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Sherry Whitney

From: John Bodnovich <bodnovich@ablusa.org>Sent: Monday, January 12, 2015 11:11 AMTo: John BodnovichSubject: FW: Industry News Update - Monday, January 12

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Diageo wins India United Spirits vote Source: FT January 11th

Diageo has scored an important victory in India with minority shareholder approval for its local subsidiary, United Spirits, to make, sell and distribute its parent's products - two months after investors rejected its first attempt for being too vague. Diageo finally established control last year over India's largest spirits producer following a protracted battle, only to run up against a wave of new Indian minority shareholder activism. The latest vote was reported to the Bombay Stock Exchange at the weekend. The owner of brands such as Smirnoff vodka and Johnnie Walker whisky, had declared itself "surprised and disappointed" in November when United Spirits' minority shareholders rejected plans to produce Diageo products. The global drinks giant had argued the deal would give United Spirits a competitive advantage in India's premium alcohol market, which is growing rapidly. But research houses that advise minority shareholders on votes said the original proposal had not provided enough detail on how costs and benefits would be split between the parent company and its listed Indian subsidiary. India's new Companies Act, which took effect on April 1, has strengthened protection for minority shareholders by requiring majorities of independent shareholders to approve related party transactions. In contrast to the past - when minority shareholders had to travel to distant locations if they wished to participate in votes conducted through annual or extraordinary general meetings - India now allows electronic voting. United Spirits, once the jewel in the crown of liquor baron Vijay Mallya, has a share of about 45 per cent of India's rapidly growing spirits market.

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In its revised proposal, Diageo said it expected the manufacture, sale and licensing agreement to generate about Rs7bn ($113m) in revenues for United Spirits in the first year of full operations, compared with about Rs420m in revenue United Spirits had previously earned in commission from selling Diageo brands. Diageo reached a deal to take majority control of the company after three years of negotiations but only took full control last June following a sweetened open tender. Since then, United Spirits has had to set aside Rs36bn for the lossmaking sale of Whyte & Mackay, which the UK's competition commission required to permit the Diageo takeover. Diageo has also discovered about $225m in loans - much of it unlikely to ever be repaid - that the cash-rich spirits business had made to its former parent to help its now defunct airline, Kingfisher Airlines. ------

Legislators Float Bill To Cut Small Brewer Taxes Source: Law360 By Ama Sarfo January 09, 2015

U.S. Rep. Erik Paulsen, R-Minn., introduced legislation Thursday to slash excise taxes on beer sold by small brewers, marking the latest legislative effort to cut taxes in the new Congress. The Small Brewer Reinvestment and Expanding Workforce Act, which Paulsen floated with U.S. Rep. Richard Neal, D-Mass., would reduce excise taxes on the first 2 million barrels of beer that small brewers sell annually in a bid to protect the growing industry, which the lawmakers say is a testament to this country's small business tradition. "The rise in the popularity of craft brewing is a quintessential American success story," Paulsen said in a press release. "Many of these brewers start out enjoying a hobby, but end up growing businesses that create jobs and provide a product that people enjoy. The tax code needs to catch up to the nature of the brewing industry and not penalize the nation's small brewers." The lawmakers, who introduced the legislation along with four other Congressmen, say small brewers have a strong impact on local economies but aren't receiving proper protections from the government. "While our brewing industry has evolved, our tax code hasn't evolved with it," Rep. Patrick Meehan, R-Pa., added in the release. "Outmoded federal excise taxes inhibit the growth of small brewers and make it harder for fledgling businesses to survive and prosper."

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Congress just reconvened, but Republican lawmakers have wasted little time in attempting to repeal tax provisions they do not like.?? Earlier in the week Paulsen introduced a different bill to repeal the 2.3 percent tax on medical device sales in what could be the Republican-led Congress' first sortie against the taxes in the president's Affordable Care Act. H.R. 160, the Protect Medical Innovation Act of 2015, would strike the medical device tax that went into effect in 2013 and was enacted to partially fund President Barack Obama's signature health care reform law. "The medical device tax continues to stifle innovation, cost American jobs and drive up health care costs despite bipartisan opposition in both houses of Congress," Paulsen said in a statement. "It's clear repealing this tax should be one of the priorities for the new Congress. The American people are looking for their elected officials in Washington to find common ground, and repealing the medical device tax is a great place to start." And on Wednesday, U.S. Rep. Mac Thornberry, R-Texas, said he introduced legislation to permanently abolish the federal estate, gift and generation-skipping taxes, explaining that the taxes must be scrapped because they make it difficult for small business owners and farmers to pass on their businesses to family members.?? Thornberry floated H.R. 173, the "Death Tax" Repeal Act, because he believes that it's unfair for taxpayers to pay taxes on their assets at death, or for their heirs to pay upon receiving the property, since those assets are already taxed during the taxpayer's life.?? "The American people should be able to work hard, build and save, knowing that these assets will one day be passed on to their children and grandchildren," Thornberry said in a release. "Particularly vulnerable to the death tax are small business owners, farmers and ranchers who hope to pass personal business on to future generations but have to contend with a tax that may make that impossible."? ------

Modelo Especial tipped to topple Heineken as No.2 US Source: Beverage Daily By Ben Bouckley 09-Jan-2015

Constellation Brands announced yesterday that its Mexican beer brand Modelo Especial is poised to overtake Heineken as the No.2 selling imported beer in the US. "Continued investment in national Hispanic TV helped propel the continued growth of this brand, which posted consumer retail take away volume trends of more than 20% in IRI

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channels during the quarter," CEO Rob Sands told analysts during an investor call on his firms' Q3 2015 results. Net sales rose 7% on a comparable basis to $1.542bn for Q3 fiscal 2015 and net income rose 14% on the same basis to $248m, as Constellation reaped the benefits of what CEO Rob Sands described as "exceptional ongoing momentum for our beer business". Modelo Especial expanding beyond Hispanic population Sands said Modelo Especial had a "huge runway for growth" and was currently at about 60% ACV in IRI with the product still skewed from a demographic point of view towards Hispanics, though he believes penetration with this population isn't what it could be. "Because the brand is expanding into the general market now so well we've introduced general market television advertising which we think is going to accelerate the growth of this product even further. Glossing a ramp-up in distribution of Modelo Especial to 90% ACV, Sands said: "All these things are going to contribute to Modelo Especial continuing to be really the hottest major beer brand in the market of any significance. "There's really nothing of that size that's growing like Modelo Especial and just even anecdotally.you're seeing all of a sudden Modelo Especial becoming a popular product in the general market as well as the Hispanic market." Corona Light on draft boosts bottle, can sales in area Last year Sands pinpointed draft beer as one opportunity where the No.1 imported beer brand in the US, Corona Extra, could win, and he said Constellation had seen 40% growth in draft across all its beer brands during the quarter. "We've introduced it with brands like Corona Light and in actuality not only is there not cannibalization, but when we put Corona Light draft in an on-premise establishment we tend to see a pickup in the bottle or can product in the area around it, because it's really marketing." Sands said Constellation had expanded Corona Light draft into three new markets and had also tested Corona Extra on draft again. The future was equally bright in cans, he said: "Cans - same thing, great can growth, great can opportunity, represents obviously a very large portion of the market that we haven't participated in. "Cans are purchased for consumption in cases where glass can't necessarily be used - boats, beaches, stadiums, etc.," Sands added.

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"So that also represents a purchase opportunity that does not result in cannibalization for us. So these package additions are definitely driving growth in the overall beer business," he said. Mexican beer brands: Feeding Heineken its lunch? Heineken sales have fallen in the US over the last 10 years, and one beer industry source told us last year that "Corona really fed them their lunch" as the premier import brand from the mid-1990s. ------

Non-alcoholic beer and wine are hot - but do they taste good? (Excerpt) Source: NY Post By Reed Tucker January 10, 2015

Non-alcoholic beer and wine are hot - but do they taste good? One of the hottest areas in the drinking world is alcohol-free tipples: Sales of non-alcoholic wine in the US jumped 5.6 percent to nearly $100 million from November 2013 to November 2014, according to Nielsen. Worldwide, 2.2 billion liters of non-alcoholic beer were quaffed in 2012, marking an increase of 80 percent from five years earlier, according to analysts Mintel. The converted include teetotalers and those with health issues. The weight-conscious are also fans. Alcohol-free wine has about one-third the sugar and calories as the regular stuff - yet retains its heart-healthy benefits, according to research. "We wanted to capitalize on the trend for healthy beverages - things like kombucha and Pom Juice," says Jonathan Canter, vice president of V/NO, a new alcohol-free wine. "We're displayed next to the Pepsi products in grocery stores." But there's really no point in drinking any of these if they don't go down well. One potential downside? Alcohol is crucial to flavor. V/NO injects concentrates, including oak and tannins, to give its product a more wine-like flavor and mouth-feel. We rounded up six bevs for a G-rated taste test.

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http://nypost.com/2015/01/10/non-alcoholic-beer-and-wine-are-hot-but-do-they-taste-good/ ------

5 'Imported' Beers That Are Really Brewed in the U.S.A. Source: TIME Brad Tuttle Jan. 9, 2015

If you've been buying the Japanese "import" Kirin beer brand under the impression it's actually made in Asia, you've been misled. And you've probably been paying too much for the beer. Fortunately, you might be able to get some of that beer money back. According to Law360.com, Anheuser-Busch InBev, which owns Kirin alongside giant brands like Budweiser and Bud Light, recently settled a class-action lawsuit filed in Miami that alleged "the packaging, marketing and advertising of Kirin beer is designed to deceive consumers into believing they are purchasing a product made in Japan." In fact, Kirin-described as a "Japanese-style pilsner" on the Anheuser-Busch website-is brewed in Virginia and southern California. A statement offered to the press from A-B said, "We believe our labeling, packaging and marketing of Kirin Ichiban and Kirin Light have always been truthful." Yet the company agreed to settlement terms that include no further use of the word "imported" relating to Kirin, more prominent disclosure on labels concerning where the product is actually brewed, and refunds to people who bought Kirin and have receipts to prove it. Customers can get money back to the tune of 10¢ per bottle or can, 50¢ per six-pack, and $1 per 12-pack. No matter how much Kirin you've purchased, the maximum payment per household is $50. What's interesting, and somewhat ironic, about the alleged trickery is that the labels and marketing would be implying a beer was made somewhere other than the U.S. in the first place. After all, the "Made in the USA" label is a selling point for all manner of goods lately. And in an era when Budweiser, Coors, and other iconic "American" brands-even Pabst, for cryin' out loud!-are in the hands of foreign owners, smaller brewers have gone to special lengths pointing out that their beers are thoroughly American. What's more, consider the swift rise of American craft beer's reputation around the globe, and how the hot trend is for beer-loving countries like Germany to import top-quality American beer rather than the other way around. Given the modern-day beer landscape, if anything, you'd think that beer companies would be more inclined to fudge that a product was brewed in the vibrant American beer scene even if it wasn't.

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But Kirin, and a few other mass-market "imports" (see below), gained their footholds in the marketplace during a different era-one in which beers were deemed superior to American brews simply by claims of foreignness. So, in the same way that the world's biggest brewers continue to blur the lines of what brews are truly worthy of the "craft beer" label, there remains a proliferation of a few beer brands that seem to originate overseas, and that one would understandably assume are made overseas, and yet truthfully are produced right here in America. In addition to Kirin, the faux imports below are all brewed in the U.S.: Beck's. Like Kirin, this Anheuser-Busch InBev-owned brand is the subject of a class-action lawsuit claiming deceptive marketing because the labels use phrases such as "Originated in Germany" and "German Quality." Beck's is actually brewed in 15 different countries, including the U.S., so the Beck's you buy in this country was most likely produced here. Foster's Lager. Billed as a "uniquely Australian beer" by corporate parent SABMiller, Foster's has been brewed in Texas for years. British pub patrons may also be surprised to know that the Foster's on tap there is made in Manchester, England, not Down Under. Killian's Irish Red. In fairness, MillerCoors lists the Killian's brand under the category of "Craft" rather than "Import." But craft beer insiders wouldn't call Killian's either. The Killian's website runs through the history of the brand, which originated in with "the first batch of Enniscorthy Ruby Ale" made by George Killian himself in Ireland. It glosses over how the name was purchased in the 1980s by Coors, and that it's been brewed in Colorado for decades. Red Stripe. When sold in the U.S., the iconic grenade bottles of Red Stripe used to feature the word "Imported" on its label. But starting in 2012, when production for the U.S. market was switched from Jamaica to Wisconsin, the Diageo-Guinnness-owned beer dropped the "I" word and tweaked the label to reflect its status as merely a "Jamaican Style Lager." Nonetheless, plenty of drinkers assume it's still made and imported from the Caribbean. [UPDATE: Somehow we overlooked that Bass Ale, the "original English Pale Ale" that was actually served on the Titanic, is now also brewed in the U.S. (Baldwinsville, N.Y.), and some drinkers sure aren't happy about how the American-produced version tastes.] ------

College Football Is Powerful: The Proof Is in the Alcohol (Excerpt) Source: New York Times By MARC TRACY JAN. 10, 2015

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Spectators at the men's basketball Final Four last April at AT&T Stadium in Arlington, Tex., could buy burgers, sodas and even Texas-shaped waffles. But they could not buy alcohol. The N.C.A.A. does not permit alcohol sales - or even its advertising - at the 89 championships it administers. But on Monday night, about 80,000 fans will flock to the same stadium for the first College Football Playoff title game, between Oregon and Ohio State, and they will be able to select from an array of beer, wine and spirits. They can even order a Cowboyrita, the signature drink at the Dallas Cowboys' home field, made with 100 percent blue agave tequila. Alcohol was also sold at the six bowls affiliated with this season's inaugural playoffs. Fans who care to imbibe can thank the powerful Football Bowl Subdivision, the only N.C.A.A.-sanctioned group whose championship is not governed by the N.C.A.A. It therefore essentially gets to play by its own rules. In recent years, the championship was conducted by the Bowl Championship Series, which also permitted the sale of alcohol. http://www.nytimes.com/2015/01/11/sports/ncaafootball/signs-of-college-footballs-clout-beer-sales-and-travel-aid-.html?_r=0 ------

52 people die after drinking poisoned beer in Mozambique Source: The Chron January 11, 2015

Health authorities in Mozambique say 52 people have died after drinking a contaminated traditional beer. Alex Albertini, the health director in the northeastern Songo district, said Sunday that 51 more people were admitted to the hospital after drinking the brew at a funeral on Saturday. Albertini said an additional 146 people have reported to hospitals for examination in the Chitima and Songo areas, both in the northeastern Tete province. Carle Mosse, provincial health director, said blood samples and samples of the traditional beer were being sent to the capital Maputo to be tested. Pombe, a traditional Mozambican beer, is made from millet or corn flour. Authorities believe that the drink was poisoned with crocodile bile during the course of the funeral. Police are investigating the incident.

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United Kingdom: Put up drink prices to stop A&E crisis, say doctors Doctors call for a 50p minimum unit price for alcohol to help tackle a culture of "excessive alcohol consumption" Source: The Telegraph By Laura Donnelly, Health Editor 11 Jan 2015

Leading doctors are calling for an end to cheap alcohol in an attempt to resolve the hospital accident and emergency crisis. In a letter to The Telegraph, 20 senior health professionals are calling for a 50p minimum unit price for alcohol, which they say could tackle a culture of "excessive alcohol consumption". Latest figures show that 20 per cent of A&E attendances are alcohol related. The figures rises to 80 per cent during peak weekend periods on Friday and Saturday nights. Each year, more than one million hospital admissions in England are alcohol related. Over the last decade, such admissions in those aged between 15 and 29 have risen by almost 60 per cent. Signatories to the letter include Prof Sir Ian Gilmore, past president of the Royal College of Physicians and chairman of the Alcohol Health Alliance, Dr Kieran Moriarty, alcohol services lead at the British Society of Gastroenterology, Dr Adrian Boyle, from the College of Emergency Medicine, Prof John Ashton, president of the Faculty of Public Health, and Dr Dominique Florin, medical director of the Medical Council on Alcohol. The doctors write: "The current A&E crisis is being compounded by the failure of policymakers to tackle the impact of excessive alcohol consumption. "However, successive governments have failed to enact evidence-based policies that would save lives and ease pressure on the health, policing and criminal justice systems." The doctors go on to say that a 50p minimum unit price is required urgently to lift the pressure on A&E units. They say: "A 50p minimum unit price for alcohol, regulation to protect children from alcohol marketing, improved alcohol labelling and the establishment of alcohol care teams

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with specialist consultants and nurses are simple measures, none of which would punish responsible drinkers, that must be adopted urgently in order to reduce pressures on A&E departments." Sir Ian has long campaigned for a minimum price for alcohol, which was considered by the Coalition but has proved controversial. The Home Office has put the plan on hold, saying more evidence is required to see if it would help tackle problem drinking. A 50p per unit minimum would mean that most bottles of wine or four-packs of strong lager could not be sold for less than £4.50. In some cases, a can of strong lager can be bought for less than a pound. Two weeks ago, Dr Cliff Mann, the president of the College of Emergency Medicine, which represents A&E doctors, provoked controversy with calls for the police to arrest more drunks in order to reduce pressures on casualty units. Dr Mann urged the police to adopt a "zero-tolerance" strategy towards binge drinking that would see troublesome drunks arrested, charged and given a criminal record. He suggested that police forces mount campaigns over several successive weekends against those who are drunk and disorderly to try to reduce the numbers needing help from A&E staff and diverting resources from patients he said were "more deserving". Dr Mann said: "If more people knew that if they got drunk they were going to be arrested, they wouldn't drink in the first place and then end up in A&E. "If more people knew that they were facing the prospect of a prosecution and having to pay a fine, that would be an effective sanction or deterrent to drinking too much." Figures released last week showed that the NHS was experiencing its worst emergency performance in a decade. In the two weeks over Christmas, almost 21,000 patients waited between four and 12 hours on trolleys. In some areas, the Red Cross and St John Ambulance services were being called upon to help, while fire engines and police cars were being used as makeshift ambulances. At one point at least 14 hospitals had declared a ''major incident'' which allows trusts to call in extra staff and ask for help from outside agencies. ------

United Kingdom: Distillers lobby the Treasury for 2 per cent cut in duty on whisky Source: The Independent

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Mark Leftly Sunday 11 January 2015

The alcohol industry is lobbying the Treasury to reduce tax on wine and spirits by 2 per cent in March's Budget. Danny Alexander, Chief Secretary to the Treasury, will face calls to introduce the cut at a meeting in his Highlands constituency early next month. The Liberal Democrat has six whisky distilleries - one of which belongs to drinks giant Diageo - in his Inverness, Nairn, Badenoch and Strathspey seat. A source close to the campaign said "excise duty will feature high on the agenda" at a meeting that takes place just weeks before the Budget. Mr Alexander and his Conservative Treasury colleague, Priti Patel, are thought to be sympathetic to the proposal. A source close to Mr Alexander said: "Danny has previously supported the industry - he has a long-standing interest in the whisky and distilling industry. It's an important part of Scottish life." The Drop the Duty campaign, which is backed by the Wine & Spirit Trade Association, the Scotch Whisky Association (SWA) and the TayPayers' Alliance, argues a small cut would boost public finances by £1.5bn. Accountant EY said much of this boost would be the result of increased investment across the industry and more jobs in pubs, restaurants and off licences. Beer received a similar cut in last year's Budget, saving drinkers 1p a pint. Chancellor George Osborne also announced a freeze on spirits' duty, but the industry wants the Treasury to go further. Campaigners argue that alcohol is too heavily taxed, with duty accounting for more than £10 on bottles of whisky and gin. Tax accounts for about 76 per cent of the price of a typical bottle of vodka and 56 per cent of a bottle of wine. An SWA spokesman said: "The Scotch Whisky industry welcomed Danny Alexander's support for a duty freeze last year but with tax still accounting for nearly 80 per cent of an average bottle's price, more action is needed. When we see [him] at the end of the month, distillers will make the case for a 2 per cent duty cut as a further step to support the sector at a time when there are challenging market conditions at home and abroad." ------

Vidrala wins bidding war for Quinn Glass (Excerpt) Spanish bottle maker is poised to snap up Encirc in ?400m deal Source: Sunday Times

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Gavin Daly 11 January 2015

THE Spanish bottle manufacturer Vidrala is to buy the former Quinn Glass operations in Ireland and the UK, in a deal worth up to ?400m. Vidrala, which is valued at almost ?1bn on the Spanish stock exchange, has emerged as the preferred bidder for the business following a three-month sale process. The deal is likely to be completed this week. The former Quinn business, rebranded last year as Encirc, employs about 1,100 people at Derrylin in Fermanagh and Elton in Cheshire. It has valuable contracts with drinks groups Diageo and Britvic. Vidrala has operations in Spain, Portugal, France, Belgium and Italy, mainly obtained through acquisitions over the past decade. In the nine months to the end of September 2014, sales were ?363m and it made an operating profit of more than ?54m, latest figures show. ------

Bespoke Capital Partners Joins Noël Group to Purchase Nomacorc, LLC from Summit Partners Source: WineBusiness.com 01/08/15

Bespoke Capital Partners announced it has made an investment in Nomacorc, LLC, the world's leading manufacturer of synthetic wine closures. Bespoke partnered with the Founder and Chairman of Nomacorc, Marc Noël, to recapitalize the business and buy out Summit Partners resulting in the partnership owning the entirety of the Company. Mr. Noël is currently the Chairman of Noël Group, a global leader in the transformation of synthetic materials. This investment provides the foundation and resources for Nomacorc to build upon its global leadership position. It will accelerate its industry-leading efforts in research and development for closures and oxygen management solutions to drive global growth as well as help the Company capitalize on the large long-term opportunity to consolidate certain attractive segments of the global wine supply industry. As such, Bespoke tailored its investment in a unique and thoughtful manner to allow for a longer-term hold. "We are excited to partner with Marc Noël and the Nomacorc management team" "We are excited to partner with Marc Noël and the Nomacorc management team," said Robert L. Berner III, Bespoke's co-managing partner. "Nomacorc has developed a leading market share in the overall wine closure sector with an attractive financial profile. The Company's culture of technical expertise, ability to tailor products to customer requirements, product reliability and exceptional cost management are key contributors to

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its success, and clearly differentiate Nomacorc's operations from other closure businesses." Mark Harms, co-managing partner of Bespoke added, "We invested in Nomacorc as a platform for consolidation of the highly fragmented supply chain in the $250 billion global wine industry. We look forward to supporting the management team in executing a growth strategy to increase the types of products and services offered to the wine industry thereby leveraging and enhancing the company's already formidable distribution capabilities." Mr. Noël said, "I am excited to be partnering with Bespoke as Nomacorc begins its next phase of growth. Bespoke's experience, strong track record and deep domain expertise in the wine industry will support the Company's infrastructure for growth and help drive global expansion. Bespoke's model is very attractive to entrepreneurs like myself who are looking for a thoughtful partner and structured capital solution that enables us to accelerate value creation and focus our efforts on the truly long-term potential of the enterprise. We are also pleased that Ken Lamb, an expert in the wine sector, has joined the Nomacorc Board and will be actively involved with our organization going forward." "We're excited to work with the new ownership group to grow our business and are thrilled about the many opportunities that this investment will bring," said Lars von Kantzow, president and CEO of Nomacorc since 2006. "We'll be able to expand the Nomacorc brand and all that it entails - superior quality, groundbreaking innovation and exceptional customer service - to deliver on our ultimate objective of ensuring that wine is experienced and enjoyed by the consumer just as the winemaker intended." Global Leisure Partners ("GLP"), a leading sector-focused leisure and consumer merchant bank and joint venture partner in Bespoke, initiated this transaction and advised Bespoke on the investment and associated debt and equity capital raising. Two GLP Operating Partners, Bill Rogers and Ken Lamb, are participants in the investment and will both assume board of director roles in the Company. ------

Reshuffling of power over at St James' Gate Source: Independent.ie Sarah McCabe 11/01/2015

There has quietly been a reshuffle on the top floor over at the Guinness Distillery. Diageo's top man in Ireland - Paul Armstrong - has stepped down. Genial Armstrong was until recently the head of beer at Diageo Europe, responsible for the quality of pints from Belfast to Bratislava.

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The Delgany, Co Wicklow resident worked for Guinness for more than 30 years. In a world of constant job-hopping, Guinness is one of those increasingly rare companies where people stick around for decades. But now, on the cusp of entering his 60s, Armstrong is out. There is no indication he was pushed, rather he just felt it was time to do something else. He told me earlier this year that he was itching to do something charitable and give back, so maybe he plans to do something altruistic. Taking his place is Colin O'Brien, who is more than a decade younger than his predecessor. Colin is another long-time Diageo man - he has worked for the company since 2002. He has big shoes to fill. Armstrong was well liked by staff, even shortlisted in the 'most trusted leader' category in 2013's Great Places to Work Awards. Interestingly, O'Brien won't be ruling the roost alone. Diageo, with all its subsidiaries and brands, has a funny corporate hierarchy in Ireland. Country director David Smith is equally senior. Whoever it is that is actually in charge has a big job on their hands. Diageo is facing some big challenges in Ireland at the moment - chiefly Guinness sales, which have plummeted in the past couple of years as we all pinched pennies. Sales were down another 5pc in Ireland when the group reported its last results, in June. Added to that is the craft beer revival. Alongside beards and bicycles that don't actually work very well, trendy types can't get enough of the stuff. Guinness has come out with its own craft iterations, but I'm not sure anybody really believes the concept of a craft beer from one of the world's biggest drinks manufacturer. ------

Wine trends for 2015 Source: Napa Valley Register Paul Franson January 08, 2015

Although sales of wine have recovered strongly from the depths of the recession, Impact Databank reports that the total U.S. wine market only grew 0.3 percent in 2014 to a volume of 322 million nine-liter cases. The tepid sales result largely from weak on-premise sales in restaurants and bars. The report is from the current edition of The U.S. Wine Market: Impact Databank Review and Forecast.

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The report said that the sparkling wine segment drove what growth there was, with an estimated increase in volume of 3 percent to 16 million cases. Sparkling wines represent a 5 percent share of the U.S. wine market. Last year was the sixth year that sparkling wines grew after dropping during the financial crisis of 2008. The bad news for U.S wine companies is that imported sparkling wines grew 6.6 percent to 7.1 million cases, while domestic brands were estimated to be stable at 8.85 million cases. Italian Prosecco was the biggest winner including wines from Mionetto, La Marca, Zonin and Riondo. Still, Catalonia's Freixenet Cava spakling wine and Bacardi's Martini & Rossi Asti are the largest-volume imported sparkling wines but Veuve Clicquot and Moët & Chandon Champagne lead in retail sales terms. Among domestic brands, low-end Cook's from Constellation and Andre from Gallo are the biggest sellers by volume followed by Korbel from Heck, which is marketed by Brown-Forman, but the segment received a boost in 2014 from Barefoot's new Fusion line, which is coming up fast. In Napa Valley, Domaine Chandon is heavily targeting millennials for growth, including special packages and marketing campaigns. It makes about 650,000 cases per year, one third that of cheaper Korbel. Other local producers include Schramsberg, Mumm Napa and Domaine Carneros, while V. Sattui, Frank, Artesa and others make small quantities of bubbly. At one time, Mondavi, Beaulieu and other local wineries produced sparkling wines mostly for internal use, celebrations, tasting rooms and club members, a practice that is returning as Rack & Riddle in Healdsburg makes it possible for small wineries to produce sparklers from their own base wine without the specialized equipment and expertise needed to produce sparkling wine. The numbers are a bit different from IRI, a Chicago-based market research firm that tracks sales in supermarkets; these sales aren't allowed in some states like New York. According to IRI, sparkling wines grew 8.4 percent in volume for the year ending Nov. 30. They say that imported sparkling wines grew 12.5 percent during that time led by Italian brands that were up 17.5 percent overall while Prosecco surged 42 percent. IRI channels account for 40 percent of the total U.S. sparkling wine market by volume, as measured by Impact Databank.

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For information and to order The U.S. Wine Market: Impact Databank Review and Forecast, go to ImpactDatabank.com. It costs $995 for the print version, $200 more on CD. Gallo surveys how Americans enjoy wine Meanwhile, E. & J. Gallo Winery recently reported the results of its first Gallo Consumer Wine Trends Survey to learn about Americans' wine drinking attitudes and behaviors. The survey posed a series of questions to 1,001 frequent wine drinkers in the U.S., which resulted in a better understanding of exactly where, when and how Americans are enjoying wine. Gallo, the world's largest family-owned winery, has both a stake in the results - but also in the attitudes. Its wines have always been a big part of Americans' consumption from Hearty Burgundy to Barefoot. Vice president of marketing and third-generation Gallo family member Stephanie Gallo explained: "For over 80 years, Gallo has been committed to excellence, and in today's wine market that means we must remain at the forefront of innovation by crafting wines that reflect wine behavior at the dinner table and beyond." As a whole, the survey told us that Americans are enjoying wine more often than before by bringing it into dining, entertaining and casual experiences while eager to experiment with flavors and formats. As a result, many successful wineries focus on catering to customers' tastes rather than asking them to accept what's traditional. The differences between younger wine drinkers and seniors are especially interesting. Here's a summary of the results: EVERYONE NOW IS A WINE CRITIC Younger drinkers in particular are turning to social media to talk about and discover new wines. More than half participate in conversations about wine on social media. Every wine drinker can now be both critic and influencer. They are also using the Internet for wine knowledge, with nearly half respecting bloggers' opinions. SWEET AND BUBBLY ARE IN STYLE Moscato and sparkling wines are particularly popular among the younger set. Frequent wine drinkers under 40 are more than twice as likely to purchase Moscato when compared with 26 other popular varietals as well as when compared with older wine drinkers.

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These younger drinkers also reject the notion that sparkling wines are just for special occasions. Many reported that they are popping bottles for everyday moments. WINE DRINKERS ARE MIXING IT UP Younger drinkers are seemingly unbound by traditions that have often governed wine. Of those surveyed: 66 percent mix wine with fruit or fruit juice 51 percent make a wine cocktail 48 percent mix wine with other cocktail mixers like club soda 46 percent drink wine over ice 27 percent occasionally even drink wine in a cup with a straw CONVENIENCE IS KEY Though there were many notable differences between the younger and older age groups, the survey also revealed key thoughts and behaviors shared by almost all frequent wine drinkers. Of these, the most noticeable common ground was convenience. They're all buying premium and value box wine, Tetra Paks, screw tops and 187-milliliter bottles. Boxwine is more relevant than ever, with 58 percent of wine drinkers indicating that they have bought it. WHAT IS ON THE INSIDE COUNTS While two-thirds of American wine drinkers admit to buying a wine based on its label, 76 percent say that taste is the most important factor that makes them buy more. The varieties that continue to enjoy the greatest popularity are merlot, cabernet sauvignon, chardonnay, pinot noir and pinot grigio. Get more information about E. &. J. Gallo Winery at Gallo.com and details from the survey at GalloWineTrends.com. ------

Comité Champagne under attack for its "vindictive" legal dispute against Champagne Jayne Source: Harpers January 9, 2015

Guy Woodward, Harpers columnist and former Decanter editor, has attacked the Comité Champagne today for its on-going legal battle against freelance broadcaster and educator, Jayne Powell, over the use of her "Champagne Jayne" monicker.

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http://www.harpers.co.uk/news/comit-champagne-under-attack-for-its-vindictive-legal-dispute-against-champagne-jayne/511795.article ------

Growing Pains: The Shifting Image of Champagne Champagne Louis Roederer's release of its first "Brut Nature" wine, adorned with a minimalist label and a narrative that reads more "grower" than Grands Marques, has cracked open a discussion about the changing identity of Champagne and its values. Source: Punch Zachary Sussman January 8, 2015

We've all been cautioned not to judge a book by its cover, and the same principle generally applies to wine. But who hasn't bought a bottle based solely upon the image printed on the label? Even if it doesn't always indicate what to expect from a wine stylistically, label art exists for a reason: Whether in the form of a cupcake or the etching of a fancy chateau, it imparts some kind of story or message that informs our experience of drinking the bottle. Often, the idea isn't so subtle. It might prove difficult, however, for the average drinker to decode the meaning behind a label like that of the celebrated Champagne firm Louis Roederer's new 2006 "Brut Nature" bottling. Designed by architect and designer Philippe Starck, the label bears little resemblance to any other in Roederer's portfolio-or, to be honest, the region at large. In contrast to the aristocratic ideals of "old world" elegance to which most Champagne aspires (just imagine the standard cursive script and impressive family insignia, framed by some sort of baroque floral trim), the blank square of Starck's "Brut Nature" bears nothing other than the artist's own minimalist, almost childlike or "Art Brut" (yes, pun intended) handwriting. If this reads like a departure from the values we typically associate with Champagne, it's for good reason. In many ways, the Starck bottling represents compelling visual evidence of larger changes taking place within the region as it transitions away from the luxury or nightclub stereotypes of the 1990s and early aughts. As such, the label's bare aesthetic, "stripped of any superfluous embellishment," as Starck describes it on the website, redirects focus upon the wine itself, which represents Roederer's first release of a "non dosage" Champagne. Often called "Brut Nature" or "Brut Zero," this refers to a specific style of Champagne to which no extra sugar, or "dosage," has been added. Although dosage has traditionally been viewed as necessary step towards balancing Champagne's sharp acidity, today some drinkers view the practice with skepticism, claiming that it can obscure a wine's

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underlying expression. For this reason, the "Brut Nature" category has become increasingly fashionable among a new generation of Champagne purists. This is the same generation whose tastes developed alongside the rise of the so-called "grower" movement, which many credit for injecting an alternative spirit into a historically brand-conscious region. Rather than follow the traditional model of selling their grapes to the large négociant houses, or Grandes Marques-many of which are owned by multinational luxury goods conglomerates like LVMH-these independent, often family-owned producers make their own estate-grown and bottled Champagnes, typically from the fruit of a single village or even a single vineyard. Hence the category's meteoric rise in popularity here in the U.S. among a new wave of sommeliers, journalists and industry professionals, whose own ideological leanings the grower narrative implicitly mirrors. Although the situation in Champagne encompasses a far more complex spectrum, it isn't difficult to imagine how the grower movement's success has benefitted from a certain "David and Goliath" dichotomy, pitting the agrarian values of the family farmers-with their claim to authenticity-against those of the large commercial firms, whose identities have traditionally revolved around maintaining a consistent "house style" for consumers to expect from year to year. In this context, however, the most interesting aspect of Roederer's release isn't the fact that it's a "Brut Nature" wine. The past few years have seen a general trend towards drier Champagnes, and several established brands-including Ayala, Feuillatte and Pol Roger-have already incorporated "zero dosage" bottlings into their lineups. Even as early as 1981, the storied house of Laurent-Perrier first produced an example, designed as the reincarnation of the "Grand Vin Sans Sucre" they developed in 1889 to be served at the restaurant in the Eiffel Tower. What makes Roederer's interpretation of the trend newsworthy is the marketing concept behind it, which spins a far more artisanal narrative than one might expect from the launch of a new Champagne from a "big house." Featuring several photos of the company's vineyards near the village of Cumières, including a particularly bucolic image of a horse-drawn plow, the press kit that accompanies the bottle-much of which is reproduced on the Roederer website- frames the effort in terms of "a quest for authenticity," involving a "great respect for nature" and a "deep attachment to the land." Accordingly, their stated philosophy "places research and respect for the terroir on an equal footing" and "endeavours to respect the characteristics of each of the 410 parcels in the Louis Roederer vineyard." To be fair, the house has been moving in this direction for quite some time; it continues, for instance, to convert its approximately 240 hectares of vines to biodynamic viticulture. On some level, then, this terroir-driven angle doesn't register as such a shock. But for a

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producer as iconic as Roederer-the very same house that produces a wine as frequently name-dropped as Cristal-to steer the conversation in this direction raises questions about Champagne's evolving cultural landscape. One way to frame the issue might be to ask whether, influenced by the cult success of the "grower" movement, Roederer and some of its peers might be embracing a more homespun, soil-based ethos. The extent of the grower's impact upon Champagne as a whole, however, remains subject to debate. With the big houses still accounting for over 70 percent of production, not to mention the vast majority of international sales, the grower category certainly feels niche by comparison. "Grower Champagnes have always existed, however they were not imported to the U.S. in a broad way until a few years ago," says Francois Beall of Champagne Nicolas Feuillatte, the region's third-largest brand in terms of global sales. "A few importers decided to bring these wines to the States, and they have benefited from the attention that famous houses like Moët, Champagne Nicolas Feuillatte and Roederer bring to the overall Champagne category. However, the percentage of the sub-category of grower Champagnes is small and likely doesn't have much of an impact on public perception." This may indeed hold true in terms of total sales, of which the big houses will always represent the lion's share, thanks in large part to the millions of entry-level, non-vintage Champagne sold as a mass-market luxury in airports, grocery stores, restaurants, nightclubs and hotel chains across the world. Given Champagne's historic success as a branded wine, it's difficult to imagine that this segment of the industry will be quick to abandon the lifestyle marketing upon which it has so heavily relied. On the other hand, even if many of the larger houses dismiss grower Champagne as a different or insignificant category, the dialogue in which Roederer is engaging broaches the far more meaningful issue of whether, philosophically, the grower's influence is blurring the lines between "big" and "small" and reshaping Champagne's definition as a wine. "Historically, Champagne has been marketed as a commodity," says Peter Liem, the author of ChampagneGuide.net, an award-winning online guide to the wines and producers of Champagne. "If you want to talk about the influence of grower Champagne, what they've done is help bring the narrative back to Champagne as a wine. In that sense, it's possible that their increased popularity has accelerated the efforts of certain houses to bring viticulture back into their marketing dialogue earlier than they would have otherwise." If the fundamental influence of the grower movement, then, has been to promote the wider recognition of Champagne as an actual wine-or rather, as an agricultural product as opposed to a Veblen good-it follows that, like any other expression of vinous identity, it should say something about the place from which it comes.

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"In the past, there was a fixed paradigm regarding what Champagne is," Liem explains. "It was controlled by a handful of prominent names, and everyone knew what Champagne meant. That definition still exists, but it's just one dialogue. Now we have multiple paradigms, and Champagne can mean many different things. If, according to another dialogue, Champagne is also a real wine, the question then becomes, 'What are its values?'" Ultimately, as Roederer's example illustrates (after all, the involvement of a world-renowned designer like Starck clearly represents some form of "elite" branding), this imperative doesn't necessarily conflict with notions of luxury, which will always play a central role in Champagne. Even if the quest to appeal to consumers on a luxury basis hasn't fundamentally changed, the artisanal narrative Roederer has embraced signals the broader ways in which our notions of luxury might be shifting. Whether it comes to selling a bottle of ubiquitous entry-level "Yellow Label" Veuve Clicquot or the most obscure, limited-production grower Champagne, there's always a story to be told. At this particular chapter in Champagne's evolving history, the future will ultimately be shaped by which new story it chooses to adopt. ------

Fine wine market: Hopes rise for Bordeaux prices in 2015 Source: Decanter by Chris Mercer Friday 9 January 2015

Fine wine market analysts are increasingly confident that prices for recent vintages of top Bordeaux have bottomed out after a three-year slide. Has Bordeaux turned a corner? Bordeaux prices have found stability on several indices in recent months, prompting UK-based Wine Asset Managers (WAM) to suggest that prices may have reached their cheapest point. It's hardly comparable with the plume of optimism that drove Bordeaux prices skywards before several years ago, but WAM's Miles Davis thinks there is extra reason to be cheerful in 2015. 'For those who are familiar with the characteristics of the fine wine market, what has happened over the last six months is becoming significant,' he said. 'The fact that the market has been flat for six months now suggests that it is in the process of changing direction and that the China fall out is now fully in the price.'

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Trading exchange Liv-ex said in its latest market report that its Bordeaux 500 index - representing the 10 most recently physical vintages for 50 top chateaux - had crept up by 0.6% in the past month. It is still down by almost 5% versus a year ago. Rival Bordeaux Index saw prices creep upwards in the final quarter of 2014, albeit the index remains around 25% below its mid-2011 peak. Bordeaux Index has reiterated that it believes the much-touted 2005 vintage is still 'significantly undervalued'. Bordeaux still dictates the overall health of the fine wine market due to its scale, despite higher buyer interest in alternative fine wine regions, and particularly Burgundy, Champagne and Tuscany. The Liv-ex chart below suggests prices for wines from several regions struggled for momentum in 2014. Chinese deals for Bordeeaux Chateaux Liv-ex said that Bordeaux's share of trades in the past month was around 82%, continuing a steady climb versus the first few months of 2014. But, it said this was so far not being driven the by the five first growths. They accounted for only a quarter of trades. 'Instead, it was increased activity for wines such as Mission Haut-Brion, Pontet Canet and Chateau Montrose that boosted trade for Bordeaux,' Liv-ex analysts said. Looking ahead to 2015, several commentators have said that Bordeaux's en primeur campaign for the 2014 vintage could help to fuel a market recovery, depending on how it is priced. However, other experts have warned that consumer demand remains sluggish. 'There are certainly fewer buyers, even at the upper end of the market, as the dubious benefits of naked "wine investment" are more difficult to secure,' said David Elswood, head of international wine at Christie's auction house, in the February issue of Decanter magazine's Market Watch section. ------

Napa Wine Heist Is Tough Case to Solve Rare Vintages Often Are Sold on the Black Market and Are Difficult to Track Source: WSJ By Jim Carlton Jan. 9, 2015

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The list of suspects could number in the dozens-or more. The places where the stolen loot could be sold: almost anywhere on earth. Yet sheriff's investigators in Napa County still hope to solve one of the most sensational crimes ever in this famed wine region: the Christmas Day theft of rare vintages worth as much as $300,000 from the French Laundry, a restaurant rated among the best in the world. Taken in the heist were 76 bottles, including many from the legendary French winemaking estate of Domaine de la Romanée-Conti and Napa Valley cult favorite Screaming Eagle. The vintages are so rare that some bottles are valued at more than $15,000 each, according to the online database Wine-Searcher. The theft itself was less exotic: Someone pried open a door just hours after the restaurant had closed to begin a monthslong renovation, then forced open a cellar where the bottles were stored, Napa County Sheriff's Office investigators say. A burglar alarm at the restaurant hadn't been set, they said. As of Friday, the crime remained unsolved. Investigators said they could get a break if the thief or thieves attempt to sell the high-end wines, because many can be tracked by serial numbers on the bottles. "The quality of these wines is such there aren't large numbers readily available, so if they actually surface in a legitimate market, they will be seen," said sheriff's Capt. Doug Pike. His agency has alerted wine buyers and sellers nationwide about the theft. However, no database exists of wine serial numbers for a vendor to readily check if a bottle is stolen, said Maureen Downey, a wine-fraud expert from San Francisco. In addition, stolen fine wine often is traded on the black market, including to buyers overseas, said Chuck Hanson, a wine buyer for Hi-Time Cellar, a wholesale wine retailer in Costa Mesa, Calif. Mr. Hanson said whoever committed the crime likely planned it carefully, and may sell it directly to a collector or a small store that may not be concerned about where the bottles come from. "If the guy is fairly smart, no way you will track him down," Mr. Hanson said. "They know they can't sell that wine, except to someone they know." A nearby restaurant, Redd, suffered a similar burglary last winter, losing 24 bottles of high-price wines. No wine has been recovered or arrests made in that theft. Industry observers said restaurant break-ins for wine are relatively rare, with more wine thefts taking place at storage warehouses. "It is a wake-up call for other retailers and restaurateurs who are sitting on a gold mine of hundreds of thousands of dollars of wine to upgrade their security," said Jon Fredrikson, a wine-industry consultant in Woodside, Calif.

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The French Laundry, owned by celebrated chef Thomas Keller, has been awarded a coveted three stars from the Michelin restaurant guide each year since 2007. Known for a French menu that changes daily and features vegetables from its own garden, the restaurant sees its tables booked months in advance. Mr. Keller declined to comment beyond a statement on Dec. 29, when he made the theft public. "We are confident that if and when any of the stolen bottles appear in public, they will immediately raise questions and red flags among the wine knowledgeable," Mr. Keller said. The restaurant is insured for the loss, a spokeswoman said. Capt. Pike said the theft appeared to be committed by someone with a great deal of knowledge about quality wines. "We are looking at any number of possibilities, including potentially an employee," he said. He said that some of the 104 workers at the establishment are among those being questioned. Yountville, meanwhile, is still coming to terms with this latest crime. "It is a violation of our safe place," said John Dunbar, mayor of the town of about 3,000 people, whose restaurants and tasting rooms are a big tourist draw in the famed Napa Valley. Walking by the closed restaurant early in the new year, Abby Zeiser, a visitor from Chicago, articulated a widespread anger. "It's a really stupid crime to commit," said Ms. Zeiser, 30. "It's unfair to the people who built up this business." Other local businesses said the theft has made them more vigilant. At the Pacific Blues Café, assistant manager Nikko Steen said his business began storing its fine wine in a locked cellar and stepping up other precautions after a case was stolen there a year ago. The magnitude of the French Laundry theft "is an eye-opener," Mr. Steen said. "We are on more alert now." There was relief, at least, that no one was hurt in the incident. "It's only wine," said Bob Hurley, chef-owner of Hurley's, another upscale eatery here. "It's not the end of the world." ------

Report: Restaurants end 2014 on a high note Same-store sales rise 2.5 percent during fourth quarter Source: NRN Jan 8, 2015

This exclusive series to Nation's Restaurant News provides insight into the sales and traffic data from clients subscribing to Black Box Intelligence, a financial performance benchmarking company. The views expressed here do not necessarily reflect those of Nation's Restaurant News.

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The year ended on a high note for restaurant chains, as December 2014 recorded the best same-store sales in the past three years, according to TDn2K's Black Box Intelligence, through its Restaurant Industry Snapshot based on weekly sales from over 20,000 restaurant units representing over 45 billion dollars in annual revenue. The fourth quarter registered the best same-store sales results reported in six years of Black Box Intelligence tracking. These latest results contributed to the aggregate growth of 0.8 percent for 2014, a vast improvement over the 0.1 percent decline posted in 2013 by the industry. "The relatively strong performance experienced during 2014 was somewhat tempered by the weather-induced drop in sales during the first quarter of the year, which was the worst quarter for the industry since [the second quarter of] 2010. Excluding this first quarter, same-store sales grew at an average 1.3 percent during the rest of the year, reflecting the current upswing in consumer optimism and the resurgence in the strength of some key economic indicators," said Victor Fernandez, executive director of insight and knowledge at TDn2K. Sales & Sentiment Tracker Same-store sales grew 3.1 percent during December, an improvement of 1.6 percent compared with November's growth rate. This was the best month for the industry since January 2012, and the sixth consecutive month with positive growth, a first for the industry in more than three years. Source: People Report, Human Capital Intelligence, November 2014 release "Further evidence of the strength of the industry during the year is found in the fact that nine of the 10 months since March posted positive same-store sales growth," Fernandez said. Fourth-quarter same-store sales grew 2.5 percent, an increase of 1.1 percent compared with the growth experienced during the third quarter. The last time the industry experienced three consecutive quarters of positive same-store sales was in the period ending in the third quarter of 2012. "Performance during Q1 of 2015 is expected to be positive based on current economic and consumer trends, and the fact that sales were so weak during the first quarter of last year. However, as was the case in 2014, the winter weather could play an important part reversing this trend," Fernandez said. Another encouraging sign for the industry was in same-store traffic growth at the end of the year. Traffic grew 0.6 percent during December, the best month for the industry since February 2012. For the first time in more than three years, the industry did not experience a decline in guest counts. Same-store traffic growth was 0.0 percent during the fourth

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quarter, a 1.0-percent improvement from the growth reported for third quarter, and the second-best quarter in six years of Black Box Intelligence reporting. The increases in same-store traffic mirror the jumps in same-store sales, meaning that it was a true improvement in sales fueled by attracting more guests into restaurants, and not just the effect of rising prices. The improvement in sales has been widespread across the country, with all 11 regions posting positive same-store sales during the fourth quarter, which has not happened in any other quarter over the last three years. This trend continues at the individual market level where 167, or 87 percent, of the 192 DMAs tracked by Black Box Intelligence reported positive same-store sales during December. Using a set of three key performance attributes (food, service and intent to return) Black Box found that the vast majority of online mentions are based on food items (88 percent of all mentions), while only 8 percent of the mentions are related to service, and 4 percent cover intent to return to the restaurant brand mentioned. Not only is food the attribute that was most commonly mentioned, but is also the one that generates the greatest percentage of positive comments versus negative or neutral (31 percent of comments mentioning food are positive). In terms of change in the three attributes month over month, restaurants improved in food and intent to return, but dropped in service positive mentions. The industry segment that gets the highest percentage of online positive food-based comments is upscale casual/fine dining. Mentions about service generated 30 percent positive comments, with casual dining leading the other segments. Intent to return was 25 percent positive with upscale/fine dining the leader in this important attribute. Regarding the restaurant workforce, the industry keeps creating new jobs at an accelerated pace. Those brands tracked by People Report posted a 4.1-percent year-over-year growth rate in number of restaurant jobs during November, a slight slowdown from the 4.3-percent growth reported for October. This small drop notwithstanding, the industry has been growing at a pace of over 3.0 percent year-over-year for more than a year, and reflects the expansion through unit growth strategy seen recently, especially in those rapid growth segments such as fast casual. Adding to the challenge of recruiting all of these new employees, the industry continues to face rising turnover levels for both restaurant managers and hourly employees. Median turnover for hourly employees has maintained levels above 100 percent in several industry segments, clearly a signal that the post-recession lull in workforce pressure is over. Expectations for the first half of 2015 persist for continued job growth, new unit openings and increasing turnover levels in restaurants, as well as rising labor costs as a result of minimum wage adjustments and implementation of new health care plans as defined by the Affordable Care Act.

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Wallace B. Doolin, chairman of TDn2K said: "It was a very encouraging finish to a year that began terribly. Many of the best in class operators made adjustments to prepare to reap the benefits of a much anticipated better environment for revenue growth we hope we face in 2015. Clearly the consumer is reacting with more confidence based on a number of factors not the least of which is fuel cost impact on disposable income. We are optimistic that those best in class operators will benefit in 2015." ------

Report: December restaurant sales reach 8-year high Low gas prices, rising employment result in robust month Source: NRN Jonathan Maze Jan 9, 2015

Restaurants posted their best month in eight years in December, as low gas prices, rising employment and weak comparisons resulted in a robust period for both traffic and sales, according to the latest NRN-MillerPulse survey. According to the survey, same-store sales rose 4.6 percent during the month, giving operators an upbeat outlook heading into 2015. "It was a good month," said Larry Miller, cofounder of the index. "Better than what people thought it was going to be. And everybody was ready for a good month." Improvement during the month was felt across sectors, with both casual-dining chains and quick-service restaurants reporting strong same-store sales growth, of 4.4 percent and 4.6 percent, respectively. The improvement came not just on price, but on new customers. Traffic rose 1.9 percent during the month, according to the survey, the best traffic number since March 2012. Quick-service traffic rose 1.3 percent, while traffic increased 2.2 percent for casual dining. December was expected to be a good month for restaurants in part because comparisons are easy - restaurant sales were flat in December 2013, which was the weakest it has been since then. But comparisons weren't the only reason for the positive results. Miller said two-year trends improved in December. Had the comparisons been the primary reason for the improvement, those trends would have been stable, he said.

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Restaurant sales improved steadily as the year went on. In the first half of the year, Miller said, restaurants' average same-store sales growth was 1.4 percent. That improved to 2.8 percent in the second half of the year. Sales also recovered remarkably from a surprisingly weak month in November, which Miller called an "aberration." Sales improved 1.5 percent in November, but the December number beat that by 340 basis points. Two big reasons for the sales improvement are gas prices and employment. Gas prices have been falling to levels unseen since the recession. According to AAA, gas prices have fallen to $2.17 a gallon, the lowest rate since 2009. Gas prices have fallen for a record 102 straight days, and Americans saved $14 billion in gas prices in 2014. At $2.17, gas prices are more than $1 below their level of a year ago. A person who uses 60 gallons of gas a month spends $68.34 a month less in gas than a year ago. That's about the price a family of four might spend for a night out at a casual-dining restaurant. The other reason for optimism is employment. U.S. employers added 252,000 jobs in December, and the unemployment rate fell to 5.6 percent. Overall, the economy added 2.95 million jobs in 2014 - the largest number of jobs added in a single year since 1999. People are working, which gives them less time to make food and provides them an income to spend on eating out. They also have more money in their pockets because they're not spending as much on gas - good reasons for restaurants to be optimistic in 2015. "Gas prices have probably helped," Miller said. "(Stock) markets are near all-time highs. The job markets continue to strengthen. All of that is good." Operators forecast a same-store sales gain of 2.6 percent in 2015. Quick-service operators expect 2.8-percent growth, while casual-dining operators say sales will grow 2 percent. Miller says that it's an "achievable target," but it's ahead of his own forecast of 2-percent same-store sales growth for the full year. ------

Ruby Tuesday narrows loss in 2Q Same-store sales at company-owned units slip Source: NRN Ron Ruggless Jan 8, 2015

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Ruby Tuesday Inc. narrowed its loss in the second quarter ended Dec. 2, despite a dip in same-store sales comparisons, the company reported Thursday. The Maryville, Tenn.-based casual-dining operator reported a loss of $9.3 million, or 15 cents per share, from $34.4 million, or 57 cents per share, in the same period a year ago. Revenue fell 4.9 percent, to $262.7 million, from $276.2 million in the prior year. The company said the revenue decrease reflected the closure of 42 restaurants over the prior year and a drop in same-store sales during the quarter. Second-quarter same-store sales declined 1 percent at company-owned restaurants, Ruby Tuesday said. Same-restaurant guest counts at company-owned units fell 1.3 percent from the same period a year ago. "We believe one of the primary drivers of our softer results in the current quarter was the impact of lapping last year's successful menu and value launch," said J.J. Buettgen, Ruby Tuesday's chairman, president and CEO, in a statement. "We also lowered our marketing spend from prior year as we continued our efforts to make our marketing plans more cost effective." "While our brand transformation is a journey, and near-term results may fluctuate, we remain confident in our strategy," Buettgen added. Ruby Tuesday owns and franchises 744 Ruby Tuesday restaurants in 44 states, 13 foreign countries and Guam, and 28 Lime Fresh restaurants in six states and the District of Columbia. As of Dec. 28, the company owned and operated 663 Ruby Tuesday units and 20 Lime Fresh restaurants. ------

House passes bill to change full-time definition Source: NRA January 8, 2015

Just two days into its new session, the House of Representatives passed bipartisan legislation to change the health care law's definition of "full time" from 30 hours to 40 hours a week. It's the third time in less than a year that the Save American Workers Act, co-sponsored by Rep. Todd Young (R-Ind.) and Dan Lipinski (D-Ill.) has passed the House. Now, the focus shifts to the Senate, where the bipartisan Forty Hours is Full Time Act was introduced Tuesday by Sens. Susan Collins (R-Maine), Joe Donnelly (D-Ind.), LIsa Murkowski (R-Alaska), and Joe Manchin (D-W.Va.)..

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Changing the health care law's full-time definition has been a leading advocacy priority for the National Restaurant Association since the law was passed in 2010. The NRA is concerned a 30-hour definition of full-time would lead to more rigid scheduling practices in the industry at the expense of the flexibility that attracts millions of employees to work in the industry. Under the health care law, businesses with 100 or more full-time-equivalent employees-generally defined as those who average at least 30 hours per week-are required to offer health care benefits to those employees and their dependents or face penalties in 2015. The requirement will expand next year to include businesses with 50 to 99 full-time-equivalent employees. "We have long supported this bipartisan effort to set the definition of full-time under the ACA to 40-hours per week, reflecting more traditional workforce patterns - an issue critical to our industry," said NRA CEO Dawn Sweeney. "Now that the House has done its part, we thank Sens. Collins and Donnelly for introducing the 40 Hours is Full Time Act and urge the Senate to come together and move this critical legislation forward for the good of restaurants and the business community at large." Sweeney and NRA Chairman Jack Crawford, along with NRA advocacy staff, met with several members of the House and Senate in the days leading up to the House vote to build support for the legislation. Crawford spoke at a press conference alongside Collins and Donnelly in support of the Senate bill. As a leader of the More Time for Full Time initiative, the NRA joined more than 300 other organizations in sending letters to the House and Senate in support of changing the full time definition. Young cited the letter during debate on the bill. Passing the bill in the Senate is expected to be more challenging, as 60 votes are required to bring it to a vote. The NRA and More Time for Full Time initiative urge restaurateurs to write to their senators and ask them to support the bill. Write to your senators today. The NRA also asks restaurant operators to share their stories of how the health care law's full-time definition is affecting their business on the More Time for Full Time initiative's Facebook page. ------

20 states join U.S. antitrust probe of Family Dollar merger Source: Reuters By Diane Bartz January 9, 2015

Some 20 state attorneys general have joined the federal antitrust investigation of competing bids by Dollar General Corp and Dollar Tree Inc to buy Family Dollar Stores Inc, a development that potentially complicates the companies' efforts to win U.S. approval for a deal.

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The attorneys general concern focuses on the likelihood that the loss of one of the chains would lead to higher prices for discount store customers, many of whom are poor, said two sources who spoke privately because they were not authorized to speak to reporters. Family Dollar had previously disclosed that state attorneys general were involved in the federal investigation but gave no details. The 20 states looking at this deal are similar in number to those looking at Comcast Corp's plan to buy Time Warner Cable Inc and Sysco Corp's bid for US Foods Inc, both of them high-profile deals. Florida is a member of the multi-state group, which joined the Federal Trade Commission to determine if the deals were legal under antitrust law, according to Whitney Ray, spokesman for Attorney General Pam Bondi. Vermont had also joined, said Jill Abrams, an assistant attorney general in the state. Iowa is also in the group, according to a source who was not authorized to speak to reporters. Indiana is looking into the mergers, but a spokesperson declined to say if it had formally joined the multi-state group of attorneys general. The presence of the state attorneys general gives the FTC additional lawyers to look at the case, much-needed knowledge of how the merging companies function in the state and how the deal would affect the state's consumers, said Allen Grunes, an antitrust attorney with the Konkurrenz Group in Washington, DC. "There are times where federal government wants to do one remedy and you have a state or two who believe that there should be more done in their state. They at times will negotiate additional divestitures," said Grunes. Dollar Tree and Family Dollar declined comment for this story. Dollar General said only that it remained committed to the transaction and would continue to work with the FTC. Family Dollar, which has 8,100 discount stores in 46 states, has been targeted for a takeover by both Dollar Tree, which has 5,282 stores in 48 states, and by the big dog in discount retailing, Dollar General, which has 11,000 stores in 40 states. Family Dollar agreed to be bought by smaller rival Dollar Tree for $8.50 billion in cash and stock and rejected a hostile, $9.1 billion offer from Dollar General because of antitrust concerns.

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In December, Family Dollar shareholders voted by a wide margin to put off a vote approving the Dollar Tree offer, indicating interest in the higher offer despite its risk. ------

Dollar store M&A: breaking the buck Family Dollar deal shows cash is not always king Source: FT January 11th

Cash is king; top dollar wins. These are the hard rules of commerce. The US discount retailer Dollar General may soon learn that they have painful exceptions. Last summer its rival Family Dollar announced a sale to another discounter, Dollar Tree (creative names are not necessary in the discount retail sector). Dollar General was shocked, and argued that it did not get a fair shot at its own deal with Family Dollar. However, better late than never, Dollar General showed up with an $80 per share cash offer in September. At least financially it exceeded Dollar Tree's initial $74.50 deal in cash and shares. But instead of what might have been a clear victory for Dollar General, a deciding shareholder vote on the Dollar Tree deal awaits on January 22. The highest price will not necessarily be the winner. Family Dollar and Dollar Tree have kept their deal intact because Family Dollar does not believe a tie-up with Dollar General would survive antitrust scrutiny - regulators would worry about pricing power of retailers serving those of limited means. Dollar General has offered some comfort by saying it is willing to divest 1,500 stores if asked, and pay a $500m break-up fee. Yet Dollar General has still not offered the most compelling form of risk mitigation: a so-called "hell or high water" provision in the merger contract. That would bind it to close a deal whatever the size of divestitures regulators demand. Without such a feature, Dollar General effectively has a $500m option to decide later if it wishes to complete the transaction. Family Dollar shares now trade above $78. Dollar Tree's cash and stock offer is worth just $77. So the market is betting that one or both suitors will sweeten its bid to claim decisive victory. A more interesting question than simple price, however, is whether the sweetener will come in the form of more shares, more cash, or better deal terms. ------

Tesco is worst retailer to work with say wine and spirits suppliers in Harpers poll

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Source: Harpers Gemma McKenna 09 Jan 2015

Tesco has been named and shamed as the worst retailer to work with in a survey of over 200 wine and spirits suppliers carried out by Harpers.co.uk. Tesco's wine and spirits suppliers rated it the worst retailer to do business with in a Harpers poll. Suppliers made a resounding call for fundamental change to how retailers interact with suppliers in the Harpers.co.uk survey, with 95% believing it's necessary. Yesterday the embattled grocer announced a radical turnaround plan including store closures, range cutbacks and asset sales, in a bid to claw its way back into profit. But as our survey shows, Tesco must also look to how it works with suppliers following their damning verdict on how it conducts business. Nearly a third (32%) of suppliers in the Harpers survey labelled Tesco the worst retailer to deal with, putting it way ahead of its nearest rival for the unflattering title - wine specialists Majestic (as selected by 19% of suppliers) was second and Sainsbury's third (12%). Tesco is also the most demanding grocery retailer when it comes to seeking financial support from suppliers, with 57% naming the supermarket as the most demanding when it comes to asking for additional fees or payments. Sainsbury's was the second most insistent, said 48% of suppliers, Majestic third (38%), then Asda (32%) and the Co-op (27%). The discounters, by comparison, performed far better with only 5% of suppliers claiming Lidl and 3% Aldi were the most financially demanding. The survey exposes quite how unhappy suppliers are with how they are being treated by the major retailers with a staggering 95% calling for immediate and lasting reforms. But only four in 10 of those that took part in the survey were in any way confident that this would happen. There was better news for Tesco in the survey when suppliers praised it for offering the best support to retailers, outscoring the rest of the sector with 22% of the vote. This may reflect the strength of its consumer franchise and how it allows its producers and suppliers to interact directly with its customers. 2014 saw more than 15,000 consumers, for example, attend Tesco's Wine Fairs around the country.

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Sainsbury's came out top as the best retailer to work with (19% of suppliers), followed by Marks & Spencer and Majestic (14% each), and Waitrose (12%). As part of the survey, suppliers told Harpers it is getting harder to deal with retailers because of fast-changing demands, inexperienced buyers and confusing strategies. One said: "Each retailer can set their own price/promotional mechanism and they have become increasingly complex. Annual joint business plans have now become the norm but buyers usually come back later in the year asking for more promo budgets making it difficult to plan/budget effectively." Another added: "The buyers are not specialists in their field and are moved on to another category before any meaningful traction can be gained. The strategy from the top does not seem to cascade down. There are no guarantees or commitments and retailers will do anything to ensure they are not in any way liable for anything that may go wrong". Despite all that, three quarters of suppliers were confident that 2015 represented a better opportunity for business. One added: "The only reason I say there is a greater opportunity in 2015 is because I imagine more and more suppliers will have to pull out of dealing with the multiples, or won't do so and will go bust. We are careful with whom we work, so we are stable and could see greater opportunities for ourselves. But it is still a very negative environment and any new opportunities we do win will almost inevitably involve some risk to our business." Another supplier ended with a stark warning for retailers going forward. "It will be interesting to see what finally unravels out of TescoGate. Certainly other multiples need now to be very careful with their 'business' practices from now on. We have seen some idiotic and arrogant examples in 2014." Harpers supplier poll was carried out between December 22, 2014 and January 6, 2015. ------

Tesco shares fall after rating downgraded to junk status Source: FT Andrew Bolger January 10, 2015

Shares in Tesco fell 2.7 per cent on Friday after the supermarket group had its credit rating cut below investment grade to "junk" status. Sven Reinke, senior analyst with Moody's, said the radical restructuring at Tesco announced by the retailer on Thursday "would take time to implement" and warned investors that "structural changes in the UK grocery market will continue to challenge the company's operating performance".

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Moody's issued the downgrade late on Thursday, just hours after Dave Lewis, the chief executive who was parachuted into Tesco in July after his predecessor was ousted, set out a blueprint for recovery aimed at reducing overhead costs by 30 per cent and saving £250m. The measures include closing the head office and 43 unprofitable stores, slashing thousands of jobs and scrapping this year's dividend. The rating agency said the increasingly competitive environment among UK grocers would foster continued pricing pressures that could result in a permanent reduction in average operating margins in the industry to the 3 to 4 per cent range. Tesco's UK operations suffered persistent sales declines and its trading margin for the six months to August fell to 2.3 per cent, from 5.2 per cent a year earlier. Moody's said the rating could be upgraded if Tesco's operational strategy and intended capital measures led to a sustainable recovery in the UK such that like-for-like sales increased and its trading margin improved to at least 3 per cent. But the agency said it would consider downgrading Tesco's rating if its strategy failed to stabilise the operating performance or to generate asset disposal proceeds as intended. The restructuring follows a torrid six months for Tesco, which admitted in September that its half-year profit had been overstated by £250m and suspended several senior managers. A month later, it said the overstatement was £263m and parted company with its chairman, triggering a probe by the Serious Fraud Office. Mr Reinke warned the rating would come under downgrade pressure "if the final outcome of the legal investigations by the SFO and Financial Reporting Council into the company's accounting practices has material negative implications for the company's corporate governance and financial profile or if Tesco's sound liquidity were to weaken". Moody's said Tesco had a sound liquidity profile that offered important financial flexibility to manage working capital needs and short-term debt maturities. The company had access to £5bn of committed, currently undrawn bank facilities and a high balance of cash, cash equivalents and short-term financial investments totalling £4.9bn at the end its first half in August. Mr Reinke said: "Liquidity is strong - supported by a high cash balance and large available credit lines. Tesco said there was no need for fire sales - which is consistent with the current Ba1 rating [subinvestment grade] level." Tesco said it would strengthen its balance sheet by cancelling the final dividend for this financial year and cutting capital expenditure by £1bn in its next financial year. It has also sold Blinkbox, the film streaming service, and Tesco Broadband, and appointed Goldman Sachs to explore options for Dunnhumby, the data analysis group that runs its Clubcard scheme.

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More video Moody's said it was cautious of execution risk with regard to the intended money-raising from assets, as well as the risk of shareholder litigation and its potential financial impact that could delay the company's efforts to strengthen its balance sheet. Even after a successful execution of intended assets sales, the agency said the company's leverage was likely to remain at levels more consistent with a subinvestment grade rating over the intermediate term. Moody's is the first of the three leading credit rating agencies to cut Tesco's rating below investment grade. Standard & Poor's warned in December that it might also downgrade Tesco to "junk" status. Royal Bank of Scotland analysts said the current outstanding value of Tesco's bonds in euros and sterling stood at about £12.1bn, with the current high yield market in euros at £242bn and the BB-rated section of that market at about £158bn. The analysts said the risk of a downgrade had been known for some time, and the high yield market had absorbed fairly well other recent large "fallen angels" - companies that drop from investment grade - such as Telecom Italia, which had a similar amount of euro debt. ------

Kansas: Grocery store industry begins new push to allow strong beer, wine, liquor sales Source: LJ World By Chad Lawhorn January 10, 2015

There's a new plan and a new face working to convince Kansas lawmakers to allow grocery stores across the state to sell "strong beer," wine and liquor. Native Kansan David Dillon, the retired CEO and chairman of grocery giant The Kroger Co., has become the leader of the Uncork Kansas coalition, which is seeking legislation to end the longtime Kansas law that limits liquor sales only to licensed liquor stores. "Consumers are going to win on convenience, variety and price because there is more competition," Dillon said. Previous attempts to change the law in Kansas have failed. Dillon said Uncork Kansas is proposing a new plan this year. Unlike past efforts, convenience stores would not be allowed to sell liquor and wine under the proposal. But convenience stores would be able to sell "strong beer." Currently, only liquor stores are allowed to sell strong beer, while

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convenience stores and grocery stores are limited to beer that has an alcohol content of 3.2 percent or less. Grocery stores would be allowed to sell the trio of strong beer, wine and liquor. But grocery stores would be required to purchase a liquor retail license from an existing liquor store. The coalition also is proposing that the number of liquor store licenses forever be capped at its current level of 752 licenses. Dillon said that would make existing licenses much more valuable, and would serve as a way of compensating existing liquor store owners who want to exit the industry. "If you don't want to sell, I can't make you sell," Dillon said. "I would have to get the price high enough to make you want to sell your license." Opponents of the law change, however, note that the convenience stores would not need to buy an existing liquor license to begin selling strong beer. That would potentially add thousands of new competitors to liquor stores, many of which rely heavily on beer sales. "We have studies showing that 40 to 50 percent of liquor stores won't remain profitable," Amy Campbell, executive director of the Kansas Association of Beverage Retailers, said of a widespread expansion of strong beer. She said the law change would put many small businesses out of business, and the current system is doing a good job of keeping liquor out of the hands of minors. "I would suggest it is a solution in search of a problem," Campbell said. Dillon said customers have been asking for the change for years. Many have lived in states where wine and liquor sales in grocery stores are common. He said with the increase in craft beers, many of which don't produce 3.2 percent beer, the need for grocery stores to sell strong beer has increased. Plus, Dillon said he thinks the new law could help shore up the financial health of some grocery stores in rural Kansas communities. "The value of a grocery store in a small community is really, really important," Dillon said. "If you can add wine and regular beer to those stores' mix, it increases their viability." The Uncork Kansas effort marks a return to the state for Dillon, who is the great-grandson of the founder of the Dillons grocery store brand. Dillon retired as Kroger's chairman last month, and has moved with his family back to the Kansas City metro area, he said. Dillon is a graduate of KU's School of Business, and he said he hopes to be more active in KU efforts in future years.

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"I know I'm going to get to use my own Kansas basketball tickets instead of my kids using all of them," Dillon said. "I am looking forward to becoming involved in more Kansas issues." ------

Kentucky: KEG STATEMENT IN RESPONSE TO HB168 FILED Source: Boxcar PR January 9, 2015

We would like to thank Speaker Stumbo for his sponsorship of HB168. We appreciate his leadership in making this issue a priority for the 2015 Session. With local jobs on the line, independent beer distributors, craft brewers, and retailers agree that our legislature should have a public debate concerning the threat of massive monopolistic brewers owning or having financial interest in distribution companies. Kentucky's beer distributors provide over 1,520 well-paying jobs in the Commonwealth. However, those jobs are at risk with the entrance of large brewers purchasing independent distributors and in turn distributing solely their own portfolio of products. Since 2010, seven states including Ohio and Illinois have passed legislation that clarifies a prohibition on brewery-owned distributorships. In fact, Kentucky law already specifically prohibits any supplier of distilled spirits and wine from owning any ownership interest in a distributor's license. It is time for Kentucky to do the same in order to protect local jobs and families. ------

Virginia: Virginia alcohol price hikes may generate $9.5m Source: The Spirits Business by Melita Kiely 9th January, 2015

Alcohol price increases in Virginia that came into effect on 1 January could bring in an extra US$9.5 million by 2016, according to the Alcoholic Beverage Control (ABC). On 16 December 2014, taxes on miniature bottles of spirits increased from 49% to 69% and the cost of case handling - encompassing the distribution from the supplier to the consumer - doubled from US$1 to US$2. In addition, on 1 January the ABC also implemented an initiative titled "rounding to the dime", in which a bottle of alcohol is rounded up to the nearest zero. The Virginia department of the ABC said the hikes were necessary to ensure the department could continue to operate smoothly.

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"Back in October, [governor McAuliffe] announced a mark-up on distilled spirits as part of his plan to balance the current financial budget," Kathleen Shaw, a representative for the department, told news site You4State. "So the initiatives went to help cover some of the budget deficit here in Virginia, and we also hope to be able to modernise ABC's aging infrastructure." With the new regulations, consumers are expected to pay approximately 23-30 cents more for an "average-priced" bottle of around US$15. This is predicted to generate US$9.5m for the state in the 2016 fiscal year, which currently has a budget deficit of US$882 billion. "This money goes to support state services," said Shaw. "Everything from building roads, to enhancing education to funding substance abuse prevention and treatment."