TTB Hands Down 6 More Permit Suspensions in CA

The federal government shutdown earlier this year did not hamper the Alcohol and Tobacco Tax and Trade Bureau’s crackdown on unlawful trade practices.

The TTB handed down one-day permit suspensions to four California wine wholesalers and two California wineries between December 2018 and February 2019 for engaging in consignment sales as a result of the agency’s joint operation with the California Department of Alcoholic Beverage Control. It even led to one wine wholesaler, Homage Vineyards, surrendering its permit altogether.

You’ll recall, consignment sales are defined as when a supplier gives product to a wholesaler or retailer and the wholesaler or retailer only pays for the product once it sells.

A&M Wines, Monticelli Brothers, Pavi Wines, MB Vogelzang Vineyards, Six Sigma Winery and Tamber Bey Vineyards entered into voluntary suspension agreements with the TTB, admitting to engaging in consignment sales.

Each served a one-day suspension and, similar to others who had their permit suspended, the wineries and wholesalers were not allowed to fill any wine orders, place orders, contract or offer to sell wine products, or ship wine in interstate or foreign commerce, according to the suspension agreements.

As a result of the joint investigation, the agency has also busted Modus Operandi Cellars, James Johnson Vineyards, MarcoWine, Samantha Sheehan Imports and B Wise Vineyards for consignment sales. All of which received a one-day permit suspension as well.

TWE AMERICAS CHIEF ON US STRATEGY, FUTURE PLANS

Treasury Wine Estates has two top priorities in the Americas: 1) continue to embed the new route to market strategy; and 2) premiumizing the portfolio, according to TWE Americas chief Victoria Snyder.

As reported yesterday, TWE is very pleased with the progress made in embedding its new route to market strategy in the US [see WSD 02-14-2019], but there were kinks to be ironed out. “We’ve had a great first nine months and now it’s really about accelerating our business as we continue to embed and refine the model,” Victoria tells WSD.

For instance, when the company initially rolled out its new route to market models, they used a third-party merchandiser in California. But TWE then decided to set up their own merchandising and sales teams in the states it now self-distributes (CA and WA).

“In setting up the route to market, obviously we’re pleased with it, but that tweak with setting up the merchandising team has really taken it to the next level,” she says.

As for premiumizing the portfolio, Victoria says the company’s masstige ($8-$20) and luxury ($20+) segments drove growth in the first half of the fiscal year, with depletions up 5%.

Victoria highlighted a few major growth contributors including: Penfolds, Stags’ Leap, Beaulieu Vineyards, Beringer, Matua and 19 Crimes.

19 CRIMES EXPANDS INTO BEER AND SPIRITS. 19 Crimes is “an incredible, strong brand. It’s got strong appeal with millennials and when we looked at other segments that we could potentially expand to and bring more consumers into the 19 Crimes franchise, craft beer and dark spirits over index with millennials,” says Victoria.

As such, TWE will launch three beers, an IPA, lager and pilsner, under the 19 Crimes banner. The plan is to launch the beers soon in Ohio to test the waters first before expanding availability to other markets.

In addition, a 19 Crimes Irish whiskey is also in the works. We can expect to see that join the brand stable later in the second half of the fiscal year. “Wine and spirits share a joint route to market so for the most part we can leverage our current distributor base” for the Irish whiskey, she adds.

PENFOLDS AMERICAN WINES. TWE also plans to launch Penfolds American wines. But first, they’re laying the groundwork with the brand’s Australian offerings, launching an initiative to reacquaint American consumers with the Penfolds brand. That way when the American wines are ready, consumers will “have that thirst for that unique Penfolds house style,” says Victoria, adding that the initiative has already been a “tremendous success.”

ON CANNABIS. While Victoria said she’s not in a position to comment on any plans in cannabis, she did say “we watch it like we watch other categories in beverage alcohol,” adding that “We’re really focused on wine. That’s our core.”

WSD BRIEFS:

BEAM SUNTORY FINISHES YEAR UP MID SINGLE DIGITS. Beam Suntory revenues increased mid single digits in 2018, driven by share gains in the US and Japan, per a release. In the US, full year sales were up mid single digits. Globally, Jim Beam reported high single digit global volume growth to more than 10 million cases in 2018. Maker’s Mark grew global volumes at a double digit rate, hitting the 2 million case mark for the first time. Hornitos tequila, Basil Hayden’s bourbon and Sipsmith gin also reported double digit gains globally for the year.

DEVILS RIVER WHISKEY PREPARES FOR NATIONWIDE EXPANSION. Devils River Whiskey finished 2018 distributing across 12 states and the ownership group is looking to expand that across the entire country by the end of 2019. John Potts recently joined the Devils River Whiskey leadership team as the evp of sales and marketing and will be leading the sales and marketing for the expansion. The sales team will be divided into five regions: Matt Thornton was hired on as regional vp of the Texas region; Brandon Walsh will serve as regional vp of the Northeast region; and Rick Perez will serve as the regional vp of the Southeast region. The company will be announcing appointments for the Midwest and West regions in the near future. Moreover, the company plans to open its San Antonio-based distillery in October 2019.

WINESELLERS LTD. LAUNCHES KIN & CASCADIA. Winesellers Ltd has added two wines to their portfolio from Kin & Cascadia: 2017 Cabernet Sauvignon Columbia Valley, Washington State and the 2017 Pinot Noir Willamette Valley, Oregon. They are both available nationwide with a suggested retail price of $15 a 750 ml.

JAM CELLARS RELEASES CALIFORNIA CANDY IN CANS. Jam Cellars has officially released their California Candy Dry Rose in cans, per a release. The 24.2 proof rose is available in four-packs with a suggested retail price of $20.

CONSTELLATION BRANDS UNVEILS SVEDKA ROSE. Svedka Vodka has unveiled their response to the popular rose wine trend, Svedka Rose. It is available nationwide with a suggested retail price of $13 a 750 ml. It will also be available in 50ml, 375ml, 1L, and 1.75L sizes.

Until Tuesday,
Sarah

“A man who has made a mistake and doesn’t correct it is making another mistake.” – Confucius

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