The San Francisco Chronicle announced that “Republic National Distributing Co. [(RNDC)], the nation’s second-largest alcohol wholesaler, announced last week that it will no longer do business in California after Sept. 2. It’s sent more than 2,500 beverage brands scrambling to find a new distributor in the state.” This company is based in Texas. Is it politics? Is it that a Texas company wants nothing to do with California? Or is it something else? Let’s explore.
From RNDC’s Website
The company’s website doesn’t talk about California at all. Instead, they focus on the need to reinvest in Texas. “Key enhancements include:
- Fully dedicated on-premise wine and spirits teams along with restored TEG (The Estates Group) specialist roles
- Expanded regional account support
- An increase in new associates joining the RNDC Texas team”
Okay. That might be a reason to pull out of California. But California is the largest wine market. Hmmm.
More Details
The Chronicle goes on to say that “CEO Bob Hendrickson cited ‘rising operational costs, industry head winds, and supplier changes’ as reasons for the move.” He didn’t mention that “Some of Republic National’s most important brands have defected lately to other distributors, especially to the beer-focused Reyes Beverage Group. Since the beginning of the year, the company has lost the right to sell top-selling spirits including Tito’s, High Noon, Cutwater Spirits and Jack Daniel’s, among many others.”
Interestingly, Hendrickson has only been interim CEO for four or so months. The CEO before him, Nick Mehall, left the company in February, after the loss of their relationship with Tito’s and Brown-Forman. VinePair tells us that his “tenure [was] marked by intense supply chain disruptions, industry slowdowns, and post-pandemic market normalization.”
No fun. I hope this doesn’t mean further disruptions in the industry.
