I intend to express my disgust, and if you feel it, then that has been successfully communicated.
I think that business ethics matter, and that it is healthy to question what that means.
Sometimes communities need to be “turned off”.
The cliché that “if everyone is thinking the same, no one is thinking” comes to mind.
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Robert,
If you don’t like something we do. That’s okay. You can come after me. You won’t hurt my feelings. But I don’t think it’s right to be rude and disrespectful to other people in the community who are saying your tactics are wildly off putting.
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I think your use of the term unethical is focused on the wrong people. Your beef is with the producer and Euro resellers, not US gray market importers and resellers.
If your producer sells to you at higher prices than he sells to other markets, your beef is with that producer. If you were to act hostilely toward him, he might cut you off. So you vent your spleen at TBB. I’ve never met TBB, but the wine I’ve purchased from his shop has been well cared for. As he isn’t an official importer, he doesn’t have the quantity to sell that you do. If you have less product than he does, again your beef is with the producer.
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Let’s play an example, in grossly simplified form.
Euro producer sells to everyone in the world at the same price, in Euros. In general, there is just one export price for all countries, sometimes a marginal quantity discount. So this talk of selling to people at different prices is not so much a thing, in my fairly deep experience in the industry.
For simplicity, $100 dollar equivalent for everyone.
The national American importer gets that bottle here with freight and taxes for $103.
You go ahead and pick what you think should be a reasonable margin. 20-30% markup? (conservative vs reality)
$130 that company passes the buck to a distributor, who marks up something, you pick…
Sold to a retailer who marks it up. Everyone has to make a living.
Meanwhile, in Germany, a shrewd flipper mentality in a country that doesn’t tolerate the high end as much is enticed to sell to a shrewd back door American “importer”/retailer for $120.
That American “importer”/retailer then sells at prices that are far lower than everyone else, crashing the sanctioned supply chain and destabilizing the growers and importers efforts to build a stable long term relationship in a relatively complicated many state system.
Gray market guy makes his buck, doesn’t give a f’ck.
The rest of the people trying to do the real heavy lifting need to answer to the mess created by a few snaky people.
Certainly, if the intermediaries are too overinflated in their margins, that opens the door to the arbitrage incentive. There needs to be accountability there.
The idea of selling to Europe higher than to the States, which would effectively kill the arbitrage incentive, is a very real solution that is being toyed with in a few instances I am aware of.
Bottle tracing to figure who is not doing what they sign up to do (sell wine in their country) is another, but is tricky.
It is complicated, but simple.
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Ethics is a squishy term in this business. Frankly, I don’t see anyone involved in this discussion doing anything unethical. There are two ways to sell wine: the old back room way, where a select few got access to the allocated wines at a price close to what the producer charged; and the new internet way, where everyone knows about those wines, and can hunt for them around the country or world. If you’re on the allocation list, you like that mechanism. If not, you at least have a shot at some hard to get wines, if willing to pay. And it’s not just distributors who might sell some bottles to grey marketers. There are official importers who jack up prices as well, and producers just roll their eyes and live with it. Anyone who thinks there is some kind of altruism involved in the wine business is pretty much dreaming in color. There are plenty of honest brokers and retailers who try to look out for their customers, while also running a business that needs to make a profit.
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Thanks Robert for the example… so this sounds like a Importer/distributor/retailer SYSTEMATIC issue with the US setup. could the importer or distributor should lobby the government to change it?
If the American gray market retailer sells it “at far lower prices than everyone else”… isn’t that …
a GOOD thing to the consumers here? are there consumers who rather pay more to get the bottles through the bongled mess that is the “official tiered system”?
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As a member of this community, I find it wildly off putting that people use a fecal emoji attached to posts of mine they don’t like. So disrespectful. So awful. Please make it stop. It isn’t right. Is there no God?
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I don’t think that it is guarded info that the distributor lobby is massive, and immutable.
So not a realistic course.
Fair and efficient sanctioned importers leaving no room for back door game incentives is a realistic one.
The real artisanal stuff that people here are into, for the most part, doesn’t operate so much in the “big business” sphere. Moreso, smaller regional importers.
I don’t think that it is a noble victory nor some kind of “free market correction” for a few people to get a sweet backdoor deal, and the rest of the longer term stability and growth for both the producer and their sanctioned partners to have to answer to/account for the backdoor dealers.
Another angle, to simplify: In a very common sense way, if I sold you something for $50 (and more appropriately, something that I spend all year, every year making as an artisanal agricultural product), told you not to sell it to your neighbor, you looked me in the eye, shook my hand and agreed, and then turned around and sold it to your neighbor, that would be shitty, right? If there was a guy down the block, who constantly was trying to sneaky triangulate some way to have the bottle sold to the neighbor, to specifically do what the producer asked them not to do, that would be shitty, right?
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I’d stop digging. Not a good look, at all. Again, your beef is with the producers who could stop what you object to if they cared enough about it, which they don’t. In fact, they need it, otherwise they run the risk of not selling through their inventory.
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I think we should refine this discussion to focus on a key point. There are two different categories of wine sold by grey market importers—highly allocated wine and other wine. Grey market importers don’t really affect the producer or authorized importer for highly allocated wines, since they will sell through at any reasonable price, and each layer is still getting its expected margins. The producer may still have some sort of non-economic reason for controlling sales, but their pocketbook isn’t hurting (they already made the decision to sell at a lower price). It does make an impact in the “other wine” category (i.e., this is why pharmaceutical companies don’t want cheaper Canadian drugs flooding into the U.S.).
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Can me move this discussion elsewhere? Maybe something like Commerce Corner Fight Club .
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Hi Robert, respectfully WB is a global chat board not an American one.
Please start a new thread to discuss the uniquely USA based issues and leave the rest of us to vicariously enjoy each others new wine purchases.
I wish you the best and understand your frustration but this is not the thread for it.
Thanks in advance
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There seem to be a lot of regional contracts between producers and importers here in Europe.
Very few importers seem to care though, but I’ve been told a few times that shop X sadly cannot sell to me because they are not allowed outside of their country.
I guess these contracts are made to protect the importers, and thereby the relationship between producer and importer. Why? Because there is a ton of different tax rules / living cost differences in the different EU countries, that can make it hard to compete in certain countries.
Some laws has been set in place to even out these differences (at a bigger site like Idealwine they actually add the local danish taxes…), but I guess it is hard to manage for smaller importers/shops.
Prices are certainly higher here in Denmark, than in most other countries in the EU as an example. Even with shipping costs i often save 20-50% buying from other countries. When I buy from danish importers (and I do) it is mostly to support them and support having access to amazing wine in my local shops/restaurants.
… oh and I bought a Roagna, Barolo Pira, 2013 
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There are. But I’ve learned that most of the time these contracts are handshakes, emails or verbal agreements. It’s not super formalized nor structured! At least for the (smaller) producers we’re dealing with.
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As a member of this community, I find your accusations, cursing and the nastiness of your questioning someone’s ethics “wildly off putting.” Complaining about the fecal emojis seems somewhat hypocritical.
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Mark,
That is tongue in cheek, fairly obviously, I think; all of the phrases are “call backs”, as they say in comedy, to lines others have used in the thread.
As to hijacking the thread, indeed, my apologies to have this dialogue carried out in the place that is in theory just about show-and-tell purchases.
If somebody is interested in the conversation moving elsewhere and savvy enough to do so, feel free to move things as needed to another venue.
I’m happy to have dialogue.
Thanks to all for their thoughts/contributions, and wearing the big boy pants.
I agree with Alan here. There is really no black and white when it comes to this issue, but shades of grey. I have seen wine priced at egregiously high prices that come through the “official” chain and as Charlie pointed out, some even go directly to auction from the producer. While I am not a fan of licensed retailers hiking the price of wine way beyond its “normal” retail price, I would not necessarily call that unethical, nor will I say that the grey market is unethical as well. I just simply buy wine that I like and from retailers whose prices I find fair / OK and who treat me well as a customer. Do I dislike certain practices, of course, but I just move on from that retailer or even that producer.
So your complaint is the grey market importers are undercutting the three tier system ?
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LOL. I used to get a healthy wack myself. Then I found out my retailer was flipping another retailers allocation when they were cut off.
someone send robert some gummies or maybe a tranquilizer…geesh.
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