Beverage Bulletin March 2009

California Beverage Retailers Association

P.O. Box 56686

Sherman Oaks, CA 91413

(818) 788-8120

www.cbraliquor.org

Newsletter March 1, 2009

 

 

CBRA Website

Our new website was launched this month. There are a lot of exciting features included and more to come. It gives members another way of keeping in touch with what is going on in the industry. Visit us at http//www.cbraliquor.org and get your part of the action!

Legislation

As of this writing several bills have been introduced in the legislature that will change liquor laws. The changes that will affect our industry the most involve tax increases and recycling. The legislature needs to solve its budget problems and a $41 billion deficit. They expect alcoholic beverage sales to cover a part of this. The taxes would be imposed at the wholesale level. However, initially retailers would be required to inventory their stock and pay the tax. Markups at all levels would end up changing the price structure of the entire industry.

 

Two bills have been introduced to charge a 25 cent recycling fee on plastic carry out bags. There are some exceptions and exemptions to this, but just like bottle and can recycling programs, it is sure to grow.

 

A bill has been introduced which could change the way beverages are sold in stores. This bill should be watched closely. This and other current legislation is listed on our website. We urge you to read it and let us know your opinion.

 

 

Quick Shots

Fraud Alert! According to experts fraud increases in bad economic times. Fraud could involve use of credit cards or bouncing checks. There are ways to protect yourself. Some stores are requiring ID when a credit card is used. The district attorney in some counties has a program to collect bad checks. Check with your DA's office and take advantage of this program. Watch out for customers making suspicious purchases like large quantities of cigarettes. Be careful of giving cash back on a check, these days many people use ATM's. A bad check comes straight out of your profits.

 

The Commerce Dept. reports the economy shrank by 6.2% in the 4th quarter of 2008, the worst in 25 years. Of concern to us are the off premise sales figures, off 9.3%. Dollar sales were down in all categories: Beer down 14%, Wine down 1.6%, Spirits down 0.9%. According to industry sources micro-brewers took the hit with beer sales shifting to lower price brands and multi-packs.

 

The current Economy is affecting businesses at all levels. The National Retail Federation, Walmart, JC Penney, and industry experts are predicting things will continue the same until sometime in 2010. People are eating and drinking more at home and many consumers are looking to save money and find new places to shop. You can be on the winning or losing end of these trends. You have to promote to be a winner. Low end brands, private labels or controlled labels, and manufacturer promotions all provide opportunities to get that sale. You can use them to keep current customers and get new ones. Major retailers are doing exactly this. According to the Wall Street Journal, CEO Steve Burd says Safeway will promote its private-label brands more aggressively if branded-food makers do not lower prices on their products.

 

What is growing? According to Technomics ready made Sandwiches are a category that is growing across the nation. The Subway chain sells more than $8 billion a year. But beverage and food stores have heavy traffic that comes through the door and is hungry. If you don't sell them a sandwich, you are missing a sale.

 

Pepsi is "The Choice of a New Generation”, but is it the choice of a new administration? The answer for the Obama administration is a flat NO! Peter Orzag, OMB Director, and Larry Sommers, White House Economic Advisor have been seen drinking Diet Coke in the West Wing. Meetings with groups of congressmen have featured ice chests filled with...you guessed it, Diet Coke.

 

Absolut Vodka broadcast a TV ad during the Superbowl. This marks the first time since the 1930's that radio or TV networks have accepted Distilled Spirits advertising. The change was made because TV advertising has been hard to sell in this economy. Look for more of these ads in the future.

Academy Awards attendees were served Moet Champagne, Sterling Vineyards Wine, and Patron Tequila at the Governor's Ball following the awards ceremony. Savvy retailers will promote these brands to consumers willing to pay a little extra to drink the same brands as their favorite movie stars.

 

And if your customers want to drink the same as President Obama you can feature wines served at his Inaugural Luncheon. They are Duckhorn Vineyards Sauvignon Blanc, Goldeneye Pinot Noir, and Korbel Champagne.

 

Wine Tastings

Three big wine tastings will be taking place this month. Family Winemakers of California will have 250 participating wineries. They will be held at Del Mar/San Diego on March 15 and Pasadena on March 17. Go to http://familywinemakers.org/index.cfm for details and to attend.

On March 16 Howell Mountain Vintners will have 26 wineries at a tasting in Los Angeles. Go to www.howellmountain.org for information and to attend.

Coming Promotions

March promotion opportunities include St. Patrick's Day. Plan ahead for sales of Irish whiskey and beer and things that are green. Every extra sale represents an additional profit that helps the bottom line.

Easter is April 12 and Passover is from April 8 to 16. Both represent opportunities for extra wine sales.

CBRA Opens Membership for the first time in 20 years

Now, more than ever, access to your industry is paramount. The CBRA is California's only statewide association of licensed retailers, and our membership continues to be open for the first time in 20 years.

 

What is the CBRA? The CBRA is an association of store owners and retail companies that are licensed by the state to sell alcoholic beverages. Our membership includes liquor stores, chains, grocers, and beer and wine licensees. We provide a point of contact where you can get answers to your questions about selling alcoholic beverages, what is going on and where to find things in the industry, what laws are changing and how they affect your business. We know your business is tough. You face day to day problems dealing with minors, state laws and rules, and a lot of other difficulties. We can help because we have spent a lifetime doing just what you do.

 

What do you get? A newsletter, up to date information on alcoholic beverages, what changes in the laws the state is planning, online beverage information, a way to meet and network with other people in your business and a place to call when you need help.