(WineSpectator) - A few retailers and wineries worry that the Southern and Glazer's deal could raise wine prices—most industry insiders say that won't happen.

Just two weeks into the new year, the wine industry witnessed what might be the most important business deal of 2016. On Jan. 11, Southern Wine & Spirits and Glazer's Inc. sealed a merger agreement, increasing the size of the largest distributor in the United States.

But what does that mean for you? For the average consumer, distributors are the invisible hand of the wine industry. You know the store where you buy your wine and you know which wineries make your favorites, but not the middleman.

Distributors are responsible for the logistics of getting wine to the retailers and restaurants as well as helping wineries navigate the thicket of regulations in each state. Ideally they're also a marketing and sales force for the wineries.

The middle part of any supply chain is crucial—distributors play a big role in what wines you see on store shelves and restaurant wine lists. The past two decades have brought a wave of consolidation at the wholesaler level, plus the growth of large chain retailers. Some industry observers worry that all this consolidation means higher prices or less selection. Others say no.

Here's a primer on what the Southern Glazer's deal means for consumers:

Why do I care about a distributor merger?

Size matters these days in distribution. Southern was already the largest wine and spirits wholesaler in the country. According to Impact, a sister publication of Wine Spectator, the firm had $11.8 billion in sales revenue in 2015. Glazer's was the country's fourth-largest distributor with $3.7 billion. Almost immediately after the deal, the new Southern Glazer's Wine and Spirits announced a new national supplier agreement with Bacardi, which is expected to bring in another $1 billion annually.

Combined, Southern and Glazer's will have roughly 20,000 employees, including a sales force of more than 12,000. It will distribute more than 150 million cases of wine and spirits annually, and serve more than 350,000 restaurants and retailers.

More important than size is market share. One of the biggest challenges for distributors is entering new states. Southern Glazer's will cover 41, as well as Washington, D.C., Canada and parts of the Caribbean. The firm will have nearly a 30 percent share of the U.S. spirits and wine market in dollar terms.

As Southern Glazer's CEO Wayne Chaplin told my colleagues at Shanken News Daily, they want "to create a national distributor and change the paradigm at the second tier. This deal will produce a totally unique route to market, offering suppliers a one-stop opportunity in the United States. It represents a changing of the landscape."

OK, but what's so good about being big?

Chaplin and his colleagues say it's all about efficiency. A distributor that serves almost every state can help a winery reach a lot of customers without having to work with a different partner in every market. Ideally, they should function as an extension of the winery's own sales and marketing efforts.

"Part of a distributor's role is to improve our business with retailers and restaurateurs," said Sandra LeDrew, Treasury Wine Estates' president for the Americas. Treasury sold 12.8 million cases in the U.S. last year, with brands like Beringer, Lindeman's and Penfolds. "Recently, suppliers of our size have had to put a lot of resources into reaching retailers and restaurants because distributors cannot reach them on that big a scale. But [Southern Glazer's] can reach across multiple markets."

For large wineries, the deal simplifies things. "The suppliers handled by Southern will see this deal as greatly simplifying their route to market in terms of selling, pricing, execution, IT and the overall supply chain," Chaplin told Shanken News Daily. "For suppliers with whom Glazer's does business and we do not, or vice versa, their newfound ability to expand across multiple markets represents a major opportunity."
Will this change what wines I see on store shelves or wine lists?

That depends on who you ask. Executives at larger wineries and major retailers told Wine Spectator that they believe the deal will not hurt selection.

"Southern is clearly a dominant player and they understand their space very well," said the CEO of one mid-size company that owns a dozen wineries. "There are so many different suppliers in the wine, spirits and beer business and they all have unique needs. Southern is evolving and even though they are getting bigger, they continue to focus on more specialization to better serve their suppliers and customers."