Yet another sr veep from Miller, Dick Strup, will leave Mar 31st.  Dick had been top guy in mktg, intl, corporate development and most recently in integration process.  But integration now done.  Prexy Norman Adami wrote: “I salute his leadership of Miller International, an area that has sustained profitable growth” for 8 straight yrs.  “In addition, his relationships in the sports and entertainment industry have helped pave the way for many valuable sponsorships and relationships.”

This is one of strongest studies yet suggesting light drinking reduces risk of dementia, including Alzheimer’s, among elderly.  Those who consumed 1-6 drinks/week and 6-13 drinks/week reduced dementia risk 54%, 31% respectively, compared to abstainers.  (At 14+ drinks/week tho, risk was higher.)   Even those with gene viewed as predisposition to Alzheimer’s reduced risk if they were light drinkers. 

Now here’s increased earning power over time: back in mid-80s, AB oper margin (adjusted for non-cash expenses) about 15%, but in 2002 it was about 28%, Credit Suisse chart showed. So AB’s oper margin almost doubled in last 20 yrs. Don’t think many distribs can say same.

In soft US mkt, Interbrew depletions up 1% in 1st 2 mos of 03, new ceo John Brock told analysts.  But in 02, Canadian brands up 3.6%,  Mexican brands up 8% and Rolling Rock up 5%, it reported.  Stella up 11% worldwide and Beck’s up 6% worldwide.  Beck’s made $3 mil EBITDA in US in 02, according to analyst at Dresdner Kleinwort Wasserstein.

Domestic taxpaid shipments dropped 300,000 bbls, 2.2% in Feb, estimates Matt Hein of Beer Inst.  Taxpaids down 700,000 bbls, 2.5% in 1st 2 mos.  Add in 130,000-bbl, 8.5% Jan drop for imports, and total beer biz down nearly 3% in available data. That’s worst start for beer biz in ages.

Brewers below top-4 and importers up 7% and 1 share to 23 in NH, while AB up 1%, lost 0.7 share to 53.2. In last 10 yrs, AB slipped 4 share; All Others gained 13. Coors passed Miller in NH in 02; Coors up 4% while Miller down 1%. Each around 11 share. Miller lost 5.6 share last 10 yrs.

Harsh editorial by Robert Wood Johnson Foundation member called for raising alcohol taxes to make, “the industry shoulder a more equitable share of responsibility for the problems caused by alcohol abuse.”  Editorial uses inflated federal estimate of $185 bil in alcohol abuse costs in US and notes current fed, state and local taxes on alc beverages "only" nets $18 bil.  Also notes that alcohol excise tax revs used to represent 11% of federal budget but are less than 1% today.  Credits “uproar” from alcohol industry for fading hopes of passing tax hikes in 17 states this year.  Notes that Ohio, Georgia and New Mexico unlikely now to pass tax hikes and writes: “Industry influence is paying off.” 

Prexy/ceo Pat Stokes got a 25% raise to $1.325 mil and bonus up $900K, 41% to $3.1 mil.  Pat also granted another 1.35 mil options at $49.91.  Brewing co prexy August Busch IV also got big boost, salary up17.6% to $600K, bonus up 24% to $700K.  He was granted half-mil new options.  VP/CFO Randy Baker got $30K raise to $530K, $75K bonus hike to $625K, and 300K options.  Chairman August Busch III dialed back, took $276K pay cut to $900K.  Got $600K less in bonus too; $2.7 mil.  August was granted a mil options tho.  All in the Family Info about 3 AB sons added to AB proxy this yr, under new Fed rules.  August III’s son Steven, half-bro of August IV, was paid $156,800 to be exec asst to chairman in 2002.  Prexy Pat’s sons Michael and David, made $100,120, $52,083 as sr mgr key accounts, western region mktg director, respectively.  David started Aug 02, so compensation for partial yr. 

Miller debuted 5, count ‘em 5, Miller Lite Catfight ads at Miller natl sales convention yesterday. The original ad has “broken through” and “created some positive noise,” Miller Lite group brand director told Mil Jnl Sentinel today. “We certainly have an opportunity to leverage” Catfight buzz, he added, while seemingly acknowledging no sales lift yet. “Sometimes there’s a number of other things that impact the business,” another exec told paper. Meanwhile, Ad Age reported that Miller will switch Gen Draft ad agency to Ogilvy Mather. Current agency J Walter Thompson denied report. Gen Draft has suffered from inattention in recent mos. Down 8% YTD in supers thru Feb 23.

While import shipments off to tuff start, some smaller lower-priced imports hot at retail, at least in supers thru Feb 23, according to IRI.  Surprisingly, biggest % gains among top 20 imports are Molson Canadian up 77% and Modelo Especial up 31%.  Recall that total imports up 4% and Corona down 1% thru Feb 23 (see last issue).  Trends for other leading brands:  Heineken up 6%, Tecate up 13%, Corona Light up 9% yr-to-date.  Meanwhile, Labatt flat, Bass down 3%, Foster’s down 3.5% and Beck’s down 8% YTD in supers.  Amstel Light up 10%.