Beer Marketer's Insights

Beer Marketer's Insights

Wow! Merger of Coors and Miller distribs in Phoenix will create 14-mil+-case distrib competing with 22-mil-case Bud distrib. Zeb Pearce Cos, Phoenix distrib of Coors, Heineken, Co-rona, others, will merge with Miller Brands of Phoenix Jun 1, pending supplier approval. More in BMI.
Detailed segment info in AB?s annual report. AB has fully 3/4 of declining premium regular segment with brand Bud, it sez. Gen Draft at 11% and Coors Banquet at 4%. Those 3 brands at 90% of segment, according to AB. In key premium light segment, AB sez Bud Light at 47.5 share (about AB?s share of US beer biz). Each of Coors Light and Miller Light at about 25 share of segment, sez AB. So those 3 light beer brands virtually all of premium light beer segment. And AB sez its Busch and Natural families at 43 share of subpremium. AB gained 3 share of this declining segment in just last 2 yrs.
Excluding Bass, Interbrew reported volume of 59 mil bbls, up 25% (much of growth thru acquisition). Oper income jumped $163 mil, 41% to $554 mil (slightly more than Miller), also excluding Bass. But Interbrew lost money in 2000 as it took $1.1 bil writeoff related to Bass. British courts agreed to review govt?s decision to nix Bass deal; decision expected in July.
US Appeals Ct ruled Md?s wine & liquor pricing regs?distribs gotta file prices, competition can match, and hold?em for a mo, and volume discount ban---are ?per se violations? of Sherman Antitrust Act. US Dist Ct had said regs protected by 21st Amendment, retailer who challenged ?em didn?t get chance to argue point. Now fed ct will have to look at whether such pricing rules are effective in ?promoting temperance? and balance state interests in temperance vs interest in competition.
Miller Brands in New Orleans, also known as Delta Bevs, no longer owned by big bottler PepsiAmericas, which recently became public co. Crescent Dist which co-owned Miller Brands with PepsiAmericas, ?will assume? the operation. Leaves only 1 publicly-owned beer distrib, struggling Capital Bevs in NY, which is still tryin? to close deal to pick up more Pabst biz.
Has to be 1st time ever that a chairman of a ma-jor brewer is a priest. Father John LoSchiavo, who was already a member of board of trustees of Kalmanovitz Charitable Foundation, listed in Pabst press release as ?Chairman of Pabst?s Board of Directors.? Pabst an-nounced new acting prexy and cfo Brian Kovalchuk, formerly an exec with Benetton Sportsystem USA.
AB Chairman August Busch III got $3 mil bonus on top of his $1.15 mil salary in 2000. Also got options that could be worth up to $70 mil, depending what happens to stock. In 99, he got $2.25 mil bonus. Compare to PM Chairman Geoff Bible. He also got $3 mil bonus, on top of $1.8 mil in salary. But Geoff got $8.2 mil award for ?long-term performance.? And many mil in stock options too.
Coors operates at 93-95% of capacity in Golden during peak season, estimates Morgan Stanley?s Andrew Conway. ?This high rate results in delays and bottlenecks? and ?lost sales," he wrote. Over next 18 mos, Coors will add 1.6-1.7 mil bbls to Memphis (cost: $70 mil), new ?beer supply logistics system? ($10 mil) and ?new transport logistics system? ($5 mil). Coors also got about 700,000 bbls of Keystone capac-ity in Canada as part of Molson deal, which ?could allow? Coors to ?produce nearly twice that amount? of Co-ors' beers in Golden ?by reducing time lost on line switching,? according to Andrew. Coors recent gross margin ?deterioration? because longnecks jumped to 21% of mix in 2000 from 18% in 99. Could be 23-24% in 2001.
With just 45 days before state-case trial starts over whether AB illegally terminated Maris in 97, Maris family switched attys. Hired high-profile, high-powered Fla lawyer Wil-lie Gary. He?s won some big-time verdicts: $500 mil in 95 against Canadian funeral home chain, $240 mil last yr vs Disney; and he also tries lotsa race-discrimination cases that get lotsa press. Gary calls himself a "country boy" (he?s son of migrant worker). But now has huge mansion in South Fla, has jet called ?Flight to Justice,? chief investor and ceo of cable tv station, raised half-mil $$$ for Bill Clinton at fund-raiser, etc. Gary sez Maris will seek headline-grabbin? $2.5 bil punitive damages, over $100 mil actual damages. (Maris lost bid for $100 mil+ in fed antitrust trial last fall.) AB response: ?This case is about the lawsuit, not the lawyers. We are looking forward to taking this matter to trial.? Sounds like circus is comin? to Gainesville this Spring.
Hard to believe, but underage drinkers caught at NC State in Ra-leigh face potential fines/court costs totaling $300, required ?alcohol classes,? plus 20 hours of community ser-vice, depending on how tuff judge wants to be. Local Sgt of "public safety" and college spokesman defended tuff regs as ?deterrent,? and said few students actually get max penalty, but they acknowledged ?there has been little change in the alcohol consumption level at NCSU? since rules adopted in 99, according to school newspa-per. What a shock! Final insult: this crime ?does go on your permanent criminal record.?