Beer Marketer's Insights
Specialty Biz Up 4% Jan-Jun in Key Oreg Mkt
Specialty brewers had 10.9 share in Oreg Jan-Jun. Shipped 135,000 bbls, up 5,300 bbls, 4.1%. Top-10 specialty brewers shipped 110,000 bbls, up 5400 bbls, 5.3%. Most of that gain was New Belgium intro. Among other top-10 small brewers, 7 flat or down YTD. Leader Deschutes up 1500 bbls, 6%, but #2 player Widmer down 2800 bbls, 11%. Meanwhile, total biz up 5%, AB +7%, Miller
–3%, Coors +3%. Rockin’: Modelo brands +16%, Guinness +85%, Heineken +17%, Mike’s Hard +160%.
AB Standing Pat in Pitt
Maris Update; Judge Denied All Motions
Turned down AB’s request for directed verdict (to throw out $50-mil jury award) and/or new trial. But also refused Maris' request to reinstate the additional $89 mil jury had awarded to Maris for “lost sales.” He tossed both sides’ charges of “deceptive trade practices” under Fla law. That’s key because either side may have been able to win big atty fees if charges went forward. In fact, Maris atty told Gainesville Sun he estimated Maris atty fees at $20 mil+. That number is estimate of Maris’ “costs of all litigation against AB,” Maris spokesman told INSIGHTS. Judge asked too for briefs on question of pre-judgment interest on the $50-mil award. Gotta keep in mind interest, litigation costs (remember expensive fed trial) and taxes will have major affect on amount Maris family ultimately pockets.
Maris atty said "we’re disappointed” with judge’s decision but Maris “had no expectations” that same judge who tossed the $89 mil the first time would “change his mind.” Maris will appeal to District Ct of Appeals in Tallahassee, and will re-file defamation suit. AB veep John Jacob told G’ville Sun: “We’re not totally surprised that we’re paying some amount of money in this transaction. It’s certainly not what we would have liked to have paid.” But John added it was “a very good day” for AB since judge ruled it doesn’t owe Maris any more $$ for now. Will AB appeal further? “The book has been closed on this piece of the case,” John said, “and now that it has been closed we want to sit down and see whether or not we want to reopen it.” Stay tuned.
Miller Will Take $15-20 Mil Pabst Charge
Miller will absorb closing costs from Pabst’s Lehigh plant. That’s how they finally resolved it. “Miller entered into an agreement with Pabst” in late Jul that “will result in one-time charges” of $15-20 mil in 3d qtr, wrote PM. Apparently, this hefty charge is less than it would have cost Miller not to have that volume.
Tho AB spending on major brands virtually even in 1st qtr 2001, upped spending on Bud Light by $10 mil, 39% and cut spending on Bud by $13.5 mil, according to Competitive Media Reporting. Miller jumped spending on major brands by $9 mil 21%. Coors spending off $2.7 mil, 18% in traditionally low-spending 1st qtr. Heineken spent more than Coors in 1st qtr 2001. Spending up $5.3 mil, 48% to $16.5 mil. Smirnoff Ice got $7.8 mil of ad support, more than Coors Light in 1st qtr.
Miller STRs Off 4.4% in 1st Half
AB’s Massive Motion to Overturn Maris
While Maris seeks additional $90 mil, AB seeks dismissal, new trial or directed verdict favorable to AB. In jam-packed 120-pg motion, AB argues that AB proved Maris broke contract so jury wrong. Maris attys guilty of “staggering” misconduct,insists AB, and judge erroneously admitted some testimony and excluded other. “At a minimum” a new trial is warranted. “There is simply no basis" for the $50 mil jury verdict. Maris atty tactics, AB sez, were “highly prejudicial” to jury. Maris attys “repeatedly…disregarded” judge’s instructions, so much so that they were cited for contempt of court 5 times, members of Willie Gary’s team were “ejected from the courtroom 3 times” and judge ultimately removed Willie from case "based on his improper closing argument.” Judge said to Willie: “You are to have no more role in this case, under any circumstances.” “The misconduct in this case,” thunders AB, “is far worse in terms of severity, frequency, and sheer variety” than in several cases where new trial was granted.
AB also cites beer cases that back up claim that Maris Dist “responsible for the admitted action of its employees,” like repackaged overaged beer. So instruction to jury to contrary “extremely prejudicial” to AB. “This case involves conduct on the part of Maris Distributing, not knowledge,” wrote AB. “Knowledge” not necessary to prove “breach of contract” claim, argues AB. Judge erred too when he called Rudy Maris as witness, and in allowing him to put $300 mil valuation of distrib number before jury. Judge also allowed testimony that was "prejudicial, irrelevant" when Maris side presented testimony based on its claim (that had been dismissed) that AB effort to take over distribs was illegal under RICO laws. And judge mistakenly allowed Maris attys to question "virtually every AB witness about the Jacksonville termination" even tho he had ruled that Reed termination must be excluded from questioning. “This is just one of the many examples of how Anheuser Busch has been prejudiced by complying with the Court’s orders, while the plaintiff gained an advantage by violating them.” The Adkins plan too was “erroneously admitted” as evidence, AB argues. AB witnesses were erroneously excluded too, including distribs who had been subject to METs who corrected deficiencies, testimony about how low Maris expenses were compared to peers, etc, AB argues.