Likely to be a revision or two, but after modest gain in Dec (100K bbls, 0.8%), full-yr 2016 taxpaid shipments  down 1.4 mil bbls, 0.8%, estimates Beer Inst economist Michael Uhrich.  Total of 174.1 mil bbls more than 10 mil bbls lower than peak year 2008.  And you gotta go all the way back to 1980 ‒ that’s right, 1980 ‒ when taxpaids lower than 175 mil bbls.  Other than TTB’s final #s for Nov-Dec, and revisions which will come in as it reports monthly 2017 data, only other figure still outstanding is Dec import final.  And recall, that’s a tuffie, given that Dec 2015 imports posted big, 550K-bbl, 28% gain.  But barring disaster there, and assuming TTB will add bbls to 2016 figures per usual as yr goes on, still looks like total US beer biz eked out small gain in 2016, as it did in 2015.  Recall too, US shipments up in 2014 too, following 4 losses in previous 5 yrs.  So, nuthin’ to shout about, and beer continued to lose share to spirits in 2016 (and likely to wine as well), but a gain’s a gain.  

Talented former Coors ceo Frits van Paaschen, who went on to become Starwood ceo from 2007 to 2015, recently published a book called “The Disruptor’s Feast.” Sounds like something ABI would like as it’s only co we’ve ever covered with a Chief Disruptive Growth officer on its sr mgt team.  Book is getting noticed, including several prominent blurbs from folks like Arianna Huffington and CNBC’s Jim Cramer, host of Mad Money. In fact, Frits on Mad Money for 8 minutes last night with Cramer waxing rhapsodic that the book is “terrific,” “must-read” and “perfectly captures the Zeitgeist.” He also asked Frits about negotiating with president Donald Trump, which Frits did at Starwood.  Frits said “pay attention to the action, not the antics,” maintaining that President Trump a “great negotiator.”  Limited amount about beer in book, but…

Coors Banquet Turnaround  Frits does tell story of  Coors brand turnaround after it declined for 27 straight yrs.  How did they do it?  By tying Coors brand mktg back to its roots, including reappearance of the word “Banquet,”  “resurrected stubby bottles” and other cues that represented “Timeless Western Masculinity,” especially voice over by Sam Elliott.  Frits reveals that he tried to get rights to Bob Seger song “Still the Same” but Bob turned him down.  Whatever they did it worked.  Brand up for the last decade or so.   

White House press secretary Sean Spicer is married to longtime NBWA sr veep Rebecca Spicer, as Associated Press notes today, referring to NBWA as “the influential trade group.”  And Jake Leinenkugel, former ceo of Leinenkugel Brewing “appointed as a senior White House advisor to the Department of Veteran Affairs. He was sworn into the position Friday,” wrote Chippewa Herald.  “Jake is a veteran, two of his children are veterans.  He certainly knows firsthand the challenges and opportunities men and women who leave the military face,” his brother Dick Leinenkugel told local newspaper.  

New Belgium announced this morn it will be national by mid-year 2017, filling out from 46 states it’s already in, with addition of NH, VT, ME and OK this spring.  Last yr, NBB up 44,000 bbls,  4.7% to 948,000 bbls, boosted by 1.3 mil cases of hot new product intro Citradelic and expansion to several new mkts.  More details, including interview with founder Kim Jordan in next Craft Brew News.   

Can’t get too excited about 2-wk trends.  But Nielsen all outlet + convenience scans show volume +0.9% for 2 wks thru Jan 14; volume still -1.9% for 4 wks with late Dec a drag.  Constellation jumped off in Jan with vigor: +21% for 2 wks.  Several smaller players off to good starts too: HUSA and NAB each up about 3%, Diageo Beer +11.3% and Mike’s +15%.  AB off 0.8%, MC -1.9% for 2 wks, tho both trends much better than their 4-wk dropoffs.  Several signs of soft mainstream pricing in 4-wk data.  Avg AB prices up 15 cents/case, less than 1%.  MC got even less price: +7 cents/case, less than a half-percent.  Eight of top-10 economy brands priced lower for 4 wks, as were a few struggling premiums (Miller Genuine Draft, Bud Select and Miller 64).  In contrast, avg Constellation and craft prices each up 50 cents+/case.   

Fitting pattern of majority of deals we’ve written about in last yr or two, a smaller AB distrib, River City in Watertown, Wisc, will sell to a larger one, Wisc Dist (also known as WDI).  But this has some interesting twists.   Wisc Dist deal to buy River City got filed with state dept of Workforce Development yesterday, according to Daily Cardinal.  

Interesting twist: AB owns stake in Wisc Dist, but will sell that back to Wisc Dist, prior to closing of River City transaction.  Wisc changed law to prevent branches back in 2011, tho AB stake in Wisc Dist grandfathered in.   But AB selling anyway to “support voluntary consolidation,” AB said. “AB decided it was in the best interests of both AB and WDI for AB to divest its ownership interest in WDI so that WDI can move forward with their acquisition of River City Distributing.We thank the team at River City for their service as an AB wholesaler, and we wish WDI success as they expand their footprint.”  

Recall, NBWA and others made argument to DOJ that ABI’s partial stakes should be included in AB’s branch total, which DOJ mandated to be capped at 10% of volume.  Even tho DOJ didn’t agree and add that to restrictions on AB, AB could have been wary of optics of partially owned distrib scarfing up additional territory, especially considering DOJ monitoring trustee looks closely at AB distrib transactions.

River City over 1.2 mil cases and Wisc Dist will be over 5 mil cases after deal closes, estimated sources.  Wisc Dist also purchasing River City’s extensive book of Wisc craft,  some of which River City already sold in its territory.  River City serves as statewide hub for Badger Beer Alliance, network of AB distribs selling craft brands like Shiner and Abita and more statewide.  That’s another interesting twist, as “lots of supplier approvals needed” as one source said. Other distribs will undoubtedly seek to get some of their craft brands during transition.  AB sells about 20 mil cases in Wisc, has 30 share of mkt.  Deal expected to close in late Mar.  

Sifting thru the dozen comments filed with DOJ regarding its Proposed Final Judgment on ABI-SAB, and its response, interesting to note: 1) who bothered; 2) what different interests sought; and 3) what they got.  Recall: what they got is nothing.  Except on one minor point, DOJ did not change the PFJ.  Rather, as expected, it concluded all concerns and requested changes either outside scope of PFJ, not justified and/or already covered by it.  Then too, DOJ reminded, there’s a Monitor if anticompetitive activity occurs in the wake of ABI-SAB.  Comments filed by folks in each tier and a few outsiders: 1) brewers (Brewers Assn, Yuengling and Ninkasi); 2) distribs (NBWA, WBAE, OK and VA state assns); 3) retailers’ assn American Bev Licensees; 4) a consumer watchdog group and atty who was former FTC genl counsel; 5) Teamsters and NC AG (over closing of Eden, NC plant).  Interestingly, one of loudest voices critical of DOJ’s judgment/action, Pabst ceo Eugene Kashper, chose not to file comments.  Here’s top line on comments from distrib tier.  We covered what Brewers Assn and craft brewer Ninkasi sought in sister pub Craft Brew News last week.   

Distrib Assns Had Lotsa Asks  NBWA alone had 9 specific requests of DOJ, among ’em: include Molson Coors along with AB InBev in various restrictions/requirements, especially given “threat” it would follow ABI practices regarding distribs, a position that raised eyebrows last week when MC followed AB InBev in going to 50-50 splits on promos just after DOJ decision released.  Also, NBWA wanted DOJ to stop ABI from making any more distrib purchases, clarify 10% cap for allowable branch volume and include partial stakes in distribs, not just if AB owns 50% or more.  NBWA also asked DOJ to alter provision allowing ABI to require distrib spending be commensurate with share of ABI revs in house, to make it easier for distribs to take on new brands (which wouldn’t be part of “previous” year’s biz, upon which spend level determined).  Then too, NBWA asked DOJ to amend PFJ to actual ABI contracts, strengthen power of Monitor, require ABI to update its “antitrust policy” and mandate employee training.  Finally, NBWA wanted DOJ to “clarify” language to ensure ABI (and MC) distribs can’t be terminated based on virtually any aspects of their sale of competing brands.  WBAE, assn of state assns, had some similar concerns, especially about partial stakes, and also wanted PFJ to apply to Molson Coors.  It added concern about AB’s “match and redirect practice” and “right of first refusal” in distrib deals.  WBAE wanted DOJ to declare right of first refusal “unenforceable” if state bars branches and/or if proposed deal would put AB over 10% ownership cap.  Interestingly, BA also very supportive of many distrib issues.    

VA Distribs Call for Ending Required GM Stake; OK Distribs Want Branches There Divested  VA Distribs Assn had some procedural/timing concerns, also wanted PFJ to apply to Molson Coors and asked DOJ to remove ABI requirement that GM own an equity interest in distrib.  Also like NBWA, VA assn pointed out that allowing ABI to require spending based on previous yr’s sales was disincentive to taking on new brands.  Spending based on “anticipated revenues” in current yr should be allowed.  Finally, key among Beer Distribs of Oklahoma’s “significant remaining concerns”: it figures 88% of AB biz in OK sold by branches.  OK assn’s big ask: “ABI should be forced to divest ownership of distribution in Oklahoma.”  Barring that, DOJ should allow ABI to own only single distrib in US, like MillerCoors, or apply 10% cap on state-by-state basis, not nationally, OK assn suggested. It also wanted more fact-finding about craft access where ABI owns branches, especially OK, to judge impact.  Again, DOJ did not bite on any of this. It defended its specific proposed actions (sometimes in detail, sometimes not), noted that a Monitor is in place and concluded its actions “within the reaches of the public interest” up and down the line.   

Straub has put the matter of Calif ABC accusation behind it (see Express Vol 19, #8).  Recall, Straub faced accusation from Calif ABC with 20 counts about placement of fridges, coolers etc in various retailers.  Matter resolved with a fine, no admission of guilt.  “Last year we were contacted by the Department in connection with a trade practice investigation relating to cooler leases,” wrote Straub ceo Mark Danner.   “We understand that the investigation was instigated by a competitor.  We fully cooperated with the Department’s investigation and ultimately reached a pre-hearing resolution.  Straub Distributing takes seriously trade practice matters and maintains that its operations are fully compliant with California alcohol beverage laws and rules.”  Around 800 accounts reportedly have these fridges, but only about 5 involved in these accusations.  

Kind of a “soft launch” for AB’s new Bud Light campaign, showing the debut ad to media late on a Friday afternoon, debuting its first iteration on football conference championship games this past weekend.  Another iteration already coming for Super Bowl.  This campaign “designed to sharpen the brand’s purpose, celebrate what has always made us great,” said brand veep Alex Lambrecht.  First ad “weaves sentimentality with subtle humor,” said Ad Age.  Not too many comments from distribs yet, but those coming in not what AB would wish for.  Watch it here.  Let us know what you think at This email address is being protected from spambots. You need JavaScript enabled to view it.  

Amidst many moving pieces, on first working day, President Trump has proposed “if you go to another country…we are going to be imposing a very major border tax,” according to WSJ report.  Unclear if it would apply to Constellation or whether there could be carve out for cos who sell goods that originate abroad as opposed to goods that are moved outside US for manufacturing to save on labor/tax.  Constellation stock up 1% this morn in a down mkt. Morgan Stanley put out  75-pg report on Constellation, reiterating its belief in STZ’s growth potential and limited downside risk from any President Trump trade proposal, because of “numerous indirect offsets that lower this direct risk significantly.”