Good Grape Wine Company

September 6 2007

Around the Wine Blogosphere

*UPDATED*

The recent news in Indiana that now allows out of state wineries to ship to consumers is welcome news—both in the ongoing state-by-state wine shipping wrestling match that is occurring, and also for Hoosier consumers, of which I am a card-carrying member.

I am, however, hopeful that wineries will seize the opportunity to ship and not alarm themselves with too many concerns about “Big Brother” legal action.

The Six88 blog, a noted and respected compliance solution serving the wine industry, had this to say in regards to Indiana law and (likely steeped in first hard awareness of how these things have an impact):

This is a very important decision, and many are rightfully celebrating the victory for wineries and consumers. However, a major roadblock to shipping wine into Indiana remains in place. HB 1016 stipulates that “A consumer may not receive more than two hundred sixteen (216) liters of wine in total from one (1) or more direct wine sellers in a calendar year.”

As we’ve discussed before, most wineries will continue to choose not to ship to Indiana consumers because they can’t possibly know if the consumer has already received their 24 case allotment. FedEx and UPS will continue to ship to Indiana, and some wineries will likely assume the risk and ship to Indiana consumers anyway. But the majority of wineries will opt out until the Indiana ABC clarifies their enforcement policies on this matter. Hopefully the Indiana legislature will address this issue directly in the next session.

Here’s the thing:  I hope that most wineries will CHOOSE to ship to Indiana.  In an industry that is so built on “trusting your neighbor,” wineries not shipping seems like a possible outcome based on word of mouth.  But, more importantly, we don’t know to what level the case restrictions are unenforceable.  Trust me when I say that our state gov’t can’t even properly calculate property taxes, the bedrock tax base. Does anybody really think Big Brother has a way of tracking wine shipments from thousands of different wineries to individual purchasers?  And, even if they did have a way to organize and keep track of micro-excise tax payments to individuals do we really think that the state government would be punitive in going after the wineries if a random winery sends the 25 case to a consumer who is likely not in tune with the law himself?  Perhaps if it were an underage sting operation and a phony 18 year old bought 25 cases in a single shot from a producer, but other than that short answer is “no.” In fact, the long answer is “no,” too.

I’m not advocating that anybody break any laws, but what I am saying is that if there are no tools from the state to manage this on the winery side so somebody doesn’t illegally do something they have no intention of doing and if the consumer isn’t going to be held accountable to understand a small piece of a law, then it’s not much of a law to be heeded, or, most importantly, one that can be enforced.

So, I say to all wine producers desiring to ship to Indiana, come one, and come all.  I’d like to buy your wines, particularly if you’re a small “boutique” producer not present by three-tier distribution, which is about 95% of the available wine in the U.S.

UPDATE From Free the Grapes:

For example, Indiana law still includes a provision that limits shipments to 24 cases per individual, rather than a limit on shipments per winery per consumer. The difference, and the problem, is that Winery A is not aware of how many cases Winery B has shipped to a consumer. If Winery A ships one case to that consumer, and it’s the 25th case the consumer has received that year, then Winery A has unknowingly broken Indiana law and could have its federal license revoked. That is a very serious consequence, to say the least.

Sincerely,
Jeremy Benson

I also communicated with Jeff from Six88 about this post yesterday.  Nobody seems to be able to address how a winery would, unknowingly, be caught by accidentally overshipping to a consumer, but the allusion is that regulators may be savvier on shipment tracking than I may want to give them credit for.  The net of it is, this is beer drinking country, I hope for two things:  1) a speedy legislative resolution to this sticky wicket and 2) Wineries will take their chances.  I have to put myself in the top 1% of wine consumers in the state and I can’t fathom buying 24 cases direct, so hopefully other wineries realize how slight the actual risk may be.  Or, perhaps, I should start an Indiana Defense Slush Fund for said wineries in the event they get caught in some example-making crosshairs.

Over at Lenndevours, Lenn hits on a topic that I’ve given some thought to, as well.  He notes that boutique is an incredibly nebulous word with little inherent meaning and he asks questions around the word “boutique” in usage.  Is “boutique” a winery that only produces a certain amount of cases a year?

When I was at Mondavi a couple of weeks ago the tour leader was asked how much wine Mondavi makes, and the answer was “Oh, we’re pretty small, about 300K or so.  We’re not one of the big guys like Kendall-Jackson.” Well, if you’re a consumer and not in tune with case production sizes from American wineries, that’s a perfectly reasonable answer to you, until the day somebody taps you on the shoulder and asks you try a wine from a “boutique producer that makes 500 cases of wine.”

I wonder if we haven’t reached the point in time where a simple label metric isn’t useful for consumer decision-making. 

Does it make sense to classify wine, not legally, or by appellation, or in the vinification sense, but from a marketing perspective into pre-defined buckets?  This could be on the back label of a bottle of wine, in a small, tasteful manner and would certainly provide more value to consumer making a relatively uninformed decision on a bottle of wine at a $12.99 or above price point.  Something like:

Micro Winery:  1 – 1000 cases
Boutique: 1001 – 10,000 cases
Artisan Producer: 10,001 – 15,000 cases
Mid-Tier Producer: 15,001 – 50,000 cases
Large Producer: 50,001 - Above

This wouldn’t be executed by the TTB, but more likely by a winery-centric Association.

Unless it’s a sales point and a winery wants to emphasize their small nature, consumers usually have no idea what production is for a particular wine.  Some people will continue to not care, but for me, if I’m choosing in between two Zinfandels each $15.99 and one only has 1000 case production and the other has 10,000 case production, I’m going to choose the smaller brand.

I think a lot of others would as well.

What do you think?  Would it impact your purchasing behavior if you knew production size?  Please leave a comment.

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