That’s up half a share in 02. Labatt (-1% in 02) is #2 behind AB with 8.1 share. AB up 2%, held even at 51.4 share. Miller up 6.4% at 7.1 share; Coors up 1% at 7.8 share

For big supers that is.  “If Wal-Mart and Target and Costco have made your lives miserable, get ready because it’s about to get worse,” wrote Progressive Grocer mag, summarizing McKinsey consultant’s speech to big grocers.  Wal-Mart and co have already grabbed big shares of categories like paper goods, cleaning products, etc but “battleground"  shifting to "hardcore grocery products that traditional grocers depend on for volume and profits…. Once a category goes to the value retailers, it rarely comes back,” said McKinsey guy.  Value retailers get 50% higher sales per square foot than traditional grocers, sez  McKinsey, from $625 to $420.  They're now plowing those extra $$ into service and labor while supers cut back, wrote Prog Grocer.  Same mag said supers in south and Tex may be most vulnerable, naming Food Lion.

US Ct of Appeals upheld lower ct ruling that Maris associate Irvin Philpot didn’t “defame” AB between 1990-96 as trouble brewed between AB and then-Fla distrib Rudy Maris. AB charged Philpot defamed it by “maliciously telling hundreds of people, including influential business leaders, that Busch’s dealings with its distributors amounted to criminal conduct.” Philpot testified he either never spoke to influential people or didn’t dis AB. AB sought minimum $2 mil based on theory that because of Philpot’s comments AB “did not receive full value” for approx $266 mil AB had spent 97-2000 “to strengthen its relationships with its wholesalers,” judge wrote. AB’s expert witness testified AB upped ad $$$ those yrs reversing yrs of cuts. Based on theory of “corrective advertising,” a defamed company can recapture portion of relevant spending, AB was due 1-5% of that cost, claimed expert. But Appeals Ct judges ruled AB “had not proved any actual damages from any defamation by Philpot,” so AB got zip.

Also expects shipments to be down 5% in 1^st qtr, Boston said, based on orders so far.  And 1^st qtr earnings will “definitely… be a challenge,” cfo Rich Lindsey told analysts.  Why? Boston upped inventories by 35,000 bbls in 4^th qtr 02 as part of Sam Light rollout.  While sales-to-retailers up 10.1% to 1.24 mil bbls, shipments up 12.6% to 1.28 mil bbls.  Boston rev per bbl up 4% in 02, but its oper income per bbl down $1, 10% to $9.10.  Boston upped ad and promo expenses $20 mil, 27% to over $100 mil.  Boston will up ad spending again in 03, including natl media on lager brand.  Chairman Jim Koch acknowledged “some cannibalization” from Light. Total beer environment “healthy," but last 3 mos "have been a little bit choppy,” he noted.  Yet Boston off to fast start in supers; up 27% for 4 weeks, according to IRI. 

AB, Miller and Coors each eked out 1-2% volume gains, 3-4% $$ gains in Calif supers in 02, according to IRI, but each lost share of $$ and volume statewide. AB lost 0.4 of $$ in northern and central Calif, off 1 full share in southern Calif. Down 0.8 share of $$ statewide to just 30.6. Imports up 1.3 share of $$ to 30.5, neck-and-neck with AB. Miller held $$ share in central, down 0.3 in north, south and statewide to 15.1. Coors up a half-share in north, but lost 1, 1.3 in southern and central Calif respectively, for 0.4 loss of $$ in state to 12.4. So top 3 under 60 share of $$, while top 3 importers at 25 share of $$. Modelo and Heineken each picked up 0.5 share of $$ statewide; Modelo up to 14.4 statewide. Labatt picked up 0.1 share in state too. Heineken and Labatt each around 5 share. Specialty (lotsa Smirnoff Ice) up 1.2 share, while premium biz down 1.6. Micros lost 0.1 share of $$, but still had 7.

Miller “is so pleased with the attention” to its Catfight ad that “it’s now fast-tracking four similar shock ads to air in March,” wrote Business Week. “We understand that Coors has a series of new ‘And Twins’ tv ads that will be launched in 03,” wrote UBS Warburg’s Caroline Levy.

Even with huge state budget deficit, beer tax in New York will drop 1.5 cents to 11 cents per gallon on Sept 1 if Gov Pataki gets his way.  Tax cut originally passed in 2000; would drop state’s beer tax income from $41.6 mil to $39 mil.  While some state pols complaining, “the governor made clear we should move forward with all the tax cuts that are scheduled to take effect this year,” spokesman told NY Daily News.  Beer tax has already dropped 8.5 cents since Pataki took office 8 yrs ago.

 

Miller just hired Wisc firm to “design and execute a world-class supply chain management and infrastructure solution to help Miller improve service and reduce logistics costs.” Schneider “helps customers extract strategic business value from their supply chains in the form of lower distribution costs, reduced inventory, improved customer service and increased availability to working capital,” according to Schneider. On its website Schneider sez its “years of operating knowledge, a large provider network and leading-edge technology allow you to gain control over your supply chain partners” etc.

Outpaced beer at home consumer price index, which was up 2.5%, and general inflation of just 1.6%. Five-yr trends for on- and off-premise beer: +2.6%, +2.2% annually, while 5-yr avg inflation was 2.4%. Different story for wine/spirits. On-premise wine prices up avg 4.5% per yr since 97, with 4-7% pops last 3 yrs. CPI for wine at home tho averaged up just 0.9% since 97. On-premise liquor prices averaged 3.2% increase since 97 while CPI for spirits at home averaged 2.7% annual increase. In 2002, on-premise wine/spirits indexes up 7.1%, 3% respectively. All figures are annual averages.

At least 2 big Wall St houses upgraded rating on Coors stock based on its low valuation following big 15% hit last week (UBS Warburg and Goldman Sachs).  At least 2 more reiterated their favorable ratings (Deutsche Bank and Morgan Stanley).  But stock actually down since then: below 50 today, down 1/3 last 3 mos.  Trading at less than 11x analyst estimates of 2003 earnings.  Why?  Perhaps it's what Andrew Conway at Credit Suisse called Coors’  “dour financial outlook” for 1st half 03.