Lynn M. Walding, Administrator
e - NEWS
August 22, 2003
1. Brown-Forman Settles Diageo Suit for $14.3 Million
August 14, 2003
CHICAGO (Reuters) - Brown-Forman Corp. (NYSE:BFa - News; NYSE:BFb - News), The maker of Jack Daniel's whiskey, on Thursday said it settled a lawsuit with Britain's Diageo Plc. (London:DGE.L - News) over distribution of Jack Daniels in the United Kingdom.
Brown-Forman said it would pay Diageo 8.9 million pounds, or about $14.3 million, to end the dispute, which involved Diageo's contract to distribute the spirits brand.
Brown-Forman said Diageo had distributed Jack Daniels in the United Kingdom under a contract that expired on July 31, 2002. Diageo wanted to extend the contract for an additional three years, Brown Forman said.
The spirits are now distributed by Brown-Forman under a cost-sharing agreement with Bacardi.
August 12, 2003
Source: Beernet online
MILWAUKEE - As reported yesterday in an Alert, Miller Brewing Company will cut about 200 positions in its corporate headquarters in Milwaukee.
The job cuts are part of a company-wide restructuring which will result in "multiple role and job changes" to ensure that people are in the right jobs in the right places to effect positive change for the brewer, which has experienced tough sales trends and market share loses of about a point since SAB bought Miller just over a year ago.
The 200 job losses account for about 20% of the workforce at its Milwaukee offices (not including brewery workers).
Miller spokesman Mike Hennick told Beer Business Daily that no breweries are planned for shuttering. Miller has about 950 employees at its Milwaukee offices and about 825 at its Milwaukee brewery.
Beer Business Daily has learned that Norman Adami called several key distributors yesterday morning to talk about the changes and to reassure them.
EXECS STILL THERE. The higher ups at Miller are safe (Mikulay, Broadman & Co). The upper management was essentially already restructured with the departure of John Bowlin. Spokesman Mike Hennick said that "this is the team that Norman put together" to turn this baby around, and he's sticking with it.
Miller management met with employees all day Monday, and the meetings will continue Tuesday and Wednesday. The meetings, we gather, are intended either to discuss their new positions or to lay off. Tough duty, to be sure.
Miller field reps we spoke to were no less jittery, even though the 200 deleted jobs are in Milwaukee. "Many of the changes in the field have already taken place," said one Miller employee under condition of anonymity. "But more could be coming, we don't know."
A influential distributor said, "Is it good? It depends on how they use the money they save. We'll see."
Another distributor wrote: "Miller has a fair amount of weak links from top to bottom that hopefully the light will shine on. Once they get the right people, then we can roll up our sleeves together to get the job done that we all know needs to."
August 21, 2003
Light and imported beers are giving a much-needed boost to the stagnating US beer market, according to a new report from market analysts Canadean.
The total beer market in the US has grown by just 1 per cent since 1998, but sales of light and imported beer have risen by over 4 per cent and almost 9 per cent respectively during the same period. Premium beer, popular beer and ice beer have all declined in the US, with the gap in consumption being filled mainly by imported beer. The fact that there is virtually no licensed production of foreign brands in the US has helped imported beer to grow strongly, with brands from neighbouring countries Mexico and Canada in particular appealing strongly to American consumers. These two countries account for almost 60 per cent of all beer imports.
Light beers, which are low in calories but not lower in alcohol, are unique in North America, and it is now easily the biggest sector of the beer market in the US, Canadean claims. It is still growing steadily, however, with many light versions of major brands now outperforming their regular counterparts.
Second placed premium beer has come under increasing pressure from imported and light beers and has seen its share of the market eroded to less than 20 per cent. Conversely, significant new product development activity helped consumption of super-premium and speciality beers to grow by over 7 per cent in 2002.
Although still comparatively small, the craft beer sector has become one of the most vibrant in the market. Mainly produced by microbreweries and brewpubs, the popularity of craft beer has grown strongly with 2002 consumption 20 per cent greater than it was in 1998, claims the report.
Over the last three to four decades, the US beer industry has been through a period of intense consolidation, resulting in the emergence of a small number of brewing giants. Furthermore, the five best selling brands now account for almost two thirds of all beer consumed. It is also worth noting that vertical consolidation is not possible due to the US liquor industry's unique regulations that dictate that producers, wholesalers and retailers must be independent from each other. Consolidation has also continued amongst wholesalers, albeit at a slower pace than previously.
Cans are the most popular pack type but are declining. Non-returnable glass, predominantly in 35.5cl size, is the fastest growing pack format. This growth has been fuelled not only by the success of imported brands, but by domestic brands trying to follow the lead of their foreign competitors.
The US economy remains sluggish and economic forecasts are gloomy, but the future could yet be rosy for beer, the report claims. Plans to introduce new legislation doubling the excise tax on FAB's and prevent them being sold in many outlets could turn many consumers back to beer. Nonetheless, Canadean expects total beer consumption to increase by not more than 1 per cent in 2003.
Thursday August 21, 2003 ET / Reuters
Allied shares jumped as much as 5.6 percent to a seven-month high of 403p in early trade.
At 0840 GMT, the shares were 4.3 percent higher at 398-1/4p, valuing the maker of Ballantine's scotch whisky, Beefeater gin and Kahlua liqueur at about 4.4 billion pounds ($7.0 billion).
Allied declined to comment and Brown-Forman were not immediately available for comment.
Analysts have long been looking for further consolidation in the mature spirits industry as second-tier players try to catch up with market leader Diageo Plc (London:DGE.L - News).
Teather & Greenwood's Nigel Popham said Brown-Forman, France's Pernod Ricard (Paris:PERP.PA - News) and privately-owned Bacardi were all possible partners for Allied.
Buyers would have to pay at least 450 pence per share, or about 5.0 billion pounds for Allied, Popham said.
A friendly merger was just as likely, he added, given the cost-savings and procurement benefits that could be extracted from a deal.