As of last Friday, there were  218 co-sponsors for bill to repeal 1990 excise tax increase on beer. “That kind of support from Congress speaks very well about our image,” Beer Inst prexy Jeff Becker told INSIGHTS, clearly upbeat about “recognition of what’s our most important issue.”  No bill yet in Senate, but this “positions us well for the next debate” on taxes, said Jeff.   

May 30, when SAB releases annual results.  “The company is understood to have scheduled a formal announcement” then about deal with PM to “gain control” of Miller, wrote UK paper.Sunday Telegraph May 19.  That’s pretty specific, even if "wait-and-see" still seems to be best approach.  PM would keep about 20% stake and cost savings from deal expected to be about $66 mil a yr, wrote Telegraph.  “The two sides have been locked in talks for more than two months and both have consistently played down the likelihood” of a deal.  “But people close to the talks say they are optimistic,” the paper added.  Stay tuned.  

Meanwhile, SAB ceo Graham Mackay did give keynote address at a European brewing conference held last week.  Tho CFSB analysts had expected “clarity” on Miller deal then, instead Graham “made a number of points about consolidation in the brewing industry which we think underpin the likelihood” of deal, they subsequently wrote.  Regulatory issues “key barrier” to global consolidation, Graham had said, according to Credit Suisse First Boston, which leaves only 2 or 3 large deals “left to be done.” SAB would only be interested in a deal at right price.  And Miller at $5 bil is the “most obvious,” according to CFSB.  

Apr domestic taxpaid shipments up half-mil bbls, 3.4%, estimates Matt Hein of Beer Inst. Yr-to-date, shipments up 1.3 mil bbls, 2.2% and 6-mo gain is 1.85 mil bbls, 2.2%. Shipments up 6 straight mos too, Matt notes. Last time that happened: 1986. Twelve-mo domestic shipments picture still not so hot, +0.7%, but with imports up high single-digits, looks like US malt bev biz up about 2.6 mil bbls, 1.3% last 12 mos.

NY ban of direct shipments took center stage in NY fed ct not long ago.  Judge seemed “troubled” that NY allows in-state wineries to ship direct, but bars out-of-staters unless they buy license, set up store-front, etc, according to detailed report by WSWA counsel Craig Wolf.  But because of way case brought and NY law, judge can’t just strike exception for in-staters in NY.  Has to open door to out-of-staters or toss suit.  Note: only challenge here is to wine, since only exception is for vintners.  Temperance argument came up too: atty defending direct shipments ban said 50% of NY wine sold in state is wine coolers “which while not perhaps to the same degree as beer, are nonetheless subject to significant abuse by minors.”  (Ouch).  His point: banning direct shipments of wine coolers from out-of-state is pro-temperance.

Since 98, AB averaged annual sales growth of 2.6%, Coors in same ballpark at 2.4% but “it’s not the volume it’s the volatility,” noted Marc Greenberg of Deutsche Bank.  Coors had everything from 8% growth in a qtr to a 5% drop while AB quarterly trend at worst flat and at best up 5%. A distrib said it best: “Coors’ sales chart looks like the Rocky Mountains.”. . . . Forgot to mention: comments by Jim Koch and Richard Sands in last Express were from a Goldman Sachs conference. 

Wisconsin and Illinois, that is, 2 highest share states for Miller and only ones where it's #1.  Miller off just slightly in each, 0.2%-0.4%.  Share dipped 0.6 in each tho—to 37.5 in Ill, 45.8 in Wisc-- as total shipments up in each state.  AB off slightly in Ill, share dipped too (see above); slowed in Wisc from 6-7% gain pace in 99-2000 to 3.7% in 2001.  Yet AB picked up 0.8 share in Wisc to 31.5.  Coors gained in both states, but under 4 share in each.  Pabst down double-digits in both states, still had 8.5-8.6 share in each.  Importers/small brewers up double-digits in both states, had 16.5 share in Ill (Barton-alone had 5 share there) and 11.1 in Wisc. 

And it gained share in each of  ‘em in 2001.  Most of states where AB at almost 2/3 of biz are in southeast except for home state Mo where AB reached 65.6 last yr. Top shares: 65.9 in Miss, WVa.  Also over 65 share in Tenn and South Carolina.   Interestingly, right next door to AB's home state, in Illinois, AB share only about half the Mo level (33.8) and down 0.7 in 2001. 

Brief hearing on sealed lawsuit between FEMSA and Interbrew over integration of Beck’s into Labatt USA (70% owned by Interbrew, 30% by FEMSA) inconclusive.   Judge ruled for fuller hearing later in May and expedited discovery process.  Yet judge allowed Labatt USA to proceed with integration  (which FEMSA sought to prevent)  “at your own risk.”  There is “no restraint in the interim.”  By next biz day, LUSA already in motion.  LUSA/BNA combo  will have about 100 fewer total positions as LUSA combines with Beck’s North America; vast majority of reductions from BNA side. 

FEMSA argues that it has right to prevent integration under its 99-yr distribution agreement with Interbrew.  Sez it would be immediately and irreparably harmed if the integration went forward by “loss of focus” and “deprioritization” of FEMSA brands.   Interbrew argues “no injury at all.”   But FEMSA atty pointed to “express plan to change prioritization of brands,” adding that in 32 of 37 mkts, plan is to “deprioritize” FEMSA brands.  Cited Chi, where Tecate is currently #1 LUSA priority, but would drop behind Beck’s; Dos Equis would be off priority list.   LUSA atty said: “If there’s a refocusing," which he did not acknowledge, "that doesn’t mean it’s ignored.”   Also disagreed that FEMSA had any right under agreement to stop integration.  Papers sealed.

Fed judge tossed Illinois law passed in 99 to protect wine & spirits distribs. It sparked a buncha lawsuits and big public relations battle between distrib Wirtz and UDV/Guinness. Vintner Kendall Jackson led legal charge vs law. Won summary judgment last week. Fatal flaws: law was retroactive and favored in-state vintners. State may have to pay KJ?s legal fees too. Can?t help future efforts by distribs lookin? for favors from state legislatures. That?s second win for suppliers against franchise law in less than a mo in a big state. Recall NJ guv refused to sign beer bill in NJ mid-Jan.

Two big intl brewing transactions closed since Friday that will lead to many more changes. First, Interbrew bagged Beck’s for $1.6 bil and will now complete “integration” of Beck’s into Interbrew ASAP, wrote Reuters.  But don’t know yet what that will mean in US.  Next day Coors paid Interbrew $1.7 bil for Carling.  Coors has named its UK co Coors Brewing Ltd and its ceo will be Peter Kendall, previously Coors sr veep and chief intl officer.  Sr veep corp development Rob Klugman adds chief intl officer title; Rob “led the Coors team” negotiating for Carling, said Coors.  Interbrew’s next move undoubtedly already in works.  One possibility: an Interbrew/Carlsberg joint venture in UK, reported Sunday Telegraph.