Duopoly or pro-business? Shots taken in liquor distribution fight

By. Tress Savage

The difference between “shall” and “may” in one portion of Oklahoma’s new alcohol laws has left liquor stores, a locally owned wholesaler and some legislators pushing to break up what they call a duopoly in the liquor distribution market.

Thanks to a few lines of amendment within voter-approved SQ 792, the nation’s top brands of liquor now distribute their products in Oklahoma exclusively through either Central Liquor Company or Jarboe Sales Co., two longtime Oklahoma businesses that struck deals with national distributors: Republic National Distributing Company (RNDC) and Southern Glazer’s Wine and Spirits, respectively.

The change dramatically hurt the business of Tulsa-based Boardwalk Distribution and other now-defunct wholesalers, and the Retail Liquor Association of Oklahoma says the effect on liquor stores has been equally problematic.

“These people who have exclusive rights to these spirits and these wines have continued to slowly decrease service and slowly increase price,” said RLAO President Bryan Kerr, owner of Moore Liquor. “The sharpest part of that knife pokes at the rural areas where they have really seen severely reduced service and availability of product since the passage of the law.”

To address similar concerns from other liquor stores and Boardwalk Distribution, Rep. Chris Kannady (R-OKC) dropped language into SB 608 on April 2 that would define “top brand” as one of the 25 most-sold spirits and wines over a 12-month period. The bill would require manufacturers to sell those top brands to any wholesaler wanting to purchase and distribute them.

Kannady joined Kerr in saying reduced wholesaler competition has allowed RNDC and Southern Glazer to reduce delivery frequencies and quantities while increasing bottle-handling fees.

“I have not had a single liquor store say they are against it,” Kannady said of his language in SB 608. “Restaurants have the same problem. You’ll have restaurants in downtown Oklahoma City who run out of product because they’re not getting deliveries. So if that’s happening in Oklahoma City, imagine what’s happening in rural Oklahoma.”Continue Reading