UK Market Even Tougher
The UK government released their 2008 financial budget, which includes excise tax details for wine and spirits. Excise taxes increased 14 pence (10.5%) per bottle, effective immediately. In the past, tax increases were generally in the range of 3-6p per bottle.
"Given downward pricing pressure from UK retailer, wine producers typically have been forced to absorb these excise tax increases, thus negatively impacting their margins. We estimate for roughly every 5p excise tax increase that STZ absorbs, earnings are impacted by roughly $0.05. We believe that due to the magnitude of
this year’s tax hike, pricing should move up across the entire category, but that some of the increase will probably still be absorbed by STZ," said Kaumil Gajrawala, senior analyst with UBS.
Spirits, however, took an even bigger hit. Excise tax rates rose 10% to 55p a bottle in the UK. All alcohol duties will be increased by 2% above inflation for the next four years. Just-Drinks reports that the UK units of Diageo and InBev described themselves as “disappointed” at the new tax policy.
CONSTELLATION RE-NAMES PREMIUM WINE UNIT
Constellation confirmed yesterday it has re-named its premium and super-premium wine unit from Vintas to VineOne after discovering that another company has “a different but similar name." The company was not identified.
Recall that Constellation announced a plan in January to restructure its wine business into three units, making room for the recently acquired Beam Wine Estates. The $885 million purchase gave Constellation a larger portfolio of premium and super-premium brands (including Clos du Bois, Gary Farrell and Geyser Peak), which is currently the fastest growing segment among consumers and Constellation’s new focus. Vintas, now VineOne, focuses on premium and super-premium brands, while Icon Estates carries ultra-premium and luxury brands, and Centerra focuses on specialty, fighting varietal and value brands.
In addition to acquiring Beam Wine Estates, Constellation also recently sold high volume value brands Almaden and Inglenook, along with the Paul Masson Winery in Madera, to Wine Group LLC late last month for $134 million.
"Knowing that the restructure would go into effect on March 1, in order to avoid confusion or issues with trademarks, etc., we decided to just change the name as of March 1," spokeswoman Nora Feeley said. She remarked that VineOne would be "a better name anyway."
WSD BRIEFS:
A MISSOURI BILL PLANS TO INCREASE TAXES on wine and spirits, and phase out the sales tax on food purchases over six years. The state-imposed sales tax on food is 1.225%. Grocers, c-storer owners, restaurants and suppliers are currently fighting the proposed legislation.
PREMIER VINEYARD BUYS WALLULA WINERY. The Den Hoed family of Washington has sold its Wallula Vineyard in the Horse Heaven Hills AVA to long-time vintners Allen Shoup, Augustin Huneeus, Sr., and other members of a small investor group called Premier Vineyard Estates, LLC.
WSWA HAS CREATED THE SIDNEY FRANK AWARD, named for the late industry figure renowned for his charitable contributions, revolutionary marketing vision and magnetic personality, said the trade group. The first-ever accolade will be awarded April 9th at the 65th Annual WSWA Convention and Exposition in Las Vegas.
Until tomorrow, Megan
“He not busy being born is busy dying.”
Bob Dylan
--------- Sell Day Calendar ----------
Today's Sell Day: 8
Sell days this month: 21
Sell days this month last year: 22
This month ends on a: Mon.
This month last year ended on a: Fri.
YTD sell days Over/Under: +1
"Given downward pricing pressure from UK retailer, wine producers typically have been forced to absorb these excise tax increases, thus negatively impacting their margins. We estimate for roughly every 5p excise tax increase that STZ absorbs, earnings are impacted by roughly $0.05. We believe that due to the magnitude of
this year’s tax hike, pricing should move up across the entire category, but that some of the increase will probably still be absorbed by STZ," said Kaumil Gajrawala, senior analyst with UBS.
Spirits, however, took an even bigger hit. Excise tax rates rose 10% to 55p a bottle in the UK. All alcohol duties will be increased by 2% above inflation for the next four years. Just-Drinks reports that the UK units of Diageo and InBev described themselves as “disappointed” at the new tax policy.
CONSTELLATION RE-NAMES PREMIUM WINE UNIT
Constellation confirmed yesterday it has re-named its premium and super-premium wine unit from Vintas to VineOne after discovering that another company has “a different but similar name." The company was not identified.
Recall that Constellation announced a plan in January to restructure its wine business into three units, making room for the recently acquired Beam Wine Estates. The $885 million purchase gave Constellation a larger portfolio of premium and super-premium brands (including Clos du Bois, Gary Farrell and Geyser Peak), which is currently the fastest growing segment among consumers and Constellation’s new focus. Vintas, now VineOne, focuses on premium and super-premium brands, while Icon Estates carries ultra-premium and luxury brands, and Centerra focuses on specialty, fighting varietal and value brands.
In addition to acquiring Beam Wine Estates, Constellation also recently sold high volume value brands Almaden and Inglenook, along with the Paul Masson Winery in Madera, to Wine Group LLC late last month for $134 million.
"Knowing that the restructure would go into effect on March 1, in order to avoid confusion or issues with trademarks, etc., we decided to just change the name as of March 1," spokeswoman Nora Feeley said. She remarked that VineOne would be "a better name anyway."
WSD BRIEFS:
A MISSOURI BILL PLANS TO INCREASE TAXES on wine and spirits, and phase out the sales tax on food purchases over six years. The state-imposed sales tax on food is 1.225%. Grocers, c-storer owners, restaurants and suppliers are currently fighting the proposed legislation.
PREMIER VINEYARD BUYS WALLULA WINERY. The Den Hoed family of Washington has sold its Wallula Vineyard in the Horse Heaven Hills AVA to long-time vintners Allen Shoup, Augustin Huneeus, Sr., and other members of a small investor group called Premier Vineyard Estates, LLC.
WSWA HAS CREATED THE SIDNEY FRANK AWARD, named for the late industry figure renowned for his charitable contributions, revolutionary marketing vision and magnetic personality, said the trade group. The first-ever accolade will be awarded April 9th at the 65th Annual WSWA Convention and Exposition in Las Vegas.
Until tomorrow, Megan
“He not busy being born is busy dying.”
Bob Dylan
--------- Sell Day Calendar ----------
Today's Sell Day: 8
Sell days this month: 21
Sell days this month last year: 22
This month ends on a: Mon.
This month last year ended on a: Fri.
YTD sell days Over/Under: +1
posted at 11:54 AM
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