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# Opinion: Why Southern Glazer's Will Be  Untouchable Until 2284
- URL: https://bevnews.net/why-southern-glazers-is-untouchable/
- Published: 2026-10-09T04:41:26.000Z
- Updated: 2026-10-09T05:23:05.000Z
- Author: Joel Whitaker
- Tags: Antitrust

In his [Fermentation](https://mail.google.com/mail/u/0/?tab=rm&ogbl&ref=bevnews.net#inbox/FMfcgzQhWnvRPzzShDWBmTWwhlxgTCpp) Substack, Tom Wark asks just what it would take for the State of California to revoke Southern Glazer's permit to operate in the Golden Gate State.

It certainly won't be the recent "miniscule $12.5 million" fine Southern Glazer's paid to the Federal Trade Commission, Wark says. So the State of California, through a new agency, is conducting its own investigation of Southern Glazer's.

Wark is dubious about what California's investigation will amount to, other than a shakedown (my word, not his) by California of Southern Glazer's. "The problem is this," he says: "When wholesalers are protected from competition through a legal mandate that their services must be used by retailers and producers, and when a single wholesaler is allowed to become so large that their operations cannot be disrupted without significantly harming other companies, and when that same wholesaler has [**delivered more than $700,000 in campaign contributions**](https://substack.com/redirect/398e9dbd-f920-4499-9c43-2ef641483f16?j=eyJ1IjoiMnVleWp1In0.1968ObUPQ6RJnPvXkBXZcLSp-IHEdC%5FM5F49mnw%5FUDg&ref=bevnews.net) to California lawmakers in just the last three election cycles, effective enforcement of laws is impossible."

How did we get into this mess? The utter failure of state and federal governments to enforce antitrust laws. To put it bluntly, there is no real reason why any wholesaler should sell beer, wine, spirits in more than one state. 

Lest you think I'm picking on Southern Glazer's or any beverage distributor, I'm not. There also is no reason why JP Morgan Chase should have branches in 48 states and Washington, DC. Nor is there any reason why Wells Fargo or Bank of America should have branches in 35 to 38 states. Or why Nexstar Media Group should operate 265 full-power TV stations across 132 markets in 44 states. Or why Exelon Corp. should own the formerly independent utilities serving Chicagoland, Philadelphia, Baltimore, Washington D.C., Delaware, and Atlantic City.

None of these companies became national behemoths by starting businesses in all these locations. They simply bought them. That's how Southern Glazer's grew from Florida to dominate 47 states and the District of Columbia.

Was it necessary to buy up competitors? No. Walmart, Costco, Dollar General and Total Wine & Spirits all grew organically. The bev/al wholesalers were pushed by their suppliers to take the riskier route of buying their way into a market (remember RNDC's disastrous acquisition of Young's Market Co.).

Much of the middle tier – not just in bev/al but also in other commodity lines – grew by buying their competitors. This directly violates Section 7 of the Clayton Act, which explicitly prohibits mergers and acquisitions where the effect "may be substantially to lessen competition, or to tend to create a monopoly."

So why isn't this enforced? Well, it is – sort of. When Republic National Distributing Co. set out to acquire Young's Market Co., it had to receive FTC clearance under the Hart-Scott-Rodino Antitrust Improvements Act. The FTC, which had rejected RNDC's attempt to merge with Breakthru Beverage, decided the Young's Market deal was okay because the two companies operated in different states.

So, what's wrong with that? Legally, nothing. But, as Wark notes, Southern Glazer's size alone makes it virtually "too big" to meaningfully punish. The merger of distributors that led to Southern Glazer's, Breakthru and Reyes, among others, was initiated by major suppliers who wanted to have one distributor per state, not 10\. Once they got one distributor per state, it only made sense to seek to encourage the development of large distributor networks covering many states.

But I think there are problems, not just in the alcohol business but with unnecessary multistate operations in general: 

- The collapse of RNDC demonstrated what happens when one fails. For many suppliers, the result was choas.
- It's harder for a new distributor to enter the market in a significant way. For that matter, it's harder for Breakthru, or Reyes, or Empire to compete. If one of them starts to present a threat, Southern Glazer's can simply shift resources and whip them back into line.
- When there's one distributor (or bank or radio station group, etc.) the opportunity for several people to become CEOs is eliminated. Sure, Southern Glazer's may give someone the title of "President, New Jersey" but he's not the CEO.
- The chances for innovation are reduced.
- The possibility of local control is removed.

In my Don Quixote moments, I think these operations that unnecessarily cover multiple states should be broken up into state-based distributors and local utilities, banks and broadcasters, with a limit on the number of stations per market and in total. 

In my more sober moments, I know that won't happen until 2284\. I'm looking forward to 2284\.