“Please do not deliver any $5 IRCs to any of our stores immediately,” category mgr for Circle K stores in Gulf region wrote distribs last week.  “Current inventory of IRC’s (if any) that might be in stores will sell through this week.  No more IRC’s will be used,” except for $1 IRCs.  “Thanks in advance for your efforts to restrain the insanity,” he concluded.  There’s a lot of fallout in a lot of directions from the $5.00 coupon madness in Fla.  Some chains like Circle K said “no mas,” independent retailers who didn’t get coupons are livid, and small retailers stocked up in big chains on multi-packs.  That’s just for starters.  Stay tuned.  

TTB teed up latest round in equivalence battle between beer/wine/distiller interests with next week’s deadline for comments on whether all alc bev labels should require Serving Facts, and whether that should include infamous ”drink is a drink is a drink” graphic.  Heavy hitters will wait ‘til last minute to file comments, but TTB has already booked over 14,000 comments, most generated by Diageo’s slick knowyourdrink.com website that’s been up a few mos.  It urges consumers to send comments in support of “truth” that alcohol is alcohol. In response, brewers set up alcoholmyths.com to tell their side, asking consumers to send comments that equivalence is a myth.  Can this effort build response for beer?  Will TTB give weight to canned comments from either side?

Existing royalty-free agreements with SABMiller in US and S&N in UK are “inferior to current market rates and need to be improved,” Foster’s ceo Trevor O’Hoy said to analysts in strategy briefing, wrote Dow Jones.  “Let me assure you, we are hell-bent on changing those agreements.”  Said Foster’s is a fast-growing 100-mil case brand worldwide.  Managing director Rick Scully noted that Miller incorporated Foster’s into mainline sales force Jul 1.  Miller “open to an improved business model with us” and “sees a lot more opportunity in Foster’s.”  With current agreement, Foster’s having rough time in US.  It’s down 12% yr-to-date thru Sep 4 in supers, according to IRI.  Foster’s shed 1/4 of its volume in US last 2 yrs.

And we do mean immediate.  Jeff Vukelic of Try-It distrib in upstate in NY passed baton as NBWA chairman to Va distrib Phil Short just yesterday at NBWA convention in Vegas.  Now he and his family will finally close on deal to purchase approx 2.5-mil-case AB/Inbev distrib Northern in upstate NY.  Deal will make Try-It nearly 9 mil cases in all.  More on recent AB deals in BMI.

Industry now 2 for 2 in class action battles. Colo court tossed suit vs suppliers alleging they illegally targeted underage drinkers. Language just as strong as Calif Ct used earlier this yr to throw out similar suit.  Judge wrote parents who brought claim “lack standing to sue,” “cannot prove facts in support of their claims,” and have nothin’ to show actual injury, $$ spent on alc bevs by underage or damages.  Judge repeatedly used word “nothing” to describe allegations.  As in: “Nothing alleged … that shows any children of the Plaintiff’s may have in any way been affected by the challenged” mktg actions.  Kicker 1: judge ordered plaintiffs to pay industry’s atty fees and costs.  Kicker 2: same attys may be on same hook in handful of other attempted class actions.      

That was seeming theme of long Wall St Jnl Personal Section article yesterday which stated “the removal of interstate shipping bans is creating opportunities for wine lovers.”  And for winemakers, it’s “an economic bonanza” as they “reap much greater profits… because they don’t have to pay wholesalers.”  Some  vintners offer “special deals to attract new mail-order customers,” like free-shipping to states that recently changed laws.  Some retailers “are trying to take advantage of the changes. While most new state’s laws are limited to shipments from wineries, the rules are often murky and could be interpreted to allow direct shipments from retailers, some lawyers say,” the Journal wrote.   Yikes!

Sep 15 letter to “Our Valued California Retailers” from AB said: “We will honor our commitments on scan back and coupon programs through Jan. 7, 2006.”   However, “we don’t plan to extend scan or instant redeemable coupon programs” after that.  But AB left wiggle room: “We will, however, continue to be price competitive in the market and protect our market share.” 

AB letter reminded that when it scanned back for 1^st time in May, its objective was to “’jump-start our category…. The good news is that industry sales rebounded somewhat, with a positive sales performance…. The bad news is that these tactics have resulted in a dramatic reduction of revenues and profits for retailers and lower price-value relationship for premium beer brands.”  While such discounting “sometimes necessary,” said AB, “aggressive discounting of this nature may inflict long-term damage to the image of the beer category.” AB also noted that such “programs are cumbersome and time consuming for retailers and consumers,” an issue that popped up in Fla too.  

Letter from Maine and Utah AGs to other state AGs urges that other states adopt stricter controls over malternatives because of their alleged appeal to teenage girls.  Utah AG was slated to intro proposal yesterday that malternatives not be sold in grocery stores, but only in liquor stores. But editorials already say AG has “wrong approach to the problem” (Salt Lake Tribune), pointing out that malternatives legal and lower alcohol than beer in Utah, so approach would be discriminatory.   AG “would better serve the community by cracking down on illegal sales,” (yep) or (gulp) “calling for the same restrictions on both malt beverages and beer.”   

Morgan Stanley’s Bill Pecoriello reduced estimate of AB 3d-qtr earnings.  Expects AB rev per bbl down 2.5% in 3d qtr.   (Down 2.2% in IRI for 13 weeks thru Sep 4.)  Coupons in Fla alone may have cost AB as much as $15 mil over Labor Day, INSIGHTS estimates.  Bill also noted “higher raw materials costs” and continued discounting as pressures that create “possibility for further downward earnings revisions” thru 05 and  thru 06.   

Consultant Joe Thompson, who called 2005 price war to a T at last yr’s NBWA convention (probably because of his previous incarnation as “Doctor Discount” with Pabst and Coors),  now sez IBG “does not think it will get any better in 06.”  Uh-oh.  Why?  AB must “cycle Bud Select intro and heavy discounts.”  Miller “must replace lost” Pabst contract production volume and “heavy discounts.” Disconcertingly, Joe suggests imports now under pressure that price gap will get too wide and they will have to discount as well.  Some Wall St analysts more sanguine, hopeful there’s “early signs of stabilization” as Merrill Lynch’s Christine Farkas put it or “pricing has bottomed” as UBS’s Nik Modi asserted.