"We believe the pricing environment in the beer category continues quite positive. Our proprietary retailer surveys showed very little promotional activity during key holidays?Memorial Day and July 4." (Bill Pecoriello, Morgan Stanley)?.. "According to Investec, SAB may not even need growth" in the US, "claiming that if it can maintain Miller?s market share at 20% it could add $1 bil to the value of the business." (The Independent, UK)?.. Coors is being "disproportionately hurt by poor weather" in Northeast, Miller "hurt by rainy conditions in the Central US," while "extremely dry conditions in the West are likely helping" Barton. Weather a wash for AB, helped in Sunbelt, hurt in Midwest. (Caroline Levy, UBS Warburg).

Interbrew just bought a stake in 5th-largest Chinese brewer Zhujiang, which sold 6.4 mil bbls in 2001, 3.3 share of Chinese beer mkt. Also, more speculation in UK press this week that Scottish & Newcastle in hunt for another deal. Meanwhile, ink was barely dry making SABMiller a done deal this week when it announced plans to place another 120 mil shares to "maintain financial flexibility? to maximize shareholder value through its strategy, which includes seeking opportunities to enhance its position as a global brewer." "Basically, we have a pipeline of deals," said SABMiller spokesman, tho he didn?t name names. But said today: "In light of prevailing market conditions, SABMiller has decided in the best interests of its shareholders and the company not to proceed with the proposed placing of ordinary shares."

Interesting twist, and one that supports wholesaler independence, in long-running legal fight between S&P/Pabst and one-time master distrib in southeast Barry Kanner.  Tho US Dist Ct had ruled Barry’s co Southland had violated agreement with Pabst, which called for “full time commitment to the sales and marketing of Pabst/S&P brands,” by selling tiny volumes of other brands, US Ct of Appeals reversed that part of decision.  Instead, agreed with Southland’s argument that selling of non-Pabst brands (none competed directly with Pabst) “was done for the purpose of creating good will that would advance” sales/mktg of Pabst brands as well.  Ruled too that how Southland “chose” to “devote its full time commitment” was at its discretion, wasn’t detailed in agreement and wasn’t necessarily “exclusive ‘sale’” of Pabst brands.  Here’s key: “it is not the time…devoted to the non-Pabst brands that controls, but the purpose of that activity to increase the sales of Pabst products.” 

Other than Hawaii’s recent adoption of deposits, no state had passed a bottle bill in nearly 20 yrs.  It’s been a mostly dormant issue in DC for at least a decade.  But Sen Jim Jeffords (Ind-Vt) “called the hearings to build momentum behind a national bottle bill,” NY Times wrote.  Under proposed bill, consumers looking at a dime deposit at least, and industry forfeits unredeemed deposits until 80% recycling rate achieved.  Prognosis: “We don’t believe this is a serious threat.  We still believe curbside recycling has proven the best way to go,” Beer Inst prexy Jeff Becker told INSIGHTS.

SABMiller’s first comments about Miller trends: Apr-May “characterized by disappointing sales volume due to cooler springtime weather conditions…particularly in the Midwest and Northeast.”  But declines “offset by…better pricing trends…lower raw materials costs and higher contract brewing volumes.”  Miller results “broadly in line with expectations, ” and SABMiller expects Q2 financials “in line with that of the comparable period in 2001.”  In Q2 2001, Miller’s operating rev was $1.2 bil (-0.7% adjusted to exclude discontinued brands), oper income was $168 mil (-11.6%).  But in Q2 2002, Miller’s hi-priced malternative volume and $$$ all incremental. 

Unfazed by FTC’s clear rejection just last month of CSPI’s 2001 complaint that malternatives target underage drinkers, CSPI banged its head against same wall this week with ho-hum announcement that a survey found lotsa teens actually watch television after 9 PM (wow!) when malternative ads run, and high % are aware of brands.  Per usual, no data underage are buying or consuming these products.   CSPI even got one House rep (Engel D-NY) and Conn state atty gen to climb aboard, criticize industry’s voluntary ad regs and rattle sabers about more FTC review, potential state legal action. How many times does FTC have to reject ad restrictions and embrace/praise voluntary self-regulation before antis get it?  

New Michelob ads on NYC bus shelters take sharp aim at hot, hot Stella Artois brand.  Next to pic of Stella bottle ad sez: “Belgium’s ordinary beer.  Overpriced especially for you.  $1.95 a bottle in Belgium.  $8 a bottle in New York.”  Next to pic of Michelob bottle: “Imported from America.  It’s the taste.  Not the trip.”  Reminds of past tuff AB campaigns against Smirnoff Ice, Coors and Sam Adams.

Thru May, consumer price index (CPI) for beer was up 2.2%, just ahead of general inflation of 1.8%. Wine CPI up just 0.5% while spirits CPI up 1.2%. Gap wider over last 12 mos: Beer CPI up 3.1% while wine +0.3%, spirits +2.3%. General inflation was 1.2% May 2001-2002. On-premise beer prices not up as much YTD: +1.3%. Lookin? at producer prices Jan-Jun, malt bev increase (+0.6%) below increase for all finished goods (+1.3%). Canned beer index +1.4%, bottled beer index -0.4%.

“Beck’s North America, under the direction and leadership of John Lennon, will continue to operate as a fully independent stand-alone operation with complete decision-making authority….  Any future decisions concerning BNA and the Beck’s Brand Family will not take place before” 1^st qtr of 2003,” Interbrew COO Jerry Fowden wrote.  There will be “significant increase in marketing” in 2d half 2002 and a new ad campaign, plus “several great promotions,” Jerry added.   The “longer term decision regarding integration of Beck’s in the USA” is “now before the courts.”

"Everything is pretty well on projection right now," AB prexy/ceo told Dow Jones in recent interview. "We?re pleased with where we are," even tho Memorial Day "was wet, rainy and cold in most of the country." AB continues up about 20% in China, Pat added, and biz in Mexcio going "very well." For AB to buy Grupo Modelo outright, other shareholders would have to pass on their right of first refusal, Pat told Dow Jones. "He doesn?t see that as a near term possibility," DJ added.