Friday, July 23, 2010

Family Wineries Respond to Mega-Distributor Arguments about Initiative 1100

Giant beer distributors have been circulating ugly and false rumors about the impact of Initiative 1100 on small wineries. The following red rebuttals respond to the mega-distributor arguments:

When liquor goes private via 1100, wineries that are small will get squished like bugs.

No, we will nimbly step out of the way as we always have. Small wineries will rarely be successful competing directly with the big boys. With 1100, we will be free to compete in many new ways and win the way we always have, by being local and providing better, more interesting products, service and convenience.

Distributors will be beholden to large spirit companies that sell wine and spirits. Say Gallo, Diageo and constellation.

The Washington State Beer and Wine Wholesalers Association is dominated by huge out of state distributors. Small wineries do not operate on the same level as larger spirit companies or giant distributors. Small to medium size distributors and wineries (and breweries and distilleries) will gain many competitive advantages due to the freedom and increased market offered by 1100.

The big local players will have money to buy the wine lists and cut exclusive deals.

Not if it results in any real damage (exclusion). These sorts of hard-core business practices are already illegal under other state and federal laws (e.g. the antitrust laws). And who cares if national mega-restaurant chains make exclusive deals with commodity wine producers? That’s not where small wineries sell their products anyhow. Small restaurants and retailers will benefit from the freedom to compete provided by 1100, which means there will be more places to sell Washington wine.

The shelf space in stores for wine will decrease as liquor will take 25 percent of the space.

Only at stores with poor selection that are willing to lose wine consumers as customers. Under 1100, demand for wine will increase because wine will be less expensive due to removal of unnecessary economic regulation (law of supply and demand) more than making up for any potential loss due to spirits becoming more convenient.

The selection of wine will decline as grocery stores buy from a central warehouse in full cases and the pack out means less selection.

Maybe for some commodity wines, but no way for small wineries. When Alberta privatized it’s provincial liquor stores, selection quadrupled throughout the province. Free market forces maximize selection. The existing regulations greatly limit selection.

Fly down to southern California and take a look.

Southern California is a relative fine wine desert for a number of reasons, none of which have to do with California’s liquor laws. We prefer to look at northern California where the same free market laws apply and wine flourishes along with great small restaurants and small retail shops. The customer base for small Washington wineries is much more sophisticated than the customer base in southern California and will continue to demand more and better wines than do Hollywood starlets. The biggest reason we support 1100 is that it will be great for wine consumers (price and selection will improve) and small wineries always win when they put their customers ahead of narrow special interests.

Deregulation squeezes small players. That’s why in London all the pubs have the same beer selection, they are paid by brewers.

You go to the wrong pubs. London is full of great pubs with great beer selections, just like France. Spain, Italy, and other free nations are full of great wineries, wine shops and restaurants. Plus, tied houses will remain illegal under federal law. 1100 is not going to get rid of vapid sports bars where brainwashed soccer louts swill the most heavily advertised national yellow beers. But 1100 will make it easier for good pubs and restaurants in Washington state to sell more wine and stay in business. Deregulation frees small players to compete with all their skills and inherent advantages of size while enlarging the overall wine market for everyone. Let’s give Washington state the perfect legal climate for wine!

Protect your family winery and check this out.

Embrace freedom and promote the common good over special interests by voting yes on 1100 (and no on 1105).

Your friend Dan from a mega-distributor

Your friends of small wineries and the public at Family Wineries of Washington State

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