historically not been a sustainable volume driver.” Dara details all the big splash beer intros far below their peak or out of the mkt. Tho TAP is “making an increased effort on innovation and more directly addressing wine/spirits competition,” Judy wrote, “it remains to be seen whether these efforts will gain traction in light of increased competition (both ABI and smaller companies).”

Molson Coors stock dropped $1.29, 3% yesterday in rough day for mkt overall. Molson Coors stock has dropped more than 25% from its 2008 peak, despite all the synergistic savings reaped from the MillerCoors JV with SABMiller. But Molson Coors shareholder return plus dividends has outpaced S&P over last 6 yrs, said cfo Stewart Glendinning. Plus Molson Coors currently has cash of $1.1 bil. Its mkt cap at $7.6 bil.

Private label beers jumped from 1 mil cases to 2.3 mil cases in SIG data, Dan Wandel revealed on Power Hour. Private label is finally “resonating with the right segments and the right price points in our economy,” Dan said. New private label efforts focused on craft and subpremium. Indeed, 7 of 14 new private label brands were craft, including #2 new craft brand overall, Double Take IPA. Los Angeles is the #1 mkt for private label beer. Private label has 0.9 share of LA food/drug mkt and 33 private label brands sold there. Phoenix/Tucson is #2 and 18 private label brand sold there.

Stella Artois ranked as Symphony IRI Group’s #1 “Momentum Beer Brand” in supers last yr, Dan said. This ranking, Dan reminded, is “based on a number of different measures, not strictly sales.” Stella narrowly bested Modelo Especial and Yuengling. Mich Ultra and PBR rounded out the top 5. That’s a much better showing than AB has had in most other recent yrs on this measurement. Shocktop at #6 too. MC’s Leinie Seasonals at #9 and Blue Moon Belgian White at #10.

Craft continues its steady ascent in supers: craft share of $$ has doubled from 5.4 to 10.8 in last 6 yrs, while premium beers dropped 5.5 share to 39.8. It’s an oversimplification, sure. But also impossible not to note, that’s almost a one-to-one correspondence. Craft gained 5.4 share and premium beers lost 5.5 share last 6 yrs in supers. Craft achieved its 6th consecutive yr of double digit $$ sales increase in supers, $$ up 15.1% and gained 1.2 share to 10.8 share in 2011. And craft poised to hit 12 share in supers in 2012, according to Dan. Indeed, that’s what he titled his presentation, “12.0 by 12/12,” calling goal “very attainable.” It’s not just that larger players in beer biz have failed to produce new hits in recent yrs, but at same time, biggest brands have declined. Here are some details Dan showed: In 2011, top 8 megabrands were 46% of industry $$ sales and $$ down 1.8% in supers. They lost about 1.5 share of $$ between ’em. The only gainer: #8 Michelob Ultra. The only other top 15 brand that gained: Blue Moon Belgian White.

While 2012 poised to be best yr in beer innovation since at least 2008, beer biz not very good at innovation in recent yrs, Symphony IRI Group sr veep Dan Wandel showed during Brewers Assn Power Hour this afternoon. “We’ve been in a rut,” said Dan. Last yr, 362 new beer brands intro’d. That was highest total of new brands in 6 yrs. Yet 2011 “marked the third straight” yr of “declining case sales” from new brands, said Dan. And also 2d lowest total volume in 6 yrs for new brands: at 1.382 mil cases in scanned channels. Down by more than 2/3 from 2008, yr of Bud Light Lime launch. New brands got 4.9 mil cases in 2008. New brands could break 5 mil cases in 2012, said Dan on call. Another interesting note: 8 of 15 top new brands intro’d in beer biz in 2008 have already been discontinued, including some Mike’s, Smirnoff and Bacardi flavors as well as 2 Michelob craft styles too. And 5 others down, with 4 down more than 25%, including Bud American Ale, just hangin’ on, down 62%. Only New Belgium and Blue Moon variety packs were up.

But Dan “excited about the innovation outlook” for 2012, which will include “plethora of new items,” not just Bud Light Platinum, but IPAs, ciders, FMBs etc. Beer biz will be trying harder on innovation front in 2012, so it will be very interesting to watch how successful brewers/importers are with their ramped up innovation efforts. By the way, SIG beer data does not currently capture pouches, a major focus of innovation for Diageo, Phusion Projects, etc. In 2011, AB had top new brand in SIG data: Shock Top Raspberry Wheat Ale at $6.450 mil. That was 2.5x the 2d largest new brand, Mike’s Hard Raspberry. MGD 64 Lemonade at #3, yet it was discontinued last summer. Kona variety pack at #4 and Shock Top Seasonal at #5.

MillerCoors sales-to-retailers dropped 2.8% from Jan 7 to Feb 18 compared to same period a yr earlier, according to a recent MC report. Meanwhile, AB up 1% yr-to-date thru mid-Feb. Both numbers selling-day adjusted, say sources.

Here’s a few fascinating glimpses of early 2012 from the cos. AB up 11% in Indiana in Jan, driven by Super Bowl being there. Wholesalers have always told us, this really matters in their markets, and so it also makes for tuff comps the yr after. For example, Wisc down more than 5% for AB in Jan, going against prior yr when Packers were in Super Bowl. MC off double digits in Wisc during same period.

Most of MillerCoors biggest volume challenges came from midwest. Many MC distribs in Chi cluster down double digits in this 6 week period, INSIGHTS understands. That’s largely because last yr there was load in before a price increase. And MC down at or near double digits in Oh too, taking big hit from Yuengling intro. Interestingly, AB only down 2% in Oh in Jan. That was way ahead of what it had budgeted. So if AB looking for evidence that its wholesalers would be better off without Yuengling, can’t find it in results so far.

AB’s biggest volume challenges remain in West, where it’s still off nearly 3% yr-to-date. But Southwest is rockin’ so far in 2012, up nearly 7% thru mid-Feb. Amidst overall weakness, MC showing some pockets of strength in Northeast so far.

Luiz Despite generally upbeat tone, North American prexy kept rhetorical heat on AB wholesalers who sell outside their footprint and those who sell competitive brands that take taps or space from AB. Both practices deemed “not acceptable.” “We cannot pretend that we like it. Or that we don’t notice,” said Luiz, adding this is “not an example that our good partners share.” But what that will mean going forward remains unclear, since as some distribs noted, one of AB’s top award-winning wholesalers this week also sells Yuengling, for example. Luiz repeated “alignment” theme. “We’ll win together with our wholesaler system, especially with those aligned with us,” said Luiz. “We’ll not always agree,” he added, “but even when we do not, we’ll keep a positive and constructive debate.... Alignment will pay back for you, for us and the entire system.” Consolidation “will and must happen,” said Luiz. Not only are there “synergies to be captured,” but MC network has already largely consolidated and so AB “risks being uncompetitive” in some mkts. Preferred consolidators or “anchor wholesalers” will be “aligned” with AB’s “core principles, philosophy” and “legislative agenda.” Branches “have a role to play in consolidation” but distribs “not in competition with branches.” Rather it’s a “way to jointly develop the system.” As for additional non-AB brands, “there is no perfect answer.” While AB would like 100% share of mind, it recognizes that’s not likely. “Answer is directional,” said Luiz. “If you’re not there yet but heading in the right direction,” that’s important to AB.