Substantial Distribution Companies Prepare To Merge Into Liquor Group

Jacksonville, FL - When you walk into the tall, cold grey granite and tinted glass clad corporate offices of Liquor Group you expect to be visiting an industry standard facility, much as you would find at major alcohol distribution company. I know, I have visited many of them in my years are as an alcohol beverage reporter. However, instead you are immediately surprised by the warm feeling engendered by the Liquor Group headquarters. Linda, a kind hearted New York-Jewish lady greets you with a smile and a joke then sends you back to meet the team. You then enter a large room with multiple groupings of living room sets, complete with TV’s tuned to cable news, and then you see a large old fashioned mahogany bar, not something you generally see in Corporate America. Further back as you get closer to the VP and President’s offices you must walk around a golf putting area and a billiards table, so I think to myself ‘this is my kind of office!’ So it was no surprise to me when the executives at Liquor Group Wholesale (OTCBB:LIQR) put out the word that they were looking to acquire distribution companies through stock purchase, that if this is how they are operating during this worldwide financial meltdown, I can imagine the tremendous response they received. “We are continuing to sift through the litany of proposals from state level distribution companies interested in merging into the Liquor Group network. We received some promising prospects, we have begun implementing several of them…” says Lowell Newman, VP of License States “…and we are still setting phone conferences from companies whom reached out to us as far back as last month.” Intrigued by this operation, I decided to ask some basic questions to Mr. Newman about the company and I was surprised with what I found: Q: Why would an established alcohol distributor want to become part of Liquor Group? The open areas at Liquor Group’s corporate offices are more like living rooms than meeting space, complete with a full bar, billiards, golf putting area and televisions. A: The Patent Pending Innovative Distribution Business Method utilized exclusively by Liquor Group which gained publicity when approved by the Tax & Trade Bureau in March of 2009 provides substantial operational and costs savings over traditional distribution, allowing us unlimited brand selection growth without carrying costs of traditional inventory, and quite frankly, other options for liquidity for the owners of mid sized distribution companies is thin at best. This is a radical difference from the normal operations of alcohol distribution companies, and we feel it is the difference that will allow Liquor Group to continue to excel in up or down markets. Q. What triggered the decision to merge vs. organic growth? A. Our organic growth has been astounding, in 2005 we only had 4 products, by 2006 we had 660, by 2007 we had 1250, and now we have more than 1700. Liquor Group is growing rapidly, and we are having fun while doing it, however, consolidation is all around the industry right now, as companies seek efficiencies of scale. Even 100 year old titans of the alcohol beverage industry such as Glaziers find themselves now merging with Southern Wine & Spirits, and other giants such as Republic gobbled up National Distributing, which is all just a part of the largest scale of consolidation ever seen in the business, spelling trouble for lesser distribution companies and brand portfolios trying to compete against them. However, we are interested in the acquisition of all types of distribution targets, large, mid and small. Q. Why are brands, import portfolios and distilleries flocking to Liquor Group? A. One basic principle in nature is part of the success of Liquor Group: SAFETY IN NUMBERS. Liquor Group represents so many brands in so many states that it provides safety for products that may not make the cut under their own horsepower. Our one price policy is also a strong selling point in the market, and research shows that overall the clients of Liquor Group approve of out pricing methodology and overall strategy. Our brand policy also dictates the taking of no favorites; we treat all brands fairly and provide each with the same opportunities to market. We represent small brand suppliers with only 1 SKU to large scale distilleries offering a hundred varieties of products. Last but not least, Liquor Group offers a viable and lasting alternative to the traditional distribution model that is not affected by the titans of the industry; therefore we can survive where others will eventually fail. Q. What does the publicly traded portion of Liquor Group provide to your company in this strategy? “Safety in numbers” is a key component to the ongoing success of Liquor Group. A. Liquor Group Wholesale (OTCBB:LIQR) is a vehicle created to take advantage of our plans for future growth of the overall Liquor Group operations. The company does not yet control even 10% of the overall Liquor Group privately held company asset base, however it is a key component in our unified strategy. We are the first and still the only publicly traded liquor distribution company with operations in the US, and we hope to follow the model set by Central European Distributing Company (NYSE:CEDC) in terms of shareholder value growth. Buy utilizing stock to acquire other distribution companies, we are in essence “buying them in” not “buying them out” which allows the owners of these companies to enjoy the upside potential of their stock shares in LIQR. Q. Who has answered your call to tender for acquisition? A. The Liquor industry though large in scale in dollars and economic impact, it is very small in numbers of top management personnel. When we put out the word that we were interested in purchasing distribution companies, it spread through the industry like wild fire. Several mid-market companies immediately came forward and some that are larger in their individual state than any individual Liquor Group state level operation have expressed interest and are at the discussion table. However, since we have not finalized any of the multiple initiatives that we have begun, it is too early for me to “let the cats out of the bag”. And so my day was complete, as I stepped back on the airplane heading home to New York City I thought to myself…if only I was an alcohol beverage executive instead of an alcohol beverage reporter…then I sat down in my coach seat and ordered a stiff one on the rocks to take off the edge for the flight home. Go figure. Brandy Christine is an independent reporter specializing in the alcohol beverage industry, reporting here for the Beverage News Network BevNews1.com