After months of rumors of various alliances, AB and Bacardi USA struck a deal. ?We have reached an agreement to produce and distribute a new and unique product in the growing flavored alcohol beverage segment,? group veep August IV wrote distribs yesterday, promising further info will ?be reviewed with the Wholesaler Panel? in late Oct. Bacardi is largest US spirits brand, but its low-alcohol refresher Bacardi Breezers hasn?t enjoyed same success as Smirnoff Ice in US. AB ain?t sayin? but we hear new product will be called Bacardi Silver.

The show must go on and Beer Marketer’s INSIGHTS will hold its seminar as planned on Monday Nov 5 at the Hotel Pierre.  In fact, we’ve just added a panel on hot topic of moment, malternatives and ready-to-drink products.  Joining us will be John Replogle, newly-minted prexy of Guinness UDV, Guinness Bass Import Co and John Fawcett, gen mgr of Mike’s Hard Lemonade Co.  We hope to add another panelist too.

Forbes 400 rankings gotta be particularly fluid in 2001 with declining stock mkt and aftereffects of Sep 11, but 2 beer industry players moved up significantly in rankings even tho their fortunes didn’t increase, according to Forbes.   East coast soft-drink bottler/beer distrib Harold Honickman jumped to #301 (up from #338) with estimated "net worth" of $850 mil.   And west coast beer distrib John Anderson  is #345, up from #382 with estimated "net worth" of $750 mil.  Gave  $60 mil in last yr to LA hospital. 

Two Fla judges just took themselves out of any further Maris proceedings, including Judge “Buzzy” Green, who presided over state trial.  (A 3d judge had dropped out early on.)  Means state’s gotta find someone new to hear Maris’ defamation suit.  Judge Green didn’t give reason why he recused himself.  Gotta note Maris tried to get Green disqualified from further proceedings based on statements he made to and about Maris attys, and for kicking atty Willie Gary off the case.  AB argued against Maris motion saying it wasn’t timely, and was “transparent” tactic to help Maris appeal.  (Green had apparently told attys in late Aug he wasn’t likely to do anything else in case anyway.)  

Meanwhile, the “special master” appointed by the court to look into charges of atty wrongdoing on both sides filed report that concluded: “I have found many instances of unprofessional conduct.”  Wrote too that “attitude of mistrust so infected the proceedings that civility, collegiality and respect between the counsel…became casualties of this litigation.  I find this both irresponsible and unprofessional.”  His specific recommendations: 1) have Court admonish AB atty Peter Moll for not disclosing a barbecue he hosted for some AB witnesses; 2) refer several actions by Maris attys Willie Gary and Madison McClellan to Fla Bar grievance committee, including “overstatement and misrepresentations” to court, “improper statements” to media, “defiance” of one of court’s evidentiary rulings.  Also ruled Court should use its “contempt power” to deal with Gary’s harassment of 1 witness, his “vulgarity” and violations during closing argument. Gary wasn’t supposed to mention God or the

Maris family, but he did both.   

Coors board of directors upped amount of stock it would allow co to buy back from $40 mil to $90 mil in 2001, according to Reuters.  Coors has already repurchased 815,000 shares for $40 mil. That’s close to $50 per share. Since Coors now trading at about $45 (down from peak of $80), Coors could buy another 1.1 mil shares before yr end at current prices. That would amount to about 5% of Coors outstanding stock (37 mil shares) it will have repurchased in 2001. 

This huge deal in Southern Calif just may inaugurate the next round of consolidation.  Coors just sold its 7-mil-case Anaheim branch to largest beer distribs in US, the Reyes family.  Harbor Dist, Reyes biz in S. Calif, will become almost 20 mil cases and the Reyes family will sell almost 40 mil cases a year, including Chicago, DC and Northern Va.  More details in Beer Marketer’s INSIGHTS.

 

Alcohol-related fatalities jumped 4.2% in 2000, the first increase since 1995. Predictably, MADD prexy decried America’s “complacency” about drunk driving.  But long-term progress remains remarkable. Alcohol-related fatalities are down by more than 1/3 since 1982.

 

Don’t have the documents yet, but Maris attys filed request to “disqualify” Judge “Buzzy” Green from further proceedings, presumably the defamation suit (remember that Judge Green tossed the defamation count out of the state trial).  AB filed motion to keep him on.

Higher-priced beers could grab 1/3 of industry profits by 2010, Boston Beer prexy Jim Koch suggested at NBWA.  Jim’s scenario assumes that over next 9-10 yrs: 1) high-priced beer segment (imports and specialties) grows at 6%/yr (currently growing at 9%/yr); 2) higher-priced beers maintain profit margin 50% higher per case than other domestic beer; 3) AB gains 10 mil bbls (that would be slowdown); and 4) Miller/Coors keep current volume.  If those things happen (big ifs, natch) Jim figures AB ends up with 49 share of volume (up only 1), Miller at 20, Coors at 9, higher-priced beers grow to 22 (up from about 13 now). But look at projected share of industry profits: AB at 42, Miller at 17, Coors at 8 and higher-priced beers at fully 1/3.  That would mean 60% of profit pool “outside the AB system at wholesaler level,” sez Jim, suggesting Miller/ Coors distribs (who also have most of higher-margin volume) end up with “margin advantage” over AB distribs.  Implications, according to Jim: Miller/Coors distribs “make sense,” higher-margin segment “holds balance of power” in many mkts, “managing portfolio of brands” becomes “key skill” for non-AB distribs.

 

5-yr view underscores story of explosive hi-end growth. 3 of top 5 importers scored triple-digit growth from 1995-2000: Barton up 156%, 2.14 mil bbls, Gambrinus up a whopping 2.5 mil bbls, 298%, and Labatt USA up 1.63 mil bbls, 133%. #1 importer Heineken USA up 57%, 1.66 mil bbls 95-00. Those 4 cos gained 7.9 mil bbls last 5 yrs. And though specialty mkt has lost steam in last few years, 5-yr stretch still looks strong for some top craft cos too: Sierra Nevada up 145%, 295,000 bbls; Spo-etzl up 95%, 127,000 bbls, Leinenkugel up 26%, 70,000 bbls, Boston up 24%, 231,000 bbls. In all, top 5 im-porters and specialty brewers accounted for three-quarters of the growth of hi-end segment 95-00; 7.6 mil bbls out of a total 10.4 mil-bbl gain.