“We have never envisioned that Coors or Miller can direct traffic on where our business goes,” Barton prexy Bill Hackett told INSIGHTS. “That has yet to ever happen,” he added. “We will protect our rights to the limit of the law, and we will control our destiny,” he concluded.  

Consumer price index for beer bumped up another 3.8% in Aug (vs Aug 03), while CPI for all items up 2.7%, wine prices stayed flat, liquor prices rose just 1.2%. YTD trends tell same tale: for 8 mos, avg beer CPI up 3.6% vs 2.5% inflation, just 0.1% wine price increase and 1.4% gain for liquor prices. Another view shows more aggressive beer-vs-liquor pricing in recent yrs. For 12 mos 2001, CPI for beer at home was 7 pts, 4.3% lower than spirits CPI. Thru Aug 04, beer CPI just 1 pt, 0.6% lower.

SABMiller reported that its US sales to retailers up 2% thru mid-Sep. Since it was up 2.8% thru Jun, implies about 1% gain in 3d qtr so far. That’s better than AB but no great shakes. And now tuffer comps begin for Miller. Maybe that’s why new emphasis on subpremiums coming next year. SABMiller cfo Malcolm Wyman told Dow Jones that as Miller Lite comps get tougher, Lite's “growth will slow into single-digits, but he didn’t specify a figure.” 

Domestic brewers’ taxpaid shipments flat in Aug for 2d-straight mo, Beer Inst estimates, following good Jun gain. And that was goin’ against very weak Aug 03 (-2.8%). For 3 mos Jun-Aug, taxpaids up 700,000 bbls, 1.4%. YTD gain now 1.3 mil bbls, 1.1%. Meanwhile, import shipments picked up steam: up 342,000 bbls, 7.5% Jun-Jul. Up 537,000 bbls, 4% YTD. 

Beer Institute filed “amicus” brief on distribs’ side in direct shipping case before Supreme Court, unavailable at presstime. AB prexy August Busch IV sent distribs memo about filing today, adding Beer Inst also “assisting” Wash Liquor Control Board and beer distrib assn in Costco litigation. August noted: “All of the Beer Institute’s legal fees for these two important matters are being exclusively funded by Anheuser Busch.” Gotta be a story in there somewhere.

Hmmm. This negotiation thing ain’t getting very far so far. “We have had limited conversations with Miller on this contract issue,” veep Tim Owston wrote distribs yesterday, “and there is nothing further to discuss.” Miller “appears not to recognize the impossible conflict” its amendment “creates for distributors,” he added. If a sale “involves our brands and those of Miller, Coors believes its right of exclusive negotiation is paramount” and Miller’s amendment “cannot create any right to exclusive negotiations for Miller—whether it is for the total business or just the Miller brands.”

Oh yeah, sez Miller. Take this from Miller sr veep Mike Jones this afternoon. “Miller does not believe, nor ever did, that the exclusive negotiation rights” in Coors agreement “ever applied to the Miller brands. It is becoming increasingly apparent that Coors is taking a highly aggressive interpretation of a contractual matter in order to exert unjustified control over the broader business of distributors.” Distribs, not to mention other suppliers, are caught in the middle.

Next week SABMiller will court financial community. Over 100 analysts will be in Milwaukee for many hours of presentations on progress of Miller turnaround. Then in Oct, several near simultaneous meetings. AB meets with distribs in Chi to discuss new amendments to AB equity agreement, focused on on-premise. Miller has regional distrib meetings to discuss 2005 plans, including its initiative to increase focus on subpremiums. Finally, Heineken having its natl sales meeting same days as AB meeting and at least 1 Miller regional meeting. If you're 1 of lucky few distribs that sell all 3, got some tuff choices to make.

In latest 4-week period thru Sep 5, Ultra at 2.7 share, up just 0.1 with volume down 1%, according to IRI. Share peaked over 3. Aspen Edge down to 0.22 share and Rock Green Light almost same size at 0.21 (without natl campaign). Recall AB prexy August Busch IV recently said lo-carb phenom “no longer growing.” Even Miller Lite (a light beer boosted by lo-carb positioning) slowed to single-digit growth in supers last 4 and 13 weeks . So it's interesting that AB will test Budweiser Select in 4th qtr. "A primary objective is to discredit and invalidate" Miller Lite's lo-carb positioning, an exec "close to AB" told Ad Age.  

More fund cos (including Denver-based Janus) publicly expressing their doubts that Molson Coors is best deal for shareholders. This still amounts to a small % of shares, but noise level gotta be disconcerting to Molson and Coors. Vote "expected to be very close," wrote Toronto Globe and Mail. Another problem: Ontario Teachers Pension Plan (one of most influential in Canada) will object in court to how options handled in Molson Coors deal. Molson execs with options get to vote as if they had shares. Then too, there’s grumbling about big payouts to Molson and Coors execs which potentially total tens of millions. And in background, uncertainty about whether a higher rival offer from SABMiller (or someone else) will develop. Meanwhile, Molson ceo Dan O’Neill now sez he’s “100% convinced” shareholders will vote for deal (quite a different tune from just 2 weeks ago). 

Not 2 months after TTB proposed optional “Serving Facts” label that suppliers could place on product and in ads, fed agency backed off 2 most controversial “facts”: info about “standard” drink size (0.6 oz of alcohol) and infamous “equivalence graphic”: 12-oz mug of beer = 5-oz glass of wine = 1.5-oz spirits. That’s right, 2d “white paper” released yesterday “removed…the drink servings logos and all references to a standard drink.” New “Serving Facts” label includes serving size, servings per container, and info on alcohol content, calories, fat, carbs and protein. (Editor's Note: Doesn’t a “serving size,” say 12-oz beer, 1.5-oz spirits still imply a “standard” serving?) TTB again asked for quick comments, in just 2 weeks. Gotta assume CSPI will grumble, and distillers not happy as brewers won this round on equivalence.