Do Wine Wholesalers Need To Be Taught How To Be Criminals?
In 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?
Reprehensible choice. Unbelievable lack of awareness.
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.
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.