Spurred by complaints from AB, the Nat’l Advertising Division has asked FTC to intervene for further review of mktg claims for Coors Light as MillerCoors declined to participate in NAD process. “The challenged advertising claims appeared on Coors Light beer can itself,” as well as “packaging, on social media websites,” the Coors Light website and “at least” two TV spots, noted NAD. AB challenged “implied claim” that Coors Light cans “are technologically superior to other beer cans and provide a more refreshing beverage experience.” MC’s touting that Coors Light has “The World’s Most Refreshing Can,” has been challenged by AB, which claims “with respect to technology…falsely conveys to consumers that the Can is technologically new, original, and advanced compared to both beer can technology currently available on the market and used by competitors, and what MillerCoors itself previously used for Coors Light.” AB conducted its own evaluation of Coors Light can and contends it doesn’t “have any special or unique technical properties, or represent an improvement or advance.” The “Frost Brew Liner” is not an innovation, nor does “Double Vented Wide Mouth” represent “any functional improvement.”

MC’s response: While MC “fully supports the self-regulation program,” ABI’s complaint about Coors Light can “is frivolous and an inappropriate use of NAD’s resources,” Jonathan Stern, dir of media relations, told INSIGHTS this morn. “All of the statements regarding the can either clearly are intended as acceptable marketing puffery or have been proven through extensive testing as accurate,” he added.

MC contract with over 400 brewery workers expired Aug 2 and got extended until today. Last week, union held an “informational picket,” which was broadcast on local Fox tv station. Union rep said the sides are far apart, but still negotiating. MC said “we remain hopeful that an agreement will be reached…. We are still in active discussions.” If there is a strike, it would be first in 30 yrs, but such negotiations often settle at 11th hour.

In candid conversation with AB mktg veep Paul Chibe, he conceded that “it’s not a good trend” this yr for big mainstream light beer brands, but to think there’s some “great acceleration” downwards, or a “change in trajectory, I don’t see it,” he told INSIGHTS. Lots explained by “unique pressure” and “singular events” in 2013 including weather, payroll tax etc. At same time, there is long term shift in consumer tastes (towards more innovation, flavor and variety), he agreed, but that’s not new this year. There is also some “cannibalization in our portfolio,” he acknowledged, with all of AB’s line extensions this yr. With each one, base Bud Light “takes a nick” that could be a couple of tenths of share, according to Paul. “That’s expected. Do we like it? No.” Recall, Bud Light brand down 4.7% in 2d qtr, AB reported. If Bud Light were to be down that much in a yr, that would be nearly a 2 mil bbl dropoff. Hard to make that up.

But so far, AB apparently sees base Bud Light losses as acceptable or even necessary tradeoff to bring these innovations to mkt in biggest way possible (i.e. with Bud Light name). And Paul maintains Bud Light brand remains healthy: AB sees “consistently improving” brand health measures for Bud Light in tracking studies, including on such key measurements as “awareness,” “consideration,” “top 3” and “favorite.” “We feel good about where we are.” Bud Light brand family at or near all-time high in share. Indeed, Paul made case for base Bud Light’s “resilience” that it lost as little as it has, “given the amount of innovation and the external environment.”

Spending on Bud Light and all major AB brands is up this year, sez Paul. To recent wholesaler complaints that AB has too few ads on Bud Light, Paul responded that AB “leveraging assets for efficiency” and “we pushed it a little too much… the pendulum swung too far.” So more executions coming. Recall, ABI only increased North American mktg and sales spend in low single digits in 1st half, tho it has guided for a mid-to-high single digit increase for full yr. Cfo Felipe Dutra blamed that on “calendarization” and suggested therefore that AB spending would heavy up in 2d half. (MC “softening” spending in 2d half, said ceo Tom Long.) Tho Paul wouldn’t talk about areas AB might place special emphasis on, football would be a pretty good guess. This fall’s Bud Light football executions will be from agency Translation. Ads from new agency BBDO not yet in mix.

Other interesting points from Paul: INSIGHTS noted that Michelob Ultra remained up solidly in scan, up 4.7% yr-to-date thru Jul 14 in IRI all outlet. Why? “It’s had a focused and consistent message,” said Paul, that’s been “aspirational from day one, building a premium image” without a lot of discounting. This yr, avg Ultra prices up about 4% in scan data. With the Ritas off to such a flying start, INSIGHTS hears there’s more coming. Paul wouldn’t comment on specific plans, but did note that Rita a platform that AB “can extend” with “two big flavors” so far. Plus consumers are “variety seeking.” So logically there will be more down the road.

Join us for the 20th annual Beer Insights Seminar, Monday November 11 at the Waldorf=Astoria in NYC. You won't want to miss this year’s event. Leading beer execs from top US suppliers are already on board. AB sales vp David Almeida and Heineken USA president Dolf van den Brink, as well as outspoken Harpoon ceo Rich Doyle will speak. Also on tap: a "National Retail Strategies: Challenges and Opportunities in the Growing Chain Retail Environment" panel moderated by consultant Bump to discuss the rapidly evolving retail environment and how to address the growing influence/power of national chain accounts. Panelists include MillerCoors chief customer officer Kevin Doyle, Crown exec veep sales Bruce Jacobson and Boston Beer sales veep John Geist. As always, BMI's Benj Steinman will present an overview of industry trends. More speakers will be announced in coming weeks. The seminar is $1150 per person. Sign up for what's sure to be a jampacked and insightful day. Seating is limited. Click here for more info. Click here to register.

Reports on antitrust battles in Mexico and South Africa kinda remind you of playing wiffle ball in the backyard when you were a kid. Rules depended on whose yard it was. This week a Mexican Federal Court agreed to weigh SABMiller’s appeal of July antitrust settlement that it claims “failed to truly address the monopolistic activities” of ABI’s Grupo Modelo and Heineken NV’s Cerverceria Cuauhtemoc Moctezuma. Those 2 hold approx 99% of Mexico mkt and July agreement to loosen up exclusivity deals at retailers “still makes it possible to deny access to a majority of retail sales and to large and important regions,” claimed SABMiller (as did others at the time). For now the agreement will remain in place while Fed Court takes another look.

Meanwhile in its home country, SABMiller finds itself on opposite side of antitrust argument. In case going back to 2004, an independent distrib sued alleging it was at an economic disadvantage because it was not offered same discounts and rebates SAB’s distributors received. This week, a Competition Commission ruled it is “common cause” that SAB is a “profit maximizing firm” that can “exert market power on pricing decisions,” reported BDlive. SAB had 97 share in South Africa during yrs this case covers, 2004-07 and still over 90 share. Testimony this week from former Competition Comm economist also charged indie distribs “were further undermined” when they were not able to provide product to retailers “because of exclusive arrangements between SAB and its own distributors.” SAB maintains it has “not engaged in any anticompetitive behavior,” and Norman Adami (SAB’s South African chief) recently warned that if co is forced to “scrap its territorial allocation and extend discounts to all” distribs, “it could opt to cancel its contracts with its 14 appointed distributors and set up its own depots,” reported Mail & Guardian.

On another front, the US Justice Dept has joined SEC investigation into allegation that AB InBev’s India Int’l Private Ltd bribed foreign officials, reported Wall Street Journal. ABI “has never been cited in other countries,” but “more” co’s “are reportedly giving into bribery tactics to surmount India’s rigid regulations,” noted WSJ.

“We’re seeing dramatic increases in sales” in Wal-Mart, mega-northwest wholesaler Columbia Distrib’s Steve Bailey told Bloomberg for article adding color to Wal-Mart’s stated goal to double alc bev sales by 2016. “In the past,” Steve said, “the Wal-Mart buyer didn’t know us. Now they’re just an e-mail or a phone call away.” Not surprisingly, new attitude has “pushed us to pay more attention to Wal-Mart” as well. Craft sales at Wal-Marts in Columbia territory especially strong, said Steve, as super mega-retailer has shown “willingness to expand to brands that aren’t nationally recognized.” At same time, Wal-Mart’s traditional emphasis on low prices has spread to beer. Wal-Mart dropped prices across craft (Deschutes), imports (Heineken), premium (Coors) and subs (Keystone) by 50 cents in Columbia territory. Unclear whether Columbia/breweries participated in price cut but “it got people’s attention,” said Steve.

In Oh, Heidelberg’s Ron Newsad said Wal-Mart can’t discount directly, but has offered “mail-in rebates and $10 store gift cards -- paid by the beer companies -- when shoppers buy beer cross-promoted” with other items. Also, Wal-Mart “dedicated to finding space for beer at any opportunity,” said Ron, including 4th of Jul mid-aisle displays. In Mobile, Ala, Gulf Distrib’s Amy Baldwin told Bloomberg Wal-Mart “redesigning stores to have adult beverages in a more appealing position in front of the store near produce.” Another sign of Wal-Mart thirst to sell more alc bevs: it now “promotes alcohol in its circulars, reversing a previous ban,” according to Bloomberg. Ain’t just Wal-Mart putting more emphasis on beer/alc bevs. Dollar Store General recently told investors it’s expanding alc bev sales across chain and “this year the company plans to sell alcohol in as many as 6,600 of its almost 11,000 stores, Bloomberg reported, up from 3,700 in summer of 2012.

Lots of talk about struggling on-premise biz of late. Just this week, MillerCoors ceo Tom Long noted on-premise trends were “particularly weak.” Addressing beer headwinds more broadly, Tom said that “as the economy improves, we would expect improvement,” he noted, but so far it’s “still awfully weak with key beer drinkers” with “no indication of job growth” for key consumers. Meanwhile, Brinker Int’l (owner of big casual chains like Chili’s and Maggiano’s) told investors that casual dining remains “a fairly lethargic category.” While co is “optimistic” that trends can turn positive in 2d half of yr, “the restaurant industry isn’t recovering as fast as we had hoped,” said ceo/prexy Wyman Roberts. Brinker noted tho that co had some “positive results” in alc bev sales over last 18 mos, “especially” from craft beer selections. Elsewhere, a Natl Restaurant Assoc report reminds that reaching key demographic group on-premise doesn’t get easier as US Census projects senior citizens will have “biggest population growth spurt” by 2020 and there will be fewer under 25 yr olds. “Catering to older diners will become increasingly important in years to come,” said svp Hudson Riehle. Consumers will be more diverse as well, with Hispanics expected to reach 19% of population by 2020.

Distribution Key Driver Analyzing performance of over 10,000 brands for 1st half of yr, GuestMetrics found “changes in distribution are a critical factor” in driving share gains and losses on-premise. “While overall beer sales in on-premise during the first half of 2013 are flat,” and volume is down 3.5%, “it would be incorrect to think they dynamics in the space are even remotely static,” said prexy Brian Barrett. Just 2 brands, Angry Orchard from Boston Beer and Budweiser Black Crown had double-digit gains in distribution on-premise, Jan-Jun, found GM, (+15 points, +11 points respectively). Next best gainers were Goose Island, Redd’s Apple Ale, Coors Batch 19, Coors Third Shift, Leinie’s Summer Shandy and Lagunitas IPA. All brands aimed at consumers drinking craft and looking for fuller and different flavor. All of those brands, “with the exception” of Lagunitas, “100%” of their share gain was from increased distribution. Lagunitas growth was “slightly more balanced,” with 30% of its gain driven by increased sales per point of dist, noted report. Brands with largest declines: Amstel Light, Miller Genuine Draft, Bass and Newcastle.

Looks like Craft Brew Alliance’s portfolio strategy – as it tries to drive sales across Kona, Widmer and Redhook divisions – getting some traction, at least in Q2. Shipments up 13.5% in Q2, +5.6% yr-to-date. Meanwhile, Kona has taken top spot among those divisions. With 25% jump in Q2, Kona up 19K bbls, 17% for 6 mos and shipped 126K bbls yr-to-date. Widmer still off 6% YTD despite 2.1% Q2 gain (new Omission included with Widmer). Widmer’s 120K bbls for 6 mos still ahead of Redhook’s 102K bbls, tho Redhook up 15% in Q2, 8.3% YTD. Shipments/depletions much more inline in Q2, as CBA worked to “optimize our supply chain process.” But for 6 mos, depletions still ahead, +9% vs +5.6%.

CBA booked $2 mil in operating income following loss in Q1. For 6 mos, CBA still $800K in red. And while margins improved in Q2, still quite thin vs that other large publicly-owned craft brewer, Boston Beer. CBA boosted gross margin slightly to 30.5 in Q2, operating margin to 4.1. Boston’s gross margin in Q2 was 53.6, operating margin 17.7. At CBA, lower capacity utilization – contract biz dwindling as CBA ended brewing beer for Goose Island – modest price increase (CBA expects 1-2% for the yr), cost hikes tracking rev increases and thinner pub margins continue to pressure earnings. CBA still expects depletions to be up 7-11% for 2013; a bunch of new brands/collaborations should add to current momentum. More details on CBA’s Q2 in our sister publication Craft Brew News.

Pittsburgh area AB-Coors-Others distrib Fuhrer sued MC for not getting Batch 19, Redd’s and/or Third Shift, as we reported earlier today. Court papers show that Fuhrer principals met with Pete Coors, Tom Long and Ed McBrien from MC on May 10. They said MC “would not assign any new craft/specialty brands to Fuhrer because Fuhrer sold AB products.” At same mtg, MC execs suggested exclusive sales director would be enuf for Fuhrer to get new brands and MC “admitted that Fuhrer should have received the distribution rights for Batch 19” which Fuhrer points out is made from old Coors recipe. Execs also “indicated that they would not object” to Fuhrer trying to buy rights from Miller distrib Wilson-McGinley, which got ‘em. But a few weeks later MC atty wrote Fuhrer, “withdrew the proposal” about a sales director and added those “draconian conditions” set out by MC: new corporate entity dedicated to MC with separate cfo, and restrictions on ownership, board membership (see last issue).

MC’s actions violate Pennsy law which bars conditions MC suggested simply because Fuhrer sells competing products, distrib argues. MC conditions are also “unreasonable restraint of trade” and are “tortious interference” with Fuhrer’s existing contract with AB. In effect, MC “demanding that Fuhrer either cease selling AB products or carve up the company into pieces it would no longer control.” So it asked for injunction stopping MC from using Fuhrer-AB relationship to withhold craft/specialty MC brands, plus damages. At same time, Fuhrer filed separate action with American Arbitration Assn, given requirements of distrib agreement, even tho Fuhrer believes arbitration clause does not apply to this issue.

Despite better Jul retail numbers, Jun was tuff mo for import shipments, driven by odd 33% drop in Dutch bbls coming into US. Total imports off 190,000 bbls, 7.4% for mo, as Mexican shipments down 5%. Again oddly, shipments from Canada, Belgium, Ireland, UK and Germany each up for the month. For 6 mos, imports off 340,000 bbls, 2.3%. Mexican imports managed just 100,000-bbl, 1.2% increase for 6 mos. Dutch shipments down 165,000 bbls, 6%. Among remaining major source countries, only German shipments up yr-to-date, driven by Stella being packaged there. With June import loss, total US shipments for 6 mos came in down 2.5 mil bbls, 2.3%.