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Saw an interesting short note this morning that Southern Wine and Spirits, the largest liquor distributor in the United States is seeking a 2 Billion dollar loan to get it through these tough times and allow it to restructure it’s current obligations.
http://www.thenewstribune.com/2010/05/07/1177597/southern-wine-seeks-loans-of-2.html
It brings up a couple of interesting, if divergent thoughts for me. To start I think it is in many ways a sign of the times that many companies (and individuals) are carrying more debt then the have in the past. Secondly and perhaps most importantly it doesn’t sound like getting the loan and line of credit is going to be a problem, so perhaps this just presents as a way to both encourage the passage of HR 5034(look we need you to pass this so we stay in business!) while taking advantage of historically low interest rates.
I hope that these type of debt restructuring, which are incredibly common for a company the size of Southern (about 20% of total wine distribution in the United States) doesn’t effect any one’s vote when it comes to HR 5034…..too big to fail is an interesting and debatable concept, but one I do not believe applies here.
As a reminder, I think Southern Wine and other large distributors serve a valid purpose in our alcohol distribution model and they have a ton of quality people working for them. That being said, I do believe that the government should allow other businesses, yes like my own, to compete with them without needing to pay them for the privilege.
