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4-20-2015 ABL Update from RBC

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Bankers swoop down at craft beer's biggest event

Source: MarketWatch
By Jason Notte
Apr 17, 2015

In the middle of the Craft Brewers Conference in Portland, Ore., this week, one phrase summed up the tenor of the event best: "The Passion Has Been Professionalized."

Chris Furnari of beer-industry publication Brewbound coined that phrase during a panel discussion featuring the founders of Goose Island, Elysian and 10 Barrel, all breweries that have been purchased by Anheuser-Busch InBev BUD, -0.71% in the past five years. At the beginning of that span, Furnari noted that the Craft Brewers Conference was a far smaller event in which familiar faces from less than 2,000 breweries nationwide passed bottles of beer around the event's opening reception. This past week, it had expanded to a nearly week-long convention for which the opening reception was held in a minor-league hockey arena filled with 11,000 attendees elbowing their way toward fake food carts, cereal-covered doughnuts and beer that was more available than water.

The Brewers Association craft beer industry group painted the event as a gathering of its community, and educational and networking opportunity for its community members. However, it also used the event to point out that craft beer now encompasses 3,418 permitted breweries, another 2,000 breweries in the planning stages, $19.7 billion out of roughly $110 billion in U.S. beer sales and 115,469 jobs. That's not a tiny community. That's a small city that's become a popular destination.

While there were plenty of seminars and discussions ranging from how to reinvigorate a flagship brand to how to engage with your surrounding community, big money was just as prevalent in the convention center, brewpubs and taprooms as brewery T-shirts were. Four of the brewers that reached out to us and arranged meetings during the conference - MillerCoors , Founders, the Craft Brew Alliance and Diageo DEO, -0.79% - fall outside the Brewers Association's definition of a craft brewer.

We exchanged information with folks from Wells Fargo WFC, -1.39% and Bank of America BAC, -1.46% who specialize in funding brewers and securing loans for start-up breweries. We also heard from a brewery founder from Wisconsin who's been in the industry for more than 20 years and was afraid that private equity firms and buyout plans from Oskar Blues, Enjoy Beer and others would drive down prices and thin the craft ranks. He also noted that millions of dollars in buyout money is incredibly tempting, especially when you have to keep scrambling to hold drinkers' attention and the next generation - in his case, his daughters - had no interest in beer or taking over the brewery.

From Furnari's chat with A-B to our own conversation with other brewers and companies, we saw outside investors' willingness to jump into craft beer in whatever capacity they could. Representatives from Mahou San Miguel, the Spanish brewer that just purchased a 30% stake in Founders, merrily espoused the virtues of their investment partner in Spanish. Widmer Brothers and the Craft Brew Alliance, which sold a 32.2% stake to a pre-InBev A-B in 2007, wondered aloud whether the goal was to make beer better or to take down big breweries. MillerCoors discussed the merits of building craft brands from the ground up, while hanging building-sized signs for Blue Moon beers and Smith and Forge cider around Portland.

The Brewers Association, meanwhile, announced that it had hired a lobbyist to represent its interests in Washington, D.C. Despite this, the BA couldn't prevent its partners at restaurant chains including Buffalo Wild Wings BWLD, -2.07% and Yard House (owned by Darden DRI, -2.24% ) from being forced by the Food and Drug Administration to label the calorie content of the beers they serve. Suddenly, even small, independent, traditional brewers have big beer problems.

The big breweries, money, deals and controversies - including Elysian co-founder Dick Cantwell stepping away from both Elysian and the A-B panel discussion - still haven't eclipsed the fact that craft beer thrives primarily in niches. Craft Brew Alliance Chief Executive Andy Thomas noted that of the roughly 3,000 U.S. breweries in operation, about 90% produce 1,000 barrels or less (compared to the nearly 800,000 produced by a craft brewer like New Belgium).

We met a group of Jacksonville, Fla., brewers fighting for the right to sell beer in gallon growler jugs that were banned in their home state, but are ubiquitous in Oregon. We met a brewer from Sydney who'd taken his brewing experience from Baltimore to Australia and was producing small batches of beer that fetch twice as much per keg overseas as the highest-end import and craft beers get here. Lastly, we spoke to a couple from Washington state's Olympic Peninsula who was in town to buy equipment for their recently founded brewery.

But at the end of each CBC day, it was still about beer. Craft beer has bigger numbers and deeper pockets swirling around its culture, but the love of what flows from the taps and the belief that those IPAs, stouts, sours and other beers can make one's working life just a bit less dreary keeps craft afloat without drowning it in business cards and deals. The passion is still there, even if it's dressed in more professional attire.

Keeping an Eye on CPI

Source: CITI
17 April 2015

The CPI for Alcoholic Beverages (Off-Premise) increased 0.4% this month, in line with last month.

The CPI for Alcoholic Beverages (On-Premise) increased 2.4% this month, which was slightly below last month's 2.5% increase.

The CPI for Beer (Off-Premise) decreased 0.1% this month, which in line with last month.

The CPI for Spirits (Off-Premise) was up 1.0% this month, which was in line with last month.

The CPI for Wine (Off-Premise) was up 0.8% this month, which was in line with last month.

The Distillers' Digest (Europe Nielsen - March): Weaker month in Germany (Campari) and France (Pernod)

Source: ExaneBNP
April 17th

We have just received the latest AC Nielsen data for Western Europe spirits, covering the 4 weeks ending 28/03/15. Please see the attached file for related data and dynamic charts. Our key takeaways are as follows:

Western Europe Spirits markets
Slightly lower growth in March across Western European spirits market, with sales growth of +2.3% (+3.0% in the quarter). The deceleration came from both Germany (Campari weak) and France (Pernod weak this month) and offset sequential improvement in Italy and Great-Britain. March was not a good month for companies who have yet to report (Pernod Ricard and Campari) but an earlier Easter could perhaps help shipments.

Pernod Ricard: A rather weak month in France, strong growth elsewhere
A weaker month for Pernod Ricard in Western Europe. Sales were up 0.4% in March, bringing Q1 sales growth to +3.2% (vs. +4.7% in Q4). Volumes were up 1.6% (+3.8% in Q1 vs. +4.0% in Q4) and price per unit down 1.2% (-0.6% in Q1 vs. +0.7% in Q4). Pernod Ricard maintained its value share flat in the quarter. In France, sales were down 3.1% (flat in Q1 vs. +0.4% in Q4) in a market down 1% (+0.8% in Q115). This was driven by Pernod's whiskies portfolio. In the UK, sales growth was still strong but decelerated to +6.4% (+13.3% in Q1 vs. +14.8% in Q4). Italy and Germany saw double-digit sales growth.

Diageo: (already reported -1.3% organic sales growth in cal. Q1 yesterday) A good month as UK rebounded
A good month for Diageo. Sales were up +2.5% in March, meaning Q1 was flat (vs. +1.3% in Q4), with volumes and pricing flat in the quarter. This performance was driven by strong sales growth in the UK this month (+7.5%, Q115: +0.6%). Note that Diageo reported an organic sales decline of 1.3% across its Europe division in the quarter yesterday. Diageo lost 30bps of value share in the quarter.

Remy Cointreau: (already reported) Better month but sales still down
An OK month for Remy Cointreau in the off-trade. Sales were down -0.8% in March, bringing Q1 to -4.7% (vs. -7.5% in Q4), with volumes up +0.7% (-4.2% in Q1 vs. -9.0% in Q4) and price per unit -1.5% (-0.5% in Q1 vs. +1.6% in Q4). Note that Remy Cointreau reported quarterly sales on April 15th and mentioned that Western Europe was in decline

Campari: Tough month both in Italy and Germany
A tough month for Campari. Sales were down -7.2% in March, bringing Q1 to +3.4% (vs. -1.3% in Q4), with volumes down -7.6% (+4.0% in Q1 vs. -1.5% in Q4) and price per unit +0.4% (-0.5% in Q1 vs. +0.3% in Q4). The weakness came from Italy where sales declined 4.1% in the month (+0.4% in Q115) and from Germany (sales down 9.6% in March vs. +7.2% in Q115).

Are cans the new bottle for the beer world?

Source: Greenville Online
Tony Kiss
April 19, 2015

Beer has been sold in cans since 1935. But for decades, canned brew meant domestic brands: Budweiser, Miller, Coors and others. When the craft beer revolution began in the U.S. during the 1980s, brewers mostly went with bottles.

Now, that trend is turning around. Hundreds of breweries nationwide are canning their beers. Several South Carolina breweries are going with cans, including in the Upstate. In North Carolina, others are canning, including two big breweries: Oskar Blues in Brevard and Sierra Nevada in Mills River.

Cans have provided a big boost for Greenville's Quest Brewing, the first Upstate brewery to use that package. Quest began canning its Golden Fleece Belgian Pale Ale last April, added other brands and now, about 30 percent of its business comes from cans.

The advantages over bottles are many, Quest founder Don Richardson said.

"Cans are basically like small kegs," he said. They offer protection from light, which can damage beer, and also reduce oxygen in the package. They are easy to recycle, lighter to transport, "and when you are dealing with glass, you have broken glass and that means cuts and other things."

Quest has its Smoking Mirror Porter and Kaldi Imperial Coffee Stout in cans, and the brewery will follow with its Ellida Pale Ale and seasonal selections.

Greenville's Brewery 85 will release 12-ounce beer cans this fall, brewery owner Will McCameron said. The brewery is "in the process of getting our canning machines built for us."

"I would always pick cans over glass," he said. "The main killers of beer are light and oxygen. Light never gets into an aluminum can."

R.J. Rockers of Spartanburg will release its Son of Peach beer in cans this summer, brewery owner Mark Johnsen said. Rockers uses bottles for most of its beers, but "cans are far more sexy than they were in the 1970s," he said.

Greenville's Thomas Creek Brewery has bottled its beer since 1998, the same year that it opened, said spokesman Weston Gaskill. "In 1998, canning a craft beer wasn't even imagined.

"The brewery likes bottles because they "stay colder longer after they come out of the cooler (and) we also believe that translucent amber glass works great to protect beer from light and oxygen." But the brewery is considering canning some of its beer, he said.

The history of cans

The idea of canning beer was first explored in 1908. But it wasn't until 1935 that the first canned beer arrived in stores: Krueger's Beer and Krueger's Ale in Richmond, Virginia, according to the beer can-collecting web site They were an instant hit with consumers, who didn't have to pay a return deposit as they did for bottles.

During World War II, beer cans were shipped to armed forces overseas. The market grew, and today, canned beer is about half the $20 billion market, according to

But craft beer followed a different route, using bottles and a draft product. Slowly, a few breweries began canning, among them Pete's Summer Brew and Yukon Gold from Canada.

In 2002, Dale Katechis began canning his Oskar Blues beers, establishing a trend that many have followed. "Initially, it was a kind of far-fetched idea," he said last year.

But now Oskar Blues is famous for its cans. The company's brewery in Brevard turned out 15 million cans last year, sold in 19 East Coast states. It also operates a canning brewery in Lyons, Colorado, which serves the west. About 70 percent of the company's business is in cans, said Oskar Blues Brevard spokeswoman Anne-Fitten Glenn.

The brewery is hosting its second Burning Can Festival on July 18 at the REEB Ranch in Hendersonville and has invited 450 canning craft breweries to attend, up 80 from last year, she said. Those who have committed so far include New Belgium, Founders, Catawba, Asheville Brewing, Terrapin and Sweetwater (more at Tickets have not yet gone on sale.

Canning on demand

As craft cans have increased in popularity, a new mobile canning service has seen growth. Among those companies is Asheville-based Land of Sky Mobile Canning, which is serving 13 breweries on both Carolinas and some of Virginia. In South Carolina, they have worked with Quest, Holy City and Coast.
Craig Smith of Land of Sky Mobile Canning keeps a close

In less than two years, they have canned 2.6 million cans, said Meg Whitt, who runs the company with her partner Craig Smith. With two canning lines, the company swoops into a brewery by morning, cans and packages beer, and is gone by afternoon.

Their one-day record is 1,500 cases. "Our process is very efficient," she said. "We know a lot about beer, but our business is canning." Mostly, they fill 12-ounce cans, but for Asheville's Burial Beer Co., they will use 16-ounce cans this spring.

So what's the future of craft cans in the Carolinas? "It's hard to predict," she said. "We will be here as long as the market demands it. I never expected it to be this big. Every time I pop on the computer, there's another brewery I never heard of. It's hard to keep up with up with them."

A taste difference?

Some might say they detect a difference in taste in canned craft beer over draft or bottles, but the breweries say it's the same "We have done blindfolded taste tests and the only way you can tell the difference (cans to draft) is the amount of carbonation," said Glenn. "The beer on draft is a little more bubbly."

Today's beer can linings use a substance called Bisphenol A (also known as BPA). Linings prevent any contact between beer and the metal cans.

And there are some still who associate cans with the domestic craft beer brands or believe that cans might impart off tastes. Some drinkers "lament that (cans are) just not as classy as glass," said Brewery 85's McCameron. "In my opinion, there's nothing classier than taking the utmost care of your beers."

Brand Battles: 'Dark 'N Stormy'

Source: Law360
By Bill Donahue
April 17, 2015

In Law360's latest roundup of new actions at the Trademark Trial and Appeal Board, Procter & Gamble and L'Oreal duke it out over whether the French makeup giant is trying to register a generic term, and the trademark-protected "Dark 'N Stormy" cocktail is tested by a "stormy" rival.

Whiskey v. Wine

Are whiskey and rum the same as wine? It might sound like a silly question outside of the trademark world, but it's a crucial consideration in disputes like the one launched this week by giant winemaker Jackson Family Wines Inc.

For the most part, in trademark terms, the answer is yes. They're in the same class of goods - Class 33, for those keeping score at home - and they've been considered closely related by the TTAB and courts. Last month, for instance, a federal judge ruled that consumers would confuse "White Oak" on vodka with a pre-existing brand of White Oak wine.

This week, Jackson Family Wines, the maker of the popular Kendall-Jackson brand, lodged two oppositions against Dumplin Creek Distillery LLC, opposing its efforts to register the names of a "CA Jackson Butcher's Bourbon" and a "CA Jackson Black Mountain Rum."

The key difference with the White Oak case, of course, is that the names are hardly identical. But, as mentioned in this week's filing, Jackson Family Wines claims rights in a so-called "family of marks" for Jackson-linked names, owing to its Jackson Park, Jackson Hills and other similar brands.

Jackson Family Wines is represented by Dickenson Peatman & Fogarty PLC. Dumplin Creek Distillery is represented by Global IP Asset Management PLLC.

Mark 'N Stormy

A margarita doesn't have to made with Patron tequila, and a bloody mary doesn't need to made with Stolichnaya vodka, but, according to Gosling Brothers Ltd., a "Dark 'N Stormy" can only be made with Gosling's Black Seal Bermuda Black Rum.

That's because the name of the cocktail - dark rum, ginger beer, ice and lime, apparently invented after World War I - is a registered trademark of Gosling Brothers, one that the Bermuda-based distiller told The New York Times a few years back it "defends vigorously."

So the company didn't take it lightly when a black rum rival - Proximo Spirits' upstart Kraken Black Spiced Rum, which is made in Trinidad and Tobago - applied for a trademark registration on "Kraken Storm" for use on its own line of ginger beer.

The similar name, registered for an integral ingredient in the cocktail by a company that sells the other integral ingredient in the cocktail, was too much for Gosling Brothers.

"Gosling and others have long promoted the mark 'Dark 'N Stormy' as designating a cocktail made exclusively with Gosling's Black Seal Rum and mixed with ginger beer," the company said, noting that its rights go back "decades."

"Any use of the 'Kraken Storm' mark by [Proximo] is ... likely to cause confusion, cause mistake or to deceive the public," Gosling Brothers said.

That wasn't it for Proximo this week, either: Frequent-filer Monster Energy Co. asked for an extension of time to oppose the company's separate application for "Kraken Beast."

Gosling Brothers is represented by Fross Zelnick Lehrman & Zissu PC. Proximo and Kraken are represented by Abelman Frayne & Schwab. Monster is represented by Knobbe Martens Olson & Bear LLP.

Is Diageo on the Brink of a Brain Drain? (Excerpt)

Source: Just-Drinks
By Olly Wehring
17 April 2015

Another day, another drinks executive stepping down "to explore new opportunities". Usually, this is code for "is leaving to join one of our competitors in a slightly better-paid position". But, with nowhere to go to yet, Andy Fennell's departure from Diageo is a strange one, especially as he has been held up internally as the 'next big thing'.

At the same time as issuing a trading update for the nine months to the end of March yesterday, Diageo confirmed that the president of its Africa operations will quit the company later this year. Fennell, who assumed the position in 2013, is leaving for pastures new, although he doesn't have a new job lined up.

Fennell is held in high esteem at Diageo: Since joining the firm in 1997, he moved up through the ranks on the marketing side, culminating in him becoming chief marketing officer in 2008. In July 2013, he made the move across to commercial, taking hold of the African reins for Diageo.

North Carolina: Deadly shooting prompts crackdown on illegal liquor houses

Source: WRAL
April 17, 2015

A recent deadly shooting at an illegal liquor house in Fayetteville is a reminder, Alcohol Law Enforcement agents say, of the problem of people serving alcohol without a license.

ALE agents say they are working to keep up with the growing number of operations across the state.

According to ALE agent Jason Locklear, liquor houses operate similar to an after-hours night club, and they present additional challenges for law enforcement.

"So you would go to the clubs up on Bragg Boulevard or anywhere in the city, and you show up here at this location after they close at 2:30," Locklear said. "Many of these locations are hangouts for individuals that are engaged in prostitution, drug activity, weapons and stolen guns."

On April 5, Ivery Montreat Elliott, 34, was killed and two other people were injured in a shooting during a party at 357 Dick Street in Fayetteville.

Izaak Eugene Bridges, 40, was arrested and charged with first-degree murder in connection with the shooting. According to authorities, Bridges' son was murdered at a Hope Mills liquor house on Gumberry Court in January.

In 2014, ALE agents searched about 900 liquor houses across North Carolina. So far this year, agents have searched 126.

"What we do not want to do is become a reactionary agency," Locklear said. "We don't want to start reacting. We want to get in front of this and shut the places down before death takes place."

According to authorities, liquor house operators use social media to move parties from house to house in attempt to stay ahead of law enforcement officers.

Since January, 16 people have been injured and four people have died as a result of liquor house shootings in Harnett and Cumberland counties, authorities said.

Connecticut: 2 Arrested, 15 Hospitalized for Likely Alcohol Poisioning at ScHoolboy Q Concert at UConn: Officials

Source: NBC
By Jessie Sawyer
Sunday, Apr 19, 2015

Fifteen people were transported to area hospitals from Gampel Pavillion at the University of Connecticut during a ScHoolboy Q concert Friday night because of mostly alcohol-related issues and two people were arrested at the concert, according to a UConn spokesperson.

A non-student was arrested on charges of possession of alcohol and trespassing and a UConn student faces a disorderly conduct charge, according to UConn spokesperson Stephanie Reitz.

Tolland County dispatch confirmed transporting at least a dozen people from the concert at UConn to the hospital due to likely alcohol poisoning. The call came in about 8 p.m. on Friday. They have all since been medically evaluated and released from the hospital.

The people hospitalized are believed to be UConn students because tickets were only available to students, according to Reitz. She said they were transported due to intoxication "believed to be alcohol" and that they're waiting for more information from the hospitals.

The rap concert was organized by a student group and no alcohol was sold at Gampel Pavillion during the event. People are screened as they enter, so they likely consumed the alcohol before they got in, according to Reitz.

The names of the students arrested haven't been released.

About 4,000 people attended the concert.

New Hampshire: N.H. liquor chief - Powdered alcohol poses health threat

By Elizabeth Dinan
Apr. 19, 2015

A powder that can be mixed with water to make three kinds of cocktails and two types of liquor is expected to be for sale this summer, but won't be found on shelves of New Hampshire liquor stores, said Jim Wilson, director of the state Liquor Commission's Bureau of Enforcement.

The powdered booze, with a brand name Palcohol, comes in a pouch and can make shots of rum or vodka and several types of cocktails, says inventor Mark Phillips on his website. Due to "overwhelming media coverage" Phillips said on his site, he cannot respond to all inquiries because he's "inundated with emails and phone calls" about the powdered booze. In an online video demonstration, Phillips said he's bringing the product to market, in part, for backpackers who want a cocktail after a hike. But Wilson said Phillips' website previously promoted "nefarious" uses for the product, which is why he's opposed to it.

The state liquor chief said that with 10 percent alcohol content, Palcohol is liquor by statute and the Liquor Commission "is not planning to make it available in any state outlets." At the same time, New Hampshire lawmakers are considering a moratorium on the sale of the powdered booze, while Wilson is advocating for an outright ban.

"The manufacturer was throwing out nefarious uses right away," said Wilson, who added they included the ability of Palcohol to be snorted or smuggled into venues.

Phillips has since removed those suggested uses on the Palcohol website and is now promoting Palcohol as great for hiking trips, while explaining that because one package contains one shot of alcohol, it's no more dangerous than a legally-sold nip bottle of liquor. He also dismisses the notion that anyone would want to snort it , saying it would be "very painful, "it hurts" and it would take an hour to snort all the powder in one package, as opposed to drinking a comparable shot of liquor.

Palcohol's creator denies "nefarious" uses of product

"The potential harm for nefarious use outweighs the beneficial use," Wilson countered, while noting Vermont, South Carolina, Alaska and Louisiana have already banned the sale and possession of powdered alcohol.

Wilson said he's met with representatives of the hospitality industry and the nonprofit group New Futures and they've reached consensus that there are public health concerns. One, Wilson said, was previously promoted by Palcohol as the powder being advantageous for people looking to avoid the cost of cocktails in venues by concealing pouches of powdered alcohol in their pockets, mixing it with water inside clubs and stadiums and making cocktails, or shots of rum and vodka, for a fraction of the cost.

Phillips' website shows a package of Palcohol next to a nip of liquor, showing the nip is smaller and calling the claim "unfounded." Wilson said a nip is bulkier and breakable.

The New Hampshire liquor chief said licensed purveyors of alcohol "have a lot of responsibility" when it comes to serving alcohol. Judgments are made about patrons' sobriety and if they're adding their own powdered alcohol to drinks sold legally, he said, "it puts the liquor license in jeopardy."

Wilson said Palcohol was also previously advertised as an alcoholic product that could be sprinkled onto food. He said he has concerns about it being added to drinks and food without people knowing.

Phillips, on his website, demonstrates how quickly he can pour a shot of liquor into a cocktail, versus the pile of Palcohol powder it takes to make a shot, which then has to be stirred and dissolved. The point, he said, is that it's easier and quicker to add a legal nip of liquor to a drink.

It's also "absolutely untrue" that Palcohol will make it easier for minors to gain access to liquor, Phillips argues online, while assuring it would only be sold in licensed establishments to people over age 21.

Wilson said because Palcohol can be ingested in dry form and added to cocktails that already contain alcohol, it could lead to alcohol poisoning. He said he also has concerns about it being used during the commission of other crimes, including sexual assaults.

Wilson said he spoke to state lawmakers two weeks ago about a proposed amendment to Senate Bill 99, which would impose a moratorium on the sale of powered alcohol in New Hampshire. "I testified that we ought to consider banning it now," he said. "Based on what the manufacturer said, there's a lot of potential for nefarious use."

Sarah Sadowski, community engagement director for New Futures, is also opposed to the sale of powdered alcohol. "We'd like a moratorium because it's so new," she said. "I think we should go slow. It's worthy of study."

Sadowski said the way a substance is ingested affects a body's response to it and because of that, she speculates liquid-based alcohol may be safer "because there's something in the stomach to throw up" in the event of alcohol poisoning.

"That's speculative, I want to be clear," she said. "But I think we're in new territory with synthesizing things, like synthetic marijuana. "

Massachusetts officials recently determined their current laws don't permit the sale of powdered alcohol and a long list of states are taking steps to regulate or ban it, Wilson said.

Lawrence Sanborn, division manager of the Maine Bureau of Alcoholic Beverages, did not return several messages seeking his comment over several consecutive days last week.

Maine Rep. Mick Devin, a Democrat who introduced a bill to ban powdered alcohol in Maine, was quoted by The Associated Press last week saying, "We're all trying to get our laws in place before it hits the shelves, and (Phillips) wants to get it on the shelves as quickly as possible to demonstrate that it's not a problem."

Phillips reports online that because powdered alcohol is so light, airlines can reduce aircraft weight by serving powdered alcoholic beverages and save millions of dollars in fuel costs. He reports an ice cream manufacturer wants to add Palcohol to its ice cream to make an "adult" version and that a hotel in Hawaii is interested in powdered alcohol because it would save costs associated with shipping bottles from the mainland. Phillips also reports possible unspecified commercial, medical and military applications.

David Jernigan, director of the Center on Alcohol Marketing and Youth at the Johns Hopkins Bloomberg School of Public Health, issued a statement in opposition to powdered alcohol, suggesting it will appeal to young binge drinkers.

"The decision by federal regulators to approve the sale of powdered alcohol is disappointing," he said. "Based on our experience with jello shots, alcoholic energy drinks and other "cutting edge" alcohol products, we anticipate that allowing powdered alcohol onto the market will have grave consequences for our nation's young people," Jernigan stated. "Youth is a time of risk-taking and experimentation, and these types of products have proven most popular among the heaviest drinking and more risk-prone youth. Currently, 4,300 young people under age 21 die each year from alcohol-related causes. Our efforts should be focused on making alcoholic products less, not more, available to our nation's youth."

Indonesia bans alcohol sales in 70,000 shops

Source: The Spirits Business
by Melita Kiely
17th April, 2015

New legislation has come into effect in Indonesia banning small retailers from selling most alcoholic beverages in a bid to reduce drinking in the Muslim-majority country.

Large supermarkets are still permitted to sell booze, as are hotels and restaurants, but approximately 70,000 local stores will be affected by the law, which prohibits the sale of beer, spirits and ready-to-drink beverages.

The Indonesian government stated the ban was necessary to protect young Muslims in the country, but has faced strong opposition from tourist spots such as Bali.

However, trade minister Rachmat Gobel, promised to relax restrictions on the island to ensure street vendors could still sell certain alcoholic beverages at the beach.

Indonesians are some of the lowest consumers of alcohol per capita in south-east Asia, as more than 90% of the population are Muslim and drinking alcohol goes against Islamic law.

Earlier this week, two political parties proposed legislation to impose a blanket ban on alcohol consumption in Indonesia and introduce jail terms of up to two years for offenders.

Last month, the Kerala High Court upheld a government decision to ban booze in India's largest alcohol-consuming state, closing 300 bars and leaving just 24 five-star hotels with alcohol licences.

The Secret To Selling Vodka

Source: The Daily Beast
Aaron Goldfarb
April 19, 2015

All vodkas are colorless, odorless, flavorless, and pretty much the same - which is why PR reps hustle extra hard to distinguish their brands.

They arrive at my door every day, sometimes more than once: UPS men, FedEx women, courier and messenger services with package after package. of vodka.

As a drinks writer, I receive "samples" (industry slang for free stuff) all the time. But vodka is what I easily get the most of-perhaps 50 different bottles in the last year alone.

I try most of them, but I haven't written about any yet. That's the thing: what is there to write about vodka?

Vodka is an odorless and flavorless spirit. I'm sure vodka enthusiasts will tell me there are good and bad ones, incredibly smooth ones and ones that taste like paint thinner.

But to me, each vodka is indistinguishable from every other company's completely neutral spirit. With a mere sip of craft beer or scotch, I can tell if a product is "good," interesting, worth writing about in an article. With vodka, all I can tell is, "Yep, that also tastes like vodka."

For this reason, vodka is the most intense battle for liquor PR people. How do they get writers like me interested enough in their products to write about them for people like you? I decided to go straight to the horse's mouth.

I spoke with Tina Carletto, a Senior Account Executive for Mission Media, a public relations firm in Manhattan that represents Belvedere Vodka. In the past year, I've received two samples from them: a red holiday-inspired "special edition" bottle and a James Bond-branded "collector's edition" 1.75 Liter with a light switch that illuminates the entire bottle. It's fun to pull out at parties.

"Belvedere is very proud of their heritage," Careltto told me when I asked what her PR strategy is. "Dankowski rye from Poland takes the center stage in Belvedere. This superior ingredient is quadruple distilled to create the perfect balance of character and purity, while being completely free of additives, including sugar."

That sounded like something a paid, polished representative would say, but I quickly learned a proud geographical heritage is crucial when promoting vodka.

SKYY Vodka "was invented in San Francisco in 1992 and is steeped with the innovative and progressive spirit of California." Hangar 1 notes, "In 2002, we began making our vodka in Alameda out of an old World War II aircraft hangar-a real place in California history." Tito's Handmade Vodka is "produced in Austin at Texas' first and oldest legal distillery." While SVEDKA is "imported from Sweden and distilled five times from Swedish winter wheat."

Kate Schwab of Gregory White PR, which represents Chopin vodka, understands the difficulty in promoting the liquor. For her client, the family heritage is played up as an asset.

"With vodka's reputation for being such a 'blank slate,' it helps to have a spirited family (the Dordas) who has true roots in Podlasie, Poland (a real place with centuries-old buildings where the distilling takes place and not some faceless, generic rectification plant)," she told me in an email.

Distillation technique mumbo jumbo is also a big PR strategy, as most of us have no clue what any of these words means.

SVEDKA is "distilled five times," while Belvedere is "quadruple distilled." Then again, SKYY actually "revolutionized vodka quality with its proprietary quadruple-distillation and triple-filtration process." Deep Eddy Vodka has a "signature column distillation process during which vodka is distilled ten times in a state-of-the-art twenty-foot column still to remove impurities and create a smooth finish." Phew.

Among these all-but-identical vodkas, Deep Eddy is actually worth a look. The Austin vodka company seems to have a leg up on marketing colorless, odorless spirits for one specific reason: it makes a series of innovative flavored vodkas.

Flavored vodkas tend to get a bad rap because of all the artificially-flavored, cupcake-ish, and whipped cream-y ones coming out from companies, like Burnett's and Poppin' Vodka.

Deep Eddy is different. Its Ruby Red and Lemon use actual, harvested fruits, while Sweet Tea is made with "Indonesian whole leaf black tea and lightly sweetened with local organic clover honey."

I found Chopin likewise interesting as each of its vodkas is made from a single ingredient, whether that's rye, wheat, or potato. It even has a line called "SINGLE" made from young potatoes, which sounds more akin to a single-malt scotch than a vodka.

Despite these exceptions, the vast majority of the vodka samples I receive are interchangeable. With all these odorless, flavorless products, does it come down to just throwing stuff against the wall and hoping something sticks with consumers?

Does it mean putting the product in crazy bottles and outrageous packaging, like Absolut? Claiming you're the world's best-selling vodka and hoping people substantiate that boast, like both Smirnoff and Ketel One do?

Or that you're the world's best tasting vodka, like Grey Goose and Pinnacle Vodka somehow manage to do. The latter surely cannot do so with a straight face, as it also makes a Cinnabon-flavored vodka.

Maybe it simply involves claiming your vodka is premium while so many others aren't, such as CÎROC's boast that it is "ultra-premium." I can't wait for my inbox to explode with pitches from the "world's first ultra-ultra-premium vodka." I bet it's distilled, like, a lot of times.

As with almost any marketable consumer good, teaming up with Hollywood may be the smartest move. Belvedere last year started to collaborate with Sony Pictures Entertainment for the upcoming 24th installment of the James Bond series. This "global partnership" is why Daniel Craig will be drinking Belvedere vodka martinis in Spectre-and why I got that cool bottle with the light switch.

Getting countless bottles of hooch in the mail is very cool, but I have to apologize to PR folks: the swag isn't swaying me.

The dirty little secret is that just about every guy or gal that writes about stuff for a living gets "samples" in the mail. It used to be considered unethical to take free items you might one day write about, but as a fellow drinks writer told me, "You'd be pretty pathetic if a free bottle could influence an entire story."

He's totally right. One free sample does nothing. It took me a good fifty just to write this story.

Bourbon Tourism: Is it a Factory Tour or Napa Valley?

By Fred Minnick
April 17, 2015

The Kentucky bourbon industry learned non-aficionado consumers think of a bourbon tour as a "factory tour."

In focus groups funded by the Kentucky Department of Travel and Tourism, consumers from several cities offered new perspective on the Commonwealth's "Bourbon Tourism" initiatives. The Commonwealth commissioned Illinois-based Rockpile Strategies to study focus groups in Illinois, Tennessee, Ohio and Indiana. The findings will be made public. Yesterday, I was invited to view the results along with representatives from the state's visitor bureaus, distilleries, government officials and even wineries.

I learned the outside world views bourbon a lot differently than Whiskey Geeks.

A couple examples. The use of "America's Native Spirit" when referring to bourbon made people think of a Native American drink instead of the 1964 Congressional declaration that made bourbon a unique product of the United States. One focus group member thought the "Bourbon Trail" might have had a historical connection to a moonshiner trail used to transport illegal whiskey. Hey, that sounds like a great story, but it's not true. One test advertisement showing bourbon poured into a rocks glass incited this comment regarding visiting a bourbon distillery: "I am not looking for a vacation that is one big pub crawl."

As to be expected, those who consider themselves aficionados can't get enough of the bourbon distilleries or Kentucky. And those who have traveled through Kentucky want to come back to the state and some hope to visit the distilleries. But bourbon distillery visits were not a priority among those who don't drink alcohol, those of certain religions or with kids.

The most pertinent piece of information, in my opinion, came from how these focus groups viewed the terms "Bourbon Trail" and "Bourbon Country."

The Bourbon Trail was thought to be a pathway to distilleries, while Bourbon Country was a region with cultural heritage similar to Napa Valley. As one consumer said in the focus group, according to Rockpile: "The Trail goes through Bourbon Country."

Why this is even significant is the Kentucky Distillers Association owns the trademark and promotes the Kentucky Bourbon Trail, which is a highly successful initiative with more than 700,000 visits and is coming up on its 20th anniversary. The Sazerac-owned distilleries are not KDA members; and thus, 1792 Barton and Buffalo Trace do not appear on Kentucky Bourbon Trail literature. This has led to lawsuits between Sazerac and the KDA. The Kentucky Bourbon Trail complaints have been settled, but the tensions are still there, as evident in the latest trademark objections.

The Louisville Convention and Visitors Bureau and other state tourism groups pursued the "Bourbon Country" marketing initiative in 2007 and has included the Sazerac brands as well as the KDA members.

To my knowledge, the state's recent focus groups are the first study that showed both Bourbon Trail and Bourbon Country complement-rather than compete-one another. It's a great step in the positive direction for Bourbon Tourism, but there's a long way to go.

People who had no interest in bourbon simply asked: "Why would I want to take a factory tour?"

On one hand, people think of Kentucky bourbon as factory made. And on the other, consumers view bourbon in beautiful surroundings similar to Napa Valley.

So, is Bourbon Tourism a factory tour or Napa Valley?

From the state's perspective, it's trying to appeal to the masses, and they're selling Kentucky's great landscape, bourbon, horses and the people. Bourbon is a mere slice of its tourism pie.

Until yesterday, I did not realize just how niche bourbon really is. It's time to change that. It's time for outsiders to understand that the so-called factory tour embodies the best of America, with all the smells, views and authentic people that tourists desire on weekend or month-long getaways. Bourbon is not some liquor you pour over ice; it's a lifestyle, listening to the authentic sounds of Bluegrass Music and watching the sunset over a ripe green field with young colts prancing and mares galloping.

And it's not Napa Valley, where investors appeared after the 1970s winemakers earned significant international attention. Many of today's bourbon buildings were built by hand in the 1800s, and the same families have run the companies since Prohibition. Through taxes and jobs, bourbon built Kentucky, schools and roads; it was here before Don Draper poured a whiskey on Mad Men; and it will be here if and when the Chicago hipster moves onto something else.

Bourbon isn't a factory tour or Napa Valley.

Bourbon is genuine, filled with history, tastes, smells, laughable legends and good people. Nothing compares to Kentucky's bourbon culture. And the only way to appreciate this fact is to experience it.

The bitter truth: Amaro is ready to rival Campari

Source: MarketWatch
By Charles Passy
Apr 18, 2015

The back story: If you're old enough, you might remember the cheeky ad campaign that helped make Campari a household name in America, playing off the idea of being a "virgin" to the drink. Now, the bitter Italian liqueur is nearly a 100,000-case brand in the U.S. And that sets the stage for a similar sip - specifically, the kind known as amaro, a bitter concoction of grain alcohol and herbs, roots, flowers, bark and other earthy ingredients.

Amaro Lucano, a brand with a history going back to 1894, is aiming to be one of the big - if not the biggest - player in the category. (Though it's already got stiff competition from Fernet Branca, an amaro that's gotten attention of late.) Lucano is being heavily promoted in this country for the first time in recent memory. Domaine Select Wine Estates, the New York-based importer that's spreading the spirit, is going with a two-pronged strategy: First, it's trying to convince high-end Italian restaurants to carry the brand. (Mario Batali's eateries are on board.) Second, it's trying to promote the idea that amaro can work in cocktails. If the latter sounds familiar, perhaps you're thinking of the Negroni, the Campari-based cocktail that's been a hit with the mixology-minded crowd.

And there's more amaro to come: Later in 2015, Domaine Select will be rolling out a higher-end version of Lucano, called Anniversario.

What we think about it: Granted, Italian bitters are not everyone's cup of tea (or booze) - they are a challenging bunch for those who like their flavors on the milder side. But we're huge fans of Campari, so naturally we're fans of amaro - and Amaro Lucano - as well. In some ways, Lucano is like a beginner's Campari - it's got more sweetness to balance the bitterness. But it's also very much its own sip, with a distinct herbal profile. (Some experts detect notes of dried lavender, fennel and cola.) The only knock? We miss Campari's bright red color - Lucano is more a reddish brown.

How to enjoy it: In Italy, amaro is typically enjoyed as an after-meal sip, poured neat or over ice. And don't forget the lemon garnish: Paolo Domenghetti, chief executive of Domaine Select, says the citrus "pull up" more of the flavors from the liqueur. But given that Domaine Select is emphasizing the mixology aspect, Domenghetti suggests trying Lucano in a cocktail. His preference: a "Lucano Americano," which combines Lucano with sweet vermouth, fresh grapefruit juice and soda water.

Bordeaux's woes

Source: FT
Jancis Robinson
April 18, 2015

'The big questions are not just how these baby 2014s are priced but whether enough people will care, even if they get the price right'

The only great wines I tasted during my recent week in Bordeaux were at the dining table in the evenings. At the en primeur tasting tables arrayed with 2014s less than six months old, the best wines I tasted were good rather than great. My most memorable encounter was with a French term new to me, "le Bordeaux bashing".

There's certainly a lot of that going on. This is hardly surprising. The hard facts underpinning the general opprobrium heaped on Bordeaux by so many wine amateurs and professionals outside the region were spelt out just before the start of the en primeur tastings by Liv-ex, the London-based professional wine-trading platform.

With hardly subtle timing, Liv-ex decided for the first time to turn its mass of data on 21st-century Bordeaux price movements into a 68-page booklet called "Bordeaux 2014 - A price guide for Liv-ex members". There, in graphic detail, was the evidence showing that those buying Bordeaux en primeur had typically lost money on the past five vintages, and since 2003 have made money only on investments in the 2004, 2005, 2007 and 2008 vintages. The point of buying wine before it is even bottled is supposed to be to save money - but those who bought the last great vintages of 2009 and 2010 en primeur are still, according to Live-ex, out of pocket by 18 and 17 per cent respectively.

While in Bordeaux I asked various luminaries of its wine trade whether they had seen Liv-ex's report. Yes, they replied glumly.

The big questions are not just how these baby 2014s are priced but whether enough people will care, even if they get the price right. There is widespread disaffection with Bordeaux, particularly among younger wine drinkers. The convoluted Bordeaux system does not help expose those who make wine to those who drink it. Between them come, at the very least, a courtier (or broker), a Bordeaux négociant (or merchant), an importer and, possibly, a retailer. Too many château owners still seem to be more concerned about whether their wine is offered at a higher price than their neighbour's (a point of pride) than whether it is sold to an end consumer. And to judge from the lavish new building programmes so evident at the best addresses, those at the top end of Bordeaux's carefully delineated status ladder are still flush with cash.

Meanwhile, the Bordeaux négociants' cellars are full to bursting with recent unsold vintages. Life is particularly tough for them but with the 2014 crop, perhaps the most difficult job of all is that of the courtiers who have to liaise between proud châtelains and overstretched négociants (although there is a certain amount of overlap between these two groups). Expect to see casualties - or at least even more agglomeration - among Bordeaux négociants.

To add fuel to the fire, 12 leading British buyers of Bordeaux sent a joint communiqué to the Bordelais back in January asking them to offer 2014 at prices lower than any vintage currently on the market. The typical response was one of anger - and even a suggestion that the UK traders were piqued by the direct trading avenues opening up between Bordeaux and Asia when in recent years so many Asians bought their Bordeaux from UK-owned companies.

The latest vintage is generally better than 2013, 2011 and even 2012 but it is clearly wrong to compare it to the great 2010 vintage, as some producers have been doing. Anyone who looks at the extraordinary weather pattern of the 2014 growing season can see that there has never been a vintage like it, or certainly not in living memory. There was virtually no summer and, with the exception of some parts of the far north of the Médoc, none of the midsummer drought deemed necessary to create wines with real body and potential for long-term ageing. Instead, the grapes had to depend on the much shorter days of a largely fine September and October for ripening.

The overwhelming characteristics of the vintage are therefore relative lightness of body and high acidity. The warm autumn helped to increase sugar levels and, together with a drying breeze, also had the effect of shrinking the grapes and concentrating everything: sugars (and therefore alcohol), flavour and, most notably, acidity. The tannins in 2014 are ripe and copious enough but in many reds, the acid is just a little too pronounced for comfort.

In the whites, by contrast, both dry and sweet, this high acidity is in many cases a blessing. The dry whites are the nerviest yet and the star performers are the sweet whites, in the best of which refreshing acidity is combined with the effects of late-October noble rot, picked in perfect conditions. Surely the time has come to reward the Sauternais for their efforts.

But should people buy the 2014 reds? Yes, if the Bordelais were to swallow their pride and do what they did in 2008: offer it at lower prices than the overpriced, inferior vintage that preceded it. But the signs so far are that this is a vain hope, though the weakness of the euro will doubtless be used as an excuse. Broadly speaking these wines will be early-maturing charmers without a huge amount of stuffing. In very general terms St-Julien was the most consistent, if not mind-blowing, appellation (as so often) but there are, as usual, some overperformers in Pauillac and 2014 was an excellent vintage for St-Estèphe too. Pomerol had the edge on St-Emilion.

As though the exact prices of the 2014s were not critical enough for the Bordelais, this year they are on their own. Over the past few decades château owners became increasingly dependent on the scores of the American Bordeaux specialist Robert Parker when deciding their opening prices. Parker has just handed over the scoring pencil to his much younger British colleague Neal Martin, whose tastes are still something of a mystery, while simultaneously announcing to the trade publication The Drinks Business that the Bordeaux en primeur market is "largely dead". He may well be right.

Why is no one buying Sauternes?

Source: the drinks business
by Rupert Millar
17th April, 2015

The Sauternes estates have made an early bid for attention in this campaign but despite repeated price cuts since 2010 it's still not selling.

Speaking to the drinks business, Berry Bros & Rudd's fine wine buying director, Max Lalondrelle said that the merchant had sold "under 20 cases of the cumulative total of what's been released", which so far includes Doisy-Daëne, Doisy-Vedrines, Suduiraut and Coutet.

This is in contrast to over 600 cases of Angludet BBR shifted in a day and will likely be exceeded by Sociando Mallet which it is offering today.

The problem does not lie in the quality of the wines, either from this vintage or previous ones, but rather the price - even though current release prices are as much as 50% lower than they were in 2010.

"Very few of the releases of the Sauternes have made sense in terms of pricing," Lalondrelle continued, "not doubting the quality but it's difficult to say, hand on heart, buy it now when it'll be cheaper in two years."

When Suduiraut released this week, BBR sent its offer with the caveat that there were still stocks of older vintages, the 1989 and 2010, available.

"The release prices of Suduiraut is ?47 [a bottle ex-merchant]," explained Lalondrelle. "We have bought and still have in stock some 1989 [17 cases], not as fine as 2014 but ready to drink and delicious at ?44 [a bottle]."

As such, although admittedly a "very good wine" he continued there is, "absolutely no incentive as far as consumers and we are concerned," to buy the '14.

Although BBR hasn't offered any more, the problem of cheaper back vintages is not unique to Suduiraut. Lalondrelle said it was perfectly easy to find and offer consumers 2002 Coutet at ?23 a bottle when the 2014 - which he admitted was a "pretty good" price - is ?25.

Ditto Château de Malle which is being offered at a reasonable ?20 a bottle but the 2003 can be bought for ?14.50 - BBR currently has 100 cases to sell.

The problem is a large amount of back vintages on the secondary market which are either sitting unsold in négociant and merchant's cellars or are being resold by consumers who need to make some space in theirs or who realised they just don't drink enough Sauternes to hold on to what they've got.

The result is price depression and leaves current vintages being released as more expensive or only marginally cheaper than physical and ready-to-drink vintages - which no one appears to be drinking either.

Sauternes has some of the worst performing wines over the last 10 years, average prices for Coutet, Climens, Rieussec, Suduiraut and Yquem falling between 19% and 37% between 2004 and 2013 according to Liv-ex.

The 2004 vintage is the last time any of those estates saw a return on investment and a couple have declined in price every year over the past 10.

As such, merchants are often unwilling to actively point consumers towards Sauternes. Particularly in these rather more parlous times for en Crus classé Barsac Sauternes 2008primeurs merchants want consumers to splash out on the more lucrative reds and not be put off buying a case of red from Château "X" because they've already spent part of their budget on Sauternes and, more altruistically, because the price doesn't make sense.

"We don't tell people to buy it in the majority of cases because there's no deal," said Lalondrelle. "We want to sell but we'd rather they save their powder for something they really want."

This is especially cruel for Sauternes which, above all producers and regions in Bordeaux, have done their upmost to cut prices over the years even though the region has consistently produced some of the best wine from Bordeaux recently, has had a string of very good to excellent vintages in the last decade and a half and has production costs two to three times above Bordeaux reds.

But consumers don't want sweet wines.

"Sauternes is facing a huge consumer problem," said Lalondrelle, "I'm not blaming them, maybe some at the top, but it's the state of the Sauternes market. A bit like the Port market 10-15 years ago and as it is still. There aren't enough consumers there."

The flipside is that there are lots of affordable old vintages of Sauternes on the market and in more positive news is that these do seem to sell quite well.

Lalondrelle reported that the 2002 Coutet and 2003 de Malle are selling quite well and that BBR had sold 70 cases of 1996 Yquem in the past few months.

But to add yet another problem to the mix, it's going to take a long time for that pool to contract. Joss Fowler of Fine & Rare said that the merchant has over 1,000 Sauternes listings on its system at the moment, the choice is "broad" and it's highly unlikely even the most ardent Sauternes lover is going to pick up 10 cases.

"I can find any vintage of mature Rieussec and I just need one case," he told db having revealed that despite loving Sauternes he couldn't remember the last time he'd opened a bottle.

"It offers extraordinary value for money, like vintage Port," Fowler continued, "But like Port even people who like it don't drink it very often."

So what of the 2014s? "The beauty is in 10-15 years we'll be able to buy some old Sauternes," suggested Laondrelle - and then not drink it.

Bordeaux's Château Lafleur Keeps It All in the Family

The small Pomerol estate, which produces one of the world's greatest red wines, is one of the few top châteaux still home to the owners' family

Source: WSJ
By Will Lyons
April 16, 2015

A SHORT WALK from Bordeaux's celebrated Château Pétrus brings you to a sandy-colored gravel drive, at the end of which stands a small farmhouse. You could be forgiven for thinking it was just a modest family home, albeit surrounded by a vineyard. And you wouldn't be far wrong. But what might surprise you is that this tiny, 4.5-hectare property produces one of the world's greatest red wines: Château Lafleur.

Bordeaux has changed a lot since Henri Greloud built the house and cellars in 1872. Drive through the Médoc at night and you'll have to look hard to find any lights on; most châteaux are now in the hands of corporate owners and have become little more than show houses. But Lafleur, despite its world-wide reputation, is still the home of owners Baptiste and Julie Guinaudeau, who live here with their daughters, Joséphine and Mathilde. Mr. Guinaudeau's parents, who ran the estate for many years, live in their second property, Grand Village, in neighboring Fronsac. It's a family concern.

Everything about Lafleur feels tiny. The immaculate but cozy cellar; the production, which at around 1,000 cases a year means only a handful of the world's top collectors get to taste it; the vineyard, sandwiched between Vieux Château Certan, Hosanna, La Fleur-Pétrus and Pétrus. The only thing that isn't diminutive is the wine's reputation, which over the years has been laden with superlatives.

Stephen Browett, chairman of fine-wine traders Farr Vintners, told me that the 1947 was the greatest wine he has ever tasted. And Hew Blair, chairman of U.K. wine merchant Justerini & Brooks, speaking of the wine's evolution from barrel to bottle, said: "Tasting Lafleur from barrel is challenging: brooding, complex, powerful and untogether. With bottle age Lafleur turns its coat into one of a myriad of aromas and flavors from pencil lead, earthy, Morello cherry to dark forest fruits wrapped in a fine tannic structure."

What makes Lafleur so sought-after is its individual character. The blend-a high proportion of Cabernet Franc with Merlot-is quite unusual. In Pomerol, Cabernet Franc is an intriguing grape variety. When fully ripe, it takes on a mineral, spicy, cool quality. When blended with Merlot, it creates a wine with an intense perfume and compact layers of flavor.

Tasting recent Lafleur vintages, I found them marked with an attractive finesse. Like those of Vieux Château Certan, they possess huge concentration without being too heavy. Aromatic in their youth, they display floral and sweet dark fruits that, with age, evolve into notes of tobacco and cedar.

Many say these wines have more in common with the restrained Cabernet Sauvignon blends from Bordeaux's Left Bank than the often extracted wines of Pomerol. This is due to a combination of factors-the complex soil of the high plateau the vineyard sits on, made up of clay, sand and gravel; the Cabernet Franc-Merlot blend; the meticulous work in the vineyard; and a traditional winemaking style. Which, under Baptiste and Julie Guinaudeau, isn't going to change any time soon.

Why do people get so cross about natural wine?

For some critics it's the gamey flavours; for others it's the sometimes sanctimonious ideology. But natural wine is here to stay

Source: The Guardian
David Williams
Sunday 19 April 2015

The story of natural wine sounds so innocent, so harmless on paper, that it's hard at first to understand why it still gets so many otherwise calm and reasonable people so very, very cross. It goes a little like this. Disillusioned by what they saw as the increasing industrialisation of modern winemaking, a disparate group of small-scale wine producers, mainly French and Italian, set out to see if they could do things differently. This was back in the 1980s, but word spread and they were soon joined by fellow travellers across Europe and the New World.

Most of them were already working chemical-free in their vineyards; many of them had converted to the buried cow horns, homeopathic teas and lunar and astral tweaks of biodynamic farming. But they wanted to apply the same principles they used in the vineyard to their work in the cellar after the grapes were harvested. They believed the wine industry had become too reliant on the battery of dozens of legal additives, from tartaric acid and sulfur dioxide, to powdered tannin and fish bladders (isinglass), permitted in wine production. They reckoned that these were being used too freely as props to correct deficiencies in the grapes. So they began to see if they could do without them.

They had no set rules. Working experimentally and independently they wouldn't have described themselves as part of a movement. But slowly a kind of consensus began to emerge, a set of practices and inclinations to which the "natural wine" tag was unofficially attached (there is still no legal definition). Wine writer Andrew Jefford has a pithy definition: natural wines are those made from grapes grown in organic or biodynamic vineyards "with few or no chemical additions in an artisanal manner, sometimes involving historical techniques such as amphora-fermentation".

So far, so uncontroversial: natural wines seem to fit in with any number of modern attempts at ethical food and drink production. Though the movement's critics often caricature natural wines as cloudy in the glass, most exponents are working from a core principle to which very few would object: transparency. They feel that wine should come as close to its dictionary definition "fermented grape juice" as possible, and they have a justified sense that many consumers would be horrified at the average wine bottle's ingredients list if producers were ever obliged to print one. So why are so many people - including the Observer's Jay Rayner, who described natural wines as "brutal, unstructured, with the foul back taste of farmyard" - so down on them?

In part, of course, it is just a matter of taste. Although the natural wine flavour spectrum is wide, running from wines that are barely distinguishable from the conventionally made to those that fit the stereotype of cloudy, fecal cider, the majority share a certain taste or feeling: there is a wildness to them, coupled with earthy and gamey flavours that immediately identify them as "natural".

Some people simply cannot tolerate those flavours at any concentration; they see them as faults. I wouldn't tolerate them either, if they were all a wine offered. But while there are many natural wines where I can't see beyond the bacterial murk, there are many more where you do get something new and precious: a difference in texture and vivacity, and a range of non-fruit flavours that you don't often find in conventional wines.

I suspect that it's not so much taste in wine as distaste for ideology that informs the more rabid critics of natural wine. They are reacting to the sanctimonious tone of some in the natural movement, who, in their rush for the moral high ground, and with their fanciful claims that natural wines offer a more "emotional" as well as ethical (I've also heard "spiritual") experience, tend to ignore the fact that when natural wines fail they fail badly.

But away from all the claims, counter-claims and all the hair-splitting debates about the legitimacy of the use of the term "natural" (as Rayner pointed out, as a natural phenomenon, isn't everything humankind does, by definition, natural?), I get the impression the wine world is finally moving on from for or against. In years to come, I reckon we'll see the early years of natural wine as the industry's punk moment: a bracing anti-establishment corrective to the over-produced excesses that came before. Not everything that came out of the movement will stand the test of time: there are many vinous Sham 69s. But its spirit, and many of its techniques and ideas are already informing producers in what nobody is yet calling the post-natural scene.

Six of the best natural wines

Rogue Vine Grand Itata Blanco (£15.75, Bottle Apostle)
The cool-climate Itata region is home to some of Chile's most exciting experimental winemaking, and this low-sulphur white is gorgeously textured, fresh but complex, matching fragrant floral notes with pithy citrus.

Mas Coutelou Classe, Languedoc 2013 (£16.95, Roberson)
For the natural wine-sceptic, it's hard to think of a better place to start than the wines of Jeff Coutelou: full of vivid, finger-staining blackberry fruit, this carignan is explosively juicy and succulent: pure pleasure.

Marc Angeli La Lune, Loire, France 2012 (£19.95, Yapp)
Along with Beaujolais, the Loire Valley is one of the epicentres of the French natural wine scene, and Marc Angeli is one of its standout producers: a chenin blanc that positively resonates with tarte tatin and nutty flavours.

Dard & Ribo Crozes Hermitage, France 2011 (£24.22, Solent Cellar)
There's nothing to upset the anti-naturalistas in this classic northern Rhône syrah from natural stars Dard et Ribo, just stacks of crunchy black fruit, smoky bacon and black pepper flavour and the smoothest most graceful texture.

Domaine Matassa Rouge Côtes Catalanes 2012 (£27.75, Joseph Barnes)
Suave of tannin and with a deliciously moreish freshness, this southern French red makes the most of its old carignan vines offering a meaty, leathery intensity and wild woody herbiness to go with its dusky blackberry fruit.

Radikon Ribolla, Collio, Italy 2007 (£29, Buonvino)
The traditional art of leaving white grapes in contact with their skins during fermentation to produce orange wines is difficult to master but utterly beguiling when it works: Radikon's is herbal, spicy, and zesty with a touch of red wine-like tannin.

Why Does the Federal Government Care About 6 Cases of Wine Sitting at the Bottom of Charleston Harbor?

Source: Politico
April 18, 2015

If a bottle of wine has spent time underwater, is it still something you'd want to drink? This might not strike you as the kind of question the federal government would need to get involved in, or even care about. But three weeks ago, we came across a strange new policy posted by the TTB, the federal agency responsible for labeling alcoholic beverages.

Titled "Advisory on the Underwater Aging of Wine," the document intriguingly mentioned "recent interest in the aging of wine under ocean waters," and then dropped some pretty strong language about the practice: "adulterated, unsanitary conditions," "contaminated with filth," "effluent," "decaying organic matter."

If you took this a scary verdict on underwater aging, however, you'd be wrong. In fact the TTB actually has no idea whether any of these things get into a bottle of submerged wine-the document is also generously studded with "mays" and "mights."

But why, and how, it exists at all is a window into strange world of how alcohol is regulated in the United States-a food tested by the FDA, but policed by the same Treasury department that tracks cigarettes and collects the tax on guns.

And sometimes, what looks like regulation is really one agency punting to another.

As far as anyone knows, the story starts with California winemaker Jim Dyke and his team at Mira Winery in Napa Valley, who began dropping cases of wine into Charleston Harbor two years ago.

This was kind of an experiment, and kind of a publicity stunt. The winery, which was founded in 2009, looks to "challenge conventional wisdom" of winemaking, Dyke said, adding that the aging process seemed ripe for change. "Everyone just puts wine in a warehouse at 55 degrees because that's what the Europeans did," Dyke said in an interview.

But a few underwater-aging experiments coming out of Europe and the 2011 auction of champagne from a shipwreck that went for between $15,000 and $50,000 a bottle-made Dyke interested in challenging that conventional wisdom.

So in February 2013, Dyke dropped 48 bottles, or four cases, of Mira's 2009 Cabernet Sauvignon wrapped in four steel mesh cages 60 feet into South Carolina's Charleston Harbor, which stays at a familiar 55 degrees for most of the winter. When the bottles were fished out three months later, and the protective wax seal removed from the top of each, the wine tasted as if it had aged two years, Dyke said.

Dyke and his team dubbed the wine Aquaoir and deemed it a success. A few of the bottles were sold off in sets to curious wine connoisseurs, paired with a conventionally aged Cabernet Sauvignon at the impressive price of $500 per pair. In November 2013, they did it again, this time dropping eight cases that they left for six months.

Around the time the cases were brought up in March, Dyke got an email from TTB. It indicated they had some concerns with the wine from the experiment.

How TTB found out about Aquaoir is unclear. Tom Hogue, a spokesman for the bureau, suggested it may have been due to news reports and added that "this idea has been kicking around for a while" when TTB got involved.

It might have been the agency's alertness-TTB monitors advertising from alcohol makers as well as social media in order to ensure compliance with marketing rules. It also might have been a dime dropped by the competition. Alcohol makers are encouraged to tip the government off when they find rules being broken, so it's not unheard of in the industry for winemakers to rat each other out to authorities.

Wine aging isn't regulated by the government. But wine contamination is. Normally a winery can store wine however it wants, and only in certain cases does it have to label what that method was. But plunging wine into the water-changing the pressure around its cork, potentially surrounding it with pollutants-raises the question of contamination.

It was this possibility that raised concerns and triggered the involvement of FDA and TTB, which enjoy a complicated dual oversight of the alcohol industry. If any of the horrible things in the seawater actually got into a bottle of wine, that brew would be adulterated under food safety laws that fall under FDA's jurisdiction. However, the agency has an agreement that allows TTB to enforce its rules through product labeling. (Every label on every bottle of booze sold in the United States has the greenlight from TTB.)

After hearing about Mira's experiment, TTB pitched the issue to FDA, which took issue with the number of nasty things in seawater. A warning to the vineyard and the public advisory ensued,

even if nobody at either agency actually knows whether underwater wine is actually unsafe. Shy of testing almost every bottle, it would be impossible to say if anything ended up in any of Mira's Cabernet Sauvignons-but if the FDA isn't comfortable, then the TTB isn't comfortable, making the wine unsellable.

Hogue defended the agency's involvement. "It may or may not be a small amount of wine," he said, "but what will it grow into?" He also suggested the agency had "a responsibility to the regulated industry" to let them know that underwater aging might not be a good idea.

If it became a more common practice, "It would be [FDA's] determination, I assume, in a case-by-case basis" on whether an underwater-aged wine is actually unsafe, Hogue said.

For now, at least, the experiment remains unfinished. Dyke said he has test results from his wine to show that no seawater got in. While he said he has lawyers working on the issue, an FDA spokeswoman said that the agency is "unaware of any contact in recent weeks by specific winemakers with questions about aging wine underwater."

In the meantime, it's unclear if the Mira team can even sample the, ehem, fruits of their labor.

"We think we've already felt the heavy hand of government and we don't want to do anything to make that hand come down any harder," Dyke said.

And if you're looking to try some Aquaoir? There are still eight more cases sitting on the floor of the Charleston Harbor.

Read more:

How to quaff wine

Source: The Australian
April 20, 2015

The nose really does have it when it comes to tasting wine.

When I first learned how to taste wine, I was taught to purse my lips and suck air in across the wine in my mouth, making a strangled, bubbling noise.

This weird technique, I was told, releases the aromas of the wine and carries them to the olfactory bulb behind my nose, thereby intensifying the wine's flavour.

It seemed to work - even if it did elicit funny looks from normal people every time I did it - so I've been passing on the advice to other novice tasters ever since.

Turns out, though, that sucking air across the tongue is only half the story when it comes to getting the most out of the tasting experience.

And in fact, paying close attention to what happens next is far more important and useful.

My favourite neurobiologist, Yale's Gordon Shepherd, has published a paper on neuroenology, a term he's coined to describe the study of how we perceive the flavour of wine.

It's a fascinating insight into what goes on in the nose, on the tongue, in the throat and in the brain every time you take a mouthful of vino.

I've raved about Shepherd in this column before: his 2011 book Neurogastronomy: How the Brain Creates Flavour and Why it Matters ($40, Colombia University Press) was a revelation into the meaty mechanics of taste and smell.

In this latest paper, Shepherd stresses the importance of retronasal smell to the process of wine tasting. He describes how, once you've swallowed or spat your wine, it's only when you then breathe out through your nose that the aroma molecules from the liquid are carried up through the retronasal passage at the back of your throat to the olfactory receptors in the nasal cavity and register as wine flavour in the brain.

There's an easy way to demonstrate this retronasal process for yourself (I've explained this before, too - but as it involves eating chocolate, I'm sure you won't mind if I explain it again).

First, block your nose by pinching it with your thumb and forefinger, then pop a square of chocolate on to your tongue and close your mouth. You'll be able to taste sweetness and feel the chocolate's melting texture, but there will be no perception of chocolate flavour.

If you keep your nose blocked and breathe in through your mouth you'll find there's still no chocolate flavour there.

But if you release the grip on your nose and breathe out through your nostrils then suddenly your mouth will fill with vivid chocolatey colour, thanks to the food's aroma molecules bombarding the olfactory receptors retronasally.

Bearing all this in mind, instead of doing the weird strangled air-sucking thing, I now take a mouthful of wine and, using the back of my tongue as a kind of bellows, scoop up as many of the wine's aromas as I can and blow them out past those olfactory receptors.

People still give me funny looks, but believe me, every wine I drink now tastes more vivid than ever.

France and the US are world's top markets for rosé wine

Source: Yahoo News
April 16, 2015

Americans drank 2.88 million hectoliters of rosé wine 2013, compared to 9 million consumed by the French.

The world's leading producer and consumer of rosé wines, France is not the only country to succumb to the fruity and floral notes of this summery beverage. According to a study published by FranceAgriMer on Thursday, April 16, the popularity of rosé wines is on the rise around the globe, and the US is the second largest market.

French oenophiles consumed around 9 million hectoliters of rosé wine in 2013, representing a 50% increase over the decade. In fact, rosés even replaced reds as the country's most popular wine over the course of the year, accounting for 30% of the overall wine market.

Italian wineries, France's closest rivals in the rosé sector, shipped 4 million hectoliters (105.7 million gallons) in 2013, accounting for 5% of the global market. Unlike the French, however, Italians have decreased their rosé wine intake in recent years, as have Spaniards, who nonetheless account for 4% of rosé wine consumption worldwide. Meanwhile, Spanish wineries have scaled back their rosé production, halving their production between 2002 and 2012.

Rosé on the rise stateside

Wine lovers in the US have clearly developed a taste for rosés, and Americans account for an estimated 12% of global consumption, purchasing 2.88 million of the 24 million hectoliters sold worldwide.

Slightly behind consumption, total rosé production worldwide is estimated at 23.8 million hectoliters, or between 8 and 9% of all wine production. "This share has been rising slightly since the mid-2000s, responding to the rise in global demand," the report explains. Americans also contribute to the global rosé supply, generating 3.3 million hectoliters in 2013.

Finally, British and German wine lovers are also emerging as leading rosé consumers, as their intake of the wine has risen steadily over the past decade.

Consumption of rosé wine accounts for just over 10% of overall wine consumption globally.

Bookkeeper charged with winery embezzlement

Source: Napa Valley Register
By Kerana Todorov
April 17, 2015

A bookkeeper is facing multiple felony charges for allegedly stealing nearly $200,000 from a Rutherford winery that produces high-end wines, according to court records.

Susan Jean Moore, 45, of Napa, pleaded not guilty at a court appearance last week to multiple counts of grand theft and embezzlement and other charges for allegedly writing herself checks from J.J. Cohn Estate LLC's Scarecrow brand account between 2011 and 2014.

Moore is listed as the co-owner of Aptalent Inc., a home-based consulting firm in Napa. According to court records, J.J. Cohn used Aptalent for bookkeeping services.

The investigation began last summer when an employee from Moore's bookkeeping company handed the daughter of J.J. Cohn Estate owner Bret Lopez a note with the numbers of three company checks, according to a court document filed by Napa County Sheriff's Office.

Lopez then researched the matter and discovered Moore allegedly had been writing herself checks from J.J. Cohn, according to the court filing.

Moore was booked April 10 into the Napa County jail, where she remains in custody.

On Friday, her attorney, Doug Pharr, said the district attorney has had this case for months. "Now it is our turn to look at everything. Mrs. Moore denies any wrong doing. I simply ask people to remember these are only allegations and ask them to keep an open mind. The truth will come out," he said.

In the meantime, the Napa County District Attorney's Office has frozen checking accounts under Moore's control and placed a lien on her Napa residence.

Scarecrow wines fetch top prices. A Los Angeles retailer/restaurateur in February 2014 paid $260,000 for five cases of 2012 Scarecrow cabernet sauvignon at the annual winter trade auction at CIA Greystone in St. Helena, according to Napa Valley Register archives.

Shenzhen tightens fraud controls on imported wine

Source: Decanter
By Sylvia Wu
16 April 2015

Shenzhen's quarantine authority has launched a system that claims to be able to identify a wine's origin by examining its chemical make-up, as part of an ongoing effort to reduce the number of counterfeit wines in Mainland China.

By analysing more than 1,000 wine samples from seven major wine producing countries, the new examination system can identify the geographic origin of imported wines with '90% accuracy' within a minimum of 3 days, said the Shenzhen Entry-exit Inspection and Quarantine Bureau, in Guangdong province.

The technology is based on the analysis of stable isotopes and mineral elements in wine, which 'differ significantly' according to geography, climate and altitude, said the quarantine bureau. It said the system was the first of its kind in China.

Although chemical analysis tools are widely used to authenticate food and drink products in many countries worldwide, the new system carries extra significance in China in its battle against fraudulent wines.

Currently, a 'Shenzhen-Hong Kong international alcoholic beverage examination centre' is being built in the Qianhai Shekou free trade area (FTA), which is part of the recently established Guangdong free trade zone (FTZ), according to the local quarantine bureau.

The geographic origin identification system is set to be implemented in the centre so as to 'further enhance the traceability' of imported wines bypassing the Shenzhen port. Consumers are expected to be able to view the origin information online in the future, officials said.

Customs figures show that with 76m litres of imported wines entered Guangdong province last year, making it the second biggest destination of imported wines in China, behind Shanghai.

Wine by the glass, done right, can be better than a bottle

Source: LA Times
By S. Irene Virbila
April 17, 2015

How often do you run into a friend and decide to have a glass of wine together? Depending on where you go, you could get something incredibly delicious and surprising, or something uninspiring - or mediocre and overpriced.

It's no secret that for years restaurants have been buying cheap wine, pouring it by the glass, and jacking up the price. The perception was that anybody who opted for wine by the glass was either not much of a drinker or unsophisticated about wine. For many restaurants, the wine-by-the-glass program was an afterthought, just another way to make money. That's not necessarily the case anymore.

Caroline Styne and Suzanne Goin opened A.O.C., one of L.A.'s first dedicated wine bars, in 2002. "From the beginning," says Styne, "the focus has always been on having really great wines by the glass, things I want to drink." Her husband doesn't drink, so when the two go out to dinner, she orders by the glass. "It's disappointing when a restaurant puts a throwaway out there as a wine by the glass, instead of something really interesting."

Styne is not alone in taking her wine-by-the-glass program very seriously. Many good restaurants offer 20, 50 - even 150 wines by the glass. They buy a case or two of each wine, and when that particular wine is gone, refresh the list with something else. Pours are more generous too.

Certainly, it's a lot more intimidating to buy a bottle than to buy a glass. Restaurants and wine bars with solid by-the-glass programs encourage customers to try something unfamiliar. "It makes dining out a lot more fun than it was before," says Claudio Blotta of Barbrix in Silver Lake. "You can try a varietal or a wine producer you don't know without breaking the bank."

(About that bank: Make sure when the server waxes poetic about the Cabernet or Nebbiolo the restaurant is pouring by the glass, you hear the price before you order. You can always look it up on your smartphone via or another site before you order that glass of wine. If the markup is more than three times the retail price, you're better off ordering a bottle.)

But how do you choose from a list 150 wines long? To narrow the options to three or four - or sometimes just one - Matthew Kaner of Bar Covell asks questions: Would you like the wine to be fruity or not fruity? Lighter in body or more full-bodied? By doing that, he tries to figure out what sort of wine would be right. And he's smart enough to realize it's not about him. "I think wine directors have trouble understanding it should be all about the customers. The ideal is to propose wines that are not only our passion but what people are looking for."

"The beauty of the concept," says Styne, "is that you're not married to a bottle of wine all night."

Restaurant Finance Watch: The season of high expectations

With stocks trading at record valuations, earnings reports must be perfect

Source: NRN
Jonathan Maze
Apr 17, 2015

Investors see gas prices falling and employment increasing, and they've been bidding up consumer stocks, including restaurants.

But valuations for many restaurant companies are now at historically high levels.

Brad Swanson, managing director for investment banking at KeyBanc Capital Markets, said the historical valuation for quick-service restaurants is an enterprise value multiple of 10 times cash flow. For casual-dining concepts, that average is 7.9.

Currently, he said, the average multiple for quick-service restaurants is 14, for casual diners it's 10.

These valuations put pressure on restaurant companies heading into earnings season, which begins in earnest next week. Those that can't meet expectations risk getting punished by investors.

"When we saw some of those big numbers in January, investors got a little overly excited that the industry is really breaking out," said Jefferies analyst Andy Barish. "Industry sales are a little bit better. But it's going to be hard to justify where these valuations have gone."

To be sure, restaurants are starting the year on the best footing they've been on in the post-recession era. Same-store sales in January were notably strong, according to both Black Box Intelligence and MillerPulse, in part due to weather.

Restaurant sales surpassed grocery sales in March for the first time ever, according to federal data. What's more, commodity costs are easing for everything that's not beef, which could set chains up for better profit numbers heading into the year.

There are growing concerns about labor costs, but that tends to impact franchise operators more than franchisors. Many publicly traded restaurant chains are heavily franchised and are thus shielded from such costs.

Gas prices, meanwhile, are $1 a gallon below what they were a year ago, and employment continues to grow, all of which should theoretically make people eat out more often and buy more stuff.

Consumer discretionary stocks, which include restaurants, have easily outpaced the broader markets for years now. The S&P Consumer Discretionary Index is up 20 percent over the prior year, including 5 percent year to date.

But now this has generated concern that prices have grown too rich, and investors' expectations are too high.

Indeed, Christopher O'Cull, analyst with KeyBanc Capital Markets, said in a recent note that he believes investors' expectations might be inflated. O'Cull surveyed restaurant investors, 76 percent of whom said restaurant fundamentals were in-line or improved with their expectations for the quarter. Respondents also said 83 percent of companies would either meet or beat earnings expectations for the period.

The results, O'Cull said, were "somewhat surprising" given the slowdown in same-store sales in March.

Companies with high valuations don't need to do much to knock their valuations down a notch or two.

Consider what happened to Sonic Corp. in March. The drive-in burger chain reported 11.5-percent same-store sales in its quarter ended Feb. 28. The company said earnings doubled and it raised profit projections. And then its stock fell by more than 12 percent - due likely to sales projections that weren't quite as strong as sales from early this year. Sonic could be "the canary in the coal mine," Barish said.

Other chains could face similar selloffs if they do anything in their coming earnings reports to disappoint investors. And remember: Same-store sales slowed in February and March, according to both Black Box and MillerPulse. Disappointments might be difficult to avoid.

"You'd think companies would have to report above expectations and guide higher for the year," Barish said. "But we haven't seen a lot of that in the category. It leads you to question how long these valuations can be sustained.

"You're going to have to report a good quarter," he continued. "You'll have to hear encouraging news on April, with a positive same-store-sales tone. That's going to determine the next move in these stocks."

Of course, stocks today have fallen more than 1 percent through mid-afternoon trading, and the NRN Restaurant Index is down roughly the same, amid a global selloff. Maybe that will ease some valuation pressure this earnings season, but that's not likely.

USDA Says Bird Flu Outbreak Could Prove 'Devastating'

Source: Food Manufacturing
STEVE KARNOWSKI, Associated Press
Fri, 04/17/2015

The nation's poultry industry may have to live with a deadly bird flu strain for several years, which would be "devastating," the U.S. Department of Agriculture's chief veterinary officer said Thursday.

Dr. John Clifford also said that while new cases should drop to close to zero once the weather warms up and kills off the virus, there's "very likely" to be a resurgence this fall when the wild waterfowl that are natural carriers of avian influenza fly south for the winter.

Clifford spoke on a visit to Minnesota, the state hit hardest by outbreaks that have led to the death of over 2.5 million turkeys and chickens in the Midwest since early March. He said the fact that the highly pathogenic H5N2 virus has already appeared as far east as southern Ontario means there's an uncomfortable risk of it spreading to the East Coast where much of the U.S. broiler chicken industry is based.

"If it sticks around and continues it's going to be very devastating to our poultry industry and our international markets, trade markets, as well as the loss domestically," Clifford said in an interview with The Associated Press. "That's why we have to really use this time appropriately to do all that we can to determine how best we can address and prevent introductions in the future."

Authorities have confirmed H5N2 outbreaks at nearly 40 commercial poultry farms in the Midwest, including 26 in Minnesota. All were turkey operations except for one chicken farm in Wisconsin. On Thursday, officials said four more Minnesota farms and two more in Wisconsin had been struck.

Officials say there's no risk to public health or the food supply. Economists don't expect the outbreaks to affect retail prices much because the birds that have been killed by the virus itself or euthanized to stop its spread represent just over 1 percent of the 235 million turkeys produced in the U.S. last year.

While some USDA officials have told Minnesota officials the virus could be a problem for three to five years, Clifford said it's impossible to be certain.

"It could be around that long, and there's just no way to know for sure," he said.

Experts believe Minnesota is the epicenter because it's the top turkey producing state - raising around 46 million turkeys a year - and its thousands of lakes and wetlands naturally attract large numbers of migrating ducks and other waterfowl. Turkeys are most susceptible, but chickens also die from the virus. While waterfowl can carry avian influenza viruses and spread them through their droppings and oral secretions, they don't usually become sick from them.

The ducks blamed for bringing H5N2 to Minnesota and other Midwestern states migrate through the country's midsection.

The broiler chicken industry, which produces chickens for meat, is clustered along the East Coast in states such as Georgia, North and South Carolina, Virginia, Delaware and Maryland. Clifford said the waterfowl that brought the virus to an infected farm in southern Ontario are likely from flocks that either migrate along the East Coast or intermingle with flocks that do.

The USDA has sent about 60 people to Minnesota to reinforce the state's response. State officials have asked U.S. Agriculture Secretary Tom Vilsack to ensure that enough funding remains available. Clifford estimated that the USDA has already spent $20 million to $30 million to reimburse farmers for birds that were euthanized and on other costs. He also said the secretary has the authority to provide additional emergency funding, and it's been requested as the agency gears up for a new round this fall.

The federal government is also working to limit the harm from export bans imposed by around 40 countries that are already hurting both the turkey and chicken industries, which combined export more than $5 billion worth of products annually, Clifford said.

"We've already lost hundreds of millions of dollars in those markets," he said

Ignite overhauls executive team

Company makes move to be "leaner, more efficient" after Romano's Macaroni Grill sale

Source: NRN
Ron Ruggless
Apr 17, 2015

Ignite Restaurant Group Inc. said Friday it has overhauled its management team with the closure of the Romano's Macaroni Grill sale.

Stepping down are Michael Dixon, president and chief financial officer, and Jim Mazany, president of Joe's Crab Shack, effective Friday. Dixon, however, will stay on in a consulting capacity through May 15.

Brad Leist, senior vice president of accounting and finance, was promoted to the role of chief financial officer, replacing Dixon.

David Catalano, former president of Brick House Tavern + Tap was promoted to chief operating officer, overseeing both Joe's Crab Shack and the Brick House brand.

Ray Blanchette, the company's CEO, will resume the title of Ignite president, taking on Dixon's role.

"In conjunction with the sale of Macaroni Grill, we are right-sizing our operations to create a leaner, more efficient organization," said Blanchette in a statement. "In effect, we are returning to an organizational structure that closely resembles the structure in place prior to the acquisition and reduces annual corporate overhead by over $14 million."

Ignite, which acquired Macaroni Grill in April 2013 from Golden Gate Capital, announced March 12 that it was selling the 171-unit brand to Phoenix-based Redrock Partners LLC, a company that includes former Macaroni Grill CEO John F. Gilbert III, in a deal valued at about $8.2 million.

Leist joined Ignite in 2012. Before joining the company, he was vice president, corporate controller at Builders FirstSource Inc. from 2004 to 2012, and he spent seven years at accounting firm PricewaterhouseCoopers LLP.

Catalano joined Ignite in 2013. Previously, he held senior operating roles at TGI Fridays, Hard Rock Café and Applebee's franchise group Apple Gold.

In addition, Robyn Martin, senior counsel, was promoted to the role of general counsel.

"As part of this realignment, I'm very excited to be giving Brad, David and Robyn expanded roles within the Ignite organization," Blanchette said in his statement. "Brad has been an integral part of building and developing Ignite's infrastructure during the last few years and I am confident in his ability to lead our finance and accounting teams and build upon the foundation established under Mike Dixon's tenure."

Blanchette thanked Dixon and Mazany for their contributions, noting that Dixon joined the company in 2013 before the acquisition of Macaroni Grill and was instrumental in completing the purchase and integrating the business. Mazany was credited with building Joe's Crab Shack from a $2.2 million average unit volume business into a $3.2 million AUV business.

"I wish both of them the best in their future endeavors," he said.

Dixon said in a statement, "I believe that we've positioned the company for success. I'm confident that the Ignite business is in good hands and well positioned and equipped to take advantage of the growth opportunities ahead."

As of Dec. 29, the Houston-based company had 139 Joe's and 21 Brick House units.

Tesco to plug pensions black hole

Retailer expected to report up to £5bn of losses and put £250m a year into retirement scheme

Source: The Telegraph
By Graham Ruddick
18 Apr 2015

Tesco is to pump hundreds of millions of pounds a year into its huge pension scheme in an attempt to plug a black hole. The move will pile further pressure on the stretched finances of Britain's biggest retailer.

The supermarket chain is expected to inject around £250m into its pension scheme every year as it battles to control a growing deficit approaching £5bn.

Tesco is expected to unveil the pension plan in its annual results on Wednesday. They will show the biggest loss in the company's 96-year history.

It is likely to report pre-tax losses of between £4bn and £5bn as a consequence of booking billions of pounds in impairment charges, predominantly on the value of its struggling supermarkets.

Although the loss will be non-cash because it refers to the falling value of Tesco's assets, the figure reflects the chaos that has engulfed the retailer in the past year. The company has suffered from falling sales amid fierce competition from the discounters Aldi and Lidl, but also became embroiled in a £263m accounting scandal that has led to the Serious Fraud Office investigating.

In the financial year to the end of February, Tesco lost its chairman, chief executive, and finance director and issued four profit warnings.

Dave Lewis, the new chief executive, has already laid out plans to put the retailer back on track and shore up its balance sheet. Since he arrived from Unilever in September, Tesco has cut prices and put more staff on the shop floor, which has helped to slow the decline in sales.

In January, Lewis, nicknamed "Drastic Dave" from his Unilever days, then unveiled a radical set of proposals to support Tesco's finances.

These included cutting £250m of costs a year, closing Tesco's head office in Cheshunt, Hertfordshire, scrapping the final salary pension scheme, closing 43 stores, scrapping plans to build 49 new ones, and cancelling the final dividend. Up to 10,000 jobs are expected to be lost as a consequence.

Despite the measures, credit rating agencies downgraded Tesco to junk and Mr Lewis will be forced to take further action to improve its funding. The company is in the process of selling off a stake in Dunnhumby, the customer data business behind Clubcard, but the company has played down the prospect of a rights issues and is expected to repeat that this week.

Mr Lewis must now also act over the pension deficit.

Tesco employs more than 300,000 people in the UK and has one of the biggest pension schemes. The company's interim results in October showed its pension deficit had ballooned to £3.4bn after tax. But the latest triennial review of the scheme, which is expected to be revealed alongside Tesco's annual results, will show that the deficit has grown close to £5bn according to City estimates.

This will push Mr Lewis into committing additional hundreds of millions of pounds to the scheme every year in order to close the gap. Analysts at Deutsche Bank, Tesco's house broker, have said this payment will be £250m a year. It is understood that Tesco could also make a significant one-off payment to shore up the scheme.

Bruno Monteyne, analyst at Bernstein, said: "Following the profit and loss reset last year, this is the balance sheet reset covering both writedowns but also improved accounting and disclosure standards."

Before the one-off impairment charges, Tesco has already said it will not post trading profits above £1.4bn, which is less than half the £3.3bn reported last year.

Michigan: Lawmakers shun Snyder's bid to hike liquor license fees

Source: Detroit News
Alisha Green, Associated Press
April 19, 2015

As part of his budget proposal, Gov. Rick Snyder asked the Legislature for new, increased or extended fees that would raise around $13.9 million in new revenue.

A 50 percent increase in liquor license fees would generate nearly $6.2 million in increased revenue. Most of those fees have not changed since 1976.

The liquor and hospitality industries immediately fought the proposal, saying it would unfairly balance the budget on the backs of small businesses.

The appropriations committee chairs leading the budget process in the House and Senate are agreeing with the industries. They are not moving forward with increases for liquor license fees.

Instead, a deal is in the works that would take money from the Liquor Purchase Revolving Fund to support technology upgrades for the Michigan Liquor Control Commission that the fees would have funded.

The Liquor Purchase Revolving Fund receives money from taxes on certain liquor sales in the state, among other money.

Money in that fund has increased as the prices and total sales of liquor increase.

Scott Ellis, executive director of the Michigan Licensed Beverage Association, said it wouldn't be fair to raise fees on the liquor industry when it already funds various parts of the state budget with taxes on liquor sales. Also, he said, money in the Liquor Purchase Revolving Fund could be used for the proposed technology upgrades.

"We can't punish our industry if we are already self-providing. We are doing our part," he said.

Under Snyder's proposal, the fee increases would raise $2.6 million to support technology upgrades for the Liquor Control Commission, including new reporting features and the elimination of paper applications, said Jason Moon, spokesman for the Department of Licensing and Regulatory Affairs.

It also would add staff to help reduce the application backlog, Moon said.

The remaining money from the $6.2 million would support local law enforcement and other programs.

Justin Winslow, vice president of government affairs for the Michigan Restaurant Association, said liquor fee increases are "not the way to find those resources" for technology upgrades.

Winslow said more than 70 percent of the restaurant association members are independent operators, and raising liquor fees 50 percent would especially hurt smaller businesses.

The industry is already bearing its fair burden, he said.

"We are producing substantial amounts of revenue" for the state, he said.

Senate Appropriations Chairman Dave Hildenbrand, a Lowell Republican, said he would rather use the increased revenue in the Liquor Purchase Revolving Fund to invest in technology upgrades than raise fees.

House Appropriations Chair Al Pscholka, a Stevensville Republican, said liquor fee increases will not be in any of the fee-related bills being moved through the House.

"We understand the challenges that some of the fee proposals are currently facing, including the liquor license fee," State Budget Office spokesman Kurt Weiss said. "As we continue to work through the budget process, we look forward to the continuing dialogue with the Legislature and we are confident we will have a strong budget that is ready for signature in June."

The liquor licensing fee increases are not the only point of difference between the governor and Legislature on the subject of raising additional revenue.

Snyder proposed a 36 percent increase in the air emissions fee. The fee is paid by industries that emit air pollutants and used to keep the state in compliance with the federal Clean Air Act. The House is proposing an increase closer to 6 percent.

The House and Senate have more than 100 non-liquor related fee changes to consider from Snyder's proposal. The proposed fee increases in the executive budget can be reviewed at

Virginia: Virginia Alcohol Agency's Arrest Powers Under Scrutiny

Source: NBC
April 19, 2015

A Virginia alcohol-law enforcement agency that has sparked public outrage over two high-profile arrests has investigated three complaints of excessive use of force by its officers in the last five years, according to data obtained by The Associated Press under an open-records request.

Details of those incidents, however, remain sealed. The Virginia Alcoholic Beverage Control Department declined to release the reports, citing personnel records exemptions in the state's Freedom of Information Act.

This much is known: None of the use of force complaints involves the first incident that brought attention to ABC's police tactics. No such complaint was formally lodged in 2013, when a University of Virginia student Elizabeth Daly's car was swarmed by plainclothes ABC agents _ including one who pulled a gun and another tried to break her SUV window with a flashlight _ as she left a grocery store with a carton of sparkling water the officers mistook for beer.

Daly faced charges for grazing officers with her car as she fled in panic, but the case was dropped after a public outcry and she later settled a lawsuit against the state for $212,500.

``I still can't understand the degree of aggressiveness they treat these kids with,'' said Jim Thorsen, the attorney who represented Daly in her lawsuit. ``I think they've lost the right to claim they can adequately enforce these laws.''

The alcohol agency announced a package of reforms in response to a Virginia State Police investigation, but less than two years later its police force is under scrutiny for another arrest at U.Va. Photos and video of ABC agents holding down student Martese Johnson, bleeding from a gash on his head, spread quickly on social media.

Johnson, who is black, can be heard in the video accusing the officers of racism. While his arrest provoked racial tensions on campus, ABC figures show 18.5 percent of the people it arrested over the last four years are black _ slightly below the state's black population of 19.7 percent.

Whether the ABC Bureau of Law Enforcement loses some of the authority it has used to make thousands of arrests annually is a major topic to be considered by a panel being assembled by state Secretary of Public Safety Brian Moran. The initiative is part of an executive order issued by Gov. Terry McAuliffe in response to Johnson's arrest. Moran said it is scheduled to conduct its first meeting May 4 and make recommendations before the end of the year.

``Hopefully the governor and the Legislature will be able to resolve the issue so we can continue to enforce the laws of the commonwealth and do it in a way that doesn't bring unwanted attention,'' Moran said.

The ABC law enforcement arm's authority over licensed sellers of booze appears safe because even the agency's critics say local and county police are ill-suited for that role. Whether ABC's 130 sworn police officers continue to patrol bars to arrest people for underage drinking or showing a fake ID is another matter.

``The case still needs to be made to me to understand why they need to have those full arrest powers and, more particularly, why they ought to be involved in policing consumers of alcohol in addition to the licensees,'' said state Del. Marcus Simon, D-Fairfax.

ABC declined to take a public position on the issue, saying in a written statement that it will be addressed by Moran's review panel.

Statistics compiled from ABC's annual reports show that its law enforcement agents conducted nearly 56,000 criminal investigations and made more than 10,000 arrests over the last five fiscal years. The Daly and Johnson incidents raise questions about whether the three use-of-force complaints paint an accurate picture.

``I suspect that for every one reported there may be some number more unreported,'' said Simon, who noted that Johnson's arrest might have gotten little attention had it not been captured on video.

After the Virginia State Police investigated the Daly debacle, the ABC announced 14 policy or procedure measures, including a still-unfulfilled pledge to outfit its agents with body cameras and additional training.

Scrutiny by elected officials is nothing new for the ABC, which has survived periodic proposals to turn the state's lucrative liquor business over to private interests. In the last five years, the agency that operates the state's 350 liquor stores _ one of 18 state alcohol monopolies nationally _ has funneled more than $1.8 billion into the Virginia treasury.
Read 13221 times Last modified on Monday, 20 April 2015 11:41

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