Gallo and its many brands own 22% of the U.S. wine market by volume. Considering there are 11,000 wineries in the country, that is huge! On the beer side, Anheuser-Busch InBev owns 40% of that market. It's not just product, it's also distribution and shelf space.
Biden wants to rein in companies that have gotten too big and too monopolistic costing customers selection and money plus making it near impossible for the little guys to get a foothold. This isn't just about Google and Facebook as Biden is looking at Big Pharma and Big Agriculture. Booze is part of that.
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| Gallo's acquisitions earlier this year from Constellation Brands click on image to enlarge |
Federal agencies have been directed to investigate competitive barriers. The Treasury Dept. is looking at competition in wine, beer, and spirits, specifically whether smaller businesses are being hindered from distributing their products. And, yes, they are. So the small family run winery, the craft brewery, and craft distilleries stand to gain a level playing field. The alcohol biz has lots of lobbyists and lawyers who are no doubt circling the wagons right now. The alcohol lobby spends a million dollars a month in Washington, DC on influence peddling.
There have been lots of mergers and acquisitions recently. I expect Gallo's recent $810 million deal with Constellation Brands caught someone's attention. Gallo now owns several wineries in Sonoma County and has had a huge production facility here for many years.
There are also a few distributors who control most of the market. Alcohol distribution is already a slimy business. Having no competition makes it worse.
Sonoma County has hundreds of small wineries, about 40 breweries, and about a dozen distilleries. These small businesses, and thousands like them across the country, would like an equal chance to sell to retail shops and restaurants.
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