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Biggest Distrib Deal of Yr: Frank Liquor to Buy Beer Capitol; Craft Brewer Deals Slow

Not very many notable beer distrib transactions popped in 1st half but 2d half started with a bang. Frank Liquor, parent co of Frank Beer Dist and La Crosse Bev, will buy Beer Capitol, the state's largest beer distrib at around 9.5 mil cases. When that transaction completed around Oct 1, Frank will sell 17 mil cases of beer, over 25% of beer volume in state, and have almost 750 employees. Frank sez it will be one of top 20 US beer distribs. It will also be MC's largest distrib in its highest share state (40 share) selling 11 mil cases of MC brands. That's over 40% of MC biz in state (27 mil cases last yr). On top of it, Frank reportedly will sell about 1.3 mil cases of Constellation and about 1 mil of New Glarus too. Frank is a 4th generation family biz in Madison that sells beer, wine and spirits across big swath of geography in state. Beer Capitol owner Aldo Madrigrano is current MC distrib council chairman, former NBWA chair, one of the more outgoing and visible beer distribs. Not often that a sitting council chair sells.

MC had tuff time in Wisc in recent yrs. Lost 7 share and 15% of its biz in last 5 yrs. That hadda hurt, even if craft/imports way up. Recall, Beer Capitol sold off part of its territory last yr, near 1 mil cases, to neighbor Ott Schweitzer. Recurrent rumblings that Beer Capitol for sale in recent yrs. At times, there was reportedly friction between Aldo and biz partner Ron Fowler, who is also part-owner of San Diego Padres. With this deal, Ron has now sold off all his beer bizzes, tho he retains stake in Columbia after selling Mesa to Meritage last yr. Frank Beer Dist reportedly came in with high offer.

So distrib deals slow going so far in 2016. INSIGHTS reported just 2 new deals for entire distrib bizzes this yr; normally write about 20 or so in a yr. But lotsa action behind the scenes and many deals in works. Perhaps the Beer Capitol deal signals beginning of a stepped-up pace. In contrast, still a bunch of interesting craft deals in 1st half, including Victory, Cigar City and Devil's Backbone and several other smaller transactions. However, Devil's Backbone sale to AB Apr 12 was last deal for craft brewer over 50,000 bbls. And that deal still hasn't closed. AB may not be allowed to buy more craft brewers (see below) and MC hasn't done anything this yr, perhaps because of impending deal for Molson Coors to buy rest of MC. Plus Constellation and Heineken are digesting their purchases from last yr. Meanwhile, craft trends slowed down. All that just might lead to some interesting discussions re valuation. Duvel Moortgat USA ceo Simon Thorpe has plainly called these valuations "ridiculous." Yet plenty more craft deals in works too.  

Publishing Info

  • Year: 2016
  • Volume: 47
  • Issue #: 13
Read 1089 times Last modified on 07/27/2016

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