Tag Archives: three-tier system

Winebits 667: Wine calories, three-tier brouhaha, can shortage

wine caloriesThis week’s wine news: The federal government resets the rules to list calories on wine labels. Plus, more three-tier legal excitement in Michigan and the can shortage continues

How many calories? The federal agency that oversees alcohol regulation is making it easier to put calorie numbers on wine labels and to use them in advertising and marketing. The TTB will change its calorie standards to make them more consistent with those of the federal Food and Drug Administration, which regulates calorie and nutrition labels for most of the food we eat. The new alcohol standards will allow greater flexibility for producers who want to use voluntary nutritional statements. For example, wineries won’t need to do a nutritional analysis for each new vintage; they can use the current analysis unless there are major changes in the wine. How big a deal is this? The Wine America trade group, which has long opposed mandatory nutritional labeling, has endorsed the TTB move. So we might see more calorie and nutrition labels on wine – always a good thing.

Slugging it out in Michigan: The state of Michigan is suing out-of-state retailers for selling wine in the state, in violation of Michigan law. The state has some of the strictest three-tier regulations in the country, which include laws letting the state tell retailers what they can charge for wine, beer, and spirits. This follows a similar Ohio lawsuit this summer against out-of-state retailers, marking an escalation in the legal battle to reform the three-tier system to make it easier to buy alcohol. Michigan officials aren’t buying that, claiming in the suit that the two California retailers selling wine in Michigan harm the “the health, safety and welfare of Michiganders.”

Where are the cans? Remember the pandemic-induced can shortage? It hasn’t gone away, reports the Washington Post. “Ball Corporation, the world’s largest manufacturer of cans, told investors this week that the U.S. market alone is short 10 billion cans in 2020. …” Which doesn’t bode well in the short term for canned wine, one of the biggest trends in wine, as well as hard seltzer and craft beer. The story says the largest beer and soft drink producers saw the shortage coming and stocked up. But smaller producers are struggling; one Maryland brewery says it has run out of cans every week since the end of July.

Winebits 662: Ingredient labels, tennis wine, three-tier fraud

ingredient labels

Beer drinkers want to know what’s in their glass, but wine drinkers? Nope.

This week’s wine news: A wine industry survey finds that wine drinkers aren’t interested in ingredient labels, plus a wine celebration at the U.S. Open and two New Jersey distributors are fined $8 million for cheating customers

They didn’t ask me: Most wine drinkers aren’t interested in knowing the ingredients in their wine, according to a survey by the Wine Market Council. The Wine Curmudgeon, of course, has long lobbied for ingredient and nutritional labels as a way to bring more people to wine, but I was not surprised by the results. The council’s bills are paid by the wine industry, which has opposed ingredient labels since the federal government first contemplated the idea more than a decade ago. The other thing to note: The survey didn’t include all consumers – just what the council calls “core” and “marginal” wine drinkers, and it was skewed in favor of core wine drinkers. I wonder: How different would the results have been if it had included all consumers, instead of those who already think they know what’s in their wine? I don’t write this lightly; I have tremendous respect for the Wine Market Council, and its staff has helped me with countless stories through the years. And this post probably means I will never get a phone call returned again. But it has to be said: This result has far less significance than if a Gallup poll of all consumers had found the same thing. Until then, I still believe consumers want to know if their wine contains industrial adhesives.

Bring on the wine: Tennis player Madison Brengle celebrated her upset victory over the U.S. Open’s No. 19 seed last week by chugging a bottle of Sutter Home wine, the New York Post reported. Brengle ran into the stands to drink a 187 ml bottle of an unidentified Sutter Home red after her victory. No report on how many points she gave the wine or whether she was a core or marginal wine drinker. And Brengle didn’t get a chance to celebrate again – she lost in the next round in straight sets.

$10.3 million fine: New Jersey’s two largest distributors were fined $4 million each for cheating many of the state’s liquor retailers, reports WRNJ. The legal charge was “discriminatory trade practice” – wholesalers Allied Beverage Group and Fedway Associates agreed to pay the record-high fines and promise to never to do it again after a two-year investigation by the state’s liquor cops. In addition, 20 retailers were fined $2.3 million for participating in the wholesalers’ scheme. The story in the link has the detailed charges; it’s enough to know  that Allied and Fedway worked with the 20 retailers, using illegal payments, to cheat smaller retailers. I wonder: If we need the three-tier system to protect us from corruption, who is going to protect us from corruption in the three-tier system?

Winebits 661: Walmart lawsuit, Cracker Barrel wine, Amazon Fresh

walmart lawsuit

“How about a glass of wine with that t-shirt?”

This week’s wine news: Walmart gets an ally in plan to open liquor stores in Texas, plus Cracker Barrel adds booze and Amazon plans full-sized supermarket without checkout – unless you’re buying alcohol

Walmart lawsuit: The U.S. Chamber of Commerce has filed a brief supporting Walmart’s attempts to open liquor stores in Texas. This is a big deal; the chamber of commerce, though pro-business, usually doesn’t choose between businesses. In this case, the Texas Package Stores Association, which represents most of the state’s liquor retailers, is Walmart’s arch-enemy in the liquor store lawsuit. No word yet on when the Supreme Court will decide whether to accept Walmart’s appeal. Most recently, a federal appeals court ruled against Walmart, agreeing that a Texas law that forbids publicly-owned companies from getting a retail spirits license is constitutional.

Cracker Barrel booze: Cracker Barrel, the interstate highway restaurant chain known for a front porch and souvenir shop, has added 60 restaurants to the number of locations selling beer, wine and mimosas. That brings the total to 80; the restaurants are in Florida, Kentucky, and Tennessee. This is an interesting experiment, given that many of the chain’s stores are in the South, where there are still religious objections to drinking, and that many of its customers will get back on the interstate to drive hundreds of miles after eating.

Amazon Fresh: Remember all the fuss in the cyber-ether when Amazon opened its Amazon Go convenience stores, which didn’t have traditional checkout? Then get ready for more excitement. The e-tailer has opened a 35,000-square-foot store in suburban Los Angeles, with the goal to help shoppers avoid a checkout line. Except, of course, if they’re buying wine or beer. As we noted here when Amazon Go opened, there was an employee to check ID, and one reporter noted: “There was nothing fancy or high-tech about this when I went to peruse the beer.”

Photo courtesy of Nation’s Restaurant News, using a Creative Commons license

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

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 651: Walmart, Grocery Outlet, neo-Prohibitionists

WalmartThis week’s wine news: Walmart will appeal take Texas liquor store case to Supreme court, plus blog favorite Grocery Outlet wins award and the neo-Prohibitionists strike again

Walmart appeal: Walmart, rebuffed twice by a federal appeals court, will appeal to the U.S. Supreme Court to be allowed to open liquor stores in Texas. We’ve followed this closely on the blog, since Walmart is trying to overturn a state law that forbids publicly-held or out of state companies from getting a retail liquor license (one of the WC’s favorite three-tier restrictions). Walmart won its case at the trial level, but was rebuffed twice by the the Fifth Circuit Court of Appeals. There’s no certainty the Supreme Court will take Walmart’s case. But if it does, expect some serious three-tier fireworks.

Award-winner: The Wine Enthusiast has named blog favorite Grocery Outlet as one of its 50 best U.S. wine retailers. This is a big deal, if only because Grocery Outlet — best known for its cheap wine — is still mostly on the West Coast. The award puts Grocery Outlet in the same class as Costco, perhaps the U.S. leader in what the magazine calls “value-driven” wine.

One glass of wine: An influential federal panel, reports Forbes, is recommending that men reduce alcohol intake to one drink per day, and that all Americans should cut back on added sugars. Who knew that a couple of glasses of wine were as deadly as that quart of vanilla ice cream? But that’s the finding from the Dietary Guidelines Advisory Committee, which says that the extra glass of wine is associated with a “modest but meaningful increase” in death rates.