The Impact of the Tax Cuts & Jobs Act of 2017 for Wholesale Beverage Distributors

Could It Be True? – My Distribution Rights Increased in Value as a Result of Tax Reform?

The alcoholic beverage distribution industry is complex and evolving with influences arising from multi-tier consolidation and category integration, as well as from changes in consumer behavior and disruptions in retail product channels. Complicating matters, historical rules of thumb crafted over decades under the prior tax code must now be reinterpreted for a new reality.

Lower tax rates generally contribute to higher valuations – but some new rules and limitations require careful assessment to determine their effect on investor returns and financing options. Participating in the valuation process and equipping yourself with a current valuation will give you the updated understanding necessary for your next business decision.

This paper addresses the impact of the new tax law’s corporate changes and treatment of pass-through entities on the value on wholesale distributors.