The country’s second-largest beverage-alcohol distributor, Republic National Distributing Company (RNDC), is shuttering its operations in California, the country’s largest spirits market, after losing several major suppliers.
“We’ve made the difficult business decision to withdraw from California which affects many of the roles in the state,” said Bob Hendrickson, CEO of RNDC in a statement to BevNET. “We are complying with all regulatory obligations and are committed to handling every transition thoughtfully and smoothly and ensuring everyone is treated fairly and respectfully. We are grateful for the support of these employees and will do our best to support them during this time.”
The distributor will withdraw from California effective September 1, according to VinePair.
The news follows Brown-Forman announcing last week that after leaving RNDC in California, it will now follow suit in other states. The Jack Daniel’s maker is the latest name to drop RNDC, just a few weeks after Anheuser-Busch-backed Cutwater, the second-largest spirits-based RTD, exited RNDC in California, Hawaii, and 13 control states.
Brown-Forman was the latest in a supplier exodus from RNDC, whose former CEO, Nick Mehall, departed the company in February after Brown-Forman and Tito’s Handmade Vodka, the top-selling spirit brand in the country, announced their departures in California. High Noon, the top-selling spirits-based RTD, also left the distributor’s operations in California this year. The loss of major suppliers had already caused layoffs for RNDC in the state, with at least 60 employees let go in March, which coincided with Tito’s exit on April 1.
Earlier this year, the distributor said that it is “facing tighter margins, higher costs and shifting consumer preferences,” in a statement.
With the loss of its largest spirits market and major suppliers, it’s unclear what the future holds for the distributor. RNDC tried to merge with competitor Breakthru Beverage in 2017, but was blocked by a Federal Trade Commission (FTC) review.
This is a developing story.
Read more:
RNDC Rocked By Brown-Forman Exit As Supplier Exodus Continues