Beverage Bulletin October 2009

California Beverage Retailers Association

P.O. Box 56686

Sherman Oaks, CA 91413

(818) 788-8120

www.cbraliquor.org

October 1, 2009

 

CBRA Website and Newsletter

Our website is open to the industry. You can read our monthly newsletter on the website or have it delivered right to your inbox. 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 to subscribe and get your part of the action!

 

Legislation

Assembly Bill 1060 which would have prohbited the use of self checkouts for alcohol sales was pulled by the author, Hector de la Torre. Current law already prohits the sale of cigarettes, spray pant, and some over the counter meds from being sold through self serrvice. De la Torre said the purpose of his bill is to have the retailer determine the sobiety and age of the customer. He says it will be re-introduced in 2010.

 

Industry News

Rum Subsidy Wars

The International Economic Law and Policy Blog reports that Captain Morgan rum is now produced in Puerto Rico for the British company Diageo PLC, and tax revenues on the rum are returned to the island as part of a law that comes up for renewal every year. Diageo struck a deal with the Virgin Islands, which also gets rum taxes back from the U.S. Treasury, to move production there; the deal will bring the Virgin Islands an estimated $6 billion in tax revenues over its 30-year duration. Under the agreement, much of that money would be spent on programs benefiting Diageo. The deal means hundreds of millions of dollars a year in excise taxes and creating new jobs, while the Virgin Islands has agreed to build the company a state-of-the-art processing plant plus give them the sweetheart tax deal for the next three decades.

 

Puerto Rico is not happy and is looking for help in Congress. Puerto Rican officials call arrangement between the Virgin Islands and Diageo an unfair corporate subsidy that should be outlawed, and Puerto Rico’s delegate to Congress along with several other Hispanic legislators have been pressing to change the law. Both sides have spent more than $800,000 on lobbying in 2009 alone. All of this spending and savings is at the production level. Will either Puerto Rico or VI put out dollars to support retail and restaurant promotions?

 

Wine Grape Glut

California is facing one of the largest wine grape crops in decades. Winery and wholesaler inventories are backing up due to falling sales and prices are on the way down. Napa Cabernet grapes are a good example. In 2008 the average price was $4,689 per ton. Currently offerings at $2,000 per ton are going begging. Wholesale and retail prices are sure to follow. Restaurants and retailers are trying to reduce inventory now in order to be in a position to buy at lower prices next spring.

Quick Shots

Readers Digest (August 2009) reports that drinking a half glass of wine a day made people 27% less likely to develop precancerous skin tumors in a 5 year study of over 1100 adults. According to the report wine contains quercetin, resveratrol, and other antioxidents known to prevent tumors.

 

MillerCoors low calorie MGD64 has become a sales success, but sales may have come at the expense of the brewers other products. Analysts say much of the sales comes from Miller Lite. The company feels sales have come from people who wouldn't otherwise drink beer. Who is right? Anheuser-Busch intends to find out. AB is testing Select 55 in 15 selected markets. Meanwhile AB is holding off on national advertising until the answers are in. (LA Times 9/4/09)

 

Starbucks is testing a new format in Seattle that is serving beer and wine. The new concept is called “15th Avenue Coffee & Tea.” This is an experiment to watch. Starbucks has 16,000 locations across the U.S. If this program goes chainwide the ripples will affect the entire beverage industry.

 

The Italian government has concluded its investigation of Brunello di Montelcino bottlings amid a scandal of falsified wine labels. About 225,000 cases of wines from 2003 to 2007 have been declassified or sent to distillers. The question remains: How much was exported and can buyers in this country trust that they are not being cheated?

 

The Bloody Mary is celebrating its 75th anniversary this month. The drink originated at the King Cole Bar in the St. Regis Hotel in New York on October 5, 1934. At the time it was called a “Red Snapper.” Later it changed to “Bloody Mary.” The recipe was the same then as now: tomato juice, vodka, salt, pepper, Worcestershire sauce, and lemon.

 

Merchandising Opportunities

 

The coming month brings Thanksgiving. The week prior to the holiday is the second biggest sales period of the year. This is the time to pick the wines, spirits, and beers that will bring the most sales and profits during this crtical time. It's also the time to plan sales and displays for Christmas and New Year's.

 

New Member Benefit

CBRA is making available a retail software system that will help you run your business. This software rings up sales, tracks customers and their preferences, helps accept credit cards, creates mailing lists, tracks product sales, deducts discounts, and interacts with some accounting systems. Best of all...IT'S FREE TO MEMBERS! Contact the association office to get connected with your copy of this software today.

 

Brands and Comments

 

The CBRA Newsletter has not accepted any payment from any of the brands mentioned in this edition. The editor, Ron Ziff, welcomes comments at ron@cbraliquor.org

 

CBRA Membership Remains Open

Now, more than ever, access to your industry is important. 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.

 

At CBRA we deal with licenses and regulations that affect the beverage business on a daily basis. That's why CBRA offers practical solutions, unique products, services, information, and timely advice for both large and small beverage businesses. With reasonable fees, superior service, and associates that are easy to reach, CBRA helps you to run your business better and easier.

California Beverage Retailers Association – We know how to get it done.