The 2015 Beer INSIGHTS Spring Conference is less than 1 month away, and our special, discounted room rate expires Monday April 20.  So make your reservations now.  This unique conference focuses exclusively on the high end of the beer biz.  It takes place May 11-12 at the Ritz Carlton in Chicago.  The conference features an extended panel discussion with 3 of the longtime leaders of the high end:  Constellation’s Bill Hackett, Boston Beer’s Jim Koch and Heineken USA’s Dolf van den Brink.  Another panel discussion features 3 hot craft brewers: Firestone Walker’s David Walker, Revolution’s Josh Deth and Cigar City’s Joey Redner.  We also have FMB pioneer, Mike’s Hard Lemonade founder Anthony von Mandl.  AB’s veep of high end Felipe Szpigel and Tenth and Blake’s new prexy Scott Whitley will show how top 2 brewers aim to become much bigger players in high end. You’ll also get in-depth analysis and statistical insights from IRI’s Dan Wandel and GuestMetrics Bill Pecoriello, in their first joint presentation since they formed partnership, combining off-premise and on-premise data.  And BMI’s Benj Steinman will give an extensive industry overview.  Plenty of networking time includes a special event at Goose Island’s Chicago brewery Monday afternoon, two receptions and more.  Get up-to-date with the latest high-end trends and network with your peers at the Beer INSIGHTS Spring Conference. Click here for more information and click here to reserve your spot.

Just as AB moving ad/mktg staff to NY, so it’s moving Bud Light biz to BBDO New York ad agency, from Chicago’s Energy BBDO, reports Lewis Lazare in Chi Biz Jnl.  “Official” reason, Lazare writes, is indeed to align AB mktg staff in same town with NY-based agency.  Per usual, lotsa backstory when big account moves.  Lewis notes one reason Energy BBDO got biz in first place, just 2 yrs ago, was that BBDO NY also has Guinness biz and that was viewed as conflict.  But “sources now say it’s been determined that Guinness and Bud Light target two different audiences and therefore no longer represent a serious ad account conflict,” Lewis wrote.  But he added: “Still, beer is beer” and that could ultimately “become a big problem.”  Energy’s “biggest accomplishment,” in Lew’s view, was 2015 Super Bowl “Pac Man” theme, which tho not a campaign “for the ages, it was distinctive enough to garner the requisite social media attention and at least keep Bud Light in the game – so to speak.” 

Meanwhile, Bell’s Brewing founder Larry Bell got some press in Chi Tribune yesterday when he announced a very limited release of Pumpkin Peach Ale, which he calls “a (screw) you to Anheuser Busch” for another 2015 Super Bowl Ad, which poked fun at craft drinkers.  Larry’s making only 48 bottles, which he’s selling for $20/per with proceeds going to Kalamazoo River Valley Trail.  Tho Larry sez he’s had good relations with AB over yrs and even bought some equipment from AB, he thinks Super Bowl Ad was “uncalled for…. I guess we’re getting under their skin and they had to take a shot at us.  We have a little bit of a smirk on our face with this.  You think we make fussy beer?  Well, we do.”  

 DC antitrust newsletter The Capitol Forum pulled together a number of separate AB actions, industry developments, interviews with craft brewers and a regulator, plus ongoing review of Comcast/TWC merger to suggest DoJ just might review what’s going on and launch some kind of enforcement action.  It’s all pretty speculative and even Cap Forum concludes “potential for significant regulatory enforcement is…far from a foregone conclusion.”  But who knows?  Cap Forum reminds that when ABI did Modelo deal, DoJ created notification requirements if AB bought brewers/distribs of certain size ($7.5 mil/$3 mil revs per yr) and prohibited AB from “downgrading” distribs for 3 yrs based on their sales of Modelo brands. In Cap Forum’s view, that meant “DoJ views additional purchases and a ramping up of ‘compliance’ requirements as worth monitoring.”  Those things are happening, and could lead to scrutiny/ action, Cap Forum believes.

Specifically, article points to: 1) AB’s purchase of 2 northwest distribs (K&L, Morgan) adding to branches and 2 northwest craft brewers, plus comments from two Oreg craft brewers that this is AB strategy to “lock down distribution” in area and compete better vs craft; 2) Ky situation and lengthy letter from state regulator citing numerous reasons to oppose AB branches there; 3) AB action in Portland to withhold brands from Maletis Bev as example of a “broader strategy to influence distribution” (tho that situation subsequently resolved); 4) Feb conference call AB had with distribs talking about assessments and contract compliance as another example of trying to influence distribution; 5) comments from Oreg brewer and Wash regulator claiming increases in “pay-to-play” in those and other markets, tho no specific allegations vs AB.  Cap Forum also draws some parallels ‒ and distinctions ‒ between these issues and the review of the cable co’s deal.  Will DoJ take closer look, possibly act?  Stay tuned.  

Recall that Pabst’s new owner (Blue Ribbon LLC) terminated handful of Oh Pabst distribs in Feb, claiming it had right to do so under law there that allows “successor manufacturer” to terminate without cause if distribs get “diminished value” for brands.  Legal response has been a bit confusing, with different docs filed under different case numbers.  But net-net: distribs filed complaint vs Pabst to stop terminations claiming Pabst can’t terminate under this law.  Why not?  First, “Pabst is not a ‘successor manufacturer’ because Pabst itself did not ‘acquire all or substantially all of the stock or assets of another manufacturer,’” since Pabst has not owned any breweries or brewed beer in over a decade.  Second, “Blue Ribbon is not a ‘manufacturer’” defined by Oh law, “because it does not manufacture or supply any alcoholic beverages, and Blue Ribbon cannot, therefore be a ‘successor manufacturer,’” in Oh.  (MillerCoors produces/ships the beer.)  Third, even if Blue Ribbon is “successor manufacturer,” it didn’t terminate within 90-day window.  Distribs seem to be counting the 90-day window from when deal announced in Sep 2014.  Deal did not close until Nov 13; Feb 3 terminations would be within the 90 days of that.  But distribs also argue that they did not get termination notice “from Blue Ribbon or any other person or entity (distinct from the existing manufacturer, which is Pabst) purporting to be the ‘successor manufacturer’ and purporting to terminate Distributors’ franchises.”

Pabst has not replied to this specific complaint, but recall it claims right to terminate as “successor manufacturer” and gave proper notice.  (Recall, Metropoulos earlier lost bid to terminate some of same distribs by failing to give proper notice.)  Will court view distribs’ arguments as technicalities and clear terminations, side with distribs and give them preliminary/permanent injunctions they seek or give them their days in court?  Stay tuned.

SABMiller trading statement yesterday completed latest round of updates on global beer volume, at least from top 5 players.  And the picture ain’t pretty, at least from volume perspective.  SABMiller’s global lager volume “in line” for 12 mos thru Mar 15, so call it even.  Look at the other global brewers’ organic trends, all for calendar 2014: AB InBev, +0.5%; Heineken +2%; Carlsberg -3%; Molson Coors -1.3%.  Add ’em up and you get virtually flat volume on 861 mil bbls.  Revs much stronger, of course, but complicated by sales of other bevs, foreign exchange, other factors.  Yet, 4 of top 5 reported organic rev gains, from +2% at Carlsberg to +5.9% at AB InBev.  Only Molson Coors reported rev drop, -1.4% and even there revs on “constant currency basis” eked out 0.3% increase.  Obviously, there are areas and segments of growth around world.  But all in, it’s pretty tight and global brewers face ongoing challenge of building total volume.

Yesterday the US Dept of Justice closed its investigation of the Manhattan Beer deal to acquire Windmill (Phoenix Beehive). “We’re moving forward to an orderly transition,” Manhattan’s Jeff Honickman told INSIGHTS. Recall, this deal, which INSIGHTS first wrote about last Sep, will combine Coors/Corona distrib Manhattan with Heineken/Miller distrib Phoenix Beehive to create approx 45-mil-case distrib in metro NY area.

Yesterday the US Dept of Justice closed its investigation of the Manhattan Beer deal to acquire Windmill (Phoenix Beehive). “We’re moving forward to an orderly transition,” Manhattan’s Jeff Honickman told INSIGHTS. Recall, this deal, which INSIGHTS first wrote about last Sep, will combine Coors/Corona distrib Manhattan with Heineken/Miller distrib Phoenix Beehive to create approx 45-mil-case distrib in metro NY area.

Not a lotta detail from Diageo this morning on its 1^st qtr US malt bev biz.  “DGUSA shipments were weaker than in the first half [6 mos thru Dec 2014] due to phasing of shipments.  Depletion trends have continued to improve during the quarter across both US spirits and DGUSA,” Diageo announced.  For last 6 mos of 2014, Diageo had reported DGUSA net sales “broadly flat.”  That suggests Q1 shipments off low singles.  Scan data supports comment about better depletions trend.  DGUSA +4.4% in IRI multi-outlet + convenience YTD thru Mar 22.  

Not a lotta detail from Diageo this morning on its 1^st qtr US malt bev biz.  “DGUSA shipments were weaker than in the first half [6 mos thru Dec 2014] due to phasing of shipments.  Depletion trends have continued to improve during the quarter across both US spirits and DGUSA,” Diageo announced.  For last 6 mos of 2014, Diageo had reported DGUSA net sales “broadly flat.”  That suggests Q1 shipments off low singles.  Scan data supports comment about better depletions trend.  DGUSA +4.4% in IRI multi-outlet + convenience YTD thru Mar 22.  

MillerCoors volume trends continue to bounce around in the -2% to -3% range.  MC sales-to-retailers dipped 2.7% in Q1 2015, SABMiller reported today.  That’s better than last yr’s Q1 trend, -3.4%.  Shipments to distribs off 2.5% in Q1 2015, exact same trend as calendar 2014.  For first time in long time, no color provided on premium light trends, which suggests no real positive news.  MC’s above premium trend was down low-single digits.  Blue Moon and Leinie trends improved, but Fortune down double-digits going against intro period last yr.  Below-premium down mid-singles with solid Steel Reserve gain offset by other below premium brands, presumably Keystone Light/Mil’s Best.  Given above/below premium trends, math suggests premium lights down low-single digits.  Scan data yr-to-date thru Mar 22 shows Coors Light -1.3%, Miller Lite still up 1.1% in IRI’s multi-outlet + convenience data.