Nothing, but he did things to advance Total Wine.
I am confused.
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The thread is about an investigation of Southern, a wholesaler. What does Total Wine (a retailer) have to do with Southern?
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You first insinuated that Trone ran for the Senate to help Southern. Then, when I asked you what he did in the House to help Southern (or Total Beverages), you point to political contributions by Total to help itself. Did Trone introduce legislation in the House to help Southern or even Total Beverages? Did he start investigations in the House relating to Southern and Total.
Not sure why you are equating Total and Southern. I would think that Total would be happy to see Southern cut down a peg or two. Not sure what you are talking about?
It was a tangent conversation. Andrew K was talking about special interest groups. My point with Trone is that he skipped over the special interest groups and went right into Congress himself. It had nothing to do with Southern, but Total Wine.
Not equating, just a small thread drift.
FWIW, Iâm sure Total would love to do their own importing and wholesaling too, so yes, Iâm sure cutting out companies like Southern would be helpful to them.
Total Wine in Maryland, led the way in allowing wholesalers to offer discounts to some retailers. Iâm pretty sure they got the size limit (sq. Footage) on retail stores removed.
Back in 2000 I had the head of alcohol regulation, Charles Ehart, come after me for testifying in favor of the shipping ban in Maryland. He was perusing wine BBs and saw where I had criticized the politics of the issue. These people will stop at nothing to keep their monopolies.
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Of course itâs possible to order wine/spirits at any age as long as you have a credit card. You can also buy in a liquor store with cash/card. The gating element is the ID check, and I donât see any difference between a cashier and a UPS driver.
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Itâs a good point about the quality of employees. Also, two other reasons why FedEx / UPS should be more secure:
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both companies have much more advanced ERP systems that should enable them to require ID scanning, something few liquor stores do. They can also track names on shipments against IDs.
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the incentive to sell to underage people is pretty limited for delivery companies but higher for retailers, as most delivery company revenue isnât even alcohol related
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Total wine is by far not a monopoly in the DC area market, the only market I really know. I virtually never shop there, but a lot of people who are not as into wines as most of us are love them for their low prices.
Where is Total Wine a monopolist?
I view them much differently from Southern. As I understand it, Southern is being accused of causing prices to go up in the markets where it is dominant, while my guess is that Total Wines causes prices to go down in the markets where they have stores. I started my career doing antitrust enforcement at the FTC. From an antitrust perspective, causing prices to go up is bad, causing prices to go down is good. This is why I have a very hard time connecting the two companies.
Are you guys in the business? In all types of industries, competitors hate discounters. But, consumers and the antitrust authorities love discounters. I remember the days when wine and liquor stores in NYC had to price stuff at a specified retail price. It was great for customers when NY law changed to allow discounting, although I am sure some competitors did not like that.
In PA, the few non-state shops need to scan licenses and check out at a dedicated register. The state stores donât have to check all licenses only people who look younger than a certain age.
Iâm all for limiting the power of market-dominating firms like Southern, but this wonât result in a break-up. Itâs just a Robinson-Patman Act claim over pricing. I assume itâs based on complaints from small retailers that they donât get the price breaks that big chains do. But, as I recall, R-P doesnât prohibit quantity discounts. So it probably comes down to some technical issues in what they offer.
Price cases are also complicated by state laws that mandate posted and minimum prices in many cases.
Itâs also worth noting that the FTC and DOJ have had a dismal track record in court in the last two years, as theyâve pursued novel theories, although they have caused a few companies to drop deals because they didnât want to litigate with the government to get them approved.
by monopoly I meant wholesalers. TW is rarely the lowest price for wines where I shop in the DMV area.
When T W first opened I Maryland they very high prices for âbetterâ wines.
As a further note I wonder what would happen if wholesalers were not required in many states. Just optional.
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Have you just now discovered the concept of thread drift here?
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Total is almost never the low price leader in NoVa. At one point they were close enough that if you had a coupon you could save a few bucks but thatâs long gone (to the best of my knowledge). They also at one time had a great bdx futures program but (a) their prices went way up relative to the market and (b) I got old
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It happens.
Hopefully, the alternative is no bueno.
NY requires that transparency. Some states do not. Which is, shady, to say the least.
There is a love/hate with discounters in the wine world. There needs to be a national standard for it. Too much âvirtual inventoryâ and all.
FWIW, I think this connects to the tariffs. The tariffs went awayâŚyet wholesale prices didnât drop afterward. And then, Iâve only seen spirits getting more and more expensive. So the pricing is very out of whack, and I think there is huge margins baked in there somewhere.
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There is talk that this could some how backfire, and that all pricing would be net 1 case pricing. Which then really screw over the public.
BTW, All of the big wholesalers charge âdelivery feesâ too. Which really blows my mind?
Classic externalization of costs to maximize revenue, no? Bill the customer for drivers wages, fuel etc in the form of a delivery fee.
Ditto to other comments here. do we really think that restricting interstate shipping is going to meaningfully cut off the supply to college campuses? You can ID check at stores, upon delivery by truck, etc. If juveniles are going to want access to alcohol the only meaningful control is the one exercised by the parents in a house who should be monitoring their children. Everything else is just trying to plug holes in a very leaky sieve.
This is something of the last 5 years or so. Whatâs interesting is all the margin they are making from the tariffs that went away. Itâs really crazy.
Thatâs not the underlying issue. Thatâs how Southern is âpresentingâ the issue, but thatâs not what they are trying to accomplish.
They are trying to cut off shipping so that they can eat up large chunks of the market share. Southern doesnât view alcohol sales through the lens of âdetails matterâ. They think a lot of the market share is completely interchangeable with some other product they sell. So if a consumer canât buy from out of state, they are only increasing their chances that those people will some how end up buying one of their items in place of what they would have bought out of state. (if $10 million is being bought from out of state, and they have 60% of the market share, they figure they can bring in at least another $6 million by cutting off outside competition)
Whatâs interesting is that if they took a more âpro-shippingâ route, they would have far greater support from the top retailers around the country. A lot of the best retailers deliberately do as little business with Southern as possible, and some do none at all!
Itâs the very definition of insanity.