Category:Wine rants

Follow-up: The sham and hypocrisy behind the three-tier system

three-tier system

“Ain’t it grand to be doing journalism again?”

Was the cyber-ether outraged by my three-tier system post? Nope. It mostly agreed. And that may be the biggest surprise of all

The blog’s traffic for the two days after Thursday’s three-tie system post was greater than any two-day period in the past 18 months, about three times normal.

So one would expect lots of comments, lots of emails, lots of flaming, right? After all, this is the Internet in the second decade of the 21st century, isn’t it?

In fact, just the opposite happened: Hardly a murmur of protest, hardly any comments, and only one person who canceled their email to the blog. In my world, cancellations are the mark of a controversial post – the more controversial, the more cancellations. But in this case, more people were worried that I would be arrested for illegally ordering wine from an out-of-state retailer than the number who called me names. How weird is that in today’s cyber-ether?

But, after parsing what happened over the past couple of days, maybe it’s not really weird at all. That’s because almost everyone who doesn’t have a vested interest in protecting the system accepts it for what it is – obsolete and inefficient on its best days, and corrupt on its worst. So why bother to complain? As one comment put it: “The three-tier system exists only to protect distributors – the health issue is pure hypocrisy. …”

Which speaks to a larger and more troubling point – not just about wine regulation, but about how the world works these days. The sense is that those in charge will do what they want to do, be it in politics, banking, Wall Street, technology, or the Internet, and that there is little the rest of us can do about it.

Frankly, that is a decidedly un-American approach, and it’s one I don’t believe in. If I did, I’ve wasted most of my professional life, and I know I haven’t done that. And it also explains why I wrote the post and set up the reverse sting – if the Winestream Media is going to acquiesce, that’s all the more reason for the rest of us to rouse as much rabble as we can. Which I have done my entire professional life, and which I will keep doing until I am buried, keyboard between crossed arms.

And, sadly, it also explains why so many people were worried I would be arrested. They’ve forgotten what the news media is supposed to do, which is journalism — and which is not reprinting news releases touched up with bad, punny headlines When I was a young newspaperman, this sort of thing was common – the Mirage Tavern, the bible that wasn’t in the room, and so many more. These days, newspapers are assets to be butchered to make even more money for their owners, who are usually already richer than the rest of us.

Am I the New York Times, and will this post change the world immediately? Nope. But every bit helps, and especially at a time when we need help so badly.

The sham and hypocrisy behind the three-tier system

three-tier

“Quick — get the wine unloaded before anyone spots us.”

The Wine Curmudgeon buys wine from an out-of-state retailer – even though it’s illegal

A case of Domaine Tariquet was delivered via Fed Ex to Wine Curmudgeon international headquarters in Dallas this week. The shipment violated the laws of two states – that of the retailer who sold me the wine, and Texas, which forbids shipments from out-of-state wine retailers. Welcome to the sham and hypocrisy that is the three-tier system.

Why a sham? Because the liquor cops in Texas and in the retailer’s state both know I bought the wine, since Fed Ex and UPS send so-called common carrier reports to the agencies. The Texas Alcoholic Beverage Commission received the electronic paperwork saying the order was shipped to my house; the retailer’s state alcoholic enforcement agency got the same thing when the order was shipped.

I’m not going to name the retailer or its state; let the liquor authorities do their own investigating. Click the links to see the address label and the alcohol warning label that said the package wasn’t olive oil. Also, everyone quoted in this post was given confidentiality, since I committed a crime with my purchase.

So why did my reverse sting operation work? Because each state doesn’t always enforce the interstate retail ban, according to a prominent liquor law attorney.

“It’s not high on the list of priorities,” he told me. “Most of the time, unless someone objects to that kind of sale, they don’t do anything about it. It’s like enforcing the speed limit on a highway. The police may not enforce it for a long time because they have other things to do – until someone complains about speeding, and then they set up a speed trap.”

And, now – hypocrisy

Interstate retail shipping is banned in most of the U.S. in the interest of “public health and safety” – the legal doctrine that has overseen liquor law since the end of Prohibition. Yet, more than a century later, state regulators and legislators still insist that it’s not safe for me to order wine from a retailer in another state. Yet, if it’s so dangerous, why isn’t it enforced more often?

The answer can be found in the July 8 decision by the Ohio attorney general to sue Wine.com and six other interstate retailers for selling wine to Ohio residents in violation of the state’s interstate shipping ban. Yet, according to two people with knowledge of the attorney general’s suit, Wine.com has been selling wine in Ohio in violation of the ban for more than a decade – and the Ohio Division of Liquor Control knew it was doing so and exchanged letters with the company acknowledging the practice.

The July 8 lawsuit, says the prominent liquor attorney, fits a pattern – interstate shipping bans are often enforced only when wholesalers and distributors press the issue. In Ohio, Wine.com and the other retailers weren’t buying from Ohio distributors, as required by law, but from distributors in other states. This lost business, combined with the dramatic drop in restaurant wine sales during the COVID-19 pandemic and increasing legal direct-to-consumer wine shipments in Ohio, probably had the wholesalers “crapping in their pants,” e-mailed an Ohio wine business consultant who has worked with the state’s distributors. No wonder, he wrote, that they pressured Ohio authorities to sue the interstate retailers in an attempt to redirect the lost business and revenue their way.

So where’s the public health and safety?

And, in fact, the news release announcing the lawsuit barely mentioned “public health and safety.” Instead, it emphasized lost tax revenue and lost retail sales, quoting an Ohio retailer and distributor. In addition, the Wine & Spirits Wholesalers Association, the national distributor trade group, issued a news release saying the same things. The attorney general’s spokesman didn’t respond to two requests for an interview for this post.

Keep in mind that this post isn’t about defending an illegal practice. If anyone violated the law, they should be punished, whether Wine.com (which is a long-time supporter of the blog) or me. And this post doesn’t advocate selling liquor without regulations — we certainly need regulation, but regulations that are fair and efficient.

Because selective enforcement isn’t either. If interstate wine shipping is truly dangerous, then the ban needs to be enforced. Because if the ban isn’t enforced, then it follows that interstate shipping isn’t as dangerous as it’s supposed to be. And if that’s the case, why have the ban at all?

Photo: Odd Truck” by oliva732000 is licensed under CC BY-SA 2.0

Geyser Peak gets a new owner – can that save the brand?

geyser peak

“Seriously — someone put riesling in this?”

Geyser Peak, once a great cheap wine brand, has seen sales fall by one-half and quality sink perhaps even more

Dear Robert Pepi Jr.:

I see you are the consultant for the new owners of Geyser Peak, once one of California’s great cheap wine brands. This is welcome news, given your family’s long tradition with sauvignon blanc, the varietal that made Geyser Peak one of California’s great cheap brands. Is it possible that you can convince the wine’s new owners to restore its $10 sauvignon blanc to greatness?

I ask this because American wine drinkers are eager for a $10 California label that offers consistency, quality, and value. Because, as we have too often noted on the blog, that’s almost impossible to find anymore. Geyser Peak was once once of those wines and a member of the $10 Hall of during the blog’s early days. In fact, the Big Guy used to joke that he knew it was summer in Texas when he started drinking Geyser sauvignon blanc.

But that hasn’t been the case for a long time. Your new bosses are at least the brand’s fifth owners since 2007, and the last owner drove sales from around 300,000 cases a year to half that. And no wonder. The last couple of times I tasted the wine it was, to be polite, crummy. Who mixes riesling with sauvignon blanc unless there is an ulterior motive?

Plus, the quotes I read from the new bosses didn’t fill me with confidence: “500,000 cases. … growth potential. … expanded sales force. … honing our focus.” Shudder – nothing about making quality wine in any of that, is there?

Earlier this year, a leading wine industry analyst said California desperately needs “sexy brands at $7 or $8 per bottle. …” Which you and the new owner have the chance to do with Gesyer Peak (and a $10 price would be fine, too). Grape prices have declined, so it will be possible to buy better quality grapes to put in the wine. The brand has a long history of quality – how more reassuring than marketing it as, “Great Geyser Peak wine is back, baby!”? And maybe you can even convince the new owner that this would be the perfect way to bring younger consumers to wine – cheap, fruit forward, and a product that tastes like wine.

As always, I am ready to help in any way I can.

Yours in quality cheap wine,

The Wine Curmudgeon

Photo: Librestock, using a Creative Commons license

A tale of two Italian wines: Boffa Carlo Arneis and Mionetto Prosecco di Valdobbiadene Superiore di Cartizze 

Italian wineThe former is a lovely $15 wine, while the latter is a $40 Prosecco. How can Italy be going in two completely different directions?

Premiumization has done horrible things to the wine business, so horrible that they go beyond cutting sales and alienating younger consumers. Thanks to premiumization, wine is becoming something not to drink and enjoy, but for collecting and for showing off. Case in point: these two Italian wines.

The Boffa Carlo Arneis 2017 ($15, purchased, 13.5%) is a beautiful, almost elegant white wine, with subtle lemon and stone fruit, nuanced minerality, and a whole that is greater than the sum of its parts. It’s a tremendous value for arneis, a lesser-known grape where prices can top out at $30.

The Mionetto is a $40 Prosecco (sample, 11%). It’s a well-made and enjoyable sparkling wine, but in the end, it’s a $40 Prosecco, not all that different or better than the legions of $12 Proseccos cluttering supermarket aisles.

So how did Italy, a country with thousands of years of winemaking chops, go from the more or less traditional approach that gave us the arneis to one based on premiumization and a $40 Prosecco? Because decisions are increasingly made based on marketing and category management, and not on wine.

My guess? Someone, somewhere decided Mionetto needed a product to compete with Champagne and high-end California sparkling wine. So we got a $40 Prosecco – not because the world was demanding a $40 Prosecco or because the grapes were of such high quality that they would produce a wine worth $40. We got it so an Italian wine would be able to sit on a store shelf next to Champagne and grab some of that market share. Because if a wine costs $40, it must be worth it, right?

The same thing has happened with rose, where the marketplace has been flooded with $25 pink wine that is almost no different from $10 and $12 rose in anything other than retail price. The reason? Because people who buy $25 red and white wines have been taught that cheap wine is crap, so why not sell them $10 rose that costs $25? A rose producer I know can launch into a rant on that subject even more quickly than I can, which should tell you how widespread the practice is.

Finally, remember that this post is not about price, but about value, and that expensive wines can offer, value, too. That’s the Wine Curmudgeon’s mantra. The wine business will have you believe that value is no different from price, because that’s how it makes its money. Because, $40 Prosecco. But we know better, don’t we?

Photo: “Hanging Bottles” by garryknight is licensed under CC BY 2.0

TV wine ad update: Does Stella Rosa’s sweet fizzy red commercial do what Big Wine can’t?

Is this spot for Stella Rosa’s sweet fizzy red, Black Lux, more effective TV advertising than anything Big Wine has come up with? Sure seems like it

The blog regularly rants and raves about Big Wine’s pathetic efforts at TV advertising, and especially at its failure to reach younger wine consumers with epics like (shudder) the Roo.

So how did Stella Rosa, owned by a little known Los Angeles wine producer, get this ad right? Because, after all, the company isn’t a huge multi-national with a massive marketing budget and creative geniuses on the payroll.

The secret, to paraphrase the blog’s official wine marketing guru? Stella Rosa knows its audience. Watch this commercial for its Black Lux, a pricey, sweet fizzy Italian red, and you’ll want to buy the wine and make the recipe — even if you don’t like pricey, sweet fizzy Italian reds. The commercial is fun and accessible; who else has paired tomato soup and wine? And it doesn’t hurt that the spot “borrows” its overhead, cooking hands format from popular Millennial cooking shows like Tastemade.

Best yet, the ad is not about making fun of wine snobs or showing impossibly beautiful people drinking wine that they wouldn’t touch unless they were being paid to do it. Because we know how little that has worked — and why we shouldn’t be surprised that Stella Rose sells more than 2 million cases of wine a year.

Video courtesy of Stella Rosa via YouTube

Dear Supreme Court: Please fix three-tier and allow direct shipping

three-tier

So tell us, Wine Curmudgeon, why should we allow direct shipping?

Why can’t we buy the wines we like via direct shipping? What’s so evil about that in the second decade of the 21st century?

This is the second 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, hamstringing 21st century technology and sensibility. Today, part II: Dear Supreme Court: Please fix three-tier and allow direct shipping. Thursday, part I: The Supreme Court’s 2005 Granholm decision, and why it didn’t change three-tier as much as everyone hoped.

Dear Supreme Court:

Yes, I know you’re busy. And yes, I know you are facing immense constitutional decisions that could alter the future of the republic. Still, it’s not like this one isn’t important, either: Please fix three-tier, so we can buy wine on-line and from out-of-state retailers.

I ask this not just to make it easier to buy $10 Gascon wine. I ask this because wine drinkers should be able to buy whatever they want, and not the wines that multi-billion dollar wholesalers and retailers allow them to buy. Because that’s the way the system works now – three-tier says each wine has to have a distributor in every state, so if a distributor isn’t interested in the wine, we’re out of luck. And since big distributors and big retailers want the same boring wines, we’re doubly out of luck.

How bad has the situation become? First, as you know, lower courts are not exactly sticking to your decisions. Shortly after you ruled that states couldn’t forbid non-residents from getting a retail liquor license in the Tennessee Retailers case, a federal appeals court upheld a law that said an Indiana resident couldn’t get a license to sell wine in Michigan. Talk about disrespect.

Second, I’m getting more complaints about availability than ever, and it’s not like I write about weird wines made with weird grapes. No natural or orange wines on the blog, and certainly nothing from places like Georgia. Instead, wines from the five or six biggest producing countries in the world, made with reasonably common grapes — and that I have bought so I know that they are available somewhere. My mantra has always been: An independent retailer in a good-sized city should be able to sell readers the wines I write about.

But that seems to be less applicable as wine consolidates. A reader wrote the other day that he couldn’t find a California wine in California, and his search included an independent retailer. Even worse: another reader, no doubt more frustrated, asked if I could cobble together some sort of retail network for the blog’s wines. This is what it has come to, dear justices – someone wants the Wine Curmudgeon to sell wine. And I can’t even figure out a way to sell t-shirts.

So please do something, sooner rather than later (though I would be happy with later). In fact, it almost doesn’t matter if you decide to forever forbid retail to consumer shipping. It’s a decision, at least, and as bad is it would be for wine, it’s still better than what we have now. Which makes everyone crazy save the people who benefit from it.

Yours in jurisprudence,

The Wine Curmudgeon

Drawing courtesy of Colorado Public Radio, using a Creative Commons license

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