Tag Archives: three-tier laws

Once more, the three-tier system

lego man and lego woman
“I know I feel better because multi-billion dollar companies say they’re concerned about my health.”

No, Mr. Creighton, it’s not the savior of the booze business — just the opposite

The following is a rant about the three-tier system, and regular readers know what to expect. If you’re new here, know this isn’t the wine writing you’re used to.

Francis Creighton, the president and CEO of the Wine & Spirits Wholesalers of America, recently spoke to a trade gathering, lauding the three-tier system for making the world a better place.

The WC had just a couple of disagreements (yes, sarcasm) with what Creighton said:

• “Regulations ensure consumer confidence in product integrity.” Hardly. Tainted alcohol deaths are almost unheard of in France or the United Kingdom, where the three-tier system doesn’t exist.

• “Independent distributors prevent ‘tied houses’ where suppliers can force the on- or off-premise to stock products from only one company.” Which doesn’t quite explain the federal government’s frequent investigations into wholesalers who use cash and gifts to get sales and offer illegal quid pro quos – buy this product, which no one wants, and I’ll sell you this product, which everyone wants.

• “This market is a unique achievement, a profitable public-private partnership that serves the need of all stakeholders along the value chain.” Unique certainly, but hardly serving my needs or those of any other consumer who objects to oligopoly-imposed higher prices and less choice. To say nothing of the needs of small retailers, restaurants, and wineries, who are afterthoughts in the current system.

All of which was bad enough. What was really terrifying was that he probably believes all that stuff. Is it any wonder I worry about the future of the wine business?

More about the absurdity of the three-tier system:
• More wackiness in the three-tier system
• Winecast 56: Tom Wark, three-tier reform, and buying wine on Amazon
• The sham and hypocrisy behind the three-tier system

 

Winebits 721: Hard seltzer, Ohio, food trends

hard seltzer
The boom is off the spritz: Millions of cases of hard seltzer will join these cans on the junk heap.

This week’s wine news: Millions of cases of hard seltzer will be destroyed, as the boom fades. Plus, Ohio finally does something about its Prohibition-era shipping laws and wine doesn’t make a food trends list

• So much for hard seltzer? The company that owns Truly, the second best-selling hard seltzer in the U.S. after White Claw, will destroy millions of cases of the product. The reason? Hard seltzer goes off it sits too long, and millions of cases are doing just that on store shelves and in warehouses given hard seltzer’s stunning sales plateau this year.  Hence, destroy the product rather than sell one that that isn’t fresh. The other thing worth noting here? Several wine companies jumped on the hard seltzer bandwagon; it will be worth watching to see what happens with them.

• Thank you, Ohio: Ohio, which has been almost Utah-like in restricting wine shipments into the state, has made it easier for consumers (and wine writers) to get wine from out of state producers. State law had forbidden wineries making more than 100,000 cases from shipping directly to consumers; it has lifted that restriction.  That’s not a small winery, but it’s hardly big the way the wine business works these days.

• Absent wine? Wine used to make food trends prediction stories all the time; local wine was especially popular. But not any more, according to a list for 2022 from retailer Whole Foods. Instead, we will be drinking yuzu, a citrus fruit, as well as non-alcoholic cocktails. The big eating trend? Something called reducetarianism, in which we try to eat less meat, dairy, and eggs but eat high quality meat when we do splurge (which, not coincidentally, Whole Foods says it sells). The Wine Curmudgeon, who long ago cut his consumption of meat, eggs, and dairy, always thought he was following best medical practice. Who knew I was actually being super cool?

Photo: Camden & Hailey George on Unsplash 

Winebits 691: Cocktails-to-go, wine bars, Grape-Nuts

cocktails-to-go
Yes, perhaps even in Texas — where you can still can’t buy wine in some Dallas suburbs.

This week’s wine news: Texas is one step closer to cocktails-to-go, which would have been unthinkable a year ago. Plus, are supermarkets and wine bars ready to resume consumer wine tastings, and even Grape-Nuts got caught in pandemic supply chain shortfalls

• Yes, in Texas: Texas is one step closer to legalizing cocktails-to-go, which would have been unheard of just a year ago. The state house approved the measure 144-1 last week. But, since this is Texas, there’s still much more legislative to-do to watch. The state senate has not voted the bill out of committee, and that often means it won’t come up for a vote in the full senate. Which, if that happens, means the bill is dead this session. Still, that the bill has come this far — and with the support of legislators usually opposed to liberalizing the state’s restrictive liquor laws — means the bill could pass, even if has to wait for the next session of the Legislature in 2023.

• Resuming wine tastings? Retail wine bars and tastings, which mostly went away during the pandemic, may come back in a big way later this year. That’s what one consultant told the Supermarket News trade magazine. Mark Landini, noting that in-store wine tastings and wine bars have become crucial to many high-end food retailers, says “we’re seeing optimism on the long-term prospects for wine bars and taprooms, including takeout and outdoor settings in addition to the in-store trend.” Retailers like in-store wine service not only as perk for customers, but because those who stay for a glass of wine tend to buy more groceries.

• Yes, even Grape-Nuts: The pandemic’s shock to the supply chain showed up in a variety of ways in the wine business, with some brands missing from store shelves for extended periods of time, as well as a can shortage that left some canned wines in short supply. But why not, if even a staple like Grape-Nuts cereal went missing? The Shelby Report says consumers paid as much as $110 a box for the breakfast staple, as pandemic-related shortages and price gouging sent prices soaring. A company spokeswoman says the company will reimburse consumers who paid more than $10 a box, provided they can provide a receipt. And I thought not being able to buy La Vieille Ferme rose regularly was bad. Perspective is all, yes?

Photo: “Cocktails to go” by Tom Coates is licensed under CC BY-NC 2.0

Winebits 690: Liquor laws, Millennials, wine lawsuits

Liquor laws
Will the pandemic lead to further loosening of restrictive three-tier laws?

This week’s wine news: The liquor industry hopes to continue to ease three-tier in the wake of the pandemic, plus why Millennials don’t drink more wine and a Pythonesque French wine lawsuit

• After the pandemic: How much liquor law change came during the pandemic? The Hill, which covers the Congress and government, reports that 33 states and the District of Columbia now allow to-go sales of alcoholic beverages at restaurants and bars. Before the pandemic, no state allowed to-go sales. And some of you doubted three-tier was easing up. In fact, says The Hill, the pandemic “did more to liberalize alcohol regulations than anything since the end of Prohibition.” The piece is worth reading, especially for its almost shocking disbelief in how alcohol is regulated in the U.S. It’s worth noting that The Hill’s readers are congressional staffers who may not know or understand three-tier, and will likely be stunned to find out buying wine isn’t like buying a computer on Amazon.

• Health and younger consumers: There’s a lot of jargon in this article from the Wine Intelligence consultancy, but wade through it and you’ll discover that younger consumers are interested in lower- and no-alcohol wines because they want to be socially responsible and because they don’t want extra calories. Which leads the Wine Curmudgeon to wonder: How many younger consumers know that a glass of wine has just 125 calories, about the same as a bottle of light beer? Oh, that’s right — they can’t know. Wine doesn’t have ingredient and nutritional labeling the way beer does.

• French wine lawsuit: The French rate wine quality in many regions through an agency called the National Institute for Origin and Quality, which administers the various grand cru and premier grand cru designations. In St. Emilion in Bordeaux, lawsuits by disgruntled wineries unhappy about how they were ranked have increased so sharply that the application fee to be ranked has risen 10-fold since 2006. That’s because the application fees need to cover the cost of defending lawsuits. So more lawsuits, higher fees. Which, no doubt, adds to the number of lawsuits (“I’m not paying that much money not to be ranked!”), which leads to higher fees.

15 years since Granholm, and how much hasn’t changed in the three-tier system

GranholmThe Supreme Court’s Granholm decision was supposed to make it possible for us to buy wine from out-of-state retailers and on-line. So why didn’t it?

This is the first of two parts looking at how the century-old three-tier system still prevents us from buying wine on-line or from out-of-state retailers. Today, part I: The Supreme Court’s 2005 Granholm decision, and why it didn’t change three-tier as much as everyone hoped. Friday, part II: Dear Supreme Court: Please fix three-tier.

Fifteen years ago this spring, the Supreme Court made it possible to buy wine from an out-of-state winery in its Granholm decision. The court ruled that states had to treat wineries in- and out-of-state the same way. So, if residents could buy directly from an in-state producer, then they had to be allowed to buy wine from an out-of-state producer as well. This opened the direct-to-consumer wine market, which is worth about $3 billion today

Many smart people also thought Granholm would open the retail wine market, so that consumers could buy wine over the Internet and from companies like Amazon. But that never happened (save for the rare exception like Wine.com), and I explain why in a freelance piece I wrote for Meininger’s Wine Business International.

And why didn’t Granholm do that? Because state lawmakers, regulators, and the courts still go by what’s called the “public health and safety” standard that was set up by the political compromise that ended Prohibition and gave us three-tier. The doctrine says that if a liquor regulation protects the public health and safety, then it’s constitutional. And each group – and particularly the courts in almost every decision since Granholm – still insists it isn’t safe for wine drinkers in one state to buy wine from a retailer in another state. So it remains illegal.

Yes, this is silly and outdated in the second decade of the 21st century – but that’s three-tier for you.

More about three-tier, Granholm, and direct shipping
• Tennessee residency law: Did the three-tier system come crashing down yesterday?
• Is the coronavirus pandemic the beginning of changes to the three-tier system?
• Direct shipping loses a big one

Winebits 571: Ed Lowe, three-tier foolishness, wine prices

ed loweThis week’s wine news: Ed Lowe, whose Dallas restaurant served Texas wine when hardly anyone knew what it was, has died. Plus, New York state three-tier foolishness and cheaper bulk wine prices

• Ed Lowe: How important was Ed Lowe to the U.S. regional wine movement? He served Texas wine for 30 years at his Celebration restaurant in Dallas, and when he started doing that Texas wine was chancy at best. Lowe, 69, died before Thanksgiving during a canoe trip in the state’s Big Bend region. I knew Lowe a little, and we talked several times about local wine, his half-price Thursday night wine promotion, and quality local food. Celebration was farm-to-table long before the term was invented by some East Coast hype guru, and Lowe (who could still be seen busing tables) truly believed in the concept. The world will be a poorer place without him.

• Take that, Wegman’s: The East Coast grocery store chain has been fined more than $1 million for illegally managing liquor stores by the New York state booze cops. That’s because grocery stores aren’t allowed to sell alcohol in New York, save in one location. The state liquor authority claimed Wegman’s violated any number of laws and regulations, including “illegally trafficking in wine.” That’s a delightful 21st century crime, yes? The infractions are arcane to anyone who doesn’t follow three-tier, and Wegman’s may actually have violated the law. The larger question, though, is why these laws still exist.

• “Awash with wine:” More bad news for premiumization – wine prices in the bulk market are dropping, “and in some cases, significantly,” reports a British wine trade magazine. The world is flush with wine after bountiful 2018 harvests around the world, and those interviewed in the story say prices could keep falling. Why do bulk prices matter? Because, save for the most expensive wines in the world, bulk prices influence the price of grapes everywhere. Cheaper bulk prices usually mean cheaper grape prices, and that usually means cheaper wine prices.

Illustration courtesy of Tampa Tribune using a Creative Commons license