Beer Marketer's Insights

Beer Marketer's Insights

Beat goes on.  Committee in Georgia State House passed resolution urging BATF to “reconsider its actions in approving labels and retail distribution” of malternatives.  Asserted “imperative need for immediate rescission” of BATF approval of malt products that contain “liquor flavored” materials such as distilled spirits.  Approval of malternative labels “tends to create an atmosphere of consumer deception” and “sets a dangerous precedent relative to fair and equitable taxation.”  Wow!  Resolution still has to go before state assembly for approval before it's sent off to DC.

"We're no longer competing with Allied Domecq in the US as much as An-heuser Busch," N. American prexy Paul Clinton told Reuters. Diageo will focus on getting bigger chunk of total "consumer beverage spend" rather than mkt share in particular category, Paul said at Paris conference. Di-ageo goal: just 1 spirits distrib per state. And bev website just-drinks wrote that Diageo eyein' "US sports arena market" with RTD's, and in UK, co has already rolled out Smirnoff Ice on tap.

“We have not forgotten that a viable import brand still represents a key objective, an unfinished piece of business for AB,” prexy Pat Stokes told wholesalers at New Orleans sales convention earlier this week.  “Given the consolidation of competing imports, usually within non-AB wholesalers, there is good reason for foreign brewers to assess their route to market,” he added.  Group veep August Busch IV even more specific: “We will continue to pursue opportunities to bring a viable European import into our portfolio.”  No names mentioned, natch.  Lots, lots more from top AB execs in BMI next week. 

Corona prices will go up $2.00 to consumer in NY on April 1.  NJ Corona prices will go up then too, but less.  In Fla, Corona front-line also going up.  At presstime, no word from Heineken.  In Barton’s key mkts, Calif and Ill, Corona prices already up and Heineken hasn’t gone up.  Heineken did take price increase in select mkts like Md and DC.   

Let’s hope.  Oreg House voted 60-0 Mar 1 to reject proposed nickel-a-drink excise tax hike on beer and wine.  Vote followed about a month after lengthy front-page profile of Paul Romain, who heads state beer/wine distrib assn, in Portland Oregonian.  It detailed Paul’s access, style and success in stopping tax increases for 18 yrs.  Paul’s assessment of guv’s chances then: “I still think it’s dead.”  Looks like he was right.  Guv may take another run at upping tax later in yr, Paul told INSIGHTS. 

That’s urgent request from Wal-Mart and another chain, Restaurants Unlimited, to legal mtg of control state regulators yesterday.  Key beefs from chains’ point of view:  states that have residency requirements for mgrs which keep ‘em from moving competent personnel around; states that limit the number of licenses a corp can have (a biggie, you bet); info requirements that are overly extensive, redundant and/or irrelevant to states temperance/control interests.  Wal-Mart is far from first alc bev seller to seek uniformity within or across states, but may be able to move needle.  Why?  Annual sales = $217 bil.  Serves 100 mil customers per week.  Now has 1,375 locations that sell wine, beer and/or spirits.

In Georgia, 1 of top 10 beer states, shipments dropped 63,000 bbls, 1% last yr. That?s including Smirnoff Ice. In fact, Guinness Bass Import Co biggest gainer, up 50,000 bbls, 83%. AB held even, yet still gained 0.6 share to 57.9. Miller fell 79,000, 7% and lost 1.2 share to 18.8. Coors down 2%, Pabst down 0.5%; each had 6 share. Heineken down 5,000 bbls, 4%, while Gambrinus up 21,000 bbls, 14%.

For 1st time, group veep August Busch IV listed among top-paid AB execs as he passed $1 mil mark in salary/bonus in 2001.  Got $510,000 salary, up $70,000, 16% while bonus jumped  10% to $565,000.  Chairman August Busch III’s salary and bonus hit $4.5 mil, up about 8%.  Prexy Pat Stokes’ salary and bonus jumped $358,000, 12% to $3.3 mil.   Biggest % gainer among top execs: exec veep John Jacob, up $200,000, 19% to $1.25 mil.  Group veep Randy Baker also passed $1 mil.

Interbrew full-yr results showed that Interbrew North America oper income jumped $33 mil, 8% to $273 mil. Volume up 3% to 12.4 mil bbls (including over 4 mil bbls sold by Labatt USA in US). Total Interbrew oper income at $774 mil. Meanwhile, as Interbrew seeks ?flatter? structure, many more organizational changes afoot. Labatt prexies of US and Canada, Steve Cahillane and Bruce Elliott, will report directly to recently appointed Interbrew chief operating officer Jerry Fowden. Fred Jaques, who was exec veep of Interbrew North America, chose to stay in North America and will leave Labatt Mar 30, less than 2 yrs after he joined. Also, Labatt USA just hired Tom Levenick as new sales veep; Tom most recently was Coors area veep in Gulf states. Interbrew wants Beck?s to grow 10% per yr in US, up from 4%, ceo Hugo Powell said in conference call.

Miller will spend over $100 mil on its 3 new malternatives SKYY Blue, Stoli Citrona, Sauza Diablo, it said at upbeat Miller natl sales conference. Orders for SKYY Blue are 200,000 bbls Feb-Mar. Add in Diageo?s approx $200 mil, AB?s over $60 mil, Mike?s $50 mil or so and you get over $400 mil of total mktg support for malternatives in 2002. Whew! Those are some big bets. Stoli and Sauza entries debut this spring. Newly-announced Jack Daniels brand debuts in Sep. That got 1 of biggest rounds of applause at conference. Nice human touch too: standing O for departing sr sales veep Jim Mortensen.