Two of Maryland's largest wholesale alcohol distributors are pressing ahead with plans for a partnership after the state attorney general's office decided not to challenge the plan on antitrust grounds.
Churchill Distributors LLC of Baltimore and Reliable Liquors Inc. of Glen Burnie will form Reliable Churchill LLLP. The new venture will be an affiliate of the Charmer-Sunbelt Group, owner of Churchill and one of the largest beverage distributors in the country.
James Smith, president of Reliable, will become the chairman and chief executive of the company. Churchill's president, Greg Baird, will serve as president of the new company.
Both executives could not be reached for comment yesterday, and terms of the deal were not disclosed in a news release.
The partnership between the two private companies reflects a nationwide trend in the consolidation of liquor wholesalers over the past few years with fewer - but larger - companies controlling the sale and distribution of beer, wine and liquor to restaurants, package stores and bars, according to industry experts.
But because of state regulations, which allow only one wholesaler to sell a particular brand of wine and spirits in Maryland, the partnership probably will not affect consumer prices because Churchill and Reliable do not sell the same products, state officials said.
"The consumer is not likely to be harmed or impacted in any way by this partnership," said Meredyth Smith Andrus, an assistant state attorney general in the antitrust division. "We are not anticipating higher prices at the consumer level as a result of the partnership."
The prices of alcoholic beverages, Andrus said, are driven more by the supplier than by the distributor or retailer.
In its last fiscal year, the state collected more than $24 million in taxes from 86 companies that sell wine, beer and liquor in Maryland, said Charles W. Ehart, director of the state's Alcohol & Tobacco Tax Division. Despite the growth of a few big companies, the state still has many smaller wholesalers, he said.
"Even though [Reliable Churchill] is a bigger company, there's still only one wholesaler handling each product," Ehart said. "If they were able to handle the same products, that could potentially affect competition ... , but that wasn't the case here."
But, Ehart said, the number of large wholesalers in Maryland has diminished in the past few decades.
"When I came here [in 1973], we probably had 13 to 15 significantly sized wholesalers for wine and liquor. Today we have maybe two or three," he said.
Several retailers agreed that the merger probably would not affect consumers.
Robert Pearlstein, owner and managing operator of Federal Hill Wine and Spirits on South Charles Street, said he doesn't think the merger will affect prices.
"Churchill has very strong brands, and Reliable will be strengthened by the move because recently they lost Absolut and Dewar's," he said.
Pearlstein said that, from Churchill, he buys a variety of liquors (Jack Daniel's whiskey, Bacardi rum, Dewar's Scotch and Smirnoff vodka, to name a few) and several wines (including Kendall Jackson, Berringer, Hess and a number of Australian wines).
Well-known brands from Reliable, Pearlstein said, are the Moet-Chandon champagne lines, Captain Morgan spiced rum, Johnny Walker Scotch brands and George Duboeuf, a wine brand.