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Lynn M. Walding, Administrator


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 e - NEWS

July 1, 2003


1. Know Your Limit: It's .08 in Iowa

2. Burglar Again Hits D.M. Store for Cognac

3. New Alcohol Tax Set to Begin

4. Beer Commercials Look Like Too Much Fun, Agencies Fear

5. To U.K.'s Allied Domecq, Wine Is Good for Growth (London)

6. EIRE: Roxxoff Sparks Further Controversy


1. Know Your Limit: It's .08 in Iowa

By Lynn Okamoto – Des Moines Register
July 1, 2003


DES MOINES - State officials on Monday launched a hip new media campaign featuring flashing lights, rappers and dancers to educate the public about the state's new drunken driving law.

"Iowa now has a new mandate: The legal limit is point-oh-eight," the rapper says during the public service announcement, sponsored by the Governor's Traffic Safety Bureau.

Beginning today, Iowa's legal threshold for drunken driving drops from a blood-alcohol level of .10 to .08. Officials say men between the ages of 18 and 33 are most likely to drive drunk, so the media campaign is focused on them.

"It's going to take Iowans to take this new law to heart to have the greatest impact," said Iowa Public Safety Commissioner Kevin Techau. "Personal responsibility is the essence of all our laws."

The more-than-$80,000 campaign, developed by The Integer Group of Des Moines, is extensive. Television ads will run on 32 stations, while radio commercials will run on 245 stations and print ads will appear in 350 newspapers. The print ads and billboards feature a black-and-white eight ball and say things such as "When to say when? Here's your cue."

According to the Iowa Alcoholic Beverages Division, it takes about three drinks in an hour for a woman between 140 and 180 pounds to be considered drunk. It's about four drinks for a man between 160 and 200 pounds who hasn't eaten.

Officials say drivers with a blood-alcohol level of .08 are three to four times more likely to crash than a sober driver.

Clive Police Chief Robert Cox said lowering the blood-alcohol limit to .08 will save 10 to 16 lives a year in Iowa by reducing the number of accidents, but won't necessarily increase the number of drunken-driving arrests.

"I don't think we're targeting the social drinker, the person who just has one or two drinks," Cox said.

But Doni DeNucci, president of the Iowa Hospitality Association, said she's worried the new law will lead responsible Iowans to avoid a glass of wine with dinner, or a beer with pizza.

"They may not go out for dinner or go out to consume alcohol at all, and that's what we're fearful of," DeNucci said. "This law could adversely affect our bottom line."

Under the new law, first-time drunken drivers would immediately qualify for a permit to drive to work, as long as they were not responsible for an accident causing injury or property damage.

That's a weakening of the previous law, which required first-time offenders to have their licenses suspended for at least 30 days regardless of the circumstances.

Iowa Assistant Attorney General Pete Grady said the new law will make it easier for law enforcement officers to charge drivers from other states with a second offense of drunken driving, because Iowa's law is now similar to those of 38 other states.




2. Burglar Again Hits D.M. Store for Cognac

By Tom Alex – Des Moines Register
July 2, 2003


Since mid-May, the Drake Liquor Store has been broken into eight times.


DES MOINES - A burglar with a refined taste in booze is believed to be responsible for a string of break-ins at a Des Moines liquor store.

The Drake Liquor Store, 2106 Forest Ave., has been hit eight times since the middle of May. The target is cognac.

"He throws a rock through the door, grabs the booze and he's out in about 40 seconds," police Sgt. Richard Fedson said.

Bob Braune, a clerk at the store, said glass has been replaced in the door about six times in the past six weeks.

"We don't leave too many bottles of cognac up there anymore," he said.

The store was broken into twice on Tuesday, once at 1:35 a.m. and again about three hours later.

Police say they have a photograph of the intruder.

"He always comes in through the same route and takes the same thing," Braune said.

The store is usually hit in the middle of the night, and Braune frequently is called in to figure out what is missing.

"I've been missing a lot of beauty sleep," he complained.

A security company is alerted each time the door is bashed in. But before anyone can arrive, the burglar is gone, along with the cognac.

Anyone with information about the break-ins should call Polk County Crime Stoppers at 223-1400. A reward of up to $1,000 is being offered for information that leads to an arrest.




3. New Alcohol Tax Set to Begin

KDUH TV (ABC – Channel 24)

June 30, 2003

SCOTTSBLUFF - A general tax increase imposed by the state legislature will begin tomorrow.  Including an alcohol tax increase that may prompt consumers to stock up on their favorite beverages today… in preparation for the holiday weekend.

But local liquor store owner Gary Kelly says there hasn’t been a sales increase due to the change… it’s just business as usual… “The increase is going to be nominal you’ll see at the retail level… I don’t see any immediate affect… I don’t plan on changing prices within the next week so… I don’t think there will be an effect.”

The tax jumps 25 percent for hard liquor, 27 percent for wine and 35 percent for beer. Or just under two cents a can…

According to legislative estimates this will generate just over 15-million dollars of revenue over the next two years…

State Senator Adrian Smith voted no to the increase… saying it doesn’t make since to raise taxes to rejuvenate a slow economy.

“It’s not really prudent to just raise taxes as a means to filling the budget gap… reality is there are some of these taxes that will be absorbed without a great deal of harm.”

He says even though the change is relatively small.. It adds up in the end.

Other changes beginning tomorrow include an increase in estate tax.

The current sales tax rate of five and a half percent will be maintained…and talks of raising child care tax credit for businesses will be delayed.





4. Beer Commercials Look Like Too Much Fun, Agencies Fear

Wall Street Journal
July 1, 2003


Turn that music down! The parties and fun behavior depicted in a series of popular beer ads have grown too loud for several advocacy organizations, who complain that brewers are pushing too hard to attract young drinkers by promoting over-the-top, racy commercials.

"Sex seems to be on everyone's mind in the beer business these days," says George Hacker, director of the Alcohol Policies Project at the Center for Science in the Public Interest. "It's the particular portrayal of essentially drunken, riotous behavior by young people that is so problematic."

Hacker, who also serves on the Coalition for the Prevention of Alcohol Problems, in late May sent a letter to Adolph Coors on behalf of that organization. The letter takes issue with a number of ads Coors has aired in recent months, including one that asked: "Why do we party?" The response: "Because we can-can-can!"

Coors says it agreed not to run the ad any longer after a consumer brought it to the attention of the Better Business Bureau as part of an internal program that Coors has in place.

The Center on Alcohol Marketing and Youth, a watchdog group at Georgetown University in Washington, has sought to put a cork in beer and alcohol ads by chronicling how such marketing reaches youngsters. Among the group's findings: One-quarter of alcohol advertising on television in 2001 was more likely to be seen by youths than adults. In June, the group reported that Black youths see more alcohol-related advertising than their peers do. An earlier study came to a similar conclusion about Hispanic youths.

The TV industry has much riding on these discussions. Anything that curbs beer advertising is likely to have a ripple effect on broadcasters and cable networks. The seven top beer brewers last year spent an estimated $874 million on domestic TV ads, including network, syndication, cable and spot TV. This was about 31 percent more than they spent in 1998, when TV ad expenditures totaled $662.7 million, according to an ad-tracking research firm owned by Taylor Nelson Sofres.







5. To U.K.'s Allied Domecq, Wine Is Good for Growth (London)

By  Deborah Ball - The Wall Street Journal

July 1, 2003


LONDON -- Allied Domecq is counting on wine to be its elixir of growth.


The U.K. drinks giant has embarked on a strategy that sets it apart from other global spirits companies by making wine a cornerstone for future growth. But while the potential prize is great, given the heady growth in recent years of the now $100 billion (€87.55 billion) wine market, the strategy is fraught with risk in a market awash with good-quality, cheap vintages. And the future of Allied depends heavily on making wine a success.


Allied Domecq PLC settled on its wine strategy after deciding not to compete in the 2000 auction for Seagram Co., the U.S. spirits company that was snapped up in pieces by rivals Diageo PLC and Pernod Ricard SA -- the world's largest and second-largest spirits companies, respectively. Encouraged by Clos du Bois, its successful Californian wine brand, Allied's Chief Executive Philip Bowman instead looked to wine to balance the slow growth of its relatively weak spirits portfolio, which includes Beefeater gin and Kahlua liqueur.


So Allied plunged into a shopping spree, spending about £1 billion ($1.66 billion, €1.44 billion) for vintners such as Spain's Bodegas y Bebidas of Spain, New Zealand-based Montana and Champagne labels Mumm and Perrier Jouet. Allied is now the world's third-largest wine distributor by value and derives about 15% of its operating profit from wine, compared with 10% for Pernod and just 3% for Diageo. It seemed like a smart move: Wine has emerged as a very attractive business, with a 50% increase in sales in both the U.K. and the U.S. over the past decade, compared with a flat market for spirits. And consumption of higher-margin, premium wines has been rising even faster on both sides of the Atlantic.


While it wants to grow in wine, Allied's core business remains liquor . For its fiscal first half ended Feb. 28, the company reported a 5% rise in revenue to £1.79 billion, while pretax profit grew 2% to £256 million. The wine and spirits division accounted for £1.67 billion of that revenue; wine alone contributed £233 million. The company also owns U.S. chains Dunkin' Donuts and Baskin-Robbins.


But Allied's strategy has met with skepticism from investors for a host of reasons, which Allied will try again today to address at a presentation of its wine strategy in London. First, analysts claimed Allied overpaid for the wine brands. And while they concurred that the newly acquired brands are first-rate, they feared it would be very tough to get a return in a business that devours capital in land ownership and maturing wine stocks.


Then came the perfect storm that has battered the wine industry in the past year. Unabated planting has created a glut of grapes in Australia and California, while Australian producers won market share through aggressive discounting. The result has been falling retail prices in both the United Kingdom and U.S. As Southcorp Ltd. of Australia, Robert Mondavi Corp. of Oakville, Calif., and other big wine groups issued repeated profit warnings over the last 18 months, Allied Domecq's own stock fell, down 36% between January and March.


The shares have since recovered some of that decline, however, as Allied Domecq showed it was at least able to weather the storm. This spring, the company issued its first major update on its progress in wine. For the fiscal first half, volumes rose 5% and sales by 7%, demonstrating the company's ability to maintain or even increase prices. Trading profit was up 12%, in line with the performance needed to hit the 2007 return-on-investment objective of 10% that would justify the purchase prices.


"The figures were pretty good and they made it clear that they won't make any more acquisitions until the returns are more attractive," says Graeme Eadie, analyst with Deutsche Bank.


David Scotland, president of the wine division, says Allied Domecq deliberately assembled its portfolio with a tough market in mind. In contrast to other big wine producers, which tend to be heavily weighted in a particular country, its brands are balanced geographically. The emphasis has also been on low-cost producing countries such as New Zealand and Argentina and on areas -- such as Champagne in France and Rioja in Spain -- where grape supply is controlled and thus protected from the glut that has hit varietals like Chardonnay.


The model for the strategy is the New Zealand brand Montana. It offers the ideal mix of low production costs and premium product -- and its wine is still new in the U.S. and U.K., markets where Montana can command higher prices than at home. Montana, marketed under the Brancott name in the U.S., doubled sales in the first half, and the company is developing new lines just for the American market. In the U.K., Montana's volume slipped 6%, but profit stayed steady, showing the company can still make money on declining sales.


The most critical point has been Allied's determination to hold the line on prices, says Mr. Scotland. At the same time, the company has been successful at pushing higher-priced products, particularly in the U.S. It raised sales in the U.S. by 4% in the first half of this year, due largely to skewing sales in favor of the higher-priced clutch of Perrier Jouet, Brancott and Clos du Bois.


"We've tried to discount as little as possible, even if that makes volumes less attractive than people might expect," says Mr. Scotland.




6. EIRE: Roxxoff Sparks Further Controversy

Source: just-drinks.com editorial team

July 1, 2003

The ready to drink brand Roxxoff, which has been dubbed a "Viagra Pop", is to go on sale in Ireland, amid a flurry of controversy.

The Vintners Federation of Ireland (VFI) has called on pubs and off-licenses not to stock it. VFI president Joe Browne said: "The name and marketing of this product is associated with sexual success which is absolutely outrageous and totally unacceptable.

"It is obviously aimed at young people and it is blatant exploitation without any thought for the serious consequences it could have on their lives.

"We don't want it in Ireland and the VFI will do everything in its power to ensure it doesn't arrive into this market.

Roxxoff was recently on the end of a ruling by drinks industry watchdog the Portman Group calling on the UK trade not to stock the drink.

Roxxoff has come under attack for its marketing, which claims the drink can promote sexual success. Its website talks of "a generation of randy super beings".

Roxxoff spokesman Chris Williams defended his product though, saying that it was only going to be sold in pubs and clubs to avoid exposure to underage drinkers.

Williams said: "The VFI are entitled to their opinion but I would like to hear them explain how they are qualified to make decisions for people who are over 18."

He continued: "Anyone who objects to people over 18 making up their own mind on what they drink are narrow-minded."