Five Minute Read – October 2002

News this month features the impact on the auctioneers that MRI scanning technology may exert, and looks at the reaction from other wine producing countries to the £1m a year rebate on CCT that the South Africans are enjoying from the EU.

Also in news is the Californian grape glut and the collapse in grape and bulk wine prices.

Around the World highlights the national winners in the IWC, and visits (among others) Venezuela, where rum sales at Santa Teresa are booming; Russia, where tougher beer ad laws are being introduced; Taiwan where Tsingtao is to build a new brewery; and Australia where Vincor is on the prowl.

Product news highlights new entrants to the mixed drinks sector with a Campari RTD and a new vodka/sake blend originated by pro snowboarders. If that isn’t enough to give you a hangover at the mere thought, try the strongest absinthe yet to be introduced to the UK, courtesy of Wine & Spirit International. Beer producers are active, with a new pre-packaged shooter from Coors and a tequila-tinged beer to be marketed in the UK called Salitos. On a more traditional note, Guinness drinkers in a hurry will be pleased with new plans for a fast-pour system, while scotch enthusiasts will be interested in Glenfiddich’s new Caoran Reserve bottling.

Market Comment shows another bad month for drinks companies, with all sectors falling – the only glimmer of light is that they have, yet again, fared less badly than the broader market. There were few high points – and the Japanese brewers yet again notched up 52-week lows.

The subjects of our brokers’ round-up this month are Diageo, which had solid results at the beginning of the month, and Heineken. Both split the bank analysts into buyers and sellers, but the concerns seem less serious than the healthy forecast growth numbers.

Vinexpo hits New York this month, and we thought we would share the benefits of the research we have been doing to prepare for our trip. Photocopy the pages, carry them with you, and you’ll never feel out of the loop in the city that never even dozes.

The Big Interview this week is Philip Shaw, chief winemaker at Southcorp, who puts Phil Pemberton on the back heel but soon reveals a more open and accessible style – which is fitting. Shaw insist he wants individuality and expression in his wines, and he gives his views on where the Australian industry might head next.

Jo Williamson, the new chairman of the WSA, has some views on a similar subject, but for the trade in Britain rather than Down Under. On the following page is a new Drinks Business feature – bulk wine prices from around the globe.

Jon Rees’ regular round up of the Marketing side of drinks takes us to France, where the government is at loggerheads with the wine producers on the subject of anti-drink driving advertising.

This month’s Retail Watch focuses on Alexander Anson-Esparza, Tesco’s wine buying manager, and his company’s unique buying structure. We also start another new feature, In The Press, researched for The Drinks Business by Wine Intelligence. It features in-depth analysis of who, what and where was mentioned in the UK press, including commentary on the data.

Karen Waring is the marketing manager for Stella Artois in the UK, and she Loves Her Brand.

Rum is our featured spirit, and Phil Pemberton and Andy Knott find out that the reputation of it being a spirit to ferment trouble has not dimmed over the centuries – one of the biggest battles in the industry is being fought right here, right now.

Money, the theme for this month’s magazine, kicks off with the best and worst performing stocks through the last 10 years, continues with what the City’s analysts think about the industry and what they expect in the coming months, and wraps up with a profile of the International Wine Investment Fund and a report from the Wine Industry Financial Forum in California.
South Africa is the first of our country features, and as Susan Low finds out the battle to grow the country’s exports is being fought in the brand battlefield. The problem with this is, does the consumer care if it’s South African wine, or Chilean or American?

Ben Wootliff’s investigation into the economics of haute cuisine turns up some surprises – first, that the top-end dining rooms claim to make no money. Still at the rarefied end of things, Matt Guarente looks at the world of prestige cuvée champagnes. They’re too posh to admit it, he finds, but they would love to sell more of these high-margin gargles of the rich and wannabe famous.

Sally Easton MW steers a course through the science, supposition and prejudice about corks and synthetic closures – but rather than another dull diatribe, she attempts to understand the whole process of bottle ageing, and come to some kind of answer as to whether the cork industry is dead in the water or about to see a new spark of life. It’s a piece that rewards careful reading.  

With our Pernod Ricard profile, we slow the pace considerably and look at a company settling into a new sense of itself on the world stage – something it is deemed to be doing well as it digests the huge chunk of brands from the Seagram’s sell-off.

Andrew Catchpole takes us on a tour around Australia, looking at the challenges facing the wine industry there in the coming years. One of the problems, he finds, and which we investigate in the statistics page, is the forecast decline in achieved price per litre in its main export markets.

Miguel Merino is the subject of our Diary of a Producer this month, as he reflects on what was an unexpectedly busy month in Rioja and the power of music to get rid of troublesome birds.

Outside Drinks looks into the hazy world of cannabis, and asks if the business opportunities are being fully realised as more countries look at decriminalising, or even legalising, the drug.

The Story So Far picks up the ongoing battle being waged in Germany between legislators wanting a deposit scheme for all carbonated drinks and the manufacturers who claim it will be an added burden for little gain.

Still in Germany, Marian Kopp, managing director of Racke wine distributors, talks to Phil Pemberton On The Phone about pan-European launches and the cultural problems encountered in them, and bringing up the rear, as usual, is Jonathan Goodall. Having upset sherry producers with his personal views last month, this time he’s looking to get himself struck off some celebs’ Christmas card lists.

© db October 2002