Visalia, California-based Bueno Beverage Company will lay off 43 of its 160 employees next week following the announcement of Constellation Brands’ termination of the Anheuser-Busch InBev-aligned wholesaler.
The layoffs were listed in the California Employment Development Department’s Worker Adjustment and Retraining Notification (WARN) system in late January and were first reported by the Sun-Gazette Newspaper. Bueno’s WARN filing initially said the company would permanently lay off 68 workers.
Constellation – whose portfolio includes popular Mexican imports Corona, Modelo and Pacifico – notified Bueno and Antioch-based Markstein Sales Company that it would terminate its relationship with both family-owned Bud houses earlier this year. In most California markets, Constellation is the No. 1 beer vendor and Modelo is often the top-selling beer brand.
Constellation has been streamlining its distributor network in the Golden State since 2018, when it terminated several wholesalers, including including San Diego-based Markstein (a separate entity from Markstein in Antioch), Santa Fe Springs-based Triangle Beverage and Compton-based Beauchamp Distributing, and Los Angeles-based Ace Beverage.
The loss of the Constellation portfolio can be an existential threat to California wholesalers, as it often accounts for a significant portion of their businesses. After losing Constellation’s brands, Triangle Beverage folded.
Although no successor wholesaler has been named for Bueno or Markstein, the Constellation portfolio has gone to subsidiaries of the Reyes Beer Division in most cases. Asked about the terminations during the Beer Business Daily Beer Industry Summit last week, Constellation CEO Bill Newlands said the company is “very focused on aligning with groups that are going to invest behind our business and are going to be long-term partners.”
Kevin Luckey – executive director of California Family Beer Distributors, a group of family-owned wholesalers in the state – pushed back against Newlands’ remarks in a statement following the business conference.
“With this latest forced consolidation, Constellation threatens the long-term viability of one of America’s only woman-owned and operated distributors as well as one of the nation’s few minority-owned and operated distributors,” Luckey wrote of Markstein and Bueno. “Contrary to Mr. Newlands’ recent remarks, Constellation has long recognized Markstein Sales Company and Bueno Beverage Company as excellent partners and brand stewards that have consistently invested behind their brands over their decades-long partnerships.
“Regrettably, Constellation has chosen to abandon these long-time partners at the behest of the largest participant in the middle tier,” he continued. “Unchecked, Constellation will continue its anti-competitive approach beyond California.”
For its part, Constellation has offered this statement following reports of the terminations: “The beer industry continues to experience both consolidation and an influx of new capital disrupting the distributor marketplace. As industry dynamics, service models, and route-to-market capabilities evolve, we must make decisions that are in the best long-term interests of our ability to be most competitive and efficient as we work to meet the needs of retailers and consumers.”
Owners Dan and Rose Bueno acquired then-Sequoia Beverage in 2005 and renamed it Bueno Beverage in 2015. The wholesaler began selling what is now the Constellation portfolio in 2000. Prior to the termination by Constellation, Bueno sold about 5 million case equivalents annually to 1,000 retailers in Tulare and Kings counties. Combined, Bueno and Markstein sold about 4 million CEs of Constellation products.
UPDATE (February 9 6:50 p.m. ET): Kevin Luckey, the executive director of the California Family Beer Distributors, issued a statement calling the layoffs “no surprise” given “Constellation’s latest forced consolidation.”
“These job losses are yet another casualty of forced consolidation,” he continued. “Employees at family-owned and independent distributors aren’t just numbers who clock in and clock out. They are members of their community who give back and who, in some cases, may have worked for their employer for decades. It’s unfortunate that these aren’t the first jobs to be lost and if this trend of forced consolidation continues, they won’t be the last.”
Editor’s Note: This story has been updated to reflect new information on the number of layoffs, per Bueno Beverage president Randy Bueno’s comments to the Sun Gazette.