This morning, Associated Press reporter Shawn Pogatchnik reported from Dublin, Ireland that more than 1,000 Guinness brewery workers have gone on strike, determined to reverse a company decision to close the firm's packaging plant in Dundalk, 50 miles north of Dublin. That plant is scheduled to close April 27 with a loss of 150 jobs.
The strike closed production at breweries in Dublin, Dundalk, Waterford and Kilkenny. He reported that Guinness could import its products from abroad, and that local pubs have stocked up on Guinness and Harp, in anticipation of a weeklong strike. (Guinness also brews the U.S. Budweiser brand on license in Ireland.)
The company has declined to confirm whether it has plans to import Guinness products into Ireland from neighboring Britain, where the firm also has facilities unaffected by the strike.
The “Manhattan Project” suggests an A-B/Bass Marriage?
On Monday Deutsche Banc Alex. Brown analyst Marc Greenberg released "The Manhattan Project," an in-depth study of the highly profitable tap beer market in Manhattan.
After running a survey of 130 New York bars his results showed “…the continued importance of on-premise sales as a means to build brand equity and drive growth in the industry's highest profit channel -- an estimated 26% of industry volume and 46% of retail profits."
In his report, import brands Guinness and Bass have “ …the greatest tap penetration at 70% followed by Anheuser-Busch's Budweiser & Bud Light at 50%. The next leading brands, Coors Light and Miller Lite, lagged significantly at 18% and 7% respectively.”
Greenberg believes the high tap penetration of Guinness and Bass is overshadowed by stagnant U.S. import market share growth, which leaves the brands underleveraged on a national basis. His report looks at what Bass could mean for Anheuser-Busch and how a purchase could be financed. "Our detailed analysis reveals substantial firepower for Anheuser-Busch to own Bass."
Naturally, Greenberg has an investment rating of “strong buy” on the shares of Anheuser-Busch.
This proprietary survey is available from Deutsche Banc Alex.Brown, a member of NYSE and NASD.
Associated Press reported on Tuesday morning that the Distilled Spirits Council, the liquor industry's trade group, announced at a news conference with Transportation Secretary Norman Y. Mineta and Mothers Against Drunk Driving President Millie Webb that they would urge state legislatures to lower the legal standard for drunken driving to 0.08 percent blood alcohol content. Most states now have a 0.10 standard.
Legislation signed last fall by President Clinton would take away 2 percent of federal highway funds from states who fail to adopt the 0.08 standard by 2004.
Industry officials said they would push the 0.08 BAC standard - the equivalent of a 170-pound man downing four drinks in an hour on an empty stomach - as part of a package of laws aimed at motorists who repeatedly drive drunk.
``You've got to get this repeat offender off the highways,'' said Peter Cressy, president of the Distilled Spirits Council, the liquor industry's trade group.
Representatives of the beer industry, while not endorsing the 0.08 BAC standard, said they won't oppose it either, but ``We'll allow states to make up their own minds,'' said Jeff Becker, president of the Beer Institute, the industry's Washington-based trade association.
(The
last time the beverage alcohol trio – wine, spirits and beer – producers showed
less than a united front the result was a noble experiment known as
Prohibition.)
Low Alcohol Beer A Big Hit in Japan
Yesterday, the Reuters Tokyo office reports that Japan's thirst for low malt brews caused a 10.1 percent slide in domestic shipments of beer at Japan's five major brewers in March -- the 12th straight month of drops, the Brewers Association of Japan said on Wednesday.
The decline was attributed to growth in consumption of popular low-malt beers, which are putting a cap on traditional beer consumption.
The association of low-malt brew makers, comprising all brewers except Asahi Breweries, said domestic shipment of low-malt brews rose 33.6 percent from a year earlier.
It was the 58th straight month of rises, helped by new products and vigorous sales campaigns, it said.
Low-malt brews are cheaper than beer since they are taxed at a lower rate.
(Once again, I wonder how long it will take for the mega brewers in the U.S. to catch on to this low-cost, good-margin product for consumption here. Please refer to the previous news item.)
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