Leve Opens Mouth...Confuses World On Costco's Wine Program

[WvanGorp]

The online operation could only send to a small number of states. Major sales come from the regular stores anyway. To me, its a big “so what.”

[Bill_Tex_Landreth]

@WvanGorp

The online operation could only send to a small number of states. Major sales come from the regular stores anyway. To me, its a big “so what.”

Wilfred, very true.

But as a friend of the BDX trade, Mr. Leve is making the following point that benefits the Bordelaise and not the consumer that likes to purchase his or her wines at Costco:

“Consumers wanting to obtain wines from the top Bordeaux vintages will probably need to buy them as futures if they to purchase the wines for the lowest possible price.”

How I interpret this news and this post is that having the general population losing access to BDX at Costco (which ISN’T happening) will only give more money to those that own the chateaus or the negociant houses. Costco would not be able to leverage their volume to get the consumer a better deal.

[Brian_G_r_a_f_s_t_r_o_m]

I am surprised so many people apparently care about this … especially here.

[Bill_Tex_Landreth]

@Brian G r a f s t r o m

I am surprised so many people apparently care about this … especially here.

Brian, I care because I am a minor purchaser of Bordeaux. When somebody that has the “pulse” of Bordeaux, or whatever, makes a blanket statement concerning where I purchase the bulk of my wine…it affects me.

[Brian_G_r_a_f_s_t_r_o_m]

@Bill Tex Landreth

@Brian G r a f s t r o m

I am surprised so many people apparently care about this … especially here.

Brian, I care because I am a minor purchaser of Bordeaux. When somebody that has the “pulse” of Bordeaux, or whatever, makes a blanket statement concerning where I purchase the bulk of my wine…it affects me.

How is that?

[Bill_Tex_Landreth]

Jeff in a round about way is encouraging folks to purchase futures vs. waiting and purchasing directly from Costco. If everyone that buys from Costco did this (which wont happen, but let’s assume this), Costco’s supply would dry up and I would not be able to have a good selection at the club. Just like telling people that prices will never come down affects all of us because it could have sparked a speculative buying frenzy…but most people saw right through that one.

[WvanGorp]

@Bill Tex Landreth

@Brian G r a f s t r o m

I am surprised so many people apparently care about this … especially here.

Brian, I care because I am a minor purchaser of Bordeaux. When somebody that has the “pulse” of Bordeaux, or whatever, makes a blanket statement concerning where I purchase the bulk of my wine…it affects me.

Pulse of Bordeaux?

[Bill_Tex_Landreth]

@WvanGorp

@Bill Tex Landreth

@Brian G r a f s t r o m

I am surprised so many people apparently care about this … especially here.

Brian, I care because I am a minor purchaser of Bordeaux. When somebody that has the “pulse” of Bordeaux, or whatever, makes a blanket statement concerning where I purchase the bulk of my wine…it affects me.

Pulse of Bordeaux?

My weak attempt at humour aimed at how dialed in Mr. Leve is with Bordeaux and what transpires in the market place in regard to their wines.

[Brian_G_r_a_f_s_t_r_o_m]

@Bill Tex Landreth

… If everyone that buys from Costco did this (which wont happen, but let’s assume this), Costco’s supply would dry up and I would not be able to have a good selection at the club. …

a couple points:

1. I think the emboldened part of the snippet above is kinda my point — it’s not going to happen, so you will not be affected. You, as well as most others who read Leve’s post, are smart enough to evaluate the situation yourself/themselves … in other words, it shouldn’t (and actually does not) matter what Leve says.

2. I really don’t care about this at all, and probably shouldn’t have chimed-in on this thread. [suicide.gif] My bad. Carry-on.

[Bill_Tex_Landreth]

It looks like I have offended too many folks and I have been asked to give it a rest. I appologize…

[Jeff_Leve]

@Lance Smith

Jeff - I very much like to read your follows on the other board as it gives me insight into some of the happenings in Bordeaux-land.

That said, got any additional information to provide regarding this: “…I do not think Costco will be able to receive the same favorable terms and conditions to purchase Bordeaux they were able to obtain in the past…”?

Lance, that’s a fair question. I’m not truly comfortable discussing specific, private trade business practices. So, let’s take a look at a hypothetical. For arguments sake, assume Costco was previously able to purchase Bordeaux futures from Negociants without paying up-front for the wines. The monies did not have to be paid until the wines were delivered. That arrangement would allow Costco to obtain the wines at the original offering price and better yet, at least for the consumer, they could offer the wines for their standard store wide markup, without needing to factor in cost of the carrying cost of the wines for 2 years. That type of arrange would allow Costco a huge advantage that other retailers do not have. If that hypothetical arrangement was to go away, the actual cost of the goods would be a lot more money in a hot vintage as they could no sell wines for the equivalent of the first offering price in America as they currently do.

@Jeb Singleton

Can I get a t-shirt with Jeff’s avatar from the other site? I actually like it. Now Squires’ on the otherhand…

Jeb, The creator of the avatar is one of the better graphic artists of the art deco era, Cassandre. He designed a myriad of stunning graphic images. Some of his best works for wine and spirits posters.

@Jim Brennan

I hear that Jeff’s a totally different and cool guy in person.

Jim, Count me in as another fan Leve. I like the guy too! [middle-finger.gif] Just kidding, I’m only trying to get in the spirit of the board.

@Kent Enomoto

Jim,

I hope my friends speak as highly of me as some of Jeff’s friends do of him. As I think about it, a vain hope I am sure.

Kent, Thanks. I hope we can pop a few bottles at some point in the near future. Are you for a grilled cheese night at Campanile?

@M. Dildine

Jeff is a big boy. He not only seems resistant to criticism, but impervious to it.

Through his eBob platform, Jeff is an industry spokesperson, of sorts. In my view, that comes with a bit of a responsibilty to communicate in a clear, informed and unbiased manner. That said, if he’s in my neck of the woods, I’d enjoy lifting a glass with him.

Mike, it’s interesting. Some types of silly, negative posting used to bother me. But eventually I came to realize, this is not the real world. It’s just an Internet chat board. It’s not reality. I am not, nor would I ever want to be an industry spokesperson. for more shocking news, like wine and I’m passionate about Bordeaux. If anyone doubts any of those statements, there are more than enough people on this board I’ve met or Emailed with, that know those are my views.

I have fun sharing. If a few people get pleasure and discover something they did not know due to something I posted, I’m thrilled. If others think it’s crap, that’s their business. I’m from the old school of, if you don’t like something or someone, don’t read it.

At the end of the day, regardless of what wines or styles of wines we like, we’re all wine lovers. I spend less time on petty squabbles than ever before. Life is too short to focus on BS.

I’d happily take you up on your offer to share a bottle. Believe it or not, I even have some interesting California wines I’d happily pop for you.

@Bill Tex Landreth

@WvanGorp

The online operation could only send to a small number of states. Major sales come from the regular stores anyway. To me, its a big “so what.”

Wilfred, very true.

But as a friend of the BDX trade, Mr. Leve is making the following point that benefits the Bordelaise and not the consumer that likes to purchase his or her wines at Costco:

Bill… How you come to the conclusions you arrive at is beyond me. I also buy wines at Costco. I buy wine at the same places you do. If it costs you more, it costs me more as well.

“Consumers wanting to obtain wines from the top Bordeaux vintages will probably need to buy them as futures if they to purchase the wines for the lowest possible price.”

How I interpret this news and this post is that having the general population losing access to BDX at Costco (which ISN’T happening) will only give more money to those that own the chateaus or the negociant houses. Costco would not be able to leverage their volume to get the consumer a better deal.

Bill, you make no sense. First you say Costco is going to be a player in Bordeaux for 2009. How do you know that? Personally, I doubt it. So does Posner and Max, but what do they know? Regardless of what happens with Costco, the Chateau do not make any more or less money. They sell all their wines to Negociants. Next, the Negociants all charge the same amount of money to every purchaser, so they do not make any more or less money per bottle if Costco buys or not. The very minor amounts of money that some big buyers might receive is at best, a few percent and to the best of my knowledge, while some of that took place in 2008, which had very little interest, I doubt it what happened in 2005 and will probably not take place with 2009.

@Bill Tex Landreth

Jeff in a round about way is encouraging folks to purchase futures vs. waiting and purchasing directly from Costco. If everyone that buys from Costco did this (which wont happen, but let’s assume this), Costco’s supply would dry up and I would not be able to have a good selection at the club. Just like telling people that prices will never come down affects all of us because it could have sparked a speculative buying frenzy…but most people saw right through that one.

Once again I left wondering what you are talking about and why you’re saying it. Do I think consumers should purchase hot wines in the best years. YES! Do I think folks should wait for Costco. NO. That does not even take into consideration the possibility Costco will not even offer 2009 Bordeaux at competitive prices. That being said, your post even makes less sense because Costco does not truly sell futures. They offer wines without an obligation to deliver and customers do not have an obligation to purchase.

Your post reads like I have issues with Costco. I’ve had great scores at Costco. If they do not offer Bordeaux, that hurts me too. I have no issues with Costco. I do however have issues with being misquoted.

@Brian G r a f s t r o m

I am surprised so many people apparently care about this … especially here.

Brian, you and I agree on this one! Perhaps it’s a slow news day…

[Bill_Tex_Landreth]

Jeff, you are a master of twisting things around.

My point is that I would rather pay Costco the exact same amount the day I buy my wine vs. letting the French hold onto my money for over two years. I never once stated that Costco would be a big player in the '09 vintage…one that you and RMP as well as the BDX folks have proclaimed the next greates thing.

Please take this as my last post.

[AlexHay]

Jeff, I just read your last post, and being late to all this, little else.
To clarify, what is your understanding? Is it that Costco is discontinuing its online wine sales? Online BDX sales? BDX sales as a whole? Some combination?
Thanks.

[Jeff_Leve]

@Bill Tex Landreth

Jeff, you are a master of twisting things around.

Bill… That is complete BS and you know it. I used your own words and quoted you before responding to what your wrote.

@Bill Tex Landreth

I never once stated that Costco would be a big player in the '09 vintage…one that you and RMP as well as the BDX folks have proclaimed the next greates thing.

In a previous quote from you, you state Costco will be offering Bordeaux in future vintages. You follow that up with saying in previous years, they were large enough buyers to use that power to help leverage prices. Which is it? Are they in or out with 09?

@Bill Tex Landreth

How I interpret this news and this post is that having the general population losing access to BDX at Costco (which ISN’T happening) will only give more money to those that own the chateaus or the negociant houses. Costco would not be able to leverage their volume to get the consumer a better deal.

@Bill Tex Landreth

I never once stated that Costco would be a big player in the '09 vintage…one that you and RMP as well as the BDX folks have proclaimed the next greates thing.

By the way, regarding the potential quality of 2009, I am on record for thinking it’s going to be a great vintage. Remember, I was there. If I am wrong, you can blast me. If I am right, I hope you will consider saying I was right.

@AlexHay

Jeff, I just read your last post, and being late to all this, little else.
To clarify, what is your understanding? Is it that Costco is discontinuing its online wine sales? Online BDX sales? BDX sales as a whole? Some combination?
Thanks.

Alex… My sole understanding is, Costco.Com will not be selling wine. Everything else is a surmise.

[Brent_C_l_a_y_t_o_n]

Moreso than this Costco thing, I am interested in how the Bordeaux market in the US is affected (if at all) by the downfall of Diageo Chateau & Estates. While this Costco thing might mean higher prices in the future at Costco wine stores, there still seems to be much misunderstanding about whether or not it will affect actual inventory of wines available. Diageo pulling out $20M or so of known annual futures purchases would seem to have the greater effect.

[J_Singleton]

What a show this has turned into. It’s like watching the Young and the Restless… or so I hear. Jeff, thanks for the heads up on the creator of the avatar. I’m going to have to check it out!

[Scott_Manlin]

Once again, he knows not of what he speaks. Two years of float at Costco’s borrowing costs would have a diminimus effect on the end pricing…changes measured in single digits. That hypothetical was frankly, silly

[Chris_Freemott]

IIRC,
Costco took a stand against the 3-tier model.
Perhaps they’ve realized that they alone cannot win it.

I cannot imagine trying to deal with the rules and regulations on selling to the states they operate in - and, appropriately collecting sales taxes, worrying if there are volume limits per user account and the like.

Couple that with sending 1st Growths and then dealing with delayed shipping (heat damage) someone who’s pissed off about not getting an OWC because, perhaps their order of 12 bottles was filled by loose soldiers etc.etc.etc.

And, do all of this for the margins they, by corporate dictate, maintain.

No thanks. I view costco selling wine at their margins, to the masses, via FedEx as one huge losing gamble.

If they want to sell me a case of $10-$80 a bottle wine that I want to drink and not count on my personal balance sheet like First Growths, that’s one thing but to dabble in the field of selling high-end wines…No bueno.

They scored big w/ 2000 and 03’s. Bless them for it.

But, they should focus on the stores, the provenance and the idea that when you walk in you are, per the Costco tradition, on a 'Treasure Hunt" - ‘buy it today, because it likely won’t be there tomorrow’.

Couple this with their growing success as their own private labels - and the pending doom in nearly all wine regions starving for capital - and I think Costco, by killing (if they do) the dot com - can strengthen their position locally.

My $.02

[Joel_Pulver]

Why is Jeff even on this board? Doesn’t he have his own board to play on? I thought I came here to get away from all the garbage on the other board.

[Steve_Saxon]

@JPBone

Why is Jeff even on this board? Doesn’t he have his own board to play on? I thought I came here to get away from all the garbage on the other board.

Dude, this is your 5th post, Leve is more than 4 times active than you. Just remember everyone is welcome here…that’s what makes this a better board.