This time in NY. Just struck deal to purchase Premier out on Long Island with annual revs a mere $300 mil, according to Newsday. When deal closes in Dec, this will mark 12th state in which SWS does biz. Already over $5 bil in sales, SWS bigger than almost all of its suppliers. With this purchase it will now do biz in 4 of 5 largest mkts, leaving only Tex. This deal "establishing a footprint" in Northeast, wrote Miami Herald. Asked if he has any plans to enter Tex, SWS chairman Harvey Chaplin told Herald: “Not today.”

Media spending for import brands in 1st half that is, according to tnsmi/cmr data. Many competing import brands got same or less media support as last yr. Compare Jan-Jun 2004/03 spending levels (mil $$): Heineken $22.9/$23.5; Corona & Light $17.3/$18.9; Guinness $8.5/$8.2; Amstel Light $12.8/$15.9. Then look at Interbrew hikes: Labatt Blue & Light $13.7/$11.2; Beck’s $7.9/$2.4; Dos Equis $4.0/$2.9. Note too Interbrew pumped $6.3 mil into Bass Jan-Jun 04 compared to $2.7 mil spent by Diageo Jan-Jun 03. Interbrew reduced spending on only 1 key brand, Tecate: $1/$1.2.  

$234 mil in suspended SOT taxes on alc bev licenses for 3 yrs is a start. Industry lobbyists have been tryin’ for years to get feds to wipe out SOT tax on licenses: $250/retail location, $500/wholesale, $1000/manufacturer. A 3-yr hold on tax was part of huge corporate tax package passed by House/Senate. Now goes to President Bush.

In Tex, light beer over 60 share of total beer biz and steadily gained share in recent yrs (driven by Bud Light gains, even as Coors Light and Miller Lite declined). But some unusual developments so far in 2004. First of all, trends changed for each of big 3 light beers that are almost half the biz. Perhaps even more importantly though, collectively they are down 315,000 bbls, 5.6% for 7 mos. That’s mainly because Bud Light down 94,000 bbls, 2.9% in its biggest state. (Bud Light remains up 3-4% nationally.) Miller Lite has dramatically reversed course from double-digit declines. But it’s up much less in Tex than elsewhere; gained 31,000 bbls, 2.6% thru Jul. Meanwhile, Coors Light dropoffs have accelerated. It’s down 126,000 bbls, 13% yr-to-date in Tex. Collectively, these 3 mega-brands down 2 share to 48.7 so far in 2004. Makin' up much of slack for AB: Mich Ultra up 95,000 bbls, 88%. At 1.8 share. 

NY Beer Wholesalers honored veteran industry consultant Mark Rodman last night in NYC with assn

Super case sales up 5.8% for 4 weeks thru Sep 26, according to IRI. Gained 3 of last 4 weeks. That followed 3 consecutive 4-week periods when volume down 3-4%. Supports anecdotal evidence that Sep a pretty good month for beer biz. But avg prices paid up just 2%, compared to 3% in most recent 4-week periods. AB lost 0.5 share last 4 weeks while Coors and Miller gained slight share.

Heineken blamed recent “severe weather conditions,” like hurricanes, for worse than expected US sales.  Lowered expectation for full yr growth to 3.5-4% from 5%, reported Dow Jones.  Recall Heineken also increasing price in much of country.   

Wild scenarios suggested in yet another massive global beer tome, this one from Dresdner Kleinwort Wasserstein. How wild? “InBev would gain substantial benefits from a merger either with Anheuser Busch or with SABMiller,” DKW wrote. Either deal would result in co over 275 mil bbls. But "impediment is whether the Interbrew families would accept loss of control, and whether the Busch family would want to pool their interests.” Among analysts’ conclusions about each top brewer: both AB and SABMiller “would gain most from” deal with InBev. Could such a deal really be possible? Interbrew was working on deal to acquire SAB before SAB acquired Miller, one source reminded. Report also touted Diageo’s many and appealing options, including buying one of big global brewers, but “we are not convinced that it will exercise any of them.” In global beer game, seems can’t count anything out these days.

Good news and not-so-good. First the good: 1) FTC cleared way for Molson Coors, even suspending 30-day wait period, since it found “no antitrust problems” with merger. 2) Molson CEO Dan O’Neill told investor conference last week that the synergy “numbers continue to go up. We feel there’s an opportunity to capture another $25 million to $40 million that we plan on reinvesting in driving top line sales revenues.” Molson also announced it was reviewing decision to allow option holders to vote on merger and proposed compensation packages for execs if merger completed. Not-so-good news, as predicted by some Canadian analysts/observers: 1) Molson warned that current qtr sales/earnings in Canada will come in lower than expected, perhaps a “mid single-digit percentage decrease in domestic EBIT.” (Earnings before interest and taxes.) Continuing "price war" in key Ontario mkt won't help Molson profits. 2) Molson is considering a $157 mil writedown on Brazilian biz, which would bring value down to about half of the 2002 purchase price, according to AP.  

Miller “will stay very clear about the difference between the baby and the bathwater,” Miller prexy Norman Adami told mtg of Illinois distribs yesterday. Assured that Miller will take “common sense approach” to resolving current contract issues and cited “harsh fact that none of us involved in the situation can afford to take our focus off the marketplace.” Insisted too that Miller had “no desire to tamp down” value of distribs’ biz or “assert more control” over distribs. Norman followed contract comments with insightful, mostly serious/partly humorous list of “8 Sure-Fire Methods For Alienating a Beer Distributor.” Here it is:

1. Wave the contract in the distribs face every time there’s a disagreement. Norman’s point: brewer-distrib relationship gotta be based on “commitment” and trust,” not “ “enforcement” and “compliance.” Battles over legalities “should be rare.”

2. Ignore system return on investment. Norman reminded: “Being an American beer distributor is a pretty good life” and tweaked that in next life he'd like to come back as distrib. But ensuring return is about “maintaining ability to compete,” not just buildin’ wealth. Suggested brewers gotta think about system ROI before adding SKUs, new processes, requiring new distrib investments.

3. Complain about execution, “particularly when one of your brands is tanking.” Brewers gotta provide “pull” for brands and distribs gotta “push” ‘em through better execution.

4. Underestimate strengths of 3-tier system. Norman reiterated point from NBWA speech that 3-tier is “best-integrated multi-local consumer business system” in US because it combines pervasiveness, local strengths and national efficiencies. Said he was calling for distribs to join with brewers to “step up to challenge” of retail, “not out of” it.

5. Sacrifice the rest of the industry for your own short-term benefit. This was not-so-veiled message to key competitor that no industry member “benefits by trying to conjure unfounded worries with consumers.” Retailers “will punish” industry, Norman warned, if “we make their lives more difficult by introducing new complexity into our category” since they “don’t want to have to manage the beer section the same way they have to manage the produce section or the dairy section.” Will Norman’s delicate dig at “freshness” issue get traction?

6. Tell them they’re not the target audience. Norman blasted this common reaction when brewer execs fear distribs won’t like new ads. “Good advertising transcends,” Norman reminded. Noted too that TV ads becoming “decreasingly important” as world changes, citing success of TV-less Starbucks.

7. Pretend you’re not responsible, by blaming headquarters. “Disassociation” between field personnel and HQ “sends a terrible signal" to distribs and retailers.

8. Zig and Zag. Miller over last 10 years has “inflicted no fewer than 7 ‘turnaround strategies.'” Oscillation is over; Miller will stay focused, Norman vowed.