TTB Report Provides Insight on Supplier Growth, Category Management

FILED MARCH 3, 2017

The boom in the number of alcohol suppliers isn't breaking news, but the Alcohol and Tobacco Tax and Trade Bureau's (TTB) annual report out today provides a picture of the scope of the increase. Since 2012, the number of wineries has grown 30% (to 11,095 active permits), distillers have increased by 100% (to 2,524 active permits) and breweries have increased by 140% (to 7,039 active permits). Together those companies paid about $8 billion in excise taxes in fiscal 2016.

The top 10 states by number of alcohol permits in 2016 were: California (7,254), Washington (1,911), New York (1,887), Texas (1,473), Pennsylvania (1,335), Oregon (1,245), Michigan (1,240), Ohio (1,078), Illinois (979), and Florida (964).

One of the more interesting segments of the report was on category management in the US. You'll recall, the TTB issued guidance on category management practices last year around this time that mostly just confused members of the industry [see WSD 03-16-2016]. The agency's report provides a bit more insight into the matter, claiming it came to the decision after a nationwide investigation found that "a number of the top alcohol beverage producers" were providing shelf space management services to the top 50 chain-retail establishments worth "millions of dollars per year."

"Services being provided far exceed those contemplated under the shelf plans and schematics exception in the TTB regulations and often include the producers being directly involved in the day-to-day operations of these retailers, including the selection and placement of products in the commodity category," per the report. TTB says it will monitor the marketplace in F2017 to ensure industry compliance with the new guidance.

WIDOW JANE OWNER ACCUSED OF "SABOTAGING" SALE

A group of spirits industry executives have filed a lawsuit against the owner of Widow Jane bourbon, Daniel Preston, for allegedly sabotaging the sale of the brand. According to a complaint filed in Delaware Chancery Court, the "buyer group" for Widow Jane, referred to as only four "highly regarded" liquor executives, say they made a deal to buy Widow Jane, but now Widow Jane's ownership is trying to break off the deal because they've found a higher bidder, per Law360

"Defendants are now actively attempting to sabotage the transaction. Defendants have intentionally interfered with the pre-closing conditions to frustrate their completion and prevent the closing, all in purposeful violation of their obligations under the agreement and their duty to act in good faith."

Although the price is not apparent from the documents, the buyer group claims they completed a bidding process and enacted a purchase agreement that included a no-solicitation provision. They allege Daniel texted them in February to say their agreement undervalued the brand and he had "no requirement to sell" below market price.

A hearing is set to be held today because Vice Chancellor Tamika Montgomery-Reeves will consider fast-tracking the case.

NY-BASED SKURNIK WINES EXPANDS INTO CA

New York-based distributor and importer Skurnik Wines and Spirits will be expanding into the California market starting this May under the name Skurnik Wines West, reports a local publication. Skurnik Wines West will be headquartered in San Francisco.

All of Skurnik's national imports that are already available in California through other distributors will switch over to Skurnik Wines West, including Raul Perez, Paul Jaboulet Aine and the entire portfolio of importer Terry Thiese. Moreover, Skurnik will be bringing several of its wines not currently available in the California market, such as Doyard, Michel Tete, Domaine de l'Enchanoir, Chateau la Grangere among others.

As for the producers that Skurnik represents in New York, some of them will switch over to be distributed by Skurnik in California as well. "Some of them have already committed," says president and coo Harmon Skurnik. "But we don't have any illusions that we'll replicate the book we have in New York."

WSD BRIEF:

SAZERAC BUYS A BITTERS BRAND. Sazerac has taken a "strategic interest" in Bittermens cocktail bitters brand, though no purchase price has been disclosed. Under the agreement, the current owners, Avery and Janet Glasser will continue to lead the business, while Sazerac manages sales, marketing and distribution. "The synergy between Avery and Janet's work in the contemporary cocktail scene combined with our historical roots made for a natural fit between Sazerac and Bittermens," says Sazerac Co. chief Mark Brown. "We are looking forward to meshing together the creativity of the Glassers with our team of marketing and sales experts to strengthen the overall bitters and cocktail modifiers category."

Until Monday,
Your Editors

Emily Pennington - emily@winespiritsdaily.com
Sarah Barrett - sarah@winespiritsdaily.com

"My mind, with all its deficiencies, has certainly kept me interested." -- Marilynne Robinson

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