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Exclusive: RNDC, Breakthru End Merger Talks. FTC’s Lack Of Response Is Blamed.

Monday, April 8, 2019  
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Shanken News Daily | Daniel Marsteller
April 5, 2019

Big news this morning from the wholesale tier. SND has learned that after 16 months of talks, Republic National Distributing Co. (RNDC) and Breakthru Beverage Group have ended discussions about a merger of the two companies, the second- and third-largest wine and spirits wholesalers in the U.S., respectively.

SND understands that the companies have decided to move on, due to the Federal Trade Commission dragging its feet. With legal fees mounting, RNDC and Breakthru opted to withdraw their application to the FTC.

Originally announced in November 2017, the merger of RNDC and Breakthru was expected to create a 30-state distributor that could mount a national challenge to 45-market player Southern Glazer’s Wine & Spirits. RNDC is projecting revenues of $8.1 billion this year, while Breakthru is expected to tally $5.4 billion in sales, according to Shanken’s Impact Newsletter. Combined, the two companies would have sales of approximately $13.5 billion and a nearly 23% share of the total wine and spirits wholesale market in the U.S.

Southern Glazer’s, meanwhile, is projecting revenues of $19 billion, taking a 32.2% share of the wine and spirits wholesale tier. This year, overall wholesale revenues in the U.S. wine and spirits market are expected to increase 2.8% to $59.1 billion, according to Shanken’s Impact Newsletter.

Among the states where RNDC and Breakthru are both present, the largest include Florida, Colorado, and Maryland. In Florida, for example, RNDC-Breakthru’s combined revenues are projected at $1.9 billion this year, compared with $3 billion for Southern Glazer’s. In Colorado and Maryland, RNDC-Breakthru’s combined sales are expected to reach $1.2 billion and $940 million, respectively, potentially giving the merged entity a dominant position in both states. Now those plans have been put on hold, at least temporarily. However, it’s still possible that the merger talks could be reopened in the future.


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