A local company that began as a post-Prohibition venture in beverage distribution has been sold to a large Portland distribution company, officials said Friday.

Portland’s Mt. Hood Beverage bought Bend’s Haines-Central Oregon Distributors Inc. on Feb. 5.

Terms of the deal were not released.

Mt. Hood Beverage will absorb Haines’ facilities, customers and most of its 50 employees, said Lou Wood, chief financial officer for Mt. Hood Beverage.

Haines, a family-owned company for more than 70 years, has distributed for customers including Deschutes Brewery, Red Bull Energy Drink and Miller Brewing Co.

Other local beverage distributors include High Desert Beverage Distributors and Columbia Distributing Co.

The sale stemmed from the distribution industry’s changing business climate and the owners’ wish to pursue other interests, said Jeff Hatch, former vice president of the company.

Rising costs in fuel, labor and health insurance have made it difficult for small businesses like Haines to compete with larger distributors that have greater volumes, Hatch said.

”We were in a position where we couldn’t grow geographically anymore,” he said. ”We were counting on Central Oregon getting bigger, and it has, but it hasn’t grown as fast as costs have gone up.”

The Hatch family, blood relatives of the Haines family that started the company, still owns Central Oregon Recycling and is invested in some commercial developments, Hatch said.

For Mt. Hood Beverage, purchasing the longtime Bend distributor is a strategic step.

”It’s important for us to have a statewide network, and Bend and Central Oregon have always been our void,” said Wood, of Mt. Hood Beverage. ”That is the last area with any significant population that we were not servicing in Oregon – we are positioning ourselves to take the market growth and what the area has to offer.”

Mt. Hood Beverage distributes beer, wine and nonalcoholic beverages throughout Oregon and southern Washington state. The company started operations in 1990, purchasing what had been an existing distribution company since 1933, Wood said.

When it started, Mt. Hood Beverage had 325 employees, Wood said, and now has 725 – excluding the 50 employees from the Haines company.

Mt. Hood Beverage will soon hire a general manager to oversee Central Oregon operations, Wood added.

A saloon start

Hatch’s great-grandfather ran a saloon in Sisters in the 1930s, which gave Hatch’s grandfather, D.C. Haines, a love of beer. Haines didn’t want to work at a saloon the rest of his life, however, so when the prohibition ended, he decided that beer distribution was the way to go.

Haines convinced a brewery to give him some beer to distribute and then got a Bend dairy to let him drive their delivery truck for free, distributing milk to customers’ doorsteps and beer to local stores. Soon, his small distribution service grew to the point where he could start his own venture, Haines Distributors Inc.

”His first warehouse had only three walls,” Hatch said, ”and he had to sleep there at first.”

That was 1936. Haines later served as a World War II major in Africa and Sicily, Hatch said, leaving his wife, Lois, to run the company. Hatch boasts that she was the only female beverage distributor in the country at that time.

Hatch’s mother was a daughter of D.C. and Louis Haines.

Hatch’s father, Phil, took over Haines Distributors in the early ’70s and until this month served as the company’s president, Hatch said. In the mid-’80s, Haines Distributors merged with Central Oregon Distributors, creating Haines-Central Oregon Distributors Inc., he said.

Selling the company has been bittersweet, said Hatch, who’s been vice president for the past 15 years. He thanks Central Oregon for so many decades of patronage with his family’s business.

”Bend is kind of a unique market in the state – kind of a last jewel that the big guys in the (Willamette) Valley hadn’t covered yet,” Hatch said. ”It’s been fun working in Central Oregon – we had a good time with it, but the world’s changing and we had to change, too.”