America’s second-largest alcohol distributor, Republic National Distributing Company (RNDC), is leaving California, the country’s largest alcohol market.
This abrupt and sudden move will result in the layoffs of more than 1,750 employees and send shockwaves throughout the drinks industry.
The company’s decision to cease all operations in California by September 2, 2025, marks one of the most dramatic shakeups the sector has seen in decades.
Costs, Contracts, and Competition
The collapse is rooted in a perfect storm of rising operational costs of doing business, mounting debt, and the loss of key supplier contracts. According to the San Francisco Chronicle, CEO Bob Hendrickson cited “rising operational costs, industry headwinds, and supplier changes” as the main drivers behind the exit.
Industry expert Susie Goldspink of IWSR adds, “The U.S. market is seeing marginal growth or even contraction, making it increasingly tough for distributors to survive in expensive states like California.”
Massive Job Losses Sweep Across California
The immediate fallout is the loss of 1,756 jobs, affecting workers from warehouse drivers to vice presidents in cities such as Hayward, Los Angeles, San Diego, and Sacramento.
Employees in sales, analytics, and HR staff are among those receiving pink slips. For many, the layoffs came as a shock, with some questioning whether the company provided adequate notice under the WARN Act, which requires 60 days’ advance warning for mass layoffs.
Disrupted Supply Chains for Bars and Retailers
Now that RNDC is gone, more than 2,500 alcohol brands must scramble to find new distributors to keep their products on California shelves.
Local bars, restaurants, and liquor stores face uncertainty as they rush to secure new supply chains. Some may experience shortages or delays, while others could see higher prices as remaining distributors gain leverage.
Competitors Move In—But Not Without Hurdles
Reyes Beverage Group, a major beer distributor, has already picked up some of RNDC’s lost contracts, including big names like Jack Daniel’s, Tito’s, and High Noon.
However, the rapid influx of new brands may strain Reyes’ logistics and customer service, potentially causing hiccups for suppliers and retailers.
Other smaller distributors may attempt to fill the gap, but few have the scale to take over RNDC’s once-extensive reach.
Consumer Choice Narrows, And Price Could Go Up
Under the shake-up, California consumers may notice fewer options and higher prices at their favorite bars and stores.
Disruptions in distributions often lead to temporary shortages, and with fewer competitors, the remaining distributors can increase their fees, which could be passed on to shoppers.
According to The Street, wine and beer sales are already sliding, and this move could accelerate that trend.
Industry-Wide Warning Signs
RNDC’s departure is the latest in a series of troubling signs for the alcohol industry. Several other brands, including Alamo Beer Company and Brüeprint Brewing Company, have filed for bankruptcy in the past year.
Analysts at Bank of America warn that alcohol consumption in the U.S. is likely to decline for a fourth consecutive year due to health trends and economic pressures.
National and Global Trade Impacts
The collapse of a major distributor in America’s most populous state could have repercussions on national and even international alcohol trade.
U.S. producers may struggle to get their products to market, while international brands could reconsider their U.S. strategies.
As reported by IWSR, mature markets like the U.S. are facing subdued growth, and such disruptions may push brands to focus on emerging markets instead.
Human Stories and Industry Voices
Insiders say that RNDC’s downfall was as much about mismanagement as market dynamics. “They started focusing on numbers instead of customer satisfaction, and that’s what drove them to their fall,” an anonymous California-based employee told VinePair.
Former employees describe the company as “terribly run,” with executives “in over their heads” in the complex California market.
What Happens Next in California and Beyond
RNDC’s collapse in California is about more than just business — it’s a sign of deep changes sweeping the alcohol industry.
From changing consumer habits to rising costs and cutthroat competition, every link in the chain is feeling the strain.
For consumers, businesses, and workers alike, the effects are likely to ripple outward for years to come, reshaping how America drinks and does business.