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Industry issues.

At the recent National Alcohol Beverage Control Association's (NABCA) 70th Annual Conference, there were several notable presentations that touched on issues relevant to the beverage alcohol industry. For those of you who don't know, the NABCA is an organization that represents the control state systems, the 19 jurisdictions across the U.S. that directly control the distribution and sale of beverage alcohol within their borders.

Every year, the conference aims to address pressing beverage alcohol issues. "Global Alcohol Strategies" brought together top execs from the spirits, beer and wine segments: Paul S. Walsh, chief executive of Diageo, PLC; August A. Busch IV, ceo of Anheuser-Busch Companies; and Richard Sands, chairman and ceo of Constellation Brands.

In his comments, Walsh explained that while beverage alcohol businesses need to maintain "keen insights into trends," they also must take into account the "ethical consumer, who wants to feel good about the product he or she is using. Marketing our products responsibly is not only right, it's what our consumers want us to do."

In his address Busch stated, "While beer has a 56% share of the beverage alcohol market, its share is slowly declining. The aging population prefers less carbonation, which is good for wine. Spirits companies have been more effective at offering consumers more variety and choice. But there are opportunities for beer to grow." Global alliances have been a major element in A-B's strategy. "We redefined our corporate mission to become the leading global beer and beverage company; to look at the entire world as our marketplace. "

All three executives predicted more consolidation among suppliers, distributors and retailers, though Sands noted be thought the retail tier would see the most consolidation.

In discussing the viability of the three-tier system, Brad Vassar, executive vp and general manager of Southern Wine & Spirits of America, described how it provides U.S. consumers with access to most products in the world at very good prices. Though there are pressures on both suppliers and retailers to increase profitability by "cutting out the middleman," the reality is, Vassar contends, that the wholesale tier delivers a range of services that makes it crucial to the entire beverage alcohol delivery system.

Jim Goldberg, NABCA's general counsel, said, "we have a 1930s regulatory system trying to cope with a contemporary distribution system. Legislators have adopted incremental steps, which end up a patchwork quilt of regulations."

Goldberg noted that post-Granholm [the May 200Y Supreme Court decision which found that states can regulate beverage alcohol but cannot treat in-state wineries different than out-of-state wineries], there have been lawsuits filed in 19 states. He believes there will continue to be challenges to beverage alcohol laws over the next few years. "It is incumbent upon the industry to examine parts of the three-tier system that may not be necessary. "

Are there any industry issues that you'd like to address? Send me an email ( and we'll publish it.

Richard Brandes, Editor-in-Chief
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Title Annotation:BY THE WAY
Author:Brandes, Richard
Publication:Beverage Dynamics
Date:Jul 1, 2007
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