The Beer Wars are back as new Miller Lite ads directly take on Bud Light on taste and carbs, as first reported in both WSJ and Ad Age last night.  The 15 second ads will debut on NFL games next weekend.  "Bud Light says raise one to right now, so why not raise the right one," the first ad says, and then:  "Miller Lite has more taste and half the carbs."   Three more ads will be coming, notes Ad Age.  Here’s copy from another: "Apparently Bud Light is inviting everyone to join their party. Thanks for the invite, we'll bring Miller Lite." MC also took ad in today’s Chi Tribune repeating the taste, carb and calorie claims. 

The Beer Wars are back as new Miller Lite ads directly take on Bud Light on taste and carbs, as first reported in both WSJ and Ad Age last night.  The 15 second ads will debut on NFL games next weekend.  "Bud Light says raise one to right now, so why not raise the right one," the first ad says, and then:  "Miller Lite has more taste and half the carbs."   Three more ads will be coming, notes Ad Age.  Here’s copy from another: "Apparently Bud Light is inviting everyone to join their party. Thanks for the invite, we'll bring Miller Lite." MC also took ad in today’s Chi Tribune repeating the taste, carb and calorie claims. 

Study published by New Frontier Data and Arcview Market Research not as bullish as Cowen report, originally pinning potential for cannabis market to reach $22.8 bil by 2020 earlier this yr before actually revising estimate “down slightly [to $20.6 bil] as a result of better modeling and data,” reported USA Today.  That would still be 3.5X growth vs 2015 estimated revs.  “Marijuana-legalization initiatives being decided by voters in November could provide a $7.8 billion economic jolt to the nation’s economy by 2020,” according to study.  Nine different states will vote on various legalization initiatives this fall tho Calif legalization would have largest impact, natch.  “A state-taxed marijuana marketplace could generate $1 billion in taxes in the Golden State alone.”  Thus far in Calif “proponents have raised more than $10 million to support the proposal, including $2.3 million from former Facebook president Sean Parker, while Pennsylvania retiree Julie Schauer donated $1.3 million in opposition,” paper noted.  All in, “savvy investors looking to get into the cannabis market can look at these numbers and see the industry is on the cusp, ready to explode,” said ceo of Arcview Group Troy Dayton.  Currently 25 states “permit some form of medical marijuana use” while CO, WA, OR AK and DC permit recreational use (tho DC “sales are prohibited and not taxed”).

Legalized marijuana industry will grow nearly 9X in 10 yrs to $50 bil in revs, according to lengthy 100 plus page report from Cowen and Co earlier this mo.  Cowen one of “the few mainstream research firms to officially begin covering the cannabis industry,” Forbes noted.  Currently legalized marijuana does approx $6 bil while black market makes up another $25 bil in sales, Cowen estimates (tho black market number gotta be tuff to pin down).  So lotsa 10 yr growth would be from “illicit sales transitioning into the legal market” on top of “continued growth in cannabis incidence.” 

That could have adverse effect on alcohol sales, notes Cowen’s Vivien Azer, using familiar if unproven logic.  She figures that consumers could “shift from alcohol consumption to marijuana use” as recreational pot becomes more commercially available.  (So far in states where pot legal, beer biz has grown.) Meanwhile, big tobacco cos stand to greatly benefit from marijuana legalization, since they “could leverage [their] expertise to explore the legal cannabis market through vapor,” sez Vivien.  In fact, tobacco could achieve as much as “~20% market share in overall cannabis, which by 2036 would have cannabis adding over 20% to the top  line and nearly doubling tobacco’s underlying growth,” she added.

Then too, down the road “there could be as many as ~17,000 legal cannabis retailers in the U.S,” per report.  In CO alone there are already 440 retail stores as of Jun 2016, which is “more than the state’s entire fleet of Starbucks.”  They generated $76 mil in monthly revs, nearly double last year.  An “average cannabis retailer generates $974 per square foot annually,” citing Marijuana Business Daily, which is “well ahead of department stores ($180), pharmacies ($676) or even Whole Foods ($930).”

Southern Glazer’s lawsuits an unexpected fallout of creation of $16 bil behemoth.   Southern Glazer’s is locked in legal battle with the 2 leading craft brewers in the state that represent big chunk of its beer biz there.  Plus recall Ballast Point reportedly terminated its distrib in OH too and switched earlier this yr.  And Pabst also in legal battle with several OH distribs.  Many times in past, distribs have sued suppliers that terminated distribs based on OH law that allows termination with change in control at supplier level. But Southern Glazer’s marks first time we know of that supplier tried to terminate because of change in control at wholesaler level.

Southern Glazer’s lawsuits an unexpected fallout of creation of $16 bil behemoth.   Southern Glazer’s is locked in legal battle with the 2 leading craft brewers in the state that represent big chunk of its beer biz there.  Plus recall Ballast Point reportedly terminated its distrib in OH too and switched earlier this yr.  And Pabst also in legal battle with several OH distribs.  Many times in past, distribs have sued suppliers that terminated distribs based on OH law that allows termination with change in control at supplier level. But Southern Glazer’s marks first time we know of that supplier tried to terminate because of change in control at wholesaler level.

As fed ct judge mulls whether to give OH distrib Southern Glazer’s TRO/injunction to stop termination by Great Lakes Brewing (see Expresses earlier this week), Southern Glazer’s filed amended complaint/emergency motion yesterday to add Boston Beer. Seeks same relief: to stop Boston termination.  Same legal argument too, that termination not for cause and fact that Boston did not consent to Southern Glazer’s ownership change earlier this yr is not grounds for termination.  Negotiations went differently between Boston/SG and Great Lakes/SG.  Boston and Southern Glazer’s apparently discussed a “standstill agreement” to hold status quo thru Oct 19; Boston’s termination on tap for Sep 30.  But that agreement never happened.  Fearing “disruption of termination” next week, SG added Boston to complaint to preserve status quo. 

Biggest difference: Boston a bigger piece of Southern Glazer’s OH biz.  While Great Lakes was 25% of Columbus branches’ beer revs and 4% of total revs, Boston is 50% of Columbus beer revs, 8% of total revs.  Data filed with emergency motion shows SG’s Boston revs in 2015 at $12.34 mil for 475K case-equivalents.  SG sold 218K cases of Sam Adams/Rebel, 135K cases of Angry Orchard, 94K cases of Twisted Tea last yr (SG also sold Traveler, Coney Island bands).  Recall, SG sold 156K cases of Great Lakes in 2015.  Southern Glazer’s sez it built its sales of Boston’s brands 75% by volume since 2011; 3-yr trend for revs +31%, volume trend +26%.  Over same 3-yr period SG “invested over $1.2 million” in Boston brands “in the form of advertising, equipment and facility upgrades specifically benefitting” those brands, as well as additional employees and new ordering/mgt system.  “Significant portion” of that $1.2 mil investment “made at the request of Boston Beer,” sez SG.  Loss of 75% of Columbus branches’ beer revs, 12% of total revs “would undeniably result in irreparable harm,” SG claims.  

Will Mitchell use ABI’s “Mobility ordering system?”  And “if so, he asks that Mitchell “please provide detailed information which demonstrates that ABI does not have access to other suppliers’ information” as that would “provide an unfair competitive advantage to ABI” since it “would have access to detailed account information of other suppliers.”  Finally, Dave asks as a condition of any potential approval that Mitchell provide “an enforceable commitment that it would not utilize the Yuengling brand rights as a lure to consolidate other ABI brands, which are currently distributed by other competitors in the marketplace.”  Dave asked for written responses to all these questions. 

AB has said that it chose Mitchell because it’s already in MS and could best service mkt. But this letter comes against backdrop of DoJ consent decree, which says that AB cannot consider 3d party brands in deciding upon any transaction. Lots of crosscurrents swirling around that should make for interesting conversation at upcoming NBWA convention.  See you in Chicago.    

Since AB “redirected this transaction to you, we need to know the exact relationship between” AB and Mitchell Rex (what Rex will be called after Mitchell purchase)   “and the commitments made by” Mitchell Rex to AB “which may materially impair its ability to successfully market our products.”  Dave also asks: “What if any information do you have in your possession which relates to the reason” AB “has redirected this transaction to you?” 

“We are requesting specific information on how Mitchell plans on financing this transaction since our investigations and due diligence into” Mitchell “would lead us to believe that it may be difficult for Mitchell to obtain the necessary financing unless it has financial assistance from other entities.  We certainly need to know the identity of those entities and the detail of any financing so we can assure ourselves that we are dealing with a financially sound distributor partner as well as an independent wholesaler.”  Unstated in letter, but implication is that Yuengling thinks AB could be lending a hand.