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

RNDC-Breakthru Deal: FTC Raised Concerns About “Anticompetitive Harm,” But Didn’t Respond To Concessions Offered

April 9, 2019

Late last week, SND reported that after 16 months of talks, Republic National Distributing Co. (RNDC) and Breakthru Beverage Group agreed to terminate their proposed merger. Yesterday, the Federal Trade Commission (FTC) weighed in on the matter with a statement noting that it had “significant concerns about likely anticompetitive harm if the transaction were completed.” However, SND understands that the companies offered potential solutions to those concerns, but those offers went unanswered.

Ian Conner, deputy director of the FTC’s Bureau of Competition, wrote that the agency’s staff “gathered extensive testimonial, documentary, and economic evidence to support our concerns that this transaction likely would have resulted in higher prices and diminished service in the distribution of wine and spirits in several states.”

Conner continued, “The transaction likely would have adversely impacted suppliers of wine and spirits that depend on these distributors to promote and distribute their products, and retail and foodservice customers that purchase those products from RNDC and Breakthru. Now that the deal has been abandoned, consumers will continue to benefit from meaningful competition between RNDC and Breakthru Beverage.”

The FTC did not identify specific markets where it saw potential for competition issues. A senior RNDC executive emphasized to SND that the companies tried numerous times to negotiate a possible resolution to the impasse with FTC officials, but did not receive a response.—Daniel Marsteller

Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.

Tagged : , ,

Get your first look at 2018 data and 2019 projections for the wine and spirits industries. Order your 2019 Impact Databank Reports. Click here.

Previous :  Next :