Exclusive news and research on the wine, spirits and beer business

News Briefs for February 27, 2014

February 27, 2014

•With only two weeks left in Washington’s legislative session, state lawmakers have introduced a bipartisan bill aimed at lowering spirits sales taxes from 20.5% to 6.5% over an eight-year period. If passed, the bill—sponsored by one Republican and two Democrat state senators—would offset the sharp rise in spirits prices that has occurred since Washington privatized the business in 2011. According to the state’s Department of Revenue, the average price per liter in late 2011—before the ballot vote on privatization—was $21.61. Two years later, it had risen by roughly 11% to $24.12, sending shoppers across state borders to Oregon and Idaho in search of lower prices. The fact that the bill was put forth so late in the session may hurt its chances of passage, as do estimates that cutting spirits taxes would cost the state $20 million in the first two years of implementation and more than $45 million two years later.

•Tuscany’s Chianti Classico DOCG has introduced Gran Selezione, a new top-tier wine category. Unveiled in Florence last week, the Gran Selezione classification dictates that a wine must be sourced from a winery’s own vineyards, adhere to strict production regulations and can only be sold following a 30-month maturation and period of bottle refinement. Gran Selezione wines are estimated to account for around 10% of Chianti Classico production and are collectively valued at between €70-€100 million ($95-$136 million). Previously, the Chianti Classico denomination featured just two quality classifications, including the Annata (year’s vintage) and Riserva categories.

•The LangeTwins, Coors and Ficeli families have formally launched a new collaborative sales and marketing company, LCF Wines. Brands from across the three families’ respective wine businesses—such as LangeTwins, Goosecross, Assembly, Caricature, Caminada and others—are included in LCF Wines’ portfolio and will have a national reach with strong emphasis on key strategic markets. LCF Wines, headquartered in Acampo, California, will focus on estate vineyard wines. Next month, the company plans to expand several wines from Goosecross to new on-premise markets, as well as launch two new SKUs to Caricature—a Cabernet Sauvignon and an Old Vine Zinfandel—to select markets and accounts.

•Young’s Market Company has appointed Richard Gillis to the newly created position of president of the company’s distribution network, effective March 3. Gillis will be based at Young’s headquarters in Tustin, California, and will oversee all sales and operational aspects of the company’s 10-state network. He will report directly to Young’s CEO Chris Underwood, with all state executive vice president, general managers reporting to Gillis. A 20-year veteran of sales and distribution, Gillis previously served at Coca Cola Enterprises, Dean Foods Company, Inc. and Lactalis America Group, Inc.

•Mississippi-based Anheuser-Busch wholesaler Mitchell Distributing has agreed to acquire a fellow A-B house, Maryland-based Winner Distributing Co., as well as an interest in related distributor F.P. Winner. Terms weren’t disclosed. According to the Baltimore Sun, Mitchell plans to combine the two Maryland distributors’ activities into one warehouse rather than continue to operate two separate warehouses. Winner said last month that it would lay off 125 workers at the end of February and close its eastern Baltimore County warehouse. F.P. Winner was formerly partnered in a joint venture with Southern Wine & Spirits of Maryland and Washington, D.C., but early last year Southern opened its own sales, marketing and administrative office in Baltimore and exited the joint venture, although F.P. Winner still managed some SWS warehousing and shipping needs on a contractual basis.

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