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Tag Archives: three-tier system

Winebits 352: Red wine, wine brands, three-tier

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wine news red wineBring on the red wine: Americans, apparently, drink more red wine than white. This is not news, though for some reason a writer at the Washington Post who doesn’t write about wine (and there seem to be so many of them) thinks it is. Red wine has traditionally outsold white, but a white, chardonnay, remains the best selling wine in the U.S. The people at the Post have one of the best wine writers in the world working for them; I don’t know why they insist on pretending to be experts when there is a real expert at hand. One other thing, as long as I’m being cranky: Given that online retailing accounts for just 5 percent of U.S. wine sales, is a survey from an on-line retailer a better source than Nielsen or the Wine Institute?

Bring on the new brands: One of the great mysteries in the wine business is how many wines actually exist. It’s also a mystery why it’s a mystery, since wine is regulated and this should not be difficult to determine. But it is, and the best guess has been about 15,000, which includes different varietals but not different vintages. Turns out that may be just a fraction of the total, according to Ship Compliant, a company that helps wineries through the maze of regulation. It found that the federal government approved 93,000 labels in 2013. However, since that could include changes to old labels or old wine given a new name, as well as wines that were proposed but never made it to market, there probably aren’t 93,000 wines available for sale. Which, given the size of the Great Wall of Wine, is no doubt a good thing.

Bring on the lawyers: The Wine Curmudgeon notes this item not because he expects anyone to understand it unless they are a liquor law attorney with a large staff, but to remind the world, again, of the pointlessness of the three-tier system unless you are a distributor or attorney. It details a court case in which a distributor is suing a producer even though the producer followed the letter of the law. Or something like that. Regardless of the outcome, it will make no difference to anyone who buys wine. Incidentally, this is a jury trial. I can only shake my head in sympathy for those poor jurors, and hope they have lots of wine at home for afterwards. Update: Hours — literally — after I posted this, the suit was settled. No doubt they were terrified the jury would laugh at them, go home, and open a beer.

Image courtesy of Houston Press food blog, using a Creative Commons license

Winebits 350: Three-tier, wine prices, wine marketing

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three-tier systemNo love for three-tier: The Wine Curmudgeon has much respect for the Wine Folly website, which does great work educating wine drinkers. Its recent post on the dreaded three-tier system was no exception, detailing what it was and how it worked with quality graphics and clear writing. I don’t know that it gave enough credit to Prohibition in three-tier’s formation, but it did discuss its beginnings in the late 19th century, which I didn’t know. And it did impressive work tying the cost of wine to the inefficiencies of the system. My only complaint: That it forecast the coming demise of three-tier, based on direct shipping, the Internet, and flash sites. It’s not that I don’t want three-tier to go away, but it overlooks three things — three-tier’s constitutional protections, which the Wine Curmudgeon has lamented many times, the system’s immense clout through campaign cash, and that direct to consumer sales account for less than five percent of wine sales in the U.S. That’s hardly eroding the system.

“A giant sinkhole”: W. Blake Gray writes about the media’s immense joy in forecasting rising wine prices, which seems to happen every six months or so whether it’s true or not. The most recent example came after the Napa earthquake, even though the region produces just a tiny fraction of the world’s wine. Gray writes: “People just don’t have a sense of how enormous and international the wine business is — that if Napa Valley or Mendoza, Argentina or Barossa Valley, Australia fell into a giant sinkhole tomorrow, we would all be the poorer for it, but overall world wine prices would still not be much affected.” He also notes that many media types figure only rich people drink wine, and so deserve higher prices. I’m not so sure about the second; many of the media types who still get paychecks in this post-print world aren’t exactly paupers. My hunch is that it’s mostly crummy reporting. When a Washington Post writer proclaims that wine prices are skyrocketing when they’re not, and the Post is supposed to be one of the world’s best newspapers, it’s no surprise that everyone else misses the point, too.

It’s not about the marketing: Producers in the French wine region of Bordeaux are running around in a panic because sales are down, and this report discusses how it will try to solve the problem through better marketing — some €3m worth (about US$3.8). The Wine Curmudgeon, out of his great respect and admiration for Bordeaux wine, has a cheaper and simpler solution: Stop overcharging for your wine. It’s one thing to sell the best wines for hundreds and thousands of dollars a bottle, but when the everyday stuff costs $15 or $20 — and isn’t any better than $10 wine from California, Spain, or Italy — you’re not going to sell it, no matter how much you spend on marketing. One retailer, when I asked him why this was happening, attributed it to Bordelais greed. “If they can get it from the Chinese, they figure they can get it from the rest of us,” he said. Obviously, that isn’t the case any more.

Winebits 340: When you think three-tier can’t get any more foolish, it does

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three-tier system

How does anyone make sense of these three-tier decisions without a crate of aspirin?

The Wine Curmudgeon always underestimates the silliness of the three-tier system — which governs alcohol sales in the U.S. — even though I have been writing about it for 20 years:

Only in Texas: What happens if you open a chain of liquor stores in the Lone Star State and run it successfully? You get sued — by other retailers who claim you’re violating state law. Like most three-tier stories, it’s terribly confusing, but the gist is this: Texas law says only state residents (for at least a year) can get a retail license to sell booze, but the law hasn’t been enforced in more than two decades. Total Wine, a Maryland chain that has opened six stores in the state, is being sued by the trade group that represents Texas liquor stores because Total isn’t a state resident. The trade group says that a recent Missouri case validated the residency requirement that Texas hasn’t enforced, and wants Total’s license revoked. Yes, I know, it makes my head hurt, too.

Cold beer? How dare you? A federal judge had told Indiana convenience stores and supermarkets that they can sell warm beer and cold wine, but not cold beer, reports Supermarket News — even though liquor stores can sell cold beer. His logic? That the state would have a more difficult time preventing beer sales to minors if c-stores and supermarkets sold cold beer. Apparently, minors don’t try to buy cold wine or warm beer at gas stations by asking their friend who works there to ring it up as motor oil. Still, before we start making too much fun of the judge, know this: His logic makes perfect sense given the legal underpinnings of the three-tier system, which allows each state to regulate liquor sales as it sees fit. If Indiana law says everything possible must be done to prevent underage drinking, and the state insists that grocery store cold beer sales will make this difficult, then the judge didn’t have much choice.

Beer at Oktoberfest? Not in Utah: The Wine Curmudgeon has a soft spot in his heart for Utah’s liquor laws, because they have managed to retain their 19th-century Victorian charm in the 21st century. The latest? That the state’s liquor cops require an event be for “the common good” before they will grant a permit to sell alcohol for something like a festival or concert. And, since the Snowbird Ski Resort near Salt Lake City couldn’t demonstrate that its annual Oktoberfest was for the common good, it didn’t get a license to sell beer or wine. That the idea of “common good” — whatever that is — is not part of state law, but from rules written by the liquor cops, only makes this decision that much more charming.

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