January 12, 2011

"Inherit the Wind" – The REAL interview with Craig Wolf

Finally here is the epic interview and debate about HR 5034, the WSWA’s opinion about direct shipping and wine, and the exposure of an upcoming partnership between Shipcompliant and the WSWA.  Please feel free to comment or post your blog editorial about the content of this interview.  You can find the audio here (both in .wav and .mpg) formats:

Craig Wolf Interview mp3

Craig Wolf Interview .wav

Sorry for the delay but huge thanks to Candace Hermsmeyer (@mrspinotblogger) for her incredibly fast transcription and for back up from our friends @redwhiteboston.

Craig Wolf:     Sounds like it’s working

Paul Mabray:     Yes, Craig, it is, we actually can use technology as well as lead it, so (laughter). But again, uh Craig, thank you very much for giving us this opportunity and like I said, such a pleasure to speak with you. We had a lot of fun with the last video, and thank you for being such a good sport about it.

CW:    Well I’m glad somebody forwarded it to me. You know, it’s funny, I actually was sitting in the office today with Cary Green from Wine America. He hadn’t seen it, so I made sure to point it out to him.

(laughter)

PM:     Yeah, it’s uh, it’s been a fun project for sure. And it was a lot of fun to play with, so. So, um, well I just wanted to say before I actually even get started. You know, despite our predisposition to be proponents of consumer direct and direct sales in general, we really do believe that the three-tier system is an important element of the wine industry. And it’s an essential part of the wine industry. So I want you to understand that that’s also our perspective. You know, it’s not anti-wholesale by any means. It’s, um, synergistic components of one whole ecosphere.

CW: Well, Paul, I appreciate that, and in your little vignette, in your little film, you said that. And I noticed that and I appreciate that, and I think that most wineries recognize that, and that wholesalers are an integral part of the growth of wine in this country, so I appreciate that.

PM: No problem. Well let’s start with the questions that we sent to you. And I really want to start with the first one, which is the main topic, which is: What does HR5034 really mean to you and the WSWA?

CW: Well, you know, Paul, there’s a lot of misconceptions about why we’re backing 5034, and of course there’ll be a new number in the new session, but, um, the major reason is, you know, we’ve been fighting these legal battles for, you know, twelve, thirteen years now. And our perspective is that the 21st amendment gave states the authority to create alcohol policy, largely unfettered, by the courts. And that has been whittled down over time. And the problem with litigation is, and I think this is from both sides, but whatever side you’re on: it creates uncertainty. You don’t know how a judge is gonna come out with alcohol policy. We prefer to, uh, have these discussions, these debates, in the state legislatures, which I think was the intent of the 21st amendment. And you know, look, we recognize that there are some battles at the state legislative level, and some that we lose, but we think that at least at that level, everybody can be heard, and everybody can have their say, and the representatives of the people of the states make the decisions, not an elected judge making a decision for alcohol policy for an entire state.
PM: I hear what you’re saying. I would think that, you know, that that’s very true in some places, but there’s also huge lobbying power that applies to legislation and judicial oversight adds another element to that for sure, to ensure that not only the legislation is correct, but it also adheres to other factors, not just people with the largest pockets in some ways, but…

CW: Well I agree with you on that score, except I think it’s been abused. I think it’s been taken to the point where it was never intended by those who enacted the 21st amendment. The 21st amendment wasn’t enacted in a vacuum. It was enacted because of the problems states had enforcing their laws pre-prohibition and there was litigation, Congress called litigation throughout the late 1800s and early 1900s and the 21st amendment was designed to stop that type of litigation and put an end to it so the states could enact policies. So while we recognize there is a place for litigation, we think it’s gone beyond all bounds and now it’s being used to structure policy, not just to challenge laws, but to create policy and to change the nature of the state’s relationship with the alcohol distribution system that has existed for so many years.

PM: Interesting perspective for sure. So, that being said, then why do you believe that this should be passed, in essence?

CW: Well because, you know, we certainly believe that these things should be handled at the state legislative level. I mean, it’s a simple proposition for us. You know, we think that in many respects, this legislation is pretty neutral. It doesn’t at all speak to direct shipping in any sense, other than mentioning GRANHOLM and incorporating GRANHOLM? so it incorporates the actual language of GRANHOLM and the holding of GRANHOLM, but really what we’re trying to do is say, look, there’s been an erosion of state control over alcohol. It has gotten to a certain point. We are happy to live – well, we’re not happy – but we will accept the decision of the Supreme Court of 2005, but what’s happened since then is that people are trying to go beyond that. And we think that that should be the line in the sand that nobody crosses. So, the idea is, it should be passed because we want to basically make GRANHOLM the high level watermark for this type of policy. And let states make their decisions based upon GRANHOLM but no further.

PM: But the states themselves haven’t equally chosen against GRANHOLM, so I think that’s where a lot of this judiciary intersection comes there where the GRANHOLM is being interpreted by the states and I think that’s a key component of why the judicial oversights feel important in this piece, due to the interpretation of GRANHOLM. For sure.

CW: Well, you know, our perspective is that most states actually have followed, have tried to adhere very closely to GRANHOLM. You know, we have always read GRANHOLM as being uh, standing for the proposition that you cannot discriminate at the producer level. We accept that, we certainly have not challenged that. Um, and the laws that have been passed since then, we believe, have been basically neutral when it comes to producers. Now, you can make an argument about the first circuit case, and GRANT, and the uh, out of Massachusetts, but the actual law itself was facially neutral, there was nothing discriminatory about it. On it’s face it said, in-state and out-of-state wineries at a certain level would all be treated the same. And so, I think what states try to do in opposed to GRANHOLM was try to do exactly that: create even-handed statutes when it came to producers, and yet that was insufficient. And of course we don’t believe that the decision at all created any type of authority for retailers to go outside the system, and I think that every court decision, pretty much, except for the mooted Michigan decision, has upheld that perspective. That this circuit, the second circuit, and of course the fourth circuit, when they address these issues. So, we think our interpretation is correct on that score. That, when they say that the three-tiered system is unquestionably legitimate in the GRANHOM case, what they meant is that they couldn’t discriminate at the producer level, but the three-tiered system by its very nature requires differential treatment when it comes to wholesalers and retailers. Uh, and that has to be held enviolet (this word was fuzzy).

PM: Well I definitely understand and agree with what that came down from the GRANHOLM decision, but I mean, facial discrimination is still as a uh, muddy water as it is for producers, I mean there’s still different discrimination levels occurring at the same level with uh, you know, production caps and shipment caps that occur…

CW: Right, but Paul, they’re not facial. I mean they’re, they’ve been found, a couple of them have been found to be discriminatory but not on their face. And that’s, that’s the rub. Because, you know, there has been no allegation of facial discrimination as to most of these cases, post-GRANHOLM. It’s all been an effect kind of case, or intended, in discrimination. But on its face, every one of the statutes that have been challenged post-GRANHOLM have been facially neutral. So, whereas the cases leading up to GRANHOLM were all about facial discrimination, in other words, the statute on its face was discriminatory against in-state vs. out-of-state. Everything since then has been attacking a very facially neutral statute and trying to find, or have a judge find, some implied effect on, that they believe to be discriminatory. Most of these have failed. Um, but I believe that that goes one step too far.

PM: Got it. So, how do you see the strategies for 2011 to make sure HR5034 gets passed next Congress?

CW: Well, you know, obviously we have a full session to do it. When this process started, remember it was late in the session of the last Congress in April. We had limited goals at that time, and we achieved them. The object was to get a bill introduced, to start the debate, to have some hearings on the matter, and have a discussion about it. And having achieved 150 plus co-sponsors in a six month period, we thought was pretty productive. But we never anticipated that we would complete the job last session. And the idea is to go back in this session to certainly pay heed to the concerns of the suppliers that have been voiced. And we already have, as you’re probably aware, because the latest version of the legislation that DELHUNT put forward in the fall was a much more conservative version than what had originally been put forward. So we are listening to some of the concerns. Um, but you can get to the point where you’ve totally emasculated the legislation. It’s gotta have an effect. So we intend to go back into the process. One thing I will tell you, Paul, and I think this is important to understand, and I think for your listeners to understand, is that – and your viewers to understand, excuse me – is that, you know, we’re not trying to, in any way, denigrate suppliers on the score. We recognize they have concerns, we recognize that they are, in some cases more legitimate than others, but they do have concerns. And you know, we don’t think that our suppliers who we work with every day are bad people, but we just think we have a disagreement on policy. And that’s the way we’ve approached this legislation. We’ve made our positions known, we’ve had our discussions on this issue, but we do not go into the halls of congress and denigrate the suppliers. We simply disagree on policy. And we’ll continue to do that.

PM: I think that’s a key schism between suppliers and wholesalers right now.

CW: It is, it is, you know, but the bill has been characterized as the monopoly protection act, and you know, we take offense with that. We certainly disagree on policy on the issue, but to somehow imply that wholesalers are monopolizing the market, or, monopoly implies that one wholesaler monopolizes the market, is absurd, and we all know that. So the language or the rhetoric that’s being used on the suppliers’ side we certainly don’t believe is helpful, but we don’t engage in that same rhetoric. We try to keep it on a substantive level.

PM: Yeah, no, I agree with you in terms of the – it might be a bit of hyperbole – but at the same time, in every state there’s only three relatively large-sized wholesalers that represent that market, which is not quite monopolistic, but um, an ability to access markets is really disintegrating as we look around us to even get a new winery into market due to the limited channels that we can get to – the access. So I understand –

CW: Right, I mean, the thing I would disagree with there, is that certainly you have to look at each market differently. The franchise markets, there are of course a lot of wholesalers need franchise markets. So they do differ from the non-franchise markets. And remember that, you know, to some degree, when people talk about consolidation, they often point to wholesalers as if this is something that we instigated or something that we wanted to do, and the fact is, the suppliers largely pushed this consolidation. And we’ve had to respond to it, or else, obviously, go out of business. So wholesalers have had to live with the business conditions that we’ve had to live with. It’s just the nature of things in business that you go through cycles, and this was obviously a consolidation cycle. What I would say, though, is that over the past 20-25 years, I don’t think anybody can question the fact that there is more variety and selection on the shelves today than there was then. And so, you know, yes, there’s been consolidation, but the ability of a citizen as consumers to obtain wines has only grown over that period. And I’ll tell you if you’re talking about a Southern Wine and Spirits, obviously the biggest wine and spirits wholesaler in this country, um, and you know they’re in 30 plus markets, they will generally have in each of their warehouses 10- to 15,000 SKUs of wine. Now, granted, we know there are many scores of thousands of wineries out there. But that’s not nothing to look askance at, that is tremendous selection and variety. And of course, most people don’t even realize that. When they go into their local liquor store, they’ll see anywhere from, you know, 500 to 5,000 SKUs of wine, but if they ask their retailer to obtain more, they could. And maybe there’s a communication issue there that needs to be addressed, but there is a lot of wine available. Now, I will grant you, and I’m sure you’re going to come to this question: “Is every wine available?” The answer of course is no, and we recognize that as well.

PM: And I respect the business dynamics do occur and I do think that consolidation is a natural byproduct. And look, wholesalers are businessmen and it’s a natural progression for them to do the right things for their business. So I don’t think I bemoan – or we at the producer level bemoan – the consolidation in the sense that it’s good for the wholesalers, it’s good for the major producers that leverage that tier for high velocity SKUs. Where it really causes difficulty is that, as a single point of entry into the market, the smaller producers who don’t demand or even deserve sometimes the attention of those wholesalers are essentially locked out of those markets and it does limit the diversity. When on the other hand, there are definitely retailers, restaurateurs and consumers looking to buy those products. It’s an economic challenge, and I respect that and understand that, it’s just, the laws that allow that are very difficult for small producers to access market, for sure.

CW: You recognize, Paul, as we do, that the market has changed considerably, you know the marketplace has changed considerably. In ’75 there were, what, 800 wineries and now there are what, 8,000? And that doesn’t even begin to talk about the international competition that’s now out there. So, yeah, you’re right, it is a tremendously competitive marketplace, and it makes it difficult for everybody to get to marketplace even if they want to.

PM: Yeah, no question on that. So, let’s talk about consumer direct in general. I mean, does the WSWA remain philosophically opposed to consumers being able to purchase wine directly? It feels like that continually. And not just from wineries, but from retailers or from retailers to wineries.

CW: Or you mean from wineries to retailers, you’re talking about?

PM: Wineries to retailers, I apologize, yes, correct.

CW: Yeah, we are philosophically opposed to it and you know, from our perspective, we’ve never argued that most 18, 19 year olds out there, 17 year olds, are looking to buy a $500 bottle of chardonnay or whatever, or pinot and abuse. We recognize that’s not the issue. The problem is that once you open the door to unregulated channel, everything comes through. Nobody’s monitoring it, in other words. If you’re selling, let’s say in the state of Virginia, where wine is now allowed to be shipped direct. You know, what we’ve heard people – regulators from Virginia say – is that they check the UPS and FedEx (or whatever delivery company is now currently delivering to Virginia) logs, and they see a lot of shipments from non-licensed individuals, uh companies. So what happens is, when you open the door, you create a shadow market – a black market, if you will – of product that cannot be traced or monitored. So, while we don’t expect that kids are going to be abusing wine on a regular basis – we get that – you can’t stop once those boxes start coming in, the people that sell spirits, a lot of retailers, a lot of online retailers do, and beer as well. So you get into a situation where you’ve created this avenue, this channel, that is unregulated. That’s the problem, you know, and what’s going to happen is – and may have already happened for all we know, is some kid at college is going to order a bottle of Everclear, they’re gonna put it in their punch, kid’s gonna get drunk, go out and kill somebody. And then, the regulators are gonna look and this and go, ‘where was the industry on this issue?’. So, we appreciate that wine is probably not the greatest risk factor when it comes to direct shipping, but once you open that door, you opened it for pretty much everybody.

PM: Well then let’s focus in on that issue a little bit, I mean it’s not completely unregulated. The access to the states require this permitting process which is a regulatory oversight by the state.

CW: Right

PM: So it’s by no means unregulated with consumer direct shipping.

CW: No the wine is regulated, or at least those that comply with the law, it’s regulated. We know not everybody does that. But for those that actually get a license and report their sales and taxes, that is correct. You will see them hopefully following the law. The problem is those that don’t. And the fact is that UPS and FedEx usually can’t distinguish, you know when the boxes come through, who is shipping and who is not. Now, if we thought they were being completely, if they had complete integrity in their process, that’s one thing. But you know the media has done a number of law enforcement stings on this and we find UPS and FedEx leaving it at the door. We found vodka could be ordered directly to the door, and beer as well. So whenever there have been these stings done, we’ve found there is a very poor system. So, we’re not condemning wineries who participate in the direct shipping system, we actually applaud them for following the laws that exist. We are concerned about those who do not follow the law and simply ship willy nilly wherever they want to, without regard for the law. And that is a big problem. And because of that, because of that we know what is going on, we think it’s better not to do it at all. Although we do recognize that that causes great concern for the wineries. And we don’t want to diminish that concern, we just think there is a balance to be struck. And the unregulated channel creates too much risk.

PM: It sounds to me like the regulatory conversation should be tied to the common carriers allowed to ship the product, more than the wineries access of it. It sounds to me like it focuses on how the delivery system works, more so than how the reporting system works.

CW: It has to do with how the delivery system is very porous. It’s unfortunately a problem, but you know we’ve never opposed local retailers delivering locally because they’re very accountable at the local level. But if you’re a state like Delaware for instance, and you allow direct shipping from out of state, how are you going to possibly regulate 50 states’ worth of wineries and retailers? You can’t do it. You gotta trust them. You gotta trust them to comply with the law, and of course it doesn’t come through their system so it’s all a matter of trust, and so it creates a very high regulatory burden on any state that attempts this. And we applaud those who do follow the law, but we know many do not. And that’s the problem once you open that door.

PM: Hmm. That’s an interesting standpoint on that. I think that there’s a lot more accountability than you anticipate from the winery perspective. I can’t speak at all for the beer/spirits perspective, and I know spirits producers themselves don’t ship direct. I think you’re talking about interstate shipments between retailers to consumers that have spirits and beer.

CW: Correct.

PM: And that also ties to the fact that even consumers, you talk about the underage drinking challenges. It goes as far as wine on the internet at almost any price point, to be honest with you. And not just the $500 bottles, I mean the wait time and all the other elements are not realistic for an underage drinker.

CW: I would agree with you, Paul, that wine isn’t the predominant issue when it comes to direct shipping to kids, I agree that the kids are probably looking for other things. But once you open that channel, you create risks. And look, you know when you allow shipment of the $100 bottle of wine, you allow shipment of the Thunderbirds of the world, you know, from the retailers as well. So wine is subject to abuse as we all know, so you gotta be careful of that as well. But, that being said, I will tell you this: look, you know, we happen to look at the direct to consumer trade out there for the wineries and we look at all the arguments that are made on 5034 on direct shipping and we sort of scratch our heads because really, the battle is pretty much over. You know 38 (37 states and District of Columbia) allow direct shipping to buy wine. Um, and we’re not out there trying to overturn those laws every day. We accept them, the legislative decision has been made, and that’s the way it is. We disagree as a policy matter, but we’re not out there either in the courts or in the legislatures trying to overturn them. Now, if something comes up, like in Maryland or New Jersey where there’s a battle, we’ll fight the battle. But if we lose it, again, we don’t turn to the courts for the answer. We fight it in the legislatures and then we live by the decision. So, as far as it goes, for the direct to consumer side for the wineries, we’re sort of accepting of the status quo. We may not agree with it, but we’re accepting of it.

PM: But don’t you think that by HR5034 itself, before pre-HR5034 that kind of judiciary oversight is kind of a mediator from you continuing to really fight against consumer direct and once placed all back into the legislative hands, it really enables you the fodder to go back and fight that from a legislative standpoint?

CW: See, I don’t buy that. You, you know, I think you got it wrong a little bit when you talked about what GRANHOLM really meant. What GRANHOLM said in 2005 was that states can make a choice. They can allow direct shipping on even terms, from wineries, or they can deny it completely. So obviously a number of states, at least 12 today, don’t allow direct shipping. That’s their right. Every one of the 38 states that allows direct shipping today could kill it tomorrow. They don’t need this legislation to do that. The fact is there’s no political will to do so. And this legislation won’t change that dynamic. The fact is that you’ve done a very good job and the people that follow you have done a very good job of convincing legislatures that the law should be changed to allow direct shipping and that perspective has prevailed and you’ve been very successful. And so, the protestations that wholesalers are all so powerful at the state level… well, if we were all so powerful you wouldn’t have direct shipping in 38 states or so. And so we look at that kind of a little bit skeptically in terms of those allegations of tremendous power. But we also look at it and say, ‘is it worth us fighting the battle?’ And the answer is, you know, once those laws have been passed and we’ve had our battle, it’s done. And we don’t need to revisit that, and this legislation is going to help you revisit it. What it will do, is stop litigation designed to further erode the system. And that’s of a larger concern to us.

PM: I think where we’ve been very powerful is using consumer demand to have the judiciary system recalibrate some legislation that was outdated, in a sense, for sure. And we’ve been very successful at having that revisited across the nation since GRANHOLM for sure.

CW: You’ve been able to motivate your grassroots very effectively at the state level, and the federal as well for that matter. And you have a very, you know, look, we’ve done polling and VEERHOL (sp?) has done polling, and we know that the vast majority of consumers in this country are overwhelmingly satisfied with the selection and variety that’s out there. But there is a very strong 3-5% that want more than is available and they are very vocal, and they’re connected, and they’re active. So we recognize the grassroots power they have engineered. And I think they’ve done a good job doing it.

PM: And we also see it as a growing percentage due to the buying patterns for the millennials so I think that will be a continuing theme that you’ll see growing in terms of the seeking out of diversity and selection among the wine properties, especially with the amount of wines that actually don’t have access to markets individually as our population matures.

CW: Oh, I think you’re right. Certainly the wine audience out there is growing and I think it has become more diversified and their tastes are diversifying, and frankly, that’s fine with us. You know, we sell wine and spirits. We sell wine and you know, it was our members, our wholesalers who helped engineer the whole revolution in wine. We were the ones who started bringing different wines and exploring the different tastes to all the local marketplaces long before there was direct shipping. So, the demand that exists today was fostered by the efforts of wholesalers years ago, so we’re proud of that and we continue to be glad to introduce new products to the marketplace. But again, we recognize there’s certainly more out there that can never make it to the local marketplace.

PM: With all this consolidation occurring, which it’s continuing at a rapid rate. And also with this last recessionary period we had of many producers being dropped from portfolios of wholesalers, and understandably that’s an economic decision, it’s a business decision, it’s not necessarily a relationship decision, and we respect wholesalers for making those decisions. How do you think the American consumers can be able to access those wines from domestic and foreign producers – especially foreign producers – in light of all these changes?

CW: I don’t know if you’re advocating direct shipment from abroad, but we certainly would be opposed to that. I mean, talk about a regulatory challenge. I mean, it’s hard to control across state lines when you don’t have any access to the apparatus of shipment, much less internationally. And then in terms of the taxes, state and federal taxes, they would never be paid if it was international. So, internationally, it’s just the nature of the business that you’re going to have to find an importer and a wholesaler to deal with things and get it to your local retailer. Domestically, we’ll continue to have these legislative discussions and debates about what the proper rules should be, and I think that the legislatures will ultimately seek their level; they’ll find the level where they’re most comfortable with things, and we’ll have our say and you’ll have your say, and then the rules will be made. And so, I think the battle will continue. I do think that, um, you know our perspective is that you know, we want to work with wineries as much as we can, and to the extent we are able to get their product to market, we will certainly do our best to do so. I will say this one thing about the business cycle to sort of wrap it up, Paul, and that is that, like all business cycles, when you see consolidation, you also then start to see a proliferation of small wholesalers start to spring up to fill some gaps and we know that there are about 400-600 small wholesalers out there that are seeking product all the time. One of the things we’re doing is right now working with ShipCompliant to create an online community that would link up wholesalers – small to mid-size wholesalers and small to mid-size wineries – because even the big guys are always trying to turnover a portfolio and look for new product, so a community that’s online would help alleviate the concerns they have about being able to communicate with wholesalers. If it’s successful, it would create a great place for people to meet their future wholesalers and wholesalers to meet the next great wines. So we’re looking forward to working with ShipCompliant on that, and we’re always encouraging wineries to come to our convention and to try to meet wholesalers and to create relationships. And we’re always trying, by the way, to bring in small wholesalers into our membership so that we’re able to encourage them to continue to look for small wineries and bring them onboard. So believe me, we do understand the concerns of the small winery. We want to work with them, and we’ll do everything we can to try to get them into distribution.

PM: So essentially what you’re saying is that ShipCompliant is building a direct to trade kind of portal, but a business to business portal between wineries and wholesalers is what I’m hearing from you.

CW: That’s what we’re trying to accomplish right now, we’re in the formative stages of it, but we’ve been in discussions with them for about a year, we’re trying to enter into a contract with them, we’re hoping the wine community will come on board with it, and ShipCompliant of course has a lot of wines that work with them. And the idea would be to create this online community where a wholesaler will go on board that’s seeking a particular Pinot Grigio, let’s say, from Washington State, and you’ll have Washington State wineries posting “we’ve got the Pinot Grigio from this year, this particular vintage” and try to connect them. And that’s something I think that hasn’t really been done effectively, at least not in a cohesive fashion, and so we’re trying to make that work. So we’ll see how it goes, and hopefully it’ll be up and running by the end of this year.

PM: Interesting. Very interesting. We had an interesting question come from Twitter, a really intelligent technologist. He asked us to ask you: “Name five successful markets where oligopolies have served the best interest of the consumer.” Love to hear your answer on that one.

CW: Well, first of all, we’re not an oligopoly, obviously. But um, you know, it’s not a question of that. But I would simply say this to you, and that is: if you look at any other consumer product out there. Any. You can tell me if I’m wrong here. Name one besides wine and spirits that has as much variety and selection as the consumer does in that field. Not one! I mean, there are thousands of SKUs available of wine and spirits and beer for that matter to the consumer. You can’t find that in toothpaste, chainsaws… I mean you don’t find it in any other consumer product. So I think the system – while we’ve never said it’s perfect – is the best in the world, and is very very helpful to the large majority of consumers. But we’ve never claimed it’s perfect, Paul, we never will. We claim that it strikes a very good balance between accountability and between distribution. And that’s what we try to seek.

PM: I agree with you somewhat. So just to give you a little context for use for you later on, there are four super long tail products, wine being one of the four. The other ones are books, movies and music. But those are the other three consumer products that have the same amount of SKU selection. But nothing else to the level that wine does.

CW: But let’s just talk about consumables alone, I mean, you know.

PM: Yes, consumables, for sure. I agree with you.

CW: I believe you have some sort of humorous question for me that you want me to try and answer for you?

PM: Yeah yeah! So it was great to see you and the Muppet. I hope you enjoyed it, I understand that you don’t wear a vest and obviously you don’t have a southern accent.

(laughter)

CW: And Paul, I don’t have a spray-on tan!

(laughter)

CW: One of your viewers wrote that and uh, I do happen to be outside, I run a lot and I travel a lot, so believe me, whenever I can get out and run in the sun, I do. But I don’t spray on tan. So just, just be aware of that. And I will put in a call for this. If some day you decide that you don’t need that muppet anymore and if you ever thought about sending it this way, I’d love to have it and put it up on my shelf because I do appreciate what you achieved and I think it was very creative and I applaud you for that. Standing out whether you’re a winery or anybody in this business is hard to do, and I think your creativity helped you a lot there.

PM: Thank you very much. Well, that being said, since he doesn’t represent you quite the way you want, if you were to choose one muppet that does represent you out of the group, which one do you think you’d pick?

CW: You know, I’m not really big on the muppets. In fact, when you made the reference in your questions to both Statler and Waldorf, I had to ask my director here, I said, “Okay, who are Statler and Waldorf and why don’t I know about them?” (laughter) and then she showed me a picture of course, and then I realized who they were up in the audience. You know, I don’t have a particular muppet that I can point to that’s most like me, so I wish I could help you there. I’m always trying to be helpful, so maybe…

PM: No that’s good. I think we’ll let the representation of the muppet that you have currently stand, ‘cause then you stand out as your own muppet in the future we’ll just work on the accent and some of the dress attire. How’s that sound?

CW: Oh and by the way Paul, I appreciate the fact that you quoted me directly and although some of it was a little bit – in terms of context – a little bit off, I do appreciate that you used actual quotes. That showed a lot of integrity and I appreciate that.

PM: No problem. Well look, thank you so much for giving us the time. Looking forward to finding a way to make this work between us and try to serve the needs of the consumer, the wineries, the wholesalers and the retailers.

CW: And then one more thing before you go. We have a convention every year. You know, if you want to come visit, I’ll be happy to comp you this year a registration to our convention if you want to come by and see what it’s all about and actually take a look at what we do there. And happy to have you there, so if you can handle the travel to Florida, we’ll take care of you registration for you.

PM: I’ll definitely be there this year, you can count on it. Thank you very much for the kind offer, I look forward to it.

CW: You got it. Take care now.

PM: You, too Craig. Thanks so much.

Bye Bye!

  • http://www.1winedude.com 1winedude

    If the “legislation is essentially neutral” than WHY BOTHER WASTING TAXPAYER FUNDS & TIME doing ANYTHING with it?

    I DO NOT want my money being spent on something that has the singular benefit of making a certain group of people in the marketplace sleep a little better at night!

  • http://passionatefoodie.blogspot.com/ RichardA

    First, let me start at one of the last serious points made by Mr.Wolf, before the Muppet questions. He boasts that there is no other consumable product that offers as much variety and selection as wine and spirits. I will not dispute that but you can also look at it through a different angle. There is no other consumable where consumers are denied as much variety and selection as wine and spirits. There are many thousands of wines and spirits which consumers cannot obtain due to the current system, and Mr. Wolf does concede that point earlier in the interview.

    I think it is fair to say that consumers are denied more wines than they are allowed to purchase. Using Wolf’s rough figures, there are about 8000 wineries in the US alone, and we ca roughly guess that those wineries produce at least 45,000 SKUS. Wolf stated that the largest wholesaler, Southern, may have up to 15,000 SKUs in their warehouse. So, consumers could not access 2/3 of the country’s wines through Southern. Plus, this is only considering U.S. wines, and not the many thousands of international wines that are available.

    I think it would be fair to say that overall, U.S. consumers have access to less than 10% of the available wines in the world. To me, that signals there are significant problems with the system.

    Second, now as 37 states and D.C. already permit direct shipping, it is very clear that eventually all states will allow it. There is inevitable momentum which will eventually persuade the remaining 13 states to do so. Overwhelming, the country has supported direct shipping. So, why does Mr.Wolf waste all of the time, money and effort in combating the inevitable in the remaining 13 states? At best, all you do is delay matters, and waste many resources which could be better used in other endeavors.

    Third, though you allege potential harms from allowing consumers to order directly from wineries, you failed to address what is wrong with retailers being able to order directly from wineries. None of the potential problems with consumers are applicable for retailers. So, what, if any, are the reasons why a wine store should not be able to order directly from a winery?

    (That is a start, and I will probably have more to comment on soon.)

  • Matthew Mann

    “If you’ve never seen the sun, the moon looks bright.”

    I believe it’s disingenuous for Mr. Wolf to point out that surveys show the vast majority of consumers are satisfied with the selection of wines available to them. I can’t help but think that’s because they are unaware of all the wines that are NOT available to them.

    Paul, kudos on a very interesting interview and for getting Mr. Wolf to sit down with you.

  • http://steveheimoff.com Steve Heimoff

    quick take: Wolf was so disingenuous. The 21st amendment wasn’t passed “because of the problems states had enforcing their laws pre-prohibition,” it was passed because of the religiously-inspired, anti-alcohol Temperance movement.

    re: Wolf’s complaint that litigation has “gone beyond all bounds and now it’s being used to structure policy,” this is the way the Constitution envisioned our society: one in which the Courts have equal say to the Legislative body. Without the Courts, America would still have segregated schools!

  • Diane Thompson

    Overall, I agree with the other comments that have referenced the disingenuous nature of Mr. Wolf’s answers. Additionally, the whole discussion about the WSWA’s concern about underage drinking is laughable. Is he aware that kids manage to get booze at stores – so should we eliminate store sales of wine, beer etc, since the controls are not perfect? Silly. Whenever, the reasoning for legislation lead with “it’s for the children”, you can be sure it’s a red herring and a desperate one, at that. Thanks for the interview, Paul!

  • http://s191715151.onlinehome.us/wine/?p=3403 The Founders v. Wine Wholesalers: The Audio Version « Wine Blog Reviews

    [...] listened to Vintank's audio interview with Craig Wolf, president of the Wine & Spirit Wholesalers of America. You have to give Craig credit for [...]

  • http://topsy.com/www.vintank.com/2011/01/inherit-the-wind-the-real-interview-with-craig-wolf/?utm_source=pingback&utm_campaign=L2 Tweets that mention “Inherit the Wind” – The REAL interview with Craig Wolf | VinTank — Topsy.com

    [...] This post was mentioned on Twitter by Joe Roberts, pmabray, pmabray, Ward Kadel – @drXeNo, vintank and others. vintank said: If you are in the wine industry, this is a key interview for you to hear about the WSWA, their perspective on HR… http://fb.me/ROG9Ld7o [...]

  • http://www.bevsites.com/index.php/2011/01/the-arguments-against-allowing-retailers-to-ship-interstate/ The Arguments Against Allowing Retailers to Ship Interstate : BevSites :: Ecommerce for wine stores

    [...] a recent interview with Vintank, Craig Wolf of WSWA expressed the concerns of those opposed to retailer shipping that by allowing [...]

  • http://s191715151.onlinehome.us/wine/?p=3408 Ignorance, Bias, Hipocricy, Self Service—Wine Wholesaler Style « Wine Blog Reviews

    [...] willing to demonstrate their ignorance, bias, hypocrisy and self serving intentions. Yet, thanks to Paul Mabray's VinTank interview with Wine & Spirit Wholesalers Association President Craig W… we get more than a glimpse into these commonplace [...]

  • http://s191715151.onlinehome.us/wine/?p=3438 Ignorance, Bias, Hipocrisy, Self Service—Wine Wholesaler Style « Wine Blog Reviews

    [...] willing to demonstrate their ignorance, bias, hypocrisy and self serving intentions. Yet, thanks to Paul Mabray's VinTank interview with Wine & Spirit Wholesalers Association President Craig W… we get more than a glimpse into these commonplace [...]

  • http://www.vintank.com/2011/01/shipcompliant-wswa-say-it-aint-so/ Shipcompliant + WSWA – say it ain’t so! | VinTank

    [...] weeks ago we had an informative and engaging discussion with Craig Wolf (who is really a nice guy and very smart even though his perspective is a bit [...]

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