Buffett Said To Be Weighing Entry Into Spirits And Wine Distribution

Peter Zwiebach
Posted: March 4, 2010

Warren Buffett, one of the world’s best-known and most successful investors, is said to be targeting a new business—spirits and wine distribution. Industry insiders claim that Buffett, CEO of investment firm Berkshire Hathaway, is considering a purchase of Empire Distributors, one of Georgia’s biggest wholesalers.

The Atlanta-based Empire, which also has operations in North Carolina, is owned by David and Michael Khan, grandsons of Max Khan, who founded the company in 1940. At press time, David Khan, who serves as Empire’s President, hadn’t responded to requests for comment on the potential deal.

Berkshire Hathaway is certainly no stranger to the distribution trade. It has owned Temple, Texas-based McLane Co., a $30 billion grocery distribution business, since purchasing the company from Wal-Mart for $1.45 billion in 2003. Of course, given the complexities of the three-tier system and the labyrinth of state laws governing the sale of beverage alcohol, spirits and wine distribution is a far different business than food distribution. Berkshire Hathaway also hasn’t responded to requests for comment.

While the spirits and wine distribution tier has undergone a massive consolidation over the past decade, Georgia and other so-called “franchise” states have remained largely immune from the trend, because the laws governing the business in those states inhibit brand and portfolio shifts between distribution houses. Still, the entrance of a seminal figure like Buffett into an increasingly national industry that’s still dominated by family-owned companies would surely shake things up.

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