The mega
distributor Southern Glazer looks like it is going to have some huge company
with the proposed joining of Republic National Distributing and Breakthru
Beverage Group. The completion of this
deal will mean that 56% of the American alcoholic beverage distribution will be
controlled by two distributors. Many of
the larger producers and looking toward having only one distributor in the
United States, a trend that is being spearheaded by Bacardi and Campari, but we
will see where this leads. We question
whether there will be pressures on other suppliers to consolidate their
distribution networks to one wholesaler or continue with a portfolio approach.
A sole supplier could lead to better coordination on retail activation and
branding, lower inventory (better readings for stock levels), cost savings
(simpler organizational structure). On the other hand, a sole supplier could
lead to improved bargaining power of wholesaler over supplier.
"The
merger of RNDC and Breakthru will create strategic opportunities that will
benefit our associates and our business partners in a rapidly changing and
highly competitive marketplace. Much more than a growth opportunity, we are
entering this venture to create something that is different, sustainable and
transformative," said RNDC President & CEO Tom Cole. "Together,
our deep bench of focused, diverse associates will bring great and unique
advantages to our suppliers, our customers and the consumers who enjoy the
products we represent." Proposed
Merger to Allow Greater Focus on Innovation and Differentiation in Rapidly
Changing and Competitive Marketplace
Breakthru
Beverage Group President & CEO Greg Baird commented, "Breakthru looks
forward to joining forces with RNDC to establish an even stronger foundation of
industry knowledge, talent, history and heritage. We see this as the launch pad
to bring innovation to life and to usher in a new era for our business and
industry."
"Across North America, the combined company of RNDC
and Breakthru will benefit from a broadly expanded footprint, a passionate and
progressive team, and an uncompromising commitment to providing innovation,
value and service to all our stakeholders," added Cole. The transaction is expected to close late in
the second calendar quarter of 2018 subject to regulatory approvals and other
customary closing conditions.
