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Joel Armato
Posts: 8
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« on: January 17, 2008, 01:03:19 PM » |
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I have a question about three-tier that hopefully someone can chime in on because South Eastern, PA is hemmoraging over HopSlam right now.
If there's one Wholesaler for Bell's in a region do other wholesalers also have to go through them, and if so is the beer taxed extra on that extra transaction driving price up for either the wholesaler, distributor, or buyer to pay?
Or are other Wholesalers just not in on the action for that particular brand?
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Grant McCracken
Posts: 27
Grant McCracken
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« Reply #1 on: January 18, 2008, 10:48:01 AM » |
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I would assume it's in the contract. If your brand is big enough (Bell's is quite large) they could possibly rationalize having more than one distributor in a region; especially if it's very fragmented. I guess it would ultimately come down to whether or not the distributor agreed to not having full control though.
I've never heard of distributors going through distributors, but I guess it's possible...
Grant
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David Little
Posts: 14
Craft beer anyone?
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« Reply #2 on: January 20, 2008, 10:39:42 AM » |
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Grant, a wholeseller won't go through another wholeseller for product in the same territory. A State can be divided up into smaller territories (usually by county) and then brands can be assigned to multiple wholesellers but each wholeseller will obtain their product from the producer or importer for distribution in their territory.
The only time one wholeseller will get product from another wholeseller is when the producer doesn't have stock (or can't get it to the wholeseller in time) and then stock can be transfered from another wholeseller. In this case, taxes aren't paid twice so the only incremental cost would be the transportation from one wholeseller to the other.
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RD2
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« Reply #3 on: January 22, 2008, 11:21:24 AM » |
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Good answers from Grant and David.
I would add that you occasionally see a "master distributor" for a state who might handle the most populous area (e.g. Chicago) and contract for small sub-distributors to handle other parts of the state. This is rare, but I have heard of it.
Anyone have experience with an arrangement like this?
Cheers,
Ray
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Ray Daniels
Director, Cicerone Certification Program
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Jon Piepenbrok
Posts: 1
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« Reply #4 on: January 23, 2008, 01:40:41 PM » |
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As far as a sub-distributor network, Rave Associates in Ann Arbor, MI does exactly that. They often will contract a new brand for the entire state and sub through other wholesalers. Not sure what Rave charges, but when wholesalers buy from other wholesalers, they pay an upcharge on the product. It's usually no more than a dollar a case, which is compounded onto the original freight cost, not price to retailer.
Rave, for example, only self-distributes to a territory of nine counties, but their brands are available through other houses in any county in the state.
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Joel Armato
Posts: 8
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« Reply #5 on: January 24, 2008, 12:24:35 PM » |
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Thanks for all of the perspectives and facts here guys. It's much appreciated.
Enjoy the weekend.
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David Armanetti
Posts: 1
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« Reply #6 on: January 25, 2008, 11:09:02 AM » |
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I would add that you occasionally see a "master distributor" for a state who might handle the most populous area (e.g. Chicago) and contract for small sub-distributors to handle other parts of the state. This is rare, but I have heard of it.
Anyone have experience with an arrangement like this?
Cheers,
Ray
If I remember correctly, Louis Glunz is a so-called "master distributor." I think they sell to guys in downstate Illinois. |
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Richard Heller
Posts: 2
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« Reply #7 on: March 25, 2008, 01:01:19 PM » |
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There is really a push towards "Master Distributors", (MD). A MD may get a statewide territory, but only directly service part of the geography, and essentially subbing out the rest of the territory. The master distributor will provide other services that are valuable to both the supplier and the sub, such as bulk breaking, Merchandising materials, and, making key retailer calls to gain retailer authorizations. Those authorizations are CRITICAL to the success of any brand. As more and more retailers become part of chains, or advertising co-ops, the Key Account Manager becomes more important. But, this is a chicken or the egg situation. Distributors want the authorizations prior to taking on the brand (guaranteeing volume), while retailers want their stores covered before adding the authorization.
Again, these MDs are more critical for small brands. So, in fact someone like Stawski or Glunz distributes directly in the Chicago market, they will bring on subs to cover the rest of the surrounding geography. Most distributors drive by the MDs on their way to pick up other products, like from Miller in Milwaukee. To find a brand, call the local distributor, or the brewery; they wil be able to tell you of any retailers handling the brand in your market
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Timothy Conheeney
Posts: 1
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« Reply #8 on: December 28, 2009, 11:56:53 PM » |
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I have a question about three-tier that hopefully someone can chime in on because South Eastern, PA is hemmoraging over HopSlam right now.
If there's one Wholesaler for Bell's in a region do other wholesalers also have to go through them, and if so is the beer taxed extra on that extra transaction driving price up for either the wholesaler, distributor, or buyer to pay?
Sorry to drag up an old topic, but our situation in PA is a bit different than most other states. We have the additional "distributor" tier. These distributors, positioned between the wholesaler and the deli/bar off-premise licensee, are open to the public but prohibited from breaking up packages or selling smaller packages (the "case law"). So, yes, these distributors must purchase from the ID (importing distributor) who has the distribution rights to that brand in that territory. And yes, unless the "secondary" distributor is operating on unusually low margins, there will be a price increase. Here in eastern PA, the wholesaler for Bell's has the rights to Philadelphia and 15(?) surrounding counties. Hopslam being a pretty popular and relatively limited release is usually allocated to be fair and spread it about. Last release (around when you originally posted) we received 4 cases, and 4 lucky customers got themselves one in 3 days. Even I was forced to picking up a 6-pack from the local deli bottle shop (though they had failed to update the price in their system so I got the 2008 price  Hope this provides some insight as Pennsylvania seems to want to make things that much more difficult. |
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Jeffrey Banet
Posts: 1
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« Reply #9 on: September 19, 2011, 10:31:21 PM » |
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I have a question about three-tier that hopefully someone can chime in on because South Eastern, PA is hemmoraging over HopSlam right now.
If there's one Wholesaler for Bell's in a region do other wholesalers also have to go through them, and if so is the beer taxed extra on that extra transaction driving price up for either the wholesaler, distributor, or buyer to pay?
Or are other Wholesalers just not in on the action for that particular brand?
The answer is Yes - you have to buy through the Distributor in your geographical area that has the rights to that brand or product. There is no Dual representation on the wholesale side: PALCB Code: SECTION 4-431. After January 1, 1980 , no manufacturer shall enter into any agreement with more than one distributor or importing distributor for the purpose of establishing more than one agreement for designated brand or brands of malt or brewed beverages in any one territory. Each franchise territory which is granted by a manufacturer shall be geographically contiguous. All importing distributors shall maintain sufficient records to evidence compliance of this section. With regard to any territorial distribution authority granted to an importing distributor by a manufacturer of malt or brewed beverages after January 1, 1996, the records shall establish that each and every case of a brand of malt or brewed beverages for which the importing distributor is assigned was sold, resold, stored, delivered or transported by the importing distributor, either from a point or to a point within the assigned geographically contiguous territory, to any person or persons, whether such person or persons are licensed by this act or not licensed by this act. |
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