January 19, 2009
just-drinks.com editor's weekly highlights
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With today (19 January) being statistically the most depressing day of the year – don't ask me how they figured that out – it seems apt that last week's headlines were dominated by continuing talk of the economic downturn, as a new results season beckons.
Pernod Ricard weighed in early on, to confirm that spirits sales in the US have slowed during its first half. Even the beer sector, which traditionally holds up relatively well to recessions, has been affected, according to SABMiller, which reported a 1% slip in global volumes for its third quarter.
While nothing to do with sales, Diageo's coffers also look set to be hit, by a US$150m tax bill in South Korea.
Providing the silver lining, however, was the annual wine and spirits market report from Vinexpo, which predicted continued growth of wine and spirits consumption over the next four years.
Elsewhere, Constellation's sale of a raft of spirits brands last week prompted speculation about the company's intentions going forward. One observer has suggested that Constellation is priming itself for a move on some of Foster's wine brands, should the Australian company be moved to sell. Despite its aggressive track record of acquisition in recent years, however, I'd be surprised if Constellation would use the US$334m it has banked from the divestment to embark on another spending spree, especially in these troubled times.
If they did, however, such a move would certainly inject some colour into these grey days.
Until next time...
Olly Wehring, Managing Editor
The year ending in an odd number can mean only one thing. In June, the wine sector will be migrating en masse to Bordeaux for Vinexpo. Chris Mercer spoke with Xavier de Eizaguirre, managing director of Baron Philippe de Rothschild and chairman of Vinexpo, about the prospects for this year’s show and Vinexpo’s international aspirations, including a possible return to the US.
Most certainly the biggest story in the spirits industry, like virtually all other industries, was the economic downturn that struck the world this year. Despite the claims of many spirits companies, that they offer “affordable luxury” with their products, trading down seems to be here to stay for the foreseeable future. For the wine industry, 2008 was not a year of huge deals and seismic shifts in the corporate landscape. Instead, the downturn made its presence felt, accentuating the pressures already affecting businesses all around the world. Whilst in years to come, many observers will look back on 2008 as a watershed for the global brewing industry. After an already sustained period of consolidation, the trend appeared to reach its zenith this year, with what could safely be termed a ‘mega-consolidation’. And in looking for issues which have dominated the soft drinks pages over the last year, one need really go no further than, yes, you've guessed it, the state of the global economy. Review the year that was, with just-drinks' top contributors, sector by sector.
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