BRONCO WINE COMPANY PLEADS WITH SUPREME COURT

The U.S. Supreme Court must once again decide whether it will hear the case between Napa Valley winemakers and Central Valley-based Bronco Wine Company. Ever since a California law was passed in 2000 requiring wines with Napa County names to be made with at least 75% Napa County grapes, Bronco has sought legal measures to overturn the ruling. The U.S. Supreme Court refused to hear the case in 2005, and if they decline this year Bronco will likely be forced to follow the wine labeling law. Vintners Executive Director Linda Reiff challenged Bronco in a prepared statement saying, “Our goal has remained the same since this fight began more than five years ago: If a wine label says ‘Napa’ then the wine in the bottle should be from Napa.”

SW&S CHOSEN AS MAIN DISTRIBUTOR IN U.S. FOR PERNOD

Southern Wine & Spirits of America was chosen by Pernod Ricard to be the exclusive distributor of their full line of spirits and wines in Florida, Illinois, New York, Kentucky, and South Carolina. The wholesaler will also be Pernod’s spirits and wine broker in North Carolina, Virginia and West Virginia with continued representation in Nevada and New Mexico. Chief and chairman of Pernod, Michel Bord, said they chose SW&S because it “has a proven track record in its appointed markets, as well as excellent planning and execution capabilities that will position our brands for continued growth.”

INBEV HIRES NEW CEO

Carlos Brito was selected to become the next Chief of InBev following John Brock’s three-year run. Carlos is currently in charge of the North American operations for InBev and was formerly head of the Brazilian company AmBev. Said Chairman Pierre Jean Everaert, “Brito is young, aggressive and used to developing markets. AmBev is a sales-led business. This will bring us a new wind of direct marketing.” Pierre also reported that he will be replaced as chairman by Peter Harf, a board member, in May.

CHAMPAGNE SECTOR SHOWING PROMISE

Although French wine exports aren’t doing so hot, their champagne is showing increasing popularity in other countries, especially the U.S. and Japan, where sales were boosted by 35%. French consumers still drink the largest amount of champagne but marketing research shows that foreign consumers purchase more expensive brands. Says Daniel Lorson of the CIVC, "The French buy non-vintage brut [dry], the basic wine, whereas in places such as the United States and Japan they buy upmarket vintage brands." Also, export prices are 30% higher according to Lorson: “There is so much export demand that it would be a shame to give up the margins." Britain drinks the most amount of champagne, followed by the U.S. and Europe with increasing numbers from Japan, Singapore, China and Russia.

PERNOD FULFILLS EC REQUIREMENTS

In accordance with the European Commission, Pernod Ricard signed two agreements with Campari for the disposal of its Glen Grant, Old Smuggler and Braemar products they acquired last year after taking over Allied Domecq. The transaction came out to about €115 million and €15 million respectively and marks Campari’s first move into the key Scotch whiskey segment. Campari’s chief Enzo Visone said Scotch whiskey was “one of the most important spirits categories in the world, a segment with great potential internationally as well as in the domestic market.” The new brands had already built popularity in the U.S., Eastern Europe, Italy, Argentina, Thailand and China which Campari intends to expound on.

VIETNAMESE BEER INCREASE CALLS FOR NEW BREWERY

Yesterday, Vietnam’s Saigon Beer Beverages Company launched a new, 100-million-liter-per-year brewery in Ho Chi Minh City to meet increasing beer demands in the country. The plant is outfitted with the most technologically advanced German brewing equipment and expected to produce its first batch in June 2007.

HUSA PREPARES FOR HEINKEN LIGHT ROLLOUT

Heineken USA chose Berlin Cameron United to run advertising for the national launch of Heineken Premium Light. The agency begins immediately but national rollout starts March 1, 2006 and will first be introduced in on-premise sectors. The brand was tested in Phoenix, Dallas, Providence and Tampa since the summer and did well with very little cannibalization.

PERNOD SALES THREE WHISKEY BRANDS

Pernod Ricard announced today that they have sold their Glen Grant whiskey brand, as well as their Old Smuggler and Braemar to Italy’s Campari for €115 million. Selling the three whiskey brands was a condition the EU set for the company’s acquisition of Allied Domecq last spring and is likely to be finalized early next year. In addition to selling their Dunkin’ Brands, Pernod has greatly reduced company debt. Chief Patrick Ricard said: “The disposal of Glen Grant, Old Smuggler and Braemar following the sale of the Dunkin’ Brands and our minority stake in Britvic, has enabled us to …to reduce indebtedness.”

CALIFORNIA WINE INSTITUTE PLEASED WITH WINE AGREEMENT.

The California Wine Institute issued a statement commending the EU-US wine trade agreement that was passed December 20. European names are now more protected than before and the U.S. is safeguarded against the EU, their biggest import. However, the CWI admonishes any remarks that imply US winemaking is not up to standards just because their methods do not conform to some European country’s practices. International Director of the California Wine Institute, Joseph Rollo, says “US wineries produce high quality wines which meet a broad distribution of consumer tastes and price preferences using practice approved and used throughout the wine world.” Since winemaking practices differ throughout the world based on climate and tradition, it is unfair to point fingers according to the CWI. They claim that U.S. wine is not watered down and that using wood chips is a legal, acceptable and common practice that has been used for years.

LOW-CARB AMSTEL SOLD IN RUSSIA

Heineken, the third largest brewer in Russia, has decided to launch a low-carb, lower-calorie version of Amstel in an effort to reach out to health conscience Russians. “Amstel is the first beer entering the growing vitality market in Russia. This is a unique product for modern beer drinkers,” said Heineken Russia CEO Roland Pirmez. The brand will initially be sold in Moscow and St. Petersburg and will be rolled out across the country next January.

ANNOUNCEMENT

Ola Salmen was appointed as Cruzan International’s newest chairman of the board and began last Tuesday, December 13.

THAIBEV HOPING TO REGISTER ON THAILAND’S STOCK EXCHANGE

ThaiBev, the largest alcohol producer in Thailand, will continue trying to list on the country’s Stock Exchange but will carry on with business as usual until that happens. If the company enlists on the Stock Exchange of Thailand, it will be the largest initial public offering ever undertaken by a privately owned local company; however, due to the protests of religious and social activists, the Securities and Exchange Commission has postponed their final decision. “The Securities and Exchange Commission told us to wait. We’ll wait. Financial matters are not at all an issue for a company with this level of revenue,” said Kasemsant Weerakun, VP for corporate communications. ThaiBev will continue to use its revenue towards expansion and enhancing consumer recognition of their products. Ueychai Tantha-obhas, managing director of Thai Beverage Marketing Co, said “ThaiBev aims to release new products at regular intervals, especially products in the premium segment.”

BAVARIA LOSES THEIR CEO

Ricardo Obregon, current Chief of Bavaria, announced yesterday that he is planning to leave the Colombian company in the near future. Although SABMiller spokesman James Crampton was unable to reveal possible candidates, he confirmed that “we have started the process of trying to find a successor.” Ricardo might already have another job in line since he has been appointed as president of Procafecol, the holding company for the coffee producers’ guild in Colombia.

PIO CESARE AND MMD TEAM UP

Piedmonte’s Pio Cesare has announced they will partner with the U.S. wine importer Maisons Marques & Domaines following their split from Paterno Wines International. MMD president Gregory Balogh said, “Pio Cesare produces outstanding wines from the region…we are delighted to welcome Pio Cesare to our family of wines.”

STEVEN TAYLOR JOINS SOUTHERN WINE AND SPIRITS

Steven J. Taylor has been appointed as the new Vice President of Retail Spirits for Southern Wine and Spirits of Illinois, a division of Southern Wine & Spirits of America, Inc which is the largest wine and spirits distributorship in the U.S. Reportedly, Steven worked as Division Vice President for Allied Domecq Spirits, USA prior to Allied’s recent sale to Pernod Ricard. He will begin his new job on January 2 and will report to John Boulahanis, Vice President-Spirits who stated, “In this new position, Steve brings the experience and dedication that will continue to enhance our business relationships with our supplier partners and customers.”

POSSIBILITIES THAT BELVEDERE WILL TAKEOVER MARIE BRIZARD

News wires are reporting rumors that Belvedere will announce its acquisition of Marie Brizard, the French counterpart, tomorrow. The deal would give Belvedere a host of wines, spirits, and soft drinks that would help add variety to the “white spirits” the company already distributes.

EU AND U.S. PASS WINE AGREEMENT

Yesterday the EU approved an agreement on U.S. wine imports into the European wine market although Germany, Austria, Portugal and Lithuania opposed the decision. For starters Germany wants a “purity law” to protect Euro wines. The German Farm Minister Horst Seehofer has complaints against the U.S. practice of adding water to dilute alcohol content and aging wine with woodchips. Horst stated that “adding wood chips to wine in Europe is just unimaginable in our wine culture.” However, some EU officials consider these practices to be a sign of things to come and both the EU and U.S. will mutually recognize one another’s winemaking. Italy has asked the EU to allow the use of wood chips which will likely be granted since onerous certification procedures could further slow export sales.

RTD SPIRITS WITNESS DECLINE IN UK

After a 5-year boom ready-to-drink spirits, such as Smirnoff Ice and Bacardi Breezer, are seeing a decline in the UK along with Red Bull and Lucozade Sport energy drinks. In 2005-2009 slow growth is projected in the drinks market with wine expected to do best along with soft drinks. The beer sectors, especially dark beers, will likely decrease in the UK as they already have done in many other countries.

ST. PETER’S BREWERY GAINS RECOGNITION

The annual Food from Britain Export Awards, held at The Savoy in London, awarded St. Peter’s Brewery with the Drinks Exporter of the Year title. “We have put a great amount of effort into exporting,” said Colin Cordy, managing director at St. Peter’s Brewery. St. Peter’s supplies its extensive stock of beers and ales to 15 overseas markets, including the U.S., Canada, and Russia, making up nearly half of the brewery’s total sales. Simon Waring, marketing and international management director at Food from Britain, said, “The judges were extremely impressed with the company’s approach to export markets. It is passionate about exporting and has had huge successes through highlighting the ‘Britishness’ of its products. The only British brewer whose main focus is on exporting, this small company has big ambitions.”

PATERNO WINES AND PIO CESARE AGREE TO SEPARATE

After working together for 28 years, U.S. distributor Paterno Wines International and Italian wine producer Pio Cesare have agreed to part ways. Paterno claimed they were “proud” to have imported Pio Cesare, a premium wine from the Piedmont valley, into the United States and called the decision an “amicable separation.”

MICHIGAN CEASES TO BAN NATIONAL WINE SHIPMENTS

Michigan Governor Jennifer Granholm passed a law to overturn out-of-state direct shipment bans yesterday and now allows all in-state and out-of-state wineries to send up to 1,500 cases a year to residents. However, the state attorney general believes it may not stand up in Michigan court.

WINE ENTHUSIAST COMMENDS VERGELEGEN WINES

Vergelegen wines of Stellenbosch, South Africa won the 2005 New World Winery of the Year Award from Wine Enthusiast Magazine marking the first award for South African wines and the New York trading company 57 Main Street Imports. Main Street Imports are the exclusive U.S. importers of Vergelegen, and are “proud to represent Vergelegen, and to contribute to the emergence of the Cape wine industry,” said President and CEO Peter Morales.

IT’S FINAL: COOPERS SHAREHOLDERS SAY NO

93% of Coopers Brewery shareholders voted in favor of removing Lion Nathan’s pre-emptive share purchase rights today, dealing a serious blow to the Australian company’s acquisition plans. Coopers managing director Tim Cooper said, “We would not have thought there is merit pursuing us in further litigation. The shareholders are very happy for us to be left alone to continue what we do best, which is run as an independent brewery in Australia.” However, Lion Nathan has chosen to keep the offer on the table and will continue to pursue all legal alternatives available. Coopers chairman Glenn Cooper says, “Our shareholders … have spoken convincingly and loudly." It appears as though Coopers will stand firm against Lion Nathan although the giant drinks company will go to great lengths to get what they want. Lion Nathan spokesman Paul Evans said, “We will continue to defend our rights, pre-emptive rights that were previously given to us by Coopers.”

CHAMPAGNE SALES LOOKING GOOD

According to Yves Benard, president of the trade group l’Union des Maisons de Champagne, Champagne sales are expected to rise by 1.5% in volume and 3% to 4% in value in 2005 on the previous year. YTD sales should be between 300m and 310 m bottles.

SABMILLER LOSES MARKETING CHIEF

Mark Sherrington, SABMiller’s marketing director, is set to leave the company after three years to pursue other ventures. A spokesman said, “The plans to find a successor are taking place and Mark intends to stay in place until a successor is found.”

UB GROUP MOVING OUT OF AFRICA

India’s UB Group is planning to sell off its stake in the South African-based United National Breweries to a buyout led by UNB CEO, Rajan Ranganathan. UNB specializes in Sorghum beer which has lately declined in popularity, a likely reason for UB to pull out of the company.

THE EMERALD ISLE’S DIAGEO WINS AN AWARD

Diageo Ireland and RMG Target received the title of Best Direct Marketing Program for their Guinness Relationship Marketing Program, consisting of direct mail and POS material, at the Direct Marketing Association (DMA) International ECHO Awards in Atlanta. “This is a huge achievement for the Guinness brand and our agency, RMG Target,” said Asta Lund, Relationship Marketing Brand Manager, Guinness.

CALIFONIA ANTICIPATING EXCELLENT HARVEST

California winemakers predict the 2005 Wine Harvest to be a success with high quality and quantity. The State Agriculture officials estimated the harvest at 3.15 million tons of wine type grapes in October with a 10-15% increase from the norm, making it the second largest crop ever for California. The weather provided a cool, long growing season perfect for developing grapes with “good maturity and flavors, with sugar levels coming in slightly lower than past vintages,” said Robert Steinhauer, consulting viticulturist for Foster’s Wine Estates Americas. “It was also a slow ripening season that contributed to the quality of the fruit, and the resulting wines should have elegance and balance.” The early release white wines for 2005 will be available in February and March while most of the reds will be sent out in 2007. “Though global competition is fierce on the retail wine shelves, the excellence and large size of this 2005 vintage is setting the stage for continued expansion of the California wine industry,” said Bobby Koch. California wine makes up 64% share in the U.S. market.

NEW MARKETING CAMPAIGN FOR COCKSPUR RUM.

Hood River Distillers of Hood River, Ore. announced yesterday that its ad agency, Leopold Ketel & Partners, in Portland will create a U.S. marketing campaign for Barbados-based Cockspur Rum. LKP redesigned the packaging for the complete Cockspur portfolio and will also provide advertising, promotions, POS, and public relation services. "The rum category is one of the fastest growing spirits segments in the nation and our agency is very excited about this new assignment … We look forward to providing Cockspur with a big, splashy introduction to the U.S.," said John Russell, LKP president.

SW&SA WIN CHATEAU COUFRAN DISTRIBUTION RIGHTS

Southern Wine & Spirits of America, the nation’s largest wine and spirits distributor, won the exclusive U.S. rights to distribute Chateau Coufran. Mel Dick, President of Wine Division/Senior Vice President, said, “This is a wonderful opportunity for Southern Wine & Spirits of America to continue to expand our Bordeaux wine business. Chateau Coufran is a high-quality wine estate and we are very pleased to represent them and gain a stronger presence in restaurants and wine shops across America."

MAGNOTTA WINERY RELEASES RESULTS

The Canadian Magnotta Winery Corporation released their financial results for the third quarter ending October 31, 2005 yesterday. Net sales increased 5% while gross profit margin decreased to 49.7% from 51.1% due to “increased cost pressures in the quarter for raw materials and packaging materials.” Overall, the 2005 Ontario grape harvest has been a tough one due to lower harvest amounts and poor weather.

OLD MACDONALD PROJECTS DROUGHT RECOVERIES

According to the New South Wales Government, the drought they have been experiencing for the past four years is finally easing up. The number of drought declared areas in the state have dropped from 27% last month to 18% says Ian Macdonald, Primary Industries Minister. "There's a lot more high moral out there than there has been for a period of time. The problem is we can't really say the drought's over until we see what pans out over this rather hot summer we may be expecting,” says Ian.

VINCOR BACK ON TRACK

As of today Vincor claims it’s no longer for sale and is eager to return to normal. “We are back to our strategy of building long-term shareholder value," said Mark Hilson, the chairman of Vincor's special committee. Mark says all discussions with possible buyers have come to an end. "This has been a huge distraction and we need to get everybody focused. We've got a business to run." Although many analysts believe Constellation will eventually make another offer, "There's nothing planned at this point," announced Constellation spokesman Mike Martin. Was it Vincor’s intention to stay independent all along? Probably not. If Constellation makes a better offer the two wine companies will likely merge.

LION NATHAN FEELING UNLUCKY

Lion Nathan believes shareholders from Coopers Brewery will likely vote against the drink giant on Wednesday and agree to block their preemptive right to buy Coopers share. A vote of this nature would derail Lion Nathan’s A$420 million takeover bid for the brewery because they would no longer be entitled to share offerings that come up for sale in the unlisted brewer after they are first offered to existing shareholders. However, there may be a way around it. "If the resolution to remove our rights is passed on Wednesday, there remain processes in play which aim to protect our original position to purchase shares…regardless of the outcome of any vote, we know there is a significant minority of shareholders who wish to sell to Lion Nathan," a Lion Nathan spokesman said. It looks like Lion Nathan will continue to pursue the acquisition whether or not Coopers shareholders vote against them.

NEW POMEGRANATE VODKA

Canadian Pearl Persephone Vodka came out with a new pomegranate-flavored vodka. "Today's consumers are constantly searching for unique flavors," said Todd Nickodym, executive marketer for David Sherman Corporation, the U.S. importer for Pearl.

THE HOUSE OVERLOOKS GULF-SHORE LIQUOR STORES

As most of you have likely heard, the House of Representatives passed a bill giving $7.1 billion in tax-relief to the hurricane damaged Gulf Coast. Sounds good, right? Well yeah, until you get to the part where they specifically excluded liquor stores along with casinos, massage parlors, golf courses, racetracks, tanning stores, and probably anything else deemed decadent by the Republican dominated House. Never mind the fact that suppliers and distributors have been contributing almost $15 million to mainly Republican congressional campaigns. Do donations not count for anything? Many conservatives wanted the exclusions believing that helping those damaged businesses would be “virtually impossible to defend” while other arenas like food stamps and student loans saw major spending cuts. "This is horrible tax policy," said Frank Coleman, spokesman for the Distilled Spirits Council of the United States. "Many small, family-run liquor stores lost everything in the hurricanes. This is just piling on."

CONSTELLATION’S CLOCK NO LONGER TICKING

According to Constellation, Vincor lost its chance to negotiate further with the wine giant’s proposed acquisition, and the deal has retired to the place where all lost business endeavors are doomed to squander. "It is unfortunate for Vincor shareholders that the Vincor board chose not to pursue the alternative that would maximize value for its shareholders, despite the board's failure to identify any other alternatives," said Richard Sands, chairman and chief of Constellation Brands. "The Vincor board refused to engage in any dialogue with us regarding our C$35 per share cash proposal." Sands added, "Constellation could not let this process continue indefinitely. In these circumstances, we will move on to other priorities." Vincor has said in the past that they “were open to talk to them [Constellation], so long as they gave a firm and fair offer north of C$35.”

However, analysts think the deal is not yet complete: "They're playing a little game of chicken here and at the end of the day, absent a bid from someone else, the Vincor board is going to be pressured to look at Constellation's bid and reevaluate it," said Tim Ramey, an analyst for D.A. Davidson & Co. "My guess is we'll know something next Monday morning because over the weekend they'll haggle about things, there will be some increase in Constellation's bid and they'll probably end up owning it." Could this be the end? Well only time will tell.

INBEV WINS CHINESE BREWERY

Well, it looks like InBev, the world’s largest beer producer, beat Heineken and A-B to the punch and is set to acquire Fujian Sedrin Brewery, the 8th largest brewer in China for $750 million. That’s right, only the eighth largest brewery in a fragmented, under-developed country where beer production is not very profitable. Why the mad rush? “I don’t know,” said Joe Zhang, a UBS analyst quoted in the New York Times. Denise Chai, an analyst at Merrill Lynch, agreed. “To quote the former head of Harbin Brewery: ‘Everyone wants a seat at the movie, even though they know nothing’s going to be playing for 20 years.’ It’s a very low-margin, fragmented business.” So perhaps it’s just a fad? However, the major brewers must look to the future to stay in the game, and they all see China as a potential superpower in years to come. They must buy now to keep up with the times, and as it turns out, the deal between InBev and Fujian Sedrin will mark one of the largest acquisitions ever for a foreign company operating in China. Overall, InBev’s jump ahead of A-B and Heineken may come as a surprise since many sources yesterday were predicting Heineken as the highest bidder.

DIAGEO MOVING BACK TO INDIA

Diageo may be jumping on the bandwagon already occupied by Pernod Ricard and UB by dipping into the burgeoning Indian spirits market. The company already had some experience in the market although it sold its Gilbey’s label to a subsidiary of the UB group years ago. “They should never have sold off,” an analyst tracking the spirits market said referring to Deepak Roy and UB who acquired the brand and made it a success. Although Diageo denies these reports, sources say the conglomerate has hired McKinsey & Co. to help with their reentry into India which will help increase volume and market share. Ravirai Gopal, Diageo’s Chief of Indian operations, reportedly stated that “we are focusing on the premium segment and towards that effort we have launched Ciroc, a premium Vodka label from the Diageo portfolio in India.” Diageo is also planning to introduce Johnnie Walker Gold and Blue.

RUSSIAN VODKA BEGINNING TO CONSOLIDATE

Russian Wine and Vodka Co. and OST-Alco may agree to merge together by the end of this week. Together the two companies would control 8% of the country’s vodka market and could possibly come together early next year. “We are considering two options: both companies holding 50% in the venture, or OST holding 51% and RVVK holding 49%,” Yelena Sorokina the general director of OST group, told a Russian newspaper. With new alcohol legislation passing in January, the Russian vodka market will likely see a number of consolidations.

AUSSIE’S DOWN UNDER BREW INTRODUCED IN KAZAKHSTAN

Foster’s will soon be launched in Kazakhstan by Russia’s largest brewer, Baltika, which has been brewing the beer under license since last year. Baltika plans to strengthen its position in Kazakhstan by controlling 4% share of the super-premium segment in a country where licensed brews make up “7% to 8% of the total beer market” according to a spokesman. Foster’s is already a huge hit in Russia and will likely make a mark in Kazakhstan in the next 12 months.

COOPERS DECIDES TO BUYBACK

Not surprisingly, Coopers shareholders agreed yesterday to buyback shares for $A260 as a way to resist brewer Lion Nathan’s bid of $A310 a share. They also agreed to buyback up to 15% of the company which will cost around $A50 million. Next Wednesday, December 14 Coopers shareholders will meet again to determine Lion Nathan’s pre-emptive rights over the South Australian brewery.

RÉMY COINTREAU’S PROFIT REPORT

Rémy Cointreau, the French drinks group, is looking good according to their first-half net profit report. They have more than doubled profit and plan to sell their Bols brand, which includes vodka and liqueurs, and cheaper champagnes, in order to concentrate on core drinks. Net profit for the six months to the end of September was €42.9m, up from €18.7m in the same period last year partly due to the disposal of a Polish division. Although volume is down, Remy did not seem worried and attributed the loss to its focus on premium brands such as its Piper-Heidsieck champagne. They promised a "resolute concentration on key brands" in the second half of their financial year.

VIJAY MALLAYA: “A VISIT TO CHINA IS LONG OVERDUE”

UB group may be looking to extend its clutches abroad, most likely China, as well as increasing its influence in the Indian wine market. Chairman Vijay Mallya pointed out that “growth in the western markets is pretty flat compared to India and Asia," and they have much better chances with an eastern expansion. “China is a market I want to seriously look at.” As we all know, UB is the third largest spirits company in the world after Diageo and PR and is going through the process of consolidation with United Spirits. They appear to want to give the number one and two spots in the market a run for their money. Vijay remarked that “we’re number three in the world, but we’re very India-centric, and we would clearly like to be global.” However, he does not seem worried about losing control of the Indian market to players like Fosters and SABMiller: "With the ban on advertising and sponsorships, foreign brands have an inherent handicap here," he said.

Vijay is also hoping to get more involved in the wine market, citing that “wine is definitely one of the growing segments... We are looking at it very seriously and want to expand our facility located at Baramati in Maharahstra as a full-fledged winery with new variety of grapes.” In addition to wine and spirits, UB is considering bringing Kronenbourg beer, a Scottish and New Castle brand, to India where it “would be particularly appealing to women,” said Vijay.

PERNOD’S DUNKIN’ DONUTS HOLES POTENTIAL BIDDERS.

After a British website posted a list of possible companies interested in purchasing Pernod Ricard’s Dunkin’ Donuts, Baskin Robins and Togo fast-food services, everyone is left speculating over the report’s validity. According to the story Carlyle Group along with Thomas H Lee Partners and Bain Capital may compete against KKR combined with Trimaran Capital Partners versus JP Morgan teamed with Providence Equity Partners. However, the French wine and spirits company refuses to disclose any information about the three possible competitors until later this month or early 2006 concerning the food chains they acquired from Allied Domecq earlier this year. The resulting deal could come out to $2 billion.

ANNOUNCEMENT

Mihai Ghyka has been appointed as the new Chief of Interbrew Romania and will begin January 1.

NEW BOXED WINE BRAND FOR CANADAIGUA

Box wine is all the craze in today’s wine market as people are beginning to turn towards the once stigmatized sector. “The premium 3-litre box wine category has grown 515% in volume during the past year, far outpacing the growth rate of the entire table wine category,” said Canandaigua vice-president of marketing Gary Glass. US Canandaigua wine company, owned by Constellation wines, is rolling out a new boxed wine brand called Trove which will come in a Pinot Grigio, Chardonnay, Merlot and Cabernet Sauvignon in test markets January. Trove will be introduced nationally in March 2006

MICHIGAN CORK SNIFFERS GAIN MORE ACCESS TO WINE

Michigan residents are no longer limited to what retail stores have to offer. On December 5 the Michigan state house voted 104-0 to approve legislation that would allow in-state and out-of-state wineries to ship up to 1,500 cases of wine a year directly to consumers. The house also voted 103-1 to make wineries pay a $100 fee for a state license to ship their product to consumers. In addition, a bill was passed that allows Michigan winemakers to distribute directly to restaurants and retailers while out-of-state wineries must continue to use wholesalers. And while most people view Michigan’s new legislation as a victory, the issue of minors gaining easier access to alcohol was solved with a law forcing wineries to obtain a faxed copy of the buyer’s driver's license or use an age-verification service.

NEW ZEALAND WINE: “STELLAR EXPORT PERFORMANCE”

New Zealand Winegrowers reported today that global sales reached 103 million litres, exceeding the 100 million mark for the first time. Cheaper prices as a result of the grape shortage in New Zealand have helped sales which have increased 39% from 2004 and 89% higher than 2003. Chief of New Zealand Winegrowers Philip Gregan points their success is due to the “recovered market share from imported products” and a “stellar export performance.”

COBRA BEER HEADS EAST

Karan Bilimoria, the Indian founder of Britain’s Cobra Beer, plans to take the company east to his native town of Hyderabad, India where he will set up a brewery. Karan is among a growing number of entrepreneurs who are looking to India as a potential economic superpower and hopes to begin production within the next 18 months. Although Cobra will continue to brew beer in Bedford, England, they will use their new brewery in India to serve what they expect to be one of the fastest growing markets in the world. Karan views this as an opportunity to improve the UK and India’s trade relations. According to the Times, Karan “said that British businesses were not doing enough to foster good trading relationships with India and risked losing out to countries such as the United States, Belgium and Germany. [Trade with India] represents about 1% of Britain’s overseas trade. But India is the world’s second largest country and one of the fastest growing economies.”

GREENE KING MAKES IT BIG WITH HELP FROM BELHAVEN

UK pub group and brewer Greene King, which leases over 2,000 pubs in the UK, shows impressive half-year results with a 23% rise, a record for the company. The firm chalks up their success to help from recent acquisitions which include Belhaven, Laurel pub chain and brewer Ridley’s. Although Belhaven only contributed for two weeks to day’s results, Chief Rooney Anand says synergy savings from the Dunbar-based group were effective. “Together, we predict these synergies to total approximately £3 million in 2006/7, rising to approximately £5 million pounds over the next two years,” said Rooney. Greene King’s brands include IPA, Abbot Ale and Old Speckled Hen which increased revenues 13%.

COOPERS STOCKHOLDERS DEMAND MORE TIME

Australia’s Cooper Brewery will postpone one of their voting sessions until late next week claiming they need more time to review information regarding Lion Nathan’s preemptive takeover. The Takeovers Panel determined late Monday night that a voting session set to determine Lion Nathan’s rights over Coopers shares will be delayed until next week although a date is yet to be scheduled. Lion Nathan’s rights entitle it to be offered shares that come up for sale after they are first presented to already existing shareholders, and include an exemption from a rule in the Coopers constitution that prevents the sale of shares to a competitor. Without these rights Lion Nathan will likely end their bid. Lion Nathan Chief Rob Murray maintains that “clearly the best option for shareholder liquidity at a full market price, both now and in the future, is for Lion Nathan to retain its ability to purchase Coopers shares.”

VINCOR SHAREHOLDERS PUSHING FOR MORE.

Canadian winemaker Vincor International refused U.S. Constellation’s latest takeover bid of $33 per share on December 1 but a deal will likely formulate soon. Although Constellation’s spokesman, Mike Martin, said the U.S. company has not proposed “any number at any time in terms of an offer about C$35,” many analysts believe they are willing to pay as much as C$36 a share. Mark Hilson, chairman of Vincor’s special committee of independent directors, said “we would welcome an offer from Constellation that fairly and fully values Vincor.”

LION NATHAN CLEARED BY THE ACCC.

The ACCC will not stand in the way of Lion Nathan’s bid to acquire Southern Australia’s Coopers Brewery Ltd. Graeme Samuel, chairman of the ACCC, reportedly stated that “while the ACCC recognized that Cooper’s market share is growing…its market share remains small, and substantially smaller than the two major beer producers in Australia, CUB and Lion Nathan.” Coopers shareholders will now determine the fate of their company at two extraordinary general meetings on Wednesday, December 7 where they will vote on amendments to the Coopers constitution and on a proposed buyback of shares by Coopers at $260 per share. Lion Nathan is offering Coopers shareholders $310 per share. Lion Nathan CEO Rob Murray says, “The Coopers board is on record stating that its key concerns were ACCC approval and the condition relating to the Coopers buy-back. Now these concerns no longer apply, we can see no reasonable basis for rejecting the offer.”

NEW WINE COMPANY IN CALIFORNIA.

Dan Leese and Doug Walker, both formerly executives at Foster’s Wine Estates Americas, have created a new wine company entitled Axiom Wine Company. Axiom was launched last week after Leese and Walker acquired the Red Truck and White Truck wine brands from Cline Cellars. “We see an opportunity to take a non-traditional approach to an 8,000 year-old industry. Our aim is to create a focused, flexible, and innovative wine company,” said Leese.

SKYY SPIRITS ADDS NEW BRANDS TO SUPER-PREMIUM PORTFOLIO

Skyy Spirits, a subsidiary of Gruppo Campari, as won the exclusive U.S. rights to distribute Midori Melon Liqueur, ZEN Green Tea Liqueur, Yamazaki Single Malt Whisky and Akadama Plum Wine from Suntory International Corporation, a subsidiary of Suntory Ltd. Based in Osaka, Japan as of January 1, 2006. Gerard Ruvo, president and CEO of Skyy Spirits said, “This is an exciting distribution agreement and groundbreaking year for Skyy Spirits strategically adding proprietary brands to our super-premium and luxury portfolio. We look forward to our partnership with Suntory.” The San Francisco-based company’s “appointment by Suntory International is part of its strategy of adding high-quality brands to its super premium and luxury portfolio through strategic partnerships, alliances, and joint ventures with companies that believe in the long term value development for brands to maximize profitability for its stakeholders.”

PERNOD EXPERIENCES DECLINE.

For the month of October Pernod’s volume decreased 1% “with Martell volume again underperforming (-16%) vs Brandy/Cognac category -3.3%. Pernod however is gaining vol share with Seagram's Gin and in Scotch with Chivas Regal,” according to UBS. The newly acquired Allied brands grew 5.8% in October.

U.S. SPIRITS RISE IN VOLUME

According to UBS analyst report, U.S. spirits volume has increased 3.1% year to date with a 2% growth in October. Although slightly down from September’s 3.2% rise, volume has improved greatly from last year in October 2004 which only experienced growth at 0.7%.

DIAGEO’S VOLUME CONTINUES TO CLIMB

For 14 consecutive months Diageo has exhibited increasing volume trends which include a 4.58% growth for the month of October and a +5.7% year to date. UBS notes that the numbers are “impressive given that in this month DGE raised prices across 40% of its US spirits volume…volume performance was especially strong with Canadian Club, Crown Royal and Smirnoff.”

FORTUNE’S Q3 EARNINGS.

As was widely expected, Fortune Brands reported a 59% drop in Q3 earnings with a stock that has risen almost 3 dollars a share. The decline resulted from the company’s one-time purchase of many spirit and wine brands, including Maker’s Mark bourbon, Sauza tequila and Courvoisier Cognac. Spirits and wine, led by Jim Beam bourbon, accounted for only 16% of sales but 30% of operating profit.

FOSTER'S OVERTAKING SOUTHCORP

The Australian based Foster’s Group plans to integrate Southcorp wine producer into their company this year. Trevor O’Hoy, Foster’s CEO, states, “We’re committed to being the leading premium branded beverage company in the world,” according to the Herald Sun. “Our key focus in this financial year is to integrate Southcorp into Foster’s and to cultivate the Foster’s beer brand.” O’Hoy is credited for leading his company into a $3.31 million growth in 2004-05 which includes a salary of $1.11 million and a bonus of $1.42 million.