The fallout of Constellation Brands’ forced sale of its distribution rights in California to the Reyes Beer Division is still being felt.
Anheuser-Busch and Triangle Distributing owner Peter Heimark announced Thursday an agreement to exchange distribution rights in California, according to a joint press release shared by A-B.
That press release name-checked rival Constellation Brands for its 2018 Golden State moves that shook up California beer distribution landscape.
As part of the proposed deal, A-B would acquire distribution rights from independent A-B wholesaler Triangle in Santa Fe Springs, in exchange for A-B divesting a portion of its wholly-owned Riverside distribution operation to Heimark Distributing LLC. Peter Heimark owns both Triangle and Heimark.
“Constellation’s unexpected actions and termination of distribution rights in 2018 continue to put California’s independent wholesalers at risk of distress,” Heimark said in a press release. “Working alongside Anheuser-Busch, we are implementing solutions that will keep us competitive in the marketplace. We are proud to partner with Anheuser-Busch as they continue to support their wholesaler partners that have been impacted by these inappropriate terminations.”
A-B would pick up as around 3 million to 3.5 million cases of its product in the Triangle territory, which runs from East Los Angeles south to Long Beach. The company would continue operations at the Triangle facility, and it is interviewing existing employees for jobs there.
For Heimark, his Heimark Distribution operation would add an equivalent volume to its territory in Indio, which is adjacent to A-B’s Riverside wholesaler.
The transaction is expected to close in the fall.
A-B called the transaction “net neutral with respect to A-B distribution rights.” The company added that after Constellation’s terminations in 2018 have affected several of its wholesalers, and the company “has been working to strengthen its route-to-market system in California.”
The transition of territories “furthers the organizations’ commitment to ensuring continued quality throughout the distribution chain and helps to ensure that product continues to be available to valued California-based retailer customers and consumers,” according to A-B.
“For more than 50 years, Anheuser-Busch has proudly served California as a licensed beer distributor, and this agreement reflects our ongoing commitment to our California consumers and to strengthening both our independent wholesaler network as well as our company-owned distribution operations,” A-B chief sales officer Brendan Whitworth added in the release.
Heimark and A-B will work together on transitioning the territories in the coming weeks.
Beyond distributing A-B-owned brands, Triangle sold craft beer offerings from Firestone Walker, New Belgium, Karl Strauss, Coronado Brewing, and Left Coast, among others. Triangle’s non-alc portfolio of brands includes Nestle Nesquik, Icelandic, Jarritos, Langers and more. Those suppliers could be part of the transition, pending approvals.
In October 2018, Constellation Brands forced a sale of the rights to distribute its popular imported Mexican beer labels Corona, Modelo and Pacifico to Reyes Beverage Group from Triangle Beverage in Santa Fe Springs and Beauchamp Distributing Company in Compton.
Reyes acquired 3.4 million cases of Constellation beer products from Triangle in that deal. Constellation’s wholesaler realignment began in June 2018 when Markstein Beverage Co. sold the Constellation portfolio in northern San Diego County to Reyes subsidiary Crest Beverage.
Last September, 15 months after Markstein, under threat of termination, was forced to sell the distribution rights to Constellation Brands’ portfolio of Mexican import brands, the wholesaler sold its assets in San Marcos to A-B, which it rolled into its existing wholly owned distributor, Anheuser-Busch Sales of San Diego.
Constellation also forced a sale of its distribution rights from Ace Beverage to Reyes in 2018.
Since mid-2018, Reyes has made 11 transactions in the state of California. In mid-June, Reyes, the largest beer wholesaler in the U.S., agreed to acquire the assets of Elyxir Distributing LLC in the Monterey Bay Area of California.