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News Briefs for March 27, 2015

March 27, 2015

•The Distilled Spirits Council (DISCUS) and the American Craft Spirits Association (ACSA) have united to pursue legislation that would reduce the federal excise tax on distilled spirits. The trade groups are advocating for a joint tax legislation that creates an excise tax rate of $2.70 per proof gallon on the first 100,000 gallons, with a top rate of $9.00 on all spirits above that gallon mark. DISCUS and the ACSA are in agreement that the rates should apply to all distillers regardless of size, as well as both imported and domestic spirits. According to DISCUS, more than half of the purchase price of an average bottle of spirits goes toward taxes and fees, with the federal excise tax currently standing at $13.50 per proof gallon. The ASCA represents more than 700 small distillers across the country, 110 of which also belong to DISCUS.

•Brown-Forman’s Woodford Reserve Bourbon has unveiled the 2015 edition of its annual Kentucky Derby bottle. Rolling out in early April, this year’s commemorative offering features artwork by artist Carole Andreen-Harris depicting race horses, jockeys and Churchill Downs’ historic twin spires. The 2015 Woodford Reserve Kentucky Derby bottle will be available nationwide, priced at around $43.99 a 1-liter. An Impact “Hot Brand,” Woodford Reserve—which has served as the Kentucky Derby’s official Bourbon since 1998—was up 17% to 275,000 cases in the U.S. last year, according to Impact Databank.

•A recent study from the University of Texas at Austin claims that alcohol advertising impacts consumer choice, but does little to influence overall consumption. Led by Dr. Gary Wilcox, the study found that per-capita alcohol sales across the beer, wine and spirits categories remained essentially flat between 1971-2012, despite the fact that total alcohol advertising spend rose nearly 400% within the 40-year period. As a result, the researchers concluded that advertising serves primarily as a way to gain market share, and that efforts to restrict alcohol beverage advertising in order to curtail consumption “work against rational public policy.” In response to the findings, senior vice president of science for the Distilled Spirits Council Dr. Sam Zakhari released a public statement, calling restrictions and bans on alcohol advertising “ineffective, misguided and unsupported by the scientific research.”

•The chef/owner of Chicago’s Michelin-starred Moto restaurant, Homaro Cantu, is being sued by one of his minority investors, who alleges misappropriation of restaurant funds and other financial mismanagement. The plaintiff is Alex Espalin, who reportedly holds a 15% stake in Moto, known for its molecular gastronomy and adventurous wine and cocktail list, and who was also an investor in another Cantu restaurant called iNG, now out of business. Espalin accuses Cantu of using money from Moto’s account to finance personal trips, to pay legal fees and to support other personal ventures. He also alleges that he received no profits from Moto for the period from 2010 to 2013 even though the restaurant’s revenues reached an annual peak of $3.5 million during that time. Cantu has said the suit is without merit. A hearing is set for July 17 in circuit court in Chicago.

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