The experts at Anderson Economic Group have prepared an analysis on the craft beer industry in Michigan, including interactive visualizations. The analysis shows the explosive growth of the craft beer industry in Michigan over the past four years, where the production hot spots are, and sales for each brewery over a four-year time period. “As […]
Anderson Economic Group was retained to value the distribution rights of a beer distributor. The rights were owned by multiple distribution companies prior to its acquisition. We provided an industry review, market analysis, economic outlook, financial review, and valuation opinion for the client. Additionally, Anderson Economic Group provided methodology and assumptions along with the valuation […]
Patrick L. Anderson and Ilhan K. Geckil
A review of valuation methods in the alcoholic beverage industry.
Franchise Value Analysis: Heineken USA and Alaska Distributors
A leading importer and brewer of top-selling beer brands from Europe, Canada, and Mexico, asked for Anderson Economic Group to provide an analysis of a Nevada-based distributor’s valuation claims, and to help determine the information needed to prepare a complete valuation report.
Our report evaluated the market area of a distributor, its sales patterns, and the financial statements needed to prepare an assessment of damages or valuation report. We found the distributor to be missing important information from its valuation, and worked with our client to determine the strategy needed to complete an accurate valuation or lost profit calculation. Specific attention was given to the importance of brand values in the alcoholic beverage industry.
Sales and Financial Analysis for Expert Report
Alcoholic Beverage Distiller and Importer
One of the nation’s leading distillers and importers of wine and liquor, with operations across the United States, retained Anderson Economic Group when a dispute arose with a former distributor in the State of Missouri. At issue was whether the distributor’s rights under franchise law were infringed on when its contract was terminated.
Anderson Economic Group used it extensive background in market analysis and franchised retailing, along with its knowledge of the three-tiered distribution system of alcoholic beverages in the United States, to prepare an expert report for use in litigation in US District Court. The report addressed the economic basis of a franchise agreement; the common-law understanding of the rights and obligations of each party; and whether the distiller and importer had properly terminated its franchised distributor. Using advanced economic and financial techniques and a sophisticated graphical and mathematic analysis of the available sales data, we were able to provide a report showing the relevant basis for termination, based on both legal and performance grounds.
Subsequent to the provision of the report, our client was offered favorable terms for a settlement.
Valuation of Beer Distributors
North American Beer Importer
Anderson Economic Group was retained by a beer importer to estimate the fair market values of several distributors of their product in the New York City area. By “fair market value,” we mean the price a willing buyer would pay to a willing seller, both possessing adequate information, for the economic value of the line of business. The valuation was done using the best available information, and well-accepted methods of estimating the economic value of a firm. However, certain unique characteristics of the market affected the value of each distributor, and adjustments were made for discounts and for premium factors of marketability, barriers to entry, scale, uniqueness of distribution system in the state, per-capita consumption and other market patterns, “bottle law” factors, and dominance of brands.
We produced a report with sections for each distributor, for use by the importer in improving its distribution network and in negotiations with its distributors.