Brief hearing on sealed lawsuit between FEMSA and Interbrew over integration of Beck’s into Labatt USA (70% owned by Interbrew, 30% by FEMSA) inconclusive.   Judge ruled for fuller hearing later in May and expedited discovery process.  Yet judge allowed Labatt USA to proceed with integration  (which FEMSA sought to prevent)  “at your own risk.”  There is “no restraint in the interim.”  By next biz day, LUSA already in motion.  LUSA/BNA combo  will have about 100 fewer total positions as LUSA combines with Beck’s North America; vast majority of reductions from BNA side. 

FEMSA argues that it has right to prevent integration under its 99-yr distribution agreement with Interbrew.  Sez it would be immediately and irreparably harmed if the integration went forward by “loss of focus” and “deprioritization” of FEMSA brands.   Interbrew argues “no injury at all.”   But FEMSA atty pointed to “express plan to change prioritization of brands,” adding that in 32 of 37 mkts, plan is to “deprioritize” FEMSA brands.  Cited Chi, where Tecate is currently #1 LUSA priority, but would drop behind Beck’s; Dos Equis would be off priority list.   LUSA atty said: “If there’s a refocusing," which he did not acknowledge, "that doesn’t mean it’s ignored.”   Also disagreed that FEMSA had any right under agreement to stop integration.  Papers sealed.

Fed judge tossed Illinois law passed in 99 to protect wine & spirits distribs. It sparked a buncha lawsuits and big public relations battle between distrib Wirtz and UDV/Guinness. Vintner Kendall Jackson led legal charge vs law. Won summary judgment last week. Fatal flaws: law was retroactive and favored in-state vintners. State may have to pay KJ?s legal fees too. Can?t help future efforts by distribs lookin? for favors from state legislatures. That?s second win for suppliers against franchise law in less than a mo in a big state. Recall NJ guv refused to sign beer bill in NJ mid-Jan.

Two big intl brewing transactions closed since Friday that will lead to many more changes. First, Interbrew bagged Beck’s for $1.6 bil and will now complete “integration” of Beck’s into Interbrew ASAP, wrote Reuters.  But don’t know yet what that will mean in US.  Next day Coors paid Interbrew $1.7 bil for Carling.  Coors has named its UK co Coors Brewing Ltd and its ceo will be Peter Kendall, previously Coors sr veep and chief intl officer.  Sr veep corp development Rob Klugman adds chief intl officer title; Rob “led the Coors team” negotiating for Carling, said Coors.  Interbrew’s next move undoubtedly already in works.  One possibility: an Interbrew/Carlsberg joint venture in UK, reported Sunday Telegraph. 

For 1 qtr at least, red ink turned to black for 2 of top micros. Redhook had oper income of $46,000 and Pyramid made almost $500,000 in 2d qtr, tho both still lost $$ for 6 mos. Redhook volume up 5% in 2d qtr, which ceo Paul Shipman noted was its 12th consecutive qtr of volume growth. Jul shipments up 15% too. Pyramid beer shipments up 3% in 2d qtr.

No progress in talks yesterday and no date set for new ones between Teamsters and AB’s statewide RI distrib McLaughlin & Moran, Providence Jnl reported.  Potential fallout: two state pols vowed to repeal RI’s franchise law.  One of ‘em trashed distrib as “arrogant, union-busting” co running “greedy monopoly,” and said new law will “remove this irresponsible corporate citizen’s bullet-proof vest.”

“Inflammation” may be “even bigger trigger of heart attacks” than cholesterol problems, AP reported.  Why's that matter? Turns out that one way inflammation “can be readily lowered” is, you guessed it, “moderate alcohol intake.”  New findings about inflammation “will change everything we do in heart disease,” one cardiologist told AP.  Stay tuned.

Once again Coors shows willingness to ante up for high-profile US mktg events, as it struck multiyear pact with Miramax Films which includes “co-hosting of premieres and special events" and "product placement and promotional opportunities” in some flicks.  Follows on heels of Coors’ NFL deal, $10-20 mil campaign with new Hispanic agency, and efforts to find a 2d creative shop for some “very surgical smart-bombs” as sr veep mktg Ron Askew told Ad Age.  Will these moves improve sales picture? 

Bad news. That?s 2d-straight increase following declines in 12 of previous 13 yrs. Ten-yr trend still shows 15% drop and % of all deaths that are alc-related stayed same. Note: govt revised figures for alc-related deaths upwards for previous yrs. Details in Aug Alc Issues INSIGHTS.

As AB upping stake in #1 Chinese brewer Tsingtao (which had 11 share of 194-mil-bbl Chinese beer mkt in 2001) sets up interesting battle of top-2 worldwide brewers in soon-to-be #1 beer mkt. SAB is #3 in China through its joint venture CRE Bev (6.4 share).  SAB’s made 27 acquisitions in China in recent yrs, and is “committed to growing our position in China,” SAB spokesman told South African paper Business Day this week.  Some speculation in foreign press that AB may raise current 5 share of Tsingtao to as much as 25%.  Interestingly, AB’s biggest partner in Tsingtao would be Chinese govt, which owns about 40%.

They’re everywhere in beer biz these days, those high-paid McKinsey and Co consultants, or so it seems. McKinsey and Co is certainly in Milwaukee for SABMiller during transition.  Also has done lotsa work for Interbrew.  Connection goes deeper tho.  In '99, McKinsey consultants authored what now appears prophetic paper about  coming globalization of beer biz.  It praised consolidators like… Interbrew and SAB.  Hmm.  Same paper put Miller in category of  “dressed-up for sale.”  Finally, 1 of authors, McKinsey consultant Richard Benson Armer, gave statement in current lawsuit between Interbrew and FEMSA.  Richard said he worked with Interbrew for the last 7 yrs (before joining McKinsey, he worked for SAB), and described himself as "leader of teams charged with assessing Beck's North America business."