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 e - NEWS

February 13, 2004

1. Brown-Forman says Barton's 'Legendary Still' Doesn't Exist

2. Pernod Ricard Raises Profit Guidance

3. New Test Will Scope Out Fake Dram

4. Coors Profits Despite U.S. Beer Sales

5. 19-Law Under Scrutiny

6. Lawmakers Study Use of Video 'Slot' Games

7. Anti-Smoking Ads Well-Known in Va.

8. Awash in Pinot Noir

9. Afton Strips Pub Owner of his Idea






 Brown-Forman's Woodford Reserve bourbon, left, and Barton's Ridgewood Reserve are at the heart of a trademark suit.


1. Brown-Forman says Barton's 'Legendary Still' Doesn't Exist 
By David Goetz -The Courier-Journal

February 13, 2004

Louisville distiller attacks ads for  Ridgewood brand 

It's hard to know what to believe about bourbon these days. Last week, Barton Inc. told us Brown-Forman Corp.'s Woodford Reserve wasn't really made in Woodford County. Now Brown-Forman says Barton has been guilty of watering down the truth.

Barton has been touting its new Ridgewood Reserve bourbon as being made in "the legendary Ridgewood Still" at its plant in Bardstown, Ky. Trouble is, Brown-Forman said, there was no such still until Barton executives thought it up for the launch last September of the Ridgewood brand.





Barton had no immediate comment.

The claims and counter-claims have been flowing like branch water since Brown-Forman accused Barton in federal court of infringing on its Woodford Reserve trademark in the naming and design of Ridgewood Reserve. Pre-trial filings have offered a glimpse of the marketing techniques associated with the popular super-premium brands.

Barton was concerned about "legitimizing" its new bourbon and tying it to bourbon history, Brown-Forman claims, when executives came up with the idea of naming one of its Bardstown stills the Ridgewood Still.

"This approach directly ties Ridgewood Reserve to whiskey history," Brown-Forman quotes from a December 2002 memo by Barton vice president of marketing services Jack Kavanagh. "If we decide to pursue this, we can have a brass plate engraved with `The Ridgewood Still' and attach it prominently to the front of the still."

In its advertising and promotional materials, Barton claims the brand was named for "the legendary Ridgewood Still," Brown-Forman says, and its public-relations firm called the claim "one of its key messages."

The Ridgewood Still "certainly cannot be `legendary' because it did not exist" before the September brand launch, Brown-Forman said, so the advertising is false.

Brown-Forman raised the argument in answer to a Barton charge that the elaborate marketing image Brown-Forman created around its Woodford Reserve Distillery in Woodford County is false advertising because most Woodford Reserve bourbon is made at the company's Louisville distillery.

Each company has argued the court should throw out the other's claim of false advertising under the legal doctrine of "unclean hands," which says you can't win a false advertising claim if you've done the same thing yourself.



2. Pernod Ricard Raises Profit Guidance

By Adam Jones in London

February 5, 2004

LONDON -- Pernod Ricard, the French distiller, on Thursday raised its profit guidance and pronounced itself ready and willing to take part in further spirits industry consolidation should the right opportunity arise.

The maker of Chivas Regal whisky and Havana Club rum said underlying growth in net profit in 2003 - a figure that strips out currency volatility - would be greater than the 15 per cent it forecast in September. Pernod releases its full financial results for 2003 next month.

On Thursday it said group sales fell 27 per cent to €3.534bn ($4.4bn) in 2003 because of disposals. Wine and spirits sales were €3.419bn, just 0.3 per cent ahead of last year after strong organic growth from brands such as Jacob's Creek wine was eroded by currency movements.

Even after factoring in this currency pain, Pernod said profits before exceptionals were still expected to be up by about 5 per cent in 2003. Shares rose 3.4 per cent to €93 following its upbeat sales update.

Pernod is seen by some as a potential suitor for Allied Domecq, the UK-listed distiller.

Richard Burrows, Pernod director-general, declined to comment on specific consolidation opportunities. However, he said it would be keen to look at deals at the right price: "We are in very good standing with our financial backers. I think we could raise substantial funds if an opportunity arose."

Pernod's family shareholders were "open to us issuing equity in order for us to make an acquisition".



The authenticator machine

The authenticator uses ultra-violet technology



3. New Test Will Scope Out Fake Dram

BBC News

February 12, 2004



A fresh drive to cut the amount

of fake whisky sold in pubs

and restaurants has been launched.



The drinks company Diageo has announced a new and easier method of detecting whisky which is not the genuine article using a portable authenticator.

Figures suggest that up to 6% of licensees substitute cheap spirits for genuine Scottish malts or blends.

There is also concern some may be contaminated with chemicals which can cause serious injury or even death.

At the moment the procedure for testing that the liquid in the bottle matches the label is complicated and lengthy.

But the Diageo authenticator has been designed to work "in the field" and cuts the screening process down to less than a minute.

The portable spectroscopic kit uses ultra-violet technology to test the authenticity of whiskies.

Allan Burns, joint executive director of Diageo Scotland, described the authenticator as a "very significant development".

This device provides a new weapon to complement the existing work undertaken by the industry to defeat counterfeiters

Gavin Hewitt
Scotch Whisky Association

He said: "Counterfeiting is a worldwide problem for premium brands across many industries.

"Protecting our consumers and ensuring that they continue to enjoy the taste and quality of genuine Scotch whisky is essential to the future of the industry.

"When consumers think they are buying reputable brands but are in fact buying counterfeit copies, damage occurs not just to the reputation of the industry, but counterfeit product can also pose potentially significant consumer health risks."

Mr Burns added: "The authenticator means that detection can now be swift, efficient and highly cost effective, providing a powerful deterrent to the Scotch whisky counterfeiters."

Gavin Hewitt, chief executive of the Scotch Whisky Association, also welcomed the development.

Series of trials

He said: "Scotch Whisky has developed a global reputation as a drink of quality.

"Its international success means that others seek from time to time to trade illegally on that reputation.

"This device provides a new weapon to complement the existing work undertaken by the industry to defeat counterfeiters, and will give consumers even more confidence that the industry is doing all it can to ensure the quality of Scotch whisky is maintained."

The £100,000 project was developed at Diageo's Brand Technical Centre in Menstrie, Clackmannanshire.

It has successfully undergone a series of trials in Colombia, Spain and Venezuela.

Diageo plan to make the technology available to trading standards authorities and other whisky companies.

The firm trades in 180 countries and its brands include Smirnoff, Guinness, Johnnie Walker and Baileys.



4. Coors Profits Despite U.S. Beer Sales

Associated Press

February 6, 2004

GOLDEN, CO -- Adolph Coors Co. said its fourth-quarter earnings rose 79 percent as higher prices, improved European sales and favorable foreign exchange rates helped it more than offset a decline in U.S. demand for its beer. Its shares climbed nearly 10 percent Thursday.

Coors reported earnings of $36.1 million, or 98 cents per share, in the quarter ended Dec. 28, up from $20.2 million, or 55 cents per share, a year ago.

Analysts were looking for earnings of 68 cents a share, according to a survey by Thomson First Call.

Sales rose to $1.4 billion from $1.33 billion a year ago.

While beer sales in Europe edged up, sales in the Americas slipped to 5.1 million barrels from 5.2 million barrels in the fourth quarter 2002.

"Going forward, our focus will be sustaining the progress that we made late last year in Europe and restoring volume growth in key markets in the Americas business," Coors Brewing Co. CEO Leo Kiely said.

Kiely said Coors had a strong January and expects to launch its own low-carb beer, Aspen Edge, in March, along with three new flavors of Zima as it heads into the peak summer season.

Coors is counting on the offerings to generate excitement for the company amid a flurry of new drinks from competitors.

The company implemented new supply chain systems last year that hurt fourth-quarter earnings but should lead to improved service and lower costs, Kiely said.

For the full year, Coors reported net income of $174.6 million, or $4.77 per share, up from $161.6 million, or $4.42 per share, for 2002. Sales rose to $5.39 billion from $4.96 billion.

Coors shares rose $5.58, or 10 percent, to close at $61.50 on the New York Stock Exchange.


5. 19-Law Under Scrutiny

By Vanessa Miller - Iowa City Press-Citizen

February 7, 2004


Bar owners: Code not curbing underage drinking

IOWA CITY, IA -- The number of patrons tipping pitchers and cramming local dance floors Thursday night was significantly less than a year ago - and that wasn't just because of the snow storm outside.

Iowa City Police officers Kevin Bailey, center, and Andy Martin, left, cite underage drinkers with PAULAs on Sept. 4, 2003. Press-Citizen file photo

Iowa City bar owners say the new alcohol ordinance banning people younger than 19 from entering their establishments after 10 p.m. has significantly hurt business without affecting underage drinking.

"It ain't made a hell of beans of difference," said Don Stalkfleet, owner of the Sports Column and Joe's Place downtown. "In fact, it's probably exacerbated under 19 consumption of alcohol; they are just doing it in a different place."

After six months of enforcing the law that the City Council enacted Aug. 1, police officers agree, and some local officials and business owners are suggesting it's time to up the restricted age to 21.

Capt. Tom Widmer said that so far, stricter enforcement and new regulations haven't stopped minors from consuming alcohol.

"My own opinion is that it hasn't made a bit of difference," he said. "I'm sure there are some people who shy away from the bars, but as far as solving the underage drinking problem goes, it hasn't made a bit of difference."

According to police records, officers issued 2,219 alcohol-related citations from Aug. 1, 2003 through the end of January, 134 of which were for underage bar entry. During those months in 2002, officers issued 1,987 alcohol-related violations. In 2001, that number was 1,051.

"We have not seen any decrease," Widmer said. "... and the number of arrests we have per bar visit is up."

Widmer credited the heightened alcohol enforcement to the council's dedication to curb underage drinking.

"We work for the council, we look for people who are under 19 in bars and issue them a ticket," Widmer said. "But there's still a problem with underage drinking in Iowa City. Even if you doubled the size of the police force you would still see a problem. There will continue to be one until our culture changes its view on alcohol."

Details of the law

 • Bans those under age 19 after 10 p.m. from bars or restaurants where alcohol accounts for more than half the sales.

 • Fines bar patron violators $250. Owners face escalating fines beginning at $100 and topping out at $500.

 Bar employees under age 19 are allowed on the premises during regular work hours

 Patrons under age 19 can enter an establish-ment when accompanied by a parent, guardian or spouse of legal age.

 Patrons under age 19 are allowed in an establishment that restricts entry when the owner plans a non-alcoholic event and gains approval from the police chief.

Stalkfleet said he is concerned by the crackdown in enforcement, arguing that police checks for underage alcohol salesare conducted unfairly and pose a serious threat to business.

"There are (bar owners) about to go under in Iowa City because they don't have the same customer base as they did before. If they are going to send someone in here that looks 23 with stamps on his hands, and then take my livelihood and take what feeds my family, it just doesn't seem right," he said, suggesting that it might be better for the council to enact a law banning everyone under 21. "If they want to go to a 21-only law, they should just go 21."

Ames, a community similar in size and demographics to Iowa City, has done that. According to their police records from Aug. 1, 2003 through the end of January, officers issued 458 alcohol-related tickets, nearly one-fifth those issued in Iowa City.

Mayor Ernie Lehman said city councilors will evaluate the ordinance after a year and review citation numbers to determine its effect.

"But I don't think you will see it repealed," he said. "All seven council people said that if the 19-only ordinance didn't work, they would go for a 21-only law. I don't know if they are still of that persuasion, but five of them are still on the council."

Jen Larson, a 20-year-old University of Iowa sophomore, said she thinks restricting bar entry is ineffective because it results in more house parties.

"People go to the bars half as much as they used to, but I don't think it's done anything for underage drinking - people just go to house parties now, and that's not as safe," she said. "People are going to drink regardless. I live on Iowa Avenue, and I have seen an influx of house parties."

Lynn Walding, administrator for the state's Alcoholic Beverages Division, said his department was investigating a high number of Iowa City bars for alcohol violations before the law's enactment, but that number has tapered dramatically.

"We've only had two violations sent to us in six months," he said. Those violations went to the Q Bar, 211 Iowa Ave., on Sept. 6 and Studio 13, 13 S. Linn St., on Oct. 29. "So it appears the licensees in Iowa City have gotten the message."

Mike Porter, owner of The Summit Restaurant & Bar and One-Eyed Jake's, said the drop in violations is not an accurate indicator of underage alcohol consumption.

"There are less underage people in bars, so there is less underage drinking in bars," he said. "But has underage drinking decreased? No. Realistically, it's probably increased."



6. Lawmakers Study Use of Video 'Slot' Games

By Lynn Okamoto – Des Moines Register

February 12, 2004


DES MOINES, IA -- Iowa lawmakers, alarmed at the rapid growth of video games that look like slot machines in convenience stores and gas stations across the state, are taking steps to put additional restrictions on the devices.

"This, to me, is a bigger problem than the gambling problem," said Rep. Daniel Rasmussen, an Independence Republican. "We could have one on every street corner if we don't restrict it."

Video game machines are legal in Iowa, but only if they offer non-cash prizes of $5 or less, such as credits for food or merchandise in the bar or store offering the game.

Some have gotten around the law by trading their winning coupons for cash. Officials estimate that Iowa has as many as 18,000 of these machines.

"They have all the appearances of a video slot machine," said Rep. Scott Raecker, an Urbandale Republican. "I think we're going to see a much greater limiting of these machines."

House File 2114, sponsored by Rep. Dave Heaton, a Mount Pleasant Republican, would require a counter on such machines to better keep track of their usage. The bill is being studied by the gambling subcommittee of the House State Government Committee.

Raecker, who recently observed six middle-school students using a video game machine for half an hour, said he thinks there should be further restrictions.

He will offer an amendment so the machines can't be used by people under 21, and so they're only located in places that have a license to serve alcohol. He also wants to prohibit businesses from advertising that they have "video slots."

Retailers said they were willing to work with lawmakers to ensure that school-age children aren't using the video game machines.

"We would not endorse that type of behavior in our stores," said Randy Meyer, senior vice president of Krause Gentle Corp., which operates Kum & Go convenience stores in Iowa.

"Being able to offer these amusement devices is an important profit tool for them," said Dawn Carlson, president of the Petroleum Marketers and Convenience Stores of Iowa.

Raecker said lawmakers could instead vote to ban these amusement devices. But Ned Chiodo, a lobbyist for the Iowa Operators of Music and Amusement, said the industry would prefer regulations. "We want to see this industry stay alive," he said.

Lawmakers last year voted to require registration of the video game machines, and to limit businesses to two machines and nonprofit groups to four. Lawmakers said they expected the machines to be used mainly in bars, restaurants and places like the American Legion or Isaac Walton League.

Instead, the machines have cropped up statewide in convenience stores, laundromats and other places. Many have gotten around a $2,500 state registration fee by purchasing the machines. "We never expected this to turn into this kind of mess," Rasmussen said.







7. Anti-Smoking Ads Well-Known in Va.


By Stephanie Stoughton - The Associated Press

February 11 2004

Grossness, humor may draw in young

Text Box: RICHMOND, VA -- He's billed as America's most pathetic superhero: Buttman, an overweight chain-smoker who hacks, spits and gets too winded to respond to emergencies.






Buttman is part of a series of anti-smoking ads increasingly popular with youths in Virginia, home to industry giant Philip Morris USA. A recent survey suggests that most children in the state are aware of the television and radio initiative, perhaps due to its in-your-face humor and high gross-out factor.

"You should be almost able to stop any kid on the street, and only one in four couldn't tell you about the campaign," said Danny Saggese, marketing coordinator for the Virginia Tobacco Settlement Foundation, which finances the ads

Last year, the advertising-industry publication Adweek gave its thumbs-up to the Buttman ads. And a leading anti-smoking group, the Campaign for Tobacco-Free Kids, cautiously praised the foundation and its Richmond ad firm, Work Inc. It said the campaign was a step forward, in spite of the state's poor record of financing tobacco prevention.

"I think the foundation is on the right track," said Danny McGoldrick, research director for the Washington, D.C., organization. "What they need is a better-funded program."

Like many state-financed programs, the foundation has fallen victim to Virginia's state-budget woes. Each year, it receives 10 percent, or about $14 million, of the state's share of a historic settlement with tobacco manufacturers. That money is expected to cover a number of community, education and enforcement programs to prevent youth tobacco use.

The annual stipend hasn't changed, but the state reduced the foundation's current financing $15.5 million by taking the group's "savings." The foundation had stashed that money away during its fledgling years, when it had fewer operating costs.

Despite the decline in money, the edgy campaign has reached about three-quarters of its target audience - kids ages 10 to 17 - since it began in 2002.

Among the kids' favorites is an ad in which a girl tastes a trash-can lid and car tire, with the message that these disgusting habits are comparable to smoking. The same theme emerges when a group of kids visits the school's cool nose-picking spot, a takeoff on the informal smoking areas outside many schools.

Wearing thick black-framed glasses, the disheveled Buttman appears in several spots: lighting up at a gas station, flicking ashes into the cup of a prospective employer and making kids cry.

The 2002 National Youth Tobacco Survey found that 13.3 percent of middle school students and 28.4 percent of high school students used some form of tobacco

In 2002, about a quarter of Virginia adults smoked, compared with the national rate of 23 percent, according to the national Centers for Disease Control and Prevention.

Buttman and similar ads have proven to be popular, but they compete with the tobacco industry's multibillion-dollar marketing machine.

Cigarette companies can no longer target U.S. youths, but they still depict adult smokers as "cool," an image that conflicts with - and perhaps overpowers - the message of Virginia's upstart campaign.

Virginia's ads make a point of not chasing after tobacco companies. The advertisements are successful because they don't preach - the "kiss of death" for ads targeting teens.

Rebecca Darby, a 17-year-old member of the foundation's board of trustees and a Goochland High School senior, says she sometimes has to remind the adults in the group that finger-wagging isn't the best approach for her generation.


Kids, she said, "just like to know the information so they can decide for themselves."





8. Awash in Pinot Noir

By Corie Brown – Los Angeles Times

February 11, 2004


Tired of Merlot and Cabernet? 

This red has become affordable.

LOS ANGELES, CA -- Suddenly we’re flooded with Pinot Noit, so much so that a decent bottle can be found for $3.  That’s the low end of a previously unheard-of price category of $15-and-under Pinot Noirs.









Pinor is actually a Burgundy wine known for its classic bright red fruit taste.  In the past two years, more than 100 new California Pinot Noir labels have been launched, representing wine at every price point, including some at $75 and more.  It’s a phenomenal increase in new brands or extensions of old names to include new pinot Noir labels.  It signifies a major departure from the abundant Cabernet, Merlot and Chardonnay wines that have been readily available.


Yet, amid the current frenzy, prices frequently have little or no relationship to quality, which has been worse than spotty.


“It’s extremely expensive but not yet delivering on the promise,” says wine critic Steve Tanzer.  “It’s a cynical attempt to make early drinking wine that is an enjoyable soft red wine, which is not what I consider Pinot Noir.”


“There was too much planting of Pinot Noir without knowing what to do with it,” says Glen Knight, a buyer at the Wine House in Los Angeles.  “There have been a lot of garage wines where people are grabbing whatever wine they can get and sticking a label on it.”


Everyone is in search of the new great one right now.


“Everyone is sick and tired of the same flavors.  California Cabernet, Merlot and Chardonnay have all been formulized to a specific taste.”


Stilll, the new wines have been a dramatic improvement over an earlier Pinot Noir wave in the 1970s that died quickly when consumers rejected the weedy, thin wines, say wine industry insiders.


“We’ve spent a long time in the U.S. trying to make good Pinot Noir and only recently made advances,” says Vic Motto, wine industry consultant, noting that the new regions are still sorting themselves out.  Santa Barbara County’s Santa Rita Hills is one of the most promising.


“Pinot Noir is about the excitement of discovery.  Now that it has a sophisticated, consistent style, it’s safer (to try the California wines),” Motto says.


Pinot Noir is a terroir wine, meaning that the best examples express the particular mineral and climatic attributes of a property more than other varieties might.  To create the illusion of exclusivity in the midst of a glut, ambitious vintners are subdividing their labels into dozens of vineyard-specific secondary labels.  Some growers – notably Gary Pisoni of the Santa Lucia Highlands in Monterey County – have become as marketable as the vintners they supply, adding their names to the dozens of wine labels that include their grapes.


Never mind that many of the latest Pinots are of disappointing quality and are overpriced:  Wine drinkers are buying them, doubling sales of the varietal over the last decade.


The good news for Pinot Noir drinkers:  Supply quadrupled during the same period.  Prices are going nowhere but down for all but the most sought-after wines.





9. Afton Strips Pub Owner of his Idea

By Colleen Krantz – Des Moines Register 

February 12, 2004



DES MOINES, IA -- The stage was the clincher.

Once a rumor began to circulate in Afton that a stage was being built at Bert's Pub and Grub, city leaders immediately moved to block what they suspected would be a strip club on the town square.

It took the City Council one meeting to discuss and unanimously approve an ordinance that stops Bert's from adding exotic dancers.

No one asked owner Jeff Zeits if that was his intention.

"We heard that they put in a stage and were talking about go-go girls," said Ann Tunnicliff, a council member in the town of 920. "Nothing has been confirmed, but we are just hoping to get ahead of the game."

The ordinance came as news to Zeits, who acknowledged Wednesday that he did plan to bring in exotic dancers "as an occasional thing."

"I thought it would bring a little life to this town," he said.

Mayor Gary Clear said the rumor was enough to prompt quick action, lest the town square start to resemble Times Square. "I don't think it's something any town would want to be known for," he said.

A recent Des Moines Register article on the growth of adult-oriented businesses in rural Iowa was discussed at Tuesday's meeting where the ordinance was approved.

Afton's ordinance bans adult entertainment within 1,000 feet of City Hall or any park, school, church or residence. Bert's is a few doors from City Hall and across the square from a park.

Afton is "not like a city the size of Des Moines where they can put it someplace and 90 percent of the people don't know it exists," said Darius "Di" Boone, owner of Rusk Food and Fuel in Afton.

Zeits said he had told many of his customers about the plan. "Evidently, the word got out and they put the kibosh on it," he said.