On malternatives that is. At control states’ legal confab, Treasury official promised announcement “soon,” couldn’t say more. So Treasury still sittin’ on rulemaking: whether to require that in order for these products to be defined as malt bevs, 90% of alcohol has to come from malt base, or 51%, or some other limit. Outcome has huge implications for how bevs taxed, where sold, etc. Note too: states have different definitions of beer. Coors atty argued for “beer integrity,” stressed that if 75-99% of alcohol comes from “spirits” flavor (that’s case for vast majority of brands), product should not be treated as beer. Rep for group of malternative makers insisted consumers “don’t care” where alcohol comes from, pointed to history of “flexibility” in fed treatment of malt bevs. Said his group “prepared to swallow hard and adjust to majority standard” that 51% of alcohol be from malt base. Stricter standard, he said, could “kill the golden goose.”

Franchise protection laws took tuff hits during panel talk at legal symposium put on by control states assn this week.  Leading free-mkt economist/prof rejected laws’ legitimacy for solely “protecting incumbent distributors.”  Told control state officials he “didn’t see the logic” to support need for control states in first place!  From free-mkt perspective, no difference between distribution of alc bevs and peas, he suggested.  Prof has served as expert witness for big brewers, Wal-Mart, Microsoft, etc.  His comments came after gen counsel of Canandaigua (world’s #1 wine co, owned by same co as Barton) ripped franchise laws as “exclusive protection” of 1 tier at expense of others.  Atty for Kans wine/spirits distribs argued laws benefit suppliers and distribs, said most arose as response to “horror stories” of mistreatment of distribs.  Suggested too that, 21^st Amendment aside, franchise laws can be considered “a reasonable exercise of the states’ police powers.”  Another atty noted laws balance interests of suppliers who buy brands, their current distribs who expect to get new brands, and brands’ “original” distribs who helped build ‘em.

Nasty signs that Calif wine biz facin' rocky '03 poppin' up all over, wrote just-drinks.com. Back in Jan, a top Cal bulk wine broker estimated "20% of the state's 900 wineries could face bankruptcy or be forced to merge" due to double whammy of tuff economic environment, 1.5-mil ton oversupply of grapes. Even with prices droppin', Calif wine sales down in most channels for 1st time since recession of early 90's, according to ACNielsen.

AB up 4 share over last 3 yrs; gained 3%, 44,000 bbls in Ia in 02. Bud Light at 25 share of Ia mkt; got 4% gain. Busch Light #2 in Ia at 19 share. Miller flat in Ia; down half a share to 20.6. Miller Lite off 1.5% and down to 10.9 share. Coors up 7.5%, 10,400 bbls; up 0.3 share to 6.3. Pabst down to 6.4 share in Ia; lost 4 share since 99. Imports got just 2.8 share in Ia. New brand notes: AB shipped 7100 bbls of Bacardi Silver, Miller shipped 6000 bbls of Skyy Blue in Ia. Mich Ultra did 5600 bbls Jul-Dec.

“Read my lips: This was sour grapes,” atty Willie Gary told press conference in response to news that grievance committee for Florida Bar assn found probable cause in 10 complaints against Willie for his conduct during trial vs AB in 2001. Special master appointed by judge in case also found cause against 2 other Maris attys, Madison McClellan and Patricia Hoffler, according to Palm Beach Post. No charges found against AB atty Peter Moll. A Bar trial expected to take place by end of 03.

Just 3 yrs after Erlanger, Ky consolidated as Miller/Coors house owned by Ron Plattner and Jay Morgeson, Jay sold his stake in 2.5-mil-case distrib. This deal also went thru many twists and turns as Miller and Coors disagreed for many moons over who should be buyer. Finally, deal closed last Friday as Stagnero family sold its Hamilton, Oh Miller biz to Bonbright Dist of Dayton and bought 50% of Erlanger.

Pabst Blue Ribbon is showing surprising strength in some areas, seemingly as example of retro chic.  In Oreg, Pabst up 11,000 bbls, 15% thru Sep 02, while AB, Miller, Coors flat.  Draft up 4200 bbls, 43%. Trend started in Pac Northwest, but it's spreadin’ to midwest too.  “Known as the unofficial beer of skateboarders, PBR also is popular with college students and restaurant servers,” wrote Columbus Dispatch.  “It’s a backlash against the hoity-toity upscale beers that sell for $5 each,” a local bar owner told paper.  PBR up double-digits in supers nationwide for 4 and 52 weeks, according to IRI.

Pepsi Bottling Group warned of soft 1st qtr sales yesterday (off 5-6%), and at least 1 analyst saw negative implications for brewers in announcement.  Namely, it’s tuff out there.  Morgan Stanley’s Bill Pecoriello cut forecasts for sales-to-retailers for AB and Coors to flat in 1st qtr.  That’s about where both are yr-to-date.  Could March be better?

About 18 mos after deal first presented to Coors and many twists and turns later, Miller of Dallas (owned by Barry Andrews) bought about 7-mil-case Willow Dist to form over 15-mil-case colossus renamed Andrews Dist of North Texas. Paid over $55 mil, we hear. Combined distrib has 57 share of mkt, it estimates, and reportedly well over 60 share of margin pool. In addition to near 5 mil cases of Coors and 5-6 mil of Miller, Andrews Dist sells over 1 mil cases of Modelo products, about 1/2 mil Heineken, 1/2 mil of Interbrew, over 100 brands in all. But both Miller and Coors have struggled in north Tex in recent yrs. Deal originally supposed to be a merger; Barry finally bought it outright. Andrews Dist competes head-to-head with largest AB distrib, Ben E. Keith.

Recall Guinness Bass Import Co’s bold projection of 100 mil cases in 02. After doubling in 01, GBIC expected to repeat. But GBIC up modestly (6-7%) and didn’t even hit 50 mil cases.