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Southern Expanding In Minnesota With Quality Wine & Spirits Acquisition

February 21, 2012

Southern Wine & Spirits of Minnesota, the joint venture between Southern and eighth-ranked U.S. beer distributor J.J. Taylor, has signed a letter of intent to acquire certain assets of fellow Minnesota wholesaler Quality Wine & Spirits for an undisclosed sum. The deal is expected to close in March.

In Minnesota, spirits producers sell to every wholesaler, but wine lines are exclusive. “Southern is buying our wine business and our relationships with retailers,” Quality Wine & Spirits owner Jack Goldenberg told Shanken News Daily. Quality’s wine portfolio includes Constellation, Treasury, Huneeus, Boisset Family Estates and Canopy Management labels among others.

“In an era of consolidation, distributors like me lack a national footprint or assets to make consolidation work,” Goldenberg added. “We were faced with a consolidation of one of our major suppliers and could not afford to win (their business) or lose it.”

Quality Wine & Spirits, founded 76 years ago, is Minnesota’s third-largest wine and spirits wholesaler—just ahead of fourth-ranked Southern, which had projected revenues of roughly $60 million in the state last year. The state’s biggest wine and spirits wholesaler is Johnson Bros., whose revenues are not broken out state by state. In second place is Wirtz Beverage, with projected Minnesota sales of around $230 million in 2011, according to Impact. “Once the deal is finalized, I believe we’ll be in second place after Johnson Brothers,” Goldenberg said.

The Southern-J.J. Taylor joint venture—which utilizes J.J. Taylor’s infrastructure while Southern takes the lead on sales—was created in 2010. It currently handles brands from Pernod Ricard, White Rock Distilleries, Patrón Spirits, Russian Standard, Sazerac, Winebow and Palm Bay International, among others.

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