Taking his place among business icons such as Warren Buffett, ABI ceo Brito once again named one of Barron’s top 30 global ceos.  “Why: Built the world’s largest brewer and is looking to expand.”  Barron’s repeats speculation on usual suspects for ABI’s next deal (SABMiller, Pepsi), points out problems with turning Bud brand around in US, and cites 5 yr profit growth of 16.5% and 21% “annualized total return” while Brito ceo.   

Beer Inst-backed beer tax reform bill dubbed Fair BEER finally launched in Senate late last week as S807 with 8 co-sponsors.  Took quite awhile for Beer Inst to get even get started in Senate.  Not sure why. Recall, Fair BEER launched in House over a month ago and currently has 39 co sponsors.  That’s actually more than BA-backed Small BREW in House (32).  But Small BREW has far more cosponsors in Senate (29).  Interestingly 5 of 8 Fair BEER cosponsors are also on Small BREW.

Small BREW hasn’t made much progress since Fair BEER launched and BI/NBWA actively oppose.  But this week, BA will be making big push in advance of Craft Brewers Conference, with Hill climb involving lotsa craft brewers.  For a couple of weeks, Small BREW had very nearly stalled in House, before adding 9 co-sponsors last week.  In any case, odds remain slim for passage of either bill. The independent website govtrack.us rates prospects of passage of all kinds of bills. Small BREW in House rated at 5%, compared to 2% for Fair BEER.  But Small BREW only rated at 2% in Senate, where ironically it has far more cosponsors. It doesn’t look like either of them is going anywhere soon.  

D-S Beverages  of Moorhead, Minn and Fargo ND has struck again.  Just 2 yrs after it bought 300,000 case Anderson Dist Co in Crookston, it bought neighboring Big North Dist in Bemidji, according to Bemidji Pioneer.  D-S over 2 mil cases.   Not too many distrib deals so far in 2015; in fact this is the first new AB transaction we’ve reported on in 2015, out of a half dozen deals (for part or all of a distrib) that we’ve written about.  But there are reportedly a number of AB deals in works.    

As expected, KY gov signed anti-branch legislation just 1 day after anti-branch legislation passed neighboring Tenn Senate and House overwhelmingly.  But while AB said it was “pleased” with compromise in Tenn, it is “deeply disappointed” by KY gov signing bill, which would kick them out of branch biz in that state.   “On one hand the Governor says he is working to lure outside companies to the state, and on the other he’s signing a bill that literally tries to throw one out,” said AB mktg and sales director for Louisville Branch Damon Williams. “This will have a chilling impact on future attempts to lure companies to Kentucky, as it is now clear that this state government, if a political patron asks,” continued Damon, “feels empowered to attempt to shut down companies that have followed every law and paid every tax.”

Many expect a lawsuit.  AB only sez “we… continue to review our legal options.  We believe this legislation violates our rights under both the U.S. and Kentucky constitutions. We remain dumbfounded that this state would waste so much time and taxpayer money solving problems that don’t exist when there are so many other more important issues.”  Since ABI came to US, 9 states have passed some kind of law limiting or prohibiting branches. Several concentrated in the area surrounding KY, such as IL, OH, TN which are 10% of AB biz. 

Schӧfferhofer did about 200,000 cases last yr in about 20 states, said Radeberger Gruppe USA evp sales Anthony Giardina.  This yr, “our plan is to double,” said Anthony, “but we have almost tripled the business in the first 10 weeks.”  Wal-Mart is testing it in select stores.  If it were to triple, would be about same size as what Leinenkugel expects with Grapefruit Shandy.  Not bad.  

That was fast. House version of Tennessee bill to block brewers from owning or having financial interest in beer distribs flew thru that chamber this morning, headed straight to the Senate and passed there too.  It passed 84-7 in the House, unanimously in the Senate (a pair of lawmakers in each House abstained). After minor confusion over order of amendments in House and a single clarification on parameters of bill, it passed an hour into House session. No debate. Concurrently running Senate session got House bill within a half-hour, replaced Senate version with it (recall, bills intro’d in each chamber), and passed it after identical clarification.  No debate. Bill “closes a loophole,” Senate sponsor Ken Yager reminded again before final vote, equalizing beer regs with those governing wine and spirits suppliers and distribs in state. That’s been publicly-stated reasoning and focus of conversation in Tenn all along.

Amendments allow for limited, one-time only financial interest for up to 5 yrs during brand transitions, terminations. That’s allowed for example when distrib “voluntarily selling its distribution rights” and supplier whose brands “are being transferred seeks to assist the transfer by taking a financial interest in the purchasing wholesaler.” Same is true when “licensed wholesaler” can’t service territory or when there’s termination in accordance “with present law requirements” in which case “manufacturer is authorized to appoint and take a financial interest in temporary licensed wholesaler to service the manufacturer’s brands in the designated territory.”   Just before the vote, Senator Yager commented: “Both sides, on this issue, have worked very hard.” And that was that.

Bill heads to Tenn Gov’s desk and expected to become law. Anti-branch bill still awaits Gov’s final signature in neighboring KY, also expected any day.  In each state, gov can choose not to sign and bill would still become law.  Veto considered highly unlikely.  In Tenn, AB and distribs negotiated bill together in advance, without any of the same acrimony so abundant in neighboring KY.  Whether that’s because AB could read writing on the wall, or because distribs and AB worked together on joint legislation, or because no one wanted another situation like KY, Tennessee situation much healthier for industry as a whole.  

Why is AB pleased? "Anheuser-Busch is pleased that, together with our wholesalers in Tennessee, we have reached a legislative solution that addresses our concerns about protecting the significant investment we have made in our brands,” said veep wholesaler development Bob Tallett, “while giving us the option to explore limited wholesaler ownership opportunities when necessary.  This flexibility is critical as it allows us the ability to grow our business in the state and, jointly with our wholesaler partners, focus on selling more beer by providing Tennesseans with the brands they love."

The 2015 Beer INSIGHTS Spring Conference, focused on the exciting high end of the beer biz,  will take place May 11-12 at the Ritz Carlton in Chicago.  Just added: Revolution Brewing’s managing partner Josh Deth will join Firestone Walker co-founder David Walker in a wide-ranging panel discussion moderated by BMI’s Benj Steinman.  Also, on Monday afternoon, Goose Island will host a special event for conference attendees, visiting their barrel warehouse and brand new tap room in Chicago, before the opening reception.  The conference program on May 12^th will feature presentations and interviews with the industry’s leading high-end players, plus top craft execs, keen quantitative analysis, actionable insights and much more.  Get up-to-date with the latest high-end trends and network with your peers at the Beer INSIGHTS Spring Conference. Space is limited. Click here for more information and click here to reserve your spot.

While US brewers have dueling tax-cut bills, for 3d straight yr UK excise tax cut a penny-per-pint, Chancellor George Osborne announced. Those cuts, along with ending “beer duty escalator” (automatic yearly tax hike), reduced avg price of pint 20 pence lower than where it would have been, according to one research firm, reports The Express.  That’s saved lotsa pub jobs and kept 1000 pubs in biz, claims Campaign for Real Ale.  At same time, UK cut duty on scotch and cider by 2% each and froze wine tax.  Scotch tax reduction is about 16p/bottle, tho avg price still a pretty hefty $19 or so.   Cuts coming at opportune time.  Scotch biz off about 5% in UK last yr.  And tho beer trend improved in UK in 2014, “total volume of beer downed in Britain and Ireland has fallen by 20% over the past 6 years,” according to Euromonitor data, reported by the Economist.  Guinness hit especially hard in Britain in recent yrs, with volume off about 20%.  Guinness did experience uptick in Ireland tho last yr, Diageo reported, its first gain in homeland since 2008.

AB’s next effort promoting quality of Budweiser following Super Bowl spot (that raised ire of many craft fans) dropped this week with video of  bar customers in Brooklyn unknowingly sampling Bud.  “Setting it in Brooklyn gives it a nice cultural punch,” wrote Adweek, adding “many of the reactions seem genuine – perhaps not surprisingly as Bud isn’t actually a bad beer.”  Ad Age was not as impressed noting “blind taste tests are known for making people look like fools,” and said its favorite positive responses were that Bud’s “a reliable beer” and “this would be great on like a hundred degree day.”  “We need to continue to make bold and proud statements affirming Budweiser’s quality and role in beer culture,” Budweiser veep Brian Perkins told St Lou Post-Dispatch. The taste test video will only run online. It’s up to 14.8K views on YouTube and you can see by comments many folks are skeptical it’s for real given production quality and lack of big bar crowd.  And speaking of Budweiser, the Bartendr app found it to be among the most misspelled brand names searched by its users, reported Wall St Journal. Around 42% of users misspell it, often as “Budwiser.”  That was second only to Jägermeister which is misspelled 90% of the time.     

Ain’t exactly legalization of pot or privatization of liquor, but Pennsy consumers now have oppy to buy 12-packs at their local retailer-distributors.  That seismic change follows Mar 6 decision by Pennsy Liquor Control Bd to “re-interpret” 80-yr old law previously believed to ban those distribs from selling in anything smaller than a case.  Indeed, we heard that 12-pks hit shelves almost immediately.  But atty for PLCB sealed the deal with letter yesterday clearing 12-pks “so long as the 12-pack was prepared for the marketplace to be sold as a single unit.”  What’s that mean?  Lotsa cases invoiced as 2/12s and “bound to each other in a cardboard tray.”  Then too, many 12-pks have their own UPC code.  Besides, requiring distribs and wholesalers to ship beer already in stock back to brewers, who’d then reship them back “untouched,” would be “a wasteful and pointless exercise,” atty wrote, and would be “problematic both on a practical level… and on a legal level.”  Enforcement arm of Pennsy state police agreed that reshipping millions of cases “neither logical nor consistent with good business practices.”  So distribs can split the cases if invoice said 2/12.  But anything packed as 24 loose has to be sold as a case.  A coupla brewers have already shipped twelvers, Pitt Post-Gazette reported yesterday.   And: “On Thursday, 18-packs of Miller Lite are expected to arrive on shelves.”  Recall, Brewers of Pennsy dubbed 18-paks “predatory” pkg used by “foreign-owned mega brewers” as “loss leaders” and create “competitive disadvantage” to small Pennsy brewers (including Yuengling and Boston Beer) since “nearly all of our members do not have manufacturing and packaging capability to offer 18 packs.”