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e - NEWS |
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October 3, 2003 |
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3. US: Pernod
Launches Martell Print Ads
4. SABMiller
Sales Are Flat In U.S., Foamy in Europe
5. Alcohol
Industry Efforts Improving
6. Pernod Serves up Merger Talk
7. Red Bull Takes Air at
Passing Off Offenders
1. Under the Influence?
By Karen Dandurant and Elizabeth Kenny
Seacoastonline
September 29, 2003
Do candy cigarettes or
tequila-flavored lollipops influence children’s decisions later
on in life? Police and health officials say they do, but some
local stores say there is no reason to pull the products off the shelves. Candy and bubblegum cigarettes like those shown here are
available for kids in many local stores. Staff photo by Rich Beauchesne
Kittery resident Priscilla Guy said she
was outraged when she walked into the local 7-Eleven and saw tequila-flavored lollipops
that include a real worm. What she found more outrageous was that the candy was
accessible to children. The lollipops do not contain alcohol.
Guy is chairwoman of the Kittery Youth
Connection and the Kittery Chemical Awareness and Prevention program.
"Parents see this stuff and they
call me," Guy said. "First of all, I am worried about children eating
insect larvae, but even more disturbing is the message a liquor-flavored
lollipop sends to children. It tells them alcohol is OK. It makes it realistic
because there’s a real worm in a tequila bottle and in the candy."
Guy approached the manager of the
7-Eleven who told her he saw nothing wrong with the tequila pops.
"There’s nothing in there that’s
against the law; there’s no liquor in them," said Don Chabot, manager of
the 7-Eleven, waving his hand at the box on the counter.
Chabot said the pops are aimed at adults, and so
far adults are the only ones who have purchased them.
Pictured above is
the the tequila pop.
Staff photo by Rich
Beauchesne
"Adults buy it as a joke
thing," he said.
The lollipops are
the creation of California-based company Hotlix. "Our Hotlix
worm suckers and other insect confections have surpassed our expectations
for acceptance, perhaps due to the increased demand for insects as
food," the Hotlix Web site states.
According to information on its site, the
bugs are FDA approved and completely safe. Hotlix claims to sell more than 100
million a year.
Source: Beernet Online
September 30, 2003
The letters from Gambrinus starting arriving on
Friday, from Barton on Monday. The shocking news: both companies are going up a
buck a case, more in some markets, on Corona and Corona Light, effective
November 1. Both importers getting the directive from Grupo Modelo. However, we
hear Modelo is discounting it back to the importers until the end of the year
to help ease retailers into it.
Corona distributors are worried. "There will
definitely be pushback," says one, echoing several others. Many
distributors are privately wondering what Modelo is thinking when the beer
industry is so soft this year.
But not everybody so upset. A large West Coast
distributor emailed me on Friday: "I haven't heard anything [letter hadn't
arrived yet] but it sounds like a good idea. Their brands are on fire and can
handle an increase."
WHY SO AGGRESSIVE? The mere size of the increase, on
top of last year's increase, and when Heineken is sitting out an increase, is
getting tongues wagging. While Corona has experienced a rebound in
August-September in much of the country, September industry volumes are seen as
sluggish despite the extra sell day (against buy-in last year).
Surprisingly, some believe Anheuser-Busch had an
influence on the decision. "They [A-B] get the extra equity income [from
Modelo], while creating a comfortable price umbrella under which they can raise
Bud and Michelob prices," says one wholesaler. Good point.
Indeed, the move can only help A-B as it pushes
through price increases this week in a soft volume environment. The timing of
the announcement also softens retailer complaints of A-B's increase. And don't
forget: While it's no secret that Modelo execs don't get BBQ rib baskets from
St. Louis at Christmastime and A-B execs don't get piñatas from Mexico City,
A-B does own half of the company and presumably has a say in pricing decisions.
Others wondering if Modelo is taking up the price to
help pay for a future acquisition, say, of one of their importers. The dual
effect of the increase would be to dampen volume, thereby decreasing the value
of said importer, while at the same time generating more cash to pay for it.
A-B could, again, be a winner in this scenario.
But for those of you who prefer less conspiratorial
explanations, the reason might simply be that Modelo looked at its brewing
capacity, profit margins, and maybe Pat Stokes was kind enough to share A-B's
price elasticity models, and looked at Corona and Corona Light moving average
trends, particularly 12 pack bottles, and said, "Hey, we can push this
through, let distributors take retailer heat for a couple of months, and make a
lot more money."
Don't forget that Corona 12 pack NRs are the highest
grossing beer SKU in supermarkets, and they are hot, up 13% in recent IRI
scans. That gives you some sort of leverage in the marketplace.
While October price increases move through the supply
chain, distributors who are not going up expect A-B to take up their pricing in
February about 2%, or sixty cents a case across the board on premium brands.
3. US: Pernod
Launches Martell Print Ads
Source: just-drinks.com editorial
team
October 2, 2003
French drinks group Pernod Ricard
is launching a new print ad campaign for its Cognac brand Martell.
The ads, called "Rise above", will run from
September to December 2003 in order to help the continuing repositioning of the
brand.
The campaign features three successful African
Americans who call for individuals to 'rise above' life's challenges, said
Pernod in a release.
The company hopes the new ads will appeal to its key target
audience of 21-35 year old male Cognac drinkers.
The ads will run in consumer magazines and regional
newspapers and be supported by promotional activity and events.
"The new campaign, exclusive to the US, embraces
Pernod Ricard's philosophy to manage global brands at a local level (to ensure
marketing activity is relevant to its audience). The campaign is aimed at
recruiting new Cognac drinkers through effective and relevant media, increasing
awareness of Martell in a competitive environment and establishing brand
territory," said Pernod.
International marketing director for Martell, Eric
Benoist, said: "We are very proud of this impactful campaign and believe
it will appeal to existing Martell consumers as well as inspire new ones.
Martell has always adopted its own original approach and 'Rise Above'
demonstrates Martell's individual character and will appeal to our US target
audience. It provides us with an excellent platform to educate people about the
quality of Martell cognac and what sets Martell apart."
4. SABMiller Sales Are Flat In U.S., Foamy in Europe
By Dan Bilefsky - Staff Reporter of The Wall Street
Journal
September 30, 2003
SABMiller PLC said on that despite strong demand for
beer in Europe, it is still suffering slumping sales volume of its flagship
Miller brand in the U.S.
The London-listed company, which last year paid $3.6
billion in stock to Philip Morris Cos. to buy Miller Brewing Co. and create the
world's No. 2 brewer in volume, said the volume of the Miller brands sold in
April to mid-September fell 4.5% in North America. SABMiller said it continues
to struggle against Anheuser-Busch Cos., the world's largest brewer and maker
of Budweiser, which has the biggest distribution network in the U.S. and
accounts for nearly half of U.S. beer sales.
"The volume of Miller brand sold continues to
remain weak, and we don't expect any big improvement anytime soon,"
SABMiller spokesman Nigel Fairbrass said after the company released a trading
update, a snapshot that lists volume increases and decreases world-wide without
disclosing sales figures or liters of beer sold.
Still, SABMiller's shares rose 2% to 474.15 pence
($7.86) in London, buoyed partly by an 8% increase in beer volume in Europe in
April to August. Europe's hot summer and robust demand in the Czech Republic
and Russia helped boost sales, the company said. The Czech Republic has the
highest per capita beer consumption in the world -- two glasses a day. In
Russia, a growing number of people are turning to beer instead of vodka.
SABMiller, which generates about 14% of its annual
sales of $9 billion in South Africa and reports in dollars, also has benefited
from the recent strength of the rand compared with the dollar. That contrasts
with rivals Heineken NV of the Netherlands and Interbrew SA of Belgium, both of
which report in euros and have seen the performances of their U.S. imports
dragged down by the strength of the euro against the dollar.
The company, which is based in London and
Johannesburg, said its volume was up 2.5% in South Africa and up about 3% in
the rest of Africa and in Asia, despite economic turmoil in Zimbabwe and the
severe acute respiratory syndrome epidemic in China.
SABMiller alarmed investors in May when it said it
would take three years to turn around the Miller brand. Despite a recent U.S.
television campaign featuring former "Baywatch" star Pamela Anderson,
the company continues to lag behind rivals Anheuser-Busch and Adolph Coors Co.
Ian Shackleton, analyst at Credit Suisse First Boston in London, estimates that
Miller's U.S. market share has fallen to 18.5%. The brewer had a 19.6% share in
2002, according to the newsletter Beer Marketer's Insights. "Miller
continues to be the big black mark on this company," said Mr. Shackleton.
Mr. Fairbrass, the company spokesman, said SAB hoped
to improve Miller's performance by pruning the more than 57 brands in the
Miller portfolio. Miller Brewing's brands include its premium brew Miller
Genuine Draft, as well as less expensive brands such as Milwaukee's Best and
flavored beverages such as Jack Daniel's Hard Cola. The company wants to focus
more on the higher end of the market. "We have too many brands in our
portfolio, and we want to simplify things," Mr. Fairbrass said, though he
wouldn't say which brands would be eliminated.
Miller is spending $500 million this year on
marketing the Miller brands. Earlier this year, it began a brand shake-up aimed
at attracting younger beer drinkers. It replaced Miller's silver label, which was
easily confused with its rivals, with royal blue packaging. Mr. Fairbrass said
the company plans to launch a new U.S. advertising campaign in November. He
wouldn't disclose details, other than to say it will focus on the overall
Miller name, instead of separate commercials for each of the Miller brands.
SAB also has introduced the Miller brand across
Europe as part of its effort to boost sales. Miller Genuine Draft has been
introduced in Russia, Romania, the Czech Republic, Poland and Italy. The
company says it wants to benefit from Europeans' affection for iconic American
brands, such as Levi's jeans.
5. Alcohol Industry Efforts Improving
By Frank Balsamello -The Hoya
(Georgetown U.)
September 29, 2003
(U-WIRE) WASHINGTON — Concern over alcohol
advertisements once again reached the floor of Congress with the release of two
reports on Sept. 9.
Although differing in opinion, both reports confirmed
a central issue — the alcohol industry is beginning to reform youth exposure to
its advertising.
Of the two reports, the Federal Trade Commission's
was most in favor of the alcohol industry's changing practices. Jim O'Hara,
executive director at the Center on Alcohol Marketing and Youth at Georgetown
University, said that the report was a "review of what the industry had
done since 1999," and that "the industry has made several
improvements."
In order to limit youth exposure, the alcohol
industry has agreed on a 70 percent threshold of adult access in order to run
such an advertisement, meaning that they will only choose to run such ads in
periodicals or during air time in which less than 30 percent of its readers,
viewers or listeners are under 21. Prior to the change, the threshold was set
at 50 percent, statistically leaving one in two viewers of the ad underage.
While saying he is glad about the changes, O'Hara
also added that he wished it had come sooner.
The other report presented to Congress comes from the
National Academy of Sciences. According to its findings, the 70 percent
threshold is too low; it calls for 85 percent of the audience to be adults.
Further, they claim that the percentage does not
account for the size of the audience in general. George A. Hacker, director of
the Alcohol Policies Project at the Center for Science in the Public Interest
in Washington, said, in reference to the Super Bowl, that "even though the
underage audience is a small proportion, it's still the largest audience of
kids for any show ever," in a Sept. 15 New York Times article.
According to O'Hara, 15 percent of the U.S.
population is age 12-20, and so the Academy concluded that 85 percent access
was a better proportion than 70.
The National Academy of Sciences calls for other
regulations beyond an 85 percent rule. According to O'Hara, it has "a very
comprehensive strategy that addresses the issue from all angles." One such
proposal includes increased taxes on alcohol or cigarettes.
The Center on Alcohol Marketing and Youth will soon
release the 2002 findings in order to assess if industry changes have started
to have any impact yet, he said.
At this point, O'Hara said he finds the good news to
be that "everyone recognizes the need for change, and the industry is
taking steps."
6. Pernod Serves up Merger Talk
By James Dow – The Scotsman
September
26, 2003
THE world’s
third largest spirits group, the French giant Pernod Ricard, yesterday threw
its hat in the ring for the next round of mega-mergers in the drinks industry.
Pernod managing director Richard Burrows, unveiling
half-year results in London, said he was in a position to do a deal with his
rivals "right now", adding he would take a "very careful
look" at any opportunities that arose.
Separately, he disclosed that Pernod has received
inquiries to buy its five mothballed whisky distilleries in Scotland. None of
the approaches has led to talks.
Speculation began last week when the chief executives
of Diageo and Allied Domecq - the world’s largest drinks groups - revealed they
are considering mergers or alliances with other major players.
Burrows signalled that he is prepared to enter similar
discussions. Asked if he was ready to do a deal he said: "We’re in a
position to, right now."
He pointed out that Pernod has pared down its debt -
accumulated in 2001 when it bought the Seagram portfolio with Diageo - to below
the 2 billion (£1.4 billion) mark.
He added:
"We’re more or less back to the debt ratios we had before that
acquisition. We’ve digested Seagram, in other words."
He did not feel that Pernod needed to reduce its debt
further before it could consider new mergers or acquisitions.
Burrows
said he was aware of the opportunities for further consolidation in the
industry, adding: "We’ll take a very careful look at them."
He appeared to suggest he was more interested in
acquiring specific brands rather than a merger. "We’re interested in
looking at opportunities that arise within our very specific spirits and wines
parameters", he said.
Turning to the Scottish operations, Burrows said
Pernod had received approaches for the Allt A’Bhainne, Braeval, Benriach,
Glenkeith and Caperdonich distilleries on Speyside. He said the inquiries came
mostly from individuals rather than trade buyers. They had not progressed to
discussions.
"We’re not in a situation where we’re forced to
sell, and they could be needed by us in the future. A silent distillery is not
an expensive item to maintain," he said.
Pernod is focusing on its six remaining distilleries
in Scotland, with plans to launch a £28 million global advertising campaign
this winter.
Burrows was bullish about the outlook for the second
half, pushing his net profit forecast to 15 per cent growth for 2003, from 10
per cent.
Pernod was hit hard by exchange rates in the half to
end-June, logging a 3.7 per cent rise in net profit excluding exceptionals. The
lift would have been 34 per cent at constant exchange rates.
7. Red Bull
Takes Air at Passing Off Offenders
Red Bull Communication Center – Media Information
September
24, 2003
Settlements Reached with New York,
Las Vegas and Philadelphia Restaurants, Lawsuits Pursued Nationally
SANTA MONICA,
Calif. – Red Bull, the manufacturer and distributor of the well-known energy
drink, has reached negotiated settlements with New York City
restaurant/nightclub Centrofly, Las Vegas restaurant/nightclub Drai’s on the
Strip and Philadelphia restaurant/nightclub M Restaurant and Lounge that
resolve “passing off” and other claims alleged in lawsuits filed by Red Bull
against those establishments. The
three lawsuits, which were filed in federal courts in New York, Nevada and
Pennsylvania, respectively, alleged, among other things, that customers
visiting Centrofly, Drai’s and M Restaurant who requested Red Bull routinely
received a substitute beverage instead of Red Bull without being notified of
the substitution. Red Bull alleged
in the lawsuits that the substitution of an alternative beverage for Red Bull,
without providing the customer with notice of the substitution and an
opportunity to reject the alternative beverage, violated Red Bull’s rights and
deceived consumers.
The terms of the
settlements of each of the lawsuits involve the entry of a permanent injunction
against the establishment and its employees that precludes them from “passing
off” other beverages as Red Bull.
In addition, pursuant to the settlements, each of the
restaurants/nightclubs have agreed to pay to Red Bull an undisclosed amount,
some portion of which is to compensate Red Bull for the claims alleged in the
lawsuits and some portion of which will compensate Red Bull for attorney’s fees
incurred in pursuing its claims.
Dan Ginsberg, Red
Bull’s Executive Vice President, expressed satisfaction with the outcomes stating: “The settlements achieve all of our
litigation objectives. They ensure
that customers will not unwittingly receive a substitute beverage when they
order Red Bull, they protect the integrity of the Red Bull brand and they send
the message to others that Red Bull will aggressively pursue those who attempt
to “pass off” other beverages as Red Bull.
These lawsuits
are three among a number of legal actions Red Bull has recently initiated to
preserve the integrity of its brand and to ensure that Red Bull drinkers are
not misled when they order Red Bull and instead receive another beverage in its
place. Red Bull also has filed a
lawsuit against a restaurant/nightclub in San Diego where its investigations revealed
routine substitution of alternative beverages for Red Bull were occurring
without notice to customers. In
addition, Red Bull currently is actively investigating numerous reports of
“passing off” at other restaurants/nightclubs across the country, some of which
may result in the initiation of additional lawsuits.
“The defendants
in the lawsuits filed by Red Bull each were repeatedly warned that the passing
off of substitute beverages as Red Bull damaged the Red Bull brand, deceived
consumers and violated federal and state laws,” said Jim Goniea, an attorney at
Sonnenschein, Nath & Rosenthal representing Red Bull. “When Red Bull’s investigations
revealed that the defendants continued to serve substitute beverages to
customers who had requested Red Bull without notifying them of the
substitution, lawsuits were initiated to protect Red Bull’s rights and those of
its customers. Although Red Bull
would prefer to resolve passing off issues whenever possible by educating
restaurants, bars and nightclubs concerning their legal obligations and by
obtaining voluntary compliance with the law, Red Bull has made a decision to
aggressively pursue those who persist in deceiving Red Bull consumers by
serving them a substitute product without warning.”
“I was at a bar
recently in San Francisco and I ordered a Red Bull. The bartender reached for the soda gun and I told her to
hold off. I know Red Bull doesn’t
come out of a gun, but other customers probably don’t,” said Carlton Solle,
owner of San Francisco-based restaurant, the White Trash Bistro. “People who want to make sure they
really get Red Bull and not another product should order the can so they know
what they’re getting!”
