The wine business

I much prefer to learn about wine as a wonderful and ancient and delicious drink than as the business that it also is. But the money-and-invoices, shipping-and-licensing business of getting a glass of wine to the table is just about as important as the more, shall we say, "pillowy" work of sunshine, grapes, barrels, and fermenting sur lie.

I work retail. I'm the last person who handles your wine before you take it home and pop the cork. It is wheeled in to me in cases of 12 bottles by delivery guys in trucks, who leave the cases in a corner and hand me the invoices to sign. I receive the delivery into our computer inventory, and file the invoice in a folder to be paid within 30 days. Old, paid-off invoices are kept in a separate binder, to be shown to liquor license inspectors any time they drop in.

The delivery guys picked up the wine from the warehouse of the wholesale distributor, whichever it was: Southern, Metro, Heritage, Maverick, Pure Wine Company. The wholesale distributors got it from ... well, from the actual wineries, I suppose. Here is where a fog settles in (probably a lovely, whirly purplish one). I don't think there is a fourth player in the vineyard-to-wholesaler-to-retailer chain that brings wine to you. Still, how the wholesalers choose what wineries to buy from, who tastes what and says "This is terrific, let's offer it to our retail accounts," is a mystery to me.

This three-player wine delivery system nevertheless seems pretty efficient. The trouble is that it leaves very little room for you, the wine drinker, to see what else exists apart from what you have been offered at retail. Just as, when I go to Target to buy clothes, I am choosing from the relative handful of choices that Target has chosen for me, so when I shop for wine I am choosing from the relative handful of choices that the retailer and his wholesale supplier have chosen to present to me.

As consumers we don't seem to complain about this situation too much when it comes to clothes or shoes or things. Isaac Mizrahi has had an inkling, and gets a few of his designs into Target for us, as Martha Stewart put a few of her paint color choices, I think it was, onto K-Mart's shelves at one time. I respect these two: here are two creative people trying to reach us, not because we, the ordinary, need exposure to their greatness, but simply on the understanding that we the ordinary might like access to sources of creativity that are normally out of reach.

So, efficient though it is, practiced oenophiles decry the standard three-tiered merchandising system as outrageous. As I read about it, I begin to grasp their point of view. They are thinking like Isaac Mizrahi: they want you to have more access to the creative source. And wine is not like clothes or paint. Not that it's somehow nobler. Simply practically speaking, it comes in smaller quantities and is consumed quickly, and there is so very much more of it in the world than there is either clothing or different colors of paint. How can we find out what the wholesalers have rejected on our behalf? Even if we don't necessarily plan to spend small fortunes on, say, grand and unreachable French wines, perhaps they have rejected fine little offerings from Texas or Virginia that might have been enjoyable. What do we do?

Given the morass of liquor laws tangling up all the fifty states, the answer seems to be, not much. If you travel, you can buy wine at a winery and haul it back in the trunk of your car -- maybe. Check your state's liquor laws; bringing booze into the state might be illegal. You can buy wine at a retail shop and have that shipped to your home -- maybe. Check your state's liquor laws (or the retail clerk will for you); it might be illegal. If you are flying home with a wine purchase, you may be able to ship it cargo, if that is legal. Of course you cannot bring it on board. It's a liquid.

There's always the Internet. I was thinking, myself, of just dipping one inexperienced toe into the on-line wine buying business, which would seem to open up all sorts of interesting possibilities in the exploration of the beverage. Then I found out: no can do. I live in Illinois. It's illegal, or will be in ten more days.

As of June 1, it will be against the law for Illinois residents to buy and have shipped to them wine from out-of-state merchants. Wineries are a different matter. If you belong to a California winery's wine club, for example, you can still get your deliveries. But if you would like a case of that delightful red blend mailed from that hole-in-the-wall shop you discovered in Saugatuck, or the Bronx for all I know, so sorry. Against the law. If, like me, you explore Internet wine sales and find an interesting wine that comes from a non-Illinois retailer, not a producer, again, so sorry. You can't try that. Against the law.

Why on earth? Morals? No indeed, instead it seems, money. Wholesale liquor distributors in Illinois contributed a total of $627,000 in campaign contributions to two major sponsors of the new law and to Governor Rod Blagojevich, who has received over $500,000 from them in total, and $50,000 since he signed the bill into law in October of 2007. Illinois wholesalers evidently prefer that that hole-in-the-wall shop in Saugatuck not get your business. The same goes for that supplier you might have found on-line. Their selections interest you, and seem reasonably priced? Too bad. There is plenty of wine in stores in Illinois, chosen for Illinois retailers by Illinois wholesale distributors. Just be happy, and buy your wine here.

Economists call the wholesalers' behavior "rent-seeking," a term which has nothing to do with paying the rent, precisely, but describes instead a small group's ability to get its way through actions whose consequences ("costs") are so spread out among the rest of the population ("the market") that they become negligible, and so prompt no reaction. We complain about special interests and lobbying, and think it all mysterious and corrupt. But there is a reason why it works.

We'll see how long this works. According to what I have read, Illinois' new law is flat-out unconstitutional. It violates the Constitution's Commerce clause, about which the U.S. Supreme Court ruled in 2005, "States may not enact laws which burden out-of-state producers or shippers simply to give a competitive advantage to in-state businesses." What the law, and the wholesale distributors of Illinois, do have on their side is time and indifference. I doubt there are many wine drinkers in the state whose blood will boil when they can't make Internet wine purchases anymore. I doubt they will react in force, quickly.

A third thing the rent-seekers have on their side is the very variety of the product that they do choose and present to us. Although the wholesalers are the villain of the piece in an ongoing, direct-shipping controversy roiling the wine world well beyond Illinois, I have to salute their spokesman, the chairman of the Wine & Spirit Wholesalers of America, for saying something pithy and funny:

"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!"

Arrogant, contemptuous -- would he speak like that about the Consumer who wants frou-frou Scotch, or beer brewed by Croatian virgins? -- but at least somewhat to the point. Yes, having given us choices, don't flip us off when we want more choices; but then, it is hard to imagine living long enough to sample all the wines available in the state's retail stores now. I don't enjoy having blinkers put on me by pay-to-play politicians who probably say "rize-ling," but, at least arithmetically, Mr. Chairman has the tail end of an idea. The distributors do show us far more than we could ever have found ourselves. A wine-life without them would be unimaginably impoverished.

Perhaps at this point a true Pollyanna would comment that, if the wholesale distributors are this concerned about protecting their end -- their bloated middle -- of the business, maybe that's a good sign in the long run. Taking action to forestall competition and choice must mean that competition and choice are out there. That means people are spending money on wine, and hunting for it in new and independent and threatening ways. In the long run, and if they stick to their pursuits not to mention the Commerce Clause, it should all prove good, I hope, for everyone's business.

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