nabca daily news update (1/23/2018) · bacardi buying patrón tequila in deal valuing brand at $5.1...

Control State News

MT: First competitive bidding process for alcohol license opens

NH: New Hampshire Considers Lowering Drinking Age to 20

VT: Vermont becomes first state to legalize marijuana through legislature

License State News

IN: Indiana Senate OKs Sunday retail alcohol sales, 39-10

MA: Study pushes to reform alcohol laws to reduce drunk driving deaths

TX: Texas craft brewers get political to 'protect the rights' of beer makers, drinkers

International News

United Kingdom: Less than 5% of problem drinkers amount to one third of alcohol consumption in England, warn public health chiefs

New Zealand: Health expert calls for alcohol prices and bar licence fees to increase, saying taxpayers shouldn't be footing the bill

Public Health News

Research on Alcohol in Pregnancy

Industry News

Bacardi Buying Patrón Tequila In Deal Valuing Brand at $5.1 Billion

The thirst behind Pernod Ricard's digital transformation

Japan’s wineries adapting to tighter grape geographic-origin rules

Daily News

Alconomics Sends Thirsty Drinkers on Crawl Around the Baltics

Amid Customer Complaints Uber Forced To Share Data On Drunk Drivers

January 23, 2018

Please visit NABCA’s new website at www.nabca.org

SAVE THE DATE Registration Is Now Open for the Legal Symposium! Visit www.nabca.org to register. MARCH 18-20, 2018 25th Annual Symposium on Alcohol Beverage Law & Regulation at the Crystal Gateway Marriott in Arlington, VA.

Join government, legal and industry professionals for a symposium that offers the chance to hear the latest on legal issues related to alcohol beverages. Session topics currently planned include Here Comes the Judge, The Lens of Time: 1st versus 25th NABCA Legal Symposium, Trade Practices: A Civil Matter? plus many others. Watch for registration materials in the coming months! Continuing Legal Education (CLE) credit is available for many states. For more information, go to www.nabca.org.

APRIL 11-13, 2018 Alcohol Policy 18: Evidence To Action -Building an Evidence-Based Social Movement Renaissance Arlington Capital View Hotel, Arlington, Virginia. For additional information on hotel, important dates and more, please visit the AP18 Conference website. AP18 Registration Now Open! APRIL 30–MAY 1, 2018 2018 RRForum National Conference - hosted by the Michigan Liquor Control Commission and will be held in Detroit. MAY 21-24, 2018 81st Annual Conference will be held at the Arizona Biltmore, Phoenix, AZ. Theme: Bridging Divides; For more information, visit www.nabca.com website.

JUNE 3-5, 2018 2ND Annual Beverage Alcohol Retailers Conference - Denver, Colorado Registration is open and sponsorship information is available at www.BevRetailersConference.com. Secure your early bird rate before prices increase on February 9.

Seating is limited.

http://www.nabca.org/



http://www.nabca.org/meeting/2018-annual-conference

NABCA Daily News Update (1/23/2018)

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JULY 18-20, 2018 8th Biennial Northwest Alcohol & Substance Abuse Conference Riverside Hotel, Boise Idaho

The Pre-Conference Sessions are on Wednesday. The official conference kicks off Thursday morning. Visit NorthwestAlcoholConference.org for more information.

NABCA HIGHLIGHTS

Native American Nations & State Alcohol Policies: An Analysis

Sunday Alcohol Sales (July 2017)

Alcohol Technology in the World of Tomorrow - (White Paper)

The Control State Agency Info Sheets. Please view website for more information.

NABCA Survey Database – now available for members on the website.

www.NABCA.org


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CONTROL STATE NEWS

MT: First competitive bidding process for alcohol license opens

Independent Record By Holly K. Michels January 22, 2018

HELENA -- After a change to state law during the 2017 special legislative session, the state Department of Revenue is opening bidding for the first competitive alcohol licenses.

The licenses are both in the Bozeman area. The minimum bid for a Bozeman retail beer license, with gaming restricted, is $187,500. The minimum bid for a Belgrade all-beverage license is $350,000.

Bidding opened Jan. 18 and closes at midnight Feb. 23.

License bidding for other quota areas will follow in the future.

Before, new alcohol beverage licenses were awarded by a lottery system.

The law replaces alcoholic beverages license lotteries with a competitive bidding process to determine which individual or business is eligible to apply for licensure. The highest bidder will be granted the opportunity to seek licensure.

A fiscal note estimated the bill would generate $2.5 million in fiscal year 2018, $3.8 million in fiscal year 2019, $5 million in fiscal year 2020 and $2.7 million in fiscal year 2021.

The new law also separates the state’s six combined quota areas so that each incorporated city and incorporated town has its own allowable number of licenses or quota. Those areas were Bozeman/Belgrade, Whitefish/Columbia Falls, Helena/East Helena, Hamilton/Pinesdale, Eureka/Rexford and Red Lodge/Bear Creek.

To find bid information or submit a bid, visit revenue.mt.gov. All bids must be accompanied by a $100 processing fee and an irrevocable letter of credit for at least the amount of the bid.

NH: New Hampshire Considers Lowering Drinking Age to 20 Lawmakers are again considering lowering the drinking age in New Hampshire.

U.S. News January 23, 2018

CONCORD, N.H. (AP) — Lawmakers are again considering lowering the drinking age in New Hampshire.

The House Criminal Justice and Public Safety Committee is holding a public hearing Tuesday on a bill that would lower the legal age for alcohol possession from 21 to 20.

In 2016, the House rejected a bill that would have allowed residents as young as 18 who were accompanied by adults to drink beer or wine, but not liquor. Similar bills have failed in other states over the years, in part because states that lower the drinking age below 21 would lose federal highway money.

New Hampshire is among only a handful of states that has no exceptions to its prohibition. Other states allow minors to consume alcohol under parental supervision, during religious ceremonies and other circumstances.

VT: Vermont becomes first state to legalize marijuana through legislature

CNN By Eric Levenson January 22, 2018

(CNN)Vermont, the "Green Mountain State," has become the first state to legalize marijuana by passing a law in the legislature rather than by use of a ballot measure.

Gov. Phil Scott signed H. 511 into law "with mixed emotions" Monday night, allowing for the possession of recreational marijuana.


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Long one of the most liberal states in the country, Vermont legalized the use of medical marijuana in 2004 and recently decriminalized possession of a small amount.

This is Vermont's second attempt at passing a marijuana bill in the past year. State lawmakers last spring passed a bill legalizing marijuana for recreational use.

But Scott vetoed the bill, saying it did not adequately protect public safety. He said he was generally a "libertarian" on the issue but asked for more protections against stoned driving and children's access to marijuana, which this bill provides.

"As I said when I vetoed S. 22 in May, I personally believe that what adults do behind closed doors and on private property is their choice, so long as it does not negatively impact the health and safety of others, especially children," Scott said in a statement following the bill signing.

"While this legislation decriminalizes, for adults 21 and older, personal possession of no more than 1 ounce, and cultivation of two mature plants on their private property, marijuana remains a controlled substance in Vermont and its sale is prohibited," the statement added.

"Also, consumption of marijuana in public places is prohibited. Consumption of marijuana by operators and passengers in a motor vehicle is prohibited. Schools, employers, municipalities and landlords are also empowered to adopt policies and ordinances further restricting the cultivation and use."

Although several states have legalized possession, cultivation and distribution of pot in recent years, marijuana remains illegal under federal law.

In the US, nine states and the District of Columbia have legalized recreational use of marijuana.

LICENSE STATE NEWS

IN: Indiana Senate OKs Sunday retail alcohol sales, 39-10

NWI Times By Dan Carden January 22, 2018

INDIANAPOLIS — The Indiana Senate voted overwhelmingly Monday to get rid of the nation's only statewide ban on Sunday retail alcohol sales, and the House is poised to follow suit on Tuesday.

Senate Bill 1 authorizes Hoosier businesses that already sell alcohol for at-home consumption six days a week to also sell beer, wine and liquor on Sundays between noon and 8 p.m. local time.

It passed the Republican-controlled Senate, 39-10, after its sponsor, state Sen. Ron Alting, R-Lafayette, briefly explained the terms of the measure that originated in a November recommendation by the state's Alcohol Code Revision Commission.

No senator spoke against the proposal. The entire Senate debate and vote on an issue that had stymied lawmakers for decades ultimately consumed less than three minutes of floor time.

"This is a great step toward modernizing Indiana's alcohol code," Alting said. "Hoosiers want the convenience of buying alcohol on Sunday, and now is the time to pass this bill into law."

All seven senators representing Northwest Indiana voted in favor of Sunday sales, including state Sen. Karen Tallian, D-Ogden Dunes.

Last week, Tallian urged her Senate colleagues to scrap the limited Sunday sales hours, and treat Sunday like every other day of the week, where retailers can sell alcohol between 7 a.m. and 3 a.m. the following day.

"The members of the Senate and Hoosiers expected a clean bill: Sunday sales, 'Yes or No?' Instead, we have a bill that puts arbitrary limits on the hours of availability," Tallian said.

Her proposed amendment was defeated on a voice vote.

The Republican-controlled House on Monday similarly rejected a proposed change to House Bill 1051 that would have expanded Sunday sales hours to match the six other days of the week.

Alting said limiting Sunday sales to just eight hours ensures Indiana is not moving too fast on the issue.


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It also enables liquor stores, which previously resisted the change, to open for a single employee work shift instead of all day long, he said.

Jon Sinder, chairman of the Indiana Association of Beverage Retailers, a liquor store interest group, cheered the Senate's affirmative vote on Sunday sales, which he described as "landmark legislation."

"This is an important milestone in the legislative process, and we are eager to continue working directly with legislators to make sure that this bill is ultimately signed by the governor and becomes law," Sinder said.

The House is eligible to vote Tuesday on its identical Sunday sales legislation. However, House approval would not immediately send the measure to Republican Gov. Eric Holcomb for his signature or veto.

Instead, either the Senate must endorse the House proposal, or the House must ratify the Senate-backed measure after the chambers in early February trade their approved legislation.

Both proposals also follow the traditional July 1 effective date for new Indiana laws, which this year falls on a Sunday.

MA: Study pushes to reform alcohol laws to reduce drunk driving deaths

WWLP 22 News By Matt Caron January 22, 2018

CHICOPEE, Mass. (WWLP) – A new study suggests sweeping changes when it comes to alcohol.

A group of scientists are pushing alcohol reform to eliminate drunk driving deaths. Among the changes, they propose lowering the blood alcohol content intoxication threshold from .08 to .05. This is already the limit in countries like Austria, Denmark and Japan.

They want to increase the tax on alcohol, limit the availability of alcohol, and regulate how alcohol is advertised and marketed.

In December of last year, Congress decrease federal excise tax on alcohol by 16%.

The study also calls for frequent sobriety checkpoints, fully enforcing ignition interlock laws, and getting addicts into treatment. The study calls for all of these changes to be publicized through media campaigns and on social media.

It also recommends new car manufactures make a technology that prevents a drunk person from operating a vehicle standard in vehicles.

TX: Texas craft brewers get political to 'protect the rights' of beer makers, drinkers Political action committee formed to counter influence of distributor

Austin Business Journal By Will Anderson, Digital Editor January 22, 2018

Displeased with state lawmakers' recent changes to beer laws, the Texas Craft Brewers Guild has decided to amplify its voice at the Texas Capitol by forming a political action committee.

CraftPAC, which was announced Monday, is meant to "protect the rights of Texas breweries and champion common sense, 21st century legislative reforms," the group said.

Money raised will be used to support candidates, ballot initiatives and legislation that "positively impact the growth and sustainability of the Texas craft beer industry," and also oppose legislation the guild sees as detrimental.

There are more than 200 craft beer breweries in Texas, according to the TCBG's count. More than 40 are based in the Austin area, with other breweries and brew pubs continuing to open every month.

When the guild was founded in 2009, there were fewer than 40 craft breweries across all of Texas. So it has overseen a period of extensive growth across the industry. The proliferation of breweries has accelerated since 2013, when state laws were greatly relaxed to allow brewers to sell directly to consumers, spurred in part by pressure by TCBG.


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But the guild has seen some setbacks. Lawmakers last year passed House Bill 3287, which defines the size of craft breweries and forces some of them to pay a fee to distributors for selling beer in their taproom, even if it's just a few feet from their production equipment.

Texas ranks 46th out of 50 states for breweries per capita, so TCBG wants to ensure there is a policy environment that encourages even more breweries open.

"There’s plenty of room for craft beer to grow in Texas, but archaic, anti-competitive beer laws hold the state back and have had a chilling effect on the industry’s growth," the guild said in Monday's announcement.

Beer wholesalers in Texas have contributed more than $18 million to politicians in the past decade, per TCBG. Those wholesalers were largely seen as the beneficiaries of last year's new beer laws.

"This stuff is our entire livelihood. To have an unconcerned middle tier come out and tell us we need to behave another way because they don't like that we’ve become succesful, that’s not the American way," said Adam DeBower, board chairman of CraftPAC. “It's mind boggling."

DeBower is also co-founder of Austin Beerworks, the second-largest craft brewer in Central Texas (for a full rundown of local beer production, view the list at the bottom of this story that uses 2016 data, and see the map below).

Austin's cup of local craft brewers runneth over. Click on each location for more info on how much it produced in 2016.

The craft brewing industry contributed $4.5 billion to the Texas economy in 2016 and had the equivalent of 26,506 full-time jobs, per TCBG.

INTERNATIONAL NEWS

United Kingdom: Less than 5% of problem drinkers amount to one third of alcohol consumption in England, warn public health chiefs “This small group of people whose daily heavy drinking of these very cheap, strong alcohol - mostly ciders - is doing them so much harm"

Independent By Alex Matthews-King, Health Correspondent January 23, 2018

Four per cent of UK drinkers who have the most harmful alcohol consumption habits account for a third of all the alcohol drunk in the country, public health chiefs have revealed.

The “staggering” statistic was revealed as part of evidence to MPs on the potential impact of a 50p minimum price per unit of alcohol in the England.

Doctors said the change would benefit the two million people in this group by making very strong alcohol less affordable.

Director of alcohol, drugs and tobacco at Public Health England (PHE), Rosanna O’Connor said a minimum price police would “exquisitely target” the strongest, cheapest alcohol – typically high strength ciders – with negligible impact on moderate drinkers.

“A staggeringly small group of people, about four per cent of the population, are drinking just under a third of the alcohol consumed in the country, about two million people.

“I thought ‘wow’, when that emerged from our evidence review, 4.4 per cent of people drink 32 per cent of the alcohol. It’s a staggering figure.

“This small group of people whose daily heavy drinking of these very cheap, strong alcohol – mostly ciders – is doing them so much harm.”

MPs on the House of Commons Health and Home Affairs Committee, invited response on the question of Minimum Unit Price (MUP) legislation in England after a landmark ruling in Scotland.

It is set to become the first country in the world with a 50p MUP following the UK Supreme Court’s rejection of a legal challenge by drinks manufacturers.


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The Supreme Court said the Scottish Government’s plan was a legitimate means of targeting problem drinkers and protecting human life and health.

It also said that an excise duty or tax on alcohol manufacturers would not be as effective in this aim as it would increase the prices of all alcohol, including sales in pubs and clubs, and could be circumvented by bulk-buy deals.

The Committee heard that the impact of a MUP for wine would be felt on bottles that were around £4.60 or cheaper.

Liver specialist Professor Nick Sheron, head of clinical hepatology within medicine at the University of Southampton, said the impact of a 50p MUP would be about £1.26 a week for a wine drinker consuming 14 units a week – the recommended maximum.

“But if you look at my patients with alcohol related cirrhosis, their median consumption is 120 units a week, and the mean (average) is higher, it’s 150,” Professor Sheron said.

“A typical Frosty Jacks drinker would be drinking 16 litres of that and paying £20 pounds for it, that would go up threefold, so instead of £20 they’d be paying £70.”

He added that there is currently limited real world evidence of the impact of a 50p MUP, but the initiative will almost certainly have benefits which would become clear as Scotland moves ahead.

“I would absolutely agree that, in terms of knowing the precise impact on economics, crime, and deaths, from minimum pricing, we don’t know the answer. But is it going to reduce deaths and crime? Yes, it’s beyond doubt, the question is how well.

“As more data comes in from the introduction in Scotland, we will see this fascination natural experiment.”

Representatives from the National Police Chiefs Council also made the case for targeting cheap alcohol.

The trend of drinkers “pre-loading” on cheap alcohol at home before heading out was seen to be a significant contributor to public order offences, as well as putting vulnerable drinkers at risk.

Sergeant Mick Urwin, co-chair of the NPCCs licensing sub-unit said it also put officers at risk.

“Forty per cent of officers have said they experienced sexual assault or harassment while dealing with alcohol related issues, certainly in the night-time economy.

“Alcohol may be involved in a small proportion of all incidents we deal with, but the amount of time that takes up if you’re dealing with someone who is drunk: you can’t investigate the offence until eight to 12 hours later, that’s staff time and space.”

Sgt Urwin said he hoped for a host of alcohol control measures as part of a “harm reduction toolbox”, but MUP would be a preferred priority.

New Zealand: Health expert calls for alcohol prices and bar licence fees to increase, saying taxpayers shouldn't be footing the bill An alcohol harm researcher is calling on the government to raise the excise tax on alcohol and increase alcohol licence fees to help pay for alcohol-related harm.

TV NZ January 23, 2018

Professor Sally Casswell, director of Massey University's Social Health Outcomes Research and Evaluation Centre, says taxpayers are footing the bill for emergency rooms filled with people harmed by alcohol - and that needs to change.

The comments come after a Dunedin emergency department doctor said licensed premises should be charged higher annual fees to help pay for the carnage caused by alcohol - they currently pay between $150 and $1250.

Hospitality New Zealand, however, says most of that harm is caused by people drinking at home.

Professor Cassell told TVNZ 1's Breakfast today a good approach would be to address both issues at once by increasing both excise taxes and licence fees.

"Cracking down on the bars could be increasing licence fees - they are very cheap ... they could be paying a lot more," Professor Casswell said.

"We really need the alcohol in New Zealand to cost more - then the people who drink very little, who are picking up the tab through their income taxes wouldn't be getting the bad treatment that they're getting at the moment."


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Bars are often overlooking intoxicated patrons, she said.

"The young ones and heavier drinkers - they're drinking 8-10 drinks before they get to the bars," Professor Casswell said.

"The law in New Zealand says do not sell alcohol to intoxicated people - are the signs of intoxication being picked up in the bars and nightclubs when they should be?"

Professor Casswell said a rise in alcohol prices is long overdue, and has been suggested before.

"The New Zealand Law Commission in 2010 recommended a 10 per cent increase in alcohol tax and we've not seen anything happen - it was immediately turned down by the previous government.

"We're looking to the current government to say this is really a good tax - it's a very important tax.

"It helps people drink less, it stops young people starting to drink and it recoups some of the costs that the health system and the Police are dealing with at the moment from a very high level of harmful drinking in New Zealand."

PUBLIC HEALTH NEWS

Research on Alcohol in Pregnancy

News, Medical, Life Sciences By Jeyashree Sundaram, MBA January 23, 2018

Globally, most clinical and government rules advise pregnant women to refrain from drinking alcohol during pregnancy because of possible unfavorable consequences on the pregnancy outcomes. The World Health Organization (WHO) recognizes pregnant women as a group that needs special care, as they are predominantly at risk of adverse effects of alcohol.

Antenatal or prenatal alcohol exposure may cause either physical, psychological and/or behavioral disabilities in the newborn, defined as fetal alcohol spectrum disorder (FASD). Fetal alcohol syndrome represents the final stage of FASD.

Alcohol consumption

The frequency of alcohol consumption during pregnancy differs among various studies and countries, revealing differences in culture and communal approaches towards drinking. Most women are found to abstain from drinking alcohol as soon as they become aware of their pregnancy, or after they have started to plan for one.

In a systemic review in 2011, researchers investigated alcohol-consuming predictors all over the world based on the population and prenatal settings during pregnancy.

The two most common factors for use of alcohol during pregnancy were identified by women who had a higher consumption of alcohol previous to pregnancy and victims of abuse or violence. The other factors that led to alcohol drinking were upper social status referred to as socio-demographic factor and psychiatric indications such as anxiety and depression.

Drinking alcohol before pregnancy

The prototypes of pre-pregnancy drinking have been considered as a predictor for influencing alcohol drinking among pregnant women. In the case of pre-pregnancy drinking, a woman may not be aware of her pregnancy, specifically if it is unplanned, but later when she comes to know about it, the consumption of alcohol is reduced.

A research study in Canada investigated a group of women who had newly delivered a baby. The rate of alcohol consumption was acquired for three distinct time periods: six months before pregnancy, period before the recognition of pregnancy, and the period after confirmation of pregnancy. Nearly 80% of women stated drinking alcohol before pregnancy, 50% reported pre-pregnancy recognition, and 18% post-pregnancy recognition.

Of these, some women had indulged in binge drinking prior to or after knowing that they were pregnant. From the study, it is clear that almost all women are sensitive about the risks of consuming alcohol while pregnant, and many had prevented themselves from alcohol intake after pregnancy recognition.

Intake of alcohol during pregnancy and their risks

Alcohol acts as a teratogen in babies born to mothers who had consumed alcohol during pregnancy. The National Institute for Health and Care Excellence emphasizes to avoid consuming alcohol in the first trimester of pregnancy, as this period is the most strongly connected with a higher risk of miscarriage, fetal growth, preterm birth, and low born weight.


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Alcohol consumed reaches the fetus through the placenta and causes almost even absorptions in both the mother and the baby. Hence, women preparing to become pregnant and pregnant mothers are strictly advised not to drink alcohol.

Effects on fetal development

Prenatal exposure to alcohol during pregnancy shows its impacts in the normal development of the fetus. Proofs from several animal studies have revealed that disruption in the processes of fetal development occurs through numerous mechanisms.

These disruptions are found in cellular metabolisms like modified use and mobilization of glucose, DNA synthesis and protein suppression, oxidative stress, damage in cell acquisition, dysregulated gene expression, break in interactions between cells, intervention in cell signaling pathways, cell damage or death, and modified placental function or hypoxia.

Child neurodevelopment

In 2013, a research was conducted on the association of mild to binge alcohol consumption with neuropsychological disorders.

The study was carried out in children aged from 6 months to 14 years. Among them the association of alcohol drinking and cognitive function was assessed, which demonstrated that the offspring of mothers involved in binge consumption at the time of pregnancy scored less on cognitive function tests than children of mothers who did not consume alcohol during pregnancy.

Unlike binge antenatal exposure to alcohol, exposure to mild and moderate alcohol drinking during pregnancy was not allied with cognition. No evidence was noticed on association of prenatal exposure to mild or moderate alcohol consumption with visual or motor development, language skills, attention, and cognition; it also did not provide confirmation on the safe quantity of alcohol that can be consumed while pregnant.

Leukemia

A study was conducted on the relationship between alcohol drinking by women while pregnant and early age leukemia in children. Acute or infant leukemia in children is largely unknown, but it is believed that ionizing radiation exposure, Down syndrome, and chemotherapeutic agents are closely related with the risk of acute leukemia.

Several studies in the past decade have been conducted to demonstrate a positive link between acute leukemia in children and prenatal exposure to alcohol, as it causes damage to DNA during preconceptions in gamete cells or during pregnancy in fetal cells.

Reviewed by Afsaneh Khetrapal Bsc (Hons)

Sources:

1. www.hpa.org.nz/.../Drinking%20during%20pregnancy-lit%20review.pdf 2. jech.bmj.com/content/jech/early/2014/02/11/jech-2013-202934.full.pdf 3. https://www.ncbi.nlm.nih.gov/pubmed/22413723 4. journals.plos.org/plosone/article?id=10.1371/journal.pone.0042710 5. www.bma.org.uk/.../fetal-alcohol-spectrum-disorders-report-feb2016.pdf 6. http://onlinelibrary.wiley.com/doi/10.1111/acer.12214/full

Further Reading

• Fetal Alcohol Spectrum Disorders (FASD) Signs and Symptoms • Fetal Alcohol Spectrum Disorders FASD Treatments • Fetal Alcohol Spectrum Disorders FASD Types • Fetal Alcohol Spectrum Disorders FASD Diagnosis

Bacardi Buying Patrón Tequila In Deal Valuing Brand at $5.1 Billion Global rum giant will pay a premium price to get into increasingly crowded premium tequila market

Wall Street Journal By Cara Lombardo January 22, 2018

Bacardi Ltd. is buying the maker of Patrón tequila in a deal that values the premium brand at $5.1 billion, said people familiar with the matter, one of the biggest liquor deals in years as rivals scramble to own more top shelf spirits.


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Bacardi, best known for its namesake rum, has held a roughly 25% stake in Patrón Spirits International AG for nearly a decade, the people said. Bacardi is now buying full control with plans to distribute the Mexican-made liquor more widely and cash in on demand for high-end tequila, they added.

The two privately held companies are expected to announce the transaction as soon as Monday, the people said.

Over the last decade, global liquor makers have tried to adjust their portfolios to keep up with changing consumer tastes, especially as overall volumes fall and drinkers shift away from beer, vodka and rum. As part of that effort, producers have tried to change tequila from an inexpensive party drink to a more refined spirit comparable to a single-malt Scotch.

Patrón, which was an early entrant in the premium tequila market, is now the industry's leader, with U.S. sales of $1.6 billion in 2016, according to Euromonitor, a market research firm. However, it faces increasing competition from several brands, including ones backed by celebrities such as George Clooney and Justin Timberlake.

"Adult consumers are very interested in high-end super-premium tequilas for sipping as much as cocktails," said Frank Coleman, senior vice president at the industry group Distilled Spirits Council. At Patrón, "they're now starting to finish tequila in sherry casks like the scotch guys."

U.S. volumes of super-premium tequila jumped more than 700% from 2002 to 2016, compared with a 121% rise in all tequila volumes over the same period, according to the Distilled Spirits Council.

While Patrón has bottles that retail for as little as $45, others sell for hundreds of dollars and some limited-edition versions cost thousands of dollars. It was founded in 1989 by billionaire John Paul DeJoria, the same entrepreneur behind Paul Mitchell hair products, and Martin Crowley, an architect who has since died.

After the deal, Patrón's existing leadership is expected to continue to oversee the business, including CEO Edward Brown, the people said. Mr. DeJoria is expected to continue to be an ambassador for the brand as a chairman emeritus, they added.

Bacardi's competitors recently bought their own premium tequila brands. In June, Diageo PLC acquired Casamigos tequila, which was co-founded by Mr. Clooney, for up to $1 billion. Pernod Ricard USA said this month it will purchase the remaining 16% of Avión tequila that it doesn't yet own. In 2015, Diageo swapped its Bushmills Irish whiskey brand for Don Julio, previously owned by José Cuervo.

Patrón, which is based in Schaffhausen, Switzerland, produces more than three million cases, or 36 million bottles, each year, while Casamigos was expected to produce about 170,000 cases last year. In addition to its namesake tequila, Patrón owns Pyrat rum and distributes Ultimat vodka.

Bacardi, which dates back 156 years to its founding in Cuba, is still controlled by its founding family though it switched CEOs last year and appointed Mahesh Madhavan to run day-to-day operations. Mr. Madhavan a 20-year company veteran who took over in October.

The Bermuda-based company, which also owns Grey Goose vodka and Dewar's Scotch, has been trying to diversify as consumers spend more on aged bourbons and whiskeys. Bacardi, currently the fifth-largest spirits company in the U.S. by value, would jump to second place if the deal goes through.

The thirst behind Pernod Ricard's digital transformation

Ad News By Pippa Chambers January 23, 2018

French beverage company Pernod Ricard's lead performance marketer Evan Huggins admits while the brand may be data poor when it comes to consumer transaction data, it's data rich when it comes to interactions from an advertising perspective.

Speaking to AdNews, New York-based Huggins, who also previously worked at Havas in business data intelligence, says like many brand owners, Pernod Ricard is at the at the beginning of its digital transformation journey.

“We're chasing ROI - that's like the holy grail,” Huggins says. “There's a lot of data pieces between where we are now, and getting there, that we have to take care of before we can get to that point.”

Huggins says the ultimate goal is to know how its advertising, at a granular level, influences transactions at the individual consumer level – which is what every company wants. But as its products are owned by different brand companies, such as Chivas Brothers, Irish Distillers or Absolut, and all have their own research teams, websites, IT systems, supply chain as well as totally different consumers.


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“Are there synergies? Of course. Do we have the scale to identify them right now? Not quite,” he says.

“Our priority is creating more one-to-one consumer marketing - personalising an experience across touchpoints with the brand. That's the priority.”

He says theoretically it’s about the business using its own data to get more share of the category.

“It’s about getting that a relationship between us and them and then looking at how we marry that with brand story-telling, so we can encourage consumers to connect our products together.”

Early transformation of digital infrastructure

The world’s second-largest wine and spirits seller, which owns more than 40 brands such as Absolut vodka, Jacob's Creek wine, Jameson Irish Whiskey, Kahlúa liqueur, Malibu rum and Beefeater gin, as well as nine separate subsidiaries, is in the early throws of working with Salesforce in the US as it attempts to dissect and act upon the data it has.

One of the first things the business is looking at in the US is tapping into the marketing cloud to help consolidate consumer data.

“Consumer data is broad, it means a lot of things and it can live in a lot of different places. But we leverage it at a certain level and then orchestrate how we activate it. Those are the two things that the marketing cloud does well and that's what we really utilise it for,” Huggins said.

The brand has also just activated a demand side platform (DMP) and attribution “is a whole other thing” it's hoping to crack.

“We're on that attribution path, but the first thing you need to do is get a sense of all of your data sets internally,” Huggins says.

“The DMP is just like icing on the cake because now that houses the anonymous cookies, and the device IDs that we use. It's an exciting time,” he said.

Speaking to AdNews at Salesforce's Dreamforce event in late 2017, Huggins says his role involves enabling a mindset shift in the organisation; moving from broad marketing tactics to creating more direct one-on-one consumer interactions.

This involves getting to grips with the vast amount of data it has, accepting the data it doesn't have, and working around this to ultimately improve its return on investment (ROI).

“We are positioning data to be the focus of all advertising,” he says.

“I'm completely embedded in that side of the business. There is no separation and that's the ideal state – that you don't need a digital person anymore and you don't need a data person anymore.”

Transaction data challenges

If the brands, subsidiaries, B2C and B2B categories weren’t enough to de-tangle, state by state there are also different rules when it comes to selling alcohol in the US, which adds complexity.

“Prohibition kind of decentralised that - there's no broad governing body about how booze can be sold except that we can't sell it directly,” Huggins says.

Huggins explains the complex chain of being a supplier out of France which then sells on to distributors, who then sell it to the retailers, who then sell it to consumers - meaning the transaction level data that they deliver can be challenging to get.

He says while there are some data sets, such as loyalty cards, in the transaction level space, that it can model ROI on, that is clearly not possible in the liquor store on the corner which has a cash paper register and doesn't even give receipts.

“The data we can get is more about the frequency of transactions between the distributor and the retailer,” he says.

But in a world where personalisation and more one-to-one consumer reach tactics are being pushed by brands, this leaves Pernod Ricard out in the cold when it comes to data on transactions and consumer behaviour.

“That's where advertising comes in”, says Huggins (below).

“Yes we're very data poor with the consumer transaction data, 100%. So, where are we data rich? We're data rich with the consumer interaction from an advertising perspective,” he says.

“So the end game for us is how do we leverage the consumer interaction data sets here, to push audiences of people who we've identified through analysis, who are more likely to convert on an offer, or to transact on a particular brand, or the brand of a competitor, to a point where they can do that?


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“An example is if we partner with a retailer who sells our booze and we know people are clicking on our ads, we need to push them to a place where they can transact. But we need to partner with them at the end point to get visibility to have that performance."

The wild ride of digital transformation

Huggins describes Pernod Ricard's digital transformation as a “big wild time” and that the people change management side of the shift can’t be underestimated.

“We've needed to build a team so that we can have more narrative internally to grow the appetite,” he says.

Huggins says the brand may not be as far ahead as he’d like it to be within its digital transformation journey, but from what he has seen so far there is a “tremendous appetite to move increasingly in that direction”.

“It's one of those things that people don't fully accept what they don't understand. But once they understand it, there's a ravenous appetite for it,” he says.

Pernod Ricard's model is based on four 'Essentials' – the group’s fundamentals – on which the four growth Accelerators rest:

In Australia, Pernod Ricard works with Adobe, suggesting no global strategy of alliance to Salesforce. In 2016 the distilled beverages brand, which sat with Dentsu Aegis-owned media agency Vizeum, revealed it would be moving to TubeMogul’s platform (now Adobe Ad Cloud) to plan, buy, measure and optimise its Australian brand advertising - with the view to move everything in-house.

Digital transformation 'sounds a threat'

The shift in advertisers working directly with ad tech platforms has grown in recent times as marketers increasingly crave deeper transparency and more direct control. While Huggins focuses on the US alone, his advice to others who are about to get under the hood of their businesses, or who are in the early stages of digital transformation, is to focus on 'business outcomes' first and foremost.

“Social media is really sexy. Programmatic is really sexy. Marketing automation, DMP, it's all sexy. But how are you connecting it to the business outcomes?” he says.

“Your business model still exists. That hasn't changed. Maybe it will, depending on your company, but for us booze is not changing. Ultimately it’s how can all this stuff that we're doing help bottles sell quicker and more efficiently? If we can't talk to the CEO about that, none of it matters - forget about it.

He says “you've got to have that story down and senior leadership has got to buy it”, then you get to more of the middle management layer and the people narrative, as ultimately people want to know what is in it for them.

For that part, he says you've got to help them understand how this is going to help make their job easier and make them more successful as otherwise “it sounds like a threat to a lot of people”.

“This is something they don't understand. It's new and people will say ‘we've done it this way for so long, why do we need to do it differently?’” he explains.

“The truth is we have to do it differently because consumers are expecting more from their experiences with companies, like Amazon's one-click to buy function. Can you one buy and click booze at scale? No.”

Making sure stakeholders understand what is in it for them is vital as Huggins says they're the ones that are going to make it happen.

“Stakeholder alignment is the biggest challenge. Without that nothing will happen, and, with that, everything can."

Japan’s wineries adapting to tighter grape geographic-origin rules

The Japan Times JIJI January 23, 2018

YAMAGATA – Some wineries are moving to change their product names containing geographical terms ahead of a tightening of place-of-origin rules aimed at preventing consumer misunderstanding.

Among them is Takeda Winery in Kaminoyama, Yamagata Prefecture. Its mainstay products include the Zao Star series. The brand name derives from the Zao mountain range, known for popular ski resorts and the tourist-attracting scenery of frozen snow-covered trees.


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The winery will change the names of wines within that brand so they include Takeda Winery Rouge, starting with products made with grapes harvested in 2017.

The move is intended to meet a requirement that will be introduced Oct. 30 by the National Tax Agency stipulating that wine products with geographical names must be accurate for at least 85 percent of the grapes grown locally.

In the Zao Star series, white and rose wines meet the new requirement, but red wines do not, as they use not only locally grown grapes but also grapes from Tendo, another city in Yamagata but somewhat distant from Zao.

Although Takeda Winery had the option of changing grape suppliers, it chose to maintain its contract with its current partner farmers in view of some 100 years of relations. It therefore decided to change the product indications instead of seeking new suppliers.

“The rule change will enable consumers to tell the places of origin clearly,” Takeda Winery President Noriko Kishidaira, 51, said. “We accept the revised rule positively, seeing it as a good opportunity,” she said.

At the same time, some wineries are trying to keep changes of product indications to a minimum.

Asahimachi Wine in the town of Asahi in Yamagata sells popular wine products carrying its corporate name.

As white wine products on its lineup use grapes from a different area of the prefecture, the winery last September placed a kanji character meaning “limited liability company” just ahead of the product name of Asahimachi Wine on the bottle labels.

By having the labels suggest that they show the name of the company, not the product names, the winery obtained the tax agency’s green light for the indication.

“We’ve experienced a sales decline following a product name change,” said Hidetoshi Konoe, 56, a plant manager at the winery. “That’s why we tried as much as possible not to change the appearance of the labels.”

Meanwhile, officials of the Yamanashi Prefecture Wine Manufacturers’ Association said the rule change is expected to have only a limited impact on roughly 80 wineries in the prefecture, whose products are widely known as Koshu wine.

This is because Koshu is the name of a wine grape variety whose use in product names is authorized and its indication is allowed for wines made with the grape variety grown not only in the city of Koshu but also other areas in the prefecture, officials of the association said.

As product indications carrying the names of the places where wineries are located will also be allowed, Hokkaido Wine in Otaru, Hokkaido, has already changed the names of its Otaru Niagara wines that mainly use grapes grown outside the city but are made in the city to Otaru Jozo Niagara. Otaru Jozo means “brewed in Otaru.”

“Overseas, wine products are sold under specific geographical names, such as Bordeaux and Bourgogne,” said Minoru Kubono, 64, an official of the Japan Wineries Association. “Toughening the labeling regulations will help protect wine-producing regions.”

DAILY NEWS

Alconomics Sends Thirsty Drinkers on Crawl Around the Baltics Latvia benefits from its neighbors’ moves to boost excise

Bloomberg Markets By Aaron Eglitis, Ott Ummelas, and Milda Seputyte January 23, 2018

Home to the world’s biggest drinkers, governments in the Baltic region thought they’d curb boozing and raise more revenue by hiking alcohol taxes. The only problem was that they didn’t coordinate.

While Estonia and Lithuania increased excise, neighboring Latvia was slower. The result? A flood of thirsty drinkers into the latter, whose budget has received a boost. Meanwhile Estonia is experiencing the opposite effect as the higher tax discourages domestic alcohol purchases.

Booze Boost Latvia's budget benefits from foreign drinkers

“Along the major routes of the Latvian-Estonian border there are a lot of new alcohol shops,” said Martins Kazaks, Swedbank AB’s chief economist in Latvia. “There are economic implications – for jobs and tax revenue.”


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The incentives for drinkers to hit the road are clear: a 0.7-liter bottle of Tullamore Dew whiskey costs 23.99 euros ($29.40) in Tallinn but 15.69 euros in Riga, and shoppers driving relatively short distances are able to head home with carloads of beer, wine and spirits.

As Latvia laps up the new business, Estonia says revenue from alcohol taxes probably fell 34 million euros short of projections last year. The government has slashed by half another planned tax increase on all alcohol except wine to “reduce risks from cross-border trade.” Estonia has boosted liquor taxes by 60 percent in the past five years, and hiked excise on beer by 70 percent last summer.

Lithuania, ranked by the World Health Organization as the biggest per-capita consumer of alcohol on the planet, is faring better: Revenue has beaten targets even after excise on beer and wine was more than doubled during the past year.

But risks remain as its booze-busting policies are expanded. The hours during which alcohol can be sold in stores are being cut, the drinking age has risen to 20 from 18 and advertising has been restricted, forcing pages to be ripped out of some magazines.

The fallout from the tax policies is spreading even beyond the Baltic region. Finns, who previously flocked to Tallinn from Helsinki by ferry to snap up cheap alcohol, are increasingly turning to Latvia, according to a survey last year by Finnish researcher TAK. Of citizens who returned home with more than 100 liters of alcohol, half had traveled to Latvia or further to buy it, it said.

Amid Customer Complaints Uber Forced To Share Data On Drunk Drivers

CBS SF Bay Area January 22, 2018

SAN FRANCISCO (KPIX) — A San Francisco judge has ruled Uber must turn over data on how many times customers have complained about an impaired driver.

The ride-sharing company didn’t want to.

But the public complaints were not hard to find on Twitter.

“Uber, last night my driver was more drunk than me,” or “The DRUNK Uber driver had the audacity to pick us up, I am irate.”

Now a judge has ordered Uber to turn over those private complaints too, and also share what Uber did about them.

He was impaired to the point when the officer asked him where he was, like physically on the planet, he wasn’t really sure.

In 2016, Robert Win was pulled over by police in Southern California on suspicion of driving under the influence. Beer cans were found in his car and he blew a .25. That’s more than three times the legal limit.

“He was impaired to the point when the officer asked him where he was, like physically on the planet, he wasn’t really sure,” said Cmdr. Robert Arabian, with the Simi Valley Police Department.

And Robert Wing wasn’t just any driver.

“Turns out that driver, drives for Uber and was on his way to actually pick up a fare,” said Arabian.

Wing told police he had completed three fares and was on his way to pick up a fourth. When asked about this, Uber issued a statement saying, “We have a zero tolerance policy for alcohol or drug use for anyone driving on the Uber platform.”

But what does Uber mean when they say “zero tolerance.”

According to documents submitted to the Public Utilities Commission between August 2014 and August 2015, in California alone Uber received 2047 complaints about drivers being under the influence. Uber only deactivated 574, or 28 percent.

This got the attention of District Attorneys in Los Angeles and San Francisco.

Evan Ackiron is the Managing Assistant District Attorney for San Francisco

“If they say they have a zero tolerance policy for drugs and alcohol and they really don’t, it would be in violation of the injunction,” he said.

Thanks to an earlier legal settlement, Uber is legally required to tell the truth about its safety measures including zero-tolerance.

“What we’re here for today was to ask them for all their information about their zero-tolerance policy so we can see whether they’re in compliance or whether they’re misrepresenting the policy,” said Akiron.


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Uber’s lawyer William Stern couldn’t talk to KPIX. He said, “The matter is under submission, I can’t comment.”

“They don’t like giving up documents or information, they’re a very private company,” said Arabian.

Thanks to the judge’s ruling, Uber now has to turn over information about drivers under the influence.

And starting in July, Uber, Lyft, taxis – anyone charging money for a ride – will have a different standard for DUIs. Instead of getting a DUI at a blood alcohol level of .08, they’ll be convicted for anything over a .04.

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