Fermentation: The Daily Wine Blog

The Future of Online Wine Sales

"He said: "I think the market has just tipped. All of a sudden, rather than being driven by 20-year-olds who were the early adopters [of the net], I'm starting to get emails from people saying 'as a pensioner ... The silver surfers have arrived."

This comes from a news story put out by Off License News. Just how significant is this finding that older drinkers are coming to the on-line wine sales channel?

I think it must be significant. Despite the talk about young folks being the one's helping to drive wine's sales accent, it is somewhat older folks that do the real buying of wine. There appearance in any significant number in the on-line world would in fact represent a notable turning point in the on-line wine sales world.

Now get this quote, from the same article:

"Vinitrac research from Wine Intelligence in March 2007 found that 16% of regular wine drinkers in the UK had bought wine online in the previous six months. Internet shopping was marginally more popular among those aged over 55, the survey found, with those under 34 the least likely to buy wine online."

These kind of findings remind me that we are still very much in a transitional phase when it comes to the world of on-line sales and wine. While on-line purchasing has overtaken some industries such as travel and books, this same kind of transition WILL come to the world of wine and completely transform how this beverage is sold. And for those companies that are making full court presses to be at the center of this transformation and who have the funds to keep going and breaking even during the transition, AND who have the ability to either develop or implement "ease-of-use" technology to the sector will find themselves sitting pretty in the years to come.

It also suggests that as this transformation to on-line sales continues, the political pressure to make these virtual transactions easier will become more intense. This is bad new for those who still want to argue that restricting consumer choice in wine is a needed trade off in preventing all those teens from purchasing Paso Robles Syrah and the Austrian Rieslings they are known to crave.

Shipping & The Big Question For Wineries

As executive director of Specialty Wine Retailers Association, I've been thinking a lot recently about who supports free and open markets in wine and who supports retailer to consumer shipping—the only channel through which consumers can actually access ALL the wines on the market today.

We know consumers do. They've written letters to legislators, testified on direct shipping bills, and even donated $1000s of dollars to the work Specialty Wine Retailers Association is carrying out.

We know newspaper editorial boards and wine writers do. They've written scads of editorials denouncing the laws that serve to only protect wine distributors from competition.

The Wine 2.0 community has been vocal about their support of both winery and retailer shipping

And we know retailers support free and fair trade and consumer access to wine. See SWRA.

BUT WHERE DO WINERIES STAND ON FREE & FAIR TRADE IN WINE?

WHERE DO WINERIES STAND ON RETAILER TO CONSUMER SHIPPING? WHERE TO THEY STAND ON CONSUMER ACCESS TO WINE THROUGH RETAILERS? DO THEY IN FACT SUPPORT THE WINE RETAILER—THE GROUP MOST RESPONSIBLE FOR PUTTING THEIR PRODUCTS IN FRONT OF THE CONSUMER—AND THEIR BID TO HELP ADDRESS THE LEGITIMATE CONSUMER DEMAND FOR ACCESS TO WINES?

The various winery associations and trade groups have been true to their fiduciary responsibility to their members and seen fit to support laws that prohibit consumers from buying wine from out-of-state retailers both in CA and IL. They have opposed laws that would allow retailer to consumers shipping in WA. And in other cases the wineries have simply been neutral on laws that would open shipping to consumers and retailers. In doing this they've supported their members' needs, despite the impact on consumers and wine merchants. OK...I understand this approach that many trade associations believe they must take.

But the more important issue is not how the various wine trade associations conduct themselves with regard to issues of fair trade in wine and consumer access to wines. The real question is HOW INDIVIDUAL WINERIES STAND ON RETAILER TO CONSUMER SHIPPING? Do the individual wineries support their best customers—wine lovers and the wine merchant?

Does CONSTELLATION BRANDS, perhaps the wine producer that benefits most from support by retailers, support the wine merchants bid to engage in direct to consumer sales? Are they willing to say they do publicly? Are they willing to donate a mere $125 a month to support this cause?

Does JOSEPH PHELPS WINERY support real consumer access to wine? Are they willing to say so publicly or show their support by joining the cause to break down barriers to retailer shipping by putting up, say, what they take in for the sale of a single case of Insignia?

Does DON SEBASTIANI & SONS support retailer shipping or just winery shipping? Are they willing to support efforts to bring down unconstitutional restrictions on retailer shipping and consumer access to wine?

Does STAGLIN think that free trade and shipping for wine merchants is worth supporting through publicly standing up and saying so or by joining an organization that is fighting for the right to sell their wines to consumers that want them but can't find them?

Will GALLO take a stand for retailers and donate real cash to the cause to allow consumers to access the wines they want?

Will the folks at ALBAN VINEYARDS take a stand against monopolists laws that keep wine retailers from selling their wines to the folks who want them enough to pay shipping from another state? Will they say so publicly? Will they make even a small donation to actually make this happen?

Will the MENDOCINO WINE COMPANY demonstrate its support for its best customers and its consumers by issue a public announcement of support for real fair and free trade in wine? Can they show their support by making a financial donation equivalent to the retail value of a mere 5 cases of their Paul Dolan Zinfandel?

Is DUCKHORN willing to only support winery shipping or will they publicly state they support retailer to consumer shipping, as well as help the only organization fighting for the right of retailers to market Duckhorn wine through direct shipping with a small contribution...just as "thanks" for the effort?

I wonder if RODNEY STRONG VINEYARDS, which has grown significantly with the support of wine merchants, has consumers in mind and will support retailers' attempts to change wine shipping laws with a small donation to the cause or just a public statement?

What about KORBEL and their family of wineries including Kenwood and Valley of the Moon? Do these folks have any interest in stepping up and supporting consumers and retailers with a monetary donation or public support for retailers who have supported their products for decades?

Do the folks at LORING WINE COMPANY have any interest is supporting the retailers that work to assure their outstanding wines get into the hands to the wine geeks that can't find them locally or from the winery? Can they step up with a show of support?

And then there is FOSTER WINE ESTATES, one of the largest wine producers in the world with a collection of wines that is nearly entirely dependent on wine merchants for putting these brands in front of the public. Can they afford to donate $1500 a year ($125 per month) ($4 per day) to the cause of retailers, who are fighting for the ability to to sell Foster's wines to wine lovers across the country? Or is this not important enough for them?

Is it possible that HANZELL VINEYARDS in the hills of Sonoma, a brand that fine wine merchants have supported for literally decades, can find the time to make a donation to, or public statement about, the retailers and consumers that are fighting monopolists for the right to simply fulfill a legitimate demand?

Is there any room in the PAHLMEYER budget to support consumers who merely want the right to purchase wine without the threat of being fined? Do they have room to make a simple statement to the effect that "we support consumers and retailers in their desire to simply do business together"?

I have to think that the folks at VINE CLIFF support free and fair trade in wine and have enough respect for their consumers that they too would show support through donations or public comment for the work consumers do through organizations like SWRA.

Are the IRONSTONE people satisfied with their retail supporters being left out of direct shipping now that they have their battle won, or are they willing to make even a small donation to the cause of direct shipping by retailers and consumer access to wine. Even a short public statement of support would be helpful if they think the cause is worth supporting.

Is it possible that PACIFIC WINE PARTNERS, the marketers behind brands like Rex Goliath, Hardys, Blackstone and Twin Fin and a company that relies tremendously on retailers to sell their products, might be able to help those friends of theirs with some support for the simple cause of direct shipping, or are they content to sit on the sidelines not get involved and see retailers hurt more and more as Pacific's best customers are shut out of more and more direct ship markets?

Is DIAGEO CHATEAU & ESTATES, a company whose wine such as Chalone, Beaulieu Vineyards, Sterling Vineyards and Acacia, are dependent on retailers, willing to step up and make a small donation to the cause of retailer to consumer shipping or just say out loud, "we support a free and fair market for retailer to consumer sales and shipping"?

There is nothing particularly special about this grouping of wineries other than they, like most other wineries in America, rely on wine merchants to put their wines in front of the consumer. They are a pretty random selection used only to make a point. Each in this group, like most other wineries, COULD afford to support though donations, membership in SWRA or contributions, those retailers and consumers that are working to create a free, fair and accessible market for consumers and retailers alike.

If they choose not to support retailer to consumer shipping, the question is why?

Why let your most important partners work all alone when you can could get involved?

That's the big question for American wineries. And I suspect both wine merchants and consumers do take some notice of how this question is being answered by wineries.

I Have Been Shamed!!

It appears that shame has fallen upon me.

In response to this press release, issued two days ago on behalf of Specialty Wine Retailers Association and in conjunction with the 75th anniversary of Repeal of Prohibition, I received the following scolding:

"Your press release is an absolute travesty; I wonder how the members of your organization would feel if people outside your industry considered all of the retailers the same.  I'm sure your stereotyping and fear-mongering seems more than justified in your eyes, but as a Sales Manager for a reputable wine wholesaler I take offense at being lumped in with everyone else.  What people like you don't understand is that not all consumers in the US are comfortable supporting causes or organizations that only see things in black or white; that paint everything with the same brush.   You are no better than people running around saying "All politicians are corrupt scumbags" or "All professional athletes are rich, spoiled steroid junkies."  Shame on you."

I would have sympathy for the pain this gentleman feels if he were actually willing to come out publicly, as a wholesaler, and break with the two decade old line the distributors have held: that direct shipping is bad for the public and will only lead to children dying from consuming Pinot Noir.

I'd have sympathy for this gentleman's plight if he issued a statement saying, as a wholesaler I disagree with my industry's cynical and self serving positions that serve only to line their pockets and screw consumers. I've been looking for just such a wholesaler for a very long time.

In fact, my response to this gentleman wholesalers was as follows:

"Tell me Sir, are you the wholesaler I've been looking for? Are you the one that will break from the party line. Because if you are, I'm willing to send out a press release nationwide, retract any sweeping statements I've made about wholesalers and demonstrate my mistake by noting that you, a Sales Manager at respected distributorship, are willing to support retailer to consumer shipping.

In fact, I suspect that next year there will be a bill in your state's legislature that would create a permit for out of state retailers to ship to consumers. Would you be the wholesaler willing to testify in favor of it. Can you get the owner of your distributorship to put his firm on record as supporting retailer to consumer shipping?

You see, until I can find a wholesaler willing to actually prove me wrong, a wholesaler willing to stand up for consumers and support their ability to purchase wines that wholesalers will not bring into the state, then I think I'm on firm ground in painting with a very broad brush."

I've not yet received a response to my offer. However, the offer stands for ANY wholesaler: Come out against the cynical positions your state and national associations have taken for two decades and Specialty Wine Retailers Association will issue a press release withdrawing any sweeping statements it has made about the cynicism of wholesalers and their willingness to dismiss and disregard the consumers for the sake of their own bottom line.

I await the flood of wholesalers taking me up on my offer.

The Internet & Giving Wine a Fighting Chance

A new website has opened its doors that reminds me just how extraordinarily empowering the Internet is.

Prior to the Internet's development it would have been impossible for a brick and mortar version of Israeli Wine Direct to survive anywhere in the United States. The focus and selection of wines at this new on-line retailer is so specific and exclusive it quite literally would have been passed by and perhaps glanced at no matter where in America it opened its doors.

On the Internet, however, it has more than a fighting chance.

Israeli Wine Direct works in a very similar way as WineMonger, Truly Fine Wine and Kermit Lynch (why Kermit Lynch is not selling on-line I do not understand). Richard Shaffer walks Israeli vineyards and wineries looking for small, undiscovered, high quality wines made in that country but which are not currently available in the U.S. The latter qualification is not hard meet since very little Israeli wine is sold in the U.S. Yet it turns out that Israeli vintners are churning out  delicious wines. Shaffer imports them, sells them at Israeli Wine Direct, but also distributes the wines in the United States.

While the current number of wines at offer at IWD won't come close to matching the number of wines offered at your local brick and mortar store, they do deliver more Israeli wines than probably any brick and mortar store anywhere has ever offered at any one time. And while the names of the vintners won't be familiar, the types of wines produced in Israel and sold at IWD will be familiar: Caberent, Pimativo, Merlot, Shiraz, Chardonnay, Sauvignon Blanc, Chardonnay, Riesling.

Israeli Wine Direct is the kind of on-line wine store that should attract at least a glance, if not an order, from all those wine lovers that fancy themselves wine explorers and who revel in the diversity of what different places and people can do with the grape.

Wine Clubs and the Economy

The success of the wine industry is dependent on the state of disposable income. In other words, wine is not a staple in American life, but rather a luxury. Granted, their are a variety of ways one can luxuriate with wine be it through a bottle of "Two Buck Chuck", a nifty 15 Australian Chardonnay or with a $60 Napa Cabernet. But no matter what, it would be a mistake to disregard the fact that wine purchases are not like cereal or energy purchases.

I've often looked for ways to evaluate and measure the state of the American economy and the health of the wine industry. One very simple way of doing this is to look at sales trends? Are wine sales in general selling more? Are higher priced wines flying off the shelf?  Are consumers trading down to lesser priced wines? These figures can tell you quite a bit.

However, yesterday it hit me that there is another type of measurement that can tell us not only the state of the wine industry but of consumer confidence: Wine Club Cancellations.

Anyone who runs a wine club follows cancellations in club memberships very closely. At the very least the level of monthly, quarterly or bi-annual cancellations in a club's memberships tells one the satisfaction level of its members.

Tracking membership cancellations is tricky and dependent on how the club works. For example, every club sees more cancellations right before or directly after a shipment of wines is made. This is for the obvious reason that the person's membership is not top of mind between shipments. It only arrives there when the shipment is imminent or has just arrived. It's only then that the financial consequences or satisfaction level of membership is evaluated.

Still, a certain number of cancellations will occur between shipments also. The good club manager keeps a close eye on cancellation trends and knows what to expect at any given time.

So how about this: My informal survey of a few wineries shows that cancellations of wine club memberships has increased over the past two or three months to a rate not ever seen by some and to a point for others that correlates to times in the past that were clearly recessionary.

This informal survey makes sense. We appear to be moving through an economic moment that is somewhat perilous and consumers confidence in the future of our economy is not great. I'm not an economist, just an observer. But neither am I blind.

The Consumer Confidence Index hasn't been as low as it is now since March of 2003. This measurement of consumers' confidence levels in the American economy has fallen for six out of the last seven months, an ominous movement that correlates to the late 2002/early 2003 period when the run up to and launching of the war in Iraq hit folks like a brick. If you negate the 2003 plunge in the CCI a related to confidence effected by a war rather than an economy then the last time the CCI was at this level was 15 years ago.

Wouldn't it be interesting for someone to work up a Wine Club Cancellation Index. I have no doubt that were it being done for the past 15 years we'd see that at this moment that Index will be in a severe downward trend.

Of course when economic times such as this are with us we learn where the creativity, business acumen and solidity really exists in the wine industry. This is the moment when agile companies and business people put their ingenuity to work. Perhaps those that rely on wine clubs will institute a new type of club that allows the wine lover to still indulge in their periodic box of vinious surprises without breaking their bank. Perhaps some retailers will will find cost effective ways to reach out to previously unappreciated consumer sectors.

Whatever must be done, I think we can say that we are moving through an economic moment that will challenge many in the wine industry.

The Persuasive Writing Skills of Children

My daughter recently had to take a writing test mandated by the state. The format of this particular test was to have the kids write a "persuasive letter". The topic, which the kids could take either side of, was "Should schools add an additional two weeks to the annual school schedule?"

I thought it outstanding that persuasive writing skills of the 7th graders were tested simply because good persuasive writing might be the most important type of writing a child should learn to do well. It is a skill that will be used their entire life.

Paul Chartrand, a former Maine State Legislator and now wine importer, has certainly put the talent of persuasive writing to good use in a letter to the Kennebec Journal Morning  Sentinel that argues against the pending Direct Wine Sales legislation in that state. What Mr. Chartrand's letter demonstrates is that good persuasive writing combined with a disregard for the truth can often make a poor argument appear much better than it is.

From Mr. Chartrand's letter:

"For a small state, Maine already has an incredible choice of wines and beers available to customers through our wholesale and retail distribution....Can a Maine retail customer buy every single wine available in the United States?

No. Why?

Wineries not selling in Maine have chosen to bypass the state in their nationwide distribution plans in order to avoid the time and cost involved, while focusing their resources on larger markets. They could pay Maine license fees, register their products and develop distribution, but they refuse to undertake that task."

There's nothing about this part of the letter that is untrue. In fact, Mr. Chartrand's description of why many wineries choose not to distribute wine in Maine is dead on. But what's brilliant about this short description of the circumstance that result in many wines remaining unavailable to Maine consumers is the subtle insinuation that the wineries that choose not to distribute their wine in Maine are just lazy. They just don't want to go through the process. But here's where Mr. Chartrand's writing skills are on display. He wisely fails to note that it's not simply a matter of "registering" one's wines and a simple task to "develop distribution." Rather, a wholesaler in Maine must agree to distribute your a wine before the winery can enter the state. As in most other states, the only wines that are distributed in Maine are the one's that are chosen by distributors, making Maine, like most others, a state whose selection of wines are determined by a very tiny group of folks who have no contact with consumers and usually have no interest in distributing a wines that are made in very small supply.

Then Mr. Chartrand goes on to use a writing technique I like to call, "Inserting and twisting".

"Instead they [wineries, presumably] whine, pressuring Maine customers and government for an easy way into the state, avoiding the work and fees the rest of us pay to sell here. Rather than admitting Maine customers are not so important to them, these wineries cleverly blame big government."

Wow! That's good writing!! Wineries are whiners who don't care about Maine wine lovers. Why? Because they want the right to obtain a permit to sell wine directly to Maine residents without going through a distributor. I know, the underlying reasoning is loopy in the extreme, but you have to appreciate the deftness with which the knife was inserted and twisted. The fact of the matter is, Mr. Chartrand is on his way to arguing that the conditions under which Maine residents obtain wine ought to remain as complicated as possible and as expensive as possible for wineries. Why? Well, because, of course. Note there is no reason offered here why Maine residents ought to be prohibited from obtaining wines distributors don't offer other than the implication that making wine difficult to get into the hands of Maine residents is the way it is and the way it should be.

But now watch this flawless turn in the argument:

"My company spends thousands of dollars and hours every year for the privilege of legally selling our wines in 25 states, including Maine. No question about it, alcohol sales requirements are expensive and burdensome. The United States and Maine have antiquated systems. But it won't be fair unless it changes for everyone. All I, and other Maine wine dealers, ask is a level playing field."

Wow!!! In five short sentences Mr. Chartrand has admitted that Maine's laws are burdensome and antiquated and inefficient, while implying that there ought to be some sort of national standard set to level the playing field for wine sales and distribution...all after he just got finished defending a patently unfair system of wine distribution. And in addition, he makes the brilliant move of ginning up sympathy for his own plight. And again, Mr. Chartrand makes the strategically proper decision not to mention that under the legislation now being considered, Maine's laws would offer a level playing field for those that want to go through a distributor or those that want to sell direct to consumers. IMPORTANT RULE OF PERSUASIVE WRITING: AVOID THE TRUTH AND EVEN SUGGEST THE OPPOSITE IF DOING OTHERWISE WILL HURT YOUR ARGUMENT.

Chartrand finishes with flourish:

"If the newspaper wishes Maine government to subsidize distant wineries while Maine business suffers, so be it. It does not surprise me that your last letter on this came from Kennewick, Wash., home to many such "whine-eries.

In a year of budget deficits, I vote for continuing to collect all fees that Maine can collect from alcohol sales."

Once again, Chartrand does not mention that all sales of wines direct to Maine customers from out-of-state shippers would be taxed [see rule above] or that the wines that would be shipped are most likely those that are not distributed in the state, can't be found in the state and would not lead to any cannibalization of sales at Maine retail stores. Another good move in this persuasive letter.

But then comes the flourish: "Whine-eries". Wow!!! Not bad. Chartrand has turned those Maine wineries, who under this legislation would be allowed to finally ship direct to Maine residents, into nothing but whiners.

The cynical would simply call this projection on the part of Chartrand, who I suspect simply can't abide the notion of fair competition. But you have to admit, it's a bold rhetorical move.

I'm going to show this letter to my daughter as an example of what can be created when really, really good persuasive writing is combined with a disregard for truth .

Everything Served To Arouse

Winebid.com remains one of the surviving early dotcom wine ventures. It survived for a number of reasons, not the least of which is that it presents a business model that is so perfectly suited to the Internet.

Their most recent achievement is pretty cool. They just finished having Apex Wine Cellar install a 100,000 bottle Malaysian Mahogany racking system in their temperature controlled warehouse in Napa. 100,000 bottles.

As you can see from the photos, that's a pretty cool thing.

What's interesting about Winebid.com is that it operates differently than the traditional wine auction house insofar as it sells a tremendous number of individual bottles rather than many lots of multiple bottles or full cases of a single wine. This is what necessitates it having so many single bottle openings in its new racking system.

The warehouse they work out of in Napa looks a great deal different than when I was with the company. For a long time the wines sat in cases along the floor with tags around their necks. Then we got large shelves in the warehouse that came with a pretty simple categorization system. And even though I was inside the offices in the marketing department, I loved heading out to the warehouse...just to stroll among the bottles.

It was a little like walking through a sex shop. Everything in it served to arouse...if you were a wine lover. Over there was the mag of 1961 Margaux, in that corner was the 20 year vertical of Mondavi Reserve, the 3 liter of d'Yquem was over on that side of the warehouse, in the middle there was the vertical of Stony Hill Chard. It got me off.

I'm still pretty proud to say I worked with Winebid.com at the time of its first auction and helped open it's first CA warehouse. It's great to see them do well. According to their CEO Jerry Zech, "This custom wine racking system was the final step in completing an inventory and shipping system to handle the thousands of bottles of wine we auction every week.  Our new bar coding system and wine inventory database are all integrated into the final process of shipping and fulfillment."

That's good news too. Winebid now has upwards of 50,000 registered bidders. I fully recall the excitement when the number of bidders hit 5,000. back in the late 90s. It's nice to be able to point to a pure Internet wine play and not say, "what were they thinking!!".

Very Quaffable Innovations

John Gavin, best known as the author of Quaffability Blog and popular web designer to the wineries is on a roll with two new and innovative websites that wine lovers probably should be aware of.

WEB TASTING ROOM

It's a video blog. It's a source of excellent deals. It's a message direct from the winemaker. What John has done here is create not just a web site the provides access to good deals on wines, but gives you much deeper insight than normal into who is behind the wine. One deal is offered at a time (right now it's an SB and Red blend from famed winemaker Mia Klein) that most often includes a fantastic deal on shipping. The current offered delivers two very rare wines with SHIPPING INCLUDED. In addition you not only get detailed info about the wine but a video interview with the winemaker. Pretty cool!

FREEWINESHIPPING.COM

While I like the WebTastingRoom concept, this particular website is the one I think will lead a number of folks to sign up for their mailing list and RSS Feed. John is regularly posting links to wineries and retailers who have a deal going that offers free shipping. How cool is that??? "Free Shipping" is the number one promotion that consumers want from wine sellers. Not 10% off. Not 20% off on a case. It's "free shipping" or its equivalent that is desired.  Gavin is searching the web and posting his finds, be they from wineries or retailers. If my wife finds out about this I'll need to raise my rates to Wark Communications clients.

Cheers to more very cool wine innovations on the web!!

The Implosion Begins!

Let me see if I have this right...

On the one hand, wine retailers across the United States are telling alcohol regulators in every state that they'd like to enhance their operating budgets by paying an annual fee to ship wine to consumers in those states. They'd like to help fill their state's coffers with funds resulting from the remittance of taxes on the wine they sell and ship to consumers in their state. These retailers would like to voluntarily submit themselves to the legal jurisdiction of a remote state as well as allow their books to be audited at the notice of the regulators.

On the other hand, the Wine & Spirit Wholesalers of America want alcohol regulators to commit a significant amount of their valuable time looking for an alleged band of adult wine lovers who are claimed to be committing the sin of buying wines they can't find in their own state, from a retailer in another state. Further, the WSWA wants these alcohol regulators to spend their valuable budgets looking for these supposed scofflaws in their own states as well as tracking down the alleged sellers in other states. Of course, wholesalers aren't mentioning that this would take significant time and resources away from actually carrying out the core mission of these alcohol regulators: making sure licensees in their state are following the law and attempting to assure licensees don't over-serve their drinking patrons.

Get More Money for their states and their budgets...VS...waste time protecting wholesaler profits???

Hmmmm? Tough one, isn't it.

Yet this is the silly suggestion that the head of the American wholesaler cartel actually made in the form of a press release today as well as in letters to Attorneys General, governors and alcohol regulators in 50 states.

In case anyone reading this has missed the point of the American Wholesaler Cartel, allow me to remind you: PREVENT AS MANY AMERICANS FROM ACCESSING ANY WINE UNLESS WHOLESALERS FIRST MAKE A PROFIT ON IT.

Damn the regulators and the efforts they make to maintain an orderly and safe market for wine and spirits. Damn the states and their need to raise revenue. Damn the consumers who only want to obtain the wines the wholesalers feel these folks don't need to have. JUST PROTECT OUR PROFITS.

I wonder if WSWA and the wholesalers ever tire of being ridiculed?

I don't think so. The American wholesaler cartel appears to never tire of having their face rubbed in it. They lose lawsuit after lawsuit. They get slapped down by the Supreme Court of the United States. They get caught in their misogynistic ways. Their arguments against direct shipping are put to bed with efficiency and ease by person after person. But none of this is enough for them it appears. Now, they whine like a little girl who just soiled their Sunday dress and run off crying to daddy asking him to put down his tools and stop doing his job, so he can clean the mess the little girl made all by herself.

If anyone is wondering, it's only going to get worse for the wholesaler cartel as they continue to spin out of all control.

But what I'm really wondering is who in their right mind at WSWA gave the approval to issue a press release that actually criticizes the the most powerful newspaper in the land merely for an offhand quip a wine writer made in its pages? Is there no one at the helm at WSWA? All they have to do is call me and I can recommend a number of fine PR professionals who will tell them the utter depth of stupidity that move represented. But allow me to recreate this act of stupidity...just as an object lesson in how not to run a communications program.

To quote from yesterday's WSWA press release that whines about the alleged "Illegal alcohol trafficking and open disregard for state liquor  laws":

"Wolf even cites a prominent New York Times wine writer openly sympathetic to the unregulated-shipping cause, who recently opened one column: “I have a confession to make.  I am a lawbreaker.”

Wrote Wolf in response to the remark: “That a newspaper of record would publish such comments in the clear light of day, we believe, ought to trouble any regulator, lawmaker or law enforcement official.”

Tell you what, if I ever recommend to one of Wark Communications' clients that they criticize the New York Times in a press release, please have someone come to my home, drag me out of bed and beat me senseless.

Finally, I fear I'm forced, out of the knowledge that my good readers love a bit of humor, to quote from the letter that WSWA's CEO Craig Wolf wrote and sent to alcohol regulators, the top law enforcement officials and the Governors (yes, the following quote actually ended up in a letter to GOVERNORS) in all fifty states:

"As you are well aware, the sidestepping of state-controlled alcohol distribution channels causes a host of negative effects—the inability to collect taxes, the absence of a face-to-face transaction that addresses myriad regulatory aims, and the very real possibility of introducing tainted or counterfeit product into your marketplace, to name but a few.”

Tainted Products? Now the American wholesalers are protecting us from tainted wine? I've got news for them. This is not 1926. No one is making tainted wine in a bathtub with grain alcohol and red food coloring, slapping a stopper in it and running it across the river to avoid Elliot Ness. And just when was the last time a wholesaler broke open a case of Opus or Dom Perignon or Russian River Valley Chardonnay to make sure it wasn't "Tainted"?

I think we may be witnessing the end of a long sad saga as the implosion begins.

The Heart of Darkness

Let's go into the heart of darkness. Let's examine the center of cynicism in the world of wine:

"It is cynical to say you support people just because of the power shift," he said. "But clearly when the power in Congress changes, there is a tendency to support those who wield authority."
-CRAIG WOLF, CEO, Wine & Spirit Wholesalers Association

This is Mr. Wolf's commentary on the fact that his organization has "decided  to shift his group's donations so that two-thirds will go to Democrats rather  than, as before, to Republicans"

How much will wholesalers spend on federal candidates before the election in November is over? Well over $1,000,000. When you add to this the fact that alcohol wholesalers across the country will likely break their previous record for giving to state political campaigns in a single year ($19.2 Million in 2006), you have a very good indication why the vast majority of laws concerning access to alcohol by adults are anti-consumer, pro-monopoly and a shining beacon for cynics the world over.

How is it that America's wine-related laws can still be largely based on decades old assumptions, stifle the growth of the American wine market, needlessly criminalize consumers, take millions of dollars in tax revenue out of the states' coffers and demonstrate a complete lack of concern or respect for consumers kept in place?

Consider this nugget from the Chicago Tribune article:

"He (Craig Wolf) believes in giving to friends in Congress, both Democrat and Republican, who can help his organization. He believes in helping friends stay in office, especially when they have power in Congress. And he likes to make friends with the new arrivals in Congress, who can ultimately help his group."

This is hardly news, nor should it be shocking, to those who have watched politics in America for any amount of time or who have observed the way the politics of wine are played in America. However, it is a great reminder of what the consumer and the entire wine industry is up against: The Very Heart of Darkness.

1997 Whatever....

"most Americans were satisfied with the system as it is except for a small, very vocal segment who say they can’t get their bottle of 1997 whatever.”

Count me in as part of that small, vocal segment of folks who really do love the "1997 Whatever". What a great wine that was, huh! I'd loved it's fruity component of So What. And who can forget that wine's firm and crisp Too Bad. And the wine was legendary for it's long, smoky Nevermind.

The wine that all vocal wine drinkers will be looking for today, the 1997 Whatever, is the creation of Craig Wolf of the Wine & Spirits Wholesalers Association. Mr. Wolf made note of this very hard to fine legend of a wine in a New York Times article by Eric Asimov. In the article Mr. Wolf pull off a pretty neat trick as he responds to the movement to open up direct shipping laws: He very capably denigrates both consumers and wine producers in once sentence. That's not easy to do...you have to work at it.

The implication of his "small, very vocal segment" is that these wine lovers, the ones that purchase LOTS and LOTS of wine from retailers, restaurants and wineries, really don't matter to him and the wholesalers he represents. And I can understand that. It's awful difficult to really pay attention to this big spending, influential, but small, group of wine lovers when your main concerns is making sure 15 year-old Lisa Schoolgirl isn't ordering 1997 Whatever on her laptop while hiding under her bed covers at night (a trick that is always followed by her faking sickness the next day so she can stay home from school and convince the delivery person that, yes, she really is 21 years old even though she lost her drivers license. Craig Wolf is worried about this group not getting wine, as well as worrying that the small, vocal segment of adults don't get their 1997 Whatever. He's a busy guy.

But Mr. Wolf also finds a way to denigrate the producer. "Eh...it's just 1997 Whatever". I suspect the owners of Chateau Whatever work pretty hard to make and sell their elusive bottling that Craig has now made famous. In fact, I'll bet the VP of Marketing at Chateau Whatever spends a GREAT DEAL of time begging his few distributors across the country to PLEASE sell the wine they said you would!! Who knows, maybe the folks at Chateau Whatever decided to drop their wholesalers and start selling their wine direct to retailers and to consumers. After all, why give away margin to a distributor who is so willing to denigrate your wine and wines of other small producers right there in the NEW YORK TIMES!!!!

If you ever wanted a pure explanation of how the wholesaler community views fine wine lovers and producers of fine wines in America, all you need to do is re-read Craig Wolf's statement today in the New York Times. Make no mistake. He knew he was talking to the NEW YORK TIMES. He knew he was talking to a reporter who's article would be read by millions including the vast majority of the winemaking community and the fine wine drinkers in the United States. He chose his words carefully. So let me remind everyone what he carefully chose to say about wine drinkers and fine wine producers:

"most Americans were satisfied with the system as it is except for a small, very vocal segment who say they can’t get their bottle of 1997 whatever."
Craig Wolf, Wine & Spirits Wholesalers Association

The Good & The Bad

The issue of direct shipping brings out the best and the worst in folks, no doubt about that. But I also think the Direct Shipping issue is the kind of topic that can demonstrate the power of online media and the power of blogs.

First the good in people. Alder's post on the Wine.com Stings has resulted in a remarkably coherent and well thought out set of comments on the issue. I can tell you that people are reading them too. In the past few days I've been interviewed by upwards of 8 different media outlets on the issue and what it means for retailers in general and to direct shipping in particular. But I want to bring you back to this issue of bringing out the good. Consider the comment on Alder's Vinography by one Emily & Stephan of Winemonger.com. It's at the bottom  of the comments. If you want to see a comment on a blog that not only sets the issue in context, but also delivers an appropriate rebuke, is amazingly articulate and actually takes action by putting their money where their mouth is, theirs is the comment to read.

More than anything you have to congratulate Alder for having what is clearly one of the most involved and well spoken readership anywhere.

But then there is the Bad that this issue of direct shipping brings out. I simply must highlight a comment I received on the post just below this. It is in fact the kind of comment I like to see if only because I know they are reading Fermentation. But it also highlights what this issue of direct shipping can do to people who are personally engaged in the issue. "The Big Boys" had this to say:

The last thing this world needs is a presumptuous prick like you telling everyone else that a system thats worked great for 70 years is corrupt.

You think you've got this figured out don't you. If there weren't any wholesalers you and your faggy California vintners would be up shit creeke.

You think drinkers and your precious SWRA will win against distributors then think again. You don't stand a chance and it's not cause of few mllion doallars. Its because no one wants to buy 100 dollar bottles of wine ovr the Internet. And it's because states don't want kids ordering booze.

Why don't you take your shitty blog, your shitty SWRA and leave the work to the big boys."

The issue of Wine.com and its stings will eventually fade away and we will all be on to another topic and another conversation. But the fact that the issue was unwrapped by bloggers and blog readers and by those that comment on wine bulletin boards will be remembered by Wine.com, "The Big Boys" and all those in the media and the simple wine lovers that found introduction to the issue online.

 

$50,000,000

Some of the most important work I've done over the past year has been with the Specialty Wine Retailers Association where I began acting as executive director in January 2007. In that year I've had the chance to testify in a number of states on the issue of direct shipping, work with some amazingly talented folks and even bear the brunt of some of the wholesalers' more nasty and snide remarks.

However, a good deal of that time was spent staring at numbers. Everyone knew that America's wine wholesalers gained influence via their campaign contributions at the state level. But we never knew the extent of that largess. So I started looking...and looking...and looking.

All that looking resulted in the SWRA Report issued today called "Wholesale Protection" that breaks down the $50 Million dollars that American wholesalers and their associations have delivered to state politicians between 2000 and 2006.

The number is remarkable not only for its size but for the way in which it exceeds the amounts of money given to political campaigns by any other sector of the alcohol industry. In fact, in that time wholesalers have given more to politicians than all wineries, beer producers, spirit producers, restaurants and retailers—combined.

Many have suggested that these are amazing numbers but that there is no smoking gun. I suppose a "smoking gun" would be evidence of legislation in exchange for dollars. Of course, this has not been found and this sort of research could not find it.

However, consider that nearly every state has laws on the books that either protect wholesalers directly from competition or limit the access that consumers have to wine in a way that aids wholesalers bottom line. Better yet, consider these circumstances:

•Between 2000 and 2006 Illinois alcohol wholesalers contributed $5,731,776 to political campaigns. In 2007 the Illinois Legislature passed a law that protected in-state alcohol wholesalers by prohibiting Illinois consumers from continuing to buy wine from out-of-state retailers. Wholesalers also convinced the Illinois legislature to force large Illinois wineries to sell only to state wholesalers, rather than direct to retailers has they had been able to do.

•Between 2000 and 2006 Texas alcohol wholesalers contributed $6,976,104 to state political campaigns. The Texas Legislature has passed prohibitions on out-of-state retailers shipping to Texans and limitations on in-state retailers shipping to Texans, both moves protective of and supported by state alcohol wholesalers.

•Between 2000 and 2006 California alcohol wholesalers contributed $4,296,304 to state political campaigns. In 2005 California passed legislation protecting wholesalers from competition by prohibiting Californians from purchasing wine from out-of-state retailers, policy California wholesalers pushed for.

•Between 2000 and 2006 Michigan wine wholesalers contributed $2,099,319 to state political campaigns. In 2005 the Michigan legislature passed a wholesaler-supported law that protected in-state wholesalers from competition by prohibiting Michigan consumers from purchasing wine from out-of-state retailers.

•Between 2000 and 2006 Virginia alcohol wholesalers contributed $2,580,161 to state political campaigns. The Virginia General Assembly passed a wholesaler-supported law prohibiting Virginia wineries from continuing to sell wine directly to retailers and forcing them to sell their wine to wholesalers.

One wonders if all this is simply a coincidence.

Here's what I know. This kind of largess buys access and influence. The lobbyists for the the wholesalers have open doors into legislators' offices where the lawmakers are told that consumers don't care about direct shipping, that retailers are bootleggers, and that minors are going to get their hands on alcohol via direct shipping.

These kinds of conversations lead to states like Illinois passing boldly unconstitutional laws even in the face of consumers begging it not be passed in the form of conversations, e-mails, letters and with the media writing over and over that the legislation stinks.

Now while I know this kind of legislation hurts the members of Specialty Wine Retailers Association, I know that it hurts consumers even more. In fact, I'm a bit surprised that there has not been the creation of a national organization that represents consumers on these issues because that's really where the leather meets the road; when consumers are told that "no, we can't ship you that wine."

The "Wholesale Protection" report is the first in a serious of steps that will expose the wholesalers, that will demonstrate conclusively that their rhetoric is not just rhetoric but actually damaging to the American wine industry and the American wine consumer. What they've yet to understand is that things will get a lot worse for them when consumers begin to get involved. They accuse me and the Specialty Wine Retailers Association of wanting "nothing less than the total deregulation of alcohol regulation in America."

What they don't understand is that I and SWRA would never advocate such a thing. However, American consumers will not just advocate it eventually, but they'll demand it.

The Department of Online Wine Policemen

In addition to being in the business of taking enormous amounts of venture capital, as well as selling wine on-line, Wine.com now has apparently set up a division within its company that I suspect is called: "The Department of Online Wine Policemen.

As was pointed out by Rich Cartiere at the Wine Market Report and made available HERE and by Alder at Vinography, Wine.com has begun ordering wine from out of state retailers and having it shipped to Wine.com in Washington State. They've then taken those shipments over to the Washington State Liquor Control Board and insisted that the state of Washington take action against these retailers. And they did just that. In fact, the Washington State Liquor Control Board's actions, particularly in conjunction with other states, has forced a number of wine retailers to stop shipping to Washingtonians.

Many have suggested that this is a matter of "Tattletale" and actions on the part of Wine.com that are remarkably anti-consumer. In fact, if you want to see what folks have been saying just go read the comments at Alder's blog or at the Wine Spectator bulletin boards or at Mark Squire's bulletin board.

But here's a little tidbit that hasn't been brought up. The State of Washington has no jurisdiction when it comes to out-of-state retailers. Rather, the only people who are at risk when a consumer buys and has shipped to them wine from an out of state retailer is the consumers. It's the consumer who is at risk for "importing untaxed liquor".

This explains why in all the letters that the Washington Liquor Control Board sent to out-of-state retailers at the behest of Wine.com's Department of Online Wine Policemen "REQUESTED" that the retailers stop shipping, rather than demanding they stop shipping.

Now, it might be that Wine.com's motivation for carrying out sting operations against its fellow retailers was its concern for public safety. It also might be that given Wine.com's model of having residency in every state and not shipping over state lines had something to do with it's aggressive move against its competitors. Who knows.

But here's what I do know. As long as Wine.com is going operate a Department of Online Wine Policemen it really should turn its attention to consumers who are buying from out-of-state retailers rather than from Wine.com, who could ship the wine from within Washington.

Now, I don't think the Wine.com Internet Wine Police Force is going to go after the only people, consumers, that the state of Washington can actually touch with enforcement actions. I don't think they'll do this because, well, that would be stupid. However, I honestly wish they would do this. If they did, there would be no need for Wine.com to worry further about the state of retailer-to-consumer shipping because there would be no more Wine.com. Consumers would get one inkling of the actions that Wine.com had taken and never patronize them again.
--------------------------------

Tom Wark is Executive Director of the Specialty Wine Retailers Association 

The Wine Czar Has Arrived

Inspired by Paul Gregutt's excellent story on the meaning of wine terms, I began fantasizing about being named the American Wine Czar and being given complete control over wine regulations in the United States. I've fantasized about this before but given the wonderful fantasy it is, the topic deserves an update.

My first set of acts as the American Wine Czar are:

THE OLD VINE" REGULATION
Any wine produced in the United States that carries the term "Old Vine" or "Ancient Vine" or any other derivation of these terms that imply the vines are actually much older than average must have have been made with 100% grapes grown on vines that have been in the ground for 75 years or more.

THE VARIETAL REGULATION
Any wine sold in America that carries a varietal designation on the label must be made with 100% of the named variety.

THE DIVERSITY REGULATION
Any company that sells wine to consumers that is not also a producer must carry at least two wines from no less than five different states.

THE CONSUMER WINE PROPERTY REGULATION
Any consumer that takes legal possession of a wine may ship that wine to anyone anywhere in the United States unfettered by any agency or law of any state.

THE SPINAL PROTECTION ACT
No wine sold in the United States may be contained in a bottle that weighs more than 25oz.

The "HANDCRAFTED" REGULATION
No wine sold in America may carry a back label that asserts the wine was "hand crafted" unless documentation is submitted to the Wine Czar that verifies the wine was actually produced entirely while being held in the hands of one or more employees of the producer.

THE "RESERVE" DISCLOSURE REGULATION
The term "reserve" may be used on any wine label of American-produced wines only if on the back label the producer explains why the wine in the bottle is of higher quality than all other non-"reserve" wines made by the same producers.

THE "100 POINT" ACT
A 100 Point rating scale may only be used to rate a wine or promote a wine or to advertise a wine if the person or company assigning the rating is able to explain the difference between an 88 point wine and an 89 point in purely aesthetic terms.

The Solution is At Hand...Rejoice

"It's just a matter of time before we all end up in court"
—Mike Wittenwyler, Attorney for Wisconsin Wine & Spirit Distributors

What would Mike and the Wisconsin wine and spirit distributors do without me? Luckily, I'm on job and can explain in simple terms how they and the state of Wisconsin can avoid ending up in court. But first some background.

In Wisconsin it was legal for Wisconsin wineries to sell and deliver wine directly to retailers. they were not forced by law to sell their wine to a wine distributor who may or may not have sold the wine to retailers and who don't know nearly as much about the Wisconsin winery's brand and wines and who most of the Wisconsin wineries wanted nothing to do with..thank you very much.

However, Wisconsin did not allow out-of-state wineries to go around the wholesaler and sell directly to Wisconsin retailers. That's a constitutional "no no".

The wholesaler's solution? Make it all fair by taking away the Wisconsin winery's right to sell directly to retailers and force them to sell their wine to wholesalers. The Wisconsin wineries will make less profit. They'll have far less control over the marketing of their wines. But, Wisconsin would be in compliance with the constitution and Wisconsin wholesalers would make more profit.

The Governor of Wisconsin vetoed this approach, which led Mr. Wittenwyler to offer his dire prediction that "It's just a matter of time before we all end up in court".

Fear not, Mr. Wittenwyler. I have the solution:

Allow all wineries, whether in Wisconsin or outside Wisconsin to sell and ship directly to retailers. This approach has a number of benefits:

1. It is an embrace of free trade.
2. It rejects commercial restrictions.
3. It rejects protectionism.
4. It helps Wisconsin wineries
5. It assures greater selection for retailers and customers
6. It is not unconstitutional

There you go Mr. Wittenwyler. Sleep soundly tonight. The answer to your worries is hence offered.

More on this issue can be found at the Specialty Wine Retailers Association Blog, "Wine Without Borders".

Fighting Back By Blogging

The number of blogs on the internet that cover the issue of direct shipping and consumers rights and shipping regulations is few and far between. There is the blog you are reading, the ShipCompliant Blog and Inertia's REthink blog.

NOW THERE IS A NEW ONE....dedicated to covering this issue particularly from the perspective of retailer-to-consumer shipping, but delving into the world of wine shipping issues on a daily basis.

WINE WITHOUT BORDERS is the new blog created by the Specialty Wine Retailers Association, for which I act as Executive Director.

Wine Without Borders will be the second blog I'll be maintaining on a regular basis, but this time I'll have help from the various members of SWRA who will also be posting commentary.

One things is clear: if the wine industry including retailers, wineries and consumers don't support efforts to make wine shipping easier and more open, then it simply won't happen. Today, retailers can ship legally into only 15 states. Wineries may ship into roughly 35. Why not all of them?

But here's how I hope Fermentation Readers can help...
IF YOU MAINTAIN A BLOG OR A WEBSITE, JUST PUT UP A LINK TO WINE WITHOUT BORDERS.

Help us get the message of free trade in wine out to a larger audience. One link per blog/website....That's all we ask!

Wine Without Borders will try to do some heavy lifting by being the ongoing communication vehicle for issues surrounding direct shipping. That means keeping you up to date on legal, legislative, political and philosophical issues concerning this issue. It turns out that the the interests of retailers are the interests of consumers. It's this conversion of interests that allows retailers to be always on the side of consumers on this issue.

So help out the cause if you can. Read the blog from time to time. Spread the word. Link Up. Please.

How will I maintain two blogs? I've committed to reducing my amount of sleep. But no tears for Tom. He don't need no stinking sleep!

The Sticker Printing Prowess of Wine Distributors

It appears that the alcohol distributors in North Carolina along with their national umbrella organization the Wine & Spirit Wholesalers Association are very proud of themselves for having printed up stickers discouraging minors from drinking.

So proud of this sticker printing project that they issued a press release congratulating themselves on their sticker printing prowess.

One small quote in the press release by Bill Kennedy, president of Mutual Distributing of Raleigh, reminded me of an idea I've ruminated on for some time. Mr. Kennedy said:

“The alcohol industry has a unique and special responsibility to encourage and support government and community programs that inform everyone about the dangers of unregulated access to alcohol.”

It has always struck me that  as long as wholesalers are going to be supported by the state with the creation of an anti-competitive landscape (the state-mandated 3 tier system) for them to work and derive profit from, then they should also have a "special responsibility" to spend a certain amount of their state-granted profits on more than sticker printing projects.

Let's face it, American and North Carolinian alcohol distributors owe their enormous profits to their status as state-supported special interests. The state mandates that nearly every bottle of alcohol be shovel through the wholesalers before reaching the retailer or restaurant. This allows the wholesalers to take a profit that might not otherwise be taken since the producer might otherwise choose to sell directly to the retailer or even the consumer.

It turns out that North Carolinians may purchase wine from out-of-state and have it shipped to them, but only from wineries, not from retailers. This means that enormous amounts of greats wines (particularly rare wines, imported wines, and wines that are no longer available from the winery) are unavailable to North Carolinians since the states wholesalers won't bring them in.

The fact that North Carolinians can receive wine from any out-of-state winery is only a result of a hard won court battle in which the North Carolinian and national wholesalers did their best to prevent this. In fact, wholesalers argued that it would be better if no one could ship wine to North Carolinians, including North Carolina wineries, rather than allow all wineries in the U.S. to ship to North Carolinians.

Nice, uh?

But back to my point. Only a very small amount of wine can legally be shipped to North Carolina consumers and most wine sold in North Carolina by law must go through their wholesalers. Shouldn't these businesses that receive such enormous support and special privileges from the state be required to plow a certain percentage of their profits back into the state...and I'm talking beyond the printing of stickers.

If it were me suggesting a fair demand to be placed on the specially privileged wholesalers, I'd say they should be required to pay some portion of their profits--perhaps 10%--to a fund that would be used to promote North Carolina's wineries and brewers and to promote the existence of the direct-to-consumer channel.

At this point, North Carolina's distributors, as well as distributors in most other states, are being granted a HUGE state-mandated, anti-competitive advantage that supplies them with enormous profits by virtue of the laws that literally guarantee they will make a profit if they can figure out how to load and unload boxes on to a truck.

It's not enough that they print up stickers with cute sayings.

Where Healthcare Meets Wine Shipping

I admit to being entirely curfuddled (sp?) by what we've come to call the "healthcare crisis" here in America. Basically, all I know is that I'm probably going to die because I don't have healthcare coverage that will pay to have my head removed from my ass or pay to have the correct procedure administered when I need to be treated for Emuthropopolititus - aliabosisalia...or something like that.

But, folks are working on the problem. Those folks are usually presidential candidates.

Today I read Senator John McCain's approach to fixing healthcare. What was startling about his approach was that it happened to include one element that would also work to correct what I like to call "The Wine Shipping Crisis" here in America.

Among McCain's proposals was:

"Allowing people to buy health insurance nationwide instead of limiting them to in-state companies, and permitting people to buy insurance through any organization or association they choose as well as through their employers or directly from an insurance company."

Applied to the the wine shipping crisis you'd only need to change a small portion of this part of McCain's healthcare proposal:

"Allowing people to buy wine nationwide instead of limiting them to in-state companies, and permitting people to buy wine through any means they choose as well as through wineries or directly from a retailer."

Read how the Associated Press (and hence McCain) characterizes his healthcare plan:

"John McCain proposed an overhaul of the nation's health care system Thursday, aiming to give people more control, encourage greater competition and lower costs."

Let's try this again:

"Tom Wark proposed an overhaul of the wine shipping laws Thursday, aiming to give people more control, encourage greater competition and lower costs."

Now, I'm not trying belittle the importance of healthcare, nor suggest that consumers being able to get the wine they want without special interest, monopolists getting in their way for profit's sake is more important than people being able to have heads removed from asses without going into bankruptcy.

I'm only suggesting that some folk's plans for fixing other industries might apply well to fixing the wine shipping business.

The Wine Distributor Protection Act of 2007

Yes, this editorial is a little late, but it is still on the mark.

Last week Illinois Governor Rod Blagojevich signed HB 429 into law. It takes effect on June 1, 2008.

You remember this law. It's the one that many have come to call "The Wine Distributor Protection Act of 2007". It's also the law that the codifies the idea that wine Illinoisans obtain from out-of-state retailers is down right dangerous and must be prohibited from coming into the state. And so, this law does just that. Illinoisans may no longer legally have wine shipped to them from out-of-state wine retailers.

You see it's very simple. Illinoisans are safe when they buy wine from out-of-state wineries. They are safe when they buy wine from in-state wineries. And Illinoisans remains safe when they buy and have wine shipped to them from Illinois-based wine retailers. However, something very terrible will happen if an Illinois resident buys and has shipped to them wine from an out-of-state wine store. At this writing we are still attempting to determine the nature of that threat. It's just not clear. But it's out there somewhere.

What's the upshot of this ugly legislation?

Illinoisans will lose access to thousands of wines they either can't get in-state or from out-of-state  wineries. Illinoisans will now pay higher prices for wine, particularly for rare wines that are hard to find in the state.

The other upshot is that Illinois liquor, wine and beer distributors can sleep well knowing that the $5.4 million they contributed to Illinois politicians since 2000 has been well spent. They got what they wanted: Consumers now have less access to wine and distributors have decreased the competition they are subject to so that they are now free to make even greater profits so that they might "contribute" even more money to politicians.

The Chicago Tribune editorial, though late in coming, did get it correct when they wrote:

"For years, Illinois laws have interfered with the wine market in ways that do nothing to benefit the average tippler. It's time for the state to get out of the way and let buyers and sellers work out the arrangements that suit them best."

Yes, I have a vested interest in this issue, being the executive director of the only national or non-Illinois wine organization that opposed this law . So, you may want to take with a grain of salt my opposition to legislation that is unconstitutional, deprives consumers of access to a legal product, and shuts retailers out of a market they've cultivated legally for 15 years. The legislators and Governor of Illinois certainly didn't seem to give much weight to these issues. However, just know that by taking all this with a grain of salt doesn't mean you too will be receiving millions of dollars from Illinois wholesalers.

$45 Million and Counting...

Just how much do America's alcohol distributors pay to keep their stranglehold over legislatures across the country where anti-consumer and anti-shipping legislation that only benefits distributors is passed on a regular basis?

According to data collected by Specialty Wine Retailers Association using FollowTheMoney.org, alcohol distributors have given more than $45 million to state politicians across the country since the year 2000.

Interestingly, more than half of that amount was contributed by alcohol distributors in just five states:

TEXAS
How Much: More than $6.7 million since 2000.
What Wholesalers Got: Texas recently passed wholesaler-endorsed legislation with little if any debate that prohibits Texas wine consumers from having wine shipped to them from any retailer outside the country they live in.

ILLINOIS
How Much: More than $5.4 million since 2000
What Wholesalers Got: Illinois recently passed legislation that would prohibit Illinoisans from purchasing wine from out-of-state retailers, a right Illinoisans have had for more than 15 years. The legislation was written by Illinois wholesalers.

MASSACHUSETTS
How Much: More than 4.9 million since 2000
What Wholesalers Got: MA passed pro-wholesaler wine shipping legislation in 2006 that prohibits Massachusetts consumers from purchasing wine from a vast number of small, medium and large wineries and from purchasing wine from any winery that has had a relationship with a Massachusetts wholesaler within the preceding six months.

CALIFORNIA
Home Much: More than $4.6 Million since 2000
What Wholesalers Got: CA passed a law in 2005 that prohibited Californians from purchasing wine from any out-of-state retailers.

FLORIDA
How Much: More than $3.1 Million since 2000
What Wholesalers Got: Twice in the last two years wine wholesaler-sponsored legislation has been introduced that would have severely limited the rights of Floridians to have wine shipped to them.
Source: Specialty Wine Retailers "Bottom Line" E-mail Newsletter

This is a story absolutely begging for coverage in the wine trade media as well as in the mainstream media. The circularity that allows this kind of influence by a very tiny group is astounding and entirely unique in the American Republic and American politics: Alcohol distributors are given a state-mandated monopoly to control access to wine. That monopoly creates enormous profits. Those profits are dumped into campaigns to gain political influence. The distributors state-mandated monopoly is protected and expanded. More profits come to the distributors, etc, etc, etc.

Imagine what kind of power arises from 70+ years of this kind of special interest protection by the state afforded to a very tiny group of companies. Wait you don't have to imagine. Just re-read this post.

Under Cover of Darkness

Yesterday a law went into effect in the state of Ohio that is not only begging to be overturned but is exactly as Jim Gord