Lotsa interesting give-and-take between 3 state regulators (Calif, Fla, Tex) and industry attys over tied-house laws at CLE Intl symposium last week. Or, as one supplier atty dubbed laws – “dumb ass rules that restrict marketing.” Key question: “Who’s controlling who?” Tho tied-house laws originally passed to keep retailers free from supplier control, he asked if anyone could picture a retailer big enuf to warrant control these days, yet small enuf that it actually could be controlled. Supplier attys also questioned how regulators justify picayune rules and comprehensive regs while allowing “exceptions” that undercut regulation.

Regulators’ response: they enforce laws; they don’t make ‘em. That’s up to legislators. Industry members, one noted, “phenomenally unsuccessful” in changing laws to accommodate all interested parties. What's more, abuses occur, they said, on price, promos, ads, etc, and “we hear about it.” Regulators also represent public interest, they said, including health folks who are legit “stakeholders." (Reminds of point by Prof Steve Diamond at NBWA that distribs need to “embrace” regulation to help justify middle-tier.) Interesting question from regulator who pointed out a motivation for tied-house laws was to put “brake” on consumption. Asked: Do “we need tied house laws” for that, or are antitrust laws sufficient to protect public from overly aggressive competition? Does uniqueness of alc bevs require “extra layer of protection” tied-house laws provide?

It ain’t first time ever, but it is 1^st time in yrs Fed govt suspended a beer wholesaler’s basic permit. Tax and Trade Bureau suspended W.O.W Dist of Sussex, Wisc (near Milwaukee) for violating FAA act by entering agreement with a raceway which prohibited it from “purchasing products from or promotionally associating with any wholesalers other than W.O.W,” according to TTB release. There was 2d violation too.  Suspension lasts for 7 days out of next 30 and doesn’t have to be consecutive.  But that means W.O.W. can’t conduct biz on those 7 days.  Recall that TTB (formerly BATF) has hired as many as 200 new auditors and they are going around and checking on those with basic permits, which in beer biz means distribs (brewers don’t have basic permits).  W.O.W. prexy Aldo Madrigrano is well-known player in biz too, serving as NBWA’s Secretary and PAC chairman and on Miller’s distrib council.  

In Express #62, lead article questioning whether light beer mkt “oversaturated” in Tex overstated case because some of our numbers incorrect. Trend figures for Bud Light, Miller Lite and Coors Light correct, but collectively their decline actually -190,000 bbls, -3.5% thru July. And share decline for the 3 brands was -1.2 share to 47.8. Aug data just in changes picture again: Bud Light up 60,000 bbls, 13.2%, Lite even, Coors Light down 11,000 bbls, 7.5%. YTD, top 3 light brands off 141,000 bbls, 2.2%, down 0.8 share.

State regulators from 3 of largest alc bev mkts in US – CA, TX, FL – were asked at CLE Intl legal symposium about impact if Costco wins Wash case and gets right to buy direct from out-of-state suppliers. Each acknowledged such a win would be “major re-write” and “fundamental,” even “radical” change. Calif ABC director suggested that there would still be a place in mkt for distribs since they provide service and some unspecified “protections.” Gen counsel for Tex ABC put a more provocative spin on it. Said regulators have been hearing from distribs “ad nauseam” for years about “commercial justifications” of middle tier, how they “add value.” Were Costco to win, he suggested, “we’ll find out” whether such arguments are “chicken salad or some other part of the chicken.”

ABC reversed its position earlier this week and put hold on all of the new regs, including “packing out,” etc even tho NJ Ct supported NJ Alc Bev Comm decision to put hold only on new draft-cleaning regs. ABC will now go thru formal rulemaking process (seeking comment from industry, others). That’s one of the things AB, which had strenuously objected to new regs, had sought in its lawsuit, which will now be dismissed. Gotta figure plenty of political pressure put on ABC, given it had already won in court.

Tho domestic brewer shipments flattened out over summer, imports heated up. Up 259,000 bbls, 13.4% in Aug. That’s 4th strong mo in a row. Up a very respectable 796,000 bbls, 5.1% yr-to-date. Mexican shipments once again led way with 22.5% gain in Aug. Now up 672,000 bbls, 9.7% YTD.

“While we are strong supporters” of 3-tier system, InBev USA prexy Simon Thorpe said three-quarters thru a speech to Calif Beer and Bev Dist assn, “we have a lot of wholesalers,” he noted. In fact, more than “any other supplier,” according to Simon. So InBev USA has goal of going from 750 distribs to a “core” of about 300. “That will take some time," he added. Note: top 300 InBev distribs are already 94% of volume. InBev will attempt to consolidate network over next couple of years, INSIGHTS hears. Thru Aug, InBev USA brands +5% on depletions, Simon said, not including Mexican brands. Stella up 50% . “We haven’t even scratched the surface” on Stella, Simon said. Beck’s up 7% and Rolling Rock family up 11%. Labatt Blue Light up high-single digits. 

Where beer biz laggin’ behind wine/spirits, that is. Per capita beer consumption in Britain dropped avg 3%/yr 1998-2003, reports Datamonitor. Same period, spirits consumption rose slightly, wine consumption up nearly 18%. Another similarity: on-premise sales down in UK too.  

Fox reportedly jumping Super Bowl ad rates by 4.4-8.7% this yr. That means a 30 second spot will now cost $2.4-2.5 mil, according to Wall St Jnl. AB has secured 5 minutes of air time for its exclusive. Even if it gets discount for purchasing so many spots, it’s still an expensive day. Then again, last yr 89.8 mil people watched Super Bowl.

AB continues to struggle in home state Mo. Down 50,000 bbls, 2.5% for 8 mos and 2.6% for 12 mos too. In last 12 mos, AB down 2 share to 64.5. But Miller has slowed lately too, including 12% drop in Aug. Still up 7% for 6, 8 and 12 mos. It has gained 1.1 share. Coors is flat, but All Others jumped 35,000 bbls, 17% yr-to-date and 0.9 share in last 12 mos.