1 / 16

2007 Winter Meeting

2007 Winter Meeting. Beer Institute Industry Update. Presentation by Lester Jones, Chief Economist Beer Institute, Washington, DC January 7, 2007 ljones@beerinstitute.org. 2006 Changing US Market. Top 2 Brewers gain 1.5% market share though acquisitions –

geraldine-aguirre
Download Presentation

2007 Winter Meeting

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 2007 Winter Meeting Beer Institute Industry Update Presentation byLester Jones, Chief EconomistBeer Institute, Washington, DCJanuary 7, 2007 ljones@beerinstitute.org

  2. 2006 Changing US Market • 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.

  3. Total Industry 2006 November YTD (1,000s of Barrels) Note for 2006: Molson/Coors closes Memphis brewery and temporarily moves some production including NAs to Canada. Source: Beer Institute, 2006

  4. Domestic ProductionQuarterly 2004 through 2006 Source: Beer Institute, 2006

  5. Imports Continue to Show Strong GrowthTop 6 Importing Countries (31 Gallon Barrels) Source: Commerce Department, Bureau of Census and Beer Institute, 2006

  6. Expect Imports to grow to over 28.3 million barrels for 11% gain in 2006 Imports of Malt Beverages31 Gallon Barrels (1,000s) Share will grow to 13.5% in 2006 Source: Commerce Department, Bureau of Census

  7. Shipments and GrowthTop 10 States YTD November 2006 Total US Brewer/Importer Shipments to Distributors up 1.7% November YTD Source: Beer Institute, 2006

  8. 10 Highest Growth Rate StatesYTD November 2006 Total US Brewer/Importer Shipments to Distributors up 1.7% November YTD Source: Beer Institute, 2006

  9. 10 Highest Volume Growth StatesYTD November 2006 Total US Shipments from Brewers to Distributors up 1.7% November YTD Source: Beer Institute, 2006

  10. 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

  11. 2005 Effective Excise Taxes (Tax per Gallon) US Median at $0.19 per gallon with a range from $1.07 in Alaska to $0.02 in Wyoming. Does not include: Puerto Rico at $4.05/gallon, County/local excise taxes, states sales taxes, or special on-premise taxes. Each state becomes a unique case study in taxation. Source: Beer Institute, 2006

  12. Total US Effective Excise Tax1970 to 2005 Total US effective excise tax held steady for last 12 years at average $7.80 since 1994! Beer is over taxed compared to the rest of the economy. Excise taxes combined with other taxes paid by brewers, importers, distributors, and retailers amount to the burden on beer being more than 68% above the tax rate on the rest of the economy. Source: Beer Institute, 2006

  13. Consumer Expenditure Survey, 2005Average Expenditures by Income Source: 2005 Consumer Expenditure Survey, BLS.

  14. Beer Gets the Largest Share of Alcohol Budget Spending by Household Income On average, in 2005 all US households spent about $426 on all alcohol beverages Households in the <$49K category spent 57% of their “alcohol budget” on beer while high income households only spent 41% on beer. Beer taxes burden lower income households more than high income households. Source: 2005 Consumer Expenditure Survey, BLS.

  15. 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

  16. THANK YOU

More Related