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US CONFERENCE
First and foremost for suppliers
CASE STUDY: CODORNIU
THE US
carried away by a distributor’s
handshake after a good lunch, One solution to balancing federal
GOVERNMENT’S O’Brien’s message is “Get a written legislative requirements with the
SENSE OF
contract”. Painfully obvious as this inconvenience of managing
may seem, many foreign suppliers distribution through several
HUMOUR IS
are unaware of the strict franchise importers was seen in Codorníu’s
LIMITED WHEN
controls operated by several states, 2007 purchase of the business
which can make it very difficult now called AV Brands. Not only
DEALING WITH
to change distributor if it is did this step buy the Spanish Cava
no longer meeting the needs of brand an established business
THOSE WHO,
the brand. complete with portfolio,
EVEN
Even when all relevant licences, infrastructure and clients, it also
labelling and registration hurdles provided the opportunity to share
INADVERTENTLY, have been cleared by a producer, in the US profit of other brands
CONTRAVENE
usually with the help of its US imported by their new company,
importer, there remain tight which includes Two Oceans. In
REGULATIONS
regulations governing promotional addition to its core Cava business,
activity. Here in particular it is Codorníu also owns wineries
possible for informed suppliers to including Artesa in Napa Valley,
remain on the front foot and which give it still further control
develop a creative marketing over US distribution and profits.
approach to navigating their
product safely through these
recommends Miami as a starting launched into the US nine months restrictions. A word of warning, citing discrimination is changing
point, where regularly shared traffic ago. This proved to be an expensive however, from O’Brien for those the rules and, once the goal
with New York can facilitate further exercise, with little long-term sales who fail to do their homework: “It is posts are set, hopefully this process
expansion by word of mouth. If it uplift once promotional fervour had a criminal offence to violate trade will be easier. As current
reaches the point where retailers moved on to the next brand. practices and many overseas regulations stand, however, most
and bars are initiating contact with However, all the strategy, planning representatives don’t realise this.” companies will find it
the distributor then phase one of the and commitment in the world Anecdotal evidence suggests that more cost effective to continue
battle is won. amounts to nothing if a brand the US government’s sense of using a distributor. Among other
It is at this point that commitment crosses the immoveable dragon humour is limited when dealing with factors, only companies with a
from the producer is key to that is the Alcohol and Tobacco Tax those who, even inadvertently, US office base may apply
generating sustainable excitement and Trade Bureau (TTB). The contravene regulations. for the certificates of label
for its brand. However successful hangover from Prohibition means approval (COLAs) required for all
the distributor may be at opening that certain regulations on alcohol Beating the system alcoholic beverages.
account doors, this needs to be sales, branding and marketing will For all its rigidity, the US legal However difficult the timing of the
supported by marketing activity, vary from state to state, creating a system is gradually allowing some US Drinks Conference may have
ideally from the supplier. Whether potential minefield for European alternatives to the infamous proved for the organisers, with
this involves educating bar staff importers trying to establish “three-tier system”, which, scripts being revised each time a
about the product, sending the themselves in one state, never dependent on your viewpoint, government bailed out a bank, or
winemaker over for tastings, mind 50. either separates or unites producer didn’t, it was perhaps more
providing gift packaging, setting up Some of the biggest pitfalls for and consumer. Direct shipping is important than ever that European
in-store floor displays or preferably importers were highlighted by permitted by an increasing businesses with an interest in the US
all of the above, there are options Vincent O’Brien, senior counsel at number of states, and has now market had access to this breadth
for every budget. Some approaches Nixon Peabody LLP, whose expertise been extended by some to foreign and depth of expertise. The
will prove more successful than in US beverage alcohol law has imports. However, direct sales message taken home was clear:
others, as David Phelan, managing made him hot property on advisory currently account for just 1.5% of there is still gold to be had in the
director of The Coole Quay Liqueur committees and international US imports, proving a viable US, but the supply is limited and
Co, discovered when he organised conferences as the key to option for only the most niche, only those prepared to offer a
a promotion in a high-end US unravelling a complex system which limited-quantity products. For rigorously researched business plan,
nightclub to market Coole Swan, a has scuppered many an unwary the moment, every new legal distinctly positioned product and,
super-premium Irish cream liqueur business plan. challenge from frustrated suppliers above all, patience, need apply. db
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