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Lynn M. Walding, Administrator

 e - NEWS

October 5, 2007


1. Ahead of the Bell: Tobacco Regulation

2. Legislative Push: Two Calif. Cities to Vote on Banning Smoking in Apartments

3. Court Rejects Tobacco Case

4. Bush Veto Gives Victory to Tobacco Industry

5. Why Price Increases Are Brewing for Craft Beers

6. Pernod Ricard Eyes U.S. Buys – Executive

7. Drivers Ages 21 to 34 Disproportionately Involved in Drunk-Driving Fatal Crashes


8. Italian Wine Production at 50-Year Low

9. Anheuser-Busch Marches into Chinese Third-Tier Market

10. Heineken Sued Over Dutch Beer Cartel


11. Sales Drop Follows Cigarette Tax Increase

12. Alcohol Tickets Pour In

13. Battle Over the Bars has Begun

14. Ames Coach Arrested for Third DWI

15. Car Hit Camper at 87 mph, Troopers Say

16. People Unhappy with 'Beer Garden' Ad

17. IHP Liquor Sting


18. Becomes Largest Beer Producing State in the Nation (Colorado)

19. Couple Sentenced in Teen Drinking Case (Illinois)

20. Wine Shipping Bill Signed by the Governor (Illinois)

21. State to Receive Grant to Curb Underage Drinking (Kansas)

22. Wet-Dry Issue Gets Hot Quickly in 3rd District (Kentucky)

23. Commercials Target Underage Drinking Problems (Massachusetts)

24. Democrats’ Refusal to Pass Temporary Budget May Shutter Michigan Government, Prevent Restocking Liquor Stores (Michigan)

25. Judge Strikes Down Breath Tests for Pedestrians (Michigan)

26. High School T-Shirts Cause Controversy (New Hampshire)

27. Liquor Chief Takes a Tough Approach (New Hampshire)

28. Two Charged in Rider Alcohol Death Enter Program, Avoid Prison (New Jersey)

29. WSWA Hails New York Decision Upholding State-Bases Alcohol Regulation (New York)

30. Bill would Ban Alcohol Ads on Buses, Subways (New York)

31. Ohio's Restrictions on Out-of-State Wine Shipments Begin (Ohio)

32. Parents Being Warned of Look-Alike Alcohol Energy Drinks: Youth May be Target (Oregon)

33. Supreme Court won’t Hear Appeal of Rhode Island's Franchise Liquor Store Law (Rhode Island)

34. Supreme Court Upholds Former Police Chief's Conviction (South Dakota)

35. Liquor Store Employees Accused of Bootlegging Alcohol (Texas)

36. Alcoholic Drinks May Be Pulled from Utah Stores (Utah)

37. UW-Madison Introduces New Football Game Drinking Policy (Wisconsin)

38. Man Drowns in La Crosse During Oktoberfest Celebration (Wisconsin)

39. High Court Hears Case against Madison Bar Owners (Wisconsin)

National News

1. Ahead of the Bell: Tobacco Regulation

At a House subcommittee hearing set for Wednesday, federal lawmakers will debate initiating federal regulatory control over what goes into cigarettes.

Associated Press
October 3, 2007

The legislation, which has already cleared a key Senate committee, would allow the Food and Drug Administration to regulate the levels of tar, nicotine and the other 4,000 cigarette ingredients, of which 40 are known to cause cancer.

The 10 a.m. EDT hearing in the House Energy and Commerce subcommittee will take up the bill, which also would give the FDA the ability to restrict the advertising and marketing of cigarette products.

Similar efforts have failed to pass Congress in recent years, although analysts say a Democratic majority may be more willing to expand the FDA's authority. The House bill is co-sponsored by nearly 200 representatives.

The effort toward more regulation has the support of Philip Morris, a unit of Altria Group Inc. that sells the most cigarettes in the U.S.

Philip Morris rivals, such as the Vector Group Ltd. and Reynolds American Inc., argue that the bill would give Philip Morris the opportunity to maintain market dominance because it can spend more on lobbying than most competitors.

The company also would have a bigger budget to fund scientific studies of reduced-risk cigarettes, which would undergo FDA review if the pending bill becomes law.

Witnesses from academia, the Institute of Medicine and the National Association of Convenience Stores are scheduled to appear at the hearing.


2. LEGISLATIVE PUSH: Two Calif. Cities to Vote on Banning Smoking in Apartments

Welcome to Smoking Wars 2007. As tens of thousands of apartments and condos go smoke-free, a new battle is opening in the nation's decades-long fight over tobacco. Smoking bans have spread from workplaces to restaurants, bars, parks, ATM lines, cars with kids and now private residences.

Wendy Koch

USA Today
October 3, 2007

Two city councils in California are moving toward making it illegal to smoke in apartments and condos, but most of this growing movement comes from landlords and condo associations acting on their own.

"It's a sign of the times," says Jim Wiard, portfolio manager of Guardian Management in Portland, Ore. His company began a smoke-free policy last month in 8,000 rental units in the Northwest, giving smokers until January to quit or move. He says more companies will follow because tenants are demanding clean air.

"We're advertising that we're smoke-free," Wiard says. "It's a sought-after amenity."

The number of smoke-free apartments and condos has risen quickly in recent years, says Jim Bergman, director of the Smoke-Free Environments Law Project, a Michigan effort launched three years ago partly with state funding. In Michigan, he says, more than 600 buildings with at least 6,000 units ban smoking, up from no buildings four years ago.

Bergman says 48 public housing authorities nationwide have adopted no-smoking policies, but there is no national tally of the number of smoke-free units.

In Maine, 37% of landlords have smoke-free policies in at least one building and few hear complaints, says Amy Olfene, project director of the Smoke-Free Housing Coalition in Maine. Her group lists 1,631 smoke-free units on its website.

Bergman says smoke-free housing is a win-win for the rental industry, because landlords can reduce fire risks and cleaning costs while pleasing the approximately 80% of American adults who don't smoke.

"There's a huge market need," says Kylie Meiner, tobacco prevention project coordinator of Oregon's Multnomah County Health Department. She says a 2006 survey of 400 renters in the Northwest, funded partly by her department, found 76% of renters prefer a smoke-free unit but only 20% live in one.

"The big thing is the turnover costs," says Robert Couch, president of Virginia-based Centrum Management. He says a smoker's unit costs $800 to $2,000 more to clean when the tenant vacates. In September 2006, his company banned smoking in more than 5,000 units in six states. Couch says his company has had no problems enforcing the policy.

Some neighbors, however, have fought over smoke.

In Baltimore in May, newspaper editor Frank J. Keegan was arrested after allegedly pointing a gun at his neighbors during a dispute over his smoking. A police report said David Ayers complained that cigarette smoke from Keegan's row house caused his 3-year-old daughter to have trouble breathing.

At least 27 lawsuits over smoking in multi-unit housing have been filed since 1991, some by smokers and others by irritated neighbors, says Edward Sweda, attorney at Northeastern University School of Law's Tobacco Control Resource Center. He says judges side more with non-smokers, ruling smoke a "nuisance" akin to loud noise.

"There is no constitutional right to smoke," says Brian E. Martin, the attorney who represented the condo association against the Sauves. "The smell of smoke alone is obnoxious. The court agreed."

Landlords have a right to ban smoking in their rentals, but private property owners should be able to do what they want in their homes, says Gary Nolan of the Citizens Freedom Alliance and its Smoker's Club. Nolan says no research proves smoke from one unit can harm someone in another unit.

The Surgeon General's report last year said no level of secondhand smoke is safe. However, no major study in an apartment building has shown the extent of smoke drift from unit to unit, says Andy Hyland, epidemiologist at the Roswell Park Cancer Institute. He says smaller studies in single-family homes show an unhealthy amount of smoke wafts from room to room.

Marvin Freedenberg, 79, says he's glad his 200-condo building in Silver Spring, Md., began two months ago to bar smoking if it bothers others. Before that, he says, "you couldn't walk down the hall without being disturbed." He says he didn't complain about his neighbors' smoking for a long time because they're nice people and "you don't like to infringe on others."


3. Court Rejects Tobacco Case

Local News Watch
October 1, 2007

WASHINGTON - The Supreme Court on Monday rejected a request by tobacco companies to consider making it harder for smokers to prove they were misled by the industry.

In July 2006, the Florida Supreme Court dismissed a $145 billion punitive damage award against the tobacco companies for injuring smokers, saying that recognizing the huge class of victims was inappropriate.

The companies say that approach is unfair to them because the state court‘s conclusions were too general.


4. Bush Veto Gives Victory to Tobacco Industry

Triangle Business Journal

October 3, 2007

The tobacco industry scored a win Wednesday when President Bush vetoed a bill that would have expanded federal funding for children's health insurance through a big boost in cigarette taxes.

The State Children's Health Insurance Program helps pay for health insurance for children whose families aren't poor enough for Medicaid, but who still don't have health insurance. The proposal would have increased spending on the program by $35 billion over five years, with the idea of adding another 4 million children to the program, which now subsidizes coverage for about 6.6 million.

But the president had vowed to veto the bill, arguing that in many states, the SCHIP program has been extended to provide benefits to families who didn't need the aid. He also claims that such a major expansion of the program would amount to a step toward socialized medicine.

The tobacco tie-in to the legislation is simple: The SCHIP expansion would have been paid for by raising the federal excise tax on cigarettes by 61 cents a pack to $1. Tobacco companies lobbied strenuously against the proposal.

North Carolina's politicians were largely split on the issue, with Democratic Gov. Mike Easley supporting the bill even as the state's two Republican senators, Elizabeth Dole and Richard Burr, voted against it.

According to Easley's office, which cited the Congressional Research Service, the bill as passed by the House and Senate would have increased North Carolina's allocation of SCHIP money to $334 million from a previously expected $148 million. The governor argues that, at least in North Carolina, that money would be used not to expand the program to families who don't need it but to make sure that poor children get the insurance they need.

Dole and Burr have said they support the current SCHIP program and think the funding formula should be tweaked to make up for shortfalls the state now faces in funding it. But an expansion, they said in a joint statement Sept. 27, would be government largesse. And the tobacco tax increase, they said, would disproportionately harm the state's economy.


5. Why Price Increases Are Brewing for Craft Beers
That six pack of high-brow beer is about to come at a higher price, thanks to the sharpest surge in decades in the cost of the hops and barley that give each brew its distinctive taste.

David Kesmodel

October 5, 2007

Consumers could pay 50 cents to $1 per six pack more in the coming months for many small-batch "craft beers," as brewers pass on rising hops and barley costs from an unpalatable brew of poor harvests, the weak dollar and farmers' shift to more profitable crops. Other makers of craft beers, the fastest-growing segment of the U.S. brewing industry, say they may eat the higher ingredient costs, which will pare their profits.

"The hops are to Samuel Adams what grapes are to wine," says Jim Koch, founder of Boston Beer Co., maker of Samuel Adams Boston Lager, one of America's fastest-growing beers. The company has raised its prices just over 3% this year to help offset the hops and barley costs. Mr. Koch says that for next year, the company is "probably looking at the same or maybe more."

"The cost increases have been the largest we've ever faced, both in barley and in hops," says Mr. Koch, who founded the company in 1984. The company only buys hops that are grown on several thousand acres in Bavaria, and the crop has been smaller in the past two years, making them more expensive, Mr. Koch says.

The cost pressures could slow the expansion of American craft brewers, which account for about 5% of U.S. beer revenue, and even put some smaller ones out of business. Craft-beer makers also are battling other cost increases, including higher prices for glass, cardboard, gasoline and the stainless steel used to make beer kegs. "People are very concerned," says Kim Jordan, co-founder of Colorado's New Belgium Brewing Co., which makes Fat Tire Amber Ale, a top-selling craft beer. "It significantly affects profitability."

Big American brewers like Anheuser-Busch Cos. and SABMiller PLC's Miller Brewing Co. also face cost increases, but the impact isn't nearly as great for them. They use much less hops and barley in most of their beers, which is why they are lighter in taste and calories. A barrel of craft brew Sierra Nevada Pale Ale, for example, has about twice the malt and as many as five times the hops of a mass-market brew, like Budweiser or Miller High Life.

Large beer makers are also better able to secure long-term contracts to mitigate the impact of rising ingredient costs. Most spirits makers, such as Diageo PLC and Fortune Brands Inc., also face a relatively limited impact from global increases in the cost of grains such as corn.

The craft-beer segment has been among the few bright spots in the slow-growing U.S. beer industry. The number of barrels of craft beers sold rose 11% in the first half of this year against year-earlier levels, according to the Brewers Association, a craft-beer trade group in Boulder, Colo. Meanwhile, the Beer Institute, a Washington-based industry group, projects total U.S. beer sales, by barrel, will rise 1.5% this year. The boom in craft beers reflects heightened awareness of their brands and a willingness by American beer drinkers to pay an extra $2 or $3 per six pack to get a premium product.

Craft beer makers have faced escalating costs over the past year. Prices for malting barley, which accounts for a beer's color and sweetness, have jumped as farmers increasingly shifted to planting corn, which has been bringing higher prices because of high demand from makers of biofuels, like ethanol. The weak dollar also has made it more expensive for U.S. brewers to buy commodities from Europe.

The news worsened for craft brewers significantly in recent weeks. Firms that turn barley into brewing malt informed craft brewers of price increases ranging from 40% to 80%, and hops suppliers announced increases ranging from 20% to 100%, depending on the variety of hops.

The price of hops -- which give beers their bitterness and aroma -- has risen because of shortages across the globe, due in part to poor crops in Europe. Some European brewers are competing with American brewers for hops grown in the Pacific Northwest.

For years, hops were cheap due to a glut. That prompted growers over the past decade to replace hops with other crops, such as apples. Now, the amount of hops acres world-wide is about half the total of 12 years ago, says Ralph Olson, a hops dealer with Hopunion CBS LLC in Yakima, Wash. That's caused some hops varieties to quadruple in price over the past year, he says.

To cope with higher malt and hops prices, smaller brewers are trying to secure longer-term contracts for the ingredients. And, in some cases, they're tweaking their recipes.

At Bell's Brewery Inc. in Comstock, Mich., founder Larry Bell says he is substituting other varieties of hops into the brewer's Bell's Oberon Ale and Bell's Lager because he could only secure 60% of a Czech Saaz hops that he normally uses in the beer.

Mr. Bell says employees who test beers at his company haven't been able to detect a change with the new hops and that he won't make any changes that will compromise quality. Starting next year, he anticipates he will raise the price he charges beer wholesalers by 50 cents to 60 cents per case. Customers may see an even higher price increase because retailers typically mark up beer even further.

"I am concerned that there could be some small players out there that will fail because of this," says Mr. Bell, whose brewery sold its first beer in 1985.

Boston Beer has inked long-term contracts for some of its ingredient needs. But many smaller brewers, such as Allagash Brewing Co. in Portland, Maine, buy hops and malt on the open market, exposing them to huge price swings. Rob Tod, president of Allagash, says the company expects to absorb some of the recent cost increases. But it will likely impose some price increases, resulting in a four-pack of its Allagash White costing about $9 at retailers in the Northeast, up about 50 cents. "We're getting hit on all sides," Mr. Tod says.

Ken Grossman, the founder of Sierra Nevada Brewing Co. in Chico, Calif., says the brewer plans some price increases, but it's better positioned than others because a price spike for hops in the early 1980s prompted him to sign long-term contracts. "I've gotten calls of panic from other brewers," he says.

Dogfish Head Craft Brewery Inc. in Milton, Del., is coping by trying to make its operations more efficient, locking in commodity contracts as early as possible and weighing a price increase, says brewmaster Andy Tveekrem, whose company is known for "hoppy" beers like 60 Minute IPA, or India pale ale.

"I think there's going to be some brewers out there," Mr. Tveekrem says, "if they haven't looked that far ahead, that actually might run out of malt or hops, which would be a catastrophe."

6. Pernod Ricard Eyes U.S. Buys - Executive

September 28, 2007

French wine and spirits group Pernod Ricard, which plans to bid for Absolut vodka maker Vin & Sprit, would also like to own another winery, or buy a tequila or rum brand to expand its portfolio of offerings in the United States, a senior executive said Friday.

Pernod, which owns Chivas Regal Scotch whisky and Martell cognac, is the world's No. 2 spirits company, with nearly a fifth of the global market, behind Smirnoff vodka maker Diageo PLC .

But in the growing U.S. market, Pernod ranks third with an 8 percent share eclipsed by Caribbean rum maker Bacardi USA.

"It's not that we feel we are weak in the U.S.," Managing Director Pierre Pringuet said in an interview. "But if you compare it to where we are in the rest of the world, I would rather be in that 20 percent (range) where we are worldwide."

"Anything that could strengthen our position in the U.S. would be welcome," said Pringuet. He has been tipped to succeed Chief Executive Patrick Ricard, who is expected to retire next year.

Pernod's first priority is spirits, but that wine brands to complement the Jacob's Creek and Montana labels it already owns could be interesting.

"A good brand from California could very well fit into our portfolio," Pringuet said.

The company, which will introduce a 25-year-old, $299 a bottle Chivas Regal whisky in the United States on Monday adding to its portfolio of premium brands. Those include: Jamesons Irish whiskey, Perrier Jouet Champagne, Stolichnaya vodka as well as Beefeaters Gin.

Pringuet said this focus on expensive drinks helps insulate the company against economic swings.

"We're certainly not immune from the economy, but luxury goods in general are less sensitive than general consumer goods, possibly because rich people suffer less," Pringuet said.

"The start of this (fiscal) year, all in all, was very good. So far we haven't seen any impact at all from the financial crisis in the markets," Pringuet said. He declined to give a forecast for the year-end holiday season, which generally accounts for about a third of annual sales, except to say that he felt confident.

7. Drivers Ages 21 to 34 Disproportionately Involved in Drunk-Driving Fatal Crashes

Join Together
October 1, 2007

Drivers ages 21 to 34 comprise a disproportionate share of fatal motor vehicle crashes in which at least one of the drivers was legally intoxicated (had a BAC of .08 or greater), according to data from the National Highway Traffic Safety Administration (NHTSA).

Although drivers ages 21 to 34 were involved in 31% of all fatal crashes in 2006, they were involved in 43% of all fatal crashes in which at least one driver was intoxicated.

On the other hand, drivers ages 45 or older were involved in 36% of all fatal crashes, but just 23% of drunk-driving fatal crashes.

These findings suggest that prevention efforts may be most effective if they focus on educating young adult drivers about the dangers of driving while intoxicated.
II. International News

8. Italian Wine Production at 50-Year Low
Time-honored traditions of Italian winemaking have been thrown out of rhythm by the earliest harvest on record in 70 years.

Associated Press
September 26, 2007

There was little autumn picking this year. In some wine regions, growers began to harvest grapes during the first 10 days of August. In Soave, renowned for its white wines, the harvest started a month early-Sept. 1 for the traditional wines made from a crush of Garganega grapes, and earlier for grapes to make bubbly Spumante.

It has been a year of inversions: While the north basked in a July heat wave, the south suffered an unusual rainy season, meaning a northern boom of succulent early grapes has been offset by a bust of sorts in the south, where a deadly fungus spread through vineyards, cutting yields in wine-rich Sicily-one of Italy's top four wine regions-by 30 percent.

Consequently, Italian wine producers are forecasting their lowest production in 50 years: 1.14 billion gallons, down 13 percent from a year ago, along with an increase in prices of up to 30 percent, said Giancarlo Prevarin, president of the Italian Winemakers Association.

This year's crop of Soave Garganega grapes, grown on reddish volcanic turf deposited east of Verona millennia ago, have been declared unusually robust. Even a late hailstorm in August-the type of threat that can wipe out a season's work in a flash-caused little damage because of the advanced stage of maturity.

"It will be a southern wine, less flowery, more fruity" pronounced Aldo Lorenzoni, director of the Soave consortium of winegrowers-some 3,000 growers who produce 80 percent of the wine bearing the name Soave.

Most Soave growers work modest vineyards averaging around five acres and the vast majority, 2,800, contribute their pick to wines produced by a handful of local cooperatives, which have been working to improve their viniculture with experts at the University of Verona.

Lorenzoni says they will try to hold their prices steady-noting every price spike in the last 30 years has been followed by a steep decline, difficult for small growers to manage.

This year's bumper crop comes at a moment of renaissance for Italian wines, which eclipsed French wines in US sales in 2002, according to the Italian Winegrowers Association. Soave growers also note that white wines have found favor among diners seeking lighter fare-a turnaround from the era they refer to as the "French paradox" when reports on the health benefits of red wines crashed the white wine market.

This early harvest wasn't just the result of the hot summer; 2003 was even hotter, wine growers point out. It was the exceptionally mild winter-not unlike another early harvest easily recalled, 1945, the end of World War II.

Elderly residents recount fondly a spring so early that the cherries were already ripe and ready to eat when American soldiers arrived on April 25, Italy's liberation day.

This year, cherries were equally early. And by the time of Soave's annual Grape Festival at the end of September, which usually announces the start of the harvest, the vines surrounding this medieval town were nearly picked clean.

"Nature woke up early this year," said Giuseppe Coffele, who has more than 35 years experience making wine in Soave.

While there have always been incidents of exceptionally early harvests-like in 1945 and 1972-Coffele says the tendency over the last two decades has been toward an ever-earlier picking time.

He has been keeping records of temperatures and precipitation on his hillside vineyards in the hamlet of Castelcerino above Soave for more than three decades, and notes that two decades ago grapes were generally picked in October into early November. Now that has become mid-September into October.

Prevarin, who himself is director of the Colli Berici cellars in nearby Lonigo, said the early harvest makes little difference to the final product: The point is to pick the grape when it is ripe-be it August, September or October.

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