Wine Distributors: Obtuse, Facetious or Just Plain DUMB?

Wine wholesalers I swear to Bacchus, I can't tell anymore if America's wine distributors are being obtuse, being facetious, or are just plain DUMB when they open their mouths and utter words about the business they are in.

As reported in the April issue of Wine Business Monthly, at the recent 2009 Unified Wine & Grape Symposium seminar concerning direct shipping, Craig Wolf, president of the Wine & Spirits Wholesalers Association, responded in the following way to the question of how smaller wineries that can't get distribution in various states are able to obtain exposure in those markets:

"You cant."

He went on to explain that in every market there are "winners and losers":

"It's a direct result of the relationship you create, the product you create (and) the investment you put into it yourself. And that's in any business, not just wine and spirits….I don't think wholesalers need to apologize for that."

I guess when you are guaranteed by law control of the wine distribution system in America and with that guarantee are granted unearned profits, you can make just about any silly and absurd statement you like.

The losers in different states have nothing to do with whether or not a winery has created a marketable product, created relationships in the market or invested sufficiently in the brand. Who loses depends entirely on the capricious whim of wholesalers in states. If they don't want to represent a brand, for any reason, then that brand loses by not have access to the state's market.

Now, were wineries able to sell as much as they wanted, or even a limited amount, directly to consumers or if wineries were able to sell directly to restaurants and retailers across state lines without using a wholesaler, then Mr. Wolf's statement might make sense.

I understand why wholesalers would defend a system that puts them in control of 99% of all profits generated by wine sales in a state. What I can't understand is how these wholesalers gather the gumption to lie straight into the faces of the rest of the industry.


10 Responses

  1. John Kelly - April 9, 2009

    Doesn’t sound to me like Wolf was lying, Tom. Sounds like he was being pretty honest about the world according to the WSWA. And heck, I agree that the wholesalers don’t need to apologize for taking full advantage of the monopolies granted to them by law.
    But it still ticks me off for the guy to basically look at all the small producers in the industry and say “suck on it, folks – and then suck on it again.” ‘Cause that’s what he did.

  2. mydailywine - April 9, 2009

    I read Craig Wolf’s response earlier this week and literally laughed out loud at his audacity.
    No, wholesalers do not need to apologize for anything but they do need to make room for some healthy competition.
    Of course wholesalers cannot sell every single wine ( many are struggling to sell the wines they already carry)….that’s why we need legal direct to consumer and direct to trade channels for wineries.

  3. Marky - April 10, 2009

    “Craig Wolf, president of the Wine & Spirits Wholesalers Association, responded in the following way to the question of how smaller wineries that can’t get distribution in various states are able to obtain exposure in those markets:”
    Do you call that a sentence? Learn how to write, sir.

  4. Scott - April 10, 2009

    Have you thought of renaming your blog “Regurgitation”? Your fixation on this issue is sooooo boring. But kudos on your list of links to sites and blogs that are actually about wine.

  5. Tom Wark - April 10, 2009

    No, I have not renamed it “Regurgitation”. I wanted to. However, the URL was already purchased. Thank you for the cogent comment and please consider my earlier offer to purchase a particular URL.

  6. Wine-on-the-Way - April 10, 2009

    We live in an extremely competitive world it’s true. But all is not lost. Is there nothing to be said for having good old fashioned gumption?!! Perhaps this is what Mr. Wolf was referring to. Who can give us a pep talk?

  7. Scott - April 11, 2009

    Mr. Wine-on-the-way has hit it on the head. It seems there are business people who would rather blame the fact that they’d like to be more successful on a “system that’s rigged against them” than on any shortcomings or failings within themselves or their organization. Sometimes we all just have to overcome the obstacles in our path, and get tough.
    Reading continuous rants about the plight of wineries and their battle with the mighty imperial forces of the distributors reminds me of Alec Baldwin’s sarcastic impersonation of former salesmen at the bar in “Glengarry Glen Ross”. “I used to be in sales..(mimics throwing back shot of cheap whisky)..Tough racket…”
    Put that coffee down, Wark. Coffee is for closers.

  8. Tom Wark - April 11, 2009

    I don’t mind having my thoughts and writings criticized or taken down. Hell, I’ve got a number of pairs of Big Boy Britches. I will note, however, that you’ve not disputed any of my claims. Now while this doesn’t surprise me, I at least expected you to give it a whirl.
    And don’t talk to me about closing. You’re looking at a former Kirby Vacuum Cleaner salesman. We learn how to close one way: hard.

  9. Scott - April 13, 2009

    If your claim is that the wholesale distributors in a given state would be in the business of refusing to sell and represent a product that there is a real and proven demand for in their territory, then we have to question who is and isn’t stupid or lying. And even if that were true, wouldn’t that provide a golden opportunity for an existing or new competitor to take these ignored jewels and run with them?
    I hope you feel that I have now addressed your phantom claims in a more detailed and precise way. The larger point, which I made before, is that this is more rhetoric aimed at a shadowy conspiracy among the American wine system to prevent consumers having what they want. One that, in fact, does not exist. Real demand for a product results in a real and easy supply of that product. The failures of Prohibition, and the “Drug War” prove this fact.
    What I said before, and what I’ll say again is that it’s simple and cheap to suggest that a winery’s lack of ability to make their products happen in Duluth or Buffalo or Birmingham is due to the baddies who are out to get them. Certainly much cheaper and simpler than doing the work it takes to make it happen.
    And I can’t help but ask: why would Kirby Vacuum let one of their hardest closers slip throught their finger?

  10. Tom Wark - April 13, 2009

    What exactly do you think “demand” amounts to in a marketplace where “The Long Tale” is the driving factor behind the emergence of small brand marketing?
    If a winery has had to turn away 50 wine club memberships in a year because they can’t ship wine direct to New Jersey, isn’t that “demand”. Of course it is. And it happens all the time. It happens because wholesalers use their political muscle to assure no direct shipping legislation gets passed
    Furthermore, how can the “demand” for a product in a particular market or state be assessed if the product isn’t on the shelves, particularly if it is a small production brand at a high price point?
    And even further, Do you really believe that wholesalers are really capable of accurately assessing demand of such a product. Time and again they fail to do this.
    In the end, there is no question about it. Wholesalers conspire openly to keep products out of the hands of consumers. There’s nothing shadowy about it. They work to assure there is no direct shipping and they work together to assure there is no Self Distribution knowing that their efforts will result in fewer products for consumers to choose from.

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