Do Wine Wholesalers Need To Be Taught How To Be Criminals?

wine wholesalers belfort copyIn 1998 Jordan Belfort was indicted and convicted of money laundering and securities fraud. He stole, bilked and defrauded more than $200 million from thousands of Americans. He cheated. He was a con man. He ripped people off. He spent two years in prison and was ordered to pay back more than $100 million to those he ripped off. Of course he never has done that. In fact, he was paid $1.7 million for two books and the movie rights to his story. But he never paid restitution out that according to the feds.

Today, Belfort makes $30,000 per speech that he gives.

I was thinking, wouldn’t it be appropriate for this crook to be the keynote speaker at the Wine & Spirit Wholesalers of America Convention now taking place in Las Vegas.

Oh…wait a minute….HE IS! In fact yesterday, Belfort collected his fee for giving a speech to America’s wine and spirit distributors who describe the crook this way:

“As the owner of Stratton Oakmont, Belfort employed over 1,000 stockbrokers and raised over $1.5 billion and started more than 30 million-dollar-companies from scratch.”

No mention of his crimes. No mention of the money he stole. No mention that he hasn’t repaid what he owes.

The Wine & Spirit Wholesalers of America are the folks who have paid off politicians to oppose direct to consumer wine shipping. They have supported franchise laws that require beer, wine and spirit producers to pay them off before they can switch wholesalers. America’s wholesalers are the ones who lie about the benefits of the three-tier system. They are the ones that lobby lawmakers to have beer producers pay them protection money. These are the people who, by virtue of doing anything they can to protect the corrupt three-tier system, have cost Americans and American businesses million if not billions of dollars.

What in the world could Jordan Belfort teach America’s wine and spirit wholesalers?

8 Responses

  1. Nate - April 9, 2014

    Reprehensible choice. Unbelievable lack of awareness.

  2. Dennis - April 9, 2014

    The big liquor wholesalers do not need Belfort to teach them much…in fact, I suspect they could teach him some new illegal and unethical protocols.
    Wineries partners with these companies under the guise of making sales…they pay 50% of something called a “samples” budget, but most samples are used to grease the skids and sweeten the pot, not actually being used to sample and sell more wine.
    I’ve been told that many flat screen TV monitors you see these days in virtually every new bar/restaurant are bought and paid for by one of the two big liquor houses here in California.
    If a bar needs tables and chairs, those can be arranged for as well.
    They offer wine list printing services…but now some wine lists are presented to diners on a “tablet” or I-Pad…with the proviso that something like 90% of the products offered are theirs, thus blocking competition.
    And the disparity in pricing offered to small accounts and chains is often huge, meaning little wine emporiums cannot easily compete.
    In fact, some items are sold so cheaply to chains, that with a modest mark-up at, say, Costco, consumers can find wines and (especially) Champagnes at prices below those offered at the wholesale level to stores and restaurants.
    It’s a real mess and one sad situation.

  3. Bill Haydon - April 9, 2014

    I don’t think anybody likes the big wholesalers and how they do business, particularly the small wholesalers and importers who have to contend with it on a daily basis. The problem with Mr. Wark’s simplistic approach is to demonize an entire industry with his childish insults and metaphors thus alienating and driving away people and companies who might otherwise be naturally inclined to seek a common ground with small wineries (and the Potempkin “wine consumer”) on reforming the system. Mr. Wark might be somewhat adequate as a histrionic polemicist, but he is a woefully inadequate standard bearer for building any kind of mature coalition to take on clouted up behemoths like SWS or Wirtz. One should note Steve Heimhoff’s recent comments that every time he has become inclined to take up the banner with Mr. Wark, he has backed off specifically at the urging of small wineries. Perhaps these small winemakers know something about the market (and reality) that escapes Mr. Wark.

    Also, his stubborn refusal to criticize the California wine industry in any manner whatsoever leads to the rather significant blinders to the role that the Gallos, KJs and Constellations play in propping up the large distributors and pushing consolidation in the industry as a means of killing off national distribution for smaller players. And many of those deals that lock out access to smaller players are done in full agreement and partnership between the large wholesaler and the large winery, if not initiated by the wineries local sales staff itself. This is the rather muddy reality of our current (and I’ll be the first to say in need of reform) system that Mr. Wark is either incapable of or unwilling to analyze and address. Oh so much easier to tilt at strawmen with semi-clever photoshops.

    Regarding the wheeling and dealing that leads to large companies selling product for less than small retailers can buy it, that is not confined to the wine industry. Ask any small, independent wine retailer who has attempted to sell Coke and found his wholesale cost less than what the supermarket down the road was retailingovernment) that has placed the interests of big business above all esg it for. Ask the local hardware store what he pays for a Weber grill compared to Wal-Mart. It is not unique to the wine industry.

    • alec - April 9, 2014

      It always seems like Mr Wark has only ever spoken to Ca wineries and never asked anyone in retail in other states. I love most of my distributors and sales people in NY. We are much better off for the diversity of the middle tier helping better brands to market.

      Many major wineries would never have made it to the USA at all without the aid of Chadderdon who for the record is as bad if not worse than SWS in many ways.

      That being said I like Huet and he brought it here first along with Quintarelli et al.

    • Dennis - April 10, 2014

      Unethical pricing practices, then, are okay for the wine industry since other business sectors employ those sales schemes? Am I asking too much for vintners to have sensible and ethical business practices? I gather they don’t teach ethics in business school these days.

      • Bill Haydon - April 10, 2014

        Dennis, my point is not to excuse unethical, strong-arm business tactics, the use of market leverage to squeeze the little guy out of business nor the naked use of money to buy political influence in America. I find it loathsome on all fronts. My point is to point out Mr. Wark’s shallow hypocrisy in constantly screeching about it in reference to the segment of the industry that he hates (wholesalers) in the most simplistic and polarizing terms (using such phrasing and metaphors as “mafia” “thugs” “criminals” and the “lobotomized”) while at best ignoring it and at worst condoning it from his beloved California winery industry. I eagerly await his first post taking KJ to task for cutting national “deals” with chain steakhouses that severely limit access to smaller producers with much shallower pockets. I eagerly await the same childish name calling reserved for the political activities of wholesalers when it comes to the very same political lobbying, campaign donations and influence peddling of the Wine Institute and Family Winemakers.

        Alec hits right onto the crux of the matter quite succinctly. Mr. Wark is really listening to no one other than the California wine industry, and despite any contentions to the contrary, that is entirely his audience and intended beneficiaries in these posts and his rather crude policy proposals. Although from Steve Heimhoff’s rather candid comment, it would seem as though many small California wineries are less than thrilled with Mr. Wark’s antics and insults not to mention his rather simplistic black-and-white, us-vs-them take on the three tier system.

  4. mari kane - April 10, 2014

    He’s doing a speaking tour in Canada next month. Already, natives are getting restless about it.

  5. Tom Wark - April 10, 2014

    Alec and Bill:

    I think the box movers in the middle of the system are great.They are great and necessary box movers. But, should their use really be mandated? I suspect many of the same folks that utilize wholesalers now under the unethical state mandated three tier system would likely use them if the state didn’t require they use them. But, when they make the case that without a state mandated three tier system the sale and distribution of alcohol would become chaotic or that not as many products would come to market or that there would be an increased risk of counterfeit products they are just straight up lying. And what’s worse, is that they know they are lying.

    And then there are the Franchise laws. A wholesaler can literally take on a brand of wine, beer or spirits in a state, never show it to accounts, and the producer has no recourse to fire the wholesalers with these laws. Why do wholesalers need government protection when simple contract law will do the job, plus make the playing field even. The wholesalers say Franchise laws are necessary in order to assure that they are not unrewarded for the “work” they do establishing brands in a region. But again, why can’t they work on a contract basis like everyone else does?

    Both Franchise laws and a state mandated use of the wholesalers must be finished and put away.

    But here’s the thing, those small wholesalers never speak up and make these points because they are just too happy to have the big wholesalers buy the protection they need.

    It’s old. It will end.

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