California’s beer distribution system is being shaken up once again.
Anheuser-Busch InBev announced Friday evening the planned acquisition of “key assets” from Markstein Beverage Co. in San Marcos, California. The company will add those assets to its existing wholly owned distributor, Anheuser-Busch Sales of San Diego.
The move comes about 15 months after Markstein, under threat of termination, was forced to sell the distribution rights to the Constellation Brands portfolio of Mexican import brands, including Corona Extra, Modelo Especial, and Pacifico, among others, in northern San Diego County to the Reyes Beverage Group.
Financial terms of the deal were not disclosed. The transaction is expected to close upon closing requirements being met.
According to a press release, A-B and Markstein will work together in the coming weeks to “ensure a seamless transition.”
“Markstein Beverage Co. has been a long-time partner and we believe this purchase is a natural extension of our business in California,” A-B chief sales officer Brendan Whitworth said in the release. “We thank the Markstein Family for their 32 years in San Diego with Anheuser Busch, and we wish the Markstein family all the best and look forward to them continuing to play a critical role in driving Anheuser-Busch sales within the region.
“For more than 50 years, Anheuser-Busch has proudly served California as a licensed beer distributor, and this agreement further reflects our commitment and dedication to our California consumers,” he added.
Markstein Beverage Co. president Travis Markstein and his family have decided to focus on their Sacramento-based beer wholesaler, which was not included in the transaction, according to the release.
“While we are saddened to have to say goodbye to our people and end our legacy of service in San Diego, the economics of our business were just no longer viable after the unexpected loss of the Constellation brands last year” Markstein said in the release. “We are happy, however, that Anheuser-Busch expressed an interest in our remaining business and has agreed to acquire it.”
Beyond A-B products, Markstein’s portfolio in San Marcos includes craft brands such as Sierra Nevada, Hangar 24, Speakeasy and Drake’s Brewing, as well as offerings from Craft Brew Alliance, including Kona Brewing, Redhook, Widmer Brothers and Square Mile Cider. The future of those brands’ distribution appears unclear.
Asked if Sierra Nevada’s distribution rights would transfer to the A-B WOD, chief commercial officer Joe Whitney told Brewbound that the Chico, California-headquartered craft brewery is “working through that now but it seems unlikely.”
Given CBA’s distribution agreement with A-B, those brands would appear safe.