- The beverage business blog -
Olly Wehring's unique web log on the global beverage industry, key events, people and his own daily experiences. If you would like to offer your comments, opinions, suggest topics or just have a good rant, please feel free to email: Olly Wehring. |
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Budget day looms
10th March 2010 15:29
UK prime minister Gordon Brown has revealed the date for the Government's 2010 Budget announcement.
Drinks companies will discover the extent of any tax rises on their products on 24 March, when Chancellor Alistair Darling will unveil the annual Budget to Parliament.
Trade bodies are clamouring for the Government to hit the emergency stop button on its "tax escalator", which provides for a 2% above inflation rise on all alcoholic drinks in the upcoming Budget.
At current inflation, that would mean a 5% tax rise - at a time when most people in the private and public sectors have seen wages frozen as a result of the economic downturn.
Wine and beer tax is already up 20% inside two years, with spirits tax up around 16% in the same timeframe.
Surely, it is time for a break.
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PepsiCo cuts loose from Woods
1st March 2010 17:18
When sportsmen as successful as Tiger Woods fall, it’s a long way down and they can take many with them.
PepsiCo has become the latest major company to end its sponsorship deal with the disgraced world number one golfer Tiger Woods.
Slowly but surely his sponsors are backing away, with no definite date for his return to the green.
The news was probably to be expected given the media's spotlight on the golfer's private life.
Since media speculation broke last year over the golfer's extra-marital affairs, Woods has been dropped by Accenture and AT&T and both Tag Heuer and Gillette have reportedly slimmed down his role in their ad campaigns.
His 14-minute public television apology for “irresponsible and selfish” behaviour clearly did little to polish his reputation or help his sponsorship deals.
The only support for Woods appears to be from sports equipment giant Nike, which reportedly pays Woods $40m a year…and fellow philanderer and ex-president Bill Clinton, who is no stranger to public humiliation himself. He is said to have called the golfer to offer his support.
While Woods goes through the proverbial mill, the affair is also a reminder of the pitfalls that companies face when they tie themselves to celebrities - who, as we know, are capable of the same "indiscretions" as the rest of us.
Only that theirs make front-page news.
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The big Coca-Cola secret
26th February 2010 15:28
A secret recipe is not the only thing Coca-Cola Co has been hiding behind closed doors over the last few months.
No one is clear just how long Coca-Cola and Coca-Cola Enterprises have been thrashing out yesterday's announced deal.
If you listen to Coca-Cola's CEO, Muhtar Kent, then you would believe that talks have been ongoing prior to rival PepsiCo's deal to acquire control of its own bottlers.
Whatever timescale you pick, it appears that the companies have successfully shrouded the whole thing in secrecy - even from some of their own middle management level employees.
A number of such employees, from the Western European side of CCE, first found out that something was going on at about midday UK time yesterday.
Their immediate reaction, we understand, was to question whether the email was "some kind of joke".
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Coke, CCE and Dr Pepper the dark horse
25th February 2010 17:44
We've seen some fast-paced news days in our time on just-drinks, but today's Coca-Cola Co story is up there with the best of them.
Unlike the public tit-for-tat that precluded PepsiCo's deal to acquire its own major bottlers, Coca-Cola Co and Coca-Cola Enterprises (CCE) wrapped up their deal within 12 hours of the news breaking.
CCE and Coca-Cola Co did well to keep us all in the dark. Company officials spent the second half of 2009 actively briefing against a merger deal.
But, Coca-Cola Co CEO Muhtar Kent told analysts today that the two entered talks even before PepsiCo announced its own move.
CCE shares rocketed by more than a third today on news that shareholders will get some serious payback.
As we digest the deal, however, our eye has been caught by a dark horse lurking in the wings.
Enter Dr Pepper Snapple, which, via licence arrangements, is already pocketing $900m from the PepsiCo deal and looks set to reap another windfall from Coca-Cola Co and CCE, analysts believe.
With net sales looking up, Dr Pepper's prospects are looking a lot rosier for 2010 and into 2011.
Chris Mercer, Deputy Editor.
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Diageo v Bacardi - Tick, tick, tick, tick... BOOM
24th February 2010 15:21
Today's top story is certainly a cockle-warmer on a cold, damp Wednesday in February.
Diageo didn't so much fire a warning shot across Bacardi's bows yesterday (23 February), more set about the boat itself... with a bazooka. Not only does Diageo's statement make for an interesting read, but it is also a pretty long one – take a look for yourself here.
This is most unlike Diageo, which usually prefers to play the strong, silent type when it comes to disputes - witness how the firm chose to keep its head when all about it was losing theirs and blaming it on Diageo during last year's Scotland closure row.
Our take on the surprise reaction? Well, Diageo has been getting heat ever since it announced its move of Captain Morgan operations from Puerto Rico to the US Virgin Islands back in 2008.
A brace of more recent attacks, including one from Bacardi, however, was one poke through the bars too many. I've heard that Diageo was tiring of having to rebut the allegations to each individual who challenged them, choosing instead to give its full (and I mean full) and frank take on the matter.
Bacardi's response – all of three sentences - is short and sweet, much like that of the Puerto Rican government – two sentences.
Yet, in such a short burst of words, the two ask whether the US taxpayer is the one getting a rum deal here.
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Heineken kicks off Brazil push
18th February 2010 15:04
Heineken has wasted no time in using its connection with football to begin building presence in Brazil.
As just-drinks settled down to watch Arsenal's calamitous display against Porto last night, we noticed that the Netherlands-based brewer is offering fans the chance to watch the UEFA Champions League final from Brazil.
The final will take place in Madrid, but Heineken will take fans to Rio de Janeiro as part of its sponsorship of the tournament.
It is surely no coincidence that this competition has come about following Heineken's acquisition of FEMSA Cerveza.
Heineken is keen to use FEMSA's platform in Brazil to build the Heineken brand in what is the fourth largest beer market in the world. Brazil is also football 'maluco' and Heineken has already stated its plans to use football to "win" with Heineken in what is also A-B InBev's backyard.
To gain the chance to win tickets, fans are asked to test their rhythm in the first of three tests on Heineken's website. Guitar Hero players stand at a minor advantage, although one must question whether anyone unable to complete the task should be allowed to leave their house.
Chris Mercer, Deputy Editor
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A funny thing happened on the way to The Macallan...
16th February 2010 9:15
Number two in our haphazard, (hopefully) long-running series of drinks industry travel-related anecdotes.
Here's number one, to ease you back in.
At Heathrow's Terminal 5 yesterday (15 February) en route to Aberdeen for a dinner at Edrington Group's The Macallan distillery, the tannoy kicks up:
"Would Mr Rasmussen, travelling to Copenhagen, please make his way to gate A6 immediately, as the 'plane is ready to depart."
Not that Mr Rasmussen, surely?
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Wine writers - criticising the critics
9th February 2010 15:19
It's open season for critics of wine critics here in the UK this month.
Last week, US wine personality (I struggle still to find out what it is he actually does) Tim Hanni attacked wine critics en masse, claiming that the breed are of little use to the wine consumer in the street.
"We've created the false idea that to be a wine expert you have to have an almost supernatural palate," he told the Guardian. "But, ironically, if anyone really did have such a palate, it would disqualify them from being an oracle to those who didn't.
"Received wisdom holds that certain wines are simply the best, and that anyone who disagrees is stupid, unsophisticated, or both. That's more chaotic than giving people the confidence to drink what they like, no matter what the bottle costs, and no matter what food they enjoy it with."
(Granted, Hanni was pushing a questionnaire he has designed in partnership with Bibendum in the UK, designed to help consumers work out what tastes they prefer. Still, his opinion on wine writers warrants consideration.
Today, however, Tim Atkin – a wine writer – has countered Hanni's argument, going so far as to suggest: “Experienced wine critics are arguably more essential in a recession than ever.”
Do feel free to let me know which side of the fence you sit on. Indeed, if you tell me, I'll tell you.
I'll have to whisper it, mind.
Your Comments
I think that Jerome has a very good point. An illustration. The issue for discussion at the moment is alcohol levels in wine. Why this has become an issue I am not sure. What about Spirits? A wine writer researching this topic for a well known wine journal asked my opinion. I sent him a paper from a 11 country study undertaken by my former University and other collaborators to research wine attributes of which alcohol level was one. I sent the wine journalist a paper comparing results from Australia and France where the alcohol level attribute scored as last or next to last. The sample was split between take home and HoReCA and as you would expect the restaurant diners saw alcohol levels as an issue ( drink drive laws are a powerful demotivating attribute). This argument was not considered in the article as a balancing factor. It would appear that wine writers print what they believe rather than what is important to the wine consumer. Wine writers should be concerned with facts rather than what Jermone illudes to and that is to pander to the pander an oligarchy of vested interests,
Robert is right - the growth of interest group pages and blogs are far more effective in both communicating and receiving feedback from the people who really matter in all of this the consumer. They have tuned out from wine journalists along time ago so much so that in my teaching I now concentrate on new media and the personal relationships that the consumer can develop with their " favourite" tipple.
Tony Spawton, Australia
As a fan of both Tims (Hanni & Atkin), I'd mischievously suggest that they're both somewhat missing the point. Critics - of books, films, restaurants, music, wines or whatever - are valuable when their comments ring a welcome bell with sufficient numbers of their audience. So Robert Parker's followers have shared his preference for opulent wines while Jancis Robinson's many US fans presumably find her recommendations more to their taste. Whether or not either of these critics is a "super" taster is not really the point, any more than whether Sylvestor Stallone is a better actor than Colin Firth.
But to agree with Tony Spawton, the evidence internationally is that recommendations from established and well-respected critics like Parker, Atkin and Haliday have less effect on sales than they used to.
Anecdotally, online chatter from bloggers and tweeters seems to be beginning to influence sales quite significantly. It remains to be seen how sustainable a trend this is going to be...
Robert Joseph, United Kingdom
Wine writers are a dying breed as they have their own recession to cope with as their role becomes irrelevant.
More attuned to being the wine paparazzi, the " poly - waffle in the pool journalism has contributed to a commodisation of the wine industry especially in the AOP where their damage has been close to tragic. Referred to in the trade as " Parkerisation" includes other writers more concerned with the long levity of their own brand as editors cull expensive condottiere of the campagnie de ventura.
Machiavelli was worried - for the wine condottiere to be useful in a wine crisis - the wine sector better tremble as they stuffed up the boom times - so in a crisis what is their motive - a death wish. The UK press better look to the News of the world to criticize the dalliances of the premier league and leave wine alone.
Tony Spawton, Australia
Funny, we were talking about the same thing on this side of the pond last week. Check out the video of the "Virtual Vino" session at the Italian Trade Commission's big soiree in NY last week. Moderator was Anthony Dias Blue with a stellar panel (including me!) http://vino2010.italianmade.com/blog/video-virtual-vino-seminar.
What was particularly funny was that Andy had been taken to task by bloggers for some nasty comments he made about the breed in his magazine. Details on the controversy are posted on my blog at http://thebrandactionteam.blogspot.com/
Steve Raye, United States
It's a joke to see what a super-natural drink wine has become.
Wine critics serve a greedy, incompetent middleman (merchants) between producers and consumers.
The most important thing in wine is who you drink it with.
jerome belcourt, France
Hi Olly - feel free to contact me directly - love to fill you in on what the reality of all this is. AND I will even share with you what I do!
One of the really interesting thing with the internet is nobody even bothers to contact the SOURCE any more and things just wizz by and the story takes on a life of its own. Tim Atkin did not bother to get the context and talk with me. I invite you (and have invited him as well) to get the full story, not the Guardian headline that did not represent my, or the author's, true position.
Hope you give me a shout!
Tim Hanni, United States
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Survey time - We ask the questions
3rd February 2010 11:34
At the beginning of last year, the performance of the drinks sector in 2009 was pretty easy to forecast. After all, as 2008 came to a close, it was clear that the prognosis for the following 12 months was not good. One year on, however, and the future is a little tougher to forecast.
So, just-drinks is asking its readers what they think 2010 has in store for our industry.
We've put together a short questionnaire, which will only take a few minutes of your time. Once the responses have been compiled, I will send you the results.
The survey is live now, so please dive in and have your say.
Rest assured that all responses will be treated in the strictest confidence and summary/average results presented.
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Everything you always wanted to know about Champagne...
2nd February 2010 17:09
If, like us, you're based in the UK and, like us, you prefer your peers to believe that you know more than you actually do, then this little black book might come in handy.
Champagne Lanson is celebrating its 250th anniversary in the UK this year by offering a pocket guide to all things champenoise, ‘The Little Black Book of Champagne’.
The 52-page book offers a guide to the different taste profiles of malolactic and non-malolactic styles of Champagne and helps to put into context the role that taste should play when choosing Champagne.
Retailing at GBP5.99, the guide will be available free of charge to trade and consumers for a limited period by requesting a copy from here.
We've already put our order in.
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What's this?
Your Comments
I have enjoyed Bacardi products and indeed even promoted them to the trade and the public in my work, but I have been increasingly troubled at the tactics Bacardi has used to protect and grow their business. The stories placed in the media at the release of Bacardi's Havana Club brand, depicting the Pernod Ricard product as undrinkable, were not only ridiculous but harmful to Bacardi's reputation. This latest bout to protect their lion's share of subsidies at the expense of a US Territory and the reputation of a competitive drinks company is disturbing. This is a time when all of the Caribbean should work together to recover from the devastating financial storms they have endured. Puerto Rico should be leading that initiative.
Dale DeGroff, United States
It's certainly the first time I have had to practically take the morning off to read a press release. What a monster that was!
Alan Lodge, United Kingdom