As the World Drinks: AB InBev's Carlos Brito

Almost two years ago global brewing powerhouse InBev bought U.S.-based Anheuser-Busch for a staggering $52 billion, creating AB InBev, which now controls about a quarter of the world's beer market.

Carlos Brito, the company's CEO tells Big Think that “One of the beauties of this merger was to really enable Budweiser to become our global flagship brand.” Brito has been at the helm of AB InBev since 2005 (then simply InBev), and has seen the company through a series of mergers and acquisitions.  

AB InBev is a global company, in ever sense of the term.  The purchase of Budweiser brought an iconic national brand under the management of a company anchored abroad in Leuven, Belgium, and in San Paulo, Brazil.  AB InBev commands nearly a quarter of the market share and ownership of hundreds of beer brands. It produces upwards of 400 million hectoliters per year. Yet with all this global growth has come the concern about retaining national identity of the brands.  Is Budweiser still an American beer? Is Stella Artois still Belgian?

Brito answered this concern, as well as the issue of maintaining a brand’s national identity as it’s brought brought abroad.

Speaking about Budweiser’s global growth, Brito says, “Look at what Budweiser represents today in China. It’s by far the number one premium beer in China. You look at what it represents now in the U.K. more and more; what it represents in Canada, the number one brand; what it represents in the U.S.”  He adds that the brand recently has been brought to Russia, and plans are forming to bring it to Brazil.

“We’re going to take Budweiser to where it belongs, which is a global stage,” he says.

AB InBev has a portfolio over 200 brands, ranging from “local jewels” limited to one region or country to global brands, such as Budweiser, Stella Artois, and Beck’s, Brito says. 

Speaking with Big Think ahead of a company-wide day to promote responsible drinking, Brito spoke about why a company built on beer sales, and one that has had flagging sales in some sectors, would advocate less consumption.

“Excess consumption and consumers and volumes that come from consumers using our products in the wrong way is not what we need for our business,” he says. “We don’t need that kind of volume, that kind of consumer, to have a great business.”

by Big Think Editors 

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A thousand year of hairstyles

Hair design contest launched to celebrate Hanoi’s great anniversary

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VietNamNet Bridge - A hair design contest entitled “A thousand year of hairstyles” featuring Hanoi’s hairstyles for the last 1000 years, has been launched in Hanoi. 

The contest will give people a chance to have a clear view of the changes Vietnamese hairstyles have gone through during various historical periods in Hanoi.

The competition is for Vietnamese hair designers at home and abroad between 18 and 40 years of age.

The contest is divided into two categories including “Past” featuring different ways the hair was worn up, and “Present,” focusing on modern hairstyles.

Contestants must send photos of their designs and video clips, showing the process by which hairstyles are created, to the Tra Giang International Company, 55 De Quai Street, Tay Ho District, Hanoi, before August 10. Photos and video clips will be posted on website http://tgishow.net.

Miss Vietnam Mai Phuong Thuy in the ao dai and the hairstyle of Hanoian girls in the past.

Ten contestants will be selected for the final night on August 27 in Hanoi, which will be broadcast live on VTC1 channel.

The organizing board will present one first prize worth $4000, two second prizes worth 10 million dong each, two third prizes worth 5 million dong each and five consolation prizes worth 2 million dong each.

The competition is co-organised by Tra Giang International Company, the Embassy of Italy in Hanoi, Selective Professional hair care products and Chihtsai Hair Care.

PV

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From Spain, Big Reds That Are Well Balanced

RIBERA DEL DUERO is a paradoxical region, ancient yet thoroughly modern. Its wines embrace the mainstream characteristics that seem so popular around the world. They are plush, opulent, flamboyantly fruity and powerfully oaky. Yet while some unavoidably stray into the homogenized international style, the best remain identifiably Spanish.

What makes Ribera del Duero so unusual? Throughout European wine regions over the last 50 years the essential story has been how traditional wisdom and methods, honed over generations of careful observation, have come to terms with modern technology and globalization.

This conflict, felt in Old World vineyards and cellars, resonates with consumers around the world. Efforts to appeal to perceptions of global tastes have produced rivers of standard-issue wines, as bland as computer-generated car names. At the same time, a rising appreciation and understanding of fine wine around the world has meant unprecedented access to a wide diversity of wonderfully distinctive wines, some from appellations virtually unknown until a few years ago.

Gaze at Bordeaux and Burgundy, Barolo and Sicily, Rioja and the Rhone, even at Napa Valley, and you can find innumerable examples of this conflict playing out. And yet, if you look at Ribera del Duero, in the geographical heart of Spain, you see a place seemingly set aside from this central clash of cultures.

This paradox may seem peculiar against the backdrop of other Old World countries. But then again Spain has always stood apart from European winemaking powers like France and Italy. Because of regional tastes, politics and civil war, the Spanish wine industry got a far later start on modernization than its neighbors. Despite having grown grapes and made wine for centuries, the wines of Ribera del Duero never achieved high status.

The region had one significant exception. Vega Sicilia was established in 1864, and it rightfully came to be recognized as one of the world’s great wines. Beyond Vega Sicilia, it wasn’t until the 1980s that the region came to be seen as a source for fine red wines. By that time the Franco era had ended, Spain had joined the European Community, and modernization was well under way.

Unlike Rioja, where many producers had already been established by the early 20th century, Ribera del Duero, on a harsh, high plain southwest of Rioja, was dominated by cooperatives up until the 1980s. After pioneering efforts of a few producers like Alejandro Fernández in the 1970s, new wineries began to pop up. Without longstanding traditions of excellence to clash with new and fashionable ideas, modernity was largely unchallenged.

Success and acclaim came swiftly to Ribera del Duero in the 1990s, and it was hard not to make comparisons to Rioja. Both make red wines largely from the same grape, called tempranillo in Rioja and tinto fino in Ribera del Duero. The wine critic Stephen Tanzer once said Rioja is Bordeaux to Ribera del Duero’s Napa cabernet, and I think the analogy remains apt.

To check in on the current state of Ribera del Duero, the wine panel recently tasted 20 bottles in vintages ranging from 2003 to 2008. We capped our spending at $60 a bottle, which eliminated celebrated labels like Vega Sicilia and Pingus, which sell for hundreds of dollars each.

For the tasting Florence Fabricant and I were joined by Ashley Santoro, the wine director at Casa Mono, a Spanish restaurant near Gramercy Park, and Sean Josephs, the owner of Char No. 4, a Southern restaurant in Brooklyn, who comes by his knowledge of Spanish wines both as a former sommelier and as the husband of Mani Dawes, an owner of Tía Pol, a tapas bar in Chelsea, and Tinto Fino, a Spanish wine shop in the East Village.

Let’s stipulate that almost all the wines we tasted were very well made. How you feel about them will depend largely on your stylistic preferences.

“I’m torn between the fact that there’s a lot of quality, but not finding wines that excite me personally,” Sean said. He added that when he worked at a steakhouse, he sold a lot of Ribera del Duero as an alternative to California cabernet.

I can see that. More than California, I thought of these big, modern wines as the malbecs of Spain, well tuned to a popular pitch.

“People are comfortable with them, and they’re easy to sell,” Ashley said. Still, she suggested that what is exported from Ribera del Duero doesn’t entirely reflect the range of styles available there.

Even if these wines are not particularly to my taste, what I looked for was balance, which characterized our top wines. The 2005 Montecastro, our No. 1 bottle, was dense and juicy, but rather than an overwhelming mouthful of sweet fruit, the plummy, berry flavors were tempered by a spiciness that added nuance, as well as vivacious acidity.

By contrast our No. 2 wine, the 2004 Tinto Figuero Reserva from García Figuero, which is aged in barrels for 15 months, was big, powerful and ultradark. It didn’t have the complexity of the Montecastro yet it, too, was well balanced. Tannins gave the wine shape and structure, and an earthiness blended well with the dense fruit flavors.

Our No. 5 wine, the 2006 Tinto Pesquera from Alejandro Fernández, who played a crucial role in the rise of Ribera del Duero, typified the well-balanced blend of fruit and oak flavors we found in so many of these wines. The 2006 Condado de Haza, which is also owned by Mr. Fernández, offered a fresher, less oaky approach, without the density that seemed to prevail.

Next to the other bottles, the 2008 Sastre Tinto stood out for its directness, simplicity and refreshing lack of polish. At $22, it was also our best value.

In the end, it pretty much comes down to taste. If you enjoy modern California cabernets, Argentine malbecs and new wave Riojas, these wines should be just right for you. If you prefer old-school Riojas, classic Rhones and wines that show an herbal touch now and then, these may not be for you. Better to wait and to hope for a benefactor to pour you a glass of Vega Sicilia someday.

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Billionaire Mallya's UB Group-india to Buy Heineken Venture, Alcohol Maker Stake

Billionaire Vijay Mallya’s UB Group will buy a stake in an Indian alcohol maker and merge its breweries, including a venture with Heineken NV, with United Breweries Ltd., the owner of the nation’s biggest beer brand.

United Breweries, the Bangalore-based maker of Kingfisher beer, rose as much as 2.9 percent to 448 rupees in Mumbai. The shares traded at 439.10 rupees as of 12:01 p.m. local time after the brewer said in a stock exchange filing it would absorb the group’s brewery units and acquire Millennium Alcobev Pvt., its venture with Amsterdam-based Heineken.

United Spirits Ltd., the group’s whiskey and rum making unit, separately announced that it would buy a 54.7 percent stake in Pioneer Distilleries Ltd. to boost capacity. United Spirits fell 1.3 percent to 1,602.30 rupees.

The Pioneer purchase will increase United Spirits’ alcohol manufacturing capacity by 160 kiloliters a day, according to the statement.

United Spirits will spend 740 million rupees ($16 million) to buy 7,322,280 shares of Pioneer at 101 rupees apiece, or a 44 percent premium to the stock’s closing price yesterday. Pioneer rose as much as 5.1 percent to 73.85 rupees. United Spirits will also make an open offer for a further 20 percent of Pioneer.

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Pepsi has the advantage in Hindi

NEW DELHI — Coca-Cola Co. offered to buy a refrigerator for Rajesh Yadav's store if he would sell only the company's drinks.

Yadav kept his part of the bargain: Lines of Coke and Diet Coke cans glisten behind the glass screens of the fridge. A red-and-white banner with a Bollywood film star chugging a bottle adorns his storefront.

Yet Yadav doesn't mention his partner when he describes his shop.

"I sell Pepsi and cigarettes," Yadav said in Hindi, India's most widely spoken language.

Still, he isn't reneging on his deal. Pepsi became a synonym for cola in Hindi after having the market to itself for three years until 1993 — a linguistic advantage that translates into higher sales. Its cola brand's market share is 73 percent greater than Coke's, according to Euromonitor, a consulting firm.

Coca-Cola had pulled out of India in 1977 after a change in government regulations would have forced it to partner with an Indian company and share the drink's secret formula. PepsiCo Inc. joined with two Indian companies and introduced Lehar Pepsi in 1990. Coke re-entered the market in 1993, after foreign brands were allowed to operate without Indian partnerships.

"Pepsi got here sooner, and got to India just as it was starting to engage with the West, and with Western products," said Lalita Desia, a linguist at Kolkata's Jadavpur University who studies how English words enter Indian languages. "And with no real international competition, 'Pepsi' became this catch-all for anything that was bottled, fizzy and from abroad."

In much of the Hindi-speaking belt of northern India, home to three of the five most populous states, children begging at street corners will point to bottled juices inside cars and plead for "Pepsi." Mahipal Singh, who drives a truck route between Delhi and Bihar, terms his rest stops "Pepsi-wepsi" breaks, regardless of what he is drinking.

"Saying 'Pepsi' connotes getting a soft drink," said Kiran Bhushi, an anthropologist at Indira Gandhi National Open University who researches middle-class consumption patterns and has consulted for both companies. "How exactly does someone like Coke dislodge this idea from a consumer's brain?"

Tea on top

Coca-Cola must also contend with consumer preferences for other drinks. About 90 percent of India's beverage market is composed of tea, milk and coffee-based drinks, with bottled soft drinks holding less than 5 percent, according to Harish Bijoor, who runs a brand consulting and strategy business in Bangalore. The company relies on drinks other than Coke to be the country's top beverage seller.

"Cola in India is still an evangelical task, because it's not a lifestyle habit yet," Bijoor said.

Coca-Cola needs growth in overseas markets to offset at least four years of declining U.S. sales volumes for its soft drinks.

India's economy expanded 8.8 percent in the three months through June. Growth in the United States, the biggest market by revenue for both Coca-Cola and PepsiCo, slowed to 1.6 percent.

Sales by volume in India surged 31 percent in 2009, Coca-Cola Chief Executive Officer Muhtar Kent said in February without providing specific numbers. Indian sales of Coca-Cola, Diet Coke and Coke Zero grew 25 percent, according to the company's annual report. Last year, Coca-Cola turned a profit in India for the first time since re-entering the country in 1993 after a 16-year absence, according to spokesman Kamlesh Sharma.

While Coca-Cola uses the cola brand to drive market share in other countries, its top three products in India by sales volume are Kinley bottled water, Thums Up cola, and Sprite, according to Euromonitor. Mirinda ranks fourth and the Coca-Cola brand is at No. 5. Thums Up, a lemon drink called Limca, and an orange drink called Gold Spot were acquired by Coca-Cola in 1993.

"Pepsi is bigger than Coke as a brand, but Coke as a company has very smartly introduced other brands that have done very well," said Bijoor, the consultant.

That's Coca-Cola's strategy, said Atul Singh, the Atlanta-based company's president for India and South West Asia.

"We want every part of our portfolio to grow, so that any consumer, on any occasion, anywhere in India, makes a choice to drink a Coca-Cola product," he said.

Going after new business

Purchase, N.Y.-based PepsiCo, the world's largest snack-food maker, will invest "aggressively" in emerging markets, according to Chief Executive Officer Indra Nooyi. Last year's sales in Asia, the Middle East and Africa grew 12 percent. In India, retail sales of its products, including Frito-Lay potato chips, Quaker Oats and fruit juices such as Tropicana, are worth $1.5 billion. PepsiCo had $43.2 billion in sales last year.

"The Pepsi brand becoming the default name for the cola category is certainly a big positive," spokesman Sandeep Arora said in an e-mail. "It can also be a double-edged sword if the marketer is not able to differentiate the brand from the rest of the category."

Coca-Cola has run an advertising campaign called "Thanda Matlab Coke" ("Cold Means Coke"). North Indians use "thanda," the Hindi word for cold, as a noun when offering someone a drink.

"It was definitely a good idea," said Bhushi, the anthropologist. "If Pepsi means cola, then emphasizing that a 'thanda' means Coke is perhaps the best way to gain control of the vocabulary."

"Thanda Matlab Coke" runs across the red-and-white poster at Yadav's New Delhi store. His biggest seller, though, isn't Coke.

"People ask for Pepsi, and I give them a Thums Up or a Coke," he said. "Thums Up they don't mind, but Coke, sometimes they say no."

Bloomberg News

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Coca Cola's largest China bottling plant to open in October

Coca Cola, the world's largest beverage maker, will begin operations at its largest bottling plant in China, a 900-million-yuan (132-million-US dollar) investment in Luohe City of central China's Henan province, by the end of October this year.

"We are very positive and committed to our growth here in China," said Glenn Jordan, president of Coca Cola Pacific Region, during an exclusive interview with Xinhua while attending the fourth Summer Davos forum held in north China's port city of Tianjin, on Monday.

The soft-drink giant already operates 39 plants in China. It opened three new plants in Jiangxi Province, Hubei Province and Xinjiang Uygur Autonomous Region last year. Also, it now has two factories under construction, including the largest one in Henan and the other in Inner Mongolia Autonomous Region.

Statistics from the company showed its investment in the new plant in Hubei Province has reached 600 million yuan, while the cost of the two-phase project in Jiangxi Province added up to 250 million yuan.

Jordan said these are all parts of Coca Cola's three-year, 2-billion-US dollar investment plan in China announced last March, and the project is now "well on track" in terms of infrastructure, marketing and product development.

Jordan believes the expansion was good for both sides. "On average, we are hiring around 10 people per day in the Coca Cola system and putting almost 1,000 coolers per day in the market."

The investment package also includes a 90-million-US dollar innovation and research center in Shanghai. One new beverage created at the center last November was Minute Maid Pulpy Super Milky, which combines fruit juice, milk powder, whey protein and coconut bits to create a creamy fruit-flavored dairy drink.

"The Shanghai research center has been very productive and very rewarding," Jordan said, "We have already taken some of its innovations and technologies to other parts of Asia and to the world's markets."

As for the business environment in China, Jordan believes the country is moving in a better direction, as it has continuously improved its business operating rules and regulations.

"We have been here for more than 30 years, during which China has changed rapidly. China has to adapt and evolve its strategies,

 and we can look back to our track record and find our way to the current changes," he said."We are very confident about the future of China and the future of our business here," he said, "In the case of the beverage sector, I don't think there is really something in China hurting us or that is not conducive to good business."

Special Report: Global Financial Crisis

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New Jersey's wine market is aging well

Winemaker Larry Sharrott 3d looked through a kaleidoscopelike instrument called a refractometer, measuring the sugar content of a just-pressed batch of chardonnay grapes. He liked what he saw.

This summer's hot, dry weather has produced the best grape harvest in South Jersey in years, growers say - high in sugars and full in flavor. "Napalike," Sharrott said.

Sweet wines made with American grape varieties or other fruits - cranberries, peaches, blueberries - have long dominated New Jersey's wine industry. But with the number of wineries soaring in the last decade from 12 to at least 40, that's changing.

Sharrott and his father, Larry Jr., started growing mostly European varieties on a former apple orchard in Winslow seven years ago. They joined a group of new and long-established wineries set on making robust red and fine white wines they hope will someday hold their own against the heavy hitters in California - at least in the fight for space on wine lists in the Mid-Atlantic region. This year's vintage will help, they say.

"We wanted to produce a good wine that happens to be from New Jersey," said the younger Sharrott, 35. "Not something that makes people say this is a good wine - for Jersey."

Sharrott splits his time between a job in software at Lockheed Martin and the vineyard, where he manages much of the science of winemaking, researching grape varieties, measuring pH and sugars, and keeping the yeasts happy during fermentation. His father handles the business end and wine blending.

On a breezy morning, they manned the crush together. The younger Sharrott used a forklift to tip 1,000-pound bins of chardonnay grapes into a machine that removes stems. His father, 62, a retired hospital executive, monitored the process that followed, as crushed grapes were pumped into a press and then out as juice and into a fermentation tank.

"This is one of those jobs that's very glamorous until you actually do it," the father said.

The Sharrotts' winemaking venture began as an at-home hobby. They opened the winery to the public about 21/2 years ago. Last winter, they won one of their top honors when their 2008 Cabernet Franc won a gold medal at the San Francisco Chronicle Wine Competition, the largest competition in the country.

Longtime winemaker Louis Caracciolo said he was glad to see craftsmen like the Sharrotts enter the market. He has been making wine at Amalthea Cellars in Atco since 1976.

He talked about the change in New Jersey winemaking with the giddiness of someone who can finally share a long-held secret: Good wine can come from the Garden State.

Just as Napa emerged as a competitor against the French after winning a blind taste test in Paris 34 years ago, Caracciolo said his state eventually would emerge as a competitor to California in quality, if not volume.

The Golden State produced more than 89 percent of all U.S. wine last year - 631.6 million gallons compared with 1.7 million in New Jersey, according to the Treasury Department. Pennsylvania winemakers turned out 747,054 gallons.

Because few New Jersey wines are distributed outside the state, they receive little or no notice from publications such as Wine Spectator.

As evidence that could change, Caracciolo pointed to national awards that his and other New Jersey wines had earned and the expansion of the region's wineries to handle increased demand.

And they have a new marketing tool. Though it lacks the renown of the Napa Valley or Sonoma Valley, New Jersey's wine region in 2006 earned a federally designated name: Outer Coastal Plain.

"The industry is evolving in New Jersey, and it's getting noticed," state Agriculture Secretary Douglas Fisher said.

Fisher regularly fields questions from people interested in growing grapes in New Jersey. The growth has brought a lot to the state, he said - agriculture-based tourism, an opportunity to preserve more farmland, and another source of income for long-term farmers.

It took some time for Ed Gaventa, a fourth-generation farmer in Logan Township, to convince his parents that grapes were a good addition to their fruit and vegetable farm. His father was raised Quaker and never drank wine, he said. His mother was unsure about the value of the investment.

But the family decided to put 87 acres into farmland preservation and use the money earned from selling the development rights to start a winery. The Gaventas planted grapes in 2004 and started making wine in 2007.

Their Cedarvale Winery sells primarily from a tasting room and at weekly vineyard events.

The state's winemakers are "all getting better and better," Gaventa said. "We're actually running short."

But are New Jersey wines catching on where it matters - with the wine drinker?

"Eighty percent of people looking for New Jersey wines are looking for sweeter wines," said Vladi Nikolich, manager of WineWorks in Marlton, which has a large section of local wines mostly filled with blueberry or cranberry and the popular Cape May Red, a sweet table wine made by Tomasello Winery in Hammonton.

Many of New Jersey's finer wines are priced between $20 and $28. Nikolich said wine buyers today are educated. They know they can get a better California or European bottle for the same price, he said.

Sweet wines from Tomasello Winery, one of the state's oldest, are among the best-selling. But at a media event to demonstrate the crushing process and this season's strong harvest, owner Charlie Tomasello talked mostly about the winery's Outer Coastal Plain varieties.

New Jersey winemakers are trying "to develop their regionality," Tomasello said. "It's a hard nut to crack."

By Chelsea Conaboy

Inquirer Staff Writer

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Brewers Association Announces 2010 Great American Beer Festival Competition Winners Competition Continues to Grow; 2010 Entries up Nine Percent

BOULDER, Colo., Sep 18, 2010 (BUSINESS WIRE) --

The 2010 Great American Beer Festival (GABF) competition drew an impressive field of competitors, with 2010 topping last year's entries by nine percent. GABF remains the largest commercial beer competition in the world, with 3,523 beers vying for medals (compared to 3,308 entries in 2009).

View the 2010 winners list or download a PDF list of the winners.

Highlights:

-- The most competitive category was again American-Style India Pale Ale with 142 entries and a broader geographic distribution of winners than in the past.

-- TAPS Fish House & Brewery was the first-ever winner of the new Brewpub

Group of the Year category, with Brewmaster Victor Novak taking home the honors.

-- The competition saw increased geographic diversity among medal winners, with an emerging trend of winners from the Midwest and the Southeast alongside the traditionally successful states like California and Colorado.

2010 Brewery and Brewer of the Year Awards

Small Brewing Company and Small Brewing Company Brewer of the Year Sponsored

by Microstar Keg Management Mad River Brewing Company Brewing Team Mad River Brewing Company

Mid-Size Brewing Company and Mid-Size Brewing Company Brewer of the Year Sponsored by Crosby & Baker Ltd. UBC Brewers Utah Brewers Cooperative

Large Brewing Company and Large Brewing Company Brewer of the Year Dr. David Ryder Blue Moon Brewing Company (owned by Miller Coors)

Brewpub Group and Brewpub Group Brewer of the Year Sponsored by Country Malt Group Victor Novak TAPS Fish House & Brewery

Small Brewpub and Small Brewpub Brewer of the Year Sponsored by Briess Malt & Ingredients Co. Noah Regnery Pizza Port San Clemente

Large Brewpub and Large Brewpub Brewer of the Year Sponsored by Brewers Supply Group Pizza Port Brew Guys Pizza Port Carlsbad

2010 Great American Beer Festival Pro-Am Competition Sponsored by Briess Malt & Ingredients Co and HopUnion

Medals were also awarded in the GABF Pro-Am competition, which pairs amateur American Homebrewers Association (AHA) brewers with professional brewers, who scale up the award-winning homebrew recipes:

Gold Medal Red Velvet, Eagle Rock Brewery, Los Angeles, CA Brewmaster: Eagle Rock Brewery Brew Team AHA member: Donny Hummel

Silver Medal Ryed Hard & Put Away Wet, Rockyard Brewing Company, Castle Rock, CO Brewmaster: Jim Stinson AHA member: Adam Glaser

Bronze Medal Bronze: Robust Porter, Wormtown Brewing Company, Worcester, MA Brewmaster: Ben Roesch AHA member: Keith Antul

Great American Beer Festival 2010 Statistics

-- 455 breweries in the festival hall

-- 2,200+ beers served at the festival

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Wine distribution options at stake Proposed law would eliminate dualing practice By Bill O'Brien

TRAVERSE CITY — Northern Michigan winemakers worry that a bill in the state Legislature will slash their distribution options and stunt wine-industry expansion.

The deep-pocketed Michigan Beer & Wine Wholesalers Association backs the proposed law, which would eliminate a practice known as dualing that allows wineries to use more than one distributor.

It would establish exclusive wine-distribution territories requiring wineries to use a single wholesaler in a specified region, similar to the system that's regulated beer sales in Michigan for almost 30 years.

Winemakers said such a law would limit their distribution outlets, especially for newer, smaller wineries that don't have long-standing relationships with major alcohol wholesalers. Dualing is not a common practice among Michigan wineries, and several area wineries said they have good relationships with their distributors.

But dualing gives them leverage against poor distributors and the ability to pursue other wholesale outlets if they can't get their products to the market. A ban on dualing would diminish that freedom.

"It's limiting our marketing and our choice," said Bryan Ulbrich, owner of Left Foot Charley Winery in Traverse City. "Distributors constantly change hands ... I could suddenly be an also-ran and they could hold my brand hostage in a warehouse."

Supporters contend the measure would not limit wine-industry growth. Its aim is to offer protection for Michigan wholesalers who otherwise might lose business to larger distributors or wineries that could be located in other regions or states, they said.

Mark Ribel, a principal at H. Cox and Sons Inc. distributors in Traverse City, said a dualing ban would establish "territorial integrity" for alcohol distributors. Local distributors take on infrastructure costs, he said, for setting up distribution systems in their areas that include warehouses, shipping equipment and employees.

Doing away with dualing would secure those investments, he said.

"It helps protect jobs and the tax base of local communities by having these laws in place," Ribel said. "I don't see a downside to our local wineries."

Area winemakers disagree.

"This doesn't seem like something that should be legislated," said Liz Berger, operations manager at Chateau Chantal winery in Grand Traverse County's Peninsula Township. "To make that kind of a contractual arrangement legislated, it seems like bad will and almost greedy."

Chateau Chantal uses multiple distributors, but its distributors' regions don't overlap. Ulbrich's winery uses one distributor and also self-distributes its products, which wouldn't be impacted by the bill. But both winemakers said losing the dualing option could limit their ability to sell their wares.

"We're small guys," Ulbrich said. "We could easily get lost in a larger wholesaler."

Contributions, bipartisan support

A bill to eliminate wine dualing breezed through the state House on Sept. 8 by a 99 to 5 vote and moved to the Senate. But fast-track consideration slowed last week, when the Senate's Economic Development and Regulatory Reform Committee postponed a scheduled review. A new hearing date has not been set.

Several legislators who sponsored or support the House bill accepted campaign contributions from the Michigan Beer & Wine Wholesalers Association. Two co-sponsors, Republican Rep. Tory Rocca, of Sterling Heights, and Democratic Rep. Tim Melton, of Auburn Hills, received more than $2,400 in travel and lodging expenses from the Wholesalers Association to speak at its winter convention in the Cayman Islands, according to state campaign-finance records.

Rocca also received $5,000 from the Wholesalers for his state Senate campaign, while Melton received $2,500 for his re-election campaign.

Several other bill sponsors reported Wholesaler contributions for re-election campaigns or to support their efforts to run for other seats, state campaign-finance records show.

The Wholesalers group significantly contributes to candidates in both major political parties, said Rich Robinson of the nonprofit, nonpartisan Michigan Campaign Finance Network.

"They're agnostic as far as party goes, as far as I can tell," Robinson said. "It's almost anybody who's sucking air who's not a teetotaler."

The churn of politicians guaranteed by state term limits means political fundraising is "more aggressive than it's ever been," Robinson said, and special-interest groups want lawmakers to address their pet issues before they leave office.

"Any interest group that gives money to office holders is making an investment, and they're going to want some policy payback on their investment," Robinson said. "They don't hand this money out for selfless reasons. That's the system we have."

Democrat state Rep. Dan Scripps, of Leland, supported the House bill, despite opposition from wineries in his home base of Leelanau County, including Leelanau Cellars, the state's largest wine producer.

Scripps accepted nearly $2,500 in Wholesalers' contributions in the current election cycle, but he disputed the suggestion that campaign cash spurred the dualing bill.

"There are very good arguments for this legislation outside of campaign contributions," Scripps said. "If I believed this was bad for our local wineries, I would've voted against it."

Bill opposition

Two other northern Michigan representatives, Republicans Wayne Schmidt, of Traverse City, and Kevin Elsenheimer, of Kewadin, were among the five House members who opposed the bill.

"Some of the larger wineries in northern Michigan expressed their concern with the bill," Schmidt said. "I thought it was important to vote with them on this particular issue."

State Sen. Jason Allen, R-Alanson, hasn't taken a position on the bill and planned to meet with regional winemakers to discuss the proposal, said Norm Saari, Allen's chief of staff. Saari said the dualing bill is part of several pieces of pending legislation that could affect the state's licensed beverage industry, including proposals to raise close to $9 million in revenue through new fees on the industry.

A spokesperson for Gov. Jennifer Granholm's office said she is reviewing the wine-dualing bill and hasn't taken a position.

Mike Lashbrook, state Wholesalers president, said the wine industry is divided on the bill, and some Michigan vintners favor it. A law would not change the status quo for most wineries that already use a lone distributor in a particular region or self-distribute their products, Lashbrook said.

If the state outlawed dualing, it would eliminate the potential for large, out-of-state wineries or distributors that might set up a "vertical monopoly" in certain areas that could crush smaller, local wineries' products, Lashbrook said.

"It really doesn't change anything in the marketplace today as far as who's handling what," Lashbrook said.

But Robert Elhenicky, a lobbyist hired by bill opponent Wine Michigan, countered "the dual is the only way to keep your wholesaler honest."

"To take away the only check-and-balance that exists for wineries is counter-productive to growing an industry," he said.

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