Comments on: Fluid Dynamics: Washington Wine & Spirits Update

By: Mary Swindell

Mary Swindell — Thu, 06 Sep 2012 14:58:33 +0000

I own The Wine Shop in Smokey Point, WA and I used to spend a lot of money with each of the two big distributors who are now charging me more per bottle than before ($1-$3)…well unless I buy 10 cases …so now I only buy from the smaller distributors who want my business….funny how that works out. PS: There is a Costco in my shopping center and I will celebrate 4 years in October.

By: Richard Leland

Richard Leland — Wed, 29 Aug 2012 17:53:46 +0000

Dave – In the rest of the country those are called quantity discounts. In the example you cite, the front line price of the Columbia Crest Grand Estates is $116.28 per case (9.69/bottle), and then there’s a $30/case discount on a 3 case purchase and a $45/case discount on a 10 case purchase. That’s pretty standard stuff for most big brands. Good for the big box stores, terrible for small independent retailers.

By: Dave Hall

Dave Hall — Wed, 29 Aug 2012 05:38:07 +0000

(Responding to Richard below) – Nope. Example, the wholesale cost for Columbia Crest Grand Estates used to be $7.19 per bottle, for any quantity. Now, if purchasing less than 3 cases, it’s $9.69 per bottle. If you buy 10 cases, it gets down to around $6.00 per bottle, which is why Total Wine can retail it for $7.27.

By: Mike Veseth

Mike Veseth — Wed, 29 Aug 2012 00:24:30 +0000

A Washington winemaker writes …
“Nice article, Mike. The only thing I would add is that after the stores were allowed to add liquor (actually before they were actually “allowed” in many circumstances) they slowed way down on the wine buying in order to free up money for spirits. Stores like Pete’s that don’t carry spirits didn’t change, but for two or three months we were hurt quite a bit by slowdown in buying and placements. That seems to have picked back up but I’m not sure if it will catch back up on the couple of months of down sales. Hard to say as the volumes change year-to-year anyway..”

By: Paul Beveridge

Paul Beveridge — Tue, 28 Aug 2012 23:05:38 +0000

Hey Mike, I thought you didn’t cover state issues? How about an analysis of whether the availability of 30 day credit terms would help or hurt WA wineries and WA wine consumers? That’s the next big issue here and we need an economist to explain the pros and cons.

Paul

http://wilridgewinery.com/signatures/wilridge-signature.jpg

Paul Beveridge – Winemaker, Tapenade, Inc. dba Wilridge Winery 1416 34th Avenue, Seattle, WA 98122 | paul@wilridgewinery.com Winery: 206-325-3051 | Vineyard: 509-966-0686 | Facsimile: 206-322-1110 | Mobile: 206-850-2098

By: Mike Veseth

Mike Veseth — Tue, 28 Aug 2012 21:30:58 +0000

Agreed.

By: Richard

Richard — Tue, 28 Aug 2012 21:06:34 +0000

It amounts to the same thing, but I’d be willing to bet that the $2.50 isn’t a really “broken case charge”, but instead a $30.00/case discount on 3+ cases that he’s not taking advantage of.

By: Mike Veseth

Mike Veseth — Tue, 28 Aug 2012 20:55:37 +0000

That’s the highest broken case premium I have heard about, Dave. Incredible!

By: Dave Hall

Dave Hall — Tue, 28 Aug 2012 20:47:16 +0000

The “broken case premium” is really hurting small stores. One large distributor is charging only 40¢ per bottle extra, but the largest distributor is charging $2.50 per bottle extra unless you order THREE cases of a given wine. So at this point, I have no more Columbia Crest, Ste. Michelle, or Hogue in my store. I’m ordering more from some smaller distributors who are not charging extra, but much of what they have is too pricey for this neighborhood.

By: PaulG

PaulG — Tue, 28 Aug 2012 17:06:30 +0000

Mike, I agree it is way too soon to make any real assessments. I am told by some distributors that choices are shrinking, and most of the supermarkets I have visited seem to have returned to the bad old days of stocking just the most cheap and cheerful plonk. But what should happen, along with the vast selections offered by BevMo, Total Wine, etc., is that niche retailers (and distributors) will see a market opportunity. This will play out especially with spirits, such as amaros, where there is certainly some demand and little or no current supply. As for wines, let’s not forget that Washington consumers can purchase virtually any wine they want from the West Coast online.