Pabst Names New CMO

FILED JANUARY 24, 2011

Dear Client:

Effective January 31, Jon Sayer joins Pabst Brewing Company as chief marketing officer, BBD has learned from a letter to employees by chief Dean Metropoulos. Sayer replaces former cmo Brad Hittle, who left the company in August amid some high turnover in the upper ranks of Pabst.

Jon Sayer comes from Pabst after seven years with Disney, leading their Disney Media Multi-Platform Sales in the Midwest and ad sales on Radio Disney, where he helped develop sales and marketing programs with companies such as Kellogg's, Wrigley, McDonald's and General Mills. Previously he was a vp at World Wrestling Entertainment, and is a graduate of the University of Wisconsin, Madison. At Pabst he will oversee Brand Teams, Marketing Services and Field Marketing. "Will be supported by Bryan Clarke who will continue to drive the strategic brand direction and programming," writes Dean.
KEG 1, LLC SET TO PURCHASE CENTEX BEVERAGE OF AUSTIN

It's been a long time coming, but KEG 1, LLC has entered into an agreement to acquire the assets of Centex Beverage, a 2.2 million case MillerCoors distributor in Austin. That brings KEG 1, LLC to over eight million cases in Texas. Centex sells MillerCoors, Diageo-Guinness USA, Heineken and other brands (but not Coors or Crown, which is still distributed by Capitol Beverage). The deal is expected to close in the first quarter. KEG 1, LLC chief Don Faust said "it has been a long time goal to distribute quality beers in Austin. Continuing the legacy established by Centex founder Lowell Lebermann is truly an honor and proud moment for me personally. Lowell was a tremendous business and civic leader". Lowell sadly died in July 2009.

Austin is a unique town in that it still has four beer distributors: Brown Distributing in the red system, Capitol Beverage with the silver system (and Crown), Centex Beverage with the blue-green system, and Ben E. Keith Beers with a craft/specialty imports division there. So there's still a lot of action to be had in Austin. And it's an important young adult market. The WSJ reported over the weekend -- in a feature on Austin -- said that the The Brookings Institution recently found it to be the country's most popular destination for the 25-34 demographic.

SABMILLER HAS OVERCOME OBSTACLES TO BID ON FOSTER'S BEER DIVISION

SABMiller has "overcome key obstacles to a potential takeover bid for the local brewing giant" Foster's, writes the Sydney Morning Herald yesterday. SABMiller, which has a small presence in the Australian beer market through its Pacific Beverages joint venture with Coca-Cola Amatil, is understood to have spent the past few months working with lawyers to solve some legal issues relating to its joint venture with CCA that have to date prevented it from making a lone bid for Foster's beer unit. Those obstacles are "now understood to have been sorted out, leaving SAB with the option to bid for Foster's." Foster's is understood to be set on February 15 to announce the demerger of its wine and beer divisions.

A-B FILES BRIEF IN CHICAGO APPEAL

A-B has filed a brief in their appeal of the remedy of the Chicago case. The brief is hardly that, weighing in at 72 pages, so we're going to just give you the (very) brief version of their brief, briefly. You'll recall that as a consequence of A-B attempting to purchase all of City Beverage in Chicago, a federal judge in September ruled Illinois' liquor code unconstitutional because it gave an advantage to in-state breweries, and leveled down so that no brewers could self-distribute, staying the decision until March. A-B agreed with the district court that the Illinois law is unconstitutional under Granholm, but it disagreed with the remedy. So they appealed.

The gist of A-B's argument in their brief is that the court, after declaring Illinois self-distribution law unconstitutional, erroneously looked to that unconstitutional law itself for a remedy. And the court fashioned a remedy "to accept the lawless views of the state actors who committed the violation in the first place."

A-B says that the "facts of the case are stunning." What are those facts? A-B outlines them:

-Since the beginning in 1934, the Illinois Liquor Control Act "has allowed brewers of beer to engage in wholesale distribution in Illinois", including A-B for over 30 years.

-Even after some amendments, the General Assembly "intended for brewers to be able to act as distributors."

-A-B contends that the Supreme Court has advised that "in cases of discrimination 'ordinary extension, rather than nullification, is the proper course.'" But instead of fashioning a remedy that is "consistent with the intent of the" General Assembly, it "fasioned a remedy consistent with the goals of the ILCC and its supporters..."

-This, according to A-B, is a "significant error of law." Why? Because it relied on the ILCC's interpretation of the law, instead of "independently examining the law and its application over time."

-The proper remedy, says A-B, is to allow "all brewers to act as distributors, just as the General Assembly has provided in the law, and just has been the case in Illinois for more than 70 years."

So there you have it, condensed. We'll see if the state, distributors, or others respond.

BEERPIC OF THE DAY: Many folks have been sending me a video that's gone viral of GrinOn Industries' new quick filling draft system, the "Bottoms Up Draft Beer Dispensing System," which fills specially designed plastic cups from the bottom up (56 cups filled on one minute). See the video here: http://www.grinonindustries.com


Until tomorrow, Harry

- Join us at the Fontainebleau Hotel in Miami on March 6 - 7, 2011 for our annual beer industry confab. More info here: http://www.beernet.com/beer_summit.php

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-Frank Wilzseck

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