Kickbacks in Wine Country—A Problem?
Your wine is fairly expensive: $40 to $100 per bottle. And direct sales at the winery from appointments are critical to your bottom line. As are mailing list sales that come from those who visited the winery at one point or another. You don't sell out SO easily, but you come close.
You've honed your hospitality program to appeal to discerning buyers looking for unique wines, great service and a tasting experience different and more intimate than they can get at a tasting room open to the public.
One day a limousine driver who makes a good living chauffeuring visitors around wine country comes to you and let's you know that for a healthy kickback (say 5%-10% of sales), they will regularly bring you good buyers. They infer that without this kind of agreement, they won't be bringing buyers to your winery.
Do you agree?
This happens in Napa Valley and it happens in Sonoma County. It happens not only with tour guides and limo drivers making the request, but even the occasional concierge will make it known a "gratuity" is necessary for them to recommend a visit to your winery.
The competition in Napa Valley, for instance, for big buyers is intense. The best tour guides and limo drivers don't usually take their high paying charges to wineries open to the public. They tend to venture into the hills and side roads along the valley floor, taking their rides to out of the way wineries. And there are a lot more of these in Napa than there are wineries open to the public. These kinds of buyers regularly drop anywhere from $500 to $3000 on wine purchases and they join mailing lists and clubs.
Yet there is a quiet debate among those in Wine Country whether such kickbacks are ethical or should be encouraged. Two wineries I spoke with today, one in Napa an one n Sonoma, both said they most certainly would pay the kickback to the tour operator or limo driver if the "commission" were reasonable. Another said they simply would not do it. They refused.
Meanwhile, the executive director of CANVAS (The Concierge Alliance of Napa and Sonoma) says that such practices harm the customer as well as the Wine Country economy for the simple reason that when buyers arrive at wineries based on kickbacks, they may be getting less than the optimal match for them.
Colby Smith co-founded CANVAS with the idea that the hospitality community in Wine Country along with the Concierge community in the Bay Area need to know each other intimately, work well with each other, be able to provided educated recommendations and referrals and have a detailed knowledge of the amenities and properties in Wine Country in order to better serve the visitor and assure their experience results in more sales and return visits.
Smith has quietly built CANVAS into a formidable organization that has attracted considerable support from Napa, Sonoma and San Francisco hospitality professionals. Smith learned the trade while working at the Concierge Desk of the Villagio Inn & Spa in the middle of Napa Valley. Her experience there and running CANVAS convinced her that the practice of kickbacks is not the best way to protect the Wine Country economy
Smith explains that proper, educated and well-vetted referrals are at the heart of the Wine Country visitor economy. She knows that it is the concierges in San Francisco and Wine Country, tour guides and limo drivers and winery hospitality folks that tend to be essential in referring visitors to appropriately matched winery properties. Visitors often determine where they will visit based on referrals from these professionals:
"A great referral is one that perfectly matches a winery property to the visitor's wine educational level, palate preferences, expectations and means." Smith notes, "Focusing on finding the best experience for the guest independent of any personal gain is what has the most positive effect on the Wine Country economy."
I think Smith is absolutely correct. And yet in this economy, I understand perfectly why a winery might agree to pay the kickback.
I've started to think about these issues since I began volunteering with CANVAS on their advisory council. For years I've worked with wineries helping them craft a hospitality experience, working to help them build and maintain wine clubs, and working with them to draw visitors to their winery. But only since beginning to sit in on CANVAS meetings have I come to understand the remarkable importance of the Wine Country hospitality communities working together.
Supporting a kickback system isn't really working together, is it.