Friday, January 04, 2008

Miller Coors JV: Great Taste for the Brewery, Less Filing for the Distributor

Let's face it boys and girls, any happy thoughts you have about the joint venture between Miller Brewing Company and Coors Brewing Company you can forget them. The only positive outcomes of this merger will be for the breweries involved and the large mega-wholesalers. Believe me, this new company will become "Millerized". That means less margins, no supplier supplemented POS (thanks to a wonderful program called Service 2000), higher freight, and more bureaucracy. That also means the supposed worst nightmare for small to medium sized wholesalers....consolidation. I say supposed because many think of consolidation as bad. It's not as bad as many may think. Anyway, I think the Justice Department should scrutinize every detail of the propsed merger/joint venture because it is anti-competitive and many small family-owned businesses will be pushed (read shoved) out. I would welcome that "shove" because I believe the valuations for smaller beer distributorships are as high as they will ever be. Think about it, margins are going to shrink even more, fuel, insurance, and salaries are escalating out of control, and the breweries are going to get more and more "influence" over your affairs. Just remember, as it says on our invoices, you are an independent business person free to conduct business as you see fit. If you believe that, I'd be willing to bet you think Miller/Coors is going to lower FOB's.

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