Drinks on Us

A white paper by The National Center on Addiction and Substance Abuse at Columbia University paints a disturbing picture of the impact of underage drinking in America. “The Commercial Value of Underage and Pathological Drinking to the Alcohol Industry” pegs the cost of alcohol abuse and addiction at $220 billion in 2005--well ahead of the $196 billion estimate for cancer and the $133 billion for obesity. These amounts reflect “direct medical costs; lost productivity due to illness, death, crime and victimization; and other costs including accidents, criminal justice and alcohol treatment services.”

According to an analysis, eliminating underage drinking and excessive drinking by adults (defined as more than two drinks per day) would reduce the amount of alcohol consumed in the U.S. by at least 50.1%. That equates to $56.9 billion in consumer expenditures on alcohol.

Analyzing 2001 data (the last year for which numbers were available), underage drinking represented 17.5% of consumer expenditures on alcohol--roughly $22.5 billion. Adult pathological drinking accounted for another 20.1%--$25.8 billion. As a result, the paper concludes, more should be done to prevent underage drinking, arguing “those who begin drinking prior to age 21 are far likelier to become pathological drinkers…Underage drinking benefits the alcohol industry in two ways: the total amount consumed by teens, and the contribution of underage drinking to maintaining a supply of adult pathological drinkers.”

Even more telling in the paper's statistics is the percentage of those who are alcohol dependent. An estimated 25.9% of underage drinkers meet the criteria, compared to 9.6% of all adult drinkers. Furthermore, some 96.8% of adult pathological drinkers began drinking prior to the age of 21.

For more information on the paper, visit www.casa columbia.org.

Art of the Deals

J.H. Chapman Group LLC has released its “2005 Chain Restaurant Merger and Acquisition Census,” noting a 15% drop in the number of announced transactions from 2004. Nevertheless, 2005's 101 transactions were 29% more than the number recorded in 2003. Equity funds and management teams registered their best showing in 15 years, accounting for 40% of all private company transactions. Still, there was strong interest in the public market, with 12 public and six going-private deals recorded.

The census details change of ownership activity for U.S. chain restaurants; to be included, a “meaningful change of ownership must have been announced.” It includes initial public offerings, subsequent stock offerings, “significant investments,” and traditional mergers and acquisitions, though excludes “routine trades of restaurant securities on a formal exchange.” Quick-service, fast casual, full-service and cafeteria/buffet restaurants are included.

The South registered the largest number of transactions (40), though the largest percentage increase was found in the North Central region (going from 19 in 2004 to 31 in 2005). Transactions in the West diminished significantly, falling to 15 from 32, while the Northeast's nine was barely half of its 2004 total of 16.

The reasons behind the sales were quite diverse, but divestitures through outright sales or public market offerings dominated. The 53 divestitures still were down from the 67 reported in 2004. “Financial trouble” accounted for 19, and “debt reduction” for 11.

For more information and a report summary, visit www.jhchapman.com/lib_census2005.htm.


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* Citroil Enterprises Inc. launched its new interactive website at www.citroil.com, providing important information about the capabilities of the company's flavors division and offering a multitude of choices for potential clients to order spec samples of flavors.

* A one-week practical short course on “Texturized Vegetable Protein” (TVP) will be presented August 27 through September 1, 2006, at Texas A&M University. Reservations are accepted on a first-come basis. For more information, programs and applications forms, contact: Dr. Mian N. Riaz; Food Protein R&D Center; Texas A&M University; College Station, TX 77843-2476; 979-845-2774; mnriaz@tamu.edu or www.tamu.edu/extrusion.

* Vitasoy USA Inc. named Ned Desmond vice president of marketing.

* J&J Snack Foods Corp. (owner of The ICEE Company) acquired the SLUSH PUPPIE branded business from Dr Pepper/Seven Up Inc.

* ENRECO Inc. has introduced a new corporate image and ingredients, under new management. ENRECO has “a commitment to help bakers develop new, health-enhanced bakery products using flaxseed's omega-3, dietary fiber, low-glycemic and antioxidant benefits.”

* Degussa Texturant Systems now is known as Cargill Texturizing Solutions US LLC.

* Tyson Foods Inc. named Sylvia A. Wulf vice president of marketing for the Food Service Group; Richard A. Greubel Jr. group vice president—international; James V. Lochner senior group vice president of fresh meats and margin optimization; and Richard Bond president/CEO.

* Archer Daniels Midland Co. (ADM) formed a strategic alliance with Baron Spices and Seasonings to market spices, seasonings and herbs to the foodservice and retail private label industries. ADM directors also elected Dennis Riddle as a vice president of the company; he will continue his duties as president of the corn processing division.

* America's Second Harvest--The Nation's Food Bank Network and Hormel Foods Corporation signed a two-year partnership agreement to work together to combat hunger in the U.S. As part of the agreement, Hormel will make a $200,000 contribution to America's Second Harvest, sponsor special events to generate awareness and funding for the organization and continue to make large-scale protein product donations to the food bank network. In exchange for these contributions, Hormel becomes the “Leading Protein Sponsor” to America's Second Harvest.