AB distrib in Spokane B&B just picked up approx 2.5 mil AB cases from R&R in Yakima and Richland. At same time, B&B sold 800,000 cases of Coors to Odom, but kept Labatt.

As expected, Barton Beers owner Constellation announced shipments down (tho didn’t specify) in Jun-Aug qtr in wake of earlier Modelo price increase and inventory build. Net beer sales flat, which implies 4-5% shipments drop given price increase. That followed 14% net sales increase in qtr thru May, a 37% jump in qtr thru Feb. For 9 mos, net beer sales still up 14%, according to Constellation. What’s more, depletions were up 5% in 2d qtr, and Nielsen data showed “consumer takeaway” up 10% in 2d qtr. For 3 mos thru Aug 31, Corona up 13% in Barton territory, according to Nielsen. Constellation expects shipments to “pick up nicely” in Sep-Nov qtr, and that “we should see shipments and depletions tracking each other.” Constellation re-signed Tsingtao contract thru 2005.

And you thought imports were big in S. Calif supers.  Imports have hefty 38 share of dollar sales in NY metro mkt, up 0.2 share YTD thru Aug 11 and just 3.5 share behind premium segment, which lost 1.3 share. Total beer biz healthy in NY metro supermkts too, according to IRI (supers small % of biz here).  Total volume up 4% YTD; $$ sales up 7.6%.  AB built dollar sales 7% but share down 0.1 to 31.5.  But AB’s case share up 0.2 to 39.4.  Bud $$ sales flat, but Bud Light (just 1/4 of Bud volume in this mkt) flyin’: up 25%.  Just a half-share of $$ sales separates Modelo, Coors and Heineken USA in NY metro supers.  Modelo share even at 13.7, Coors off 0.1 at 13.3, Heineken up 0.8 to 13.2.  Heineken $$ and volume each up 15% YTD.  Miller a distant #5 in NY metro supers and slipping.  $$ sales down 7%; volume off double-digits.  Lost 0.9 share of $$ (to 5.2), 1.8 share of volume (to 6.3).  Guinness jumped $$ sales 35%, picked up 0.9 share to 4.4.

Labatt USA's import brands up 13% thru Jul and Rolling Rock went from –8 last yr to +1 this yr, it told distribs at Sep 26 national sales conference. Rolling Rock up mid-single digits last 3 mos. In all, LUSA up about 150,000 bbls, 6% to 2.9 mil bbls yr-to-date, it said. Stella more than doubled on tiny base, Tecate hot, hot, Labatt Blue Light up 15% and Labatt Blue up 3%. Next yr, Labatt Blue gets natl media to tune of $12 mil. Next yr LUSA also returns to goal of increasing price more than industry avg. “We’re not doing everything we can with pricing,” prexy Steve Cahillane told group.

Ex-driver had sued AB’s Hudson Valley distrib Dutchess, claiming he was owed unpaid overtime for yrs 1986-1999 when he “regularly worked more than 40 hours per week,” according to court decision.  But Dist Ct ruled and US Appeals Ct affirmed that driver covered under Fed transportation law, the “motor carrier exemption,” and that he “was not entitled to overtime compensation.”  Interesting part of test of  whether exemption applicable was whether Dutchess involved in interstate commerce.  Fed ct ruled definitively that since Dutchess shipped empties/ recyclables out of NY, it was “part of flow of interstate commerce.”   Didn’t determine whether fact that Dutchess gets beer from out-of-state, then distributes solely within NY makes biz interstate.  According to decision, Dutchess grossed over $23 mil/yr 95-97, generally kept inventory “on-hand” between $2-2.2 mil.  

Grape glut, tuff economy, price wars and stalled-out per cap consumption have really softened wine biz, wrote Biz Week. Lower-end category (75% of all wine) down estimated 6% YTD following steady growth in 90s. Meanwhile, imports have 25% of US wine biz. Americans drink 2 gallons of wine per capita (as opposed to 22+ gallons of beer) and 10% of drinkers consume 86% of that wine. Vintners pumping up mktg efforts too. While total wine industry media spending still relatively small at $111 mil in '01, about 1/9th of beer biz media spending, vintners spending more for increased exposure on TV, product placement, chain restaurant deals - and believe it or not - in stadiums (wine sales up 16% in Texas Stadium last yr, according to BW). Will these efforts help wine make headway in share-of-stomach battle? Stay tuned.

Pabst up 6%, 3200 bbls in Oreg Jan-Jun.  AB off 2%, 10,400 bbls while Miller and Coors each down 1%; lost 2000 mos. Not many micros on plus side in Oreg either: Portland –24%, Alaskan –18%, Boston –17%, Pyramid and Full Sail –11% YTD. Top gainers: Widmer up 11%, 2400 bbls and hot New Belgium up 97%, 5700 bbls. Deschutes (largest Oreg micro) eked out 3% gain. Among importers, Modelo up 7.5%, Labatt USA up 13%, while Heineken, Guinness about flatand 3000 bbls respectively. Each of top-3 lost half a share or more while Pabst up 0.2 in Oreg last 12.

That's 1 reason Deutsche Bank’s Marc Greenberg lowered estimates and rating from buy to hold on Constellation. Stock down over 10% last 2 days. Marc pointed to weakness in domestic wine biz, “signs that Corona’s spring price increase is at risk,” and tuff UK mkt. Analyzed price/sales trends in S Calif supers, particularly Heineken/Corona gap, talked to retailers/distribs. Concluded “deflationary trends, Heineken’s competitive response” (it’s holding price in S Cal), “flat to down” Corona trends in Sep in “some” Calif mkts and “aggressive import discounting” thru scanbacks add up to “lower assumption for volume growth at Barton.” Counterpoint: At presstime, UBS Warburg's Caroline Levy reiterated strong buy citing "accelerating" Corona growth in late Sep in S Calif.

Imports up 213,000 bbls, 10.4% in Jul, following 4% drop in Jun.  Pushed yr-to-date gain to 781,000 bbls, 6%.  Mexican shipments up a strong 23% for mo.  Up 662,000 bbls, 12% YTD.  German shipments had striking 19% drop in Jul; now down 67,000 bbls, 9% yr-to-date.  Meanwhile, 3 of  top 10 imports up 20%+ in supers yr-to-date thru Sep 1 according to IRI: Tecate up 21%; Labatt’s Blue Light up 27% and Amstel Light up 25%.  Corona Light also up 17.5.%.  Conclusion: imported light beers still on fire. 

Domestic taxpaid shipments dropped 270,000 bbls, 1.6% in Aug, estimated Matt Hein of Beer Institute.  So Aug drop wiped out most of 400,000-bbl gain in Jul.   Domestic taxpaids still up almost 1 mil bbls, 0.8% yr-to-date.  Yet Miller and AB’s malternative intros plus Smirnoff Ice switching some production to US likely added over 1 mil bbls incremental so far in 2002.  Turns out Miller volume off 1-2% in US Jul-Aug, according to Andrew Conway at Credit Suisse.  So total domestic beer shipments down slightly.  And next yr’s domestic shipment comparisons could be tuff.