Will the Washington state Costco ruling hurt small wineries/retailers?
Posted: Sat May 20, 2006 10:42 am
I noticed this letter in the Wall Street Journal today, and wondered about the impact of the Costco ruling might have.
Big-Box Muscle Worries Small Wineries, Brewers
May 20, 2006; Page A9
It's important to point out that the three-tier distribution system that governs the sale of alcoholic beverages in every state in the nation ensures that licensed retailers of all sizes have an even playing field when it comes to the responsible sale of beer, wine and distilled spirits ("Court Ruling Could Cut Prices for Beer, Wine1," Marketplace, May 11).
If Judge Marsha Pechman's decision stands, big-box stores will have even greater competitive advantages to muscle out smaller retailers at the expense of choice, convenience and service for Washington state consumers. While Costco claims that this decision will result in lower prices, that may not actually be the case. Providing the transportation, logistics, refrigerated storage, delivery and constant maintenance of perishable products, such as beer, is costly, regardless of who is performing the tasks. Is there really a guarantee that big-box stores will pass along savings to customers?
Americans place a high priority on having convenient access to the numerous choices of beer, wine and spirits available in the marketplace today, much of which is made possible by independent retail outlets. If Costco begins dealing directly with producers as a result of this ruling, the little guys -- microbreweries, farm wineries and, eventually, retailers -- will be left in the lurch. They certainly don't have the market power or profit margins to deal with the "enormous clout" of big-box retailers.
Harry Wiles
Executive Director
American Beverage Licensees
Bethesda, Md.
According to its website, the American Beverage Licensees is the largest trade association, representing nearly 20,000 bars, restaurants, taverns, and liquor stores. http://www.ablusa.org/
Regards, Bob
Big-Box Muscle Worries Small Wineries, Brewers
May 20, 2006; Page A9
It's important to point out that the three-tier distribution system that governs the sale of alcoholic beverages in every state in the nation ensures that licensed retailers of all sizes have an even playing field when it comes to the responsible sale of beer, wine and distilled spirits ("Court Ruling Could Cut Prices for Beer, Wine1," Marketplace, May 11).
If Judge Marsha Pechman's decision stands, big-box stores will have even greater competitive advantages to muscle out smaller retailers at the expense of choice, convenience and service for Washington state consumers. While Costco claims that this decision will result in lower prices, that may not actually be the case. Providing the transportation, logistics, refrigerated storage, delivery and constant maintenance of perishable products, such as beer, is costly, regardless of who is performing the tasks. Is there really a guarantee that big-box stores will pass along savings to customers?
Americans place a high priority on having convenient access to the numerous choices of beer, wine and spirits available in the marketplace today, much of which is made possible by independent retail outlets. If Costco begins dealing directly with producers as a result of this ruling, the little guys -- microbreweries, farm wineries and, eventually, retailers -- will be left in the lurch. They certainly don't have the market power or profit margins to deal with the "enormous clout" of big-box retailers.
Harry Wiles
Executive Director
American Beverage Licensees
Bethesda, Md.
According to its website, the American Beverage Licensees is the largest trade association, representing nearly 20,000 bars, restaurants, taverns, and liquor stores. http://www.ablusa.org/
Regards, Bob