The 21st Annual Beer Insights Seminar at the Waldorf=Astoria in NYC is a premier industry event, coming right up Nov 9-10. We’ve just added a panel on the “Changing Landscape in Beer and Beer Distribution,” including consultant Joe Thompson, Columbia Dist (Washington) prexy Chris Steffanci.  This yr’s seminar has a stellar lineup, including top execs from each of the top 4 US beer suppliers: AB InBev’s prexy North America Luiz Edmond, MC ceo Tom Long, Constellations ceo Rob Sands and HUSA prexy Dolf van den Brink.  Beer Insights Seminar features topical talks, provocative panels, lotsa q&a, plus plenty of networking oppy.  We’ll also have an in-depth discussion with craft pioneers Deschutes’ Gary Fish and Brooklyn’s Steve Hindy, as well as a panel to explore one of the industry’s hottest topics: franchise law carve-outs for small brewers and other 3-tier issues.  Veteran industry attys Marc Sorini and Mike Madigan will be joined by Manhattan Beer’s coo Bill Bessette.  Click here for more info and click here to register.  

After “lengthy review,” ABI  has decided to go with WPP Group’s MediaCom for its media buying and planning, Ad Age and Ad Week reported yesterday.  Change is “one of the first big agency moves under Jorn Socquet,” mktg veep since Jan, wrote Ad Age.  AB spent $1.56 bil on total advtertising and $572 mil on measured media in 2013, according to Ad Age data center.  “The account represents a roll up of business that was previously split between Starcom (research, planning) and AB InBev in house group Busch Media (buying),” noted Ad Week.   “Adding to its efficiency play,” according to Ad Age, AB “sought to gain lengthy 120-day payment terms for agency fees in the latest review,” citing multiple sources as well as “extended payment terms for media buys.” But “it’s not clear whether or not the agency agreed to the terms,” added Ad Age.   

Heineken signed 4-yr deal worth more than $40 mil to become the official beer of Major League Soccer, “taking a spot Budweiser has had for nearly two decades as one of the league’s top sponsors,” according to Wall St Jnl.  “We’ve been looking for a national engagement platform for the US linked to our heritage,” said HUSA chief mktg officer Nuno Teles, and MLS is the “perfect match of what the brand stands for as a European import.”  Deal comes “after a summer dominated by soccer” during World Cup, according to WSJ.  Sponsorship rights alone will cost more than $3 mil per yr, more than 3x what they cost previously, wrote WSJ, citing “people familiar with the matter.”  

Heineken signed 4-yr deal worth more than $40 mil to become the official beer of Major League Soccer, “taking a spot Budweiser has had for nearly two decades as one of the league’s top sponsors,” according to Wall St Jnl.  “We’ve been looking for a national engagement platform for the US linked to our heritage,” said HUSA chief mktg officer Nuno Teles, and MLS is the “perfect match of what the brand stands for as a European import.”  Deal comes “after a summer dominated by soccer” during World Cup, according to WSJ.  Sponsorship rights alone will cost more than $3 mil per yr, more than 3x what they cost previously, wrote WSJ, citing “people familiar with the matter.”  

Just a couple of months after closing deal, Pabst announced series of internal promotions and division realignments, involving 15 different execs in memo to distribs.   Most notably, Pabst promoted Bruce Muenter, most recently vp of field sales East, to exec veep sales, reporting to ceo Eugene Kashper. Bruce will have purview over all Pabst’s sales functions, including field sales, natl accounts, international direct sales, network development and sales training.  His counterpart, Tim McGettigan, most recently vp of field sales West, promoted to vp of sales.  Expanded role for veep of biz development Rich Pascucci, who reports to Eugene, too: “his role will be evolving to include expanded responsibilities with Business Insights, mergers and acquisitions, strategic projects and the Distributor council,” Pabst wrote.  Pabst already apparently thinking about what its m&a strategy might be and Rich working with Eugene on that.  Many other individuals got promoted.   

Here we go.  Ink barely dry on Fair BEER Act and Brewers Assn already blastin’ away at it.  Then again, recall Beer Inst and NBWA went after Small BREW Act even before it was re-introduced in current Congress. Soon after Fair BEER intro’d today (see this morn’s Express), BA put out statement sayin’ bill “not the way” to reduce excise taxes on small brewers.  Why not?  Because Fair BREW “gives further tax advantages to multinational brewing companies” who pay lower tax rates than “purely domestic brewers.”  Plus, these bigger breweries have “cut thousands of US jobs” over last 6 years and “export and shelter their US profits,” according to BA ceo Bob Pease.   

BA statement links to “infographic” that details BA’s beefs via side-by-side comparison of Small BREW and Fair BEER.  While BREW creates jobs and small brewers employ 110K employees, up 10K in 5 yrs thru 2013, BEER helps 2 companies that employ only 25K Americans, sez BA, and one of them (AB InBev) eliminated 5K+ jobs since 2008.  BA also points out that its bill “costs less” ($64 mil annually) vs BI’s bill’s $150 mil. (BA estimates higher cost for BEER than we’ve seen, which is $112.7 mil.)  While BREW keeps those tax savings “at home,” BA sez BEER sends $19 mil to multinationals that have “exported US profits” for 6 yrs and additional $39.9 mil overseas.  Then too, small US brewers have effective tax rate of 40% vs 21.5% paid by multinationals “due to global tax reduction mechanisms.”  Finally, while BREW benefits “only small American Main Street” bizzes, BEER is “one-sided, since avg tax relief for small brewers is just $28K compared to the $4.8 mil in avg savings for the “4 large multinational corporate breweries.”  (Editor’s Note: Lotsa omissions here, natch.  But gotta note two largest BA-defined “craft brewers” – Boston Beer and Yuengling – get same $4.8 mil savings under BEER.) 

BI, Co-Sponsors Point to BEER’s Bennies  Meanwhile, BEER co-sponsors Steve Womack and Ron Kind put out joint statement noting its introduction.  Womack points out tax policy should not discourage growth or “pick winners and losers in the market.”  BI’s release claims “laddered” approach of BEER provides “greatest relief to the very smallest brewers” and reforms “a hidden tax that most beer drinkers don’t even know they pay.”  

IRI multi-channel scans for Jan also show beer volume up slightly in first batch of data of the yr: volume +1.2%, $$ +3.7%.  AB and MillerCoors volume each down slightly: AB -0.4%, MC -0.9%.  Biggest winners haven’t changed: Constellation +10.7%, Boston +16.8%.  And HUSA off to good start, +4.2%.  Pabst down slightly, NAB off 3.4%, but DGUSA, Yuengling and Mark Anthony each up, as were all craft brewers of size.  Then too, dollar sales for 21 of top 25 suppliers up for 4 wks thru Jan 25.   Bud Light +0.1% (volume), Coors Light -1.7%, Lite +2.5% and Bud -2.5%.  

That should do it.  Tho imports slipped slightly in Nov-Dec, ended 2014 +1.9 mil bbls, 6.9%, reports Beer Inst, based on Commerce Dept data.  That’s best yr for imports since double-digit pop in 2006.  Mexican brews led the way, natch.  Up scorching 2.4 mil bbls, 15% for the yr as Constellation cooked, Dos Equis double-digited and AB pumped in some Montejo.  Other big winners: Belgian beers jumped 383K bbls, 24%.  Tough going from elsewhere, with Dutch shipments off near 5%, Canadian shipments down 10% and even bigger % drops from Ireland, Germany and UK.  See import deep dive in next BMI.  With final import number reported and Beer Inst estimating solid Dec gain, that should seal increase for US beer in 2014.  Right now, number is +1.5 mil bbls, +0.7%, including cider.   

Just a week after garnering very favorable press in Milwaukee with notion of starting a pilot brewery there floated during visit, new Pabst ceo Eugene Kashper played the “hometown hero returns” card in Seattle too.  This guy gets around.  “His vision includes the return of brewing operations to Seattle,” wrote Seattle Post Intelligencer blog. “Kashper hopes to select a location for a new brewery and tasting room in the next few months.” Tasting room would “explore a range of Rainier brews beyond the classic lager,” which would continue to be made in Calif. Recipes would come from pre-Prohibition Rainier.  “It will only add to our brewing cred to add some of these historical products” said Eugene.  Plan is to peacefully co-exist with all the local crafts.  “What we want is to promote great beer culture,” said Eugene.  “All our values are craft values.”  Eugene’s plan is to hire a local brewmaster and locally source the ingredients.  In online poll, 78% checked “Awesome. I would love Vitamin R even more,” while 17% voted “Eh, it’s fine, but they’re still corporate now” and only 5% voted: “This is a cheap ploy. Local nanobrews all the way.”

Incidentally, Rainier on a roll in Wash. Climbed 24.5% in Seattle/Tacoma foodstores, according to IRI.  It is #3 brand there in volume, passing Budweiser in 2014.  Bud flat for yr in Seattle scans.   Rainier gained 0.7 share of volume, to 4.2, a bigger share gain than any other brand. But it’s only 2.7 share of $$. 

What’s in BI bill?  Fair BEER reduces all beer suppliers’ fed excise tax, including importers.  New formula graduates tax from $0/bbl on first 7,143 bbls to $3.50/bbl on volume to 60K bbls, $16/bbl on volume up to 2 mil bbls and then current $18/bbl on all other volume.  Obviously that means per-bbl break is different for every brewer.  AB, at our estimated 94.75 mil bbls in 2014, would save approx $5 mil or about a nickel/bbl.  A 10-mil bbl brewer or importer would save same $5 mil, about 50 cents per bbl.  And so on down to smallest of brewers (under 7,143 bbls) whose tax would go from $7/bbl now to 0.  Price tag for Fair BEER is approx $112 mil annually at current volumes.  That’s not much more than $65-70 mil price tag for Brewers Assn-backed Small BREW Act and tons less than previous BEER bill which cost in neighborhood of $1.8 bil annually.  That’s a huge change ‒ AB’s break shrunk from $850 mil to $5 mil.

Why did Beer Inst go from backing a tax cut that provided up $9 bbl to just a nickel for its biggest member?  Fair BEER was “designed to pass,” BI veep Chris Thorne told us, claiming “this is the right time for this legislation.”  Fair BEER recognizes that “times have changed,” the “structure of the industry has changed” and “atmospherics have changed.”   Oppy for big rollback “has passed,” Chris added, and Fair BEER gives everyone tax relief while giving smallest brewers deepest cuts.