Wine Issues | Wine Cooler Blog

WINE ISSUES: WINE AND BEVERAGE COOLER INDUSTRY REALITY

Wine and beverage coolers are great appliances to have in the home. They are especially designed to store your favorite vintages and other beverages at just the right temperatures and provide easy access when entertaining. Since the first of the year, the manufacturers are making many changes that will affect your ability to find and purchase these appliances.

BACK ORDER REALITY

The wine cooler and beverage center manufacturers enjoyed record sales for the months of November and December last year. Up to that time, the industry showed a great reluctance to maintain high stock levels of their products. As a result, manufacturers, wholesalers and retailers were faced with many orders that they couldn’t fill. Back orders of these products became the rule rather than the exception. Demand exceeding expected levels and lack of stock caused many a customer frustration. The back order situation is still an issue as we start 2012.

NEW PRODUCT DEVELOPMENT

The last couple of years, manufacturers generally did not expend a lot of money with new product development because of the general state of the economy. For the last couple of years, the cooler models available for purchase remained a relative steady and unchanging list for customers to consider. Since the first of the year, our business experienced an increase of discontinued models. In our case, the discontinued models accounted for about 6 to 8 percent of our offered products. Manufacturers at the same time began introducing new replacement wine cooler models, but the reality is they are still trying to catch up.

PRICE ESCALATION

Another customer reality is that prices on beverage and wine cooling appliances are increasing. Pricing on many items have increased anywhere from 5 to 15 percent in the last 30 days. Everyone will be paying more for these products as the year progresses. Most manufactures now employ MAP (Minimum Advertised Price) pricing strategies for most of their best-selling top of the line models. Customers will find it harder to find deals on the MAP priced products as everyone is required to advertise them at the same minimum price. Retailers that violate MAP pricing directives can be suspended from offering these products in the future. Pricing competition is obviously reduced as manufacturers and suppliers seek higher profits after a couple of tough years of declining business revenues.

THE FUTURE STATE

I believe that the industry will use 2012 to settle into a situation where they will continue to develop new and innovative products to sell and get a better handle on demand so they can reduce the constant back order situation we are now in. Of course, the state of our American economy and its ability to sustain consistent growth will ultimately define any industry outcome.

MY RECOMENDATIONS

I do have some recommendations for you the consumer. First, if you run into a situation of a back ordered product, don’t be reluctant to get on the list for the first restocked items. Sometimes it is better to wait a bit rather than “miss the boat” on what you want. Be sure and ask for price protection as newly stocked items might come with a price increase if you wait to purchase them later. Second, seek out a company where customer service is important. Call the company and talk to a real human-being rather than a menu. Companies that value you as a customer should make personal contact with you as your order moves forward. Third, when purchasing the more expensive appliances, call the company sales people and ask for delivery capabilities and price breaks. You will never know what is possible unless you ask. Fourth, large companies don’t always have the best deals nor are they necessarily able to provide the best personalized customer services. Some smaller retailers will be able to fill your needs just as well. Lastly, when buying anything of significant price, do your research and perhaps go beyond page one of the search engine listing.

Ronald Senn, Vice-president, Ideal Wine Coolers, 1/24/2012

Wine Issues: More Wine Issues

When I surf the web looking for one fact, I often come across other facts that are equally interesting. There are changes going on in the wine packaging industry that have pluses and minuses. I am talking about the use of screw caps and PET, a plastic which has the more formal name of polyethylene terephthalate. I read two articles on the Wineanorak.com website that provide will provide you some insight into these packaging changes. The articles articulate much better that I can the pros and cons of the screw caps and PET bottles.

For a review of the screw cap article go to: http://www.wineanorak.com/screwcap_defence.htm

For a review of the PET bottle article go to: http://www.wineanorak.com/wine_in_pet_bottles.htm

Other wine issues that are in the news are the rising levels of alcohol in wine and the wine industry’s attempt to go-green with regards to production and sustainability. I provided links to two interesting articles you will find helpful in evaluating these additional wine issues.

For a review of the rising alcohol issues go to: http://www.wineanorak.com/alcohollevelsrigins.htm

For a review of the wine industry going green go to: http://www.winesandvines.com/template.cfm?section=news&content=80890

Author: Ronald Senn, Vice-President, Ideal Wine Coolers

Wine Issues: A Wine Consumer Powder Keg

Last year I ran across a website that stirred my interest in wine consumer issues and I wrote an article about it (see my article at: http://www.idealwinecoolers.com/page/wine-information-article-a-wine-consumer-issue.html). The website (freethegrapes.org) presented specific information with regards to shipping wine between the various states. I found out that several states actually made it a criminal offense to do this type of shipping of wine. Believe it or not, some states even classified this crime as a felony. Because it has been some time since I came across this issue, I decided to reacquaint myself with it in order to share the facts with you.

WHAT THE HOUSE BILL DOES

What I found is the issue has progressed to a critical consumer powder keg called the Comprehensive Alcohol Regulatory Effectiveness Act of 2010 (commonly called House Bill #5034). Hearings on this bill were recently held in late September of this year. This bill amends the Webb-Kenyon Act by emphasizing Congressional Policy that each state or territory shall continue to have the primary authority to regulate alcoholic beverages and decreasing the ability for legal actions challenging the authority of states to regulate alcoholic beverages. This amendment negates the Federal authority to regulate interstate commerce in this particular case.

House Bill #5034 further amends the Wilson Act to eliminate the state requirement to regulate the importation of all alcohol based liquors or liquids to the same extent and in the same manner as such alcohol based products produced in such state or territory. In my words, this means that each state can and probably will discriminate against these products that are produced outside that respective state. Once again, I believe the Federal government’s role in interstate commerce is being set aside by H.R. 5034.

WHO BENEFITS FROM HOUSE BILL 5034

Why do you suppose, with all the critical legislation that congress should be working on, that they are undertaking an issue like this? The answer is lobbyists for the Beverage Distribution and Wholesale Industry are putting pressure on them to do so. The traditional American business model starts with a producer that leads to a wholesaler that leads to the consumer. The wholesalers in this equation are naturally fighting your ability to purchase and ship directly from the wine producer of your choice, strictly a matter of money. Wholesalers do not want anyone messing with their “money tree” that has been in place so long.

ARGUMENTS AGAINST H.R. 5034

During my review of this issue, I did find information from Congressman Mike Thompson (California), a person who testified against this discriminatory House Bill. His remarks will make you think about the evolution of regulation of alcoholic beverages since the era of Prohibition in the United States. Beer lovers if you think this is only a wine issue then you had better think again. If you have a favorite brewery outside of your resident state, you may not be able to get that favorite shipped to your home. Other interested people like George Bato, Bruce Cass and Dr. Vino have also expressed great concern over H.R. 5034.

WHAT EVERYONE NEEDS TO DO

The Commerce Act was established by Congress and litigated many times since Prohibition. All of this Post-Prohibition activity led to our current regulations that have proven to be some of the best in the World. It is time for consumers of alcoholic beverages to get involved. Visit the freethegrapes.org website. They have made getting a response to your Congressperson simple with an easy to fill our form letter that can be easily e-mailed to the right people. In my opinion, if we don’t rally around getting House Bill 5034 thrown out, we will be stepping back in time with regard to your consumer and constitutional rights.

Author: Ronald Senn, Vice-president, Ideal Wine Coolers