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    Published on: February 27, 2009

    Friday Musings by “Content Guy” Kevin Coupe

    To paraphrase an old saying for the 21st century…

    “Those whom the gods wish to destroy they first make complacent.”

    Several stories have emerged this week that serve as reminders that there is no such thing as the unassailable advantage, that there is no such thing as always.

    The Rochester Democrat and Chronicle reported this week that when “Slumdog Millionaire” won its Best Picture Oscar last Sunday, it became the first film ever to win that Academy Award that was not shot on Kodak-made film.

    “Slumdog Millionaire” was actually shot digitally – not on film at all – on equipment made by a Schenectady company.

    Now, like every Best Picture winner since “Wings” won in 1928, the other four best picture nominees were shot on Kodak film.

    (Thanks, by the way, to the MNB user who pointed this story out to me.)

    It may not seem like a big deal, but shifts like these mean something…and reflect changes that will take place up and down the line.

    For example, the Ithaca Journal reports today that Tops Friendly Markets will no longer accept film or one-time use film cameras for developing. It is getting out of the film processing business.

    One of the reasons it is doing so is that its film processor is going out of business.

    But it is also because there has been a shift…and these kinds of shifts mean something.

    Heard of digital cameras?

    Another example, from another industry…

    It has been announced that when the Rocky Mountain News publishes today, it will be the final edition of the 150-year-old paper, which is being shut down by owner Scripps Howard. It is the largest circulation daily to close down in an environment where people are simply getting their information from other sources.

    Earlier this week, Hearst Corp. said that the San Francisco Chronicle may face a similar fate. And other papers in places like Philadelphia and Minneapolis reportedly are in danger, and both the New York Times and Washington Post all are facing financial troubles.

    A shift is taking place…and these kinds of shifts mean something.

    “Those whom the gods wish to destroy they first make complacent.”

    No person, no business, no industry is immune from such shifts.

    We ignore them at our own risk.

    KC's View:

    Published on: February 27, 2009

    The Wall Street Journal reports this morning that Safeway CEO Steve Burd has told analysts that if CPG companies don't start lowering their prices, Safeway will respond by pushing its private label lines harder than ever – and that, if necessary, Safeway will “chew up” the CPG companies on price.

    According to the story, Burd “told analysts in an earnings conference call that the sales growth gap between national brands and private-store brands has become ‘extraordinary’ and accused food makers of being ‘disingenuous’ with consumers by not dropping their prices to reflect declining input costs.

    “Faced with the economic recession, cash-strapped consumers have been trading down to cheaper products, both dining out and dining in, with more consumers gravitating toward private-label goods at the grocery store.”

    While Safeway and other retailers have been pushing manufacturers hard on prices, suppliers have been saying that they cannot lower prices because they are locked into higher commodity costs. But in addition to wanting to cater to economically challenged shoppers, Safeway has other reasons for pushing private label – such products earn higher margins for the retailer, and reinforces the company’s brand image.

    KC's View:
    Retailers like Safeway have to position themselves as advocates for the consumer, and holding the line of prices – whenever possible – is precisely what they have to do.

    I understand that there are contracts and commodity costs that manufacturers have to deal with, but in the current recessionary environment there are real perils to defending increased prices at a time when 1) consumers have less money to spend and 2) retailers have legitimate and quality private label options to offer an increasingly accepting shopper.

    Published on: February 27, 2009

    The Wall Street Journal reports that Walmart’s Canadian division has decided to close all six of the Sam’s Club stores that it operates north of the border, and instead will focus on its supercenter format.

    According to the story, “The Canadian unit of retailing-giant Wal-Mart Stores Inc. has tried to make a go of the warehouse clubs, which charge a membership fee in return for wholesale-priced products, for the past five years. Unlike the popular supercenters -- another 26 of which will open this year -- the half-dozen Sam's Clubs weren't meeting expectations, and weren't profitable, said Wal-Mart Canada's vice-president of corporate affairs, Andrew Pelletier.”

    The Journal notes that the Sam’s Club stores also hit formidable competition from Costco, which was entrenched there.

    The stores are expected to close by the end of March, and five of them may be taken over by D-I-Y retailer Lowe’s Cos.

    While 1,200 people potentially could lose their jobs because of the closings, Walmart said it hopes to be able to place as many of them as possible at other locations.

    KC's View:
    Gotta know when to hold ‘em, know when to fold ‘em.

    Published on: February 27, 2009

    The Colorado State Senate has defeated a bill that would have banned the use of disposable plastic shopping bags beginning in 2012.

    The bill had gone through various permutations. Originally it was going to charge six cents for every plastic bag handed out by stores between now and 2012, but that fee was stripped out of the bill.

    According to the Associated Press story, “Lawmakers in several other states - Hawaii, Missouri, New Jersey and New York, among them - are considering similar bans this year. Nine others are considering adding fees to plastic bags, ranging from 3 cents in Vermont to 25 cents in California, said Douglas Shinkle of the National Conference of State Legislatures.”

    The ban only would have applied to supermarkets, big box stores and department stores, and not to small stores and franchises.

    It wouldn't have applied to smaller stores and franchise operations.

    KC's View:
    There will be a lot of discussion in “Your Views” about the bag issue, but I need to add one small thing here.

    The AP story notes that “San Francisco has passed a plastic bag ban, as has China, Rwanda, Ireland and Bangladesh … Colorado Sen. Shawn Mitchell, R-Broomfield, argued that his state shouldn't follow the example of China, which also bans religious gatherings and having more than one child.”

    I don't know why, but I found that leap of logic sort of funny.

    Canvas bags today, communism and dictatorial rule tomorrow.

    Published on: February 27, 2009

    In the UK, Tesco and Asda are at it again.

    Bloomberg reports this morning that Tesco and Walmart’s Asda Group are engaging in a renewed price war, with both companies making major price reductions for the second time in 2009.

    Tesco says it is reducing the prices on 3,000 “every day” items, and Asda says it is cutting the price on 5,000 SKUs.

    Both companies, the story notes, are stepping up their competitive efforts to compete with Aldi and Lidl, discounters that seem to be making inroads in the British market.

    “With the country in recession, we need to do all we can to lower the cost of the weekly shop and do the right thing by our customers,” said Darren Blackhurst, Asda’s chief merchandising officer.

    And Tesco CEO Terry Leahy said that he expects suppliers to cut their prices to help shoppers financially squeezed by the recession.

    KC's View:

    Published on: February 27, 2009

    The Chicago Tribune reports that Coca-Cola has reached an agreement with 27 state attorneys general, resolving a dispute over its marketing of Enviga carbonated green tea.

    Coke agreed to pay $650,000 in the settlement, which also will require the company will stop claiming that the tea has weight-loss benefits, claims that the states maintained were based in insufficient scientific evidence.

    KC's View:

    Published on: February 27, 2009

    • Safeway said yesterday that its Q4 income was $338 million, up 12 percent from the $301.1 million reported during the same period a year ago. Q4 revenue was 13.8 billion from $13.4 billion a year ago, on same-store sales that were up 0.4 percent.

    Income for the 2008 fiscal year was 965.3 million, up 11 percent from $888.4 million in 2007. Annual sales were $44.1 billion, up from $42.3 billion in 2007., with same-store sales up 0.8 percent.

    KC's View:

    Published on: February 27, 2009

    Michael Sansolo had a good column earlier this week about “killer apps,” which prompted MNB user Bruce Christiansen to ponder:

    Good piece … on killer apps, and a great reminder that not all killer apps are software.

    I hope you can follow the dysfunctional logic below...I was reading your article this morning while I had Fed Chairman Bernanke's testimony on in the background, and while multi-tasking I noticed that one of the senators held up a printed and bound copy of chairman Bernanke's comments (which he was there reading to them...go figure). That got me to thinking about the number of media wonks and congressional knuckleheads I've seen over the past couple of weeks holding up their printed copy of the recently passed 1100 page economic stimulus bill, which then got me to thinking about watching Jeff Bezos last night on the Daily Show with Jon Stewart to discuss the release of the Kindle 2. (A side note, but how many paragraphs in the history of the world include references to the Fed Chairman, media wonks, congressional knuckleheads, Jeff Bezos, and Jon Stewart?)

    Where I'm headed with all of this I hope has become obvious...Congress is a huge consumer of paper, binding, postage and distribution costs, etc. etc. If they stopped doing that and instead published and read the drivel they created on a Kindle rather than on a piece of paper they could show some relevant leadership by using what's already a private sector killer app (the Kindle) to download the massive volume of drivel they currently print, practice what they preach about fiscal responsibility (less paper consumption), improved use of IT (if my medical records are going to be digitized, certainly congressional drivel ought to be digitized rather than printed), and being more environmentally friendly (paper manufacturing requires huge amounts of resources...both pulp and energy). There would be side benefits of setting a good example of change management, since this would be a huge change for many of the entrenched, stodgy old senators, as well as making a connection with the iPod generation.

    I realize there would be some development costs associated with this since the Kindle is not currently configured to do this, and Amazon would be a beneficiary of this kind of approach, but as one of about 12 people left in America who continues to believe that money in the hands of responsible business leaders is better than money in the hands of politicians, I think that's a good thing. And it has the added benefit of making some logical and economic sense. There would be a one time cost to acquire 537 Kindles (535 congress people, one President and one VP) but at 1100 pages per piece of legislation plus the related hearings I'm thinking it would take about five pieces of legislation to break even, and be cost-saving after that …

    I Googled "US Senate Committees" to try to figure out which group(s) might make the most sense to approach and outline the Kindle idea. In viewing the sites of the first four committees I selected (the Joint Committee on Printing, Appropriations, Budget, and Commerce, Science, & Transportation), I was gobsmacked that the sites of each of the Senate Committees have a different landing page, with different looks and feels, different architecture, etc., etc. I imagine this also means different/separate development groups, separate site maintenance requirements & costs, etc. Well, I hope you get the picture.

    Contrast that with the websites of well-known e-business models (Amazon, Walmart, Best Buy, etc.) that have to earn their customers as opposed to simply having taxing authority over them. Each of their sites is intuitive, consistent from page to page, etc. This approach has two key benefits: it's more user friendly, and has the added benefit of being cheaper to develop and maintain.

    So now there appears to be two opportunities … the second being an IT opportunity to standardize websites within each governmental branch and make them more user-friendly and less expensive to develop and maintain. Not huge budgetary items but important symbolic signs of leadership and belt-tightening at a time when all are having to be more budget conscious.


    Works for us.

    I’m just guessing here, but I suspect that as bills are circulated on Capitol Hill, they are sent via email…but I also suspect that the vast majority of senators and congressmen have those bills printed out (before they don't read them).

    Of course, the business community should not be too judgmental about this. After all, there are still more than a few senior executives out there who define “having email” as having their secretaries print out their email for them.

    I have long felt that if we really want to make government infrastructure more streamlined and modern, the White House ought to pull together a task force made up of people like Steve Jobs, Bill Gates and Jeff Bezos…and give them six months to make recommendations. (They won’t need six months. These guys are used to operating on Internet time…)

    BTW, MNB user Kevin Stopher had another relevant idea about the Kindle:

    I actually think Kindle should be for everyone. As a matter of fact, every parent should think so, too. If I had a Kindle growing up, my school books would all fit in the palm of my hand. Finding the information I was looking for would be as easy as running a search. And I would not have had to ignore all the highlighted passages from the last student who had my book. I see the Kindle as the future for school textbooks. I don't have one yet, but I'm sure I will.

    Speaking as a parent who spends a fortune on school textbooks for three kids, I agree completely. Every textbook ought to be available on the Kindle…




    On to a different technology issue, as one MNB user wrote:

    I continue to see the news highlighting manufacturers glee over online coupons. They need to remember that a significant # of people including elderly, lower income and those living in rural areas DO NOT USE or DO not have access to the web. I also wish somebody would address how if you choose to use online coupons you PAY out of your pocket for that coupon … .it is not free...your ink and paper to print it do cost you AND if you choose to use online coupons you are immediately put onto mailing lists and no matter what they say you will see an increase in spam. Let's tell the full story on on-line coupons. Of course manufacturers like them more ... they cost them less!

    Even if all this is true, I think you are missing the larger point…that in just a few years, paper coupons will be as obsolete as VHS machines, because the target customer will be completely wired and open to customized coupons delivered in electronic fashion.

    Which is why these technology companies are – and should – be testing different delivery systems. They can't just wait for the entire country to be wired and for elderly non-computer users to die off. They have to prepare now for the inevitable future.




    Got a lot of email responding to yesterday’s pro-nondisposable canvas bag rant.

    MNB user Amy Richardson wrote:

    I have to comment on this subject as it comes up often. I’m curious as to how many people buy plastic bags for their trash can liners inside their home and outside their home for the garbage trucks to pick up. Isn’t this the same thing except the trash can liners are usually bigger yet they still go to the land fills? Don’t get me wrong as I am very conscious about recycling and taking care of what I can for our planet. However, I use grocery plastic bags, cloth bags and sometimes don’t use any bags depending on the size of purchase. I also reuse grocery plastic bags for my little garbage can in my kitchen and I never buy kitchen liners. I guess my comment is I feel if we are going to make such an issue with grocery bags we should also be making an issue of plastic garbage bags as well.

    MNB user Lori Putnam wrote:

    I use and will continue to use disposable plastic and paper grocery shopping bags, until the stores I shop at no longer offer them-and then I may switch stores. We use plastic grocery bags for trash bags in our house - every Sunday, our can at the curb contains 3-4 plastic bags of trash, neatly tied and very contained. Plastic bags I don't use for trash are used for various other purposes. Plastic grocery bags line my plastic,
    aluminum, and glass recycle bins; keep pairs of shoes together off season; protect fragile items in storage; and serve as filler when I mail a package. Paper grocery bags are used to haul my newspapers and magazines to the recycling dumpster in the school parking lot. Neighbors use them for kitty litter and dog doo.

    Our unused plastic grocery bags (often those with tears or holes that make them unsuitable for anything else) are recycled at the local grocery store where I got them, along with the plastic bags my newspaper comes in every morning and the plastic bags I put my produce in. If "free" plastic grocery bags were not available, I would buy plastic trash bags, and what has anyone gained? I know this planet is increasingly fragile, but my shunning the "free" plastic bags offered by my grocery store and instead buying plastic bags from Aisle 6 will have a negative-not positive-net effect. My plastic bag-bound trash is still in the landfill - along with yours - but I will not have paid for the bags.


    MNB user Ashlee Gossell wrote:

    I read the article in the NY Times, and proceeded to send it to several co-workers, the bag “Fee” will not stop people from littering, it will not curb it, they will continue to pay the $.20 per bag or whatever the fee may be and the bags will still end up floating down I-5 caught in the breeze. Banning bags, implementing taxes or fees on them will frustrate customers and small shop keepers, and it will not help an already volatile shopping situation as it stands in most supermarkets now. Attempting to put a little effort into making it easier for people to recycle them and educate them on the current state of our trash problem, and that may stop littering, people tend to always surprise me…who knows.

    MNB user R. Dale Blotter wrote:

    I have to be honest, Kevin, and tell you that I find this whole issue of grocery bags and moral responsibility to the planet to be the most ridiculous waste of time and energy. Among all the things I have to think about in life, remembering to drag around a bunch of reusable bags for my grocery shopping is not high on my list of things to think about everyday or to be morally conflicted over. While I appreciate the convenience of a supermarket having bags for me when I checkout in order to carry my groceries I also shop frequently at retailers like Costco and Aldi, where they don’t provide bags for me and I just load the groceries directly from my cart into the car. I shop those retailers for their perceived price value and not getting a grocery bag is a luxury I willingly give up in order to get that value. Generally speaking I will adjust to whatever the business model of the supermarket is with respect to disposable bags as I suspect will most shoppers if they perceive other benefits they derive from shopping a particular retailer is more important than whether they got disposable plastic bags. In the end I think smart retailers and consumers will figure out the right balance on this issue without government involvement. We’ve got enough of that already in our current financial system mess.

    MNB user Nancy Kurdyla wrote:

    I agree with you about having a moral obligation to stop using plastic bags at the supermarket. But, what about the plastic bags we buy to use as trash bags? What's the difference between using supermarket plastic bags as your trash bags, or just going out and buying plastic bags to use as trash.

    It's a much bigger problem than simply using canvas bags. Hefty sales have increased since everyone started using their canvas bags to shop. The same people are purchasing and using more Hefty trash bags.

    Are we really helping the environment?


    Another MNB user wrote:

    I am a father of 3 young children. Not knowing the "factual" numbers involved... but understanding my trash content, I believe diapers in the trash far, far, far outweigh (literally and substantively!) the issue of plastic bags.

    Don't know how many other "non-biodegradable" items are in the limelight like plastic bags and plastic water bottles... but frozen food packages and other non-recyclable plastics come to mind when I think about what can and can't go in my recycle bin every week as defined by the trash hauler. It's really more of an issue to put recyclables in the recycle bins for the public majority and choosing to buy or use recycle friendly packaging I would think.

    However, I wonder how many lobbyists are employed to keep these items off the consumers mind and out of the governments view.

    It won't be long for our government's tentacles reaching out into this area, unless the industry and/or consumers can come up with forms of self-imposed behaviors or sponsor/promote regulations on themselves.

    Maybe it's time to come back with cloth diapers. I am sure the plastic pants employed outside the diapers contribute much less to the landfills. However, from direct personal knowledge of how they work, I would think that won't happen in our throw away society. In keeping with your final thoughts, what the hell... Diaper Tax anyone?


    Another MNB user wrote:

    The stimulus plan should have provided 4 USA made bags for the 100mm USA households shipped by the USA post office at no cost to today's taxpayer...achieves the big picture; stimulates economy with jobs/sales and improves today's environment effectively eliminating the $0.05/$0.10 revenue stream that the government does not want to impose but needs to impose for our own good...just like the tobacco settlement and other consumer -oriented programs, these are all money grabs that do not go away and do not accomplish the government's "altruistic reasoning.”

    Still another MNB user wrote:

    I agree with you in that government should give us some moral guidance in the area of reusable bags (even though moral and government are not usually used in the same sentence). Enough with legislation, fees and taxes! Personally, I never use plastic bags and try to use reusable bags whenever I can. If I cannot, I use paper bags and make sure they are put in my weekly recycling, thus eliminating the landfill dilemma. Because of the flexibility of my community recycling program, I have been able to reduce my weekly trash to less than one 30 gallon bag for a family of four. Maybe more flexibility in community recycling is a better answer.

    I agree, BTW, that the trash bag issue needs to be addressed. I confess to using them, in part because I don't get plastic bags from grocery stores, and in part because the trash bags from grocery stores tend to be small and not very strong. (Maybe we just have heavy garbage.) If someone comes out with a better trash bag, that’ll be a real winner.




    Had a story the other day about New York State retailers objecting to any law that would legalize wine sales in supermarkets, which led MNB user Mark Delaney to write:

    Rather than spend time lobbying, the liquor stores should look themselves in the mirror and ask why a consumer would want to make the additional trip to their store.

    I've lived in other states and travel extensively for work and it's always seemed strange to me that one can buy beer in a NY grocery store but not wine. I think though that there is plenty of room for everyone in this model. Yes, it would be convenient for me on a Friday night coming home from the office to pick up a bottle of wine when I'm buying groceries - but most grocery retailers are not going to be able to stock the variety of fine wines that a liquor store could and certainly won't be able to offer much in terms of advice for food and wine pairings ( though the smart ones may ).

    However, if I'm entertaining or looking for something for a special occasion I'm probably going to look beyond the limited selection that a grocery store can logistically handle. It seems to me that we talk about this every day in this forum - perhaps they've had a monopoly on this for too long and it's caused them to get lazy. There is a liquor store in nearly every grocery shopping plaza near my home and none of them offer anything unique or even forward-thinking in terms of selection or service. Their prices rarely change and the displays are usually driven by whatever new brand their distributor is trying to push. Rarely do I get asked if I'm looking for something in particular and often they're more interested in selling lottery tickets than asking if I need help. If I'm a winery I'm a little confused why I would shun additional channels of distribution but perhaps they fear losing some control? Good merchants will always find a way to adapt to changing market conditions - those who resist change and in particular consumers' desires - probably need to throw in the box cutter…..


    You’re right. Good retailers find a way to adapt and emphasize their own strengths. Mediocre retailers just whine.

    KC's View:

    Published on: February 27, 2009

    I have no idea whether the public really pays attention to this stuff, but it has been interesting to see the extent to which Michelle Obama and food have gotten coverage in the media.

    In the New York Times there was a piece about how, before a state dinner for the nation’s governors, the First Lady took some reporters and culinary students into the White House kitchen for a tour and some tastings.

    According to the story, “The first lady took the opportunity to put in a pitch for local and sustainable food and for healthy eating, a recurring theme of hers during the campaign and since she arrived in Washington. When food is grown locally, she said, ‘often times it tastes really good, and when you’re dealing with kids, you want to get them to try that carrot. If it tastes like a real carrot, and it’s really sweet, they’re going to think that it’s a piece of candy. So my kids are more inclined to try different vegetables if they are fresh and local and delicious.”

    That’s a positive message.

    But an even more positive message, I think, comes from the fact that the First Lady seems to have a good sense of balance.

    The Chicago Sun Times reports, “During the campaign, a regular stump-speech feature of the future president was a riff on parents' responsibility not to let their kids gorge on junk food. In that vein, Mrs. Obama is taking on healthy living as a cause. While the Obamas are known as foodies, the first lady is not a purist. She took some of her newer staff out to a Five Guys Burgers and Fries in Washington recently. Her order: a cheeseburger, fries and a Coke.”

    I don't know about you, but I love the idea that the First Lady was eating burgers at a place that was high on the MNB “Best Burgers In America” list.

    That kind of balance, in which one goes from locally grown produce to Five Guys burgers and fries, is a healthy trend.




    I get regular emails from an organization called Iconoculture, and there was a great line in an edition that came out earlier this week. A Spaniard was quoted as saying, “Some call it optimism, others (principally psychologists) call it denial … but one way or another, while we've still got the sun, good food, cheap wine and each other, there is still hope!"

    That’s what I call a positive attitude.



    Not so positive is the story this morning out of London saying that Ryannair, the discount airline, is considering charging a fee for people on its airplanes that want to use the toilet.

    If you think it annoys people to have to pay for water and coffee while in the air, just imagine how irritated they will be if they have to use the john and are reduced to searching their pockets for spare change. (Especially in a recessionary economy?)

    Would it be inelegant of me to suggest that people are going to be pissed?




    Here’s one of the best ideas I’ve heard about how to spend so-called “bailout money,” courtesy of New York Times columnist Tom Friedman:

    “You want to spend $20 billion of taxpayer money creating jobs? Fine. Call up the top 20 venture capital firms in America, which are short of cash today because their partners — university endowments and pension funds — are tapped out, and make them this offer: The U.S. Treasury will give you each up to $1 billion to fund the best venture capital ideas that have come your way. If they go bust, we all lose. If any of them turns out to be the next Microsoft or Intel, taxpayers will give you 20 percent of the investors’ upside and keep 80 percent for themselves.

    “If we are going to be spending billions of taxpayer dollars, it can’t only be on office decorating bankers, over-leveraged home speculators and auto executives who year after year spent more energy resisting changes and lobbying Washington than leading change and beating Toyota.”

    That’s what I call uncommon sense.




    I have two wines to recommend to you this week, an Australian white and a Spanish red…

    The 2006 Step Rd. Chardonnay from Australia is an excellent white, with just a little bit of fruit and a nice creamy taste…

    And the 2006 Bodega San Prudencio Cueto Seleccion in a wonderful Spanish rioja made from 60 percent tempranillo, 20 percent garnacha, 15 percent mazuelo, and five percent graciano…which is great with both grilled meats and even a spicy seafood dish.




    This is going to be a Jesse Stone weekend in the Coupe household.

    The new Jesse Stone novel, “Night and Day,” has been published, and I am looking forward to spending some time reading Robert B. Parker’s latest novel about the troubled police chief of Paradise, Massachusetts.

    And then, on Sunday night, CBS will air “Jesse Stone: Thin Ice,” the fifth movie in the series, produced by and starring Tom Selleck as a somewhat darker version of Parker’s creation. This one isn’t based on a specific Parker novel, but the advance word is good and I can't wait.




    Last week, we saw “Taken,” the Liam Neeson movie about the retired spy who finds himself back in action when his daughter is kidnapped by a slavery ring in Paris.

    Now, I have to be honest here. Mrs. Content Guy hated it. Hated it. Thought it was nothing but mindless violence and car chases.

    But I liked it a lot. A lot. Sure, it is a cheesy thriller, but there is something to be said for watching Liam Neeson rampage through Paris, shooting anyone who gets in his way as he tries to recue his daughter.

    And sometimes, mindless violence and car chases is exactly what the doctor ordered.




    That’s it for this week.

    Have a good weekend.

    Sláinte!!

    KC's View: