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07 May 2006

Welcome to Costconia

Editor's note: This is part of the weekend series of posts by guest authors, who are fellow bloggers, wine industry folk and Basic Juice readers. If you are interested in being a guest author on Basic Juice, contact me with a proposal, and we'll see if we can't introduce the world to your handiwork.)

Guest Author: Jameson of Le Wine Blog

Costcocard Welcome to Costconia

As a monumentally biased person who toils as a sales rep for a local wine distributor in the Georgetown neighborhood of Seattle, I can tell you two things:

1) You can set your watch to me being at
Smarty Pants Friday afternoons, drinking a PBR and eating a Ms. Piggy.  (Mmm…beer and hog fat.)

2) There is a lot of talk about
Costco and its successful lawsuit to eliminate a cornerstone policy of the wine distribution system in Washington, commonly referred to as the “three-tier” system.  In a nutshell, wineries sell to distributors who sell it to retailers.  (Washington wines excluded, natch!)  There are numerous other policies related to pricing.

Costco says that by ditching these policies, wine will be cheaper to consumers by eliminating the middle, uh, person.  Yeah, but then Costco, with its incredible buying power, will further consolidate the market.  (It’s already a nightmare; go into most grocery stores and they are probably 90% dominated by three companies at the most.)  But what wines will they order?  Chateau Clown Juice?  How would the selection be?  I think there will still be wineries that have limited production, or are so esoteric that Costco will not want to deal with them.  There will be a need for local distributors to seek out these wines and give them the attention they deserve.  And would wine still be cheaper without distributors?  Chateau CJ will have to add a lot more people and resources now that they do not have a distributor doing a chunk of the heavy lifting.  That costs $$$.

Hey, the current system is warped.  It’s like convoluted wine socialism run by petty-tyrant bureaucrats.  Most importantly: I can’t buy bourbon at a grocery store!!!  Certainly there is a lot of nudge-nudge, wink-wink going on behind the scenes, making a mockery of the idea that everyone from Le Boutique Wine Shop to the Megalomart are all on a level playing field.  It’s not going to stop me, however, from having my friend with a Costco card pose as my life partner to get me cheap tires.

Costco? Pricing? Tires?  Did I mention the
Sherman Anti-Trust Act?

Beau is never going to let me guest again. 

Wait, I did just drink a
2002 Baumard Savennieres Clos du Papillon.  This wine rolls up and smokes any domestic white.  It has an incredible natural richness to start and sizzling acidity to finish; this is a wine as complex and fascinating as any big, brooding red.  Hooray for Chenin Blanc!  Criminally underappreciated and therefore, thankfully, somewhat reasonably priced.  How does Rombauer Chardonnay cost more than the Baumard?!?  Get outta town!

And one more thing about Georgetown: BEST NEON SIGN EVER!!!  Makes me want to celebrate with a sparkling Vouvray.


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About the distributors: I am not 100% up to date on the Costco ordeal, but, I am a citizen of the (sometimes not-so) great state of Indiana, and we've recently had a whole slew of issues with state legislation and wine distribution. First of all, Indiana has a fledgling wine industry, and the distributors wanted to stop shipping of wine directly to customers and yadda-yadda, but they also were lobbying the legislators with their mondo cash and being real sneaky saying things like "if we allow shipping, little kiddies under 21 will get wine" causing certain other citizens to get up in arms and think that wineries are trying to give wine to their children. In short, the legislation that would've been the worst for Indiana wineries (not to mention those of us who'd like to be able to order from out-of-state wineries) was killed in the state senate. A month later an amendment to a completely unrelated bill was added by the distrubitors cronies in the state house which stipulated that Indiana wineries could ship to homes, but with the limitation that (a) only in-state shipping is allowed, (b) the customer has to have visited the winery and sign a form, (c) the winery has to add a large fee for shipping. And this bill is, most likely, only temporary.


Your looking at the wrong people. This has nothing to do with corporate structure and the like. This is a consumer based problem; its called Lazy Palate and most people have it. Fix Lazy Palate and raise awareness and we will have success. Unfortunately that will never happen (because Lazy Palate is an easily accepted lived with disease) and we over here in the minority will continually be reduced to our mud slinging hippie banter which is often percieved as knee jerk revolutionary liberalism. Change palates = change wines, smarter people = smarter wines. Never gonna happen though. Rock on Costco, keep on keepin're Execs will be able to afford to shop at the boutiques without us 'proletariat' bothering you.


"(It’s already a nightmare; go into most grocery stores and they are probably 90% dominated by three companies at the most.) "

This misses the point, most grocery stores are dominated by a single DISTRIBUTOR (usually Southern W&S). This is really the problem, not the suppliers.

"And would wine still be cheaper without distributors? Chateau CJ will have to add a lot more people and resources now that they do not have a distributor doing a chunk of the heavy lifting"

Costco's wouldn't eliminate distributors, that's not the point of the lawsuit. It would (among other things) give some producers the option to sell directly to Costco (or other large retailers) while still using distributors as necessary. As for producers adding people and resources to self-distribute, that sounds like a good thing to me (more jobs created), as many California wineries currently self-distribute quite successfully in California.




Good food (or drink) for thought! I just read that Washington is appealing the ruling (what a shocker!) so we'll see how that plays out.


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