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Major Wine Distributors Charmer, Peerless Team Up in New York

July 26, 2006

In a transaction that may have been inevitable given the competitive pressures of distributing wine and spirits in New York City Charmer Industries, Inc. and Peerless Importers, Inc. have signed an agreement to combine operations in Metro New York. The new company, Empire Merchants, LLC, will be owned equally by the parties, and will be a member of The Charmer Sunbelt Group. The transaction is subject regulatory clearance and other customary conditions.

The New York market has been extremely competitive in recent years, as major distributors Charmer, Southern Wine & Spirits, Eber Brothers and Peerless have battled for dominance. Some industry observers see the Charmer and Peerless venture as a match born of necessity.

The Charmer Sunbelt Group is one of the nation's leading distributors with affiliated, independent companies in Alabama, Arizona, Colorado, Connecticut, Delaware, Florida, Illinois, Maryland, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Virginia and The District of Columbia. Peerless, which has operated in the New York since 1944, is owned by Quaker Equities, which also owns Brescome-Barton, a wine and spirits distributor in Connecticut.

Huge changes in the New York market began in late 2004 when Southern Wine & Spirits of America, the country's largest wine and spirits distributor, purchased Premier Wine & Spirits, the fourth largest distributor in New York. That year Eber Bros.-Paramount Brands and National Distributing Company also agreed to create a joint venture for distribution of wine and spirits in metro New York. Southern later bought Lauber Imports, the importer/distributor serving New York, New Jersey and Pennsylvania. Southern, among other things, soon after picked up distribution rights for the portfolios of Pernod Ricard and Jim Brands that previously were with Charmer in New York.

"Some very large brands are in play," one industry source said of the new venture. "This is a defining time for the new York Market."

"The Charmer Sunbelt Group is very enthusiastic about joining forces with Peerless," Charles Merinoff, CEO of The Charmer Sunbelt Group, said in a press release. "Being like-minded, family owned companies with over 60 years of collective experience in servicing customers and suppliers, we are highly confident about the opportunities that the business combination will create for our suppliers, brands, retailers and consumers," he said.

"This combination makes great sense strategically," said John Magliocco, Chairman of Quaker Equities Ltd., owner of Peerless announced. "We are looking forward to synergies that will allow us to do an even better job for our suppliers and our customers. We can't think of finer partners than the Merinoffs and the Druckers."

Empire will be led by E. Lloyd Sobel as CEO, Anthony Magliocco as COO, Terrence Arlotta as CFO, and Steve Meresman as Corporate Secretary.

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