we have a huge liquor book, so ultimately itr can help our revenue if it passes. I voted no for people like Dan McCarthy and the small retailers adn restaurants I like to support who can’t afford to buy a case of everything to get the deal price that will happen.
I urge everyone to vote, and refuse to tell you how to, just what the consequences are.
When I took Dan’s temp on this a few weeks ago, he was very excited at the prospect of selling specialty liquors and seemed very bullish on what either initiative could do for his business. Now maybe he has changed his tune, doesn’t understand what might happen to him or isn’t representative.
Goodness knows you spend all day talking to retailers, so I imagine you have a much better sense of how they feel.
And I appreciate that sentiment greatly!
It will a little for big brands that ship direct, but the variety will wane as big box shops will only warehouse certain items, and cut back shelf space dedicated to wine to put in liquor. Other than WA wineries, and perhaps Oregon how do you figure they can buy direct? No one other than big shops will be able to fill a truck and get it here.
Kris, here’s a different question. I know the proposed departure from C.O.D. is potentially a Pandora’s box, since right now retailers are unable to get themselves into as much trouble. If 1100 were to pass, could a distributor choose to stonewall this aspect of the loosening and still only sell on C.O.D. credit terms?
As with a few others, I’m voting yes on 1100 and no on 1105.
+1
Michael
it’s not just that retailers could get themselves in trouble… but retailer could demand terms to carry a wine or a distributor could. So, wineries and breweries that currently get paid when they sell 10 cases of wine to someone could have to wait 30, 60, 90 days. Oh and what if the distributor goes out of business in those day? What if it’ changes hands or there’s a dispute? Right now, when a winery or brewery sells into the channel, they get paid on delivery. When the distributor sells to retailers? They get paid.
Couple the demise of COD payment with allowing pay to play schemes and I just don’t see how wineries and breweries come out better with either of these initiatives. And, for all of the talk about hard liquor, the people I care about are the people who make the wine we profess to love. I’d really like to see an initiative that solely dealt with the hard liquor side - I have zero problem with privatizing that and would love to be able to get some of the stuff out there.
I don’t see how credit terms help any of the small players. I do see how they help the larger players. And, really, that’s what 1100 is about. You have a law that was written by Costco, for Costco. I don’t like laws written to serve the interests of large corporations - I want laws that are written to serve the people. No, I’m not naive about the process, but I at least would like to start with “How does this help the citizens of Washington” vs “How does this help Costco?” 1105 is the same way, except it’s about helping the distributors.
I need to read 1100 more carefully before I make up my mind, but my inclination is to vote No on both. Whatever you do, please read the initiatives though and understand the issues past the smoke and mirrors about hard liquor sales that both sides are using. These initiatives have very real effects on the people who make the wine and beer we enjoy.
Well I just got back from M&S, and they are all seemed pretty bullish on 1100 there, less so on 1105. And the COD stuff hardly has them worried. Vendors in the system can still demand COD, it just would no longer be mandated by the state as today. Now I know this country has had trouble with credit, but is really the unraveling of modern society of wine merchants can get credit terms for their purchases?
I am feeling far less torn the more I talk to people.
They’re at one end of the chain. The COD restrictions only hurt them and relaxing them only helps. Talk to a winery at the other end of things who wants to sell their product. Sure, you can “demand” COD… and when a large store says “No” and you’re trying to sell in a tough economy what will you do? Right, you’ll give them terms, deliver the wine and hope they really meant 30 days. A distributor could get the same from retailers, but face it, if a smaller retailer plays hardball with a distributor demanding terms and the distributor tells them to take a hike, the retailer’s hurt too. The power between the two is roughly even - the distributor would lose sales, but the retailer would lose some chunk of the wines they want to offer.
None of that’s true for a winery - with rare exceptions, a retailer or distributor will be just fine if they tell a winery “we’re now paying net 60” and the winery refuses. The winery, though, could be hurt bigtime by that. THAT’S my concern - not the retail or even the distribution side.
Is it the unravelling of civilization? No. Silly criterion though. The question is whether it’s good law. It’s good for someone like Costco. It’s good for loosening outdated restrictions on liquor sales. It’s problematic to bad for smaller wineries and breweries. Ultimately, those are the people who make what we talk about here, so I tend to weigh their concerns a bit more heavily. I finally got the voter pamphlet, so I need to spend some time in the next week or so and read the thing.
I just read 1100 and much of the debate. It seems highly speculative to me that craft brewers and family wineries would be hurt by this. The changes they point to: allowing discounts and other promotions are the same things just about every other industry has to deal with. In any case, craft breweries and small wineries succeed or fail on quality, not price.
On the other hand, the benefits to the consumer are obvious and significant. I’ll be voting yes on 1100. No on 1105.
James - without telling you how to vote, I think the quality and not price point of view is idealistic. Both matter. See my posts above for more on that. Note that “allowing discounts and other promotions” can also be phrased as “letting large entities demand discounts and promo marketing from smaller players.” Do other companies deal with this? Yes. Is it change that is good for craft breweries and wineries? Unclear to no. Is it risky to introduce such change in a very down economy? Yes. Will it help the consumer? Perhaps, but that’s VERY unclear. Forgive me, but I’m VERY suspicious when large corporations tell me they’re out to help me.
Hey Rick,
I probably overstated the quality v price idea. Price always matters at the margins. I just have a hard time envisioning the bad outcomes here. On beer, for example, I’ve been able to buy Sierra Nevada at Costco for $10 a 12-pack off and on for as long as I can remember. A six-pack of Sierra Nevada at the Bainbridge T&C usually runs about $8. Other craft beers are $9-$12 a six-pack at T&C. Sometimes I buy Costco, sometimes I pay more at T&C for the variety. (Disclosure: I don’t drink much beer these days.) What’s going to be different under 1100? Maybe Costco will alternate other craft beers from time to time? Will that hurt them? Hard to say. Will I like getting a different craft beer every now and that at that great Costco price? You bet. Maybe T&C will sell a little less specialty beer, I suppose, and this might hurt the smaller breweries who don’t stand out on quality or who aren’t willing to discount for a higher volume sale. Maybe this same dynamic will play out for family wineries, but that’s not clear to me.
But with liquor, unlike some posters, I do like premium spirits. Washington is one of the worst states in the country for price, selection and convenience. That will improve immediately and by quite a bit.
Cheers,
James
Fair enough Rick, that seems legitimate albeit with lots of “what if.” Of course that is the problem with all of this is that it’s hard to trust any of the projections. While a ton of the stuff under attack is outmoded/archaic, this is probably among the worst times to be breaking it apart given potential revenue shortfalls for the state, impact on education etc. That is why I said I would not be heartbroken if neither initiative passed.
Eric,
Yeah, if this were 2005 etc when everyone was doing well I’d be less worried. As it is, I’m a bit concerned that even fairly minor negative effects will tip some people over the edge. A lot of it just depends on what actually happens.
I just watched this…very helpful.
http://www.king5.com/news/politics/voters-guide/Up-Front-Special-Voters-Guide---Initiatives-1100-and-1105-105296433.html" onclick="window.open(this.href);return false;
+1 Well said.My ballot just went in the mail.Don’t get me started on Bill Gates Sr. pompus ass!!
My biggest worry as a resident, and not a wholesaler is the budget shortfall, plus privatization of liquor and it’s resulting tax shortfall, plus the repeal of the soda/candy/bottled water tax, mean I live in a state with a sales tax (which there is at least one measure to raise again on this ballot), an income tax, and federal income tax…ugh.
It is naive to think the legislature won’t make up that shortfall somewhere, and I can think of no way to do so without an income tax. This could quickly become a state I don’t want to live in due to taxes.
It will be like anything, you’ll have to pass a credit check of some sort to get terms. Most non-chain accounts will be COD still. It would be moronic to tell every account int eh state you can have 30-day terms without some due diligence. Even with COD, there is a % of accounts that bounce checks continually and go on CASH ONLY vs. checks.
Terms will be what put 30+ of the 43 wholesalers in the state out of business as their models are based on the float they get from suppliers, and that coupled with 30 day term requests from the biggest accounts will sink them.
Interesting. If 30 of 43 wholesalers don’t have a strong enough business to made the shift from COD to 30 day terms, maybe a number of those businesses should be gone anyway?