The beverage business blog from Olly Wehring
If you would like to offer your comments, opinions, suggest topics or just have a good rant, please feel free to email: Olly Wehring.
Diageo - Who will buy my baijiu?
31 May 2012 15:17
Amongst the sideline talk at this year's Capital Markets Day from Pernod Ricard yesterday, check this, from a China Daily reporter.
Talk over dinner last night turned to baijiu, the domestically-produced white spirit and national drink of China. The category accounts for a staggering 99% of spirits sales in the country, with imported spirits – annual volumes of a still-healthy 5m cases – making up the final per cent.
What was Diageo's thinking in getting involved in baijiu, the reporter asked me. Could the company be keen to grow the Shuijingfang brand in China, or is Diageo looking to introduce baijiu to export markets?
I proffered the possibility that Diageo is hoping to use Shuijingfang as its way in to the Chinese consumer, before looking to turn him on to the likes of Johnnie Walker.
“No,” the reporter fires back. “That will never work.” The baijiu consumer is such, due to a mixture of compulsion and national loyalty, I'm told. A Chinese civil servant, for example, - of which there are a few - will buy baijiu and baijiu alone when it comes to spirits.
I'm hoping Diageo knew this before it made its play for Shuijingfang.
Unless, of course, baijiu's going to get its own gondola end in Wal-Mart and Tesco some time soon?
Soft Drinks International Conference - See you down the front
11 May 2012 13:36
We're less than a week away from the inaugural Soft Drinks International Conference here in London, and just-drinks will be there in force.
Taking place at the Tower Hotel in London on 17 and 18 May, the trade event will see a wealth of soft drinks companies attend. We will be there on both days and hope to see you there.
I'm told that, if you book now, you'll get a 50% discount off the standard delegate rate (use the code SDIVIP50).
To register, click here, and hopefully we'll see you there.
Anheuser-Busch InBev – My cup, it runneth over
10 May 2012 09:16
When Anheuser-Busch InBev lined up a three-year tie-up with the English Football Association last year, the romantic in me got all excited.
"Maybe," he pondered, "I'll get to see Liverpool in the FA Cup Final."
The realist in me quickly took hold and, considering the season my team has just put me through, was quite valid in dismissing such flights of fancy.
Okay, they didn't win, but I still got to watch my team play at Wembley Stadium on Saturday, thanks to A-B InBev here in the UK.
Not only that, but I also managed to get another snap for the 'Me with a Trophy' photo album.
Thanks to A-B InBev UK and Michelle Norman.
Coca-Cola Co & Monster - Did you get rich quick?
01 May 2012 16:48
Here's what my news 'timeline' looked like this morning:
A story runs in a prominent newspaper, citing unidentified people familiar with the situation as saying that the Coca-Cola Co is in discussions to buy Monster Beverage Corp.
Then, some stories break saying that Monster's share-price has soared to an eight-year high.
Soon afterwards, Coca-Cola issues a statement, saying it is not in negotiations with Monster.
Finally, several news outlets say that Monster's share price has slipped back to pre-speculation levels.
I'll wager that someone, somewhere made a pretty penny in the last 24 hours.
Let pirates be pirates
25 Apr 2012 11:56
l to r: A pirate, some Diageo execs, a governor, some more execs
This photo, from the opening of Diageo's Captain Morgan visitor centre in St Croix on the US Virgin Islands, came through earlier this week. It reminded me of my last encounter with a pirate.
In Cape Town with Wines of South Africa four years ago, I attended a party at which a performer - dressed as a pirate - did some pretty fancy juggling and some elaborate trickery with knives.
At the end of the evening, as we were leaving, I saw the pirate. I complimented him on his skills. His response?
Once a pirate...
London International Wine Fair & Distil - Are you ready?
24 Apr 2012 17:10
The London International Wine Fair & Distil is coming, and just-drinks will be out in force at the three-day trade event.
As last year, we will run our daily diary in the run-up to next month's exhibition. If you would like your company's activities covered, then please send details to email@example.com.
Also, we will run our regular presentation looking at the results of our survey of the wine industry in the UK. We have a stellar panel this year, comprising the head of Wines of South Africa, the GM for Europe at Accolade Wines and Concha y Toro's commercial director for the UK.
Seats for the hour-long, free seminar, which takes place on the Wednesday at 1615 BST, are limited, so click here to reserve your seat.
And, if you can't make it to the wine fair, you can enjoy our presentation live and online. We shall broadcast the entire session as a webinar, which is also free to watch. Click here for further details.
just-drinks Webinar - The State of the Nation - The UK: Where is the Wine Industry Heading?
03 Apr 2012 14:39
I am very excited to announce the first just-drinks Webinar.
Coming up on Wednesday 23 May, I and a fantastic panel of industry experts, will look at the results of our annual survey of the wine industry in the UK.
Not only will we be hosting the seminar at the London International Wine Fair, we will also be running the discussion as a live webinar.
If you can't make it to the wine fair, click here to register for the webinar. It's going to be rather special.
Craft brewer (n)
27 Mar 2012 11:34
We all know roughly what is meant by the term 'craft brewer', but how many of us know exactly what the definition is?
Happy to help.
The definition of a craft brewer as stated by the Brewers Association:
An American craft brewer is small, independent, and traditional.
- Small: Annual production of beer less than 6m barrels. Beer production is attributed to a brewer according to the rules of alternating proprietorships. Flavored malt beverages are not considered beer for purposes of this definition.
- Independent: Less than 25% of the craft brewery is owned or controlled (or equivalent economic interest) by an alcoholic beverage industry member who is not themselves a craft brewer.
- Traditional: A brewer who has either an all malt flagship (the beer which represents the greatest volume among that brewers brands) or has at least 50% of its volume in either all malt beers or in beers which use adjuncts to enhance rather than lighten flavour.
Red Bull on the radio
23 Mar 2012 20:49
Last week, the creator of Red Bull, Chaleo Yoovidhya, passed away.
UK radio station BBC Radio 4 wanted to speak to someone about Mr Yoovidhya, and the soft drink phenomenon he played such a large part.
They chose me.
The UK Government AKA Mythbusters
23 Mar 2012 10:49
So you can see what we're up against, here's what the UK Government has offered in defence of its proposal to bring price intervention into play to combat alcohol misuse in the country.
I particularly like their counter-argument to the "This is illegal" 'myth.
MYTH: Proposals are going to hit consumers in the pocket during difficult times and punishes responsible drinkers.
FACT: 80% of alcohol purchases are made by 30% of the population, and this group are the main beneficiaries of discounted alcohol. The cost of a GBP0.40minimum unit price would be:
- for the average drinker = GBP21 to GBP23 a year
- for moderate drinkers (drinking within recommended limits of up to 21 units a week for men and 14 units for women) = GBP5 to GBP6 a year
- for harmful drinkers (drinking far above the recommended limit – more than 50 units a week for men and 35 for women) = GBP105 to GBP135 a year.
MYTH: This is just another duty increase
FACT: No it’s not, a duty increase hits all alcohol for everyone; a minimum unit price hits cheap, harmful alcohol. To get the same positive effect on consumption, health and crime as a GBP0.40 MUP, we would have had to raise duty by RPI+9%.
MYTH: This is another attack on the poor
FACT: People on low income are the least likely to drink alcohol at all - at the moment whenever a supermarket 'loss-leads' on alcohol, they are subsidizing heavy drinkers. Independent research by the IFS shows that cheap alcohol is bought by all income groups. The factor that most determines whether you are likely to buy really cheap alcohol is not your income, but how much you drink - the heaviest drinkers (and those who binge) are particularly likely to buy cheap alcohol, which is why we are targeting it.
MYTH: The Government is going to make money out of this – it’s just another tax
FACT: The Government will not make anything out of this. Unlike in Scotland, we are not planning to link this to a supermarket tax. Instead, we expect supermarkets to put any extra profits they make towards lowering the price of other goods. Studies have shown that deep discounting on alcohol benefits the heaviest drinkers, and costs the rest of us money - so ending the 'loss leaders' on alcohol, and instead discounting other products, will make the average shopping basket cheaper - which we think is the right thing in tough times.
MYTH: A minimum unit price of GBP0.40 won’t have that much of an impact on reducing crime and health-related issues.
FACT: There will be 170 fewer alcohol-related deaths in the first year, rising to 900 a year over ten years (7.7% fewer alcohol related deaths). There will be 50,600 fewer crimes a year; including 12,900 violent crimes. More than GBP80m will be saved in health and crime costs in the first year, rising to over GBP140m in the tenth year.
MYTH: This is another example of the Nanny State as you tell people what to drink and business what to charge.
FACT: People who drink sensibly will feel very little impact from these proposals. In particular, we want to support local pubs - where people drink sensibly and enjoy themselves - and reverse the shift towards 'pre-loading' on cheap alcohol at home - which we know leads to more violence. We are working in partnership with businesses: it is essential that we tackle price. We can't do that through voluntary agreements because it's illegal for the supermarkets to make agreements on pricing together. So to tackle cheap alcohol, Government has to take action.
MYTH: This is illegal.
FACT: It isn’t illegal. We believe coming down hard on cheap alcohol and its abuse is the right thing to do. International evidence shows that the price of alcohol is closely linked to how much is consumed, and we don’t believe we can tackle Britain's relationship with drink without doing something about excessively cheap alcohol. We make no excuses for clamping down on excessive drinking and drunken behaviour.
MYTH: Alcohol consumption is going down, why are you doing this?
FACT: Alcohol consumption in general might be going down, but binge-drinking isn’t – among women it has been rising. We know binge-drinking results in crime, anti-social behaviour and visits to A&E at a cost of GBP21bn a year. Around 50% of all alcohol consumed is drunk during binge sessions - this isn't a marginal problem.
MYTH: Banning multi-buy offers would mean no more good deals on booze
FACT: The Scots have had a ban on multi-buy offers since October 2011 and it doesn't mean you can't get good deals - a ban on multi-buys means that instead of '2 for 1' you offer 'half price'. This is actually better value for the customer because you can get the deal without buying two items. We don't want to stop people getting good deals - but we do want to stop shops 'pushing' people to buy more alcohol than they want.
In 2010 more than GBP42bn spent on alcohol in England and Wales alone. Alcohol has been so heavily discounted that it is now possible to buy a can of lager for a little as GBP0.18 and a two litre bottle of cider GBP1.69.
We estimate that in a community of 100,000 people, each year:
- 2,000 people will be admitted to hospital with an alcohol-related condition;
- 1,000 people will be a victim of alcohol-related crime;
- More than 3,000 will show some signs of alcohol dependence; and
- More than 13,000 people will binge drink.
In a recent study, 66% of 17 to 30 year-olds claimed to have ‘pre-loaded’ before a night out with pre-loaders two-and-a-half times more likely to be involved in violence than other drinkers.