Costco Petitions to Head Back to Court
Costco has filed a petition for a rehearing by the Ninth Circuit Court in San Francisco, as first published by our sister publication Beer Business Daily. Following their disappointing court ruling last month which overturned almost every provision that had been in their favor in the District Court, Costco is asking the three judge panel to hear their case again. In the event that doesn't happen, Costco asks for a rehearing by the full Ninth Circuit Court, which is called en banc. You can read their petition here: http://www.beernet.com/aboutus/costcorehearing.pdf
Basically, Costco argues that they deserve a rehearing because they say the judges ruled incorrectly as it pertains to the severability of Washington's alcohol pricing laws when deciding whether they are unconstitutional under the Sherman Act.
The petition states: "The panel incorrectly evaluated the restraints in isolation from one another, and incorrectly created a rule of absolute antitrust immunity, regardless of the private discretion in how high prices go, for the state laws that, viewed in the isolation created by the erroneous severability analysis, dictate rather than just endorse forbearance from aspects of competition."
The petition also claims that the court made a mistake in a citation of the severability part of the Washington State alcohol code. They say it isn’t there. The petition also claims that the Court was mistaken on its take on hybrid versus unilateral restraints.
It will be weeks or months before a rehearing decision is made by the Court. However, this will postpone the February 26 date the Court would have issued a mandate ending the post and hold part of the law.
FORTUNE PEGGED AS THE ABSOLUT FRONT RUNNER
Fortune Brands has reportedly been picked as the favorite candidate among the four remaining V&S bidders, including Pernod Ricard, Bacardi and Swedish private equity group EQT, sources told Just-Drinks. We have predicted all along that Fortune will come out victorious, simply because it has the most to lose if Absolut goes to someone else. Recall that Fortune distributes Absolut in the U.S. through its j-v with V&S, Future Brands, in addition to their European joint-venture, Maxxium. V&S also holds a 10% stake in Beam.
According to the report, Pernod was pegged as the second most likely contender mainly because it has signed a pledge not to break up V&S. Pernod has expressed interest in Absolut since the beginning, but is also trying to secure the international rights to Stolichnaya. The French company said it would take one or the other, while chairman Patrick Ricard previously said “the one I prefer is the one I buy.”
FOSTER’S WRANGLES WITH DECLINING CONSUMER INTEREST
Could Foster’s down-trodden first half serve as foreshadowing for the entire industry? As WSD reported yesterday, Foster’s blamed a declining rate of growth in the U.S. on a number of factors most notably that consumer demand slowed in November and early December. Andy Kovacs of Macquarie Research Equities believes U.S. consumers will slow their wine spending “over the coming 12 months – or that at the least, turbulence in the trend will remain,” although “some buffer may be provided by increasing per-capita usage thanks to Millennial adopting wine.”
However, other wineries have not and probably will not see the same decline in growth as Foster’s. The ‘blush’ and Australian wine categories (which makes up the majority of Foster’s wine portfolio) specifically saw sales decline in the US in November and December – compared to the overall category which remained in growth. Operational issues in the Australian category were responsible for some of the decline, said Andy in a note, while retailer focus on the category also diminished. To help make up for its losses, Foster’s has taken a 20% price increase on its Beringer Californian Collection.
STZ FILLS NEW BOARD POSITION WITH PETER PEREZ
Constellation said its of directors authorized an increase in board positions from nine to 10, and approved Peter Perez, 54, to fill the new board seat effective yesterday. Perez is currently executive vice president of human resources for ConAgra Foods, Inc., a $12 billion, international packaged foods company based in Omaha, Neb.
Perez joined ConAgra in 2003 as senior vice president of human resources. He previously held a similar position with W. W. Grainger, Inc., after holding senior human resource positions at Pepsi-Cola General Bottlers and the Kraft General Food division of Philip Morris Companies, Inc. He began his career with Emerson Electric as a production supervisor in 1979.
WSD BRIEFS:
VIRGINIA EXPANDS SUNDAY SALES. Legislation expanding Sunday spirits sales to cities with populations of 100,000 or more passed the Virginia Senate today—a move the Distilled Spirits Council (DISCUS) hailed as a “significant victory” for both consumers and the State Treasury.
PENN. HEARING ON PRIVATIZING LIQUOR STORES. Pennsylvania legislators reportedly plan to hold a public hearing this summer about privatizing retail liquor sales after Sen. Rob Wonderling introduced the bill last week. The senator wants the proceeds set aside to meet the state's Medicare obligations. The hearing would be held jointly by the House Liquor Control Committee and the Senate Law and Justice Committee. To read our coverage last week, click here.
Until tomorrow, Megan
“Be modest! It is the kind of pride least likely to offend.”
Jules Renard
--------- Sell Day Calendar ----------
Today’s Sell Day: 13
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
Basically, Costco argues that they deserve a rehearing because they say the judges ruled incorrectly as it pertains to the severability of Washington's alcohol pricing laws when deciding whether they are unconstitutional under the Sherman Act.
The petition states: "The panel incorrectly evaluated the restraints in isolation from one another, and incorrectly created a rule of absolute antitrust immunity, regardless of the private discretion in how high prices go, for the state laws that, viewed in the isolation created by the erroneous severability analysis, dictate rather than just endorse forbearance from aspects of competition."
The petition also claims that the court made a mistake in a citation of the severability part of the Washington State alcohol code. They say it isn’t there. The petition also claims that the Court was mistaken on its take on hybrid versus unilateral restraints.
It will be weeks or months before a rehearing decision is made by the Court. However, this will postpone the February 26 date the Court would have issued a mandate ending the post and hold part of the law.
FORTUNE PEGGED AS THE ABSOLUT FRONT RUNNER
Fortune Brands has reportedly been picked as the favorite candidate among the four remaining V&S bidders, including Pernod Ricard, Bacardi and Swedish private equity group EQT, sources told Just-Drinks. We have predicted all along that Fortune will come out victorious, simply because it has the most to lose if Absolut goes to someone else. Recall that Fortune distributes Absolut in the U.S. through its j-v with V&S, Future Brands, in addition to their European joint-venture, Maxxium. V&S also holds a 10% stake in Beam.
According to the report, Pernod was pegged as the second most likely contender mainly because it has signed a pledge not to break up V&S. Pernod has expressed interest in Absolut since the beginning, but is also trying to secure the international rights to Stolichnaya. The French company said it would take one or the other, while chairman Patrick Ricard previously said “the one I prefer is the one I buy.”
FOSTER’S WRANGLES WITH DECLINING CONSUMER INTEREST
Could Foster’s down-trodden first half serve as foreshadowing for the entire industry? As WSD reported yesterday, Foster’s blamed a declining rate of growth in the U.S. on a number of factors most notably that consumer demand slowed in November and early December. Andy Kovacs of Macquarie Research Equities believes U.S. consumers will slow their wine spending “over the coming 12 months – or that at the least, turbulence in the trend will remain,” although “some buffer may be provided by increasing per-capita usage thanks to Millennial adopting wine.”
However, other wineries have not and probably will not see the same decline in growth as Foster’s. The ‘blush’ and Australian wine categories (which makes up the majority of Foster’s wine portfolio) specifically saw sales decline in the US in November and December – compared to the overall category which remained in growth. Operational issues in the Australian category were responsible for some of the decline, said Andy in a note, while retailer focus on the category also diminished. To help make up for its losses, Foster’s has taken a 20% price increase on its Beringer Californian Collection.
STZ FILLS NEW BOARD POSITION WITH PETER PEREZ
Constellation said its of directors authorized an increase in board positions from nine to 10, and approved Peter Perez, 54, to fill the new board seat effective yesterday. Perez is currently executive vice president of human resources for ConAgra Foods, Inc., a $12 billion, international packaged foods company based in Omaha, Neb.
Perez joined ConAgra in 2003 as senior vice president of human resources. He previously held a similar position with W. W. Grainger, Inc., after holding senior human resource positions at Pepsi-Cola General Bottlers and the Kraft General Food division of Philip Morris Companies, Inc. He began his career with Emerson Electric as a production supervisor in 1979.
WSD BRIEFS:
VIRGINIA EXPANDS SUNDAY SALES. Legislation expanding Sunday spirits sales to cities with populations of 100,000 or more passed the Virginia Senate today—a move the Distilled Spirits Council (DISCUS) hailed as a “significant victory” for both consumers and the State Treasury.
PENN. HEARING ON PRIVATIZING LIQUOR STORES. Pennsylvania legislators reportedly plan to hold a public hearing this summer about privatizing retail liquor sales after Sen. Rob Wonderling introduced the bill last week. The senator wants the proceeds set aside to meet the state's Medicare obligations. The hearing would be held jointly by the House Liquor Control Committee and the Senate Law and Justice Committee. To read our coverage last week, click here.
Until tomorrow, Megan
“Be modest! It is the kind of pride least likely to offend.”
Jules Renard
--------- Sell Day Calendar ----------
Today’s Sell Day: 13
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
posted at 12:26 PM
<< Home