Friday, June 18, 2010

Response to the WWI on Initiative 1100

First and foremost, Initiative 1100 will repeal outdated laws that don’t pertain to any other industry. Here in Washington, forestry, aeronautics, software, and even other agricultural products thrive without such “protections” from competition.

  • Being able to sell wine on credit is a good thing. There is a reason why every other consumer good in this state is sold on the credit principle. A reputable retailer or restaurant isn’t going to default on its credit otherwise it will lose out on all of the other business credit that it uses. A questionable retailer or restaurant doesn’t have the bargaining power to not pay on delivery. Having credit as an option gives more opportunity for a wine seller to increase their output as there will be more capital available for retailers to buy wine. The availability of credit also allows for more efficient billing and delivery, i.e. no waiting for a check unless you want to. Furthermore, allowing wineries to extend credit to customers other than wholesalers will allow those wineries to tap the equity in their inventories as a credit facility without having to go through a bank.


  • Being able to make volume discounts is a good thing. Many companies operate on this principle because it increases their volume of sales as well as cutting other marginal costs like transportation. Wineries often give a case discount to their wine club customers to encourage larger sales. They should be able to do the same with retailers and sell more wine to them. This is based on the law of supply and demand.

  • Retailers can’t run an advertisement and send a winery a bill for the cost under the initiative. What Initiative 1100 does is give producers more of an ability to advertise if they want to.

  • Printing menus is just a cost of doing business that already exists. If the restaurant pays the cost, they increase the price of the wines on their list to compensate. If the winery pays the cost, it increases the cost of its wine to compensate, and in turn the restaurant increases the cost of its services to compensate. In the end it comes out the same. A winery should be allowed to help retailers with menus if they want to.

  • Providing branded promotional items is currently legal in all other industries and how often does it happen? The wineries just fought for and received the right to provide such items to their wholesale customers. Retailers don’t have the power to make ridiculous demands on wine makers anymore than they do in any other industry. A winery should be allowed to provide a promotional item to a retailer if they want to.

The bottom line is that removing these restrictions will only help to give the Washington wine industry more options and opportunities to make money, get our wine out to more people, increase the demand for wine, and innovate. How much benefit do you derive from these so called “protections” and how many great ideas do you have to give up on every year because you are not allowed to give “anything of monetary value” to your customers?

The examples that the WWI provides are blown out of proportion to create an atmosphere of unreasonable fear. 1100 offers us the best opportunity to fix the wine laws in Washington State and take control of our own business destiny. We should embrace the future and support I-1100!

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