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Buzz: Buffett Buys Empire

Wine & Spirits Daily:

The streets are a’buzz with unconfirmed reports that legendary investor Warren Buffett, through a subsidiary owned by Berkshire Hathaway, has purchased wine and spirits distributor Empire Distributors. Representatives at Empire and Berkshire were unavailable after hours at press time.

If true, this could signal a new era in distribution in the industry with a new well-capitalized player. Empire likely is not the end, as Buffett looks to roll up the regional players or possibly go after the Big Kahuna, Southern Wine & Spirits. It’s likely that Buffett paid top dollar since Georgia is a franchise state. Also, he can’t buy too much more market share in Georgia as the state has capped acquisition based market share at 25%. However, this may be a beachhead to purchasing more wine and spirits wholesalers in other states. It will be interesting to see how the suppliers deal with a public company as historically spirits companies prefer privately held distributorships.

Buffett is no stranger to the alcohol beverage industry, once being among the largest shareholders of Anheuser-Busch. Stay tuned…