Decanter World Wine AwardsWashington ends liquor monopoly
- Monday 4 June 2012
Caleb Foster: ‘This is modernisation'
When Prohibition ended in 1933 a handful of state governments elected to control alcoholic beverage sales, but consumers have been gradually trying to change the system.
Washington State allows privately-owned wine shops but controls the sale of spirits. Now, after the Supreme Court voted to uphold I-1183, the ground-breaking legislation allowing private sales of spirits in stores of more than 10,000 square feet (930 square metres), the alcohol retail landscape will look very different.
I-1183 and was pushed through largely by retail giant Costco, and it will be hugely beneficial to it and other large retailers as it will allow the chain to sell spirits, while smaller stores will not have the same opportunity.
Wine shelf space is likely to be affected, depending on whether a store can or can’t carry spirits.
‘Unless another category gives up space it stands to reason that wine’s share of space will shrink as liquor is introduced to the shelves,’ said Annette Stadelman, northwest regional manager at the Hess Collection, which owns both California and imported wine brands.
Many key players in the US wine business are equally concerned. The worry is that large retailers in Washington will cut back on boutique wines in order to focus on major producers who can support large-scale sales goals.
At the same time, smaller stores are considered likely to specialise even more in terms of their local wine selection.
‘The addition of spirits may shift some focus and space from wine for some retailers,’ said Francesca Schuler, chief marketing officer of major California-based chain Bevmo!, which is slated to open a handful of stores in Washington.
But both BevMo! and large drinks chain Total Wine & More seem positive about the greater wine selection likely to be available and how new offerings aren’t likely to hurt local producers.
David Trone, president and co-owner of Total Wine & More, said Washington wine consumers have already shown interest in California so the continued sales of the category may not be detrimental to Washington wine sales.
He added that privatising the market may actually support increased sales of some of Washington’s super-premium and higher-priced wines, from regions like Red Mountain and Walla Walla. He also said that the transition may also help to bring a wider selection of imported wine to the market.
Some Washington producers are also comfortable with the situation. ‘This is modernisation,’ said Caleb Foster, one of the owners of Buty Winery: only the producers without long-term sales strategies would be hurt by this change, he said.
He added that this transition will also allow wine shops to carry the wines they truly want to and allow them to offer categories, such as jug wine, of which Washington State hasn’t historically been a strong supplier.
Have your say!
Santo Roman
June 07 06:29
To Dale:
First off, Dale and I have a few things in common, he worked for the same auction house as I did in NYC plus we are both in the industry still. I on one hand live in WA state and own my own store. The major flaw we have in this new law that came about is that there are more taxes being added to the distributors which the State of WA was just adding to the price before.
There has actually been less product on the shelves as larger distributors are now selling only to people who will buy large amounts at one time. Overall there has been a 20.5% tax added to each transaction as before the state was eating this. Total wine and Bevmo will be selling the barefoot and cheaper lines in their stores but will also be killing the market and taking away business from the smaller retailers who focus on quality wines rather than just volume.
The funny thing is right now is most people who voted for the bill are not now regretting it and buying booze in Oregon where it is tax free. The seattle times just wrote up two articles in one day on how people are fed-up and want the state back. This bill was written for Costco and backed by Costco. There is only one or two people who will win in this case...Costco and bog box stores. The consumer will lose and has already seen the affected area with lack of product and no selection.
Dale Dorsey
June 05 13:23
I manage wine & spirit stores in NYC, where most stores are shoe box footprints and still have selections representing the world of wine & spirits. I wholly disagree that there will be less selection available in Washington's small wine stores even if some of the stores trade some wine selections for spirits due to the fact most retailers DO NOT sell all their skus. Look at any retailers stock of old wine on their shelves and you will find proof positive. Total Wine and Bev Mo have the same issues, and in many of their stores their broad selection begins shrinking 3-5 years into its opening.
Also, given most consumers won't spend a second in their life gaining any information about wine and spirits, nor place their trust in a knowledgeable retailer's hands (because they generally have poor retail experience) most consumers buy generally-insipid big-brand products and don't require a big selection from which to choose.
Thus, every store I have worked and/or shopped in has product they don't move/sell and consumers, obviously, don't buy. They would all run better businesses by carrying less and saving money in inventory investment that they could then use to educate their customers. An educated consumer base will buy a broader base of products; then even cavernous stores like Total Wine and Bev Mo won't have to be selling Barefoot and Yellow Tail at cost to attract customers. Perhaps they could even eliminate brands like these because they actually care about their customers drinking a better quality of product? My utopia - it'll never happen!