What’s really concerning here are the rumblings advocating protectionism that we’re beginning to hear from the CA wine industry. Protectionism historically seems like a magic bullet at first, but the unintended knock-on effects are 100% devastating and more than reverse any initial benefits.
It's the imposition of tariffs on products from foreign competitors in order to make them more expensive to the American consumer (and theoretically, make the American product a better relative value).
Most recently, in the last 18 months of his term, Trump imposed a 25% tariff on European wines- excluding sparkling wines and wines under 13% alcohol- that he very much wanted to expand to a 100% tariff. Some good FTC testimony from various people in the wine business as to the possible disastrous unintended consequences convinced them to not go to 100%.
The problem with tariffs is that even though they are imposed on foreign countries, those foreign countries simply build the tariffs into their prices, so that the American consumer ends up paying them. They are the equivalent of a tax and have the same net effect as taxes.
I do not agree with Dan’s negative association with distribution partnership. I think it is a little bit short sided. First of all, DTC is a lot of work so if you need to sell 13,000 cases, it helps to have strong distribution partners. Unless he is referring to RNDC or Southern, small distributors are ofter NOT ordering a few cases from a couch as he alluded to. If we are going to have transparent conversations about the wine industry, those conversations should at least acknowledge all aspects of the industry. From the field worker to the short staffed logistics companies that transport product from point A to point B, everybody has a role to play. I LOVE Massican and have big respect for Dan but the trickle down effect of blame in the wine industry is not very productive.
Hi Lou! I don't think Dan was blaming or speaking negatively about distributors. That could be my bad for writing in a way that made it sound like that, but I don't think this is about blame--it's more about pragmatism. Dan simply did the math and knew that he needed to sell several pallets of wine in any new market to make it worthwhile for him to open that new market, or else his efforts would be spread too thinly. And yes, we can acknowledge all aspects of the industry and the challenges each face. If you're in distribution, I'd love to talk with you to better understand the pressures in that arena.
What’s really concerning here are the rumblings advocating protectionism that we’re beginning to hear from the CA wine industry. Protectionism historically seems like a magic bullet at first, but the unintended knock-on effects are 100% devastating and more than reverse any initial benefits.
Hi Reeves! Can you define and explain protectionism? It's a new term for me and perhaps other readers.
It's the imposition of tariffs on products from foreign competitors in order to make them more expensive to the American consumer (and theoretically, make the American product a better relative value).
Most recently, in the last 18 months of his term, Trump imposed a 25% tariff on European wines- excluding sparkling wines and wines under 13% alcohol- that he very much wanted to expand to a 100% tariff. Some good FTC testimony from various people in the wine business as to the possible disastrous unintended consequences convinced them to not go to 100%.
The problem with tariffs is that even though they are imposed on foreign countries, those foreign countries simply build the tariffs into their prices, so that the American consumer ends up paying them. They are the equivalent of a tax and have the same net effect as taxes.
Here's a great podcast by Richard Wolff that throughly explains the disasters that flow from tariffs and protectionism: https://podcasts.apple.com/us/podcast/economic-update-with-richard-d-wolff/id1053981528?i=1000659442482
I do not agree with Dan’s negative association with distribution partnership. I think it is a little bit short sided. First of all, DTC is a lot of work so if you need to sell 13,000 cases, it helps to have strong distribution partners. Unless he is referring to RNDC or Southern, small distributors are ofter NOT ordering a few cases from a couch as he alluded to. If we are going to have transparent conversations about the wine industry, those conversations should at least acknowledge all aspects of the industry. From the field worker to the short staffed logistics companies that transport product from point A to point B, everybody has a role to play. I LOVE Massican and have big respect for Dan but the trickle down effect of blame in the wine industry is not very productive.
Hi Lou! I don't think Dan was blaming or speaking negatively about distributors. That could be my bad for writing in a way that made it sound like that, but I don't think this is about blame--it's more about pragmatism. Dan simply did the math and knew that he needed to sell several pallets of wine in any new market to make it worthwhile for him to open that new market, or else his efforts would be spread too thinly. And yes, we can acknowledge all aspects of the industry and the challenges each face. If you're in distribution, I'd love to talk with you to better understand the pressures in that arena.