US Wine Industry Flashcards
What is the three tier system?
The way the wine industry is organized within the US. 1) producers or suppliers 2) distributors or wholesales 3) retailers
What four strict rules does the three tier system put in place?
wineries can only sell to distributors and not directly to retailers or customers 2) foreign wineries must sell their wine through a US based import company 3) distributors cannot have direct ownership in wineries or retail establishments and cannot sell directly to the public 4) retailers must remain independent of the other tiers.
Which group is responsible for enforcing laws relevant to business engaged in alcohol production, importation and wholesale and in ensuring alcohol labeling and advertising meet federal regulations?
The Tobacco Tax and Trade Bureau (TTB) of the Department of the Treasure; also responsible for alcohol tax collection.
What does ATF stand for and what are they responsible for?
the Bureau of Alcohol Tobacco Firearms and Explosives, part of the Department of Justice and responsible for enforcement of laws aimed at illegal alcohol production and smuggling.
How many control states exist in the US? How many include standard table wine within their control systems? What states are they?
18; 5 states and 2 counties in Maryland include standard table wine (Mississippi, New Hampshire, Pennsylvania, Utah, and Wyoming, plus two counties in Maryland)
What 13 states are control states for spirits only?
Alabama, Idaho, Iowa, Maine, Michigan, Montana, North Carolina, Ohio, Oregon, Vermont, Virginia, Washington, and West Virginia
Which two counties in Maryland control the distribution of wine?
Montgomery and Worcester
What are the pros of a control state?
Public safety; although state patronage jobs and revenues are underlying factors.
What are the cons of a control state?
Lack of competition; higher prices, poorer service, and less selection.
What was the Granholm decision?
The Supreme Court rules that in interstate commerce, states cannot set a different standard for the products of other states than they do for their own. Therefore, it is unconstitutional for a state to allow its own wineries to ship wine to consumers while making it illegal for other states wineries to do so.
What two options do the US states have due to the Granholm decision?
1) allow all US wineries to ship wine to the states residents 2) make it illegal for any winery, in or out of state, ship wine to residents.
What are the pros of e-commerce (directly shipping wine after ordering on the internet)?
Huge increase in selection and more competitive pricing.
What are the cons of e-commerce?
It is difficult to guarantee that underage minors will not be the recipients of the alcohol.
What are the pros to glass bottles being the choice package for wine?
sturdy, impervious to oxygen transfer, attractive, recyclable, and traditional.
What are the cons to glass bottles being the choice package for wine?
heavy, adding to the expense and environmental cost of moving the bottles to the winery and the bottled wine from the winery to their respective markets. alternatives perform as well as glass for most wines and are less fragile.
