All Eyes on Diageo
Amid analyst speculation that Diageo may attempt to court a big brewer like SABMiller or Anheuser-Busch, all eyes are on Diageo ahead of their half year earnings report on Thursday. While Diageo’s stock has been a good buy over the last five years, and Thursday’s earnings report is expected to be healthy, the past one year horizon hasn’t been anything to write home about in terms of stock price, despite sales gains. And some analysts are wondering aloud to the UK press whether Diageo’s decision to punt on the Absolut bid (in favor of their rich deal with Ketel One) may put them at a disadvantage.
The Sunday Herald writes: “There are concerns that rivals Pernod or Fortune Brands will use a successful acquisition of Absolut to make inroads into Diageo's position as the world's biggest spirits provider.” The Herald goes on to say that Diageo may be turning its focus to India. That’s where the growth is, we’re told.
Elsewhere, the Scotsman newspaper conjectures that Diageo may be on the hunt for a big brewer deal, like SABMiller or A-B, even though a spokesman for the company told the Herald that “We may not be looking at transformational deals after our past mergers and acquisitions activity, but there are tremendous opportunities to forge new partnerships and joint ventures which will take us into new growth areas.”
Says the Scotsman, quoting an analyst:
“’Beer has since moved a long way down the path of consolidation so there are companies now that are the same size as Diageo, including SABMiller, Heineken, Anheuser-Busch and InBev,’ the analyst said. ‘What Diageo is waiting for at the moment is for a beer company to come forward and say we want that as well.’"
Not sure if we buy this one, but you never know.
CALI GRAPE HARVEST BACK IN BLACK
The AP reports that the California grape harvest came in at “normal levels” for the second year, after the disastrous grape glut in 2005 which drove prices down. California state agriculture officials yesterday said the wine grape crop totaled nearly 3.2 million tons in 2007, only a 3% increase over last year. Napa County grapes got an average of $3,200 per ton, up 7% from the year before.
CALI AND WINE INSTUTUTE TO SPEND HEAVILY ON ADS
The Wine Institute and California’s travel and tourism commission plan to devote $12 million over the next five year for a major ad campaign to tout California food and wine.
Approximately $10 million will be spent on broadcast, print and Internet ads aimed at food and wine lovers over the next three years, says the Wine Institute. That may be increased depending on how well it works. The campaign will be complete with a website, LandofWineandFood.com, and a TV ad campaign featuring Gov. Arnold Schwarzenegger and other local celebrities.
WSWA USING COSTCO DECISION TO FIGHT IN MARYLAND
The Wine and Spirits Wholesalers of America and the National Beer Wholesalers of America have filed an amicus brief utilizing the Costco decision in the long-running Trone case in Maryland (officially TFWS, Inc. v. Peter Franchot, et al). That case, which has been running for years, is now sitting in the Fourth Circuit Court of appeals in Maryland. Some of the same points under consideration in Trone were kind of “settled” with the Costco case. Wholesalers say that Maryland’s challenged statutes, post and hold and a ban on volume discounts, aren’t subject to the Sherman Act because that law regulates “agreements, combinations and conspiracies of private parties, not the actions or programs of states.” The brief also uses Costco-ian logic concerning unilateral versus hybrid restraints, and argues that Maryland’s statutes are unilateral. “What is centrally forbidden is state licensing of arrangements between private parties that suppress competition – not state directive that by themselves limit or reduce competition.” Furthermore, the WSWA/NBWA argues that the restraints of trade in Maryland’s law promote the core concern of temperance.
WSD BRIEFS:
BARRY O’NEIL has been named executive vice president of sales at Major Brands, Inc., Missouri’s largest premium beverage distributor. In his new position, O’Neil will have responsibility for all sales management functions, including sales team management, leadership and development and customer and supplier relationships.
DR. ANN THRUPP, who leads Fetzer Vineyards sustainability and environmental efforts, has been appointed to the National Research Council’s Committee on 21st Century Systems Agriculture. Operating as part of the National Academy of Sciences, the NRC committee will produce a study that aims to lead to increasing environmental awareness and understanding and adoption of sustainable agriculture practices worldwide. Fetzer Vineyards is part of Brown-Forman Beverages.
CASTLE BRANDS announced that it has entered into an agreement with Autentica Tequilera to develop and launch a new brand of super-premium tequila, “Tequila Tierras Autenticas de Jalisco” or “Tierras”. Castle Brands will be the exclusive importer and marketer of Tierras in the United States.
“Friends may come and go, but enemies accumulate.”
-Thomas Jones
--------- Sell Day Calendar ----------
Today’s Sell Day: 7
Sell days this month: 21
Sell days this month last year: 20
This month ends on a: Fri.
This month last year ended on a: Wed.
YTD sell days Over/Under: 0
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
The Sunday Herald writes: “There are concerns that rivals Pernod or Fortune Brands will use a successful acquisition of Absolut to make inroads into Diageo's position as the world's biggest spirits provider.” The Herald goes on to say that Diageo may be turning its focus to India. That’s where the growth is, we’re told.
Elsewhere, the Scotsman newspaper conjectures that Diageo may be on the hunt for a big brewer deal, like SABMiller or A-B, even though a spokesman for the company told the Herald that “We may not be looking at transformational deals after our past mergers and acquisitions activity, but there are tremendous opportunities to forge new partnerships and joint ventures which will take us into new growth areas.”
Says the Scotsman, quoting an analyst:
“’Beer has since moved a long way down the path of consolidation so there are companies now that are the same size as Diageo, including SABMiller, Heineken, Anheuser-Busch and InBev,’ the analyst said. ‘What Diageo is waiting for at the moment is for a beer company to come forward and say we want that as well.’"
Not sure if we buy this one, but you never know.
CALI GRAPE HARVEST BACK IN BLACK
The AP reports that the California grape harvest came in at “normal levels” for the second year, after the disastrous grape glut in 2005 which drove prices down. California state agriculture officials yesterday said the wine grape crop totaled nearly 3.2 million tons in 2007, only a 3% increase over last year. Napa County grapes got an average of $3,200 per ton, up 7% from the year before.
CALI AND WINE INSTUTUTE TO SPEND HEAVILY ON ADS
The Wine Institute and California’s travel and tourism commission plan to devote $12 million over the next five year for a major ad campaign to tout California food and wine.
Approximately $10 million will be spent on broadcast, print and Internet ads aimed at food and wine lovers over the next three years, says the Wine Institute. That may be increased depending on how well it works. The campaign will be complete with a website, LandofWineandFood.com, and a TV ad campaign featuring Gov. Arnold Schwarzenegger and other local celebrities.
WSWA USING COSTCO DECISION TO FIGHT IN MARYLAND
The Wine and Spirits Wholesalers of America and the National Beer Wholesalers of America have filed an amicus brief utilizing the Costco decision in the long-running Trone case in Maryland (officially TFWS, Inc. v. Peter Franchot, et al). That case, which has been running for years, is now sitting in the Fourth Circuit Court of appeals in Maryland. Some of the same points under consideration in Trone were kind of “settled” with the Costco case. Wholesalers say that Maryland’s challenged statutes, post and hold and a ban on volume discounts, aren’t subject to the Sherman Act because that law regulates “agreements, combinations and conspiracies of private parties, not the actions or programs of states.” The brief also uses Costco-ian logic concerning unilateral versus hybrid restraints, and argues that Maryland’s statutes are unilateral. “What is centrally forbidden is state licensing of arrangements between private parties that suppress competition – not state directive that by themselves limit or reduce competition.” Furthermore, the WSWA/NBWA argues that the restraints of trade in Maryland’s law promote the core concern of temperance.
WSD BRIEFS:
BARRY O’NEIL has been named executive vice president of sales at Major Brands, Inc., Missouri’s largest premium beverage distributor. In his new position, O’Neil will have responsibility for all sales management functions, including sales team management, leadership and development and customer and supplier relationships.
DR. ANN THRUPP, who leads Fetzer Vineyards sustainability and environmental efforts, has been appointed to the National Research Council’s Committee on 21st Century Systems Agriculture. Operating as part of the National Academy of Sciences, the NRC committee will produce a study that aims to lead to increasing environmental awareness and understanding and adoption of sustainable agriculture practices worldwide. Fetzer Vineyards is part of Brown-Forman Beverages.
CASTLE BRANDS announced that it has entered into an agreement with Autentica Tequilera to develop and launch a new brand of super-premium tequila, “Tequila Tierras Autenticas de Jalisco” or “Tierras”. Castle Brands will be the exclusive importer and marketer of Tierras in the United States.
“Friends may come and go, but enemies accumulate.”
-Thomas Jones
--------- Sell Day Calendar ----------
Today’s Sell Day: 7
Sell days this month: 21
Sell days this month last year: 20
This month ends on a: Fri.
This month last year ended on a: Wed.
YTD sell days Over/Under: 0
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
posted at 12:14 PM
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