Following Planned Sale of Colorado Distribution Operations, Anheuser-Busch to Lay Off 400 Workers

In the wake of selling its Colorado distribution operations, Anheuser-Busch plans to eliminate 400 jobs at those branches effective December 4.

The world’s largest beer manufacturer filed a Worker Adjustment and Retraining Notification Act (WARN) notice with the Colorado Department of Labor and Employment of the impending terminations on September 29. The Loveland Reporter-Herald first reported the story.

Twelve days earlier, A-B announced plans to sell off its Colorado distribution branches to Georgia-based Eagle Rock Distributing, an independent distributor of A-B products that plans to expand into the state.

According to the WARN notice, A-B will eliminate 71 jobs in Loveland, 59 jobs in Colorado Springs, 220 jobs in Denver and 50 jobs in Littleton. The stated reason is “sale of company.”

Among the positions being eliminated are sales representatives, drivers, merchandisers, analysts, business development staff, marketing staff, mechanics and warehouse workers. The Register-Herald reported that some of the employees being cut are members of the Teamsters Local 455.

Impacted employees will have the opportunity to apply with Eagle Rock.

The sale of A-B’s Colorado operations transferred more than 10 million case equivalents to Eagle Rock.

The transaction also followed an agreement in July by A-B to pay a record $5 million offer in compromise (OIC) to the Alcohol and Tobacco Tax and Trade Bureau (TTB) for alleged trade practice violations related to sports and entertainment sponsorships related to its Colorado distribution operations. In addition to the fine, A-B’s importer and wholesaler permits were suspended for two days in Littleton, Colorado, and four days in Denver.

“This $5 million OIC resolves any such alleged violations that may have taken place throughout the United States through July 2, 2020,” the TTB said at the time.

The $5 million fine is the largest offer in compromise collected to date by the TTB,

A-B has actively worked to reshape its distribution operations in California over the last two years following moves made by Constellation Brands to align its beer portfolio with the Reyes Beer Division.

On Thursday, A-B announced an agreement to acquire the assets of Ace Beverage, a move that will add about 5.5 million cases of products to A-B’s business in the state.

The latest transaction followed an agreement in July to swap 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. It also came one year after A-B acquired “key assets” from Markstein Beverage Co. in San Marcos, folding the business into its Anheuser-Busch Sales of San Diego.

Both Ace Beverage and Markstein were among the four forced terminations in California by Constellation Brands with the intention to force a sale of its portfolio to Reyes in 2018.

Beer Business Daily reported today that those terminations have continued, with Constellation Brands terminating its contracts two additional California A-B wholesalers — Couch Distributing and Bottomley Distributing — which both have deals to sell their Constellation beer portfolios to Reyes.