America’s second-largest alcohol distributor is laying off more than 1,700 employees after announcing it is pulling out of business in California.
Republic National Distributing, a once-dominant company that linked famous beer and vodka brands with local bars, filed paperwork to lay off 1,756 employees.
Staffers in sales, analytics, and HR roles across California are set to get their pink slips.
The job cuts are coming as the Texas-based company plans to shutter its distribution operations in California by September 2.
It’s the latest warning sign for an industry that’s already struggling with closures and job losses as Americans increasingly cut back on alcohol.
There are reportedly three main reasons for the statewide departure: increasing debt, sky-high costs, and a loss of important contracts to competitors.
Republic National has not suggested that politics have played a role in its decision, but it is re-investing in Texas with 100 new jobs.
President and CEO Bob Hendrickson said: ‘This decision is driven by rising operational costs, industry headwinds, and supplier changes that made the market unsustainable.’
A liquor distributor is pulling its business out of California, the largest alcohol market in the US
He added that the company is ‘using this moment to sharpen our focus and reinvest in the markets where we’re best positioned to grow.’
California remains a conundrum for business leaders. Business in the state makes more money than any other US market.
It’s the fourth-largest economy in the world, but also one of the most expensive places to do business.
But entering that market remains critically expensive, with high gas, rent, and labor costs.
Republic acquired Young’s Market, a distributor with a complex web of local hubs, in 2022.
But company insiders weren’t impressed with Republic National’s attention to details.
‘They started focusing on numbers instead of customer satisfaction and that’s what drove them to their fall,’ an anonymous California-based worker told specialist outlet VinePair.
A former worker claimed the company was ‘terribly run’ and its execs were ‘in over their heads’ in the Golden State.
Several liquor producers turned to another distributor in California earlier this year
It has been a difficult year for many liquor-based companies, as Americans pull back from drinking as their wallets tighten
Recently, the company also lost some of its most important contracts.
Jack Daniels, Tito’s, and High Noon all moved their business over to Reyes Beverage Group, a beer distributor with a long history in California.
Losing those contracts represented a huge loss for the company, according to The Spirits Business, and nearly forced the distributor’s hand in jumping ship from the nation’s largest alcohol market.
Industry analyst Impact Databank estimated Republic National made $2.8 billion in sales in California alone in 2022.
The company didn’t immediately respond to DailyMail.com’s request for comment.
Several other alcohol brands have encountered major business disruptions in the past year, as consumers hang up their shot glasses in an increasingly inflationary economic environment.
In February, Alamo Beer Company, a San Antonio-based brewer, filed for Chapter 11 bankruptcy.
Brüeprint Brewing Company, a North Carolina-based microbrewery, liquidated its business in April.
Even larger brands, like Stoli Vodkas, filed for bankruptcy in an increasingly difficult market.
