Turns out 2001 was best growth year for the beer biz in Mid-Atlantic region in over a decade.  NY posted a 540,000-bbl, 5.3% increase.  In NJ, shipments were up 3.4%, and Pennsy’s growth rate doubled in 2001 to 1.7%.  Yet even with gains in 2000-2001, Mid-Atlantic shipments still down 1.5 mil bbls, 6% for 10 years.  Likewise, shipments to New Eng increased 2%+ for the 1st time in over 10 yrs.  Each state up 1% or more: up 3%+ in ME and RI, and the growth pace in Mass just below 2%.  Conn up in 2001, but just made up 2000 loss.  Long-term, New Eng shipments in 2001 still just even with 91.   

“We’re going after the big fish,” Gambrinus director Don Mann told Ad Age.  “Corona Light can have the same appeal [for] domestic light beer drinkers that Corona has had versus regular beer drinkers."  In Gambrinus territory, Corona Light 7% of volume but will get 20% of this yr’s mktg.   Barton is not doing separate Corona Light campaign.  Corona Light shipped 420,000 bbls in US in 2001.  

Imports up just 67,000 bbls, 3.5% in Mar. On up-and-down path: up huge in Dec, flat in Jan, up 16% in Feb, up slightly in Mar. Imports up 297,000 bbls, 6% in 1st qtr. But Mexican and Dutch shipments up 19.5% and 9% respectively, so each gained share. Shipments from several other large importing countries down: Canadian ?21.6%, UK -13.9%, German shipments -3.5%. Canadian shipments clearly affected by Diageo shifting Smirnoff production to its US plants.

New info shows Miller biz had clearly not yet turned in 1st qtr. Tho Miller shipments up 1.6%, sales-to-retailers down 2.6%, PM reported. Shipments up because of "higher shipments for core brands" and "introduction of SKYY Blue," wrote PM. Retail sales down "reflecting lower retail sales" of Lite, MGD, others. Miller?s mktg, gen and admin costs up $30 mil in 1st qtr.

To get preliminary injunction against Labatt USA, FEMSA had to meet tuff standard of  “irreparable harm,” harm that could not just be compensated by money damages.   US judge ruled FEMSA entitled to its injunction because “there has been a breach of the agreement” by Interbrew against FEMSA in their Labatt USA arm (70% owned by Interbrew, 30% by FEMSA).  He relied on recent case that said “denial of bargained-for minority rights” in and of itself constitutes “irreparable harm.”  Judge ruled there had to be some agreement between Beck’s and LUSA to combine bizzes (Interbrew denied there was agreement), and that triggered clause that apparently gives FEMSA veto power.  At Apr 25 LUSA board meeting, Interbrew decided to proceed with integration tho FEMSA execs on board voted against. 

Interestingly, judge anticipated appeal and said that if “mere denial” of FEMSA's minority rights weren’t enuf,  he would have ruled against injunction because FEMSA didn’t prove “irreparable harm” to its biz going forward.  Perhaps that’s why Interbrew spokesman referred to decision as “wisdom of Solomon,” even tho it lost.  “We will promptly appeal,” Interbrew ceo Hugo Powell said.  “We won’t get all the synergies we were looking forward to” said yet another Interbrew exec.  Interbrew said it "would likely have to wait about 3 months to resolve the dispute," reported Reuters.  Lots more in Beer Marketer’s INSIGHTS.  

Wow!!!  This afternoon, US Dist Ct Judge Martin granted FEMSA tuff-to-get preliminary injunction in its lawsuit to stop Beck’s integration into Labatt USA.  LUSA had already started putting the companies together.  “We’re disappointed and we’re looking at our options,” Labatt USA prexy Steve Cahillane told INSIGHTS at hearing.   Right now, no further steps can be taken to integrate Beck’s into Labatt USA for 30 days.  Expect appeal.  That ain’t best way to start peak-selling season.  More details tomorrow.

 

Consumers in 8 of the top-10 beer drinking countries drank less beer per capita in 2000 (latest yr available). Total alcohol consumption however was up in 9 of those countries because of wine and spirits growth. Wine drinking grew per capita in 7 of the same countries while spirits grew in 6. For example, in Ireland (#2 per capita beer consuming country in 2000) beer consumption down 1.2% while wine consumption shot up 15.7% and spirits up 6.7%. Same story in UK: beer down 3.6% while wine up 8.3% and spirits up 6.7%. In Czech Republic, top beer consuming country per cap, beer grew 0.4% but was outpaced by 3% gain for spirits and 0.6% gain for wine. All figures reported in World Drink Trends 2002.

Fed court’s decision to put on hold Labatt USA’s integration of Beck’s is “major positive” for FEMSA, wrote longtime Bear Stearns Latin American bev analyst Carlos Laboy.  Why’s that? FEMSA got “vital leverage for regaining some control” over its US biz, he sez.  Ain’t over yet, and Interbrew could win on appeal, but Carlos thinks with new leverage FEMSA might be able to buy back Interbrew’s 30% share of FEMSA, end the relationship in US, get more control over ad spending, promos etc, a separate sales force for its brands and/or better profit split. As result of any/all of these, FEMSA’s US volume could grow faster, he added.  If FEMSA shakes free of LUSA, where may it go?  Coors is “best candidate,” in Carlos’ eyes, but Heineken a possibility too.   

Post 9/11 and in tuffer economic times, volume in Puerto Rico already down mid-to-high single digits so far this yr, but looks like it?s gonna drop more. Excise taxes there will jump a whopping 50% in mid Jun from $2.70 to $4.05 a gallon as guv seeks to reduce deficit. Retail prices for a case of 10 oz (dominant package) expected to go up almost $4 per case. While volume will likely take big hit, profits might not get hurt too badly if distributors and retailers able to pass on additional increase to preserve margins. Note tho: local brewers exempt from tax hike & US brewers pay no fed excise tax on beer shipped to PR. Tax hike there has "implications for the broader beer industry," wrote Caroline Levy at UBS Warburg "as it sets a precedent for other states to use higher excise taxes on alcohol to balance their budgets."

Total beer biz down 1.4% in supers for 4 weeks thru May 18 and flat for 12 weeks, according to AC Nielsen numbers reported by J.P. Morgan’s John Faucher yesterday.   AB off 0.4% for 4 weeks but gained share in supers.  Miller down 4%, Coors down 3% for 4 weeks, each down about 2% for 12 weeks.  But pricing mostly holding in supers:  avg prices paid for AB and Miller brands up 2.5-2.6% for 12 weeks as both benefit from high-priced malternative intros and price hikes, while Coors avg prices up 0.8% for 4 weeks and 1.1% for 12 weeks “largely due to negative mix effects from Killian’s and Zima,” wrote John.