Pernod Sues Alleged Malibu Rum Copycat

FILED AUGUST 1, 2009

Dear Client:

WSD has learned that Pernod Ricard USA filed a trademark infringement suit against White Rock Distilleries in the Southern District Court of New York in late March. Pernod alleges that White Rock knowingly fashioned its Barbarossa and Jack flavored rum bottles to look like Malibu Rum.

In its complaint, Pernod states that the “defendant has embarked on an unlawful campaign to lure consumers into purchasing its fruit-flavored rums under the mistaken belief that its rums come from, are sponsored by, or are associated or affiliated with, the MALIBU® brand.” They claim White Rock deliberately copied the opague white color of Malibu’s bottle along with its “tropical beach theme and palm tree motif.” To view a picture of the Barbarossa and Jack bottles, click here.

Pernod also alleges that White Rock imitated Malibu’s website by showing “a lush tropical island in the distance.” Lastly, Pernod accuses the defendant of encouraging retailers “to place the Infringing Products directly in the middle of long rows of the signature, white MALIBU® rum bottles on store shelves, with the intent to confuse consumers,” according to its complaint.

As a result, the company claims that the “defendant’s unlawful conduct is causing and will continue to cause harm to Pernod Ricard.”

In its response, White Rock denied all allegations brought forth by Pernod. It summed everything up by stating: “The use of white bottles, depictions of palm trees and nautical and beach themed designs, both stylized and realistic, is common in the flavored rum industry and unlikely to cause confusion among consumers.” White Rock also claims it “was the first to use certain elements of the claimed trade dress on certain products.”

The case is currently pending, so stay tuned...

FOLEY FAMILY WINES PARTNERS WITH WATTLE CREEK AND BOOMERANG

Foley Family Wines continued its consolidation tear by striking a new strategic partnership with Alexander Valley winery Wattle Creek and Australian vodka brand Boomerang, which marks the company’s first foray into spirits. Wattle Creek had previously been exported to the U.S. via Beam Wine Estates. After Beam sold its wines to Constellation Brands, Wattle Creek was left in a bit of limbo, according to local Australian reports. Both brands are owned by Chris Williams and will be sold by the Foley Family Wines sales force. Recall that earlier this month Foley announced plans to purchase 280,000-case New Zealand Wine Trust.

DIAGEO DOWNGRADED DUE TO UNCERTAIN MARKETS

Evolution and ING have downgraded Diageo ahead of the company’s full year results next week. As a result, shares dipped almost -1% in morning trading. Evolution downgraded Diageo from “neutral” to “add,” with analyst Simon Hales noting that “Diageo is trading on.a slight discount to the beverage sector but in-line or at a premium to other sector leading and top-line growing consumer good companies.”

Meanwhile, ING cut its recommendation from “hold” to “buy. They said in a note this morning that it’s unlikely Diageo will clearly define its outlook for fiscal 2010 when it releases its results next Thursday due to the uncertain economy.

THE STREET UPGRADES CONSTELLATION

TheStreet.com's stock-rating model upgraded Constellation to “hold.” “We give Constellation Brands a financial strength score of 4.9 out of 10, less than the "buy"-list average of 7,” said the publication. They noted that a quick ratio of 0.5 and just $17 million of cash indicate an inadequate liquidity position, and a debt-to-equity ratio of 1.9 demonstrates excessive leverage. So far the stock has dropped 10% in 2009.

HARVEST OUTLOOKS FOR “BIG THREE”

The Washington Association of Wine Grape Growers is anticipating a record crop of 155,000 tons in 2009, up from 145,000 last year. Oregon’s harvest is estimated around 37,000 tons which is larger than 2008 but down from 2007 (38,600 tons). Lastly, California is currently expecting about 3.3 million tons of winegrapes.

KENTUCKY BOURBON TRAIL FEATURED IN NATIONAL GEOGRAPHIC

Congrats to the Kentucky Bourbon Trail, which was featured as one of 50 "Drives of a Lifetime: The World's Greatest Scenic Routes" and "20 Great American Drives" in National Geographic Traveler. It was pitted next to the Amalfi Coast of Italy, the Cabot Trail in Canada and Hana Highway, in Hawaii. The article highlights Central Kentucky's "rolling meadows, limestone-filtered streams, and cool hardwood forests,” noting they are “ideal conditions” for producing bourbon.

BOTTLE GIANT AMCOR STRIKES DEAL WITH ALCAN PACKAGING

Bottle-making giant Amcor said Tuesday it agreed to pay $2.03 billion for the majority of Rio Tinto's Alcan Packaging business, which ultimately transforms Amcor into one of the world’s largest packaging companies. Among other things, Amcor produces bottles, cans, caps and lids and labels. Alcan specializes in specialty packaging in the food, pharmaceutical, beauty and tobacco industries. To fund the offer, Amcor will issue shares and take on debt amounting to $1.3 billion. The acquisition is now up for regulatory approval in the U.S. and Europe.

SVEDKA CREATOR ADDS TO BOARD FOR SUPER-PREMIUM MIXER

In an interesting bit of news, the creator of Svedka and the president of Voss Water are joining together to develop Purista super-premium cocktail mix. Executive director Guillaume Cuvelier of Purista’s producer, Synergy Beverages, has appointed Philippe Roederer to the company's board of directors. Roederer is currently the president of Voss Water Americas and has also helped build Veuve Clicquot, Mumm and Perrier Jouet in the past. Cuvelier, meanwhile, is the creator and former ceo of Svedka. It is only available in select markets.


Until tomorrow, Megan

"He has no enemies, but is intensely disliked by his friends..."
Oscar Wilde

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