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Tag Archives: direct shipping

Winebits 381: Direct shipping, consolidation, Prosecco

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direct shippingLots of kinks to work out: Direct shipping, despite its successes over the past decade, is still a tiny part of the wine business, just single percentage points of the $17 billion in sales. One reason for that, of course, is three-tier, which makes it difficult for wineries to ship to consumers in different states. And three-tier has more to it than even those of us who think we know it can imagine; witness the lawyer suing Illinois wineries for not charging sales tax on shipping fees. This is perfectly legal in Illinois, where the law allows private attorneys to recover unpaid taxes on behalf of the state. Much of the coverage has been critical of the attorney, but that misses the point. Illinois law is vague on whether sales tax should be charged on shipping fees, so how how can direct shipping ever become more than a niche business if laws crucial to its success are as vague as the Illinois law? Because, given three-tier, this is certainly not the only vague, poorly written, or unclear law dealing with the subject.

Retailer buyout: Majestic Wine, one of the biggest retailers in the United Kingdom, has bought another British retailer, Naked Wine. This is bigger news than it seems, since Naked Wine has a trendy U.S. division that sells what can best be described as craft wine on-line at discounted prices to its members. It means that Majestic, facing tremendous competition from grocery stores, is trying to find wine that consumers can’t buy at grocery stores. Given the increasing importance of supermarket wine sales in the U.S., this may be a sign of things to come in this country (within the confines of three-tier) as retailers look for exclusive products to fend off grocery stores. It’s also another indication that retailers want to get bigger to fend of the Costcos, Walmarts, and Aldis of the world.

Nuts to Champagne: Prosecco has passed Champagne in sales at British grocery stores in news that is so shocking — given the British love affair with Champagne — that it should worry not only the Champagne business, but retailers around the world. If the British are buying Prosecco, the Italian bubbly that is at least half the price of Champagne, what does that means for retailers elsewhere? Has Champagne priced itself out of some markets? Do consumers prefer the softer, sweeter taste of Prosecco? Or are grocery stores playing a role in what’s going on? Even the story, from a British trade magazine, had a panicked tone.

 

Winebits 377: Wine rant, direct shipping, wine police

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stuart piggott There’s ranting, and then there’s ranting: Stuart Piggott, an English wine writer who lives in Germany and champions riesling, has had quite enough of overoaked, high alcohol chardonnay, thank you very much. His screed takes on Kistler, one of the most popular (and expensive) of those wines; imagine Monty Python meeting GoodFellas. It’s funny, spot on, and contains a couple of words we don’t use on the blog for those of you who worry about those things. Most importantly, Piggott doesn’t dismiss all chardonnay because of some, but points out that chardonnay that’s varietally correct is still one of the great wines in the world.

A long way to go: ShipCompliant, which helps wineries with the maze that are federal and state liquor laws. notes that we still have a long to go before out-of-state retailers can ship wine to most consumers. Currently, only 14 states allow retailer shipping, and that doesn’t include the biggest markets in the country, like New York, Pennsylvania, Texas, Illinois, and Florida. The Wine Curmudgeon, who has often been accused of disparaging direct shipping, mentions this not for that reason, but to note that until three-tier changes, most of us will not be able to legally order wine from an out of state retailer, no matter what the hype.

Turn it into bio-fuel: How out of touch with reality are liquor cops and health officials? Consider this, from South Africa, where cheap pinotage has been accused of causing one region’s drinking problems. The Western Cape premier wants producers to turn their grapes into bio-fuel instead of wine as one way to combat the problem, but apparently failing to note that there is no feasible method to do that and that other booze, like ale, is substantially cheaper than wine. Said a wine industry spokesman: “We accept that alcohol abuse is a very big problem in the Western Cape, but we believe that there should be a focus on illegal traders and [unlicensed bars] — some of whom even sell alcohol on credit.”

Winebits 373: Big Wine, Treasury, direct shipping

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Big Wine How big is big? One of the most difficult concepts to get consumers to understand is that their wine probably isn’t made by who they think it is. As noted here, Big Wine controls a majority of the U.S. market, and Big Wine includes many companies most of us have never heard of. Case in point: Trinchero Family Estates, a 20-million case producer that wants to be a 30-million case producer. And how many of us have heard of Trinchero, a California company? It’s best known for Menage a Trois and Sutter Home, but those are only a fraction of Trinchero’s production and its three dozen brands. If Trinchero makes it to 30 million cases, it will be as big as the entire U.S. wine business was in 1965.

Now they’ve figured it out: Regular visitors may remember the Wine Curmudgeon’s attempt to cash in on Treasury Wine Estate’s financial woes, which — not surprisingly — failed. One reason, aside from my lack of financial acumen, is that the people running Treasury were a little confused about how to sell cheap wine. Luckily for the company, that seems to have changed, and its results in the U.S. are much improved. Ironically, it seems this success came from a formula that I suggested when I wrote abut Treasury’s problems last year. Not that the company needs to give me credit — I’m used to saving really rich people lots of money.

The judges like their wine: Supreme Court Justice Ruth Bader Ginsburg made a bit of news last week when she admitted she fell asleep during the State of the Union address in January because she had too much wine. This got giggles from many, but they missed the point, focusing on Ginsburg’s age, 81. Rather, it points to the real reason the court ruled in favor of direct shipping in 2005 in the landmark Granholm decision, which surprised many observers. Forget precedent and constitutional interpretation; the Supremes carved out an exception to the three-tier system because they liked wine and wanted to be able to have it shipped legally from their favorite California wineries. How else to explain that Ginsburg, Anthony Kennedy, and Antonin Scalia, all referred to in the BBC story in the first link, voted to allow direct shipping?

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