These numbers are staggering. Between 2012 and 2015, ABI upped its North American sales and marketing expenses from $1.8 bil to $2.3 bil, an increase of $500 mil, 28%. Sales and marketing expenses went from 11.2% of revs to 14.7% of revs in just those 3 yrs. Yet AB lost another 6 mil bbls, 6% of its biz here in US 2012-2015 (US is almost 90% of ABI's North American biz). Since 2008, ABI has lost approx 13 mil bbls in US. ABI will be upping the ante again with more big increases in investments in 2016. Initially, ABI reaped $2.2 bil in synergies and savings in US 2008-12. But ABI EBITDA in US down last 2 yrs as it invests heavily in effort to transform portfolio and stabilize share. ABI reported "normalized" N. American EBITDA down 3% to $6.2 bil in 2015 and US EBITDA down to $5.5 bil. So ABI clearly willing to make less in intermediate term here in its biggest profit mkt. It's totally committed to spend "ahead of the curve" as ceo Brito said on conference call. With big increases in spending, "we're not only trying to fix the gaps we have, but we're trying to feed the winners," he noted. "Very important" things are working here such as Michelob Ultra up more than 15%, Stella up double digits, Goose Island IPA up 150% and Bud got best STR trend in more than a decade. Both Bud and Bud Light down low single digits. Bud Light said Brito, "is the one we really need to get to a better place." Bud Light share losses continue unabated; it lost 0.8 share of $$ in IRI YTD thru 2/21. "If we can stabilize the brand...that would be a big plus.... There's a lot of things working together now," said Brito. "We just need to add Bud Light to that group."

In 2015, AB US sales-to-retailers down 1.7%, same trend as in 2014, despite another massive infusion of sales and mktg. AB lost 0.65 share, it figures. Meanwhile shipments down 2.2%, including 3.3% drop in Q4. But depletions down only 1.1% in Q4 as total industry improved by a half point to very slight uptick (0.15% estimated AB). AB rev per bbl up 1.6% in 2015 (but 2.3% in Q4), about same as AB got in 2014 (1.7%). ABI moving in several other directions to get US biz to a better place. Recall, it bought a half dozen craft brewers in last 2 yrs (7 since 2011), spending hundreds of millions of dollars. And it's still looking to buy more. Those craft brewers grew over 30% and will be well over 1 mil bbls in 2016. AB also now owns over 20 retail outlets. ABI is only company we've ever covered that has a vp of share of throat and a chief disruptive growth officer. As AB tries to play more and more in what it calls "near beer," it's launched several brands under Best Damn moniker (Root Beer at 0.2 share nationally in Nielsen). Then too, AB's most significant product launch in 2016 will be Mexican import Estrella Jalisco. Beyond products, another area of potentially disruptive growth is e-commerce. AB has moved from 0 to over 100 people on its e-commerce team in 1 yr, Drizly ceo Nick Rellas recently said. AB also partnered with mobile app Ibotta on electronic rebates (where legal). So with nearly unlimited resources, and a big appetite to return to growth in US, will AB achieve either growth or share stabilization here? If so, when?  

Constellation Brands Beer Division sales-to-retailers accelerated each of last 6 yrs, culminating in a 23-mil-case, 11.8% gain last yr, cco Bruce Jacobson told the Gold Network Summit. It had grown 9.1% in 2014, 6.6% in 2013, 5.7% in 2012. Constellation now up for 23 consecutive qtrs. Last yr, 6 of 7 brands had record-breaking or record-tying volume. Corona up 9 mil cases, 8.5% last yr to 116 mil cases, just shy of its all-time high. About a third of that growth came from cans, which more than doubled and grew to 6% of Corona mix. Modelo Especial, gained 11 mil cases, 19% to 70.5 mil cases. It was only 30 mil cases in 2010. Other brands also kicked into higher gear, chief sales officer Bill Renspie pointed out. Corona Light up over 1 mil cases, 7.5% to 15.5 mil cases. Pacifico grew 5% to 6.7 mil cases. Negra Modelo up 7% to 4.2 mil cases. And Victoria up 11% to 2.6 mil cases. Meanwhile, Modelo Especial Chelada up 37% to over 3 mil cases. In 2015, 75% of Constellation distribs grew more than 10%, said Bill, over 40% up 15+% and almost 20% had 20%+ growth. In Calif, Constellation grew over 2.5 share in 2015; 2 Calif mkts over a 30 share, Bill pointed out. "The bigger our brands are the faster they grow," Bill added. Constellation also gained 1 share in Tex, 1.2 in NY, over 1 share in Fla.

Constellation mktg team delivered another solid set of ads, plans programs. "The number one volume driver is tv," said cmo Jim Sabia. "We are huge fans of live sports." To that end, Corona brand will get another 10% increase on natl tv media spend and 25% more digital on top of double digit increases in last 5 yrs. Brand already has breadth and depth of support of top 2's megabrands. In fact, Jim showed Corona was actually #1 in Share of Voice on English Language natl tv for 2 mos (Sep-Oct) during football. For first time, Constellation will bring "entire Modelo family under one roof" (Modelo Especial, Negra Modelo, Chelada) with ad campaign dubbed "Casa Modelo." Meanwhile, Modelo Especial ramping up gen mkt spend 40% nationally, showing several new executions. Corona Light also getting over 50% boost in tv weight. Pacifico tv will expand to 40 new mkts and even Victoria will get its first natl language Spanish campaign. "Over 50% of our business" is with Hispanics, reminded Jim. "This bodes very well for our business."  

Constellation Brands Beer Division's ambitious plans go well beyond doubling with fast-growing imports. As detailed at Gold Network Summit, CBBD seeks to cement status as "high end leader" with increased investment and innovation in new areas. "Our plans are to further accelerate the growth and keep this momentum going," said CBBD chief commercial officer Bruce Jacobson, with "even greater investment." Constellation sells top 2 imports, Corona Extra and Modelo Especial. They grew 20 mil cases last yr (see below). And it just put "$1 billion toe" in craft waters with acquisition of Ballast Point, noted new CBBD prexy Paul Hetterich. CBBD just "getting started" in craft, added Paul and "we've got more to do." But "can't ignore fact" that it has a "goose egg" in FMBs and superpremiums, noted Bruce. Paul also pointed to "a lot of white space" in superpremiums, where he expects "more sessionable big brands to evolve over time." And FMB segment, tho "constantly shifting," also "keeps getting bigger...we need to tackle that" too, said Paul, somewhere down road. "FMBs, new flavors, new styles, line extensions," said chief mktg officer Jim Sabia, "We are working on all these things." At same time, current portfolio will get "more and more resources to take these brands to the next level."

Constellation riding crest of a wave. High end beer went from 32 to 44 share of $$ in last 5 yrs, said Paul. Constellation sees high end growing to 2/3 of biz in 7-10 yrs. "That's where the center of gravity will be" in beer biz, he emphasized. "We are the ones that can really drive that," he added. Constellation "actually considerably ahead of that goal" of doubling in a decade, said Constellation ceo Rob Sands. "The worst thing we could possibly do is run out of beer," said Rob. "That would be shooting ourselves in the foot." Hence it's spending billions, not only on Nava expansion, but green field brewery in Mexicali. Nava is a "Herculean task" that in "most respects has gone without a hitch," said Rob. Paul "responsible for integrating" and there is "no one better" to become CBBD prexy. CBBD will have capacity for 395 mil cases in 2020 (sold 218.8 mil last yr).

Constellation History as "Risk Takers"; Mgt Changes; Tribute to Bill "We've been big risk takers," said Paul. "You need to take risks to capitalize on opportunity." When he started with Constellation 30 yrs ago, it was around $100 mil mkt cap, now it's almost $30 bil. Constellation went thru many changes, like working for 6 or 7 different cos, said Paul. But a "number of constants. We're still a family business." Rob Sands is only 3d ceo in co's history, following his brother and his Dad. Execs paid tribute to chairman Bill Hackett's accomplishments and vision. Paul tipped hat to Bill's "unwavering commitment and belief that the business could be what it is today." Corona and Modelo Especial "are going to be the center of the high end.... That's a tribute to you, Bill." Paul honored to have "opportunity to fill your shoes. It took four of us to fill your shoes. Everybody here is going to continue to benefit from your counsel. We're not going to let you down, Bill." Then Bill got huge standing o, natch. Bill said he's "not going anywhere," but will now function "more as a coach, not as a quarterback." Constellation biz "not missing a beat."  

Join us May 16-17 at the Ritz Carlton in Chicago for our annual spring conference. We're mixin' it up a bit this year. As usual, we'll provide a provocative program and plenty of quality networking time. But we're expanding the scope to include the current deal landscape (brewer and distrib) along with our annual focus on the high end. We're also adding presentations starting mid-afternoon Monday and going all day Tuesday.

Just added: a topical panel on rapidly shifting craft trends, IPAs & Beyond, featuring three prominent craft founders: Dogfish Head's Sam Calagione, Stone's Greg Koch and Victory's Bill Covaleski. We'll also feature an extended panel with several of the leaders of beer's high end: Constellation Brands Beer Div chairman Bill Hackett, HUSA prexy Ronald den Elzen and Boston Beer chairman Jim Koch. Separately, we'll feature two top execs from Sierra Nevada, Brian Grossman and Joe Whitney. We'll also bring you the latest from key consolidation consultants: IBG's Joe Thompson on distrib consolidation, Bill Anderson on craft brewer consolidation, plus partners Mark Hall and Randy Jozwiakowski of newly formed Paragon Bev Advisors (they previously gained lots of experience working on deals at Anheuser Busch). BMI publisher Benj Steinman will provide his annual overview with key stats and developments. Click here for more info and click here to register.  

Turns out Senators had follow-up questions for panel members at Dec hearing about ABI-SAB deal and what it may mean for US beer biz. Responses to questions put to AB InBev ceo Brito and Brewers Assn ceo Bob Pease provided additional color and facts. Then too, questions from Sen Leahy and Sen Tillis show concerns of distribs and craft brewers are being heard. Senators probed Brito on whether AB's distrib incentive program (VAIP) would "severely restrict the ability of other brands to compete," restrict AB distribs' oppys to grow and also probed commitment AB would not sell over 10% of volume thru branches.

Brito: 7.8% of Volume Sold Thru Branches; AB Incentives Haven't Stymied Craft So Far AB branches currently distribute 7.8% of AB volume in US, up from 6.37% 5 yrs ago, Brito revealed. AB would not want to agree to provision to set 10% as a "hard cap" tho, because it is "irrelevant" to ABI-SAB transaction. Also, given a dynamic mkt, AB could get above 10% if independent distribs underperform, branches outperform or via "timing of acquisitions and divestitures" even while branch footprint did not change. AB has had voluntary distrib incentives for 15 yrs, Brito noted. Yet during that time craft grew share from 2.4 to over 11 and Constellation has "risen sharply" while AB sales and share declined. "Clearly," AB incentives haven't "restricted the ability of other brands to compete," said Brito. Besides, new VAIP, he said: 1) developed "with input of advisory panel" of indie distribs; 2) "purely voluntary"; 3) "natural and appropriate" response to enhance AB sales; 4) allows distribs at highest level of benefit to sell brands from 93% of all craft brewers; 5) provides bennies regardless of how many competing brands distrib carries; 6) has "no penalty" or loss of oppy for distribs that carry non-AB brands.

Brito called reports that AB will not approve distribs with less than 90% of their biz in AB to purchase another AB distrib "simply false." Claimed AB "never instructed one of our independent wholesalers not to carry non-AB brands." AB contract "expressly recognizes their right to carry" such brands, tho AB does "encourage" distribs to focus on AB brands. He also reminded AB relies on indie distribs, who have exclusive territories, as its "sole route to market," so it's in AB's interest to see them thrive. Tho Brito said again no distrib terminations would occur as result of ABI-SAB, he would not "stipulate" to that as part of DoJ consent order as he does not expect any DoJ order to "address this topic."

VAIP "More Aggressive, Better Funded" than Past Incentives, Sez Bob; ABI-SAB Boosts AB's Market Power Meanwhile, BA's Bob Pease got another oppy to air out his concerns that VAIP: 1) "more aggressive, and better funded effort to discourage 'independent ABI wholesalers' from selling competing brands"; 2) intended to "slow or disrupt the growth of regional or national brands"; 3) together with "special protections" afforded distribs by state franchise laws, forces craft brewers to "spend months or even years and huge sums to regain control of" distrib rights when necessary. AB can't make up consumers' minds, Bob suggested, but can use mkt power and "regulatory structure to control choices available to consumers" by buying craft brewers, influencing wholesalers. ABI-SAB will only increase AB resources to "continue its path toward monopolization of the US beer industry," Bob claimed. How? In some states AB is brewer and wholesaler and its power "significantly magnified and will grow if unchecked." Pointed to recent purchases of local craft brewers which give AB distribs even more oppy to focus solely on AB brands. Four of AB's last 5 craft purchases are in states where AB has branches, Bob noted. Gotta add that those 4 states among AB's lowest shares in US: Oreg, Wash, Colo and NY. Bob insisted DoJ again should "take an aggressive stand" against VAIP and ban branches.

Boston Beer's remarkable run of growth has stalled out, at least for now. Depletions fell 3% in Q4 and another 3% in 1st 6 weeks of 2016. That's a huge shift. Recall, Boston jumped 2 mil bbls, up 88% in last 5 yrs alone, almost doubling. But its 4% gain in 2015 was its slowest pace since 2009, when it gained just 2%. Boston grew 20%+ in each of 2013-14 fueled first by Angry Orchard and then also by Rebel intro. Boston still expects mid-single digit growth in 2016. But its 2 lead brands, Samuel Adams and Angry Orchard ended 2015 on down note and Boston expects them to decline in 2016. Why? Increased competition in craft and a declining cider category. So how can it grow mid-singles? New products (nitro series, Rebel Grapefruit, hard soda), increased investments on core brands, and easier comps in 2d half. Boston remains a big profitable co. Net revs hit  $960 mil in 2015, up 6% and operating income climbed over $150 mil. Up nearly $10 mil, 7% to $156.2 mil. What's more, Boston Beer has $94 mil in cash on hand. So it has a lot of financial muscle and flexibility to ride this storm out, while it figures out how to get back on track.  

MillerCoors operating and net income down $108 mil, 8% in 2015 to $1.239 bil, following $110-mil special charge attributed to closing of Eden. That's separated into 2 parts; closing charges of $67.7 mil, (charges will continue thru Q3 this yr) and settlement of pension issues ($42.4 mil). That oper income total about $40 mil less than MC made in 2013. Constellation and MC earnings likely neck-and-neck last yr. Recall, Constellation expects oper income up 22-24% in fiscal yr thru Feb, it said last mo. That would put its oper income at $1.24 to $1.26 bil for yr. In future yrs, MC will reap significant savings from closing Eden, tho it hasn't quantified that. But Constellation's earnings set to grow too. So will MC become #3 profit player in US on ongoing basis? Already, many large distribs make more in GP on Constellation than they do on MC or AB.

MC upped mktg, gen and admin spend by $73 mil, 4% for yr, after cutting it in 2013-2014. That included big $62-mil, 14% jump in Q4. Despite big mktg boost, MC trends improved only slightly in Q4. Depletions down 2.2%, compared to 2.6% for full yr. Early 2016 depletion trend unchanged; down low-single digits thru Feb 6, cfo Tracey Joubert said on conference call. MC down 1.1% in Nielsen all-outlet thru that same day and it lost 0.8 share of $$, same share loss as in 2015. AB down 1 share but lost 0.5 share less than last yr. AB seeks flat volume this yr, INSIGHTS hears. MC reiterated its goal of flat volume in 2018, up in 2019. MC "pleased with the results" of mktg increases in back half of 2015 for premium lights (Coors Light had best qtr since Q2 2014 in Q4), Redd's and Blue Moon, said ceo Gavin Hattersley on call. MC gaining share of premium lights, but likely lost share in Above Premium. Big chunk of MC losses in economy again in 2015. About half of MC's 10-mil bbl loss in economy brands since 2007. MC subpremiums down about 25% but brands are still 28% of volume. MC "needs" to "slow" subpremium decline to hit goal of being flat by 2018.  

 MillerCoors operating and net income down $108 mil, 8% in 2015 to $1.239 bil, following $110-mil special charge attributed to closing of Eden. That's separated into 2 parts; closing charges of $67.7 mil, (charges will continue thru Q3 this yr) and settlement of pension issues ($42.4 mil). That oper income total about $40 mil less than MC made in 2013. Constellation and MC earnings likely neck-and-neck last yr. Recall, Constellation expects oper income up 22-24% in fiscal yr thru Feb, it said last mo. That would put its oper income at $1.24 to $1.26 bil for yr. In future yrs, MC will reap significant savings from closing Eden, tho it hasn't quantified that. But Constellation's earnings set to grow too. So will MC become #3 profit player in US on ongoing basis? Already, many large distribs make more in GP on Constellation than they do on MC or AB.

MC upped mktg, gen and admin spend by $73 mil, 4% for yr, after cutting it in 2013-2014. That included big $62-mil, 14% jump in Q4. Despite big mktg boost, MC trends improved only slightly in Q4. Depletions down 2.2%, compared to 2.6% for full yr. Early 2016 depletion trend unchanged; down low-single digits thru Feb 6, cfo Tracey Joubert said on conference call. MC down 1.1% in Nielsen all-outlet thru that same day and it lost 0.8 share of $$, same share loss as in 2015. AB down 1 share but lost 0.5 share less than last yr. AB seeks flat volume this yr, INSIGHTS hears. MC reiterated its goal of flat volume in 2018, up in 2019. MC "pleased with the results" of mktg increases in back half of 2015 for premium lights (Coors Light had best qtr since Q2 2014 in Q4), Redd's and Blue Moon, said ceo Gavin Hattersley on call. MC gaining share of premium lights, but likely lost share in Above Premium. Big chunk of MC losses in economy again in 2015. About half of MC's 10-mil bbl loss in economy brands since 2007. MC subpremiums down about 25% but brands are still 28% of volume. MC "needs" to "slow" subpremium decline to hit goal of being flat by 2018.

Differences between import and domestic biz continue to be stark and significant. First, imports up or even 5 of last 7 yrs while domestic biz down in 6, even with huge craft gain. Second, top 2 importers have near 80 share of segment, virtually same as AB and MC have of domestic biz. But Constellation flyin', HUSA up very slightly, while AB and MC shed 2-3% of volume per yr. Third, top import brands mostly growing volume and holding or increasing share of import biz while opposite is true for top domestics. Go figure.

Import Brand Highlights; Widespread Health Seven of top-10 import brands up or even in 2015. That's while only 1 top-10 domestic brand grew. Segment leader Corona Extra not only gained volume, but also bumped up share of import segment last yr by almost a half-point to 27. Modelo Especial expanded lead over #3 import Heineken by 850K bbls in 2015. Passed 17 share of imports; that's Bud Light's share of overall biz. Especial doubled its share of segment in 5 yrs. Back in 2010, Heineken almost 2 mil bbls bigger than Especial. That's a swing of 3.3 mil bbls. Heineken eked out tiny shipments gain in 2015, we estimate, as did HUSA in toto. In any case, Heineken still 25% below peak and HUSA has hands full growing the brand. Especially with Stella Artois still on fire. Stella up 20% and passed Dos Equis franchise in 2015, we estimate. Dos slowed to mid-single-digit gain. AB puttin' pedal to metal for Stella this yr. Recall it will spend at Heineken level. HUSA will bring big new platforms for both Heineken and Dos soon. And Constellation's feedin' the fire. Should be a battle royale.

Corona Light outpaced import segment last yr; strengthened its hold on #6 spot. Lotsa moving pieces in Guinness portfolio in recent yrs: splash and fade of Black Lager, then Blonde intro and now new Nitro IPA while core Guinness continues to face stiff competition from craft stouts. All in, Guinness family hangin' in around 1 mil bbls, we estimate, tho share slipping. Tecate off 8% and slipped below 1 mil bbls in 2015 for first time since 2003. But Tecate Light picked up slack and then some, so franchise up. Labatt Blue erosion continued too. Hasn't had an up year in over a decade. And Blue Light fell out of top 10 last yr, replaced by Constellation's Pacifico, up modestly but steadily. So majority of top ten brands now hail from south of border, 4 of the top 6.

 

Imports Hit 15 Share; Mexican Beer 60% of That Overall, imports up 1.8 mil bbls, 6.2% in 2015, Beer Inst reports. Follows similar gain in 2014, flattish 2011-2013 for segment. Imports grabbed 15 share of US biz for 1st time ever. And over 60 share of that is Mexican. Topped 19 mil bbls last yr, up 1 mil. Up 5 mil bbls, 35% since 2011.

Bold regulatory moves, whether by fed or state officials, rare in recent yrs, especially in beer. Indeed, "bold" and "regulator" aren't words often used in same sentence. But two loud shots heard 'round the biz Feb 11-12. TTB raised serious questions about legality of CatMan programs. And Mass ABC hit Boston distrib hard with lengthy suspension.

At TTB, fed regulators detailed list of "illegal inducements" associated with typical category mgt plans. This will likely scotch proposed Kroger Planogram Center of Excellence program (tho TTB did not mention Kroger), most industry observers agreed. Indeed, one of TTB's illegalities was specifically part of Kroger's plan: "furnishing to the retailer items of value, including market data from third party vendors." Many industry members provide such data now, either as part of CatMan or just a sales call. While providing shelf plans as "simple marketing tools" still legal, TTB deems data provision as an "additional service," an illegal "means to induce" retailers. And if it "results in exclusion of a competitor's products...such that a retailer's independence is at risk," and for beer, if there is similar state law, action violates Fed Alc Admin Act. What's more, it "may result in TTB scrutiny and investigation." That puts lotsa customary practices at risk. Along with providing data from 3d-party vendors, TTB included among illegalities: "assuming...a retailer's" purchasing, pricing or shelf stocking decisions about competing product; receiving/analyzing proprietary info on competitors; follow-up services that revise schematics if an industry member communicates with retailer; and more.

Did TTB Kill Kroger Plan? Recall, every alc bev trade assn in DC sought "guidance" from TTB, raising questions about legality of Kroger plan. Distillers, vintners and distribs feared compliance might threaten fed permits (brewers don't have 'em). Looks like assns got signal they sought. Indeed, TTB's ruling was a "resounding thumbs down" to Kroger, veteran alc bev atty Richard Blau told us. Ruling "strongly suggests" complying with Kroger puts fed permits at risk, DISCUS/Wine Inst said. And TTB wrote Beer Inst separate letter that suggested the same. Recall, BI asked whether it was "permissible" under fed regs for suppliers/distribs to fund CatMan plan "implemented by a retailer." TTB told BI that while some independent 3d-party services exempted from being inducements, "industry members should be especially mindful if the selected third-party promotional company is owned, created, operated or controlled by the retailer or is in any way acting on behalf of the retailer." That sounds a helluva lot like Kroger. In that case, TTB "may consider" funds to 3d party as an "indirect means to induce the retailer." And if there's exclusion too, then it's a violation of FAA Act. Finally, recall that Oh officials determined Kroger plan violates state law. Yet, few industry members likely expected ruling that may broadly threaten current CatMan practices. What's TTB's next move?

Emboldened Regulators, Inducements and Exclusion Look back to sentence about exclusion and "retailer independence." Another industry atty, Marc Sorini, suggests TTB ruling offers only "modest specific guidance," since it did not give direction on when "additional" services "may lead to exclusion." Exclusion is both necessary to making a fed case and at same time very difficult to prove. Could it be as simple as those who pay into Kroger (or other plan) gain mkt share while others don't? How do you argue exclusion when thousands of brands on shelves? Another atty asked how Kroger's independence is "at risk" if it's instituting plan and has option not to follow it. On other side, Richard reminds that while feds need exclusion to make a case, most states don't. They only need an "illegal inducement" and many take cues from feds in defining inducement. So, to Richard, TTB ruling may "embolden" state officials to look at CatMan more closely. Meanwhile, states just got a road map for investigating other potential tied-house violations. Read on.

Mass ABC Suspends Distrib for 90 Days Over "Kickback Scheme" Speaking of emboldened state officials, just as TTB ruled on shelf plans, Mass Alc Bev Control Comm levied unprecedented 90-day suspension of Craft Brewers Guild (CBG), a Boston-area distrib owned by Sheehan family. ABC found CBG engaged in "pay-to-play" scheme to buy taps in Boston bars, mostly via payments to 3d-party mktg cos that happened to share same "corporate officers and beneficial interest holders as the Retailers." ABC said scheme "spanned at least 5 years" and involved approx $120,000 in kickbacks. Actually suspension was 15 mos, with 90 days to serve, remaining 12 mos "held in abeyance for 2 years provided no further violations."

CBG argued that payments did not violate Mass regulations, that regs "vague" and they're being selectively enforced. But Mass ABC swatted those arguments away, cited chapter and verse of violations (13 pages) and levied 90-day suspension, on tap to commence Mar 30. CBG can appeal to state court. It can also seek to make offer in compromise that would amount to 50% of 90 days of CBG's gross profits, not revs as reported elsewhere. That's still a big chunk of change and has to be approved by ABC. CBG assured brewers it won't be off the street. Meanwhile, Mass ABC has hearing on tap to question handful of Boston's biggest retailers about pay-to-play. Will they add fuel to fire, i.e. call out other distribs who CBG said did same thing? Will they implicate suppliers, so far not charged, tho ABC found CBG billed suppliers and were "fully" or "partially" reimbursed? ABC decision put entire industry on notice that if they "engage in similar conduct" it will "take similar, severe enforcement action." Will other state regulators be "emboldened" to follow template now created in Mass to launch their own investigations?