Category:Wine trends

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Yes, this is silly and outdated in the second decade of the 21st century – but that’s three-tier for you.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

The Trump zombie wine tariff is lurking over the horizon

wine tariff

The Trump zombie tariff is lurking over the horizon, which means the price of European wine could double.

Why haven’t we been able to kill the Trump zombie wine tariff, which is bad economics and bad public policy?

Just when it seemed safe to drink European wine without worrying that it could double in price, the Trump zombie wine tariff is lurking over the horizon.

That’s the 100 percent tariff on almost all European wine, which the Trump Administration proposed in February. The administration backed off then, raising tariffs on European airplane parts instead. Which made perfectly good sense, since the original trade dispute was about airplane parts.

But the proposal is back. Last week, the Office of the U.S. Trade Representative proposed tariffs on nearly $3.1 billion worth of European products and that would raise the current wine tariff from 25 percent to 100 percent.

In other words, effectively doubling the price of European wine in the U.S. Some have gone as far as to call the 100 percent tariff the worst threat to the U.S. wine business – imported and domestic – since Prohibition.

None of this makes any sense, and not just because this whole thing is about airplane parts.

• The world economy is in recession. So why would any sane person consider raising taxes?

• The coronavirus. So why would any sane person consider raising taxes?

• France’s so-called digital tax on U.S. companies like Facebook, Amazon, and Google has somehow become part of the dispute, though why the federal government needs to protect these giga-billion dollar behemoths is beyond me. And doesn’t President Trump hate Amazon?

The good news, if there is any, is that most of the people I talked to say the tariff proposal is likely empty bluster, more posturing from an administration that has perfected bluster. Two wine industry officials, who asked not to be identified because of the sensitive nature of the topic, said they didn’t expect the 100 percent levy to be approved. One, who has been closely involved with negotiations, said, “My personal view is that the most likely outcome is no change” until the final World Trade Organization ruling later this year on the original aircraft parts dispute.

Having said that, this is no time for slacking off. After all, we all know how difficult it is to kill zombies. Hence, if you oppose the 100 percent tariff, you can leave a comment with the U.S. Trade Representative at this link. The comment period ends on July 26.

Image courtesy of George Romero’s Night of the Living Dead, using a Creative Commons license

More on the zombie wine tariff:
Trump Administration backs off 100 percent wine tariff
Welcome to Sherwood: Robin Hood takes on the wine tariffs
Panic wine buying

Winecast 47: Bay area retailer Debbie Zachareas and the new normal

Debbie Zachareas

Debbie Zachareas

Debbie Zachareas: Trading down is going on, even for people who buy $100 wine

Debbie Zachareas is a long-time San Francisco-area wine retailer; currently she helps oversee three wine stores and wine bars in the Bay Area. And of all the surprises during the coronavirus pandemic, among the most surprising has been that even people who buy $100 wine have been trading down. A $15 to $30 bottle, she says, seems to be what they’re looking for these days, what with staying at home and social distancing.

We talked about trading down, as well as what wines are popular — lighter whites instead of the heavier reds that had been in vogue, as well as imported wines instead of California wines. One exception: The incredible wines from California’s Jolie-Laide, a small but, unfortunately, hard-to-find producer.

Plus, customer service has improved during the duration — an odd, if unintended side effect during the duration that I’ve heard about from other retailers.

Click here to download or stream the podcast, which is almost 13 minutes long and takes up 5 megabytes. Quality is mostly excellent (save for a few seconds at the beginning). We’re back to recording on Skype.

One more reason to be wary of alcohol health studies

alcohol health studiesFinnish researchers find – gasp – that people who abuse alcohol have higher health costs

The Wine Curmudgeon, long suspicious of alcohol health studies, is not surprised by one of the latest, which links alcoholism with higher health costs. What is surprising is the headline on the news release: “Researchers put a price tag on alcohol use” – which, of course, has absolutely nothing to do with the study.

First and foremost, let me remind everyone I know first-hand the horrors of alcoholism and abuse. A friend died from them; two more are long-time members of abuse support groups. So I am not making light of alcoholism or saying it isn’t a problem.

Rather, it’s to note, once again, that there is a difference between alcohol abuse and moderate drinking, and which is something that has apparently been shunted aside in the rash of “all drinking is evil” studies we’ve seen over the past couple of years. Drinking is not cigarette smoking, no matter what one study claimed, and drinking wine in moderation is no worse, and may even be more healthy, than regularly eating nitrate-laced supermarket hot dogs. Which, of course, no one has yet done a study about.

This effort, on the other hand, was reaffirming the obvious. Finnish researchers, using what they called a “novel” methodology, say it costs an additional €26,000 (around US$30,000) over five years to treat patients with multiple alcohol abuse factors, such such as homelessness and drug abuse. It also recommends that people with alcohol use disorders should get better treatment for their non-alcohol related conditions.

Which is all well and good, but hardly unusual. So how did the release that ended up in my inbox carry that headline? After reading it, one expects to find the social and health costs of all drinking, moderate and abusive, listed. Which aren’t there and wasn’t the study’s intention.

Maybe the reason is as simple as the headline on the Finnish study being badly translated into English. Maybe it’s nothing more than more bad marketing and public relations work, each of which as gotten progressively worse over the past several years as agencies cut back on employees and training.

And maybe it’s part and parcel of positioning all such studies as being about drinking and doom, and working on the gullibility of newspapers, websites, and the like where the bosses are more concerned with their bonuses than with quality journalism.

I assume it’s one of the first two, and probably the second. I’m terrified it’s the third.

Wine premiumization and the Winestream Media

wine premiumization

“Reportin’? We don’t need no stinkin’ reportin’.”

Wine premiumization may be ending, but you wouldn’t know it by reading the Winestream Media

By most measures, the end of premiumization is underway. Wine drinkers have been opting for less expensive wine over the past six months, and, depending on which expert is talking, the trend will continue and perhaps even accelerate. In other words, lower wine prices and better quality cheap wine.

But it would be difficult to know this from reading the Winestream Media.

I don’t write this to be snarky (well, maybe, just a little), but to point out how difficult it is to tell what’s going on in wine from its most important media outlets. Wine-searcher.com somehow managed to run these two stories almost at the same time – “Premium wine falls victim to the coronavirus” and “Wine sales defy doom and gloom.” And this doesn’t include the site’s regular roundup of all things high priced – “Bordeaux’s most expensive wine,” “Napa’s most expensive wine,” and (my favorite), “Brunello 2015: Another perfect vintage.”

At the Wine Enthusiast, meanwhile, one writer was salivating over $40 California gamay, which is about as premiumized as wine gets that isn’t cabernet sauvignon. And the Wine Spectator has reassured us that it will continue to cover the 2019 Bordeaux futures market, despite what the magazine’s Bordeaux reviewer called the pandemic’s “rude interruption.”

So, why?

Why is the Winestream Media treating this almost unprecedented moment in world history – and with all of the changes it looks like it will bring to wine – as just another minor sales blip?

• Because that’s what it does, and to expect more of it is expecting more than it is capable of. Yes, it may well be fiddling while Rome burns, but it doesn’t understand that Rome can burn. Rome is eternal, just like wine scores and $300 Napa cabernet.

Because it doesn’t want to see what’s going on, as Richard Hemming, MW, explained to us last week. If wine writers write things the wine business doesn’t want written, there’s a good chance the wine writers will find themselves persona non grata. As Hemming said, there’s no reason consumers should necessarily trust wine writers.

• Because there aren’t really any good numbers to describe what’s going on, even if a wine writer wanted to write about it. We’ve noted this on the blog many times, and another example came up last week. David Morrison at the Wine Gourd has made a specialty of parsing wine industry statistics, whether sales or scores, and noted last week about one sales study: “The conclusions seem to vary from quite accurate to wildly exaggerated.”

So what’s a consumer to do? Buy wine you like, be willing to try something else, and wait to see what prices will do. We’ll almost certainly see prices drop before the Winestream Media discovers most of us aren’t all that interested in $40 California gamay.

Six things the wine business is doing to cut costs and drum up business during the duration

wine business

“Hmmm. How can I write about the same wine this year that I wrote about last year?”

It hasn’t been easy for wine producers, marketers, and PR types during the pandemic

Yes, we’re buying more wine over the Internet than ever before, but that doesn’t mean the wine business is healthy. Ask anyone at the biggest distributors who was laid off in the past eight weeks. So how else is the wine business cutting costs and drumming up business during the duration?

This is what I have seen:

• Using Styrofoam inserts for packing wine samples. I really haven’t seen any in a couple of years, given Styrofoam’s environmental evil. Most shippers have switched to cardboard liners or plastic bubble bags. But during the duration, Styrofoam appeared again, since it was probably sitting in a back room and has already been paid for.

• Samples from producers who wouldn’t normally speak to me, let alone send me wine. I’m not the only who has had this happen; several of my colleagues have reported the same thing. Said one: “What am I going to do, writing about heavy Napa cabernet, in the middle of summer?”

• Old samples, as in the same samples I got last year. I’ve never had this happen before, but one producer sent me the same rose they sent in 2019. This speaks to how much wine is sitting in warehouses, unsold and unloved.

• Emails every two or three months offering me the same wines they just sent me. This has happened two or three times this year, where a PR firm offered me wine at the end of last year and the same wine a couple of months later. And then a couple of months later.  Once again, this speaks to how much wine is sitting in warehouses, unsold and unloved.

• Virtual tastings, where I have to try and find the wine to taste with the producer. I don’t mind buying the wine, since I do so much of that anyway. But what’s the point of inviting me to a virtual tasting when I can’t find the wine to taste?

• Pleas for money. I’ve never seen this. Ever. But I one email I got from a wine trade association asked to help them find money to expand their marketing efforts during the duration. We’ll ignore the fact that my job isn’t to help them sell wine, but doesn’t asking for money from complete strangers smack of quiet desperation (to paraphrase Henry David Thoreau)?

Winecast 46: Richard Hemming, MW, and why wine writing isn’t necessarily objective

richard hemming

Richard Hemming, MW

“Why should [consumers] trust us? They shouldn’t, necessarily,” says Singapore-based wine writer

Richard Hemming, MW, a Singapore-based wine writer, wrote one of the most amazing blog posts I’ve ever read: Wine writers can’t be objective given the incestuous nature of the wine business, and consumers need to know that this prevents us from always being objective.

It’s one thing for me to write that, which I’ve been doing as long as there has been a blog. But if Hemming, firmly part of the Winestream Media — initials after his name, consulting work, and articles for important magazines and websites — writes this, it speaks to how messed up wine writing is.

Hemming doesn’t disagree. But he also doesn’t see a solution, since it’s difficult to make a living as a wine writer. So we have to depend on the kindness of strangers, with all of the compromises that entails. In this, Hemming notes, there’s a difference between a compromise, like not writing something that would offend a source, and corruption, such as taking money for a positive review.

Needless to say, I don’t agree. But Hemming’s point is well taken, and he hits on one of the key questions facing post-modern journalism, wine or otherwise: What’s going to replace the ad-supported model that paid for newspaper and magazine reporting in the second half of the 20th century? Because, so far, it isn’t the Internet.

The other thing worth noting? The post was easily the best read on Hemming’s blog, and most of the comments — from wine writers, of course — agreed with him.

Click here to download or stream the podcast, which is about 15 1/2 minutes long and takes up 9 megabytes. Quality is good to very good; I still haven’t figured out how to get the most out of Zoom.