The Nature of the Beast

BeastThe Wine & Spirit Wholesalers of America, the national association representing American wine wholesalers, finished their annual convention in Las Vegas on Friday with their CEO Craig Wolf warning members that the challenge of "privatization" “is being used as a "stalking horse" for deregulation of the industry. His prescription for facing this "challenge"?

"These challenges accentuate the need for the industry to work together. All three tiers must collaborate to protect the reliability, safety and integrity of the products they sell through our uniquely American system of distribution."

I don't know if during Mr. Wolf's address to attendees at the convention he mentioned that it was his organization that over the past two years has made a serious attempt to significantly wound those in the industry who he now asks to collaborate with wholesalers to stave off reform of the regulatory system. It was the Wine & Spirit Wholesalers Association that has spent considerable time and energy trying to strip the retail tier of the constitutional right to protection from state-based discrimination through passage of the Community Alcohol Regulatory Enforcement Act. I don't know if he mentioned that this same proposed federal law would make it significantly more likely that wine producers would face new barriers to getting their wine to consumers.

You have to stand back and appreciate the cajones on Mr. Wolf and the governing board of his organization that, having spent two years directly attacking producers and retailers, now they ask for their collaboration in helping stop movements that might hurt wholesalers.

There is no reason to believe that wholesalers, who for the past 20 years have done their best and spent millions of dollars trying to make life more difficult for retailers and producers, would now make any effort at all to aid producers and retailers. To be clear, the interests of the wholesalers are almost never the same as those of retailers and producers.

The primary interest of the Wine & Spirit Wholesalers Association and their members is that more wine flow through them and not directly to consumers; that consumers in each state have access only to those wines that have first gone through wholesalers hands in the state where they are sold. The upshot of these interests is simple: Consumers ought to have access only to the relatively small percentage of wines that a state's wholesalers choose to distribute in a state and producers ought only access a state's market if they deliver over 30% of their margins to the wholesaler.

If any retailer out there and if any producer out there believes it is a good idea to collaborate with wholesales in order to help them achieve their political and regulatory goals, then they simple haven't assessed the nature of the beast.



2 Responses

  1. Allen Dale Olson - April 9, 2012

    Well said, Tom.

  2. Bob Davis - April 9, 2012

    Maybe there’s a chance now to drive the stake into the heart of the wholesalers if they feel so weak as to ask the help of people they attack.
    “Deregulate the industry” my goodness is there any group more dishonest?
    His real problem is that when parts of the system get privatized people can then see that the predicted calamaties don’t occur which may then move towards a lessening of the regulatory environment. More shipping, allowing anyone to enter any/all of the 3 tiers, etc.

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