Burr Alert: Amazon and Whole Foods -- Changing the Beer and Wine Distribution World

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June 16, 2017, Amazon announced that it was acquiring Whole Foods Markets and its approximate 440 stores just throughout the United States. It has been no secret that Amazon has been interested in entering into the grocery business, including the sale of beer and wine. In March 2017, Amazon began delivering beer and wine in Cincinnati and Columbus, Ohio through its Prime Now program with plans to expand this service to additional markets. The instant delivery business, though, requires a fulfillment center reasonably close to the consumer, and, combined with state by state restrictions on shipping beer across state lines, it has been unclear how they would be able to effectively compete on a nationwide basis.

The acquisition of Whole Foods will change the game. By acquiring Whole Foods, Amazon immediately becomes a major beer and wine retailer. Whole Foods had previously announced long-term plans to expand to 1,200 stores in the United States, and it would not be surprising for Amazon to follow through with this plan. By combining the Prime Now program with one thousand or more retail locations, Amazon has solved both problems of how to ship across state lines as well as the proximity to the consumer challenge.

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