Wine Retailers Try to Drum Up Support

Mar 16, 2006

By John Hennessy, Vice President, Concept Shopping, Inc.

A new organization, The Specialty Wine Retailers Association (SWRA), has been launched to help protect the cross-boarder shipping rights of wine retailers. The organization consists of wine retailers across 30 states.

Todd Zucker, president of K&L Wine Merchants in Redwood City, Calif., joined SWRA in the hope that, if his business could ship wine across state lines, he would see an increase in sales. “My sense is that it would be substantial because a lot of the merchandise we offer for sale isn’t readily available in other markets or is available in limited quantities, like Bordeaux futures and rarities,” he said. K&L receives several calls every hour from out-of-state consumers wishing to order wine, he added.

The lack of an SWRA type organization to support wine retailers is blamed for the exclusion of retailers from direct-shipping legislation 100 percent of the time. The legislative activity is driven by last year’s Supreme Court Decision that said states must treat in- and out-of-state wine shippers equally.

Moderator’s Comment: How can retailers harness the loyalty of their customers to improve business results?

These wine retailers may be missing an important and powerful ally in their quest for fairness: their best customers.

Complying with inconsistent regulations raises costs, which are passed along to customers in the form of higher product prices.

If the customers of these wine retailers were made aware of how inconsistencies in cross-border shipping regulations raised the price of their favorite
cabernet, prevented their wine merchant from carrying certain products and limited the flexibility of the wine customer to ordering unique wines from merchants in other states,
those customers might be compelled to get involved and lend their support to the cause.

The result of such a unified effort would be better wine prices, purchasing flexibility and assortment for customers, and better business conditions for
the wine retailers – not to mention a stronger relationship between retailer and these engaged customers.

Often a focus on one’s own needs prevents consideration on how your need can be expanded to incorporate the interests and, subsequently, the support of
other constituents in your business web. Why not also engage shipping companies who are certain to find themselves burdened with greater regulation and cost if rules are not standardized?

John Hennessy – Moderator

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5 Comments on "Wine Retailers Try to Drum Up Support"

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Mark Lilien
14 years 11 months ago

Some retailer lobbying priorities, by their nature, are aligned with their customers’ priorities. Allowing out of state wine shipments certainly seems to be one of those cases. Retailers who want to be effective in their lobbying could collect signatures on their web sites, for example. Note that they can’t collect signatures of their customers, since by definition, those people can’t be customers.

Some retailer lobbying priorities aren’t aligned with their customers’ priorities. Unfortunately, these items are often portrayed as if they were aligned, and the people who do this are simply undermining their credibility. For example, some retailers with credit card plans claimed that the recent “bankruptcy reform” law would help society. Although the law was passed, the claim wasn’t broadly supported by people who weren’t associated with lending money.

M. Jericho Banks PhD
M. Jericho Banks PhD
14 years 11 months ago

Regarding borderless wine sales, this question is a huge non-issue. It happens all the time – legally – across both state and national borders. Good grief, California wine is sold in all 51 states (this includes the State of Euphoria).

If one were to search for a near-death case of harnessing customer loyalty to improve business results, one could look no further than the recent Blackberry rescue. This will be a classic business school case history. Various & several governmental systems depend on the RIM technology employed therein, thus encouraging the injured patent-holder to accept a reasonable buyout when it appeared that all was lost. Now that’s customer influence.

Ed Dennis
Ed Dennis
14 years 11 months ago
The issue here is that the parties in question don’t seem to understand the law. You may recall that at one time the sale of alcohol was illegal in the United States. This was done by amending our Constitution (18th). Alcohol was later legalized by again amending our Constitution (21st). Imagine, our constitution has been amended 27 times and two of those amendments deal with the sale of alcohol. As part of the repeal process each state was given the right to regulate the sale of alcohol, the licensing of the sale of alcohol, the taxation of alcohol, etc. within that state. This was done because it was the only way the repeal amendment (21st) would receive enough support from the states to be ratified. The sale of alcoholic beverages is not a right, it is a highly regulated privilege. It’s regulation is the result of constitutional law – not local regulation. Local wants and needs are not at issue. If, however, the Constitution is to be again amended to invalidate section 2 of the… Read more »
Warren Thayer
14 years 11 months ago

This is one of those cases where educating consumers in an effort to bring them to your side would be beneficial. In fact, the more consumer education going on in the wine industry, the better. Sales are held back as much by ignorance of varieties and what wine goes with what food, as much as anything else. Lack of brand loyalty (shoppers know little about what differentiates one brand from another) has been a terrific driver for private label in this category.

David Zahn
14 years 11 months ago
John has hit upon a topic that is near and dear to my own interests – being able to “stumble” upon a product carried by a particular retailer in my travels that is unique or not commonly found in my own “home market” (taking it out of the wine category for the moment) and wanting to be able to order, have shipped, and enjoy that product “from afar.” I agree with John that being able to enlist the help and support of others who are also impacted by the convoluted and inefficient system of regulations, requirements, restrictions, etc. makes terrific sense and can only serve to unify and support the effort with a roar instead of a whisper. Given this category or product line, it was my impression that “liquor laws” and fighting underage drinking were being used, at least in part, as the reasons to not ship to addresses (out of state or otherwise)…but I believe that by requiring an adult signature to accept the product, that it is not a “real” issue anyway.… Read more »

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