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TUESDAY TRIBUTES
08/25/2015
Buying Wine Is Trickier Than Ever For The Consumer

By Stephen Eliot

Much of the discussion about wine these days is about what is new and how much things have changed over the years. There is no question that new styles, new places, new varieties and the ways in which we communicate have transformed the world of fine wines, but less talked about are the new ways in which wine is bought and sold.

Back in the 1970s, wine in California was priced according to fair trade laws whereby retailers were bound by minimum pricing laws, and small, specialty retail shops were where discerning wine lovers went to find the best and most in-demand bottlings. Fair trade was abolished by court action in 1978, and the way was opened to large, big-box retailers and grocery stores, and an era of competitive discounting ensued that changed the way business was done.

One of the principal players in the early 1980s was Liquor Barn, later rebranded as Beverages and More (BevMo), and, for a time, most every bottle of wine they sold was priced well below what had been a standard, industry-wide markup.

As a small, specialty seller of fine wines at the time, I witnessed firsthand how the business climate changed, and more than a few of us wondered where pricing policies might go when enough of the “little guys” were pushed out of the market. We questioned if widespread discounts and lower profit margins would still be the norm when competition was eliminated.

As it turns out, a good many of the wines on BevMo’s shelves today, in fact, carry price tags that are higher than what a winery suggests. There are, of course, no rules or regulations governing what any retailer can charge, and the free market allows one to succeed or fail as they will, but it was a bit of a surprise given the long-standing assumption that Bevmo and their likes were the universal discounters that they once were. It is simply not true, at least for BevMo. And, the smart shopper would be well advised to quickly check a winery’s website before assuming that he or she is getting a fair deal.

The other major change in how wine is bought and sold is the astonishing rise in winery direct-to-consumer sales. I am no longer surprised when I ask this or that producer how much of their wine is sold direct to hear answers of 80% to nearly 100%, and industry numbers suggest that the trend is only on the rise. In such a scenario, a winery no longer needs to share their profits with a middle-man broker or wholesaler, and. whether claiming more for themselves or keeping prices a bit lower, it makes a great deal of business sense.

There once was a time that the only way to get rare and limited California bottlings was to secure a place on a mailing list and deal with the winery direct, but, with Internet access and quick-click buying, it is no longer just the rarest of the rare that are so sold. Instead, online purchases have rapidly become not only the easiest, but often the only way that the growing number of serious wine lovers can claim their share of their favorite wines.

The point of this morning’s musings is that the consumer must assume some responsibility and be more active in the wine game. While there are a handful, and I wish there were more, of knowledgeable, old-school, customer-oriented wine merchants willing and able to provide welcome advice, most folks are left on their own. It pays to pay attention and do a bit of homework.


 

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