Claiming Unfair Treatment, Buffett’s McLane Sues To Enter Texas

McLane Co., the mammoth food and drinks distributor owned by Warren Buffett’s Berkshire Hathaway, has filed a federal lawsuit in Austin claiming that the Texas Alcoholic Beverage Commission (TABC) is unfairly barring it from distributing beverage alcohol in the Lone Star State.

McLane’s lawsuit, filed in conjunction with the Texas Association of Business, takes aim at the TABC’s so-called “one share” rule—under which the agency aims to protect the three-tier system by prohibiting alcohol producers, distributors and retailers from holding as little as one overlapping ownership share in another tier of the business. Because McLane parent Berkshire Hathaway owns a 2% stake in Walmart—which retails beverage alcohol in Texas—the TABC has refused to grant it a distribution license in the state.

McLane argues that the TABC is taking its three-tier protection to extremes, noting that other states allow companies to own interests across tiers provided that they only control or influence business activities in one of those tiers. Moreover, the lawsuit alleges that the TABC is applying the one share rule unevenly, asserting that “in the last year, over 40 manufacturers, distributors and retailers with overlapping ownership had over 2,500 permits approved or renewed by the TABC.” According to the lawsuit, the TABC has granted “alcohol permits and licenses to numerous other companies, such as Core-Mark, Cost Plus of Texas, Molson Coors, Brown Forman Corp., and many others, who are similarly situated to McLane.”

McLane, which does $48 billion in sales annually, has steadily increased its drinks industry activities in recent years, and now distributes beverage alcohol in Colorado, Florida, Georgia, North Carolina and Tennessee. Contacted by SND, the TABC said it couldn’t comment on the pending litigation.

Currently Republic National Distributing Co. leads the Texas wine and spirits wholesale market with projected 2016 revenues of $2.15 billion, according to Impact. Glazer’s Companies of Texas (soon to be part of the new Southern Glazer’s) ranks second with a projected 2016 total of $1.85 billion. If McLane eventually succeeds in its quest for a license, it could potentially ignite a new era of intense competition within the state’s middle tier.

Campari Secures Control of Grand Marnier Through Tender Offer

Gruppo Campari has gained control of Grand Marnier owner Société des Produits Marnier Lapostolle (SPML) through a tender offer that closed in recent days. Campari, which already owned about 19% of SPML following a deal with the Marnier Lapostolle family announced in March, added another 50.74% for €347 million ($382m) through the offer. Campari now holds nearly 70% of the share capital of SPML and about 54% of voting rights. On July 1, Campari will assume global distribution rights for SPML’s spirits brands, including Grand Marnier Cordon Rouge, Cherry Marnier, Louis Alexandre, Cuvée du Centenaire, Cuvée du Cent Cinquantenaire and Quintessence.

News Briefs:

•Excelsior Wines’ Little Black Dress has added a rosé offering to its lineup, available nationwide. Created by winemaker Margaret Leonardi at the company’s Mendocino Country winery, Little Black Dress rosé is 54% Gewurztraminer, 23% Muscat, 14% Chardonnay, 5% Zinfandel and 4% other complementary white varietals. The rosé (12.5% abv) retails at about $12 a 750-ml. The Little Black Dress portfolio also includes Chardonnay, Cabernet Sauvignon, Diva Red, Merlot, Moscato, Pinot Grigio and Pinot Noir. The brand was down by 11% to 116,000 cases in 2015, according to Impact Databank.

•Luxco is set to launch a new Reserve extension to its David Nicholson Bourbon brand, which is also debuting new packaging across the range. The new extra-aged Reserve expression features rye in the mashbill and retails for around $35-$40 a 750-ml. bottle, compared to the core David Nicholson 1843 Kentucky Straight Bourbon Whiskey at $30-$35. Both David Nicholson variants are 100 proof.

•Sonoma-based V2 Wine Group has made a number of new appointments to bolster its sales and marketing team, including the addition of three retail chain director positions. 20-year industry veteran Julie Agrella will handle all retail chains in the western U.S. for V2, while Brad Bartram, formerly of Glazer’s, will become retail chain director for the central part of the country and Jim Grace, with 19 years of industry experience, will oversee retail chains in the East. V2 has also added four new regional managers across the country, as well as a new marketing coordinator, Louis Charton, formerly of Paul Hobbs Winery.

Craft Brewing and Distilling News:

•Boston Beer Co.’s Angry Orchard has launched Walden Hollow, a new year-round specialty cider, nationwide. The 8%-abv entry, which was created at Angry Orchard’s research and development center in Walden, New York, marks the brand’s first cider made exclusively from apple types sourced from New York State, including Golden Russet, Newtown Pippin and Northern Spy varieties. Walden Hollow ($15-$18 a 750-ml.) is rolling out as part of Angry Orchard’s small-batch Cider House Collection, with a new blend to be released annually each spring. Boston Beer Co. shipments dropped 6% in the first quarter of 2016, due in part to a decline in Angry Orchard depletions amid a recent cider category slowdown.

•Victory Brewing Company is launching the latest entry in its culinary-inspired Blackboard Series. Available from July through December, the Pennsylvania-based brewer’s Berliner Weisse with Elderflower is billed as a wheat ale, brewed with Hallertauer Hallertau hops. The limited edition will be sold across Victory’s 37-state footprint, packaged in four-packs of 12-ounce bottles ($10). Berliner Weisse with Elderflower marks the third edition in the Blackboard Series, following the debut of Agave IPA with Grapefruit and Dry-Hopped Brett Pils earlier this year. A fourth and final expression—Oatmeal Porter with Hazelnut—will round out 2016’s Blackboard lineup in October.

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