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Lynn M. Walding, Administrator

	e - NEWS
January 30, 2003

1. University of Iowa Scientists Study Effects of Alcohol on Immune System

2. ONDCP Links Drugs, Drinking in New Ads

3. Champps Seeks To Boost Liquor Sales, In Moderation (Iowa)

4. Study: Alcohol Attitudes Affected More by Peers

5. Beer Volume Hurt by Spirits in 2003

6. Students Ask State to Track Beer Kegs

1. University of Iowa Scientists Study Effects of Alcohol on Immune System

By Seung Min Kim -The Daily Iowan

January 23, 2004

IOWA CITY, IA -- In ongoing efforts to study the effects of chronic alcoholism on the human immune system, which makes users more susceptible to infectious diseases, UI Hospitals and Clinics scientists have conducted the first successful experiments in the country using mice for research involving long-term alcohol use.

The five-year study, titled "Alcohol and Immune Dysfunction," began in September 2003, when the National Institute of Alcohol Abuse and Alcoholism endowed UI pathology Professors Robert Cook and Thomas Waldschmidt, along with Annette Schlueter, a UI assistant professor of pathology, with a $6.3 million grant for the research.

Now, Waldschmidt said, the researchers have successfully shown that habitual alcohol use decreases the B-cell count in mice, the first step in uncovering the intricacies of the immune system in a complicated study that could not ethically be performed on humans.

"We asked, 'Are we seeing the same thing in mice as we are in humans?' " Waldschmidt said. "The answer is yes, so now, we're asking more detailed questions and looking at the B-cells more closely."

The study comes when alcoholism and its treatment are driving up health-care costs and filling medical centers with more patients than ever who are suffering from infectious diseases, which Waldschmidt said is the No. 1 cause of death in alcoholics.

"The cost to the health-care field is huge, because there are many alcoholics who suffer from infections," Schlueter said. "So how can we prevent this from happening?"

Approximately 14 million Americans - 1 in every 13 adults - are classified as alcoholics, with the 18-29 age group being the most problematic, according to the alcohol-abuse institute.

The UI study is split into several parts, with each professor researching a particular area of interest. Cook, who is heading the study, is researching T-cells, which are required to maintain normal immunity, he said.

Schlueter is studying the effects of alcohol on dendritic cells, which initiate immune-system response, while Waldschmidt is concentrating his study efforts on B-cells.

In Schlueter's study, preliminary results show that alcohol decreases the number of dendritic cells and causes them to lose their function. She is now looking at reasons for the decrease.

The trio is also collaborating in an effort to discover ways the three cells - T-cell, dendritic, and B-cell - interact with each other in the immune system.

Tom Jerrells of the Department of Pathology and Microbiology at the University of Nebraska Medical Center, is also a researcher in the project, and UI internal-medicine Professor Zuhair Ballas will begin his part in April.

"This study is an interesting thing, and it needs to be done for the long run so we can better treat patients with infection," Cook said. "And study how reversible the damage is, because we don't understand that very well right now."

2. ONDCP Links Drugs, Drinking in New Ads

By Wendy Melillo - Ad Wee

January 26, 2004

Early-intervention campaign from FCB, Ogilvy kicks off on Super Bowl

WASHINGTON -- The White House's latest anti-drug media effort, which launches during the Super Bowl this Sunday, links drug use with drinking in TV ads for the first time in the campaign's five-year history, sources said.

The new work, from New York shops Foote Cone & Belding and Ogilvy & Mather, also promotes the concept of "early intervention"—another first. That marks a shift in focus from the campaign's usual prevention-based messages. Early intervention is a drug-treatment strategy favored by drug czar John Walters.

"The campaign enlists the power of peers and parents of teens to take early action against youth drug use and will provide information and support to help get their friends or children to stop using illicit drugs," the White House Office of National Drug Control Policy said in a statement. The work will be unveiled at a press event in New York this week before airing this weekend.

ONDCP officials declined to discuss the specifics of the advertising before Thursday's event. But sources said the FCB work targets parents, while the Ogilvy work is directed at teens. The ONDCP plans to run one ad during the Super Bowl and a second during the Survivor: All-Stars premiere following the game.

A 30-second spot called "Rewind" by FCB is due to air during the game, sources said. The story unfolds in reverse chronological order, not unlike the movie Memento. The viewer first sees a girl passed out on a couch. The scene flashes to her vomiting in a urinal. Subsequent scenes show her getting high and drinking from a red cup at a party. She then appears at school with friends, on the school bus and back at home. At that point, which is the "beginning" of the story, the girl's mother has a chance to intervene. "We've got to talk," she says, holding up a bag of marijuana.

"Rewind" does not explicitly mention alcohol but "subtly" makes the association between drinking and drug use, as one source put it. The ad is intended to show parents of teens who drink and smoke pot that they have an opportunity to halt the problem before their children become hard-core drug users. "It is not an anti-drinking spot," the source said.

A second FCB spot, not airing during the Super Bowl, opens with a husband and wife slamming doors on each other as though they are angry. The viewer soon learns that they are rehearsing a conversation they plan to have with their children about drugs.

A 30-second spot from Ogilvy, targeted at friends of teens who drink and use drugs, will air during Survivor on Sunday. The concept addresses the responsibility a friend or loved one has toward someone who has a drug or drinking problem. The spot depicts "what would happen in a lake where you might have a responsibility to do something," a source said, but declined to elaborate.

The campaign urging early intervention is designed to target teens who are drinking and smoking marijuana on a regular basis. Research showed alcohol was a major part of the drug problem, sources said.

"Conceptually, it makes a great deal of sense to send an early-intervention message to the friends and families," said Chris Policano, a representative at Phoenix House in New York, one of the country's largest substance-abuse treatment and prevention agencies. "We've always believed in the value of highlighting treatment. It is encouraging to know that ONDCP is informing friends and families of the roles they can play in helping young substance abusers get help."

The prospect of including alcohol in the anti-drug media campaign first surfaced in 1998, when Mothers Against Drunk Driving lobbied heavily for such a move. At the time, then-drug czar Barry McCaffrey argued that not enough money was available to produce effective campaigns targeting both alcohol and drugs. The current media-campaign budget is $150 million.

The issue came up again in September following the release of a National Academy of Sciences study that called for the inclusion of alcohol in the anti-drug campaign. "Parents tend to dramatically underestimate underage drinking generally and their own children's drinking in particular," the study said.

The beer and liquor industries have long opposed any inclusion of alcohol messages in the campaign, on the basis that responsible drinking—unlike drug use—is legal for adults. At the time of the NAS report, Jeff Becker, president of the Beer Institute, said he was not convinced there is a need for such ads. "I would be very concerned about what a campaign to parents would look like," he said. "I've seen no evidence that doing a national media campaign does any better than the community-based efforts we and a lot of other groups do."

"The distillers are committed to fighting underage drinking," said Lisa Hawkins, a rep for the Distilled Spirits Council of the U.S. "We support the concept of educating parents and other adults, but we believe messages regarding alcohol and drugs should be separated. Underage drinking is illegal, but moderate alcohol consumption can be part of a normal, healthy adult lifestyle."

"My hope is this campaign opens the floodgates to more government-sponsored messages to parents about the risks associated with underage drinking. A toast to ONDCP," said George Hacker, director of health-advocacy group Alcohol Policies Project at the Center for Science in the Public Interest.

FCB and Ogilvy's work was done through The Partnership for a Drug-Frehe America, which coordinates pro-bono creative contributions to the campaign from a roster of about 40 agencies. ONDCP's lead agency, Ogilvy, primarily manages the media buys but also does some creative work. - with Kathleen Sampey .

3. Champps Seeks To Boost Liquor Sales, In Moderation (Iowa)

By Richard Gibson – Dow Jones Newswires

January 28, 2004

DES MOINES, Iowa -- Walking a fine line, Champps Entertainment Inc. (CMPP) is adding happy hours and ladies' nights to reverse lower alcohol consumption at some of its restaurants while hoping to avoid a rowdy bar crowd that could hurt its dining-room meal sales.

The Littleton, Colo., chain reported a 0.7% slippage in same-store sales for its fiscal second quarter, due to a 3.4% drop in alcohol sales that more than offset slight gains on the food side. Alcohol represented 29.6% of sales compared with 31% a year ago, continuing a trend.

"I don't want to panic, because margins in the (restaurant) business are very strong and I don't want to drive the liquor business at the risk of messing up our food side," Chairman and Chief Executive William Baumhauer said on a conference call Wednesday.

Consequently, Champps is seeking a delicate balance -- adding various liquor promotions, including $4.50 martini nights, and featuring a new drink menu in its dining rooms while at the same time shrinking the bar space in its newest restaurants.

The company projected "flat to slightly positive" same-store sales in the current fiscal third quarter. Because of harsh winter weather in some markets, "revenues continue to be a difficult variable to gauge," said Chief Financial Office Frederick Dreibholz.

Food costs remain "steady" although insurance has pushed up labor expenses somewhat, Dreibholz said. To lower overhead, the company had negotiated better credit-card charge rates with card issuers, he said. At the same time, it is experiencing higher natural-gas costs.

CEO Baumhauer said Champps believes it can resolve a sales tax dispute with Florida, created by a predecessor company, for about $100,000. It also anticipates closing on a $25 million credit facility with the LaSalle National Bank of Chicago shortly, a move that could substantially shrink its annual interest expense, he said.

In the second quarter Champps earned $2.1 million, or 16 cents a diluted share, compared with $1.8 million, or 14 cents a diluted share, a year earlier. Revenue for the period ended Dec. 28 rose 17.8% to $54.8 million from $46.5 million.

Shares of the 47-unit chain were trading recently at $8.64, down 0.1%, or 1 cent, on the Nasdaq Stock Market.

[Champps officials were notified by the Iowa Alcoholic Beverages Division that Ladies Night Specials are banned in Iowa.]

4. Study: Alcohol Attitudes Affected More by Peers

By Colin Van Westen -The Daily Iowan

January 29, 2004

IOWA CITY, IA -- A UI professor's three-year study, published in the latest issue of Health Communication, reports that friends' attitudes toward alcohol influence drinking habits more than marketing campaigns aimed at responsible use.

The study, headed by Shelly Campo, a UI assistant professor of community and behavioral health, questioned the effectiveness of colleges that use "social-norms" advertisements to correct misperceptions about the drinking habits of fellow students. Such ads assume that students would drink less and behave more responsibly if they knew others were moderate or nondrinkers, Campo and her fellow researchers found.

The study surveyed 550 students at a medium-sized Northeastern university where a social-norms campaign had been used for three years. It noted that, contrary to the social-norms model, students who overestimated the alcohol use of a "typical student" actually tended to drink less because not all want to act in that way.

"Clearly, norms can have an effect on behavior, but my thinking was that changing students' behavior would more likely come from social pressure from their friends," Campo said.

The Stepping Up Project has tried a variety of methods to lower alcohol abuse among students, including social-norms advertisements, but it has seen limited results, said Carolyn Cavitt. the group's co-coordinator. The problem lies with the UI's alcohol culture, she said.

"Not all of our students become high-risk drinkers when they turn onto Dubuque Street," she said.

A 2003 binge-drinking study by Peter Nathan, a UI professor of community behavior and health, supports Cavitt's contention. It shows that close to half of undergraduates nationwide are binge drinkers, compared with 70 percent at the UI. The study defines binge drinking as "consumption of five or more drinks in one sitting for men and four or more for women at least once in a two-week period."

Nathan, hailed as a national alcohol expert, encourages people who have experienced the negative consequences associated with alcohol abuse to speak out and change Iowa City's drinking culture.

"In a normal community, this information would worry bar owners," he said. "The bar owners in this city don't have a lot to worry about. They are just too important to the economy."

Studio 13 owner Brett Thomas said he worries that such studies will cause people to overlook actions that Iowa City clubs have already taken to curb alcohol abuse.

"It worries me because it will sway people who don't have all of the information," he said. "We have seen fewer minors in the bars than in years past."

Campo conducted the study as a professor at Cornell University before joining the UI faculty. The report was co-written by professors from Cornell and Oxford University.

5. Beer Volume Hurt by Spirits in 2003

Source: AP

ST. LOUIS, MO (AP)--Beer drinkers might need to be careful the next time they raise their mugs in toast. Those frosty mugs will likely clank a few more delicate martini glasses than in the past.

Market-share gains by Anheuser-Busch Cos. not withstanding, the past year has been no party for the beer industry. The final numbers aren't in yet, but most market watchers estimate that brewers' shipments to wholesalers declined about 1 percent from 2002. Merrill Lynch analyst Christine Farkas estimated in a recent report that beer volume this year will rise about 1 percent.

A sluggish economy, the war in Iraq and poor weather, especially during key summer holidays, hurt beer-volume growth in 2003.

The Distilled Spirits Council of the United States estimates that spirits volume rose 3 percent in 2003 and that it will rise another 3 percent this year.

``It's a real issue,'' said Benj Steinman, president of industry newsletter Beer Marketer's Insights, of the rise in spirits volume. ``It affected each and every (brewer).''

The growth in spirits volume isn't a new concern for the beer industry as spirits volume has been increasing more then beer since about 1997. ``But it seemed to accelerate this year,'' Steinman said.

The sizes of the two markets have to be kept in mind, Legg Mason analyst Mark Swartzberg said. Per capita consumption of spirits is still lower than beer on an annual basis, he said. That means that a small loss in beer volume can represent a ``meaningful rise'' in spirits growth.

``Nonetheless, this is a multiyear phenomenon of beer losing share to spirits,'' he said.

Beer volume accounts for 84.7 percent of the total U.S. alcoholic industry, dwarfing the 4.8 percent for spirits, according to a recent report by Smith Barney analyst Bonnie Herzog.

There are a lot of factors driving spirits volume growth, including demographics, increased advertising, the popularity of flavored alcoholic beverages, and more states allowing spirits sales on Sunday. There is also a factor that some are calling a ``cocktail culture.''

The number of people 55 and older is expected to grow 2.6 percent annually between 2003 and 2010, compared with a 1.2 percent growth in the number of people between the ages of 21 and 27, Farkas pointed out. Young adults have higher per capita consumption of all alcoholic beverages. However, wine and spirits tend to make up a greater portion of alcoholic consumption of those 55 and older than those 21 to 27, she said.

Demographics will help beer, too. The 1.2 percent annual increase in the number of people between 21 and 27 is a reversal from the past decade, when the percentage declined, Farkas said.

After a nearly 50-year self-imposed ban on television advertising, spirits companies took to the airwaves in 1996, Distilled Spirits Council spokesman Frank Coleman said. Spirits ads are now on 500 stations--including more than 400 network affiliates--compared with 50 and 75 stations three years ago, Coleman said. The companies don't advertise on the major networks.

``Not being on TV was a huge impediment to spreading the message about spirits to a wider adult audience,'' Coleman said.

The success of flavored alcoholic beverages may also be giving a boost to the spirits industry, and the major brewers may have had a hand in that, Smith Barney's Herzog said in her report. Anheuser-Busch, for example, partnered with Bacardi in 2002 for Bacardi Silver. Miller Brewery teamed up with Skyy Spirits LLC for Sky Blue in 2002.

``The brewers helped the spirits companies by advertising their names,'' Beer Marketer's Insights' Steinman said.

The flavored drinks may have made it more appealing for younger males--the biggest beer drinkers--to try spirits ``since non-flavored spirits are an acquired taste,'' Herzog said. The drinks also put the spirits brands in the minds of an age group that is developing loyalties that will affect their choices for years to come, said David Kopeck, a portfolio fund manager with Victory Capital.

The spirits companies have been more innovative and creative in recent years with their products offerings and the events they have at bars and restaurants, Steinman said. Brewers need to do more of that, he said.

Farkas agrees.

``They need to remind consumers of their options in beer,'' she said. ``They have cocktail and martini menus in bars and restaurants. A similar focus seems to be often lacking in beers.''

6. Students Ask State to Track Beer Kegs

By Jonathan Roos – Des Moines Register
January 29, 2004

Industry officials say a keg registration law

would have little effect.

DES MOINES, IA -- Groups of high school students from across Iowa are trying to persuade the Legislature to pass a law aimed at combating underage drinking by requiring the registration of beer kegs.

Teenagers from Underwood, Mason City, Lamoni, Des Moines and other communities converged on the Statehouse Wednesday to lobby for House File 220. Students packed a committee room to make their case to legislators within earshot of their press conference.

Alicia Larson, a junior at Underwood High School in western Iowa, said she was motivated by the painful memory of a friend who died last year from injuries in a car crash after leaving a keg party.

"If we would have known who bought the keg, they could have been doing the punishment now," said Larson, 17.

Tim Carr, a high school freshman from Lamoni in southern Iowa, said students from distant parts of the state are networking by e-mail to mount their lobbying effort.

"Kegs of beer are an excellent source of cheap beer. When police arrive at underage keg parties, people often scatter," Carr told reporters.

"Without keg registration, there is no way to trace who purchased the beer. As a result, nobody is held responsible for the minors who were given access to alcohol at the party," he said.

Lawmakers are hearing a different viewpoint from the Iowa Wholesale Beer Distributors Association and other segments of the liquor industry.

"We're opposed to regulating kegs. We don't think it addresses the problem. It's already illegal for an adult to supply alcohol to a minor," said Mike Heller, a lobbyist for the association.

"You could make the same argument about registering a bottle of vodka as registering a keg," Heller said.

Keg registration would require wholesalers to assign a tracking number to each beer keg. When the beer is bought at a store, the buyer would sign for the purchase. Other identifying information would be recorded along with the registration number.

Loren Moon, manager of Hy-Vee Wine and Spirits in West Des Moines, wonders about the additional record-keeping.

"It sounds like an awful lot of legwork for something like that," Moon said.

"We don't condone any kind of underage drinking" and won't sell to people if it looks like they are buying for a minor, he said.

Police officers, a Keokuk County supervisor, representatives of Mothers Against Drunk Driving and others backed up the students' arguments in support of the keg registration legislation.

Dale Killpack, Lamoni's chief of police, told of the rape of two girls who attended keg parties. Officers also investigate a lot of assaults and thefts that occur at keggers, he said.

George Belitsos, chief executive officer of Youth and Shelter Services in Ames, said alcohol abuse among young people is at near-epidemic levels.

Binge drinking by teenagers "is no longer a harmless rite of passage. It's very dangerous," Belitos said.

Jim Andersen, co-pastor of Community of Christ Church in Underwood, said the proposed keg registration law "will deter cheap alcohol with no responsibility where it came from."

Industry representatives challenge the claim of keg registration proponents that it would be an effective deterrent.

"Underage drinkers are going to find a source for what they want to do. The big thing now is buying a liter of vodka or gin and putting that in your water bottle," said Jim Carney, a lobbyist for Anheuser-Busch.

"We do not in any manner or in any way support underage drinking," he added. "We truly want to curb underage drinking."

Rep. Jeff Elgin, a Cedar Rapids Republican who heads the House State Government Committee, said he was keeping an open mind about the keg registration proposal. Elgin, after listening to the students' arguments, said he also wants to hear from beer wholesalers and other groups.

Similar registration proposals in previous years made little headway in the Legislature.

Some areas haven't waited for the Legislature to act. Keokuk County has passed a keg registration ordinance, and Ames requires permits for large keg parties.

Other states

STATES: Twenty-three states have keg registration laws. They include Minnesota, Missouri and Nebraska, according to Iowans to Reduce Underage Drinking, a group lobbying the Legislature to adopt such a law as well.

DETERRENT? Advocates claim keg registration would help deter underage drinking and binge drinking.

Bootlegging charge

An Underwood high school senior who allegedly collected money to buy alcohol for a party that ended with another teenager's death has been charged with 26 counts of misdemeanor bootlegging.

PARTY: Scott Forrester, 18, is accused of collecting money from classmates at a banquet at the school in Underwood, in southwestern Iowa, for a post-homecoming party on Sept. 20.

DEATH: Another senior, Jacob Grote, 17, of McClelland was injured when he lost control of his car after leaving the party. Grote died of his injuries on Oct. 2.