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Tag Archives: three-tier system

Winebits 327: Pennsylvania, wine prices, women winemakers

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Winebits 327: Pennsylvania, wine prices, women winemakersThe wine notes that usually appear on Tuesday are posting today because tomorrow is April 1 — and that’s time for the blog’s annual April Fools’ Day post.

More screwed up than ever: Pennsylvania has been trying to reform its horribly messed up state store system — where the state owns the liquor stores — since as long as I have been writing the blog. Nothing has been done, despite widespread political and consumer support, and the latest proposal shows just how corrupt the system is. Supermarkets would be able to sell wine under the proposed law, but only four bottles per customer per visit. Nevertheless, a spirits trade group immediately denounced the plan, claiming that those four bottles would give the wine business an unfair advantage, since spirit sales would still be limited to state stores. It’s almost impossible to understand what’s going on here, other than to note that this is just another example of the many failings of the three-tier system.

Britain’s wine pricing: Jamie Goode at the Wine Anorak has an excellent account of the wine pricing controversy in Britain, where most retailers substantially discount wine. And then don’t. And then discount it again. This must seem odd to those of us in the U.S., where discounting is accepted as a normal part of doing business, and where savvy consumers are eager to buy wine when it’s on sale. But British consumer advocates see this as nefarious — “[T]hese fake promotions are bad for wine, and a bad deal for customers, and I won’t stop talking about them until supermarkets do the right thing and stop them,” writes Goode — and have spent the past couple of years fighting the biggest retailers over the practice.

You’ve come a long way, baby: Jordan Salcito at The Daily Beast has discovered that women have broken through the glass ceiling and are now important winemakers. I’ll try not to be too cranky about this, but Salcito is about a decade late with this revelation. I wrote the same story for the American Airlines in-flight magazine in 2006, quoting many of the same women she quotes in her story. She also focuses on celebrity women winemakers, and misses the more important change, that Big Wine did most of the glass ceiling work, hiring women where they had never been hired before. Barefoot’s Jennifer Wall is responsible for 13 million cases of wine a year, which may make her the most important woman winemaker in the business. And her boss is Gina Gallo, whose company makes 80 million cases a year. Also, if Salcito doesn’t mind some writing advice, never, ever use a phrase like “pushing the envelope.” I expect more from the Beast.

Winebits 324: WC favorites edition

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Winebits 324: WC favorites edition

Will empty tables force restaurants to change the way they approach wine?

Because the things that fascinate me about wine and that consumers need to know — and which rarely include toasty and oaky — keep making news:

Distributor clout, once again: When in doubt, they get out the checkbooks, reports an Ohio newspaper group. The state’s beer and wine wholesalers donated $146,000 to Buckeye state lawmakers around the time the Ohio legislature passed a bill — apparently, without anyone knowing — that made it illegal for the world’s biggest brewer to buy more distributorships in the state. In addition, said the story, “both Republicans and Democrats benefited from the wholesalers’ cash. And donations sometimes rose noticeably around the time a key vote was scheduled.” My favorite part of the article is the quote that says the distributors, who have a constitutionally-protected monopoly that all but guarantees them profits, were saving Ohioans from the nefarious actions of an evil multi-national beer company. Talk about the pot calling the kettle black.

Restaurant sales still slow: The restaurant business continues to struggle, says this story from Nation’s Restaurant News, and no one is quite sure why. Is it the result of the worst winter in 40 years? Is it a hangover from the recession, which never really ended for all but the most high-end restaurants? Is it a fundamental shift in the way Americans eat? The restaurant business matters in wine, as regular visitors here know, because restaurants go out of their way to hurt wine. And the slump in restaurant sales, which has lasted more than five years, may force changes in the way restaurants deal with wine, which means better quality and lower prices. Or so some very smart analysts have told me.

The biggest wine companies: Mike Veseth at the Wine Economist looks at disintermediation, an economic term that refers to the specialization of labor. In this case, it’s about the number of employees needed to to make a case of wine. Not surprisingly, the formula is not as simple as it sounds, and speaks to the way post-modern business works — outsourcing, contractors, and the like. Many of the biggest wine companies don’t own vineyards or even wineries; one company, Castle Rock, produced 550,000 cases with just nine employees. “With product chain disintermediation, the number of people actually employed by a winery can be surprisingly small with that tiny workforce specializing  in coordinating the various firms and contractors that make up the links in the chain,” wrote Veseth. What this means for consumers? Less expensive wine, of course, since disintermediation lowers the cost of production.

Image courtesy of Berenika, via stock.xchng, using a Creative Commons license

Winebits 323: Sweet wine, three-tier, high alcohol

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Winebits 323: Sweet wine, three-tier, high alcohol

Where do we go? Obviously, not anywhere where three-tier doesn’t exist

Bring on the Apothic: E&J Gallo, one of the biggest wine companies in the world, is making a play for the British market, and is using its sweet red wine to do the job, reports the Harpers trade magazine. The article describes Apothic as a blend of five grapes, though doesn’t mention that it helped pioneer the sweet red movement in the U.S. Rather, it quotes a Gallo official, who says the wine is “very different from previous Gallo brands, and very polarizing.” Still, he says Apothic is selling better than expected, and has been picked up by most of the country’s major grocery stores. It’s odd that Harpers doesn’t mention that Apothic is sweet; its stories are usually better reported than that. Did the writer leave it out on purpose or just not know? Or figured no one in the UK wine business would care?

Play that dead band’s song: The Wine Curmudgeon has often noted that Alabama can be in a completely different universe when it comes to wine distribution and sales, even allowing for the eccentricities inherent in the three-tier system. Like this. And thisBut this one is nifty, even for Alabama. The state legislature wants to pass a law that would make it more difficult for retailers in Montgomery County, which includes the city of Montgomery, to switch distributors. Imagine the clout that’s required to get a bill like that through, which benefits just a handful of companies. It speaks to the immense power of distributors and why three-tier remains so well entrenched in the supply chain.

But it’s in Scientific American: Those of us who write about wine regularly argue about high alcohol, often to no effect other than name calling and snarkiness. But consider this — a report in a respected journal that’s not about wine headlined “Wine Becomes More Like Whisky as Alcohol Content Gets High” and that includes news of a new yeast that allows winemakers to produce fruity wine without high alcohol. Plus, there’s Latin in it, which always impresses me. More importantly, does an article in something as prestigious as Scientific American help mend the rift between the pro- and anti-high alcohol factions? Almost certainly not, unfortunately. The two sides just don’t like each other, and personality — and not wine — has become all.

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