Walk into a California liquor store this summer and you might notice empty shelves where familiar bottles once stood. But this isn’t about supply chain hiccups. It’s the aftermath of something deeper, an industry-altering decision with ripple effects far beyond retail.
One of America’s most powerful companies has just pulled out of the state entirely. What could make a corporate titan cut ties with the nation’s largest market?
A Silent Collapse Disrupts 2,500 Alcohol Brands Overnight
The mystery began when over 2,500 beverage brands suddenly lost their California distributor. The shock hit retailers, restaurants, and producers alike. This was a major breakdown in a sector that typically thrives on long-term stability. The industry is still reeling from the fallout. So who had the power, and the reason, to walk away from such a massive operation?
Republic National Distributing Walks Out of California
The company behind the move? Republic National Distributing Company (RNDC), based in Grand Prairie, Texas. On September 2, 2025, RNDC will be cutting all operations in California. ‘
CEO Bob Hendrickson cited “rising operational costs, industry headwinds, and supplier changes that made the market unsustainable.” The sudden exit left America’s largest wine market without a key distributor, as brands like Tito’s, Jack Daniel’s, and High Noon vanished from shelves.
When the Numbers Stop Making Sense
California’s sky-high costs have become a dealbreaker. Businesses face 8.84% corporate tax, $16.50 hourly minimum wage, and electricity rates 50% above the national average. Add in $4 billion in estimated compliance costs, and even major players struggle to stay afloat.
RNDC had poured billions into its California operations, but in the end, the math didn’t add up, especially compared to business-friendly states like Texas.
A Cascade of Brand Departures Breaks the System
The real blow came when RNDC’s longtime suppliers began walking. Brown-Forman, Tito’s, High Noon, each moved to Reyes Beverage Group. These weren’t just business transactions, they were breakups of decades-old partnerships.
Some insiders blamed RNDC’s Texas-based leadership for misreading California’s unique market. As brand after brand left, RNDC found itself in a downward spiral it couldn’t recover from.
Workers Left Behind in the Wake of the Exit
The fallout wasn’t just corporate. Hundreds of RNDC employees in California, drivers, warehouse staff, sales reps, were blindsided. A Change.org petition with 1,300+ signatures accused leadership of mismanaging the Young’s Market acquisition and abandoning loyal workers.
Many had spent years navigating the complexities of the California market. Now, as peak season approached, they were left jobless in a state where costs and competition run high.
Restaurants and Retailers Scramble to Stay Afloat
Without RNDC, California’s bars and restaurants faced a sudden drought. Some scrambled to rewrite drink menus. Others taped “out of stock” signs to their wine racks. The timing was brutal, just as the summer season ramped up.
Beverage programs, a key profit driver for many restaurants, were thrown into disarray. The disruption extended beyond California, leaving suppliers in other states on edge.
Why Texas Keeps Winning These Corporate Battles
While RNDC pulled out of California, it reinvested in Texas, adding over 100 jobs and calling it a “cornerstone market.” Texas offers what California doesn’t: low taxes, fewer regulations, and lower costs. RNDC joins companies like Tesla, Oracle, and HPE in making the switch.
With more than 150 California firms relocating in a single year, the shift is becoming a pattern, not an exception.
RNDC Doubles Down on Texas as California Exits Multiply
RNDC’s move to expand in Texas came as it exited California entirely, a deliberate pivot, not just a growth play. On May 21, 2025, the company announced over 100 new roles in what it called a “cornerstone market,” reinforcing operations in a state with no income tax and far lower regulatory burdens. California, meanwhile, was deemed “unsustainable” due to rising costs and supplier losses.
This mirrors recent corporate exits by Tesla, Oracle, HPE, and Charles Schwab—all of which moved headquarters to Texas between 2019 and 2021. A Hoover Institution study found 153 California HQ relocations in 2021 alone, three times the number in 2018. Business relocation experts warn the real number may be five times higher. As more firms flee, those who remain face mounting pressure.
A Business Move That Echoes Across the Country
RNDC’s departure is more than a company-level decision, it’s a wake-up call. If century-old industry leaders are giving up on California, others may soon follow. The alcohol sector, long built on tradition, is being reshaped by mounting costs and shifting alliances.
What’s unfolding now isn’t just about drinks or distribution. It’s about the future of doing business in high-stakes states, and the cost of staying put.
Discover more trending stories and Follow us to keep inspiration flowing to your feed!
Craving more home and lifestyle inspiration? Hit Follow to keep the creativity flowing, and let us know your thoughts in the comments below!