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Wednesday, November 9, 2011

Bud Light Platinum coming, says Anheuser-Busch as U.S. sales slip

Bud Light Platinum, a long-germinating beer concept from Anheuser-Busch InBev that’s not quite Bud Light and not really Budweiser, will finally hit stores in January.

Belgium-based Anheuser-Busch, the world’s largest brewer, said Wednesday that the new beer “appeals to a key group of beer drinkers and expands consumer occasions.”

Platinum would have 6% alcohol by volume and 137 calories. Top-selling Bud Light, by comparison, has 4.2% ABV and 110 calories while Budweiser has 5% ABV and 145 calories.

Some beer enthusiasts suggest that Platinum is Anheuser-Busch’s attempt to take advantage of growing interest in craft beers, whose popularity has also sparked a recent boom in beer gardens and micro-breweries.

As overall U.S. beer sales by volume slipped 1% last year, the craft beer industry grew by 11%, according to the Brewers Assn. trade group.

But in a post on BeerAdvocate.com, Todd Alstrom postulates that Platinum may turn out to be a “faux-spirit infused beer” such as Bud Light flavored with the taste of tequila.

The Alcohol and Tobacco Tax and Trade Bureau has already approved a proposed blue and gray label that evokes the existing Bud Light label, according to Advertising Age magazine.

Anheuser-Busch isn’t the only beverage maker changing its product line.

Coca Cola Co. made a splash this fall when it said, in a company first, that it would temporarily turn 1.4 billion classic red cans white to raise awareness for deteriorating polar bear habitats. To tap into rising interest in eco-friendly products, Coke and PepsiCo revealed new bottles this year that the companies said were made from “plant-based” sources.

Anehuser-Busch also said Wednesday that its North American beer sales slipped 3.2% in the third quarter and that it had to increase its prices by an average of 3%.

Beer gardens growing in Southern California, with a twist

-- Tiffany Hsu

Photo: New Bud Light Platinum label. Credit: Alcohol and Tobacco Tax and Trade Bureau

Senators think they have solved the Internet sales tax problem

After years of trying to figure out how to force Internet companies to collect sales taxes on their purchases, Sen. Lamar Alexander (R-Tenn.) thinks he and a bipartisan group of senators finally have hit on the right solution.

Alexander joined Sens. Mike Enzi (R-Wyo.) and Dick Durbin (D-Ill.) on Wednesday to introduce federal legislation that would enable states to more easily collect sales taxes for online purchases made by their residents. They are among a group of 10 senators -- five Republicans and five Democrats -- co-sponsoring the Marketplace Fairness Act.

"If I were president of an online retailer...I would look at this week in Washington, D.C., and I'd make my plans to start collecting sales taxes wherever I sold things in the United States," Alexander said.

He predicted the legislation, which would give states the option of collecting sales taxes from online retailers with annual sales above $500,000, would pass Congress. The bill is similar to legislation already introduced in the House.

"I think we've finally found that sweet spot," Durbin said.

The bill has drawn support from conservatives, including the American Conservative Union, because it leaves it up to each state to decide whether they want to collect the sales tax. And the nearly solid wall of opposition from online retailers has cracked, as Amazon.com Inc., the giant Internet retailer, has backed the proposed legislation.

Enzi said existing law, which requires consumers to voluntarily pay sales taxes for online purchases, costs state and local governments about $23 billion annually.

The legislation come as states have been trying to solve the problem on their own. California has enacted legislation requiring online retailers with subsidiaries in the state to collect sales tax from California customers.

Amazon, which has fought such efforts in other states, had threatened to launch a referendum battle over the California law. But last month, Amazon agreed to begin collecting the taxes starting in September 2012.

Amazon said Wednesday it "strongly supported" the Senate legislation. Alexander, Durbin and Enzi cited Amazon's support as an indication the proposal would not endanger online retailers.

The law would allow states to become part of a group of 24 states that have adopted a streamlined system to reduce the complications for retailers in figuring out a customer's exact sales tax. The law also would allow states to collect taxes on their own if they adopted some simplification requirements.

"It's about closing a tax loophole," Alexander said. "It's about stopping the subsidization of some businesses over others."

But some high-tech groups, along with online auction site eBay, said they oppose the legislation.

“This is another Internet sales tax bill that fails to protect small-business retailers using the Internet and will unbalance the playing field between giant retailers and small-business competitors," said Tod Cohen, eBay's vice president for government relations. "It does not make sense to expand Internet sales tax burdens on small businesses at a time when we want entrepreneurs to create jobs and economic activity.”

Amazon offers to serve as tax collector -- for a price

California leads the way in putting Amazon in its place

-- Jim Puzzanghera

Photo: Sen. Lamar Alexander (R-Tenn.) predicts legislation, which would give states the option of collecting sales taxes from online retailers with annual sales above $500,000, would pass Congress. Credit: Reuters

Bipartisan trio of U.S. senators to introduce federal sales tax collection bill

Congressional efforts to pass a nationwide law enabling all states to collect sales taxes on Internet purchases is gaining momentum.

A bipartisan trio of senators scheduled a Wednesday morning briefing with reporters to unveil legislation dubbed the Marketplace Fairness Bill.

The proposal is backed by Sens. Richard J. Durbin (D-Ill.), Lamar Alexander (R-Tenn.) and Michael B. Enzi (R-Wyo.).

The bill, one of at least three now in Congress, comes as California and other states battle with Internet retail giant Amazon.com over the sales tax. Amazon has agreed to start collecting sales taxes in California beginning in September 2012. The company fought an earlier state law by threatening to wage a referendum campaign to overturn the measure, calling it unconstitutional.

The new federal legislation gives states two ways to collect billions of dollars in unpaid sales taxes when consumers buy products from Internet sellers, such as Amazon, Overstock.com or EBay.com. States that become part of a multi-state legal agreement and bring their sales tax codes into conformity with other states can compel Internet retailers to charge and remit the sales tax.

But other states that don't sign the interstate compact still could collect the taxes if they adopt minimum standards to simplify the levies.

The Durbin-Alexander-Enzi bill would exempt all sellers with annual sales of less than $500,000 from collecting individual state sales taxes.

A fact sheet distributed by their offices stressed that the measure "does not create new taxes or increase existing taxes."

Amazon 3Q net income sinks, missing analyst views

California leads the way in putting Amazon in its place

-- Marc Lifsher

Photo: An Amazon distribution center in Goodyear, Ariz. Credit: Ross D. Franklin / Associated Press

GM profit dips as revenue rises; European sales a sore point

General Motors Co. saw its profits slide 15% in the third quarter.

The nation’s largest automaker said it earned $1.7 billion, or $1.03 per share in the quarter. That compared to a profit of $2 billion, or $1.20 a share in the same period a year earlier.

Revenue rose 7.6% to $36.7 billion.

“GM delivered a solid quarter thanks to our leadership positions in North America and China, where we have grown both sales and market share this year. But solid isn’t good enough, even in a tough global economy,” said Dan Akerson, GM’s chief executive. “Our overall results underscore the work we have to do to leverage our scale and further improve our margins everywhere we do business.”

GM is still losing money in Europe but is profitable in North America and is running at the break-even level or better in the rest of the world.

The report continues a string of seven profitable quarters for GM, which emerged from a bankruptcy reorganization and federal government bailout in 2009. On a fully diluted basis -- which accounts for stock options and warrants in the marketplace not yet exercised, taxpayers still own about 27% of the automaker.

And with the news, GM's shares fell $1.70, or nearly 7%, in early trading to $23.34. The stock is almost $10 off its initial offering price of $33 of last November, when it started trading following the automaker's financial restructuring.

GM's financial results were helped by it spending less money to get buyers into its vehicles. Discounts and incentives for the third quarter were 15.5% less that the same period in 2010, according to auto information company Edmunds.com. So far this year, the company is spending about 8% less on sales incentives, according to Edmunds.com estimates.

At the same time, GM is solidifying its place in the auto market.

GM has grown its market share to 20.1% in the third quarter, up from 18.6% in the same period a year earlier, according to Edmunds.com.

Part of the gain comes from the supply crunch suffered by the big Japanese automakers after the that nation's earthquake in March.

The shortage of Japanese brands of cars -- especially Toyotas and Hondas -- allowed GM to cut back on incentive spending, said Jessica Caldwell, an Edmunds.com analyst.

"The addition of compelling products like the Chevy Cruze also contributed to their success," Caldwell said. "But with their Japanese competitors re-emerging, GM will have a tougher fight on their hands in the coming months against refreshed and redesigned offerings like the Toyota Camry and Honda Civic.”

RELATED:

European brands have reliability woes

Ford tumbles in Consumer Reports reliability ratings

Detroit automakers still struggle to win California sales

-- Jerry Hirsch

Twitter.com/LATimesJerr

Photo: General Motors employees works on a van assembly line in Wentzville, Mo. Credit: Associated Press.

America and China must crush Germany into submission

Barack Obama greets Hu Jintao, the Chinese President (Photo: AP)

As we watch Italy's 10-year bond yields near 7.5pc and threaten to detonate the explosive charge on €1.9 trillion of debt, it is time for the world to reimpose order.

You cannot allow the biggest bankruptcy in history to run its course – with calamitous domino implications – before all options have been exhausted.

One can only guess what is happening in the great global centres of power, but it would not surprise me if US President Barack Obama and China's Hu Jintao start to intervene very soon, in unison and with massive diplomatic force.

One can imagine joint telephone calls to Chancellor Angela Merkel more or less ordering her country to face up to the implications of the monetary union that Germany itself created and ran (badly).

Yes, this means mobilizing the full-firepower of the ECB – with a pledge to change EU Treaty law and the bank's mandate – and perhaps some form of quantum leap towards a fiscal and debt union.

Germany will of course try to say no. But it will pay a catastrophic diplomatic and political price, and will fail to save its economy anyway if it does so.

Having followed the German political scene closely for the last five months, it is clear to me that almost the entire German political establishment is out of its depth, ideological, sometimes smug, apt to view the EMU debt-crisis as a Calvinist morality tale, and lacking in deep understanding of what it has got itself into.

One can understand German worries about money printing – and especially the loss of fiscal sovereignty and democratic control – but matters have already moved on. It is too late for that.

As for the EU authorities with their mad contractionary fiscal and monetary policies in an accelerating slump, they seem to have achieved little by toppling two elected governments in one week.

In Italy they have already made matters worse. I doubt that much will change with "technocratic governments" in either Greece and Italy, yet immense damage has been done to democratic accountability.

The EU Project has become both dangerous and insane.

Is Overregulation Driving U.S. Companies Offshore?

CATHERINE RAMPELL

Dollars to doughnuts.

As my colleague Richard A. Oppel Jr. reported on Thursday, Gov. Rick Perry of Texas is arguing that companies are sending work abroad primarily because of overregulation in the United States, and not because labor is cheaper abroad.

Dollars to doughnuts.

“They did not leave to begin with just because they could find cheap labor somewhere,” said Mr. Perry, who is running for the Republican presidential nomination. “That may have been part of a formula, but it is not the reason they left. I would suggest to you they left because they were overregulated, and the cost of that regulation and the tax structure that we have in place in this country is what drove the masses away.”

Is that statement true? Are American regulations so burdensome that they are driving companies abroad?

Certainly the United States tax code is impenetrably complicated, and companies do have to deal with plenty of regulations. But even so, the United States is far friendlier to business than are emerging markets like India and mainland China, according to international analyses of regulatory climates.

For the last nine years, the World Bank has been grading countries on 10 measures of business regulation: getting electricity, enforcing contracts, protecting investors, dealing with construction permits, trading across borders, registering property, resolving insolvency, paying taxes, getting credit and starting a business.

Based on these criteria, these are the top 10 countries where it is easiest to operate a business:

That’s right: The United States comes in fourth.

Hong Kong beats the United States, but mainland China — that bugaboo of American employment protectionists — does not. Instead, China comes in 91st. Despite the higher regulatory burden, American-based multinational companies have increased their employment in China by 161,400 from 2007 to 2008, a gain of about 20 percent, according to the Bureau of Economic Analysis. (The most recent data are for 2008.) In fact, American employment in China rose 77 percent in the prior decade, from 1998 to 2008.

India does even worse, with a ranking of 132nd. Edward L. Glaeser has written for Economix before about India’s struggles with having a stable and transparent regulatory system and public sector.

As they have done in China, American companies have ratcheted up their employment in India by 43,000, or about 13 percent, from 2007 to 2008. From 1998 to 2008, the number of people in India working for American companies rose by 54 percent, according to the Bureau of Economic Analysis.

In another measure of business climate and competitiveness put out by the World Economic Forum, the United States ranks fifth, again ahead of China (26), India (56) and a host of other countries where American companies are adding jobs.

Presumably, then, American companies are not attracted to these places because the business climate is more favorable.

Who Gets Unemployment Benefits

Casey B. Mulligan is an economics professor at the University of Chicago.

It’s commonly assumed that unemployed people not receiving unemployment benefits have been unlucky enough to go without a job for so long that their benefits have run out. But often more important are limited work histories and a low propensity to take benefits that are available.

Today’s Economist

Perspectives from expert contributors.

Historically, many unemployed people have not collected unemployment payments because of ineligibility, lack of awareness or simple unwillingness to collect benefits. But some of those patterns changed during the recent recession.

Perspectives from expert contributors.

The chart below shows the number of unemployment compensation beneficiaries per unemployed person, for people 16 to 24, people 25 and over and all people 16 and over. This ratio can be less than one for all of the reasons mentioned and because some unemployed people may exhaust their benefits sometime during the calendar year.

Not surprisingly, more than three-quarters of young unemployed people do not receive unemployment compensation, in large part because they are much less likely to have the employment history that is required for eligibility. Young people are disproportionately represented among the unemployed, and their limited work histories are the primary reason why a large fraction of the unemployed does not receive benefits.

More striking is the increase to 85 percent from 50 percent among people 25 and over. Before the recession began, about a quarter of unemployed people that age had been unemployed for more than 26 weeks, when unemployment benefits were typically exhausted.

The remaining quarter of the unemployed did not receive benefits for a variety of other reasons: they may not have been interested in or aware of benefits, or they may have been ineligible because they quit their jobs (rather than lost them).

By 2010, unemployment was lasting much longer, but the time for receiving benefits had increased even more. Ninety-two weeks was a typical unemployment benefit period in 2010 (in some states it was 78 weeks, in others 99 weeks), yet only 12 percent of the unemployed 25 and over were unemployed that long.

That means as many as 88 percent of the people that age who were unemployed could have received benefits. That 85 percent received benefits tells us how rare it was for eligible people to forgo benefits during the recession.

The recipiency rate change from 2007 to 2010 is thus a combination of a decreased likelihood of exhausting benefits and an increased propensity to receive benefits early in the unemployment spell. These two factors change so much that even though the average weekly number of unemployed people 25 and over increased by more than six million from 2007 to 2009, the average weekly number of those people not receiving unemployment insurance actually fell by 700,000. (For the purposes of this calculation, I assume that, consistent with the law, nobody received unemployment benefits for a week that she or he was employed.)

This absolute decline in nonparticipating unemployed suggests that people are more willing (equivalently, less unwilling) to collect unemployment benefits than they were before the recession began.

Unemployment insurance is known for its ability to expand eligibility as a recession gets going, whether through the “extended benefits” that take effect at given jobless rates or through legislative action beyond that. But an adjustment almost as important has occurred in the labor force itself: during the recession, people increased their propensity to take advantage of available benefits.