Liquor Biz: Washington balancing budget with booze tax
By Paul Vang
Washington Bumps Liquor Prices
Washington’s Liquor Control Board just hiked liquor prices to consumers.
It seems the Legislature relieved the state’s Liquor Revolving Fund of $78.6 million to help deal with the state’s $9 billion budget deficit.
The Board increased the mark-up on liquors from 39.2 percent to 51.9 percent, which is expected to increase revenues by $80 million and replace the money. The increase goes into effect this August and will expire in 2011.
Dry Fly Distillery of Spokane, which exhibited at the 2008 MTA convention, and Washington’s only distillery, currently sells their gin and vodka to the state for $15. With the increase, plus previous mark-up and taxes, the state will sell it for $29.95, meaning the state will be making more money per bottle than the the distiller does.
Dry Fly currently sells 70 percent of their production in Washington. According to the Seattle Times, the owners will try to sell more of their products out-of-state.
Meanwhile, if you have friends or relatives in Washington, don’t be surprised if they ask you to do some shopping for them the next time you take a trip west.
Snake Wine? What Next?
Here’s another item in the “I couldn’t make that up” category.
Customs officials in Miami seized bottles of alcohol with venomous snakes pickled inside. According to a CNN story, agents discovered the bizarre concoction in what was expected to be a routine search of an express mail package from Thailand. The package was turned over to U.S. Fish and Wildlife Service officers for further investigation, as importation of cobras is illegal, because they are an endangered species.
According to the story, the snakes were not bottled in alcohol to preserve the meat, but to dissolve the snake venom into the alcohol, which is then used for medicinal purposes.
As for what’s next, on the same day customs agents also confiscated a diaper filled with cocaine.
Personally, if my doctor prescribed snake venom-infused alcohol as a remedy for Lord knows what, I’m not sure if my first reaction would be, “Say what?” or ask him why we couldn’t use some good old fashioned Montana rattlesnake, lest we get in trouble with the Feds.
Austerity at Anheuser-Busch
According to the Wall Street Journal, construction workers recently invaded the St. Louis home office of Anheuser-Busch and demolished ornate executive office suites and replaced private offices with a sea of desks, where executives and other employees brush shoulders.
This is just one of many changes since the Belgian brewing company, InBev, bought America’s largest brewing company to form AB-InBev. The new owners have cut jobs, revamped the pay system, and eliminated perks, such as flying first class. They’re also putting company private jets up for sale.
Suppliers have also been feeling a pinch, as AB-InBev has told their barley merchants, ad agencies and other vendors that they’ll have to wait 120 days for payment instead of the previous 30 days.
AB-InBev told NBC that the company will be making a 50 percent cut in their advertisement package in the upcoming 2010 Winter Olympics and 2012 Summer Olympic games. Rival brewer MillerCoors will likely up their ad buys to take advantage of some fire sale prices after AB-InBev pulled back.
Still, AB-InBev’s U.S. sales were up 5 percent in the first quarter of 2009 compared to the first quarter of 2008. MillerCoors also reported significant first quarter increases in sales and profits.
The biggest question in my mind about Anheuser-Busch, however, is whether the Budweiser Clydesdales are also feeling the pinch? Saving a few bucks is one thing, but…
Diageo Bidding for Moet-Hennessy
Diageo, already the world’s largest beverage alcohol producer, is eyeing a takeover of what has been a French partner, Louis Vouitton Moet-Hennessy (LVMH), makers of Dom Perignon Champagne, Hennessy Cognac, and luxury consumer goods including Louis Vouitton leather goods, Tag Heuer watches, Gucci shoes and so on.
Diageo already owns 34 percent of LVMH, and buying the rest of the company would further consolidate Diageo’s position as an industry leader, as well as give them full ownership of yet more high-end labels of spirits and merchandise.
Tasting the Northwest
When we travel we often try to find wineries or brewpubs to get a taste of the true flavor of a local area.
On a recent trip to the Lewiston, Idaho-Clarkston, Wash. area, we hit the jackpot at the riverfront port area of Clarkston.
First was Basalt Cellars, with an intriguing selection of wines, mostly red.
They get most of their grapes from the Columbia Valley, though they have a fledgling vineyard and are now producing wine from those grapes.
Next door to Basalt Cellars is Riverport Brewing Company, a brand new (opened in November 2008) microbrewery, operated by owner and brewer, Marv Eveland.
Eveland is a retired teacher who has been home-brewing since age 17. Marv’s lineup of brews is fairly standard, and my favorite of his brews was a bock beer. The surprise, however, was a seasonal brew he came up with for Cinquo de Mayo, a jalapeño flavored beer. While it wasn’t hot, it definitely had a strong jalapeño flavor that grabbed my attention.
Dixie Beer for Fargo
When flood waters threatened to inundate Fargo, No. Dak., in March, Mayor Dennis Walaker said he’d buy everybody a beer after it was all over.
Through a somewhat roundabout way, Dixie Beer of New Orleans, according to the Milwaukee Journal, is helping “hizzoner” make good on his promise, sending Fargo 1,000 cases, or 24,000 beers. Dixie’s brewery in New Orleans is still rebuilding after Hurricane Katrina, so Minhas Craft Brewery (formerly Huber’s) of Monroe, Wisc., is presently making beer for Dixie.
As for how those 24,000 beers will be doled out, the city is giving people tickets good for one beer, each.
Last of the (Texas) Dries Goes Wet
Lubbock, Texas, voters opted to allow stores to sell alcoholic beverages. Lubbock has allowed by-the-drink sales in bars and restaurants since the 1970s, but if residents wanted a six-pack of beer or a bottle of wine they’d have to head out of town.
An area on the edge of town, which was annexed several years ago to increase sales tax revenues, allowed alcohol sales, but now there’s a level playing field throughout the city and the suburbs.
Source: The Montana Tavern Times, May 2009, published monthly by Continental Communications, 125 W Granite, Suite 102, Butte, MT 59701.