AROUND THE WORLD – November 2006

This month’s roundup of news from around the world

Constellation opens doors
Cellar Door boosts premium portfolio with the addition of new wines from Canada, South Africa and the US

Premium wines from Canada, South Africa and Washington State have bolstered the Cellar Door portfolio this year. The range now encompasses a comprehensive selection of wines from top-quality producers across the four continents of the New World. Fiona Boundy, marketing manager at Cellar Door by Constellation Wines comments: “Our aim at Cellar Door has always been to showcase the diversity and complexity of some of the New World’s most exciting wine regions. The
new wineries fit well within our existing portfolio, further strengthening and broadening our offering.”

Cellar Door was founded in 2003 to present a range of wines from the top wine-producing regions of Australia, California, New Zealand and Chile, including exceptional producers such as Ravenswood and Leasingham. Last year saw the addition of the high profile Robert Mondavi Winery. The Cellar Door team recently relaunched the Tintara range of wines from Australia. Tintara was established in McLaren Vale in 1861 and produced the oldest recorded bottle of Australian wine: the 1867 Tintara Vineyards Association Claret. The three tier range reflects the best of the region. It includes a Shiraz and Grenache, packaged with a new deep terracotta orange label which represents the red iron-stone soil and Mediterranean climate of the area.

Bud war in Germany

A further attempt by brewer  Bitbuger to prevent US beer Budweiser from using the word “Bud” in Germany has failed.

The brewer appealed the ruling of a German court at the second-highest European court, the Court of First Instance in Luxembourg. Bitburger makes use of the trademark “Bit”.

Because Czech beer Budweiser Budvar has the right to use the full name in Germany, the Anheuser-Busch brand is required to market its beer as “Bud”.

A court statement said:, “Considered as a whole, the marks at issue are not similar and there is no likelihood of confusion.”
Stephen J. Burrows, president of Anheuser Busch believes that “this decision will strengthen our Bud trademark position in Europe.”

Trademark issues between Budweiser and Bitburger flared up during the FIFA World Cup earlier in the year when Budweiser, an official sponsor of the event, was required to advertise as “Bud” in stadiums. Bitburger’s complaints led to the US beer losing its monopoly on sales, with both brands being available to fans during matches.

Following the recent European court decision, Bitbuger has the option to appeal to the European Court of Justice.

SAB eyes ecuador

Sabmiller is looking to secure 100% ownership of the three leading brewers in Ecuador. In a deal rumoured to total US$88 million, the world’s second largest brewer by volume is seeking to take over Compania de Cervezas Nacionales CA, Cerveceris Andina SA and Agrilsa Agricola e Industrial SA. The deal would combine the two largest brewers in Ecuador.

SAB currently owns a controlling stake in all three business – with 93%, 72% and 92% shareholdings respectively. Once it assumes outright control of the three separate entities the objective is to integrate them, with combined operations in Guayaquil and Quito. SAB’s offer opened at the end of last month, and was scheduled to close on December 13.

In other news from the brewing giant, SAB has taken a step closer to securing outright control of its Colombian subsidiary Bavaria SA. The company secured a majority shareholding last year and this latest deal – acquiring a further 500,000 shares for $10.1m – takes SAB’s stake to 97.99%. SAB has indicated that it intends to delist the company once it holds a sufficient majority share.

Thai trade clamp-down

The drinks trade in Thailand has been shocked by strict new government legislation banning advertising for alcoholic beverages. The ban was implemented at the end of October, and from November 1 all alcoholic drinks will be labelled “health hazard products” by the Food & Drug Administration.

Previously commercials could be shown on television from 10pm to 5am. There were no restrictions
on print and outdoor advertising. The new initiative, spearheaded by public health minister Mongkol Na Songkhla, will completely ban all TV, radio, print and outdoor ads. “The measures will be enforced similarly to those on tobacco products,” said Songkhla. 

Legislators are also considering extending the ban to include all marketing activities such as branded items in beer gardens, bar staff clothing and potentially even on-shelf display.

There is also growing support for raising the minimum age for purchase of alcohol to 25. Thailand has one of the highest alcohol consumption levels in Asia and lawmakers are determined to reduce this.

The industry has been stunned by the rapid implementation of the new legislation. “It just suddenly happened,” explained Somsara Pongpermpruek of Riche Monde, a Bangkok importer of brands including Johnnie Walker and Moët & Chandon.

Meanwhile other commentators have warned that the ad ban could result in a price war, which is likely to drive consumption higher.

Bollinger vs The Multiples
Discount Fury

Trouble is bubbling up in France between leading Champagne houses and the large supermarket chains. Bollinger has threatened legal action against the multiples, arguing that their massively discounted prices are damaging the brand’s premium perception.

Ghislain de Montgolfier, chairman of Bollinger, decided to initiate proceedings after seeing bottles of the brand on sale for significantly below the recommended retail price – as much as half in some cases. “The effect on our image is disastrous,” he explained. “It’s a veritable organised traffic that flouts all the rules of commerce.”

The deep discounts were made as part of Les Foires aux Vins, the wine sales that take place each autumn in France. Bollinger does not sell directly to the supermarkets, although it sells over 70% of all wine consumed in the country.

Bollinger’s marketing director Stephen Leroux explains: “This is only a domestic issue, we enjoy a good relationship with multiples in the UK.”

Batemans arrives in Russia

Independent family brewer Batemans will gain a presence in Russia via the Stolichnaya Trading Company. Beers from the Lincolnshire-based brewer will now be available in gourmet food stores and shopping centres in Moscow.

Commenting on the new agreement, Jaclyn Bateman, marketing and export director for Batemans said, “This is a real coup for us. Stolichnaya only carries traditional brands which it deems to be of the highest quality and internationally recognised. So our beers will sit beside products from outlets such as Fortnum & Mason.”

Batemans beers will feature in the international beer section of Stolichnaya’s retail brand, Globus Gourmet. Mike Hague, managing director of MPH International, consultants to Stolichnaya, reported that the company is “delighted with the quality and tradition offered by Batemans beers”.

Sapporo buys Canadian brewer

Canada’s third-largest brewer has been acquired by Japan’s Sapporo Breweries.

The company’s C$400 million offer for family-run Sleeman Breweries was accepted last month, following approval by Canada’s minister of industry.

The deal was finalised amid plans for improving efficiencies, as well as increasing sales in the US with an advertising campaign. The deal will also allow for Sleeman beers to be distributed in Japan, initially in Sapporo-owned restaurants.

Sleeman already brews Sapporo beer in Canada, and is responsible for about 7% of Canada’s beer market.

John Sleeman, the company’s CEO, explained that a number of other potential buyers, “would have not needed our facilities and not needed all of our employees”.

The Sleeman family has five generations of brewing heritage. The company’s CEO explained that “Sleeman needs the investment. They need money to grow. It’s a great match.”

Goodbye Tokai

Italy’s final Tokai harvest was marked by beauty-pageant finalists trampling grapes on a beach last month.

An EU ruling protecting Hungary’s use of the word Tokaji will come into effect next year. So from March 2007, the Italian Tokai Friuliano will be known just as “Friuliano”.

Italy currently produces 8 million bottles of Tokai a year. It has been awarded €15m in financial aid to relaunch the wine.

© db November 2006