The Thugs of the Wine Industry Respond

Posted by Tom Wark on Nov 28, 2017

From the Fermentation Mailbag:

Dear Asshole:

So as to assure you understand my position concerning your rant against wholesalers, let me be perfectly clear: FUCK YOU!

Without wholesalers to move goods around the country, wineries and retailers would be screwed. There would be no distribution of wine and wine stores would have nothing to sell. So what’s your point? 

The only thugs in the booze business are contemptible idiots like yourself who think they understand things. The Three Tier System guarantees wineries, breweries and distillers don’t cheat the public. It guarantees shitty products don’t get distributed. It guarantees taxes get paid. Only distributors can do this. 

What Fuck Offs like you who call wholesalers names don’t get is that all those small “family owned” brands that don’t get picked up by wholesalers really don’t deserve to be distributed since they can’t make anyone any money. Why the hell should a distributor work on behalf of a winery that will only still them 50 cases a year. Consumers don’t need that kind of pretentious and precious crap. 

Finally, your love for direct shipping is just ludicrous. Every single consumer who has wine shipped to them is getting ripped off by the high cost of shipping when they could easily buy wines that are just as good and cost 50 percent less in local grocery stores. If anyone should be demonized it should be the little wineries in burned out Napa that ship their garbage across the country outside the three tier system.

So, Fuck You!

[email protected] (email address withheld by publisher)

FROM FERMENTATION: The Daily Wine Blog to the writer:

Dear Sir,

You’ve made your position perfectly clear. Well done.

To soothe your concerns, I can confirm that no one wants wholesalers to go away. However, the small wineries would like the opportunity to sell their wine to retailers and restaurants without any help from wholesalers….if they choose. 

As for demonizing “little wineries in burned out Napa”, I say knock yourself out. You are welcome to air your grievances here at Fermentation whenever you like. However, I’d only note that had you wanted you could have written this kind letter in the form of a comment on the post you are apparently referring to (this one) for everyone to read. As you can see, I’ve rectified that problem for you.

Sincerely,

Tom Wark

Posted In: Three Tier System

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27 Responses

  1. Gabriel Froymovich - November 28, 2017

    Tom,

    This is exactly what I’ve been saying. The only way to create a functioning free market is to force business owners to sell their products only through wholesalers like this guy, who refuses to sell their products, calls them assholes, believes that he and his ilk are the only way in which taxes get paid by businesses that dutifully pay taxes on their own to a wide variety of tax agencies that do not deal with the three-tier system, demands to choose order sizes (and pick who is allowed to make wine) and lets consumers know what they like.

    Of course, I only believe this for alcohol. It just doesn’t make sense for aspirin, toilet paper, guns, ammo, meat, diet pills, gasoline, fertilizer, placenta pills and everything else under the sun. If only you would finally understand this, Tom, we could move on to more important topics, like finally disabusing you of your heliocentric conception of our so-called solar system.

    Tom, honestly, I barely believe that this is real. I couldn’t make up a more thuggish response if I tried.

  2. Edgar Solis - November 28, 2017

    Hi Tom,

    Well done. Very classy response to very vulgar trawl.

  3. John Skupny - November 28, 2017

    Tom,
    Do you think he finished the whole bottle before ranting?
    You best not be telling anybody your shoe size!
    Signed, Not so burned out of Napa!

  • Tom Wark - November 28, 2017

    John,
    I have a feeling his letter was written when he was stone cold sober. Making it all the more alarming.

    Keep making great wines!!!

  • Roger Beery - November 28, 2017

    You Go Tom! That has to be the most insanely self righteous thing I’ve ever read…Good to know this person knows what all consumers want. As a small family winery, I’m glad to know that my blood sweat and tears go into ” pretentious and precious crap.” and Yes… I’m not in the business to make money for someone who provides a service I can perform myself… Oh well..when you have an outdated system of delivery…you must defend it somehow… As you stated…the 3 tier system is fine for those wineries who want to use a middleman…we should not be forced by law to enrich one.

    During this period of Thanksgiving, I am grateful to all our clients who seem to prefer ” that kind of pretentious and precious crap.” Cheers to you!

  • Steve - November 28, 2017

    Sometimes one must wonder if he feeds himself with the same hand he used to write his diatribe. He certainly did not let facts stand in the way of a good rant.

  • Bob Henry - November 28, 2017

    Quote:

    “. . . small ‘family owned’ brands that don’t get picked up by wholesalers really don’t deserve to be distributed since they can’t make anyone any money.”

    And quote:

    “. . . [consumers] could easily buy [wholesaler distributed] wines that are just as good [as DTC wines] and cost 50 percent less in local grocery stores.”

    Let me wade in here speaking as both a wine retailer (5 days a week) and a consumer (7 days a week).

    Mainstream grocery stores in my hometown of Los Angeles — Vons [Safeway] and Pavilions [Safeway] and Ralphs [Krogers] — give their business to distributors such as Southern Glazer’s and Young’s Market/Estate Group and Wine Warehouse . . . who represent large unit volume wineries. And serve as “one-stop” supplemental suppliers of beer and spirits to grocery stores.

    You do not find “boutique” caliber DTC quality wines in those mainstream grocery stores.

    The mainstream grocery stores don’t know these wineries exist (their corporate and regional wine buyers rarely attend wine industry trade tastings to become acquainted with them.) Their supply chain isn’t set up to accommodate small producers. And the grocery store staffers stocking the wine aisle (despite having titles like “Wine Steward” and “Beverage Steward”) are incapable of hand-selling them.

    So “boutique” wineries survive on sales to fine wine stores and DTC mailing list members and tourists to tasting rooms.

    And on the subject of mainstream grocery stores being incapable of hand-selling, let me cite this research on how brand selection decisions are made by consumers in grocery stores.

    [But the importance of “in-store signage, creative labeling and other marketing” is trumped by the impact of “hand selling” by an accomplished “opinion leader” and “taste maker” wine retailer.]

    Excerpts from MediaPost
    (December 8, 2016):

    “40% Of Alcohol Beverage Buyers Make Their Decisions In-Store”

    Link: http://www.mediapost.com/publications/article/290633/40-of-alcohol-beverage-buyers-make-their-decision.html?edition=98740

    “Fully 40% of U.S. consumers who buy alcoholic beverages haven’t decided what they’re going to purchase when they walk into the store, according to a new study from IRI.

    “Of the 60% who do have a planned beverage purchase, 21% end up changing their minds in store, and 50% of those who change their minds ultimately buy a different brand than they originally intended.

    “All of which points to ‘immense’ opportunities for alcohol manufacturers to find new pockets of growth by engaging and influencing consumers while they’re in the store, point out IRI’s analysts.

    “Beer, wine and spirits manufacturers are increasingly aware of the importance of working with retailers to win over consumers, according to Robert I. Tomei, president of consumer and shopper marketing for IRI. ‘When you consider how often most shoppers are going to the store, and that 21% of them change their minds during the shopping trip, you realize the impact that in-store signage, creative labeling and other marketing could have on your portfolio,’ he stresses.”

    • Bob Henry - November 29, 2017

      But wineries shouldn’t find succor in having fine wine stores representing them.

      Those same retailers have just seen their business model radically altered by UPS and FedEx cutting off illegal deliveries to all but 14 states.

      Consumers in those 36 “embargoed” states will no longer be able to procure a cherished bottle using Wine Searcher.

      Excerpt from The New York Times Online
      (October 23, 2017):

      “Wines Are No Longer Free to Travel Across State Lines”

      Link: https://www.nytimes.com/2017/10/23/dining/drinks/interstate-wine-sales-shipping-laws.html

  • Sheldon Richards - November 28, 2017

    Tom, I am sorry you had to endure that rant. How dare this presumptuous idiot call my wine shitty. I would say it is he, not you, that doesn’t understand 3-tier. Distributors do have a useful purpose. As a small producer, I would not be in business if I sold my wine through distributors at half price. I do sell a little to a few select small distributors that provide me with great service. Instead, I sell 95% of my wine retail direct. And I guarantee not one wine store would or could sell it for 50% less. In fact, with a 10% case discount, the shipping is more than covered. To the DEAR ASSHOLE writer, I say, try to understand both sides of a discussion before you rant! And then do it with some taste!
    PS: I pay all of my taxes. I do not require a distributor to run my business legally and efficiently.

    • Tom Wark - November 28, 2017

      Sheldon,
      Believe me when I tell you, I’ll live. This is neither the most offensive nor the most stupid email I’ve received from readers. However, the writer is clearly very competitive.

      No one who makes wine or sells wine at retail thinks wholesalers are anything but a necessary evil at best and thuggish obstructionists at worst.

  • DAVID VERGARI - November 28, 2017

    It seems obvious to me that the letter-writer is simply a lazy order-taker. That’s about it. No, on second thought, make that a CRAVEN order-taker. Put your name on it, coward.

  • Tom Heller - November 28, 2017

    Pretty nasty email. just before I got your blog post, I got a blog post from wine-seacher.com
    There is an interview with John Hinman regarding this subject. I wonder if you have any thoughts on his comments.

    Best,

    tom

    • Tom Wark - November 28, 2017

      Tom,

      If there is a more consistent voice of reason and intellect when it comes to wine law than John Hinman, I’m not aware of that person. The only thing I take issue with in his many comments is that he does not mention that consumers can make a difference by becoming a part of WineFreedom.Org.

  • Craig - November 28, 2017

    Tom, I think recognize this writer. Or, perhaps the clone of this writer. Or, is that “clown”?

  • Stephen Thompson - November 28, 2017

    The three tier system was devised to correct the problems of an industry that lead to prohibition in the first place. that was 85 years or so ago. However, the system itself has changed over the years. There are fewer distributors and fewer retailers and more manufacturers. There was no UPS, FedEx, Amazon etc. DTC has grown and will continue to grow. Distributors will continue to combine in an effort to remain significant. Small liquor stores will continue to fail. New ways will be devised to collect taxes of all kinds. Small suppliers and large suppliers all need a better system. Costco does not need a distributor. They are big enough to buy truckloads from the suppliers. To force them to use a distributor is a waste of money if the purpose of the distributor is to keep the small liquor store in business.. Businesses grow, businesses fail. The best way to insure a strong market for all is to employ the latest technology available. No one is trying to keep the small town dress shop alive, Why is everyone trying to keep the small distiller, the small winery, or the small liquor store alive. The small distiller and small winery will survive by letting them ship direct to consumer. FedEx and UPS are way more efficient than any over the road trucking company I have ever used, One more comment, : Using foul language is a representation of the class of people who use such language. Classless.

    • Olivia - November 29, 2017

      Stephen,

      We’re beginning to combat the problems small retailers and producers face in terms of distribution over at http://www.merchant23.com

      Check out our site or email me at [email protected] if you have questions, we’d like to help anyone we can!

  • Joe Ako - November 28, 2017

    Possibly, this was written by someone who hates wholesalers, to make wholesalers look really bad. He/She has done a good job explaining the nastiness of wholesalers.

  • Doug - November 29, 2017

    Tom,

    I’ve read several comments defending the wholesalers lately. The common thread is the defenders speak volumes to the logistics capabilities of wholesalers, but put the responsibility for selling on the wineries, e,cept of course for their largest suppliers. They should stop responding like that. It is clear that the modern wholesaler is a delivery service first and foremost. Sales and marketing is a value added feature for their elite suppliers. The downside to this is there are plenty of logistics services out there. Getting my wine shipped isn’t a problem except for the regulations that protect wholesalers. Without that they would actually have to compete. God forbid. I saw a quite from WSWA stating that their members employ 75k, more or less. I find it hard to believe that retailers and suppliers, who combined employ considerably more, tolerate this DE facto monopoly of wine and spirits and don’t support a repeal or revision of the three tier system.

    • Olivia - November 29, 2017

      Doug, we have partnerships with distributors in 48 states for clearing and compliance, allowing you to ship your wines DTT nationwide. If you’re interested shoot me an email at [email protected]

  • Joanna Breslin - November 29, 2017

    “It guarantees shitty products don’t get distributed.” Good one! I think the opposite is true?

    Agree with Stephen Thompson that use of foul language is a poor tactic. (So I hope that the letter was not written by Tom Wark!)

    And agree with Tom Heller that Hinman’s comments are recommended reading.
    https://www.wine-searcher.com/m/2017/11/laying-down-the-distribution-law

    Thanks!

  • Patricia - November 29, 2017

    What an interesting diatribe and even more interesting set of comments! Required reading for all BMWs (Budding Masters of Wine) in the USA and abroad. I shall remind them. Hinman’s comments are also relevant, of course.

  • Ray Krause - November 29, 2017

    Government mandating the use of wholesale wine distributors is as morally oppressive, and unconstitutional as the Obama health care mandate. If three tier service is, in fact, essential (and I believe it is, circumstantially) let them prove it in an open market without political favors and state interference. 75,000 employees is not a large voting block and we have seen what a public fed up can do at the ballot box.

    • Bob Rossi - December 5, 2017

      Did you miss the Supreme Court’s decision upholding the constitutionality of the ACA mandate?

  • Gordon Rappole - November 30, 2017

    At least there is one adult in the room. Good reply

  • PK - November 30, 2017

    I live in the US and have wine business abroad. In that country is to each his own. Self-regulated actions and behavior. Surely wineries try to sell directly to customers, but they won’t reach everyone and eventually they will resort do distributors or retail. And then the negotiations start again…”remember me, mr winery? you snubbed us, now let’s talk”.

    To me this 3 tier system is madness and it punishes the little guys in retail, import, distribution. Just look at the fronting distributors out there who sell primarily to one major “partner” (aka the real owner) of the wines, from the port as far as the store.

    The 3TS has to go. And then we’ll have an open market, to each his own again.

  • Meg - December 1, 2017

    I’m a big fan of cussing. I do it regularly. I feel an appropriately placed F bomb can be the perfect punctuation for a point you are trying to make. So I was not offended by this dumb-dumb’s crude and lazy use of cursing. I was, however, very offended by the insensitive reference to the Napa fire. The ass-holier than thou attitude and unkind tone is unbelievable. I hope his mother is proud. And I hope he puts some Neosporin on his knuckles.

    Very classy of you Tom, not to print the email address. I wouldn’t have been so generous.

  • Paul Moe - December 7, 2017

    The letter writer says “It guarantees shitty products don’t get distributed”. Every person who has worked for a wholesaler knows what a lie that is. If Diageo and the rest of them say “carry and sell this wine if you want my volume brands”, the wholesaler says yes. Throughout my career I have sold shitty wine forced on wholesalers by the big suppliers.