News Briefs for November 26, 2012November 26, 2012
•Vodka giant Central European Distribution Corp. (CEDC) continues to face pushback from top shareholders as it seeks to revamp its operations and relieve its debt burden. The past few weeks have seen an escalating war of words between CEDC board members and top shareholders Roustam Tariko (also chairman and interim president) and Mark Kaufman. CEDC board members excluding Tariko published a letter to Kaufman on November 21, rejecting his request to join the board. “You were an accomplished executive and owner of the Whitehall spirits business in Russia that was sold to CEDC—that does not necessarily make you an ideal candidate to be an independent director of CEDC at this time,” read the letter, which went on to reiterate a recommendation of Kaufman, CEDC’s second-largest shareholder after Tariko, for the post of top executive of Whitehall, CEDC’s Russian distribution unit. CEDC published this latest missive after responding to earlier letters from Tariko alleging, among other things, that because of CEDC’s recent financial restatements he is no longer bound to complete the pending alliance between CEDC and Tariko’s own Russian Standard group.
•Treasury Wine Estates (TWE) says its premium and luxury brands, including Penfolds, have received increased investment lately in response to strong growth across the global wine market’s high end. At a briefing held earlier today in Adelaide, Australia, chief supply officer Stuart McNab said TWE has been buying up luxury vineyards and working with growers to improve overall grape quality. TWE, which currently sources 40% of its high-end wine grapes from company-owned vineyards, is aiming to increase that share to more than 50%. Additionally, the company has installed new fermentation vessels at its Penfolds winery, growing that facility’s high-end wine capacity by 80%. The ongoing TWE initiatives, known collectively as Project Uplift, accounted for approximately $15.6 million in spending for the company’s financial year ended in June.
•MillerCoors’ sales to retailers were down 2% on an organic basis in the six months through September, as sales to wholesalers slipped 1% “following a slight build-up of distributor stocks,” says SABMiller. A continuing decline in MillerCoors’s premium light and economy volumes was partly offset by double-digit volume growth at Tenth & Blake, the group’s craft and import division. Globally, despite a “moderation of growth in some emerging markets,” SABMiller’s volume rose 4% during the period, with organic revenue growth at 8%. Latin America (+14%), Africa (+19%), Asia Pacific (+10%) and South Africa (+11%) all showed double-digit organic EBITA growth at constant currency, while North America was up 6%.
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