Wholesalers VS. Retailers: He Said, She Said
Wholesalers and retailers are both determined to win the legislative fight, but the questions remains, is there an end in sight? Or will Granholm wrangling go on forever? The LA Times featured an article in today’s publication highlighting the dispute between wine and spirits wholesalers and retailers that want to ship directly to out-of-state consumers. Everyone quoted in the article is somewhat mild in their commentary, but it seems nonetheless that the two sides are nowhere near reaching a compromise.
One of the biggest priorities for the SWRA (Specialty Wine Retailers Association) right now is to secure the right for California residents to order wine from out-of-state retailers. A law was passed in 2005 to bar Californians from purchasing wines from out-of-state retailers. However, the state attorney general's office is waiting until the end of the year to begin enforcing the law to give the SWRA a chance to persuade lawmakers to change their minds, according to the LA Times.
"If we are unsuccessful it is entirely possible that Californians will be prohibited from purchasing wine from out-of-state retailers," said Tom Wark of the retailers' group.
Against allegations that wholesalers are only interested in protecting their money and power, Craig Wolf of the WSWA (Wine & Spirits Wholesalers of America) said the following:
"Wholesalers think that direct shipping is a bad public policy choice. We have never had an economic model for alcohol, it is a social model."
He refers, of course, to the wholesalers’ argument that their services help prevent minors from accessing alcohol.
Here’s a link to the article.
As you’ll recall from Friday’s WSD issue, the WSWA recently commended Wine.com ceo Richard Bergsund who is accusing fellow online retailers of openly cutting corners and defying state regulations for alcohol delivery.
A SNAPSHOT OF SPIRITS IN ’07
Dollar sales of spirits rose 3.7% to approximately $7 billion in the 52 weeks to December 12, 2007, according to Nielsen data. Volume was up 2.1% for the year, suggesting higher prices and a higher mix/shift.
PRICE POINTS. Value spirits brands were in the red, down -0.3%, while ultra premium spirits grew an impressive 10.3% in dollars. Meanwhile, value spirits volume was basically flat, down -0.9%, while ultra-premium spirits brands grew 8% in the 52-week period. Interestingly, dollar sales of premium spirits increased only 4.7%, while volume of premium spirits grew 7.3%.
FLAVORS. A notable trend in 2007 was the increasingly popularity of flavored spirits. Some people predicted it was only a fad and on the way out, but the numbers suggest otherwise. Dollar sales of flavored vodka rose 11.7% in the year, compared to unflavored vodka sales that grew 6.5%. Volume of flavored vodka was up 10.5% and unflavored vodka grew only 3.7%. Americans like novelty, what can we say.
Flavored tequila sales grew an impressive 47.6% for the 52-week period. However, it’s important to mention that dollar value of flavored tequila was down -5.4% in the 13-weeks to December 12. The tequila category as a whole is doing well, with the overall category growing 10.7% in value and 4.5% in volume.
Dollar sales of flavored rum grew 7.1%, while volume increased 6.6%. Unflavored rum rose 2% in sales and 0.4% in volume.
GIN. It looks like it’s true what they say, gin is poised for a comeback. Dollar sales of gin rose 1.1% in the 52-weeks to December. Believe it or not, flavored gin rose 0.5%. Gin volume was down -1.1%.
WHISKEY. Overall whiskey sales grew 1.7% in the 52-weeks, with Irish whiskey showing a notable rate of growth, up 20.2%. Here’s a look at the rest: sales of bourbon (+2.6%), Canadian whiskey (+1.1%) and Scotch (-0.2%).
Volume of whiskey was down -0.7%. Volumes were down slightly for Canadian whiskey (-0.5%) and bourbon (-0.5%), down -2.3% for Scotch and up 18.6% for Irish, according to Nielsen data.
DIAGEO APPOINTS NEW PRESIDENT OF CONTROL STATES
Pete Carr, the current gm of Diageo’s Florida Cluster, has been promoted to president, control states Diageo North America. Effective January 15, Carr will be responsible for leading Diageo’s strategic agenda across the control states for U.S. spirits. He will be based in Norwalk, CT.
He will report directly to Kevin O’Neil, executive vp of sales, US spirits. The general managers for the West Control, Central Control, Southeast Control and the Northeast Control Clusters will report to Carr. Carr will also represent Diageo as liaison to the NABCA and serve as a member of the Control State Industry Steering Committee.
CASTLE BRANDS APPOINTS NATIONAL ACCOUNTS DIRECTOR
Castle Brands announced that Charles “Chip” Hartnett will serve as director of national accounts. In this newly created position, Mr. Hartnett will be responsible for all regional and national on-premise accounts for Castle Brands’ portfolio of premium spirits.
WSD BRIEFS:
MARIN INSTITUTE recommended today that Gov. Schwarzenegger and state legislators raise taxes on wine, beer and distilled spirits to help reduce the state's $14 billion budget shortfall. The last alcohol tax increase in California in 1992 was $0.01 on a glass of wine and $0.02 per can of beer and shot of spirits. Since that time, rising inflation has led to a 33% net decrease in state alcohol taxes, says Marin.
Click here for the full press release.
FORMER MCWILLIAM’S GROUP senior winemaker, Martin Cooper, has embarked on a new wine venture by creating his own company – Cooper Coffman Wine Company. Cooper Coffman will focus on “developing wine brands of the highest possible quality standards using purpose built small scale winery infrastructure.”
SWAN’S NECK VODKA is a limited release, handcrafted vodka made from grapes and produced in France by acclaimed Napa Valley Winemaker Bernard Portet, the co-founder of Clos Du Val winery. Imported by L&P Spirits Imports, Swan’s Neck is found at upscale restaurants and fine wine shops with a suggested retail price of $45 per 750ml bottle. It is currently available in Northern California, with a multi-state distribution rollout planned for 2008.
WSWA has appointed Karin Moore as assistant general counsel. Moore’s primary responsibility will be to coordinate WSWA’s national litigation strategy, with secondary responsibility for regulatory issues facing wholesalers at both the state and federal level.
WAL-MART has hired a former executive from Safeway and Tesco, Jack Sinclair, as its executive vp of grocery merchandise. Jack will be in charge of planning, category management and general oversight of Wal-Mart's U.S. grocery business. He will report to executive vice president and chief merchandising officer John Fleming.
KETEL ONE will be the presenting sponsor for the third year in a row for Grammy-nominated singer Michael Buble's 2008 U.S. tour.
Until tomorrow, Megan
“Do not fear to be eccentric in opinion, for every opinion now accepted was once eccentric.”
Bertrand Russell
--------- Sell Day Calendar ----------
Today's Sell Day: 4
Sell days this month: 22
Sell days this month last year: 22
This month ends on a: Thur
This month last year ended on a: Wed.
YTD sell days Over/Under: 0
BEER SUMMIT 2008 – Feb. 24-25, 2008, Hotel del Coronado, San Diego. Join top beer industry executives to talk about burning industry issues, particularly making the most of trading up. Click here: http://www.beernet.com/aboutus/image3.html
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdail.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
One of the biggest priorities for the SWRA (Specialty Wine Retailers Association) right now is to secure the right for California residents to order wine from out-of-state retailers. A law was passed in 2005 to bar Californians from purchasing wines from out-of-state retailers. However, the state attorney general's office is waiting until the end of the year to begin enforcing the law to give the SWRA a chance to persuade lawmakers to change their minds, according to the LA Times.
"If we are unsuccessful it is entirely possible that Californians will be prohibited from purchasing wine from out-of-state retailers," said Tom Wark of the retailers' group.
Against allegations that wholesalers are only interested in protecting their money and power, Craig Wolf of the WSWA (Wine & Spirits Wholesalers of America) said the following:
"Wholesalers think that direct shipping is a bad public policy choice. We have never had an economic model for alcohol, it is a social model."
He refers, of course, to the wholesalers’ argument that their services help prevent minors from accessing alcohol.
Here’s a link to the article.
As you’ll recall from Friday’s WSD issue, the WSWA recently commended Wine.com ceo Richard Bergsund who is accusing fellow online retailers of openly cutting corners and defying state regulations for alcohol delivery.
A SNAPSHOT OF SPIRITS IN ’07
Dollar sales of spirits rose 3.7% to approximately $7 billion in the 52 weeks to December 12, 2007, according to Nielsen data. Volume was up 2.1% for the year, suggesting higher prices and a higher mix/shift.
PRICE POINTS. Value spirits brands were in the red, down -0.3%, while ultra premium spirits grew an impressive 10.3% in dollars. Meanwhile, value spirits volume was basically flat, down -0.9%, while ultra-premium spirits brands grew 8% in the 52-week period. Interestingly, dollar sales of premium spirits increased only 4.7%, while volume of premium spirits grew 7.3%.
FLAVORS. A notable trend in 2007 was the increasingly popularity of flavored spirits. Some people predicted it was only a fad and on the way out, but the numbers suggest otherwise. Dollar sales of flavored vodka rose 11.7% in the year, compared to unflavored vodka sales that grew 6.5%. Volume of flavored vodka was up 10.5% and unflavored vodka grew only 3.7%. Americans like novelty, what can we say.
Flavored tequila sales grew an impressive 47.6% for the 52-week period. However, it’s important to mention that dollar value of flavored tequila was down -5.4% in the 13-weeks to December 12. The tequila category as a whole is doing well, with the overall category growing 10.7% in value and 4.5% in volume.
Dollar sales of flavored rum grew 7.1%, while volume increased 6.6%. Unflavored rum rose 2% in sales and 0.4% in volume.
GIN. It looks like it’s true what they say, gin is poised for a comeback. Dollar sales of gin rose 1.1% in the 52-weeks to December. Believe it or not, flavored gin rose 0.5%. Gin volume was down -1.1%.
WHISKEY. Overall whiskey sales grew 1.7% in the 52-weeks, with Irish whiskey showing a notable rate of growth, up 20.2%. Here’s a look at the rest: sales of bourbon (+2.6%), Canadian whiskey (+1.1%) and Scotch (-0.2%).
Volume of whiskey was down -0.7%. Volumes were down slightly for Canadian whiskey (-0.5%) and bourbon (-0.5%), down -2.3% for Scotch and up 18.6% for Irish, according to Nielsen data.
DIAGEO APPOINTS NEW PRESIDENT OF CONTROL STATES
Pete Carr, the current gm of Diageo’s Florida Cluster, has been promoted to president, control states Diageo North America. Effective January 15, Carr will be responsible for leading Diageo’s strategic agenda across the control states for U.S. spirits. He will be based in Norwalk, CT.
He will report directly to Kevin O’Neil, executive vp of sales, US spirits. The general managers for the West Control, Central Control, Southeast Control and the Northeast Control Clusters will report to Carr. Carr will also represent Diageo as liaison to the NABCA and serve as a member of the Control State Industry Steering Committee.
CASTLE BRANDS APPOINTS NATIONAL ACCOUNTS DIRECTOR
Castle Brands announced that Charles “Chip” Hartnett will serve as director of national accounts. In this newly created position, Mr. Hartnett will be responsible for all regional and national on-premise accounts for Castle Brands’ portfolio of premium spirits.
WSD BRIEFS:
MARIN INSTITUTE recommended today that Gov. Schwarzenegger and state legislators raise taxes on wine, beer and distilled spirits to help reduce the state's $14 billion budget shortfall. The last alcohol tax increase in California in 1992 was $0.01 on a glass of wine and $0.02 per can of beer and shot of spirits. Since that time, rising inflation has led to a 33% net decrease in state alcohol taxes, says Marin.
Click here for the full press release.
FORMER MCWILLIAM’S GROUP senior winemaker, Martin Cooper, has embarked on a new wine venture by creating his own company – Cooper Coffman Wine Company. Cooper Coffman will focus on “developing wine brands of the highest possible quality standards using purpose built small scale winery infrastructure.”
SWAN’S NECK VODKA is a limited release, handcrafted vodka made from grapes and produced in France by acclaimed Napa Valley Winemaker Bernard Portet, the co-founder of Clos Du Val winery. Imported by L&P Spirits Imports, Swan’s Neck is found at upscale restaurants and fine wine shops with a suggested retail price of $45 per 750ml bottle. It is currently available in Northern California, with a multi-state distribution rollout planned for 2008.
WSWA has appointed Karin Moore as assistant general counsel. Moore’s primary responsibility will be to coordinate WSWA’s national litigation strategy, with secondary responsibility for regulatory issues facing wholesalers at both the state and federal level.
WAL-MART has hired a former executive from Safeway and Tesco, Jack Sinclair, as its executive vp of grocery merchandise. Jack will be in charge of planning, category management and general oversight of Wal-Mart's U.S. grocery business. He will report to executive vice president and chief merchandising officer John Fleming.
KETEL ONE will be the presenting sponsor for the third year in a row for Grammy-nominated singer Michael Buble's 2008 U.S. tour.
Until tomorrow, Megan
“Do not fear to be eccentric in opinion, for every opinion now accepted was once eccentric.”
Bertrand Russell
--------- Sell Day Calendar ----------
Today's Sell Day: 4
Sell days this month: 22
Sell days this month last year: 22
This month ends on a: Thur
This month last year ended on a: Wed.
YTD sell days Over/Under: 0
BEER SUMMIT 2008 – Feb. 24-25, 2008, Hotel del Coronado, San Diego. Join top beer industry executives to talk about burning industry issues, particularly making the most of trading up. Click here: http://www.beernet.com/aboutus/image3.html
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdail.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
posted at 12:30 PM
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