Shanken's Impact Newsletter May 1, 2019

LEADING EXECUTIVES FROM ACROSS THE DRINKS INDUSTRY DESCENDED ON NEW York City’s Pierre Hotel on March 7 for the 43rd Annual Impact Marketing Seminar. Hosted by M. Shanken Communications chairman Marvin R. Shanken, the event featured presen-tations from top players in wine, spirits, retail, cyber-security, and the emerging cannabis industry. The event kicked off on the preceding evening with a welcoming reception, hosted by Brown-Forman Corp. president and CEO Lawson Whiting, at Midtown’s Brasserie Cognac. The next day, Seminar attendees heard presentations from seven speakers on key topics within the drinks business, including Joseph Gallo, CEO of E.&J. Gallo Winery, on “Transforming Leadership from Two Legendary Founders to a New Generation;” Alexandre Ricard, CEO of Pernod Ricard, on “The Longevity of Luxury;” Bill Newlands, president and CEO of Constellation Brands,…

FOR THE PAST 16 MONTHS, REPUBLIC NATIONAL Distributing Co. (RNDC) and Breakthru Beverage Group have been laying the groundwork for their merger, which was supposed to create a wine and spirits wholesale giant with operations in 30 states and revenues of $13.5 billion. But with the recent announcement that the deal has been canceled due to an extended delay by the FTC in granting approval, that dream will have to wait—at least for now. Following the announcement that the merger will not proceed, the FTC released a statement citing competition concerns in several markets where both companies already do business. But according to Impact’s sources, RNDC and Breakthru offered several possible remedies to those objections, only to be left awaiting an answer over an extended period. With no movement forthcoming…

AFTER 16 MONTHS OF TALKS, REPUBLIC NATIONAL DIS-tributing Co. (RNDC) and Breakthru Beverage Group agreed to terminate their proposed merger. The Federal Trade Commission (FTC) weighed in on the matter with a statement raising “significant concerns about likely anticompetitive harm if the transaction were completed.” However, Impact understands that the companies offered various solutions to those concerns, but those offers went unanswered. Ian Conner, deputy director of the FTC’s Bureau of Competition, wrote that the agency’s staff “gathered extensive testimonial, documentary, and economic evidence to support our concerns that this transaction likely would have resulted in higher prices and diminished service in the distribution of wine and spirits in several states.” Conner continued, “The transaction likely would have adversely impacted suppliers of wine and spirits that depend on these distributors…

IN A WIDELY EXPECTED DEAL, CONSTELLATION BRANDS has agreed to sell approximately 30 brands from its wine and spirits portfolio to E.&J. Gallo for $1.7 billion, along with related facilities located in California, New York, and Washington. The deal is expected to close in the company’s fiscal first quarter, ending in May. Constellation had noted that it would be putting its portfolio of labels retailing at $11 and below on the block. Clos du Bois, Black Box, Estancia, Mark West, Wild Horse, Franciscan, and Ravenswood are among the brands included in the deal. The wineries included are Mission Bell, Turner Road Vintners, Clos du Bois, and Wild Horse in California, Hogue Cellars in Washington, and Canandaigua in New York. “While we continue to invest in our premium and luxury businesses,…

STOLI GROUP IS UNDERTAKING A major realignment of its distributor profile in the U.S., including a switch from Southern Glazer’s to Young’s Market Co. in a number of western states. Overall, Stoli’s distributor changes cover about 25% of its U.S. business. Young’s has taken on the Stoli Group portfolio across Alaska, Arizona, California, Hawaii, Idaho, Montana, Oregon, Utah, Washington, and Wyoming. Stoli is also parting with Southern in Illinois, where the portfolio is transitioning to Breakthru, which already distributes Stoli’s range in Colorado, Delaware, Florida, Maryland, Pennsylvania, South Carolina, Virginia, and Washington, D.C. Stoli is not severing its relationship with Southern entirely. The two will continue to be linked in Nevada and Arkansas. Meanwhile, Johnson Brothers, which already handles Stoli in Minnesota, has been named as Stoli’s new distributor in…

SOUTHERN GLAZER’S EXECUTIVE MEL DICK, A DRIVING FORCE IN THE U.S. wine market for more than 60 years, has been honored with the Wine & Spirits Wholesalers of America’s (WSWA) Lifetime Leadership Award. The Lifetime Leadership Award recognizes a wholesaler whose career has been marked by exemplary contributions to the beverage industry, the WSWA, and the community. “I am most appreciative to have been honored by the WSWA with their Lifetime Leadership Award,” Dick told Impact. “I have been a member of our great industry for 62 years—50 of them with Southern Wine & Spirits, and the last three with the great Southern Glazer’s. We’re very fortunate for what this industry has given to us and our families.” As president of the wine division at Southern Wine & Spirits and…