Merger Madness in the Alcohol Industry

Alcohol has always been part of the American culture. When the Puritans arrived on Boston’s shore in 1630 they brought beer and distilled spirits with them. For almost 300 years alcohol remained relatively unrestricted and accessible. Congress passed the 18 th amendment in 1919, which barred anyone from making or distributing liquor. Prohibition, the 13-year social experiment banning alcohol across the country, began in 1920. The federal policy of Prohibition ended nationally, with the pasage of the 21 st Amendment to the United States Constitution enacted on December 5, 1933. In addition to repealing Prohibition, it allowed states to decide how alcohol would move through the system. For more than six decades, license states and control states have managed the flow of alcoholic beverages in complex and diverse ways. In the recent decade the industry has consolidated through a series of mergers and acquisitions. The consolidation trend is well documented among wine and spirit wholesalers. While other industries are seeing even greater activity in terms of mergers and acquisitions, the alcohol industry is experiencing consolidation and other significant changes at the same time. These changes include an array of market dynamics as well as constant concern with public image issues.