Yuengling Throws Down the Gauntlet in Mississippi


Dear Client:

A few short weeks after Anheuser-Busch exercised its right to match and snatch in Mississippi, Yuengling COO Dave Casinelli penned an email to Thomas Magruder Jr. of Rex Distributing seeking some answers. The gist of the letter is Yuengling ain't quite ready to hand over its brands to the new Mitchell Rex Distributing, given the history.

YUENGLING IN PLAY, BUT NOT SURE THEY WANT TO BE. Recall the sticking point here is that Rex currently distributes Yuengling and their new owner, Mitchell, famously was the only A-B distributor in the state to refuse to take Yuengling when it entered Mississippi last year.

MITCHELL'S FAMOUS FIRST JILTING OF YUENGLING AT THE ALTAR. Mitchell's refusal seemingly came out of nowhere, Dave said. "I personally spoke to Mr. Adam Mitchell on multiple occasions and the Mitchell Family of Companies eagerly completed the application and due diligence process, and continued to solicit Yuengling's appointment of distribution rights for territories in the State of Mississippi only to learn that they rejected that approval without warning or explanation. It is our belief that Anheuser-Busch, LLC, or an affiliated company, greatly influenced Mitchell's decision to reject the grant of Yuengling distribution rights."

THE BETTER. With that said, Yuengling understandably has some concerns about this redirect. "This unique situation leaves us with many questions, which requires us to demand additional, material information which would not necessarily be provided in response to the Transfer Policy or otherwise identified in the Confidential Distributor Fact Sheet application."

So here are the questions Dave has in his letter to Rex:

First off "why did Mitchell Companies reject Yuengling's previous appointment of rights in the State of Mississippi?" In fact, Dave writes than other than A-B branches, "this is the first time an alleged independent wholesaler has rejected our appointment of distribution rights, especially after years of solicitation by that Distributor of our rights. We need to have a detailed explanation in writing of the facts that caused Mitchell to reject our appointment abruptly, along with the identity of the decision makers who acted on behalf of the Mitchell Family of Companies in this regard." Boom!

Yuengling is also "requesting specific information on how Mitchell plans on financing this transaction since our investigations and due diligence into the Mitchell Family of Companies would lead us to believe that it may be difficult for Mitchell to obtain the necessary financing unless it had financial assistance from other entities [Ed. Note: i.e. Anheuser-Busch]. We certainly need to know the identity of those entities and the detail of any financing so we can assure ourselves that we are dealing with a financially sound distributor partner as well as an independent wholesaler."

It seems what Dave is getting at here is that Yuengling fears that Mitchell may be very beholden to A-B if indeed A-B is providing financial assistance to Mitchell.

Continues Dave: "Is Mitchell planning on continuing to operate under the current Rex Distributing facilities or will it service this new territory (now or in the future) from other distributors' territories where it rejected the Yuengling brands and competes directly with Yuengling?"

Even technology comes in to play. "Is Mitchell planning on using ABI's Mobility ordering system for inventory management and placing orders of Yuengling products?" asks Dave. "If so, please provide detailed information which demonstrates that ABI does not have access to other suppliers' information like Yuengling's since ABI's Mobility ordering would provide an unfair competitive advantage to ABI which would have access to detailed account information of other suppliers."

"In the event Yuengling consents to this transaction, Mitchell would have to provide an enforceable commitment that it would not utilize the Yuengling brand rights as a lure to consolidate other ABI brands which are currently distributed by other competitors in the marketplace. In this regard, please identify what enforceable commitments under Mississippi law you would be willing to offer so we can guarantee that your latest attempt to solicit Yuengling brand rights is not simply an attempt to manipulate leverage over competitors to obtain ABI unconsolidated brands." Badda boom! I suspect what Dave is getting at here is he doesn't want Yuengling to be traded to gain other A-B brands (Stella Artois comes to mind).

The gauntlet has been thrown. It will be interesting to see how this plays out, because there are so many wheels turning. Remember, blue-silver distributor FEB Distributing in Gulfport is waiting in the wings to see where the chips will fall. Stay tuned…..


Tonight Heineken is debuting a new national TV commercial for Tecate Light.

Dubbed "The Wall," the 30-second spot, created with Saatchi & Saatchi NY, references Trump's high-profile platform on Mexican border relations. The spot will run on Fox News, Univision and Telemundo surrounding the first Presidential debate.

This will be the first time Tecate has expanded into General Market targeting.

It's part of the "Born Bold" theme featuring the Black Eagle, which "soars above a small Mexican border town separated from the US by a 'wall.'"

One of the commercial's opening shots implies a towering wall that goes on for miles.

But then "two groups of young men, bi-cultural Hispanics from the U.S. and Mexicans from Mexico," come together over the wall, which apparently turns out to be only three feet tall, -- "the perfect height for a group of friends to rest their Tecates on."

In other words, Tecate is the "great unifier."

WHY GO THERE? Apparently "the wall issue is extremely important to our millennial target consumers, whether leaning more liberal or more conservative," per Jennifer Weiss, Vice President, Director, Mediavest | Spark.


15 CITATIONS ISSUED TO TN GROCERS. Two months after wine in Tennessee grocery sales started, more than 30 complaints have been filed against grocers, with 15 citations issued - 9 of which involved stores selling wine lower than the required 20% markup from wholesale price, per a local publication. The Tennessee Alcoholic Beverage Commission will be hiring more regulatory officers to keep up with the number of licensed wine sellers.

Until tomorrow, Harry

"Indeed, history is nothing more than a tableau of crimes and misfortunes." - Voltaire

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