The 3-tier scam | Unsorted comments | -- Your State. Your News.

Jul 06th
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The 3-tier scam

MsGold406, You work for a NJ wholesaler, right? You say we'll return to the era of "The Untouchables". Where's your evidence? Thirty-five states allow consumers to purchase direct. None of them have put in a call for Elliot Ness. There's no evidence of increased crime. I'm surprised you didn't scream about underage drinking. That's another myth you 3-tier guys push. FedEx, UPS, etc., will not deliver wine to anyone who can't produce a photo ID proving they're over 21. Shippers are strict about this because of legal liability. Where's the evidence teenagers can buy wine interstate on the internet? Nothing reveals you wholesalers' attitude like your comment, " What makes the consumer so special that he/she can just bypass all of these laws?" First of all, the consumer is so special because he/she IS the consumer. I bet you're a "free market" conservative....until your monopoly is affected. Second, consumers aren't "bypassing" laws, they're changing them. This is called democracy. New Jersey retailers will not be harmed by this law. If they stock the wine, a consumer will always find it easier to buy it at the retailer. But wholesalers stock the products of very few small wineries because the wholesalers are only interested in high-volume wines. High-volume wineries provide advertising and in-store promotions which do the wholesalers' selling for them. For the consumer, those hundreds of small wineries, which wholesalers won't buy from, produce the best wines (and best values) in any given varietal. These family wineries can afford to sell directly to consumers at the same price they'd pay at a retailer. The family wineries CAN'T afford to sell through a wholesaler system which ends up costing them half the retail price. More often than not, the wholesaler won't carry them, anyway. The result: wholesalers win by depriving consumers of choice, family wineries of sales, and all New Jersey of needed tax revenue. Almost every small winery (under 500,000 bottles a year) in California, Washington, Oregon and, yes, New Jersey is moving away from the wholesaler system because it's no longer affordable and it restricts the number of customers they can attract. In the last few years, wholesalers spent $6 billion lobbying legislators, hoping to maintain their monopolies by depriving the public of choice. More and more legislators are giving up the wholesaler gravy train and listening to their constituents. Sorry, MSGold406, the wholesaler racket is dying all over the country.

Comments (1)
1 Saturday, 13 March 2010 11:44
Actually, NJ has one of THE BEST and most consumer friendly systems of wine distribution in the country. Just compare the pricing and selection here to anywhere in the US. Most times NJ retailers beat their out of state competitors in both categories. And no, I do not work for a Wholesaler. Its easy to check, just go on a meta site like

It is hysterical that you use this argument in a state that has SO MANY small, family owned and operated wineries offered from so many great wholesalers that specialize in just this thing. Go look at the portfolios of T. Edwards, Michael Skurnik, David Bowler, or Martin Scott or even Winebow (and these are just a few of the MANY small wholesalers in NJ) before you make these ridiculous claims. Really, doing a little bit of research on the market you live in would have been a lot more effective in rebutting his arguments than your apoplectic screed.

Most wineries seem to be moving towards mailing lists because they can make more money that way, and that is fine. But to claim that this process is going to help consumers find these wines is, quite frankly, a little unrealistic. Wine lists are a great way to get some of these wines, but they have their own share of problems. As for the tax dollars direct shipping generates, I don't quite buy it. The states that have seen that benefit were, to my knowledge, states like Tennessee, which had extremely restrictive laws paired with a VERY Limited selection of wines and not very aggressive pricing. None of that applies to NJ.

As for "Lack of Evidence" your comments about the evils of the three tiered system are about as hyperbolic as the person you are criticizing, and you show no facts to support your claim that "Almost every small winery (under 500,000 bottles a year) in California, Washington, Oregon and, yes, New Jersey is moving away from the wholesaler system because it's no longer affordable and it restricts the number of customers they can attract." Really? Almost every one? Wineries like Frank Family? Like Robert Sinsky? Like Neal Family? Like Ken Wright in Oregon? Like Larkin? like Jaffurs? Like Mauritson? Like Pride? Like Sea Smoke? I can go on if you like.

Also your claims about those wines being the "Best Wines (and best values)" for the consumer is laughable. You yourself say that these wineries are changing to direct shipping so they can charge full retail. How is that good value for the consumer? Many wineries have winery only offerings, but they tend towards the obscure varietals that the winery can't or wont plant in quantity. Also, the wholesaler system is basically designed to get the most wine to the most people in a cost effective manner. It is one of the things that the system does quite well. Are the Wholesalers lobbying to protect their system? Sure thing. Wouldn't you if you were them? They have built a huge infrastructure designed for the industry they are in and spend a lot of money making it work for most people.

In short, acting like the 3 tier system is the most evil thing ever is pretty daft. Calling the three tier system a "Scam" and a "Racket" is just silly, and it really undermines your argument. If it was such a bad thing then why do NJ consumers have one of the largest selections and the best prices in the country? Is it a perfect system? No. Is changing the laws on Direct shipping going to kill it? No. Is changing the Direct shipping laws going to be a huge boon to NJ's tax coffers? No. Is changing those laws going to be a huge boon to consumers in NJ? Also no.

Really you would be better off doing some research on this state, its situation in regards to wine sales rather than use arguments that don't really apply here. In some states Direct shipping is the ONLY way for consumers to get great wines. But often its not even from the Wineries, but from retailers in other states that ship to them!

Next time, ditch the hyperbole and lay out your case, both pro's and con's so people can judge it on the merits. This applies to both of you.

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