Enter your email address:

Delivered by FeedBurner

Subscribe in a reader

My Photo

Recent Comments

August 2018

Sun Mon Tue Wed Thu Fri Sat
      1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31  

« Was ain’t is | Main | Bringing a knife to a gun fight »

Let’s Make a Deal

The deal offers and ideas are coming a mile a minute out there in beer wholesaler-land.  Some people are racing to beat the forecast increase in capital gains taxes (and other taxes).  Others are attempting to beat the MillerCoors contract and get things done before signing.  Still others in unconsolidated Miller Coors territories are trying to get something done before the ultimate “tap on the back” comes… of course some are playing chicken with neither side willing to give.  On the other side of the fence, you’ve got some A-B folks getting out while the gettin’s good… leaving before InBev gets in the picture.  Other A-B people see the future differently and are moving to acquire and consolidate… both horizontal consolidations and just picking up distributors wherever they can find them… building the dynasty one wholesaler at a time.


I don’t think there has ever been a time like this in the beer distribution industry.  So with all this deal making going on, here’s some simple advice.


·                    If you are attempting to combine or merge in any manner, always focus your discussions on where you agree, not where you disagree.  Especially at the beginning of these discussions, spending all of your energies on where you disagree will generally only lead to not getting something done.  Of course at some point in time you will have to address the areas of disagreement but not at the beginning!  In many cases you will find that the supposed area of disagreement will disappear as you progress down the continuum of building the new organization.  At the beginning, just start a list of issues which at some point in time will need to be addressed… kick this can far down the road.  If you do, you just might actually succeed.

·                    Pigs get fat, hogs get slaughtered.  In the stock market you can never time the exact high’s and the exact low’s… it can’t be done and usually attempting to get that “just one more penny” can end up being very costly.  I won’t tell you how to play your poker hand but is winning (and getting a deal done) the goal?  Or is wringing absolutely every penny from the deal the goal?  The second strategy will often cost the entire deal… think very long and hard about the costs and benefits of these actions, especially as you near the end of the road.

·                    If you are on the purchasing side… no one will remember what you paid in 10 or 15 years.  These are profound strategic decisions.  In many cases the decisions you make now will determine whether you even exist in a few years.  Passing now because the game got more than you want to pay can change the entire layout… and once passed, there is no going back.  This is the time to set your foot print and ensure your long-term survival.  Passing on a strategic deal over a few million will look like a dumb idea in 10 years. 

·                    Compromise is almost always required.  Regardless of which side you are on, it is the rare situation where you can get 100% of what you want.  Whether a sale or merger or shared services or whatever, be prepared to compromise.  If you want everything 100% your way, don’t even start and waste everyone’s time.

·                    If some type of combination is being considered, put the whole concept of control in a closet and lock the door.  Everyone throws around the word control but what exactly does it mean?  Everyone can’t own 51% of the dang thing.  There are many types of control and many ways to control… don’t get hung up on this idea.  Good corporate attorneys have been protecting minority rights for over 100 years.  If you can agree to it, it can be done.  And since I doubt if you are an attorney, don’t argue and debate what can and can’t be done.  Decide what you want, take it to an attorney and tell them to make it so.  Remember, by definition some type of merger or shared services is a reduction in control… it must be.  Although control of various actions is of course important, ultimately you want to protect your financial resources.  Keep your eye on that ball and you can get the thing done.

·                    Is a merger right for you?  Take a hard look in the mirror.  You’ll have new partners.  Can you work with them?  Do you want to?  From my experiences the hang-ups on mergers are seldom if ever operational in nature… rather the problems are emotional.  If we can overcome the emotional issues, putting together a win-win operational merger is a piece of cake.  Is it about making a lot more money, being much more attractive to various suppliers, having better purchasing power on almost everything, and ensuring your long-term viability?  Of is it about ego?  Only each of you can decide that.


These are incredible times in the beer distribution world.  This is no time to be timid.  If you want to be around for future generations you had better force your way on to the table.  If you’re still waiting around to find a “good” deal, i,e, attempting to low-ball one, you might as well get out now.  The people who are playing understand the stakes… this is most definitely the time to either run with the big dogs or to go back under the porch.  Your call.  But a call must be made because doing nothing is simply not an option. 


TrackBack URL for this entry:

Listed below are links to weblogs that reference Let’s Make a Deal:


The comments to this entry are closed.