Exclusive news and research on the wine, spirits and beer business

Exclusive: Southern Enters Nebraska, Acquiring Sterling

February 10, 2016

Southern Wine & Spirits has reached an agreement to acquire Sterling Distributing Company of Nebraska, in a deal that gains Southern entry into one of the few non-franchise markets where it hasn’t been present.

The Omaha-based Sterling is one of Nebraska’s leading spirits and wine distributors, with annual revenue of around $65 million. Its leading suppliers include Diageo North America, Heaven Hill Brands, Moët Hennessy USA, Fifth Generation Inc. (Tito’s), Deutsch Family Wine & Spirits and Palm Bay International.

While Nebraska is a relatively small drinks market, with a total population of only around 2 million, it’s enjoyed considerable interest from the middle tier’s top players. Republic National Distributing Co. (RNDC) has been active in Nebraska for years, as has Johnson Brothers. The entry of Southern—which has been licensed to operate in Nebraska since 2007—will surely heat up the competition.

Upon the completion of Southern’s merger with Glazer’s—scheduled for the second quarter of this year—the newly formed Southern Glazer’s Wine and Spirits LLC will have operations in more than 40 states. Most of the markets in which Southern Glazer’s won’t be present are franchise states, where the movement of brands and supplier portfolios between distributors are restricted by state laws. However, Southern Glazer’s will be operating in several franchise markets, including Arkansas, Missouri, Nevada, New Mexico and Tennessee.

Ironically, in 2004, Glazer’s reached a deal to acquire both Sterling and its Wisconsin counterpart, Capitol-Husting Co. (both are owned by the Alevizos family). However, that deal fell through. Southern is only acquiring Sterling, not Capitol-Husting.

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