BEER INSTITUTELester Jones
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Outline of Powerpoint presentation
Top 2 Brewers gain 1.5% market share though acquisitions –
AB acquires Latrobe/Rolling Rock and gains 800,000 barrels
Miller acquires McKenzie River/Steele Reserve and gains +1.6 million barrels
Both brewers have acquired additional import brands
Coors closes Memphis Brewery and moves some domestic production to Canada including NAs. Expect this production to return to the US next year.
Boston Beer posts double digit growth this year. PBR revival continues and Yuengling growth slows in 2006.
Craft beer continues double digit growth – expect 2006 to be +10%.
Energy Beer category creeping into view and may be a true category in a few years.
Total Industry 2006 November YTD (1,000s of Barrels)
Domestic ProductionQuarterly 2004 through 2006
Imports Continue to Show Strong GrowthTop 6 Importing Countries (31 Gallon Barrels)
Imports of Malt Beverages31 Gallon Barrels (1,000s)
Shipments and GrowthTop 10 States YTD November 2006
10 Highest Growth Rate StatesYTD November 2006
10 Highest Volume Growth StatesYTD November 2006
Traditional View of Excise Taxes and Demand
Excise Taxes are inefficient as they force people to spend their money in less than optimal ways
Penalize moderate drinkers and responsible consumers
Excise taxes are regressive and impose a tax burden on low income households least able to afford them relative to higher income households
Unreasonably high excise taxes lead to black markets and "bootlegging" activities
Lost tax revenue to governments
Loss of control in distribution and retail channels
The user fee rationale of taxation fails because the true cost of abuse already falls overwhelming on the individual
2005 Effective Excise Taxes (Tax per Gallon)
Total US Effective Excise Tax1970 to 2005
Consumer Expenditure Survey, 2005Average Expenditures by Income
Beer Gets the Largest Share of Alcohol Budget Spending by Household Income
Examples of Effective Market Regulations
Current Three Tier Distribution Systems
Effectively regulate supply and sale of alcohol beverages
Provide checks and balances at each tier
Provide opportunities for policy makers to influence and collaborate with industry
Self-regulation / Co-regulation
Advertisers codes of conduct
Independent review boards / Code compliance
Outreach and Education
Server / Seller training
Responsibility initiatives
Underage drinking prevention
Moderation messages
