There’s a Reason Booze Wholesalers’ Margins Keep Widening
Hint: It’s not better service
Source: https://tomwark.
Tom Wark
January 22, 2025
Wine wholesaling is controlled by a smaller and smaller group of huge companies.
Wine wholesalers do less and less marketing and sales for producers in their portfolios
Alcohol wholesalers do fewer and fewer in-person presentations to retailers
Wine wholesalers are protected from competition through state laws that bar producers from selling directly to retailers.
And so it should be no surprise that wholesalers extract more and more margin from producers and retailers. Consider this remarkable graphic describing margins that are taken by the wholesale tier over time:
The American Association of Wine Economists created the above graph, which shows the margins taken by American wine wholesalers over the past two decades. While durable goods wholesalers and the entire wholesale industry have seen margins either stay the same or fall over the past twenty years, wine wholesalers have increased their margins by 21%.