Wine Revelations, Power Grabs, Numbers, Battles and Events

Thinker Thinking About…

Upon reading Anthony Lane's remarkably thoughtful analysis of Terrence Malik's new film, The Tree of Life, in The New Yorker, it finally hit me why wine critics likely won't rise to the quality challenge laid down by critics surveying other pursuits such as film, literature, dance and music: As an object of analysis and thoughtful critique, a wine provides no interpretation of the human condition, giving its critics little to grasp on to in order to engage the sentiments, concerns and perspective of their readers.

Dr. Vino appears to have been alone within the wine writing community in noting the real threat to diversity and consumer access to wine in the New York wine marketplace as a result of a Primary Source law that has been introduced into the state legislature. If passed, New York retailers and restaurants would likely lose access to numerous hard to find wines, out-of-vintage wines, Bordeaux, Champagnes and other bottlings that are brought into the state via the legal "grey market". Instead, New York's wine marketplace, arguably the most diverse in the country, will be under the complete control of the wholesalers who are designated to sell specific wines. Prices will go up. The more unique wine lists at restaurants will become more ordinary. The supply of rare wines and out of vintage wines will shrink. Costs of these wines will increase. A coalition of retailers are working to fight this absurd power grab by New York wholesaler, for which little rational reasoning has been offered as a justification.

The North American Wine Bloggers Conference, set for July 22-24 in Charlottesville, VA is filling up fast and will likely, once again, sell out. The number of rooms set aside for the conference at the Charlottesville Omni are nearly sold out. For a student of history such as myself, the placement of the conference in Charlottesville is particularly exciting given the opportunity to visit the historic grounds of the University of Virginia as well as dine one night at Jefferson's Monticello. In addition, we will get to hear from Keynote speakers Jancis Robinson and Eric Asimov. Bloggers, industry folk, writers and wineries looking to attend should probably book NOW.

The upcoming Shipcompliant Annual User Conference and Direct Shipping Seminar has announced a few of its speakers for the June 28 event in Napa. It's pretty damned impressive and likely to be a must attend event for direct to consumer marketers. Coming to the event this year are Lori Ajax, District Administrator-Trade Enforcement Unit, California ABC; Suzanne DeGalan, Hinman & Carmichael; Marc Engel; Tracy Genesen, Partner, Kirkland & Ellis, Jerry Jolly, Pillsbury; John Hinman, Hinman & Carmichael. Lots of direct shipping changes this year and lots of new issues to explore. Time to Sign Up.

It is being reported that direct sales of wine account for $3.4 billion in 2010. That's nearly 10% of the U.S. retail wine market. This according to the 2011 VinQuest U.S. Consumer Direct Wine Sales Report, released a couple days ago. "Direct Sales" means winery to consumer, be it in the tasting room, via phone, on-line, wine clubs, at events and mail order. According to the report "on-line sales" increased a whopping 38% over the previous year. Really?? Thirty-eight percent? To get the details and discover how this remarkable number was arrived at, you'll need $1595 to purchase the report from Vinteractive.

The new and likely most robust area of contention in the world of wine regulation is most certainly "Self Distribution": The act of the producer of the beverage selling direct to restaurants and retailers, rather than goilng through distributors. Illinois is poised to see a new beer self distribution bill be signed that will allow only small brewers of beer to self distribute only half of their production. The rest must go through a licensed distributor or direct to the consumer. This IIllinois law was precipitated by Anheuser-Busch suing and winning a law suit that challenged Illinois' practice of allowing small brewers to self distribute, but not allowing larger ones, like A-B, to do so. Interestingly, this new law is being proclaimed a victory and protection for small brewers. But that's hogwash. It's a victory or wholesalers who have succesfully—again—convinced a state to protect them and guarantee their continued use by companies that don't need their services. There is no compelling reason why a state should force any producer of beer, wine or spirits to use a wholesaler if they feel they don't need to in order to get their wine to market without one. Zero reason. Producers are just as capable of filing proper tax returns and issue checks as wholesalers are. But this, Self Distribution, will indeed be the battle front for the wine, beer and spirits industry going forward.

11 Responses

  1. Marcia M - May 27, 2011

    Tom, you are on quite a writing roll, post honeymoon! Post after post after post…. Of course, there seems to be quite a lot of fodder out there this week w/so many reports being released and wholesalers again being so successful in squashing the consumer’s access to his/her wines of choice through various legislative moves. Bad news for wine drinkers in New York, Alabama and Illinois this week….

  2. Morton - May 27, 2011

    Small online base plus flash marketing = 38% growth?

  3. Tom Wark - May 27, 2011

    The study accounts for all direct sales including tasting room, wine club shipments, phone, evens AND online. Still…

  4. Morton - May 28, 2011

    My point was that since flash marketing is over 25% of online sales and it has come on over the last two years, that fact combined with total online sales being a very small percentage of wine sales creates a situation where flash marketing can be the main driver in volume growth and a number like 38% could be valid, yet misleading.
    If flash marketing is 1% of total wine sales and you add that to a small base of online sales of a few percent it creates a growth percentage that may be irrelevant to the long term financial health of the wine industry.

  5. Troy - May 29, 2011

    Sounds like a very busy month!

  6. Confused - May 31, 2011

    This NY State primary source law, let me understand….. Sounds like its definitely Bad for the consumer, it will cost the State Liquor Authority a fortune to administer (and the state is broke so income or property tax will increase to pay for admin), the State will lose enormous amount of tax revenue on fine and rare as the educated will get fine and rare on line without paying NY state sales tax out of state…..
    So who wins????? I guess follow the $. And who would sponsor such a bill??

  7. Michael Richmond - May 31, 2011

    Your observation in The Revelation speaks to the very salient premise that wine is not an art form. Just because the product may be a controlled accident created by the right brain and intuition it is not a metaphorical representation of life. The critics words,however, that may rise to the level of art where art may be a matter of perception rather than presentation and says a lot about the human condition.

  8. hire a web programmer - June 1, 2011

    Superb description. I never had come across such type of post in my life before. I hope your next blog some soon as a dream of mine. Thanks for the post.

  9. Eric - June 1, 2011

    Awful news for the NY wine consumer and the state. This obviously serves a special interest group and hurts everyone else.

  10. Tom - June 2, 2011

    The highest compliment I can pay wine writing is to say that it makes me want to taste the wine. After reading this piece, though ( it makes me want to listen to the music and gives me a whole lot more to think about.
    Part of the problem is that taste and smell are the most individualistic and subjective of our senses. Still, to some extent we all have vivid emotional memories associated with taste. Food writing occasionally invokes this in a more universal way, but I haven’t seen it in wine writing.

  11. WM - June 5, 2011

    Look this: !

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