Top 10 “Olympic” news stories

Getting into the London 2012 spirit we match Olympic events with news stories and themes that have been prominent in 2012.

Each Olympic event tests an athlete to their maximum and some stories have the tested the drinks business team to the maximum this year, so read on to see which big news stories and themes of 2012 we have managed to match up with Olympic events.

1. Long jump

Anheuser-Busch InBev has taken a major leap this summer with its acquisition of Mexico’s Group Modelo.

They may land the gold medal with such an ambitious take over as the deal will give AB InBev, the world’s largest brewer, access to a growing Mexican market and distribution rights to Corona, the largest US imported beer brand.

To achieve maximum distance in the long jump the athlete will have to balance three components – speed, technique and strength.

And the alcohol company has shown all three by taking control of Modelo of which they already owned a 50.4% stake.

AB InBev inherited its stake in Modelo when InBev bought Anheuser-Busch in 2008 for $52 billion, and with a reported free cash flow of $9.1bn in 2011, the group has scope to finance a possible deal in cash.

Mexico is the world’s sixth biggest beer market and the fourth most profitable with most of the market taken up by heavyweights Modelo and Heineken.

2. Marathon 

The long running saga of the Rudy Kurniawan case has been in the news this year, but it looks a long way off being settled.

He has been indicted accused of “multiple fraudulent schemes” related to his wine business and its operations between 2007 and 2012.

The charges include attempting to sell fake wine and fraudulently acquiring millions of dollars in loans.

In 2006 alone he is thought to have made US$35m in wine sales say prosecutors.

He is charged with three counts of wire fraud and two counts of mail fraud, each of which carries a 20 year sentence.

Just like the London 2012 Olympic marathon it seems like it is going to be a long slog to the finish line.

The 42.195 km marathon route will consist of one short circuit of 3.571 kilometres (about 2.2 miles) followed by three circuits of 12.875 kilometres (8 miles). The course, which was designed to pass as many of London’s notable landmarks as possible, starts in The Mall within sight of Buckingham Palace and extends as far as the Tower of London in the east and the Victoria Memorial in the west.

3. Weightlifting

For the past year or so, pundits have been predicting a new round of consolidation in the spirits sector. It would be triggered, they forecast, either by Diageo swallowing José Cuervo or by Beam being broken up.

If this were to happen then it would mean certain companies becoming spirit heavyweights, who would be very hard to lift from their position of power.

Diageo has paid £300m for Ypioca, a premium Brazilian cachaca brand and also grabbed a boutique American maple-flavoured whiskey, Cabin Fever. That follows last year’s £1.3bn payout for Mey Içki, the Turkish raki producer and the full takeover of China’s Shui Jing Fang. They are now sorting out the future of José Cuervo.

Beam has paid over $600m for Pinnacle vodka and Calico Jack rum to take its spending this year to more than $700m after completing the purchase of the Cooley Distillery, which makes Kilbeggan Irish whiskey.

All in all, the spirits category is becoming more consolidated and like the Olympic sport it will mean competitors will have to lift more weight and shift more volume to even get into the final reckoning.

4. Archery

Beam is shooting for gold with its buy out of the Cooley distillery for US$95m.

The deal will give Beam, which split from Fortune Brands in October, a major foothold in the rapidly expanding Irish whiskey market.

According to Impact Databank, the Irish whiskey category grew by 11.5% in 2010 to 4.86m cases, with its main markets being in the US, Ireland, UK, France, South Africa and Germany.

Cooley currently sells around 250,000 nine litre cases a year, split between its Kilbeggan, Connemara, Tyrconnell and Greenmore brands, as well as the distiller’s private label products and bulk sales to third party customers.

Beam have shown a steady hand over the years and have now shown the accuracy needed to hit the bullseye in the Irish whiskey category.

Archery dates back around 10,000 years, when bows and arrows were first used for hunting and warfare. It is a testing sport that requires immense reserves of skill and nerve.

5. Boxing

Never one to shy away from a fight, BrewDog to took on the fight of their lives when they got embroiled in a battle with Diageo.

The Scottish company claimed that Diageo allegedly abused its position as the principle sponsor for the British Institute of Innkeeping Scotland’s annual awards to strip selected winners BrewDog of the title, “Bar Operator of the Year 2012″.

BrewDog began an online campaign to raise awareness of this perceived wrong-doing, with the hashtag #AndTheWinnerIsNot trending worldwide on Twitter. Diageo later apologised.

The craft brewery has also stirred some Olympic spirit after unveiling a limited edition beer called “Never Mind the Anabolics”.

Women’s boxing will be included in the Summer Olympic Games for the first time this year with Irish boxer Katie Taylor expected to lift gold after numerous World Championships. Boxing has been contested at every Summer Olympic Games bar one, since its introduction to the program at the 1904 Summer Olympics.

6. Cycling 

Wine scams and counterfeit wines seem to be never ending cycle this year, with a number of high profile cases cropping up so far. While cycling has also had to deal with its fair share of scandals and doping allegations in the past.

Some of the major wine scam stories in 2012 include:

• Over £52,000 of stolen fine wine has been seized from an off-licence in Edinburgh after staff were caught selling it for just £6.99 a bottle.
• Wine fraudster Denis Lefrancq has been ask to pay back just £30,000 of the £380,000 he amassed during a five day wine scam in 2010.
• New Zealand wine merchant Simon Mickleson has been jailed after scamming clients out of hundreds of thousands of dollars.
• One of Burgundy’s leading négociant, Labouré-Roi, was also embroiled in a wine scam.

This cycle shows no signs of stopping with huge amounts of counterfeit wines are yet to be uncovered according to Serena Sutcliffe MW. 

7. Windsurfing

Windsurfing is having a tough time justifying its existence as an olympic sport, after it was announced it will be replaced by Kiteboarding at the 2016 Olympic Games in Rio de Janeiro.

Its a blow for the British windsurfing team and they must now face into London 2012 in the knowledge that this is the last time they’ll windsurf at an Olympic Games for awhile.

Someone else suffering a tough time and facing into some harsh relaties is VJ Mallya.

The fact that Mallya, the head of UB Group, which includes United Breweries and United Spirits, India’s two largest drinks groups, is looking to raise $225 million via a bond issue backed by his spirits business has raised more than a few eyebrows, largely because it would make only a minor dent in UB’s debts.

His Kingfisher Airlineswas forced to suspend international flights after accruing debts of $1.3bn. Mallya’s United Spirits firm is understood to have struggled to balance its books after taking the strategic decision to move Whyte & Mackay away from the bulk and private label supply which at the time constituted the majority of its business.

8. Synchronised Swimming

Synchronised swimming is all about teamwork and timing – just like matching food and alcohol.

One of the big themes so far this year has been matching food with wine, Champagne and beer.

Bubbledogs will open in London later this year selling Champagne and hotdogs. It is the brainchild of foodie team James Knappett and Sandia Chang and it is set to bring the level of teamwork and co-ordination of Champagne and food to a whole new “Olympic” level.

It is also part of a bigger trend of unexpected food matches to Champagne. 

While traditional wine and food pairing combinations were debunked during a presentation by Dr Peter Klosse, founder and owner of the Academy of Gastronomy in The Netherlands.

 9. Beach volleyball 

Beach volleyball in the rain doesn’t seem very Olympic, but the weather has been impacting more than the Games in the UK, as pubs and alcohol sales are suffering too.

The weather means the women volleyball competitors may not wear their traditional bikinis as rules were relaxed this year to allow female athletes to wear shorts and sleeved shirts rather than bikinis on the court.

Exceptions have always been allowed for cold weather, which is expected to return to the UK sooner rather than later.

The inclement weather has impacted beer sales, with UK sales dipping in the second quarter of 2012 despite the Jubilee and Euro 2012.

A more direct example of this weather impact was London pub owner and brewer Fuller, Smith & Turner reporting a sales decline due to the wet summer.

The one good beer and volleyball story to come out of the Olympics was that two of team GB’s women’s beach volleyball were sponsored by American Craft Beer brand Fordham.

10.Modern Pentathlon

In the Modern Pentathlon athletes compete in five events: pistol shooting, fencing, 200m freestyle swimming, show jumping and a 3 km cross-country run.

All the different disclipines and “hurdles” that have to be overcome to win Olympic gold reminds db of the alcohol minimum pricing issue, which has gathered steam in 2012 and faces many different obstacles.

Prime Minister David Cameron has vowed to tackle the “scourge” of binge drinking in the UK, in a new strategy he makes “no excuses for clamping down on it.”

Aside from minimum pricing, the new “Government Alcohol Strategy: Choice, Challenge and Responsibility” also includes the banning of multi-buy discount deals; zero tolerance of drunken behaviour in A&E departments; improved powers to stop serving drunks and a late night levy to get pubs and clubs helping to pay for policing.

The trade reaction was to questioned the effectiveness of minimum pricing in the fight against binge drinking claiming that it is no “silver bullet” and ignores the real reasons behind the problem.

Scotland’s minimum pricing has been another major theme this year with the minimum price for alcohol of 50 pence per unit announced by the Scottish government.

It also faces mounting problems to get over the finish line as Scotch Whisky Association (SWA) is to challenge legislation the minimum price for alcohol in Scotland.