Tuesday, March 26, 2013

Retail wine pricing

It's been a pretty good day. I woke up on time, did the stuff I needed to do around the house, ate a healthy breakfast, and headed out the door to a reasonably productive day at work. Toward the end of the day, I got an email regarding an issue that pisses me off. Retail pricing of wine and how the winery gets involved.

Now, most of the rants online about wine pricing I have ever seen is in regards to restaurants. "They charge too much."  "How come I can buy a bottle at Shop-n-Save for $8 and it's $6 per glass at Applebee's?". "I saw this online for x and they charge 4x for it at Caustalauta Bistro Cafe Wine Bar." You get my point, however this isn't what I'm talking about.

The little glimpse I want to give you is in the scenario that a retail shop buys a case of wine, and puts it online for sale for a profit, but the winery doesn't think they are charging enough.

Yes, you read that correctly.

There are wineries that call me if one of my retail customers is advertising a wine on a nationally-known wine price database at too low of a price. Keep in mind these retailers aren't putting the wine at $0.01 over cost. They are making a modest profit. Sure, it's a bit lower than most of the rest of their wines, but they are still making money.

This issue is that the winery thinks that the price in question "devalues" the wine, and causes them sales problems nation-wide.


What is most likely is that someone at the winery in question has a big ego, and can't handle the fact that a business might use their popular product to draw customers into their store or webspace. This, in turn, elicits the situation where I have to call the store, asking them to raise the price.

This, I assure you my friends, is an uncomfortable call to make. They bought the product. They own it. They are within the boundaries of what the State of Missouri has deemed legitimate pricing. They are making a profit. They are using a popular product to draw attention to other products in their mix (a normal business practice). However, someone in California/France/Italy/Australia/Wherever thinks that they should charge more.

I guess what makes me angry is that the last time I checked, this is America, a free economy. I have also heard over and over again that something "is only worth as much as someone is willing to pay for it."

What gives these suppliers the right to price-fix the cost of your enjoyment at home of a nice bottle of wine?

Before you ask, no, I'm not going to name the winery or the retailer in question. Just realize that there is more going on behind the scenes than you realize when you swipe your debit card for a glass of fermented produce.

((Stepping down from soapbox))

Cheers y'all.

1 comment:

  1. Ah hah.... This argument that america is a free market does not apply to wine. You know that... your business depends on the rules that secure exclusive rights for your company. In actuality, all wine in Missouri is price-fixed... from the supplier side. It's the law, right? Until the sale of alcohol is governed by an identical set of rules for consumers and retailers (this includes restaurants), the free-market argument holds no water. As the distributor, your goal is to moved a fixed-priced product... why do you care what happens to the wine after it leaves your control. Your view is, therefore, colored by this bias. If retailers had the rights to buy wine from anybody and negotiate pricing you might rewrite this post pretty quickly. Cuz who would stop somebody from getting your book and going after every product in it with the goal of undercutting your pricing. It's easy to be on a soapbox when the law works in your favor.

    I love you anyway.