Save the Vino

This critical incident presents a business dilemma faced by Monarch Beverage, the largest beer and wine wholesaler in Indiana. Phil Terry, CEO, had just received official notification from E. & J. Gallo Winery that it was ending its longstanding relationship with the wholesaler effective September 1, 2018. Gallo had developed a growing number of liquor brands over the last few years and now preferred to deal with a wholesaler that could sell both wine and liquor. Under Indiana law, alcoholic beverage wholesalers were prohibited from selling both beer and liquor. In 2007, Monarch Beverage had aggressively begun its pursuit of a liquor license, but ten years later its lobbying and legal efforts ended in defeat. Gallo accounted for eighty percent of Monarch’s wine sales. Students are asked if Terry can prevent the decimation of Monarch’s wine division or should he consider a new business model?