Bacardi is involved in another rum war, this time with Pernod Ricard, marking a 10-year dispute over who actually owns Havana Club rum. A federal provision says Bacardi owns the rights to Havana Club because the US doesn’t recognize trademarks connected with companies nationalized by the Cuban government. That measure, however, has come under fire from the World Trade Organization and some lawmakers who want the Cuban embargo lifted.

This just in. Judging by a press release that was sent today, Southern Wine & Spirits may be setting up its own operations in Indiana instead of merging with or acquiring another distributorship. Southern has hired commercial real estate company Cassidy Turley to find property in Indiana as the preferred location for their next distribution facility.

Spirits volumes in control states fell -1.8% in January, while rolling 12-month volumes grew 1.4% year over year, according to NABCA data. In a note to clients, UBS analyst Melissa Earlam said “we believe poor weather and later Super Bowl timing caused some headwind.”

Will the industry survive heavy discounts? Readers piped in and gave us their take on discounts, promotions and the state of branding in our industry in response to our article published February 25.

In order to raise prices, Diageo is pumping more dollars into its marketing budget. That includes ‽stepping up activity pretty significantly” in the US and focusing more on middle-aged women and iPhone users, according to Diageo†s US president Larry Schwartz in an interview with Bloomberg. Larry said that ‽there†s a new consumer out there, and we†re spending more to convince them to pay another one or two dollars a bottle. The level of promotions has bottomed out. I want to take price.”

Over the past year the spirits industry has mimicked big brewers by using discounts, coupons and price promotions to lure consumers back to their brands and build volume share. The problem is that revenues suffer and so does brand image, some say, which could make it difficult to raise prices once the economy improves. The spirits companies followed suit in 2009 and really kicked things up during the holidays, while brewers, who are notorious for their heavy summer discounts, held firm with pricing. Interestingly, Jeff Nowicki, chief strategy officer with Bump Williams Consulting, told WSJ’s David Kesmodel that

The Caribbean rum wars are continuing apace. After Diageo issued a bombshell of a press release yesterday (see WSD 02-23/10), Bacardi issued a brief retort, saying, “This issue is about one point – the appropriate use of approximately 2.7 billion dollars in taxpayer money. This isn’t about where Diageo receives a free distillery, but about the proper use of federal tax dollars. Diageo has some explaining to do to the U.S. Congress and American people,” said Patricia M. Neal, on behalf of Bacardi Corporation. When WSD requested elaboration from Bacardi, they indicated they had nothing more to add.

And boy, did they fight back with both barrels blazing. You may recall our coverage last week reporting a press release by the National Puerto Rican Coalition and the Serralles Distillery making all sorts of claims about Diageo’s decision to move production of Captain Morgan rum from Puerto Rico to the U.S. Virgin Islands in exchange for subsidies that will be, according to Serralles,

The following is the full transcript of Diageo’s press release detailing what it says are misrepresentations about it’s deal to make Captain Morgan’s rum in USVI…

A WSJ article reiterates what analysts have been saying about Foster’s for almost two years: sell, sell, sell. The idea is to demerge Foster’s beer and wine units, which would make the beer unit more attractive to a global player. As the article puts it, Foster’s wine unit is “a financial bad drunk: messy and unpredictable” and “traps beer’s value” by keeping the two combined. However, the article says potential suitors, such as SABMiller and Molson Coors, shouldn’t wait for a separation before making a bid: “A strong bid now could secure the beer assets while paying a price for the wine that minimizes risk and could even provide upside.” Then the buyer could always sell Foster’s wine business if it doesn’t hold up.

Sake is a burgeoning industry in the United States that most Americans are interested in but know little about. Over the past several years sake has broken out of its traditional mainstays on the east and west coasts and thrived in alternative markets where consumers are more open to experimentation. WSD spoke with Henry Sidel, president and founder of Joto Sake LLC, earlier this month to learn about the growing category and gain perspective on his still young company.

Pernod Ricard reported that fiscal 2010 first-half net income (for the six months ending December) fell 2% on 10% lower sales. Profit was 615 million euros compared with 625 million in the year-earlier half. Revenue fell to 3.79 billion euros from 4.21 billion. Revenue was hurt by 4% due to foreign-exchange effects, particularly a weaker Venezuelan bolivar and U.S. dollar.

A French judge just

In Foster’s first half earnings call with investors (covering the 6 months to December 31), Stephen Brauer, managing director of Foster’s Americas, noted that consumer confidence is still lagging in the United States: “Confidence on Main Street trails the sentiment on Wall Street with high unemployment, high credit and a depressed housing market are the primary concerns with consumers.”

“Recessionary conditions” in the Americas was the “key contributor to the decline in wine earnings,” in the six months ended December 31, said Foster’s ceo Ian Johnston. Declines in the on-premise and independent retailers have been offset by growth in grocery and clubs channels, where competition is “intense,” said the company. Oversupply of Australia and New Zealand wines have also taken a toll, along with unfavorable exchange rates in the US.