Global beer consolidation has “accelerated” and entered new phase where “hard synergies are limited and the danger of overpaying is high,” wrote Deutsche Bank in its comprehensive overview Global Brewing. It used share price of SABMiller, down more than 20% since deal, as example of “risks inherent” in “process.” “We do not believe that any of the major acquisitions this year have been greeted with great investor enthusiasm,” Deutsche Bank added. It pointed to over $12 bil of global brewing deals in last 12 mos, and almost $25 bil in last 2 yrs. AB, Heineken and Interbrew still represent 60% of market capitalization of entire global brewing sector, it wrote. And US remains “clearly the pivotal market for the industry giants”: over 80% of AB EBITA (earnings before interest, taxes and amortization), over 30% of SABMiller’s (on a pro-forma basis), around 25% for Heineken and 15% for Interbrew. AB mkt cap at $45.2 bil, Heineken at $16.6 bil, Interbrew at $11.4 bil.

Diageo signed  multiyear sponsorship deal with Washington Redskins, the first of its type for liquor brands, reported Ad Age.  Includes stadium signage for Smirnoff Ice and Captain Morgan Gold….Diageo also said it has resumed discussions with tv networks to advertise liquor there…. Calif nickel-a-drink tax proposal is dead for this session, reported UBS Warburg….. Strike against AB distrib in Rhode Island settled awhile back…..Heineken releases earnings this week and consensus expectations are for earnings growth of 12%, following 15% in 2001 and 20% in 2000, wrote Reuters. 

Govt just reported 5 mil more Americans drank alcohol at least once/month in 2001 vs 2000. Total number of drinkers increased to 109 mil, up 7 mil in last 2 yrs. Two reasons for 2001 increase: slightly higher % of consumers said they drank (48.3% vs 46.6%) and 2 mil more consumers in pool. Govt surveys include everyone age 12+. Data shows too that over 2/3 of 21-yr-olds drink at least once/month and percentage stays over 61% up to age 29. Percentage that drink at least monthly stays at 59% thru age 39, and hangs around mid-50s thru age 54, then drops to 33% by age 65+.

August Busch III helped raise over $1.7 mil at fundraiser for Mo Rep and Dem minority leader Dick Gephardt earlier this yr, Roll Call reported.  Included over $40K from AB execs, $50K from AB distribs, “with future campaign filings expected to show additional donations,“ according to RC.  Busch has “strong conservative credentials,” RC wrote, but has been strong backer of Gephardt. Busch family spreads "donations out to lawmakers in both parties."  Article speculated natl network of beer distribs could help Gephardt if he runs for prexy; NBWA prexy Dave Rehr told mag that distribs “very passionate and strongly support those who support” beer biz.  But RC also noted 80% of NBWA contributions go to Repubs.

Prexy August Busch IV placed more of his personal stamp on organization  as lotsa personnel changes announced at AB last couple of days.  “We will consolidate within the sales department under the leadership of Mike Owens,” August wrote, “to help in our efforts to innovate and evolve to a ‘seamless selling’ organization.”  Under reorg, branches and retail mktg will now report to sales veep Mike.  And as Mike consolidated power, a bunch more changes:  3 of 9 region veeps will change, new veep position created overseeing 9 regions who also reports to Mike, new veep position “responsible for coordinating and managing our Retail Shelf Management efforts” and more.  “Key initiatives,” according to memo from sales veep Mike: “more consistency”; “address space…#1 retail opportunity”; “improve key account selling efforts,” etc.  This flurry of changes started becoming public late Friday when August IV sent out brief message announcing departure of well-regarded veep Mike Brooks (formerly sales veep who most recently ran branches).  Several more announcements followed in short order from sales, mktg, admin depts. 

Tho just about 3% of volume, malternatives got 19% of spending in 1^st half, reported Morgan Stanley in its analysis of CMR data.  That amounted to $111 mil.  WHEW!   Highlights: Bacardi Silver got $25.7 mil of spending, virtually same as Smirnoff Ice at $26 mil.  Skyy Blue slightly lower at $18.8 mil, but Miller also spent $5.5 mil on Citrona.  Diageo spent $9.4 mil on Captain Morgan’s Gold, and Mike’s brand got $7.4 mil of support (less than last yr).  Meanwhile, total beer spending down 3% ex-malternatives; Gen Draft got biggest cuts; spending off 50%, $15 mil.  But Bud and Bud Light spending way up.  More in next Beer Marketer’s INSIGHTS.   

Corona trends (in western US/Barton’s region) went from +13-14% “down to nothing” May-Jun after price increase hit at retail, Constellation (Barton’s owner) chairman/ceo Richard Sands told Prudential conference yesterday.  But there was bounce-back in Jul as  Nielsen/IRI reported 20% gains after 12-pack promos “across the country.”  That doesn’t mean Corona back on 20% track, Richard warned, since “probably in August when the 12-pack promos came off we’ll see flat business.”   Long-term growth “may be” 12%, 10%, 8%, 6%, said Richard.  Needs a few more mos of data, but “I’m certain Corona will continue to grow and grow on a very large base.”  Expects Barton’s 2d-qtr (Jun-Aug) Modelo volume to be down slightly, $$ sales up slightly.  Barton shipped extra 2 mil cases late 2001 to meet demand.  Tho it expected 1^st qtr hit, distribs/retailers bought heavily before price increase “rolled thru”  May 1.  Net-net: “some portion” of those 2 mil cases “will come out of the inventories against 2d-qtr shipments.”

US importer for Modelo brands is “entirely a Mexican decision,” Richard told Pru conference. Said when AB bought interest in Modelo, Fed Trade Comm “asked” or “made” Modelo separate its export co from Mexican beer biz. Export co “owned entirely by the Mexican shareholders so that AB would not have any additional influence over the beer business in the US.” Barton’s contract is a “perpetual contract with automatic renewal clauses every 5 years.” Renewal factors “very simple to meet,” he assured. Contract structured that way 25 yrs ago because Modelo/Barton wanted distrib community “to know that we are in charge of the brand…. If they do a good job, they’ll continue to have the brand. If they do a bad job, we’ll move the brand…. No third party is going to come along and …undo the investments that the distributor has made or makes on a continuing basis.”

Ahoy mates, since Captain is sinking, Diageo took $38 mil provision for vast amounts of unsold Captain Morgan Gold.  Captain got about $42 mil in sales in fiscal yr ended June 30, according to Financial Times.  But writedown  will be just a drop in bucket for giant Diageo, which still delivered on bottom line with pre-tax profits of a whoppin’ $3.1 bil and met analyst expectations.

The “handwriting is on the wall.  The bloom is off the rose.”  That’s what Richard, whose co stayed out of malternative fray, said about category.  Compared it to wine coolers.  Products “too easy to make.”  End up with brand proliferation, frustration among distribs, retailers, consumers.  Then: “downhill.”  Malternatives “flattened” last mo, he said.