AROUND THE WORLD

USA – Possible bad weather ahead for drinks brand owners in the USA with the news that almost three-quarters of the American public would support an increase in federal alcohol taxes…Spain – Anti-Catalan sentiment within Spain, which triggered mass Cava boycotts last year…

Americas

USA

Possible bad weather ahead for drinks brand owners in the USA with the news that almost three-quarters of the American public would support an increase in federal alcohol taxes on beer, wine and spirits. In a study conducted by the Center for Science in the Public Interest (CSPI), 71% of Americans (including the usually anti-tax Republican voters) supported a rise of 5 cents per drink, which could raise more than US$20bn over five years to help fund social security and Medicaid. Due to inflation, federal alcohol taxes have actually dropped over recent years, when assessed as a flat dollar amount. Currently, state and federal alcohol tax revenues in the USA stand at US$18bn a year.

Meanwhile, market-leading white rum Bacardi has awarded a US agency, Young & Rubicam, the contract to develop a global advertising creative for its flagship brand. A report from Bacardi says that the agreement only covers advertising creative, without any media buying, internet or below-the-line responsibilities. Bacardi is said to be stepping up the marketing of its premium spirits stable and recently appointed Stella David as global chief marketing officer.

Europe

Spain

Anti-Catalan sentiment within Spain, which triggered mass Cava boycotts last year, has been cited as the reason for Codorníu’s 70% profit tumble at the end of its fiscal year 2005. Net profits fell to ç3.7m on sales that were actually up 1.2% to ç208.5m. A spokesman for Codorníu also said that a ç5m extraordinary gain from a real-estate transaction had artificially raised the previous year’s profits, which then worsened this year’s apparent profit fall.

Exports, however, were up by 17% to reach ç62.5m which created improved profits for the Spanish company’s international division.

France

A positive outlook for Champagne houses as Yves Bénard, president of l’Union des Maisons de Champagne, has predicted a rise of 1.5% in volume and 3-4% in value in 2005 over last year, putting sales volume for the current year at between 300m and 310m bottles. Exports to the UK are expected to have increased by 6-7%.

Bénard says stocks have been bolstered by this year’s large harvest and now stand at the equivalent of one billion bottles, the highest levels seen for three to four years.

However, the news is not so good for brewers as InBev is about to cut 119 jobs from its operations in France. The total job cuts will, in fact, amount to 303 across InBev and its distribution subsidiary, CaféIn. However, 84 employees will be offered alternative positions in the revamped brewing business.

The streamlining is a result of a stagnant beer market in Western Europe. Levels of beer consumption in France have plummeted by 25% over the last 25 years and beer sales have dropped by as much as 13% in the last 10 years alone.

UK

A 27-year-old Ayrshire barman has pleaded guilty to refilling a Gordon’s Gin bottle with a different gin, proving that gin drinkers are not easily fooled. South Ayrshire Council Trading Standards received a complaint in January this year from a member of the public who claimed that the spirit being served at the Station Inn in Mossblown, South Ayrshire, wasn’t the named brand because it “tasted like cheap gin”. Analysis showed that the spirit had indeed been substituted and Thomas Irwin was ordered to pay a fine of £400 at Ayr Sheriff Court for Trade descriptions offences. Director of the International Federation of Spirits Producers (IFSP), Philip Scatchard, said, “We are doing everything we can to ensure the customer is served what they ask for and pay for.”

Meanwhile in spirits news, UK-based spirits group, Blavod Extreme Spirits, has issued an allotted 590,621 shares in the company. Issued for a cash price of £0.25 per share, the move follows Blavod’s agreement last month with the Headstart Group which will see Headstart subscribe for new ordinary shares in the company.

Sweden

V&S Absolut Spirits’ flagship brand, Absolut Vodka, has broken all previous records for full-year production as the nine-millionth case rolled off the production line in Åhus last month.

In order to meet increasing demand, V&S Group has recently invested SEK680m (ç71.6m) to expand its production facilities in Åhus and Nöbbelöv.

“Never before have so many cases been produced in Åhus in a single year, which proves how much Absolut is appreciated by consumers around the world,” says Krister Asplund, vice president of manufacturing.

A commemorative “nine millionth” case has been designed to mark the record production. It is thought the case will be shipped to the USA though it’s precise destination is not known.

Asia

China

In a milestone trademark court case in China, Société Jas Hennessy (owned by LVMH) has been awarded 300,000 yuan (approximately £21,542) in damages for breaches of its trademark by two Chinese drinks makers. Xiang Mu Tong Trading and Xiamen Golden Huanya Food had been producing wine, labelled as “French Cognac Brandy” under the names Hanlissy and Henglishi.

The awarded sum may seem small, but the real value of the ruling is considered to be the removal of the products from the market, and the strict benchmark that it sets for future cases of trademark infringement.

© db January 2006