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Posted June 2013

Turkey - Worries over tough new alcohol restrictions

A tax hike on alcohol of more than 340 percent - others say 700 percent - in a mere decade - what do you call that? Worrying, at least.

When Turkey's non-smoking and teetotal prime minister Recep Erdogan said in late April 2013 that Turkey's national drink was the non-alcoholic yogurt-based beverage ayran, not beer or the popular local liquor raki, Efes' executives should have seen the writing on the wall. A few weeks later, on 24 May, the so far tightest restrictions on alcohol advertising and sales were rushed through parliament.

The new bill bans shops from selling alcohol between 10 pm and 6 am and from displaying booze of any kind in windows. Restaurants up to 100 metres from schools or mosques cannot sell alcohol at all. What is more, spirits producers can no longer advertise or sponsor events. While not banning alcohol outright, these moves could seriously harm alcohol sales.

The news sent shares of Anadolu Efes, Turkey’s biggest brewer, down by 7 percent. Since April, when they stood at TRL 31 per share, they have dropped to TRL 24 (9 June). Read on


USA – Craft brewers adopt can-do attitude

Only years ago, any craft brewer wanting to supply beer in cans would have risked the Fall from Grace. Cans were considered, oh so mass-market and not in keeping with craft beer’s superior appeal. But now that even Boston Beer, the maker of Samuel Adams beer, has introduced the “Sam can”, something must have happened to cans’ erstwhile boo-boo image.

Over a decade ago, the Oskar Blues Brewery in Lyons, Colorado was the first U.S. craft brewery which dared put its beers into cans. Despite the initial controversy, many other breweries have since quietly followed suit and today, as a recent count by CraftCans.com reveals, some 300 breweries in 48 U.S. states are using the once-tabooed cans. Read on

 

USA - Judge denies bid to block AB-InBev's takeover of Modelo

A lawsuit opposing AB-InBev's USD 20.1 billion acquisition of Grupo Modelo by nine consumer groups lost its bid for a court order blocking the deal, U.S. media reported on 5 June 2013.

In March 2013, the antitrust attorney Joseph Alioto of San Francisco had filed a private antitrust lawsuit on behalf of nine consumers, including six from St. Louis. The lawsuit alleged the acquisition would substantially lessen competition and create a monopoly in the production, distribution and sale of beer in the United States. Incidentally, Mr Alioto was the same attorney who tried to block the Belgian brewer InBev from acquiring Anheuser-Busch in 2008. Read on

 

UK - Pub chain JD Wetherspoon reiterates its ban on e-cigarettes

JD Wetherspoon (JDW), the 860-strong UK pub chain, has defended its position after it emerged that the use of e-cigarettes had been banned inside all of its pubs, media reported on 7 June 2013.

Despite e-cigarettes being exempt from Smokefree Legislation, the managed pub chain claimed that staff had found it difficult to distinguish e-cigarette users from real smokers.

Electronic cigarettes, also known as e-cigarettes, are electronic inhalers that vaporise a liquid solution into an aerosol mist, simulating the act of tobacco smoking. In fact, users of e-cigarettes, called "vapers" are not smoking but "vaping". Some of these e-cigarettes look like the real thing, but there are many designs around which do not resemble conventional cigarettes at all. Read on

 

Brazil/Australia - Gowers' woes

The global wine glut may be ending but now there is an orange glut building up.

Global demand for orange juice has been declining, particularly in the main consuming regions of Europe and North America, with global imports falling from 1.5 million tons in 2008/2009 to a forecasted 1.1 million tons by 2019/2020, affecting the long term prospects for the industry.

This trend is starting to take its toll on Brazil, the largest producer which currently supplies some four-fifths of world exports. According to a new report by Dutch Rabobank (June 2013), this waning demand has driven a reduction in investment and the exodus of independent producers, both of which signify a considerably diminished Brazilian harvest, and will be reflected in an increase in prices in 2014. Read on

 

Germany – Brewers speak out against fracking

At the German Brewers Association, which represents the country’s 1,300 brewers, they will be pleased that their open letter to six government ministers at the end of May 2013, in which they warn against fracking in their country and ask for a moratorium on the issue, was picked up widely by the media, making it even into the New York Times newspaper.

Invoking the beer purity law of 1516 that only allows basic, and pure, ingredients in real beer, the association worries that shale gas removal could lead to contamination of the water they use to make the national drink.

Fracking, like nuclear energy, is a highly emotional issue for Germans of all political persuasions.

According to the Guardian newspaper, the process of hydraulic fracturing – or "fracking" – involves drilling a hole deep into the dense shale rock that contains natural gas, then pumping in at very high pressure vast quantities of water mixed with sand and chemicals. This opens up tiny fissures in the rock, through which the trapped gas can then escape. However, many shale deposits are buried under aquifers, and if the cement casing around the well-hole is not adequate, the potentially toxic chemicals used in the process can leak into the aquifer, thus contaminating the water used in brewing.

Or so the brewers’ reasoning goes.

But why has the Brewers’ Association waited until now to send out this letter? Could it be related to the fact that Germany is entering the final lap of the general election campaign? The country goes to the polls in September. Read on

 

UK – Diageo’s boss leaves with a meaty bank balance

They did not use the derogatory term “fat cat” - but this seems to be the implication of a Sunday Times piece on Paul Walsh, CEO of Diageo. On 26 May 2013 the UK’s Sunday Times newspaper reported that Diageo’s departing CEO is to receive one of the biggest-ever farewell packages valued at GBP 50 million (EUR 58 million/USD 75 million).

The 58-year-old Mr Walsh will step down as CEO of Diageo, the maker of Johnnie Walker and Smirnoff, at the end of June and will remain on the board until September. He is due to retire in June next year, after completing a handover to his successor, Ivan Menezes. Read on

 

Mexico – FEMSA’s sugar deal

Oh, oh, more ammunition for the obesity police. At the end of May 2013 Coca-Cola FEMSA, the largest Coca-Cola franchise bottler in the world, completed its merger with Grupo Yoli, a family-owned Coca-Cola bottler and soft drink manufacturer, best known for its lime-flavoured soft drink Yoli, popular in its home base of Acapulco.

Grupo Yoli is a tiny outfit compared to FEMSA – in terms of volumes it only represents 3 percent of FEMA’s output. But the merger is another step in FEMSA’s strategy to consolidate the Mexican market. The Coca-Cola System already controls over 70 percent of the country’s off-trade market for carbonates.

Through this USD 700 million transaction, which was announced in January this year, FEMSA also upped its stake in Promotora Industrial Azucarera, S.A. de C.V. ("PIASA"), another privately-owned Mexican company, to more than 37 percent, Coca-Cola FEMSA reported.

Thanks to PIASA’s complicated name, the deal attracted little attention. In actual fact, PIASA is the largest sugar producer in Mexico and currently produces about 450,000 tons of refined sugar, reports say.

This should give an unwanted boost the obesity police’s insulin level. Mexico ranks third worldwide when it comes to sugary drinks. Per capita consumption is 119 litres. Only the Argentinians (131 litres) and the Chileans (121 litres) drink more. Carbonates are aspirational drinks for low-income consumers, says Euromonitor, a market research company, and consumption is set to grow. Read on

 

Brazil – When will Corona arrive in Brazil

Everybody I asked seemed to agree that AB-Inbev plans to produce Corona Extra, Modelo’s best-selling beer, in Brazil. But when will it be? It took AB-InBev three years after they purchased Anheuser-Busch to start production of Budweiser in Latin America’s major beer market.

Corona is available in Brazil – but still hard to find – thanks to being imported informally. Modelo tried several times to sell its beer in Brazil but each time grappled with taxes, tariffs and other obstacles. As recently as 2011, Modelo said that it hoped to find an “established channel” to sell Corona in Brazil, where there are few imported beers available.

Corona would fit nicely into the country’s growing premium segment. It currently stands at about 5 percent of the total market, which is low by international standards. Read on

 

UK – Gin with a “heart of sake”

This must be spirits marketers’ Newspeak. Or how can a liquid have a heart? With exactly those words Diageo on 27 May 2013 announced the winner of their bartender competition Show Your Spirit 2013 launched earlier this year. It’s a “Japanese” gin called Jinzu – pronounced, I guess “ginzu”. Geddit?

Dee Davies from the Hyde & Co bar in Bristol, UK, is the lucky winner out of several hundred entrants. Her original idea was to distil the gin from sake, a Japanese rice wine.

But once she was at Diageo’s Global Technical Innovation Centre for the final round of the competition, where she was teamed up with one of Diageo’s own New Product Development people, it was decided that the spirit would work better if made from distilled gin to which some distilled sake has been added. Hence the “heart of sake”. Read on

 

 

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