Thursday, February 21, 2008

States Can’t Force Truckers to Check IDs,

The Supreme Court ruled this week that Maine cannot legally require delivery truck drivers to verify the age of buyers before making a delivery, in addition to intercepting packages from unlicensed tobacco sellers, the AP reports. The justices ruled that federal transportation law bars the state from making such demands.

The situation in Maine sounds eerily close to laws regulating direct to consumer wine shipments. In an argument similar to beer and wine wholesalers’ position against direct shipments of wine, Maine passed the law to ensure state tax collections and to keep cigarettes out of the hands of youths under the age of 18. As a result, the case was closely watched by the beverage alcohol industry because of potential ramifications for unregulated home delivery of alcohol.

The Wine and Spirits Wholesalers of America (WSWA) is now urging states to “reassess the wisdom” of direct shipping laws altogether. The trade group said in a statement that it urges states “to conduct a careful and broad re-evaluation of direct shipping regulations in the wake of a troubling Supreme Court decision.”

“The Supreme Court’s decision is clear: age verification is not a responsibility which can be delegated to common carriers,” WSWA president and chief Craig Wolf said. “States now need to reassess the wisdom of laws permitting direct shipping in light of this Supreme Court ruling. The licensed system in this country is based upon accountability, and if states are powerless to hold carriers accountable, there is no way to ensure that alcohol will not end up in the hands of minors.”

“What we have as a result of this decision is basically the Wild West with regard to direct shipping, because every law out there with this particular age check component is now rendered unenforceable,” Wolf continued.

“This opinion calls the practice of direct shipping into question entirely, because it creates an environment lacking any kind of control and accountability.”

STATE AGS PROBE BREWERS OVER ENERGY BEERS

Miller and Anheuser-Busch is once again facing heat by state Attorneys General regarding their marketing practices with alcoholic energy drinks (Sparks, Tilt, and Bud Extra), according to the WSJ. State AGs in New York, Maine, Maryland, Arizona and Iowa have issued civil investigative demands for internal papers related to the alcohol energy drinks' marketing practices. Recall that A-B pulled Spykes off the shelves last year after a similar investigation.

A-B said in a press release yesterday that it is cooperating with the subpoena, but pointed out that the TTB has already investigated the AGs complaints and found that the brewers were in the clear. A-B also claims that Tilt and Bud Extra have a lower and more consistent alcohol content then spirits mixed with caffeinated beverages, including Red Bull and Coke.

"If the Attorneys General truly believe that - despite the state and federal regulatory approvals - alcohol and caffeine should not be mixed, then they should use their powers to persuade these authorities to regulate or ban all such beverages, not just the lower-alcohol, pre-packaged ones," said Francine Katz, AB’s vp of communications and consumer affairs.

WHOLE FOODS MERGER BODES WELL FOR WILD OATS

The merger with Whole Foods has boded well for Wild Oats so far. Same-store sales at Wild Oats increased 8.9% during the first full quarter of Whole Foods ownership, one of its biggest upswings ever. After beating the FTC in court and purchasing Wild Oats in late August for $565 million, Whole Foods renovated its stores, cut jobs and added more produce and other products. So far, Whole Foods has re-branded nine former Wild Oats stores and expects to complete the rest by the end of the year.

Comparable store sales for Whole Foods increased 9.3% on top of a 7%increase in the prior year. Identical store sales, excluding five relocated stores and three major expansions, increased 7.1% on top of a 6.2% increase in the prior year.

“We realize there are a lot of questions out there about how a slowing economy might impact our sales. Historically, our sales have been highly resilient during economic downturns,” said John Mackey, chairman, ceo, and co-founder of Whole Foods Market.

“We attribute our strong sales to many factors, including our loyal core customers and their dedication to a natural and organic lifestyle, our high percentage of perishable product sales, and our extensive selection of high-quality prepared foods that attracts customers trading down from restaurants.”

TESCO STRUGGLING TO MAKE GROUND IN U.S.

Reports claim Tesco, meanwhile, isn’t fairing so well in the United States. The UK-based grocer is reportedly far from achieving the sales levels officials were originally hoping for, according to consultant Jim Prevor, speaking at a Citigroup conference this week. Recall that Tesco has decided against releasing full sales figures until next year amid growing skepticism of its overall success in the U.S.

Prevor claims that while Tesco isn’t laying off any employees, its reportedly not replacing them once they choose to leave its Fresh & Easy Stores. Also, he says Tesco is pushing out store openings in the Bay area to 2009 instead of later this year, which Tesco says was always the plan.

“While it is still early days, we are pleased with how things are going, and the customer reaction is particularly encouraging,” a Tesco spokesman recently said.

Tesco opened its 50th store, located in Palm Desert, CA, yesterday. It will open an additional three stores by the end of the week -- one in North Las Vegas and two in Henderson, Nevada.

E & J GALLO CELEBRATES 75 YEARS OF WINEMAKING

E & J Gallo has reached its 75th anniversary after brothers Ernest and Julio founded the winery in 1933 at the repeal of Prohibition. Gallo is the largest domestic winery by volume in the U.S.

As a part of their anniversary, the company recently conducted a nationwide survey to gauge American perspective on wine, and particularly on family-owned businesses. The questionnaire found that 92% of Americans would be more inclined to choose a family-owned business over a non-family owned business given the choice. When asked which attributes mattered the most in family-owned companies, consumers placed pride of workmanship (76%), honesty (76%) and loyalty (61%) at the top.

FRENCH EXPORTS STRUGGLE IN THE U.S.

France’s wine and spirits industry reached record export levels in 2007, with the highest level of growth in China, says the French Federation of Wine and Spirits Exporters. China is now the third largest market for French cognac and other spirits, trailing the U.S. and Singapore.

However, this year could prove more difficult for French exports to the U.S. The strong euro compared to the weakened U.S. dollar will make French wine and spirits more expensive, and perhaps not as attractive to the average consumer. The U.S. is France’s largest market by value despite a 3% yoy decline in exports in 2007. Champagne exports to the U.S. already feel by 7% in value and 6% in volume in 2007.

Until tomorrow, Megan

“When people are free to do as they please, they usually imitate each other.”
-Eric Hoffer

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