FREE THE GRAPES

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Roy Hersh
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FREE THE GRAPES

Post by Roy Hersh »

May 20, 2008

This month we report on big wins in Florida and Georgia, update Massachusetts litigation, and provide some much needed clarification from the wholesalers about all of you complaining consumers.

LEGISLATIVE UPDATES
Most of the details on bills is provided courtesy of Wine Institute.

Florida – No Bills Mean Win for Consumers, Wineries
Florida's 2008 legislative session concluded earlier this month without passing one of the four discriminatory bills that were introduced. No action is a victory for Florida's wine lovers, allowing you to continue purchasing and receiving wines directly from wineries.

As previously reported, four Florida legislators introduced separate bills that included discriminatory caps, preventing wineries producing more than 100,000 cases from continuing to ship directly to consumers. This is the third year in a row that “cap” provisions have been introduced in the state legislature, and defeated. Expect 2009 to make it four-in-a-row.

Thanks to all of you who sent more than 2,600 letters in opposition to these bills to Florida legislators through http://www.freethegrapes.org.

Georgia – Permit Bill Replaces Convoluted Law
House Bill 1061 was signed by Governor Perdue this month and replaces the complicated direct shipment law with a more standard permit bill effective July 1, 2008. Wineries may purchase a $50 annual “special order shipper’s permit.” Among other provisions, the volume limit will increase from five cases per household to 12 cases per person per year, consumers may participate in wine clubs, and wineries with in-state distributor representation may apply for a permit. Congratulations to the GA legislature for simplifying laws that will expand consumer choice.

Ohio – Amendments to Cap Sought
Some legislators continue to push for language in Senate Bill 150, an omnibus alcohol bill, to increase the state’s discriminatory cap provision. The language would ban winery-to-consumer shipments from wineries or wine companies producing in aggregate more than 250,000 gallons, rather than 150,000 gallons which is current law. The effect would be virtually meaningless – either way, these caps reduce consumer choice, penalize wineries for success and are being challenged in court.

LITIGATION UPDATE

Massachusetts – Judge Denies State’s Motion to Dismiss
Judge Zobel threw out the State’s motion to dismiss on May 16 (the third anniversary of the U.S. Supreme Court ruling in Granholm v. Heald). Oral argument is set for July 29. As background, the Family Winemakers of California, a trade association, is the lead plaintiff in this lawsuit against the State of Massachusetts seeking to overturn the 30,000 gallon production cap. Summary judgment is not expected until fall 2008.

QUOTE OF THE MONTH

Ray Isle, Senior Wine Editor at Food&Wine magazine, writes an informative blog at http://www.foodandwine.com/blogs/tasting-room, and one post last week caught our attention:

“Next time you can't find an interesting but small production wine in your local wine store, you might want to consider these remarks by Jack Goldenberg, Chairman of the Wine & Spirits Wholesalers of America at their 65th Annual Convention:

"The American consumer who’s complaining that he can’t get some obscure frou-frou wine produced and bottled by Croatian virgins is missing the point. The reason he even WANTS that bottle of wine is because of the incredible variety that is already on the shelves! And how did it get there? WE put it there!"

Well! Helpful clarification, there. Perhaps when I get emails from readers wondering why they can't find a specific wine, and can't order it directly from the winery, either, I'll just forward those words along. Yikes.”

________________________________________________________________________


Remarks Delivered
by
Jack Goldenberg
Chairman
Wine & Spirits Wholesalers of America
65th Annual WSWA Convention and Exposition
Las Vegas

A year ago, my wife Linda, Stan Hastings and I went to dinner with Craig and Sally Wolf in Paris. We walked into the Brasserie Alsace, 39 Champs Elysees, and the maitre d’ stuck us in the bar while we waited for our table.

So Craig, the new CEO of WSWA takes one look at the back bar, and says, “Where the heck is the VODKA???”

There was wine from Alsace and Champagne, Burgundy and Bordeaux, there were four kinds of pastis, there was prunelle, Mirabelle, cognac, Calvados – but no vodka!
Well, quelle surprise!

You see, we’ve got something here in America they don’t have in France: an independent wholesale tier! Over there, suppliers sell direct to the trade, so a lot of stuff slips through the cracks…and doesn’t get to the bars…or to retail.

Craig also would have been outraged at the selection of wines available to the average Parisian. Forget about wines from South America and Australia. If you’re in Bordeaux, you can’t get Burgundy – and vice-versa, for that matter. Forget about a decent selection of wines from California. The only wines available in Paris, with any selection ...Quelle surprise….are French.

I’m telling you this because the distribution system for beverage alcohol in the United States of America is the most efficient in the world. I can prove it.

Walk into a licensed outlet anywhere in this country and you will find the largest selection of wines, spirits and beers offered in any comparable outlet anywhere. You will find whiskies from North America, the British Isles, and Asia. You will find brandies from California, Mexico, France, Spain, Italy – and God knows where else. You will find liqueurs and cordials from the South Pacific, for heaven’s sake - anyplace you could imagine. The list of places where people make vodka is a geography class unto itself.

And the wines! Give me a break - every country in the world wants to export wine to America and become the next Italy…or is it Australia, or Chile? The shelves, floors and chilled sections of our customers are completely full of products from around the world.

The American consumer who’s complaining that he can’t get some obscure frou-frou wine produced and bottled by Croatian virgins is missing the point. The reason he even WANTS that bottle of wine is because of the incredible variety that is already on the shelves! And how did it get there? WE put it there!

We have the wealthiest nation in the world. We have the most upscale, mobile population in the world. But the people in Paris, or Rome, and Rio are pretty wealthy and sophisticated also. What do we have that they don’t?

Just look around you. You are surrounded by executives and owners of the most-sophisticated-beverage-distribution-system in the world. The people next to you have invested their whole lives and personal fortunes into the sale of our products….and they’re darn good at it! Each of us has given our business lives to making more and better beverages available to retailers and consumers of this great nation.

The three-tiered system – God, how I hate that phrase - will last only as long as we continue to make it the best and most efficient system in the world, and we should expect nothing more. We are the Wine and Spirits Wholesalers of America! We are the association of the best beverage alcohol distributors in the world. It is high time that we start being proud of who we are. It is high time that we stop making excuses to journalists and legislators and regulators for what we do better than anyone else in the world.

So if we’re already so good, why do we need to band together as an association?

It is through this association that we get to know and to learn from each other. Whenever we are approached to purchase a new product or service, we routinely ask which wholesalers around the country are already customers…and we call them for advice. When faced with a new challenge, whom do we contact but our fellow distributors around the country to see how they have reacted. We also call the WSWA office in Washington to see what the association’s position might be.

Since WSWA moved to Washington 32 years ago, we have become, dollar for dollar, the best lobbying organization in town. We have done that thanks to a Political Action Committee that many of you support to the legal limit. More of you should. We have big issues in Washington and your PAC dollars open all the doors to help resolve those issues to our satisfaction. In this election year, PAC contributions are even more important.

But it’s not just Washington. Future battles will be fought at the state level, and WSWA has added staff to lead us in those fights.

What we’ve got here is an 80/20 thing. Our membership sells 80 per cent of the product but they’re only 20 percent of the distributors. We need to get that other 80 per cent inside the tent. There is strength in numbers.

Now that I’m Chairman of this great association, I need to thank my Dad, Kokie Goldenberg, who filled this office 27 years ago. Andy Eder, Robert Lipman, Don Leebern, Stan Hastings – all you second-generation Chairmen - you know the emotions I’m feeling right now.

To my partner, best friend and wife, Linda, I can only say thank you for more than just your encouragement and support. Thank you for every minute of every day.

To my children, Rachel and Ann, I can think of no higher compliment you could have paid our family and this industry than to become fourth-generation members.

Thank you to all the employees of Quality Wine & Spirits Company who have made it easy for me to take the time to be involved in this association.

And I want to thank all of you for your involvement in WSWA. The more you participate, the bigger the rewards.

Finally, I want to thank the entire staff of WSWA, for making all of us look good.

ETERNAL VIGILANCE IS THE PRICE OF LIBERTY. That was the motto of General Eisenhower’s staff during World War II. And while we may not succeed in liberating Paris the way Ike did—we have already succeeded in making this American system the envy of the world. Quelle surprise!

Thank you.

It is now my pleasure to bring to you a brand-new undertaking here at WSWA. No business organization is doing its job unless it continually acts for the good of the community. And this year we have re-focused our efforts in that area by creating the WSWA Educational Foundation to act as the philanthropic arm of WSWA. We’ll be talking to you more about the foundation’s activities and how you can help in the future, but for now I must say we’re getting it off the ground in pretty spectacular fashion.

A few months ago, at about the same time as the WSWA Educational Foundation was thinking about its first major public activity, a prominent family in our industry was thinking about how to donate some resources to the public good. To make a very long story short, both sides got together to create the award that I’m privileged to be handing out today, which creates a fabulous charitable interest while at the same time honoring one of the most remarkable figures our industry has ever seen.

Sidney Frank leaves behind exactly the legacy we wanted for our new award. He was truly a larger-than-life figure whose vast success in our business was matched only by the largesse he showed to charitable causes around this country. I want to personally thank Sidney’s nephew John Frank and his daughter Kathy Frank Halsted, as well as Sidney Frank Importing President Lee Einsidler, whose generous contribution to the WSWA Educational Foundation made possible the creation of the Sidney Frank Award and the $10,000 donation that will be given to the charity of the winner’s choice.

As for the first winner of the Sidney Frank Award, the choice was almost as obvious as the namesake of the award itself. Even if you are not familiar with the name Michel Roux, most adults in this country are familiar with the work he has done to build some of our industry’s best-known brands. The Absolut Vodka marketing efforts created by Michel in the 80s and 90s are quite simply the standard by which all other advertising campaigns in our business are measured. And speaking of measuring, we now of course know that the name Absolut is worth the better part of 8.9 billion dollars, the sum laid down by Pernod Ricard to purchase the V&S Group portfolio.

Other brands that owe their household-name status to Michel include Stolichnaya, Bombay and Bombay Sapphire, and Grand Marnier. Michel’s philanthropic work sets him apart even further. He has been named “Man of the Year” by charitable organizations too numerous to mention, both here in America and abroad. The causes that owe Michel their thanks include child-abuse prevention, private support for law enforcement and the military, and numerous organizations in support of the state of Israel. The French government has also given him its own highest honor, Chevalier de la Legion d’Honneur.

Ladies and gentleman, accepting the Sidney Frank Award on behalf of Michel Roux, a man who has been with Michel through 14 years and countless professional milestones, it is my pleasure to introduce Crillon Importers Senior Vice President for Marketing Jim Nikola.
Ambition driven by passion, rather than money, is as strong an elixir as is Port. http://www.fortheloveofport.com
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Bryan Robinson
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Location: San Diego, California, United States of America - USA

Re: FREE THE GRAPES

Post by Bryan Robinson »

Now you are touching on activism that is close to my heart. I’m all for the ‘free the grapes’ campaign. On a similar note, I’m also for boycotting wine.com for the way they are using The Man to drive Mom & Pop shops out of the market.

And while I am outraged, why doesn't my local wine store have wine made by Croatian virgins?
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Roy Hersh
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Re: FREE THE GRAPES

Post by Roy Hersh »

Bryan,

Finally! I could not believe nobody touched this thread. I have been a big mouth and loud voice on this topic, schooled by one of the best ever to gripe about this topic. So much so that Jerry Mead was called, "the Old Curmudgeon" when his normal moniker "Wine Trader" did not fit.

I have commented in many a thread about this very topic (inter/intra-state shipping of wine in the USA) on the Parker/Squires bb over the years and before that on AOL Wine Message Boards way back when.

I wish we could get the topic "hot" here on FTLOP but sadly that has not been the case. C'est dommage.
Ambition driven by passion, rather than money, is as strong an elixir as is Port. http://www.fortheloveofport.com
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