The year of drinking sensibly

Dasani, Mondavi, Rooney – 2004 was a year of high drama, but the development that will resonate for many years is the government’s tough stance on binge drinking and drinks advertising, says Robyn Lewis

January

JUST AS the New Year hangovers were subsiding and resolutions were already being forgotten, the drinks industry went back to work to face a year of upheaval. 

In fact, in many ways 2004 was the year when some of our worst fears became reality – a government crackdown, smoking bans, strip stamps, a poor Euro 2004 performance from England and a wash out of a summer, were all to feature in a difficult year.

Other than this general apprehension dominating the headlines at the start of the year, the green shoots of some of the other big issues of 2004 were beginning to appear. 

Robert Mondavi announced that he was stepping down from the board of the family business, kick-starting the soapopera style saga that would continue throughout the 12 months; The Wine Trade Action group was formed, and the first boardroom shuffles of the year were announced with David Meyers taking the helm at the Moët Hennessy UK arm (after Malcolm Dunbar moved to LVMH Europe) and Adrian McKeon took over at Allied Domecq Wines UK.

On the new product front, the start of the year saw the launch of a new beer for women called Cool Blonde, Gordon’s launched a Sloe Gin and Ocean Spray introduced the UK to white cranberry juice.

February

It would be fair to say that the Italians, if no one else, were happy that this is the shortest of months.  First of all, nearly 60,000hl (the equivalent of 7.5m bottles) of Sicilian Pinot Grigio and Pinot Blanco were seized under the suspicion that it was to be sent to Veneto where it would be bottled and labelled as DOC Pinot Grigio.

Then the first Nielsen stats of the year showed the US had overtaken Italy in UK off-trade volume sales.  It was an equally bad month for the South African wine industry which found itself accused of putting additives in Sauvignon Blanc – allegations which were vigorously denied by all.

Elsewhere things were more positive as Gonzales Byass announced that it would open a UK office, and Pernod Ricard, Southcorp and Diageo all posted strong financial results. Carlsberg made a bid for for – and got – German Brewer Holsten and Coca-Cola launched Dasani, a new bottled water into the UK, a surefire success – or so we all thought.

March

The Dasani disaster all but dominated the early part of this month as the news that it was purified tap water hit the headlines.  Statements by Coca-Cola describing Dasani as the "purest water you can buy" cut no ice with the British public who remembered only too well a certain Derek Trotter’s Peckham Spring water hailing from a similar source.

And then things got worse when, in the PR debacle of the year, it was revealed that the water had higher than legally permitted levels of Bromate, a substance described by the FSA as, "a chemical that could cause an increased cancer risk as a result of long-term exposure".

Finally, on the 19th of the month, the soft drinks giant announced that it was recalling all bottles of Dasani from the UK and pulling the brand for the foreseeable future. 

It was, in fact, a bad month all round for the industry as the budget brought confirmation of our worst fears – strip stamps for the spirits industry, and there was a 4p rise on a bottle of wine and 1p on a pint of beer. Furthermore, Ireland banned smoking in workplaces – including bars and pubs.

Would it affect drinks sales? Would Britain follow suit? The industry watched and then the Alcohol Harm Strategy report was released at the end of the month firing some of the first warning shots to the industry.

April

By the beginning of April the trade had had enough time to digest the government’s recommendations and decided that it didn’t find them too unpalatable after all.

Tighter controls over advertising, sensible drinking messages to be put on labels and a financial contribution to address the social effects of alcohol abuse were all hinted at, but the government did recognise that the industry had already employed some best practice strategies, with the funding of The Portman Group mentioned in particular.

Otherwise it was a fairly quiet month in which Allied Domecq posted good halfyear results and Corney and Barrow launched a wine club, while a sparkling vodka, a new-look Cinzano and Stolichnaya Elit all made their first appearances on our shelves.

May

In a month inevitably dominated by the London International Wine and Spirit Fair, the industry, as usual, repaired to ExCel in the deepest, darkest East End of London.  New product launches were in abundance as brand managers sought to capitalise on the media frenzy that always accompanies the event.

Thus we had a premium Blossom Hill range, a wine from golfer Nick Faldo, a striking new Chilean offering from Bottle Green in the shape of PKNT, a Black Rosé from Blue Ridge, and Raisin Social launched Veo, to name just a few of the highlights.

The fair itself was again a runaway success with visitors up 7% to 18,000 over the three days, and it hosted the hottest event of the year, the inaugural Drinks Business Awards.

 Sponsored by Riedel, Wines of Chile, The Symington Family Port Companies and Halewood, the mid-week awards ceremony cleared the floor of ExCel as the great and the good gathered to watch Patrick McGrath MW, MD of Hatch Mansfield, win Man of the Year; Alexandra Lapostolle of Casa Lapostolle, win Woman of the Year; Jon, Mark and Robbo Whisky claimed best launch of the year, and Vladivar vodka received Consumer Campaign of 2004, along with the other winners.

Away from the event little much else was happening, apart from Tio Pepe announcing its sponsorship of the reality TV show Hell’s Kitchen starring Gordon Ramsay; and Janet Jackson’s mammaries making an unscheduled appearance on US television, an event that was to have an untold effect on drinks (and indeed all other) advertising on American television.

June

This time last year we were baking in record temperatures as the hot, hot 2003 summer began, but this year we were not so fortunate as the 2004 season proved a rather damp squib and put paid to brewers’ hopes of another record breaker.

There was positive news for the beer category, however, as Thresher launched an own-label beer range after its astounding success with the Origin wine brand; Liverpool-based brewery, Cains, launch its flagship lager; Indian brand Cobra launched in the US under the Krait moniker (after copyright issues), and Heineken and Fosters released their new advertising campaigns.

Euro 2004 also kicked-off in Portugal but the England team didn’t make it far enough for the trade to really feel the benefits, while the rumour mill hinted that Bacardi was on the lookout for a vodka brand and its eye was on the superpremium Grey Goose.

July

Just a few weeks later the deal was done

for an undisclosed sum somewhere in the region of a cool $2bn, it is said.  The vodka category continued to command our attention through the month, with Smirnoff’s release of a super-premium extension in the form of Penka.

Otherwise it was a rather quiet time for the industry, with just the launch of a £400,000 campaign from French brand Castel – with the strapline "French without the Fuss" – to keep us talking.

Oh, and there was another 2005 celebrity wine offering in the form of a range from transatlantic Masterchef and Through the Keyhole presenter Lloyd Grossman, which kept us amused for most of the remaining month – all together now: "Who driiiiinks a woine loike theess?"

Southcorp’s return to the black after posting a massive rise in profits (up 169.9% to $108.9m pre-tax) barely got a mention, while the news that Orlando Wyndham had signed a deal with Wal-Mart in the US that would see Jacob’s Creek stocked in over 300 stores in 22 states, barely hit the gossip radar.

September

By now the Mondavi saga that had been simmering all year hit full-scale, paddedshoulder, soap-opera-style melodrama.  In January there had been, of course, the resignation of Robert Mondavi himself from the board, but early this month there was an announcement that the Mondavi family was set to lose overall control of the corporation.

Then, just a few days later, we found out that the company was to be split into two separate business lines – lifestyle and luxury.  But by mid-month we were hearing that the luxury portfolio of brands was to be sold off entirely and Michael Mondavi, vice chairman, had tendered his resignation – and that wasn’t the end of it.

By the beginning of October, 350 staff had been made redundant (apparently as a result of the selling of the luxury arm) and there were rumours that Tim Mondavi, brother of Michael, would succeed as vice chairman… but then he left, although he remained as consultant and the saga continued until the end of the year as a group of shareholders filed a lawsuit in November over the company’s refusal to accept a $1.3bn takeover bid from Constellation Brands – phew!

Amazingly, there was other news to keep us even further occupied this month with the sale of the Hotel du Vin chain for £66m. A furore developed after an article in The Evening Standard, following two 14- year-old girls buying alcohol in London’s bars and clubs, caused a rumpus, and the debate over the smoking ban raged.

There was also a plethora of new Champagnes to choose from – Bollinger launched La Grande Année; Laurent-Perrier launched Brut Millésime 1996; Ruinart launched its Blanc de Blancs NV in a half bottle, and Taittinger brought us its Prelude Grand Cru NV.

Then there was another celebrity wine launched in the form of Sir Cliff Richard’s Portuguese offering – all together now to the tune of that festive Cliff classic: "Christmas time, Cliff Richard’s wine, children singing …"

October

Finally a breather from the excitement of the start of the autumn season – but no!  Moët Hennessy acquired Glenmorangie for £300m, and the Argentinian wine industry showed healthy growth, posting soaring wine exports, up 32.6% in value over last year (though volumes dropped by 18.3% year on year), due, they said to the increasing focus on quality wine for export.

This was also the month in which three-for- £10 wine deals were criticized by the Observer newspaper for encouraging binge drinking; a mystery Martini man was appointed who turned out to be megastar George Clooney; and British Customs and Excise was told to take a softer approach to cross-channel shoppers by the EU.

November

As the tinsel came down from the attic and before the non-stop Christmas carolling became irritating, this month was all about gearing up for the most important sales period for the industry.  This time, however, there was a twist. In 2004, as we approached the end of a trying year, the trade was treading carefully.

We had seen a lot of changes already and we weren’t about to blow it now, so the message was all about sensible drinking.  Early in the month Waitrose announced it was to place sensible drinking messages on its shelves, Heineken said it would place the same on all its cans and bottles worldwide, and Interbrew UK launched smaller cans of its superstrength brand Tennents.

Then there was the announcement that advertising Watchdog, Ofcom, had published its revised set of TV advertising rules which, to general industry relief, stated that the "least intrusive means of regulation" would be best.

Perhaps all our work in 2004 will mean the pressure will ease in 2005?

December

Truly, all the interesting news for December comes in January when we sit back and examine the Christmas sales figures.  Who will be the winners this year? Vodka? New world wine? Will cream liqueur continue to perform? We’ll have to wait and see.

But rather than sitting around twiddling my thumbs, I, for one, shall be out supporting the industry, partaking of a festive tipple or two and merrily welcoming in 2005.  What will it hold for us? Who knows? But we’ll be here to tell you all about it.